Last Updated on Monday, 21 July 2008 04:03

You would think the way the market is that banks would be anxious to sell.  Bu so far, I have not seen the banks negotiate like they really want to sell....

Something is not quite right. We hear how bad the market is and how banks can not sell foreclosed properties. But what I am seeing in the market is the banks have plenty of opportunity to sell, they just are not doing it.

I have been working with a few buyers letely who have been making offers on multifamily properties in Manchester and Nashua. Mostly these are bank owned properties.  So far, we have not seen the banks negotiate like they want to sell.

Granted, some of the offers have been low compared to the asking price. But the properties tend to be distressed (thats a nice, real estate way of saying they need a ton of work) and some of them had serious lead paint issues. So it is understandable that the offers on those properties would be low. (you would think banks would jump at the chance to sell properties with lead paint abatement orders on them!)

Some of these offers were cash and had no inspection contingencies. Perfect, since many of these properties would not qualify for any conventional form of financing and, of course, there are will be many inspection issue in these distressed properties. So cash offers without inspection contingencies are ideal for the banks who want to unload these "less than perfect properies". What amazes me is that the banks are not even countering some of these offers, they are just rejecting them. Even offers that are close to asking price do not seem to be enticing the banks to negotiate in earnest. SO what is going on?

There is a perception that the banks are in trouble and that bank owned properties are a bargain, maybe you have heard the commercials that have been running that claim you can buy a beautiful foreclosed home for just $30,000? I am not sure where these homes are but it is not in New Hampshire.

I started wondering, what are multifamily homes selling for? So I pulled the sales over the last 90 days in Manchester and compared the list price to the selling price. What I found was surprising! On average, properties are selling for about 95% of the list price! See the table below.

In some cases properties are selling for more than the asking price! The best deal was a property that sold for a mere 57% of the asking price. But this was the exception. The next lowest was 75% of the asking price. So it seems that properties are generally selling for around 95% of the asking price. This of course presumes that the properties have dropped into a price range that is reasonable for the buyer.

 I then went back and looked at the properties that were bank owned properties and sold over the last 90 days. For these properties the sold price was 93% of the list price. Not that big of a difference from the overall average. Surprising that the banks are not more motivated to sell. In fact it looks like they are looking for fair market value like any seller would.

So, if the properties are marketed at a price that will provide cash flow to the buyer then they are selling. and for close to the asking price. But as far as the banks unloading the properties for way under asking price? Or if you were hoping to pick up that beautiful home for just $199 a month (like the commercials tell you) It just is'nt happening, at least, not in Manchester New Hampshire.

Tot         List Price    Close Price      Sell/List %
Units
2            $132,500     $140,000     105.7%
2            $138,000     $163,000     118.1%
2            $139,900     $121,000     86.5%
3            $139,900     $142,000     101.5%
4            $139,900     $105,000     75.1%
4            $149,700     $147,000     98.2%
2            $159,900     $159,900     100.0%
4            $159,900     $160,500     100.4%
3            $160,000     $156,000     97.5%
3            $165,000     $165,000     100.0%
3            $169,900     $150,000     88.3%
3            $174,900     $175,900     100.6%
3            $179,900     $165,000     91.7%
2            $179,900     $178,000     98.9%
2            $180,000     $168,000     93.3%
4            $184,900     $107,000     57.9%
3            $185,000     $145,000     78.4%
2            $189,900     $180,950     95.3%
2            $189,900     $185,000     97.4%
2            $200,000     $197,500     98.8%
2            $209,900     $209,900     100.0%
3            $209,900     $241,000     114.8%
2            $216,900     $200,000     92.2%
2            $229,900     $231,595     100.7%
4            $230,000     $215,000     93.5%
3            $230,000     $175,500     76.3%
3            $234,900     $250,000     106.4%
2            $238,500     $233,000     97.7%
3            $239,000     $229,500     96.0%
2            $239,900     $224,500     93.6%
2            $239,900     $221,500     92.3%
3            $249,900     $266,000     106.4%
2            $257,000     $244,000     94.9%
3            $269,900     $221,000     81.9%
3            $285,900     $295,000     103.2%
2            $289,900     $280,000     96.6%
4            $299,900     $250,000     83.4%
9            $309,000     $291,000     94.2%
4            $319,900     $312,000     97.5%
7            $399,900     $385,000     96.3%
6            $425,000     $408,000     96.0%
10          $540,000     $517,000     95.7%
16         $924,900     $825,000     89.2%
                                        Average    94.9%

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