U.S. Homes Lost $3.3 Trillion In Value

Real estate website Zillow reported today that U.S. home values fell 11.6% in 2008, or $3.3 trillion. The last quarter of 2008 proved to be the worst, as homeowners lost $1.4 trillion during this time -- more than the $1.3 trillion lost during all of 2007. Since the housing market's peak in 2006, homes across the country have lost $6.1 trillion in value.

Foreclosures made up 19.9 percent of all sales during 2008, while short sales accounted for 10.9 percent of all sales. Such distressed sales are sold at a deeply discounted price and have a huge negative affect on the values of all surrounding homes and, hence, the $1.4 trillion in lost value. Finally, Zillow found that approximately 18 percent of all American homeowners are underwater and owe more on their mortgages than what their home is worth.

These statistics provide us with more evidence of the "natural vs. unnatural" real estate market where conventional home sellers are competing against the discounted home prices offered by foreclosures & short sales. Home sellers should be mindful of any such distressed properties within their local community, because today's buyers are going to be looking for the best bargain possible.

Here's some tips to compete against distressed sales:

- Skip the Agent: Your home has probably already lost considerable value in the past year, and hiring a real estate agent will cost you another 6% of your home's sales price. Sell the home yourself and you'll keep that money in your pocket.

- Price it Right: We're in 2009, not 2006. Homes have lost $6.1 trillion since housing hit its peak in 2006, and it's better to forget about the sky-high price that your former neighbor got when selling their home back then. Buyers are looking for the best deal possible so make sure you price your home right to reflect today's market conditions.

- Keep Your Home in Mint Condition: All too often, foreclosed homes are in disrepair and are in need of some renovation due to being left vacant. It can easily cost a new owner thousands of dollars and months of work to get the home back in shape. By keeping your home in mint condition and making necessary repairs, you'll be reminding buyers that your home is in "move in" condition.

Qualify Interested Buyers: There's nothing worse than spending weeks with a prospective buyer and then learning that they are unable to obtain a mortgage. To avoid such situations, make sure that your buyer is pre-approved for the loan amount necessary to buy your home.

- Be Ready for a Quick Closing: With so many properties on the market, you need your home to stand apart from the rest in not just price and condition. Being able to offer a 30 day closing will give you a huge competitive edge to attract buyers who want to move quick. Foreclosed property sales and, especially, short sales, can take months to complete and it's essential that you have the ability to be flexible to arrange a quick closing date.

- Work with an Attorney: For a couple hundred bucks, a local real estate attorney will craft & review all contracts between you and the seller, and ensure that you are adhering to all state & local disclosure requirements. Remind buyers that a real estate agent isn't needed to sell or buy real estate, and that they should get an attorney to represent their interests as well.

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