A new collobarative study recently released from the Massachusetts Institute of Technology (MIT) and Harvard University concludes that foreclosures reduce home values by 27% or more.

Now one thing’s for sure, I’m not an Ivy league scholar nor an egg head from MIT but by doing a bit of due diligence here in my own backyard, I could have written that study. However, no one would have believed me. But I bet you see the writing on the wall now don’t ya?

In the study, MIT economist Parag Pathak and Harvard researchers John Y. Campbell and Stefano Giglio conclude that a foreclosure puts a much bigger dent in a home’s value, compared to a forced sale as a result of bankruptcy or the death of the owner.

Mr. Pathak says he’s not surprised that there’s a discount due to foreclosure, but says, “It is surprising that it’s so large,”

A forced sale as a result of the owner’s death chips only 5-7% off the price of the home, and a bankruptcy filing drops the home value by an average 3%, the researchers found.

What’s even more important was the finding relative to other home sin the neighborhood NOT in foreclosure. The study found that merely by having a home in the neighborhood in foreclosure, homes within the immediate area also see their values drop. Can anybody see the need for regression analysis now?

Are you using this kind of data in your short sale negotiations to get the best price? You can bet we’ll be enclosing this study from MIT and Harvard in our packages.

I don’t mind dropping another 50 or so pages in our package on some dimwit bankers desk. I want to make sure he has the right information to grant me the discount that I’m after.

The data is becoming more and more substantive and irrefutable every day. To succeed you just have to know how to present it and be confident doing so.

For all of you Realtors and Investors who have these 3rd party BS short sale mills “negotiating” on your behalf you need to wake up!

They’re not doing the necessary work and you are leaving BIG bucks on the table. They are doing the least amount of work possible to get the easiest possible approval.

My profit is derived from beating the banks into submission and anything I can do to legitimately get the bank to scream “Uncle” is going to be a tool in my toolbox.

So you can bet that knowing this info from Harvard and MIT is going in the mix.

The presence of a foreclosed home in a neighborhood, which can often become a blight on the community, drops the value of all homes within 250 feet by 1%, on average.

How much of a problem do these foreclosures mean to the bank once it becomes an REO? Well the study “suggests that foreclosing mortgage lenders face fixed costs of homeownership, probably related to vandalism, that induce them to accept absolute discounts.”

Time to make some more money! I just love this stuff. Hopefuly you know how to use it to your advantage.

If not, then maybe you really need to hone up on your short sale skills, Then fire that sorry ass 3rd party short sale servicer…today!

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