Over the last month my buyers have seen the rejection stamp from more than one seller. In fact it seems they are collecting them in larger numbers than they did in 2003. Of course then it was because the offer didn’t escalate enough to be the highest bidder. Now the rejection stamp is coming because the offers are deemed to be to low to be a fair price for the property.
Last July when the market showed that it was going to slide downward and the first indications of lowering values really became apparent I penned a post entitled “You Want to Offer me What?” At the time it seemed like good advice to sellers who had their homes listed at “above market” values. Today the advice is just as valid and perhaps with added twists that weren’t apparent then.
Neighborhoods where foreclosure properties are rampant, neighborhoods where the builder is slashing prices to sell inventory and homes that are surrounded on either side by mega mansions are just a few examples of 
where last years prices are not going to hold up to buyer’s scrutiny in 2008. And that is before the buyer opens the door to your home. Once a buyer is inside if your price doesn’t reflect the condition of your home you can see the calculators working in their heads. But you say I just added a fantastic Jacuzzi tub, new bathroom tile and freshly painted the house! Did you over improve the house for the value of the neighborhood? Sometimes you can go too far and the value of what you added doesn’t add up to an over inflated price.
No matter how you cut it this market is hard for sellers to wrap their arms around. However homes are selling. Buyers today are savvier than ever. They know the value of the home; they’ve done the research and with the guidance of a good buyer’s agent are making realistic offers. Sellers who understand this end up with contracts, sometimes multiple and they are able to move on. For sellers who are still holding out hope for prices from the past they are finding it easy to stamp rejected on an offer and wait for the next one. And wait and wait and wait.
So sellers before you pull out that rejection stamp take another look at the offer in front of you. It might be painful to see but it might also be closer to reality than you know.
| Discussion: 5 Comments »
An Optimists View Of Northern Virginia Short Sales
April 3rd, 2008 Categories: Auctions & Foreclosures, Buyers Corner
Yes Virginia short sales do get to closing. Is it the easiest route to homeownership? No the easiest way is to find an owner who is aware of the current market conditions in Northern Virginia and prices their home to reflect the market. Can a short sale work for buyers who are looking for a good deal and have patience to work through the process? Absolutely!
As an agent who has worked both sides of short sales there are some tips that I’ve learned along the way. For buyers who are considering making an offer on a short sale you need to be aware that no matter what you include in the Virginia Regional Sales Contract the lender will have their own addendums which will supersede just about everything you put in the contract. This doesn’t mean that you shouldn’t write a contract with the terms and conditions that meet your circumstances but it does mean you need to be prepared to be flexible about closing dates, inspections and closing cost credits.
If you are firm that it is your way or no way because this is a “buyer’s market” then a short sale will leave you feeling frustrated and angry. The processors handling short sales don’t really care about what you want. They are running the numbers to see how much they can walk away with at the end of the deal. It is strictly about the bottom line for them.
For agents who are thinking about making an offer on a property listed as a short sale there are a few key questions to ask before you write the offer.
Does the agent have permission from the owner to talk directly to the lender?
Has the agent been in touch with the lender and have appropriate contact numbers?
Has the owner completed the short sale package from the lender?
Has the owner prepared their hardship letter?
How many loans are currently on the property?
If more than one loan are they from the same lender?
Who is the lender (s)?
Have you done a pre-settlement statement for the lender?
How long do you estimate that the lender will take to provide an answer?
While buying a home listed as a short sale may be more time consuming in the end you will get a home a good price without some of the problems associated with properties already owned by the lender. If you are interested in learning more about purchasing a short sale or have a home that you are considering listing for sale give me a call. I’ll be glad to talk to you about the process and see how my team can help.
| Discussion: 1 Comment »
Prince William County Foreclosures-Starting To Move
March 20th, 2008 Categories: Auctions & Foreclosures
No one in the Northern Virginia area is going to deny that of all of the localities Prince William County has been hit the hardest by the sub-prime mortgage industry. The cost of homes throughout the county were lower than closer in Fairfax, Arlington and Alexandria Counties and with significant new construction the area became ripe for “flippers” and for buyers who relied on more volatile loan programs in order to afford a home.
Over the last few months the indicators show that buyers have begun to see the value in the foreclosures and properties are starting to put them on their buying list. Do the sales over the last few months indicate that inventory is starting to move? Perhaps but let’s be realistic and admit that there is a lot of inventory in Prince William County to move. New construction is still being completed, owners are on the move and there will be more properties currently listed in other categories that may move to the foreclosure column over the next 30-60 days.
As an agent who is working with buyers who are a looking for a “good deal” foreclosure properties are starting to come into the picture. Six months ago the jury was still out on the question “can you find me a good foreclosure property” today the tide seems to be turning to answering that question with a qualified “yes.” Qualified being that not all foreclosure properties would fall into that category and buyers must always understand the issues that are involved with buying a home as is.
This past week one of my buyers ratified a contract on a foreclosure property and at a nice discount over the list price. We will keep our fingers crossed that the process continues forward without any surprises. I have two more that we are working diligently with the banks to get to the ratification stage and we have encountered properties with multiple offers on them! Each of these sales ARE more time consuming than the average sale but for buyers who are savvy enough to see the value and are patient enough to work through the process they may find themselves with a great new home.
If you are a buyer who is interested in foreclosure properties give me a call. I’m willingly to go the extra steps it takes and work through the process of getting you into a foreclosure property if that is the best deal for you.
| Discussion: 2 Comments »
Northern Virginia Foreclosures-What Don’t You See
March 15th, 2008 Categories: Auctions & Foreclosures
How many foreclosures are there really in Northern Virginia?
This is a question that is getting harder and harder to answer every day. Looking at the MLS will give you some data, not all of it marked by agents in a way that makes it easy to find, the county tax records give you a different set of numbers and then you count the homes that are headed to auction this weekend and not in the MLS you get yet another answer.
So what does this mean for a buyer who is seriously interested in buying a foreclosure property? For most of the clients I talk to it is a matter of timing. We can only look at what is listed either in the MLS or one of the other public foreclosures sources. Obviously looking at the tax records can help identify homes that might be coming into the system in the near future but we have no idea when or at what price those properties may be offered for by the banks and mortgage companies.
For example in Prince William County if you search the Real Property Assessment site for the month of December 2007 between the prices of $200,000-$300,000 you will find 507 sales recorded in the county database. The MLS only shows 134 properties sold in that same period of time and in the same price range. The highest portion of sales was banks “buying” properties as part of the foreclosure process. Now what makes this study interesting is the second part of the analysis.
Checking a few of the properties that were sold back to the banks I then checked the MLS to see if the properties had been listed and if they were what was the list price. I then compared the current list price to what the county records show the banks bought them for in December. Now we start to get a glimpse of the percentages of value that the banks will consider to sell one of the properties. It also gives buyers and agents an idea of how aggressive you can be on your offer price on foreclosures.
| Address | Bank Price | MLSPrice | Status |
|
WINCHESTER CT
|
$167,995 | $114,900 | SOLD |
| 10129 IRONGATE WAY | $181,900 | $119,800 | ACTIVE |
| 10111 IRONGATE WAY | $177,000 | $145,000 | ACTIVE |
| 7813 WEST POINT | $184,500 | $108,900 | CONT |
| 8851 TEAKWOOD CT | $200,000 | $124,000 | ACTIVE |
| 10120 SHILOH CT | $193,500 | $114,000 | SOLD |
Obviously this list is not an exhaustive study there are a lot more properties at a variety of price points to review. Since I am currently working with buyers who are writing contracts on foreclosure properties looking at the price differential is important to determine how significant a difference in price can we expect to have the bank accept. I have one accepted offer now that is 50K below the MLS list price.
If you are considering buying a foreclosure property remember that most properties are sold “as is.” Making sure that you have budgeted not only for the purchase price of the property but the repairs as well is an important part of your consideration to determine whether a foreclosure property is the right home for you.
| Discussion: 3 Comments »
Dealing with Sticker Shock When Moving to Northern Virginia
March 14th, 2008 Categories: Military Relocation
Most people hear the term “sticker shock” and they think of cars. For military families with PCS orders to Northern Virigia the term can also explain their first reaction to housing prices in Northern Virginia. Today’s market has helped lessen that shock but it is still something to consider as you decide whether you should buy a home in the area.
One of the many benefits that the military offers is the VA loan which has made a comeback for buyers in Northern Virginia over the last year. The first thing I recommend to anyone with PCS orders to our area is to verify their BAH rate, this will help you with understanding how much of a payment you might be comfortable making. Then take a look at your VA loan eligibility status. If you are eligible then you should go ahead and request your Certificate of Eligibility (VA Form 26-1880) directly from the VA or most lenders will have the ability to request the certificate electronically as well.
Why have VA loans become popular again? Due to the changes in lending rules a VA loan offers the advantage of a low down payment, no pre-payment penalties, easier qualification and loans are assumable which could be an advantage when you go to sell your home in a few years. In our current market the VA funding fee which had been a sticking point for sellers a few years ago is now just part of making the deal happen, easing the way for a seller to see the benefit of accepting an offer with a VA loan.
Once you have looked at your BAH rates, spoken with a mortgage professional who understands the VA loan process (if you need a recommendation let me know), then you are ready to begin to explore many of the great neighborhoods within commuting range of the many military installations in Northern Virginia. Whether you are looking for a condo, townhouse or detached home there are some terrific choices within 30 minutes of the main gate of base.
You can start your search for a new home in Northern Virginia online to get a feel for some of the local communities. Once you narrow down your search you need an agent who is knows the area (I’m a native) and understands military moves then you may want to give me a call. I’ve walked in your shoes from the Far East to Europe and know what it is like to make a military move. I promise I’ll help you through your “sticker shock” and find a place that you will be glad to call home during your time at Fort Belvoir!
A few communities to get your search started:
Springfield Communities
Kingstowne
Belmont Bay
Aquia Harbour
| Discussion: No Comments »
Slight of Hand-How long has that home been on the market?
February 28th, 2008 Categories: Buyers Corner, FAQ's
How long has that Northern Virginia house really been on the market? That is a question every buyer should be asking before they formulate an offer on a property. In Minnesota one agent has gone on national TV to clearly state that he is manipulating the data in the local MLS to make a home feel fresh. In fact his listings have been on the market for much longer and he isn’t the only one trying this sleight of hand. In Northern Virginia a number of agents employ this tactic and a few others to try and hide the reality that the house has been on the market for awhile by deleting the tax id from the listing.
For buyers who are working with an experienced Realtor® this slight of hand is a waste of the listing agent’s time. However for buyers who have decided to go it on their own this manipulation of MLS data could cost them big time when they overpay for a home. While the average days on the market in Northern Virginia varies slightly between counties and type of property the average in our area has climbed from a nanosecond in 2003 to between 60 to 120 days in 2007 and 2008. So unless a property has been languishing on the market for 6 months or more the fact that it has been on the market for a couple of months shouldn’t shock anyone and isn’t a reason to withdraw it from the MLS and then reentered it five minutes later.
The MLS in our area has two fields that a buyers agent knows to check when looking at how long a property has been on the market. The first is DOM (Days on Market) and the second is DOMP (Days on Market Property). The second field is the cumulative days the property has been on the market continuously even if the seller has lowered the price, changed agents or withdrawn and re-listed the property within 90 days. As a buyer when you are looking at data across various websites you may only see the DOM field and not the DOMP field.
Many times buyers think they will get a better deal if they go right to the listing agent and bypass having their own representation. Not only can an experienced buyers agent help you navigate the correct information in the MLS but guide you every step of the way from finding the right financing, the right home, navigating the complex contract process and make sure that when you get to the settlement table that you have had an advocate protecting your interests.
So if you are starting the process of looking for your new home, make sure you find your own agent. You may save thousands of dollars and a lot of heartache making one of the largest single financial purchases in your life.
| Discussion: 5 Comments »
Northern Virginia doesn’t have the worst traffic in the US but sometimes local and federal politics get in the way of making smart decisions about future road and railway expansions.
For months now there has been a debate in the area about whether to allow private enterprise the option to build HOT (high occupancy toll) lanes starting in Stafford County Virginia and coming north to Washington DC. Having just watched the extension of the metro rail system flounder, flop and die leaving the congestion in the Tysons Corner area to grow worse by the day, the idea of allowing unaccompanied drivers the opportunity for a $1.00 per mile to drive into DC on special lanes is well ludicrous.
Our current HOV (high occupancy vehicle) lanes work well for commuters who are smart enough to realize the value of car pools, van pools and bus rides. However every day as those drivers reach DC they run into the problem that anyone on the HOT lanes will face. Eventually you have to drive over the 14th Street Bridge and so far no one has included in their plan an expansion of the bridge. In London a drive into the city requires you to pay a congestion charge which was instituted to try and cut down on congestion and raise funds for public transportation. As far as I can tell if private enterprise is in charge of this operation then none of the money raised by tolls would actually benefit anyone else who has the smarts to use the HOV lanes, the metro system or VRE.
By creating another way for drivers in our area to bypass public transportation or car pool options government officials are overlooking the long term issues. If the congestion in the area is already creating a bottleneck getting into the city then how are the HOT lanes going to eliminate that problem? Wouldn’t more incentives for the use of public and mass transportation be a better idea? Wouldn’t figuring out more public transportation options be transportation official’s time? If private enterprise has millions to spend why not have them spend it on systems that will be beneficial to everyone and not just those who have the deep pockets of cash to bypass what we already offer in the area.
This is one of those situations where you have to have to say “what are they thinking?”
| Discussion: 1 Comment »
Will This Affect the Resale Value of My Home-Foreclosures
February 22nd, 2008 Categories: Auctions & Foreclosures, Selling Thoughts
Earlier this week I posted “Will This Affect the Resale Value of My Home” looking at the issue with power lines and water towers as possible issues with the resale value of your home. Today I’m going to look at a serious issue in many Northern Virginia neighborhoods, foreclosures and how they may affect the value of your home.
Foreclosures vary from community to community. In some areas you might not be able to tell a home is in foreclosure from any other for sale in the neighborhood. In others you may find signs that announce the property is a foreclosure or see homes that who obvious signs of neglect. So how do you know whether a foreclosure in your neighborhood is affecting the value of your property? One of the key components of determine the value of your home when it is being sold is a professional appraisal. In a neighborhood where foreclosures are few and far between the chances are an appraiser will not need to use a property that has sold as a foreclosure as a comparable property and there won’t be any issue. However in a neighborhood where there have been a signicant number of foreclosures, appraisers have to include those sales in their comps. Most appraisers will try and discount the value of a foreclosure property but where they are a majority of the sales in the neighborhood then they will affect the value of your home.
If you live in one of the areas where there are a large amount of foreclosures you can expect to see a slight drop in your value. It may not always be about lower prices but also about buyer’s feelings about the area. If they perceive the area is showing signs of neglect they will automatically discount the value of your property even if it is in top shape and you will need to make a tough decision about pricing your home to reflect an issue you have no control over.
A secondary affect of foreclosures in areas with HOA and condo associations is the impact of the uncollected dues and fees on current homeowners. Usually before a property goes into foreclosure the owners stop paying their monthly HOA or condo assessments. Over time depending on the number of unit in distress the association’s budgets can take a hit and current owners may end up being tasked with making up the shortfall. As a result association fees rise and that increase in fees may make a property less desirable to a future buyer. Condo buildings are at the highest risk for lower values due to foreclosures as they are often the only comps an appraiser can use.
Foreclosures can affect the value of your home and you need to be aware of what is going on in your neighborhood. A professional Realtor® is the best source of information on how many foreclosures are currently in your neighborhood, how many have sold and current strategies for getting your home SOLD in today’s market.
More information on Northern Virginia Foreclosures
| Discussion: 4 Comments »
Will This Affect the Resale Value of My Home?
February 18th, 2008 Categories: Buyers Corner, Selling Thoughts
Buyers today are often thrown for a loop when they look around a neighborhood and see so many FOR SALE signs. The sign riders advertising foreclosures or short sales don’t help. However in the case of some buyers it has nothing to do with the home values in the neighborhood, they can see past the market today and know that in the Northern Virginia area prices do recover. What throws them for a loop is whether the large utility right away, electric poles and water towers will affect the value of their home when they go to sell.
My answer is always YES. Now some may disagree with that answer but if a buyer is asking the question today, then other buyers will ask the same question when the house comes up for sale again in the future. Given a choice to buy a home without the power lines running through the backyard or not then I will always advise a buyer on the side of NOT. Now if the poles can only been seen in the dead of winter perhaps there is another answer but when they are what you will look at 365 days a year. NOPE.
Today while looking through a neighborhood with plenty of options on homes for sale I came across a home that made me stop and wonder, how will they be able sell the property in the future? Perhaps the developer made them a deal they couldn’t refuse, perhaps they thought that during the next big drought they would have a secret stash of water or perhaps they didn’t have a Realtor® looking out for their best interests. Whatever the reason their resale value has a big red question mark around it.
So buyers if you are out driving around a neighborhood and see a home that catches your attention, stop and look carefully around you. If what you see is something you can fix then keep the home on your must see list. If what you see is something that you can’t change like a power line or water tower then you might want to consider another property.
If you aren’t currently represented by a Realtor® and are interested in learning more about buying a home in Faifax County, Prince William County or anywhere in Northern Virginia give me a call. I’ll help educate you on the home buying process, what to consider when buying your home and protect your interests both for today and into the future.
| Discussion: 4 Comments »
You have decided that you need to sell your Northern Virginia home and are wondering how can you make your home standout from all of the other properties listed for sale.
If you haven’t read the first two parts of “If You List It They Will Come” you should start there:
If You List It They Will Come-Getting Your Home Ready
If You List It They Will Come-Pricing Your Home to Sell
If the Realtor® you are talking to suggests that all you need to do to get your home SOLD is list it in the MLS and buyers will come running to your house, then once again you need to show them the door.
Today’s buyer is internet savvy! It doesn’t matter what source you read they all tell you the same thing. Over 80% of today’s home buyers search for a home on the internet. The variety of sites and tools available make it easy for a buyer to browse from the comfort of their own home, on their own time and at their own pace. Many buyers spend months on-line before they ever contact and agent to represent them.
So how do the Realtors® you are talking to get your home in front of the most buyers? First and foremost you need to make sure they have an active and current website that has your listing available. Second you need to find out how well linked is their website to other websites that showcase listings. Links to sites that are not about showing your home on line are of little value to you. You want someone who is surfing the internet to find your home on as many real estate listing sites as possible.
Does the Realtor® you are considering work for company that has a presence outside of Northern Virginia? Not everyone looking for a new home already lives in the area. Making sure that your home can be found on national websites such as RE/MAX.com and Realtor.com are critical to making sure you home is seen by buyers no matter where they currently live.
Will your listing have its own URL and will that be featured on a sign rider in front of your home making it easy to find on the internet?
(click sign to go to listing)
Will the agent upload multiple good quality photos of your home as soon as it is active in the MLS?
How often are the websites and MLS updated to keep your home in front of buyers?
Does the agent maintain one or more real estate related blogs where they write about your home?
It goes without saying that your home should have color brochures available on day one and professional signage in the front yard. Each home has individual needs and depending on your home their may be other options such as coverage in the local press, featured home status in Friday Home Guides and more. Make sure that the company that the agent works for spends significant money on national advertising to bring more people to their website and more leads to their agents.
So as you consider all of your options for picking a Realtor® to list your home make sure that the internet is a large part of their strategy. Today’s buyer is online and your home should be too.
Be like one of the good citizens of the great state of Missouri and say SHOW ME!
If you are getting ready to list your home this year give me a call. I’ll be glad to show you all of the ways I work to get your home in front of as many internet savvy buyers as possible. With a personalized marketing plan for your home and the Power of RE/MAX we can get your home SOLD!
Stay tuned for Part IV. My Home is Listed Now What?
| Discussion: 2 Comments »