Archive for April, 2009
House Flippers-Do You Know About the FHA 90 Day Rule?
April 29th, 2009 Categories: Buyers Corner, NOVA Foreclosures
You just got a great deal on a foreclosure or short sale property in Prince William County. You brought in your crew to renovate and now it is ready to go back on the market. But who can you sell it to?
Recently my buyers have encountered two properties in Woodbridge that were pristine and within their price range. They were excited and ready to write an offer. However both properties were flips and didn’t qualify for FHA financing.
Since a large percentage of buyers in our area, especially at the lower price points are using FHA loans those newly purchased and renovated properties are not available for them to buy. When you look back at the month of March of the 750 properties sold in Prince William County 257 of them were purchased with FHA loans. So close to 1/3 of the potential buyer pool in the county can not purchase a flip.
Even though the FHA changed the rules last fall to provide relief for lenders handling foreclosures it does not cover individual “flippers” who purchase properties to rehab. In an area such as Woodbridge this can be a surprise to both the investors, listing agents and prospective buyers.
As an investor it is something that you need to consider before you decide that it will be easy to make a quick buck on a flip. Your pool of prospective buyers may be a bit smaller than you thought.
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Searching for additional information on pre-foreclosures, foreclosures and auctions in our MLS system is about to get easier. Or at least that is what the latest news flash from MRIS says. A new partnership with First American’s Realist will provide MRIS subscribers with access to a Foreclosure Activity Search Tool (FAST) directly linked to our system.
Per the MRIS site the tool will provide us with access to:
“Pre-foreclosure – identifies homes on which lenders or other parties have begun the default against delinquent property owners. This can help you locate short sale opportunities.
Auction – identifies homes that have an auction date to sell the property as a result of a default and foreclosure related proceedings. This can help you locate investment opportunities.
Bank Owned/Real Estate Owned (REO) – identifies properties currently owned by a bank, lender, or other financial institution due to a foreclosure-related proceeding. This can help you locate listing opportunities. “
Today I ran a search using the tool looking for pre-foreclosures in Lake Ridge and found a list of 33 properties. The next phase is to determine whether the pre-foreclosure properties are already listed in the MLS as short sales. At first glance the spot check I ran did not find these properties in the MLS.
It will take a little more investigation to determine how best to use this information for my buyers. Any leg up to help buyers into today’s Prince William County real estate market is helpful!
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Housing Inventory-More Questions Than Answers
April 23rd, 2009 Categories: Buyers Corner, NOVA Foreclosures
For anyone following my posts recently knows that I have been keeping an eye on the inventory, especially Prince William County, to see what might be coming next.
My first post pondered why the Prince William County housing inventory numbers reported in the MLS and by others was significantly lower than the previous quarter. The second showed some of the issues buyers were facing with the low inventory. Bidding wars in Prince William County started again resembling the hot market in 2002-2004.
Now Housing Wire has reported a number of critical numbers. Per Housing Wire the foreclosures decreased 77% in December and 79% in January from the previous quarter. During the same time period the number of loans that reported as 60 or 90 days delinquent increased 47%. Now these numbers are nation wide and don’t reflect only local numbers. However the Washington Post this week had 14 pages of Trustee Sales that have to end up somewhere and that somewhere is usually the MLS.
Even without a crystal ball it would seem that unless a significant portion of the delinquent loans are modified that there will be more foreclosures coming on the market in the next quarter. So the question becomes for those of us working with buyers at the lower end of the current Prince William County market should we advise them to wait and not get involved in the bidding process or move ahead and deal with the stress the current market has created?
March inventory numbers in Prince William County
March Prince William County Inventory Numbers
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Is the Market About to Be Flooded with Foreclosures….Again?
April 20th, 2009 Categories: NOVA Foreclosures
Last week in in a post entitled “PW County Inventory-What’s Missing from our Numbers I questioned the market reports that suggested that our local market had made a positive turn with significantly lower inventory. Since most of the larger banks had put a moratorium on foreclosures last fall we could see the impact in Prince William County. Inventory decreased, bidding wars started and houses flew off the market.
Now the floodgates of foreclosures appear to be ready to open again. And this time some analysts are suggesting up to 700,000 homes could be in this next round of foreclosures.
“J.P. Morgan Chase & Co., Wells Fargo & Co., Fannie Mae and Freddie Mac all say they have increased foreclosure activity in recent weeks. Those companies say they have lifted internal moratoriums which temporarily halted foreclosures.” WSJ 4/15/09
Driving around neighborhoods where foreclosures have been prevalent in our area you can find houses that have been sitting empty for months. You can only imagine what might be lurking inside a property that hasn’t had water, electricity or gas on for the entire winter. Recently while completing a BPO I found a home that had obviously become party central. The home was littered with empty beer cans, cigarette butts and other unmentionables left strewn throughout the house.
Are these numbers real? Only the lenders know how many homes they have been holding during the moratorium. However we have to be realistic and expect that later this spring we will see an increase in the number of foreclosure properties hitting the market in Northern Virginia. Hopefully it won’t bring significant price decreases in prices to some areas that were starting to see a slow recovery.
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Choose Your Agent Wisely. There are Plenty of Them Out There!
April 18th, 2009 Categories: Buyers Corner
If you are a first time buyer it can’t be said enough times that you need to have an agent on your side. You also need to make sure you find an agent that is looking out for your best interests and not in a hurry to make a sale….any sale.
You will find plenty of agents who tout their years of experience or a designation that suggests that they know more about helping buyers than another agent. But the bottom line is are they working for you?
What you need to do is find an agent you are comfortable with. You could be spending hours, days or weeks of your time in a car, touring houses and negotiating contracts with your agent. If you aren’t a good match your house hunting experience could turn into a dreadful nightmare.
If you are looking for an agent to help you find the right home in our current market give me a call. Let’s go for a test drive and see if I’m the right agent to help you find your next home. Don’t worry you won’t find a pushy salesman behind the wheel!
| Discussion: 3 Comments »
A year ago the market was ripe for buyers to try and negotiate the deal of the century with REO properties. Fast forward to spring 2009 and the chances of getting a lowball offer accepted are quickly becoming history.
The market in Northern Virginia especially in the Prince William County has shifted and instead of decent properties sitting on the market for weeks or months they are snapped up in days, most with multiple offers. For buyers who are still thinking that the opportunity to make an offer 10-20% below list price is a good idea you should seriously reconsider your plans. Lowball offers aren’t even a consideration on most properties.
A recent search through the MLS and personal experience with buyers has proven that if you snooze you lose. For example in the Lake Ridge area 50% of the townhouses that have sold recently have sold for ABOVE asking price!
The usual cautions are in place when buying a foreclosure. You are buying a property “AS IS” and this means that though you can have an inspection for information purposes only. As a buyer you are going to be responsible for having the utilities turned on, the home de-winterized and pay for any repairs that need to be made to the property. All of which factor into the price you should pay for a new home.
If you are looking at purchasing a new home in the lower price brackets (under 200K) this spring in Prince William County make sure you have talked to a local lender and gotten your pre-qualification ready. Have enough money in your checkbook to write a small earnest money deposit and be prepared to act fast.
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Let the Bidding Wars Begin Again in Prince William County
April 12th, 2009 Categories: Focus on Prince William, Local Market Updates
Have the prices in PW County (VA) finally hit bottom? Have the lower interest rates sparked new interest in home ownership? Has the $8000 tax credit finally gotten buyers off the fence?
Whatever has happened the bidding wars to buy lower priced properties in Prince William County are back and going to strong. Look at this list of current list to sales prices for townhouses in the Lake Ridge neighborhood.
List Price Sold Price
$87,900 $125,000
$97,900 $135,576
$119,000 $128,000
$128,900 $145,000
$125,900 $150,000
$139,900 $159,900
$139,900 $160,000
$149,900 $160,225
$144,900 $175,000
This past week I spent a good deal of time searching for properties for a buyer and one property on our must see list have 5 offers on it in 3 days and another one had 15. In the agent remarks we see the comments “multiple offers received”, “best and final only”, “contracts sent to the lender” and “no more offers being considered.”
The good news is that this is going to have a positive impact on prices this spring and we should see the list prices for foreclosures start to be more in line with true market prices. This will help “regular” sale and possibly short sales as well. It also means if you are a buyer you need to have your mortgage paperwork in order and be ready to make an offer on the property you want.
Lowball offers are dead!
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Military Families-Help if Your Landlord Defaults on Their Mortgage
April 6th, 2009 Categories: Military Relocation
The current real estate market in Northern Virginia has proved a rude awakening for some military families stationed at Fort Belvoir or the Pentagon who signed a lease in the last year. Landlords with adjustable rate mortgages or too many speculative properties to handle are collecting rent and not paying their mortgages. The result? A surprise knock on the door for the county sheriff with an eviction notice for the tenants.
If you are a family stationed at one of the military installations in our area you may find some relief available for you from the Servicemembers Civil Relief Act. Not many service members know that under section 531 in the SCRA anyone looking to evict an active duty service member from a rental property that is their primary residence must have a court order. Strangely enough this applies to rent that is less than $2831.113 per month. Where that number came from is a mystery but in our area that covers a significant number of leases. Service members can apply to the court to stay their eviction or reduce their rent until their case works its way through the legal process.
As of July 2008 service members who are being forced to leave their rental property due to foreclosure can apply to their base legal services and transportation office to seek financial assistance with their move. In addition to the assistance you may find through your base you can also seek “cash for keys” from the lender who is foreclosing on the property.
Recently a family stationed at Fort Belvoir that I had placed in a rental last year on a multiple year lease got that surprise knock on the door. Through some research we figured out the brokerage who would be handle the foreclosure listing and were able to assist them with “cash for keys” opportunity that provided them some money to help with their move. They are currently working with their transportation office to see about assistance with additional moving expenses. If you are active duty military family stationed at Fort Belvoir or the Pentagon, RUN to your local legal office if you are notified of your landlords impending foreclosure.
Some lenders have been providing the opportunity for tenants to remain in foreclosed homes until the end of their lease. If you are lucky you may find that you can stay put but if not hopefully this information will help you defray some of the costs associated with a mid-lease move
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