Archive for July, 2009
Leave it to Jon Stewart to come up with another look at the housing market. Guess he doesn’t qualify for a short sale!
| The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
| Home Crisis Investigation | ||||
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What’s All the Fuss About the New Appraisal Rules?
July 30th, 2009 Categories: Real Estate Ramblings
It seems like every day an agent is screaming about a low appraisal that has derailed a deal. Yet I wonder if we added up all of the settlements that have taken place since the new HVCC rules had come into play and then asked for the number of settlements that had appraisal issues, we would find the total percentage to be low.
Let’s face it in many areas our markets were highly over-valued. Yes I know a lot of homeowners are in a rough situation right now but weren’t home appraisals part of the issue? One day a home was selling for $400,000 and two weeks later the same house sells for $425,000 with no questions about the value? Weren’t appraisals part of the problem then as well? Certainly money was fast and cheap but if appraisals hadn’t been allowed to run up unchecked, would we be in the same spot with significantly lower values in some markets?
I’ve closed 16 transactions this year and not a single appraisal problem. As a listing agent I watch offers carefully and look for signs of an agent who is trying just to “win the deal” and then hope for a low appraisal. How many buyers have been surprised when they discover the home they only wanted to pay $200,000 will indeed cost them $215,000 because their agent told them “it will never appraise.”
Regulations that protect home buyers will always be a good thing. Let’s not blow the new HVCC rules out of perspective. Appraisal concerns were around before the new regulations and they will be around when this set of rules is replaced by another. It’s just the way it is!
This post originally appeared on my Active Rain and generated a good deal of comments. I’ve included a link so you can see what other agents had to say. They didn’t all agree with me and that is okay. Since this post I’ve had two more appraisals come back with no issues.
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In our current market in Prince William County, inventory is low and multiple offers are fairly common. When you are dealing with REO properties it isn’t unusual to see the MLS comments say “multiple offers submit highest and best by today at 5PM.”
There are some agents who take the attitude this means make an offer that will dazzle the seller. Offer them a price that makes them salivate and then when the appraisal comes in low hit them up for a price reduction. By then three weeks of marketing time have been lost and the seller has probably packed their bags and is ready to go. They lower the price just to get the deal over with and never realize that they’ve been duped by an unethical agent and savvy buyer.
Recently one of my listings received 8 offers in 48 hours. As I sorted through the offers to present to my clients it was obvious that there were a few of the dazzle offers in the pile. No matter how many ways I looked at the comps I couldn’t justify accepting an offer that I knew wouldn’t fly. My clients listened carefully, reviewed the numbers and agreed. We accepted a solid offer, with approved financing that was very close to the list price.
If you are selling a home in Northern Virginia and you see an offer that is too good to be true, it probably is. The highest offer is not always the best offer. Make sure you know the potential pitfalls of accepting an offer that dazzles you instead of one that can realistically get to closing intact.
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There is new term floating around the sagging housing market these days.
Strategic Foreclosure homeowner’s who can’t refinance due to lack of equity, have ARM’s scheduled to reset in the near future and who have assets in the bank. They don’t qualify for any government program, don’t qualify for a short sale and see no way out but to pack up their home and walk away.
These are not the typical homeowner’s lenders and the media have focused on but the homeowner’s who qualified for their home loan, put money down on their home and have been making their payments. A recent Wall Street Journal Blog found that once the value of a home fell by more than 15% the number of homeowners would simply “walk away” increased.
It becomes a financial choice to leave behind a home that will not regain it’s value in the next 7-10 years. They are aware of the impact on their future credit but when they weigh the impact of bad credit versus holding onto what is left in their retirement accounts the choice becomes clear.
Lenders (and the government) don’t seem to realize that these are the clients who are helping to add profit to the bottom line. These are the homeowners who if they were given an equal opportunity to adjust their mortgage and mortgage balance could afford to sell in a few years and have the money to buy a new home. Something our current market is missing, the move up buyer.
Keep an eye on the numbers over the next few quarters. Listen for the lenders to start talking about homeowners who are walking away not because they have to but because they can. This could be a far bigger tsunami than the initial wave of foreclosures in 2007.
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Often as agents we are ask to justify how we earn a living. There are a variety of ways you can hire an agent. Either a “flat rate”, an hourly consulting rate or a straight commission (always negotiated and never set.)
Not all agents are the same and sometimes when you see an ad such as this one you have to realize that hiring the cheapest agent in town may not give your home the top notch marketing it deserves.
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Will this appear in future law text books?
Really….dumb!
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More and more we hear buyer’s (and agents) complaining that all they can find for sale in Northern Virginia are short sales and foreclosures. But is that really true? For most of the first half of 2009 anyone searching through the Northern Virginia MLS quickly found short sales dominated the listing categories. In Prince William County which many in our area used to refer to as foreclosure ground zero the number of foreclosure properties listed in the MLS has dropped dramatically.
Prince William County Real Estate Market
Yet when you search the MLS you find that the majority of properties listed for sale are regular sales. So what is the issue? Is it a matter of price point that makes the difference for buyers to find a regular sale? Turns out the answer is NO. Our market seems to be dominated by first time homebuyers hoping to take advantage of the current $8000 tax credit and the competition for lower priced properties is fierce. Yet 32% of the properties below $250,000 are NOT short sales or foreclosures and overall in Prince William County 64% of the active listings are NOT short sales or foreclosures.
So what gives? Have buyers been seduced by the media that says the best deals available are foreclosures and short sales? Has anyone noticed the new construction properties with deliveries available in the next few months available below $250,000? My buyers in the last two weeks have snapped up two regular sales and one new construction property with absolutely no hassles or any other offers!
If you are a buyer in the Prince William County market you may be missing out on a great opportunity. While you sit and wait on what seems to be a bargained priced short sale or figuring out how to pay for the repairs on a foreclosure, a regular sale a block away is just waiting for an offer. With strong negotiations you may find you have saved yourself time and money by dealing directly with a seller. Don’t be seduced by the media that wants you to believe that the only good deal is a distressed property. There are more regular sales on the market than short sales and foreclosures combined. Take a look you might be surprised at what you find.
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Local Marketing Reports-How Do You Know What’s Right?
July 8th, 2009 Categories: Real Estate Ramblings
There is one thing about data you can always count on. Two people can look at the same set of data from the MLS and come up with two different interpretations.
Yesterday I pulled up a search of a West Springfield (VA) neighborhood to update a market report and community profile. I ran a CMA and found 12 closed detached homes in the neighborhood. The average sales price number was $446,223. Today I re-ran the numbers and discovered another property had settled yesterday. The sales price of the property was low and as you would expect the new average sales price number for the neighborhood was now down to $432,283.
Another local agent just reported an entirely different set of sales numbers and suggested that home sales prices were up in this West Springfield neighborhood over last year. No matter how many different ways I ran the numbers, I couldn’t get the data or the average sales prices to match their calculations or to see a positive trend in the sales prices.
So how do consumer decide who trust or what set of numbers to believe? Either one of us could be right or we both could be wrong. You have the abililty to look over sales number provided directly by the local Northern Virginia Association of Realtors for general trends. Though these numbers aren’t broken down by neighborhood they can be viewed by zip code. If the average sales prices in your zip code are down by, in this case 13%, then chances are the average sales prices in your neighborhood are still on the negative side as well.
If you are looking to buy or sell a home and you see a market report that catches your attention by all means you should ask the agent (s) to bring the full set of the data they used to come up with their numbers. See if they look right to you before you decide.
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If so you must be a Virginian.
I’m sorry to say that according to Martek, a company which researches brain health and creates DHA based products, reported that Virginia ranks #27 on the list of brain healthy states.
Ouch! The number one place for brain health is, drum roll please….DC.
This could be the fodder for late night talk show host and comedians throughout the world. Sometimes when you run across these little bits of news, you have to wonder how much did this study cost and even more importantly who cares?
So Virginian’s try and get more sleep, eat better and don’t let the news that we are cerebrally challenged ruin your day. I’m not…now where did I leave my keys?
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