Mar 22, 2011
As the foreclosures continue to mount up in the market, their selling prices are negatively affecting value across the whole market. It is predicted that 40% of all sales this year will be some type of “compromised” sale and currently 23% of all the houses on the market are compromised, meaning either bank owned, short sale (current loan is greater than selling price) or sale by a large lender like Freddie Mac, FHA, Fannie Mae or the VA from their foreclosed inventory. The sale of the “compromised “ properties is driving prices down because they are selling in a range of 8-20% below what the average sellers want for their homes. Simply put, the foreclosures are pushing prices down for everyone.
It is simple supply and demand. The companies that are selling the “compromised properties” are getting them ready for the market with new carpet and painting. They are making them very competitive.
Currently, in each price range, what is selling is in the bottom 8-15%. I personally think that 70% of all listings get eliminated on the internet by price alone. It is a bottom up price wise search. If you can buy what you want in the bottom 10% price wise of the market, then you never even look at the other homes that are listed.
There was a time when the appraisers did not consider foreclosure properties as “arms length” transaction. This is what we were taught as a standard practice, but when the foreclosure properties become the market, they must be considered. Appraisers are having a difficult time justifying sales values outside of and above the foreclosure market sales. This can result in an appraisal lower than a market sale, which can put the deal in a tail spin.
The most contentious part of this is that review appraisers or loan officers/underwriters also adjust values. That is where we really have a problem in the market, when the loan company wants to set values. It is a very interesting real estate world right now! Actually, we are selling more this year than last. We can help you through this mess, call us. “We’re always open…online” at www.CallCrossRealty.com.
Feb 23, 2011
News flash! Cross Realty had a new listing that sold in 14 days! Average selling time is about 120 days; not counting how many times the home was listed with different people or renewed as a new listing. So why did this home sell so quickly? Price, location and price range. It sold under $200,000, was in a highly sought after area and was simply priced right.
The most important fact is PRICED RIGHT. The homes that are selling are priced to be in a range that is very competitive as compared to other homes in their “selling zone”. This is in the bottom 12-18% of the market they are competing with. If you want to sell that is what you have to do.
Last week I heard that a seller was throwing in a Time Share at the beach with the sale of their home. That is creative; we think we will see more of this. A Lowes gift card for carpet or landscaping is another idea. Its time to think outside of the box! Oh, to be a buyer in this market! Lastly, interest rates are predicted to creep up over the next few months. Today the rate is 5.04%. This will probably be in the middle 5% range soon. It’s a great time to buy! We’re Open on Saturdays!
Jan 24, 2011
The year ended better than we anticipated, but we still have a long way to go to get to a balanced market. Current predictions are more of the same. The twist is that the people who make the predictions are now adding, “We just do not know with any certainty”. If the economy does not improve, then we may see more erosion in property values. Our area nationally has held up pretty well, but we have some challenges coming up in the downsizing of our military forces overall.
If you are a buyer, it may not get much better than this: Great Inventory, Good Rates, and Good Prices. If you are a seller, you must understand your competition, the absorption rate applicable to your property and your property must be in great condition. There is a “selling zone” for almost all the price ranges, it may not be what you are willing to accept, but it is what you need to do to sell. The Cross Realty Agents can help you understand this. Personally, I am over the snow, bring on some warmer weather! How can we help you in 2011?
Harry L. Cross, III
Dec 20, 2010
Happy holidays, remember there is a reason for this season!
What does the real estate market need to get to stability? Time!
The market needs to work through the large number of foreclosures and that is going to take time, probably 36 months, but it is all about the economy. If you ever thought of buying an investment rental, now is a good time to do it, we can manage it for you.
There is a portion of the market that is selling. It is the homes that are priced where the demand will absorb them. This “selling zone” is in the bottom 15-18% of the price range of a property’s competition. We can show you where that is, but you are going to have to decide to go there to move your property.
In this Christmas season, I wish for you the joy of the season, good times with family and friends, special church services, Christmas songs and a visit from Santa. Take a few minutes to recall your best Christmas memories and make some more.
We wish Peace on Earth to all people of all nations and all religious beliefs. Let us be part of that peace making as a daily mission. May the true spirit of Christmas be yours this year and all year long. God bless you and all your family.
Merry Christmas from all of us at Cross Realty!
Have you seen this surprise Christmas Event at the shopping center? You will love it, Enter the link in your browser to view: http://www.godvine.com/Flash-Mob-Surprises-Everyone-by-Singing-Hallelujah-in-the-Food-Court-90.html
Nov 30, 2010
Realtors say today’s top-value home improvement project is a front-door upgrade. Return on investment; up to 130 percent. Siding, roofing, landscaping, & other curb-appeal improvements also rank high in getting a home sold faster. Inside, carpeting and paint should be fresh. “Take away those pain points for the buyer,” says Julie Reynolds, senior director at Realtor.com, “and remember that Web appeal is the new curb appeal.” Nine out of 10 buyers search online and spend 12 weeks looking. They look at 12-16 homes in person.
From September 2010 issue of Better Homes and Gardens
Nov 23, 2010
One phrase that has become part of the American vocabulary is “short sale” – but what exactly is a short sale and how does it work?
“What is a short sale? Homeowners are ’short’ when they owe an amount on their property that is higher than the current market value. A short sale occurs when a negotiation is entered into with the homeowners mortgage company to accept less than the full balance of the loan at closing. A buyer closes on the property and the property is ’sold short.’
Why can’t I just let my home go into foreclosure? You could, but there are many negative connotations for going into foreclosure.
- If you have a Fannie Mae loan, they may seek a judgment against you to get the loan paid off.
- You will also be ineligible for another government-backed loan for 5 years.
- Your credit score will be negatively impacted for more than 3 years by as much as over 300 points.
- A foreclosure will remain on your credit history for 10 years.
- A foreclosure is the most challenging issue against a security clearance outside of a conviction or a serious misdemeanor or felony.
Do I need to write a hardship letter? Yes, it is required by every lender. Be specific about your hardship. Tell them about major events in your life that would affect your ability to stay current such as a job loss or an illness or death.
How do you, my listing agent, get paid? Who pays your commission? The bank will pay the commission along with all the other usual closing costs.
I want to do a short sale and I have a 2nd mortgage, can I still do it? Yes, both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender. Many short sales do involve 1st and 2nd mortgages.”
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