short-sale

Home buyers need a plan, and be ready to pull the plug…

It has taken a couple of months, but you are now walking up the stairs and into your new home. It’s actually a little bigger than you thought and you can’t wait to paint the kitchen, replace the carpet, get the FiOS set up, and turn in the keys at the old place. Maybe even take a dip in the pool!

Nice story, but this is the type of mental image that I want my home buyer clients to have in their minds before we start looking for houses. Setting a goal is important and visualizing the ideal or “perfect scenario” makes it  seem a little less intimidating.

Home buying is a rough sport at any level:

• first-timers
• move-up
• retirement (move-out).

The primary complaint that I hear from today’s home buyers is… there is nothing to buy! Well, there are homes to buy depending on the region of the country you are in, and many of those homes may be short-sales (where the seller is asking the bank to forgive his loan for less than he owes) or foreclosed homes (a bank is the owner and seller). In either case, these homes may have issues like needing a lot of updating or fixing up, being sold strictly “as-is”, or the sale is a long-shot to ever get to settlement.

Even with the $8,000 first time home buyer credit, a home that needs all new appliances or carpeting isn’t that attractive. And a first time home buyer may understand why some homes went into foreclosure, like homes overlooking the Beltway or backing to an industrial area. And many people feel uneasy about buying anything for $400,000+ strictly “as-is” – yes, they ain’t fixin’ nuthin’.

Okay, these scenarios may have scared some of you away but for the person looking for a good home at a discount (from even 1 year ago) and a mortgage rate around 5% then this is the perfect opportunity. Yes, the affordability index is off the charts.

I tell clients to not get emotionally attached to any home until we have completed the home inspection. This is always a contingency included in my client’s offers because our contract specifically states that “the Purchaser may void the contract” after the inspection. It is make or break time… we have a contract, is it still worth it? If not, then we submit the notice to the Seller declaring the contract void and the home buyer is back looking for better options.

By having a clear picture of what you want the end to look like, making the decision to move on to another home will be much easier.

short-sale

3rd Street in Herndon, Virginia – bought!

This 4 bedroom, two car colonial wasn’t your typical short sale in Herndon, Virginia… it was much better!

Lots of space, finished lower level, big bedroom sizes. But it took a lot of work, time, patience, and a couple off-hand prayers. Took about 2 months (fast) but almost 30 days without any response to the offer! Bought in 2009.

My thoughts on the short sale process are further expressed here…

short-sale

A short-sale success story… another home sold

I managed to get another home sold as a short-sale last week for a buyer client. This one was in Herndon and is a pretty big house, but it was grueling for my clients as information came super-slow from the other side. Honestly, the whole set up stinks because everyone (buyer, seller, agents, inspectors, and even the attorney’s) are working at the whim and discretion of the bank which can reject the whole thing at the last minute.

A few month’s ago I put together a post on real estate short-sales and what to expect, but now feel that it takes a tremendous leap of faith from everyone involved to get one of these done. I believe that these clients submitted three short-sale offers before getting this home.

Here are my random musings…

short-sale

It takes more than the crystal ball to understand real estate

Are you still looking into that crystal ball?

You know, like when you were searching for the bottom of the market, the lowest interest rate to refinance, or if the economy is sending a signal of a turn around.

In the April 27^th issue of BusinessWeek, there was an article titled “What Good are Economists Anyway?” that really put the screws to high-profile economists for missing the current downturn in the world economy and housing sector. BW can pick some hot topics, but I feel it is probably better for everyone to get out the crystal ball to look at the future instead of the mistakes of the past.

Many real estate web blogs are filled with dry statistics provided by the local MLS, Realtor Association or RealtyTrac. These are very important to economists and real estate obsessed nerds, but ask the average home buyer who is actively searching for a home or home seller waiting for an offer and then you will get a different picture, quickly.

Every market across the United States, such as Northern Virginia, Austin, Chicago, Las Vegas,  Phoenix, Portland,  San Antonio, San Diego or Seattle, has a set of distinct personalities. In addition, these personalities can seem schizophrenic to an economist sitting in an academic setting. While the market in Phoenix or San Diego may be losing value, simultaneously the Austin market may be seeing slight price appreciation. That is why real estate will always be local, almost neighborhood by neighborhood specific, and invisible to interpretation by celebrity economists.

Over my past 18 years in the business, I have met agents from all over the country traveling to training events in Seattle, Denver, Austin, Boston, Atlanta and Philadelphia. And I do my best to touch base with that network to give me insight that may benefit my clients here in Northern Virginia. The data may be not as academic as what you see in official reports, but should be an excellent peek into the “ground-floor” of the real estate business.

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