Archive for the 'opinion' Category
2009 Real Estate Market Predictions
November 10th, 2008 categories: opinion
The most asked question of the hour is, “What is going to happen in this market in the next year?”
I read a terrific article by Elizabeth Weintraub this morning that laid her 10 predictions of what will play out in the next year. A few of her ideas I found interested that will play out over the next year were…
- There will be little or no home appreciation as prices bottom out.
- Housing inventory will fall.
- Banks will rent out REO’s (very interesting).
- Banks will pursue foreclosure options over loan modifications.
- Mortgage interest rates will spike.
- READ THE WHOLE ARTICLE HERE.
Are You Missing Payments On Your Loudoun Home? What Is A Short Sale?
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Why Waiting To Sell Your Home In The Spring Will Cost You Thousands!
October 27th, 2008 categories: Sellers, opinion
The kids are back in school, the weather is cooling down, the holidays are quickly approaching, and the last thing that you want to do this time of year is to pack up your home and move. You are probably thinking about unpacking this time of year… The box of winter clothing and the Christmas tree.
But if your plans include selling your home in the next half of year and you are waiting for the exciting spring market… you could be loosing a lot of money while you wait. Let me show you what I mean.
Below are the home sale stats for Loudoun County in 2007 which was during a declining market. Notice, that during the spring there are many more homes that sold compared to October. Now, look at the 2008 stats.
If you would have placed your home on the market to sale in October 2007 you would have had less of chance to sell it since less homes sold during that time period than compared to April of 2008 (THE SPRING MARKET). However, if you would have sold it during October of 2007 you would have netted an average of $40,000 more on your home! Some would consider this worth moving during the holidays for.
In other words, don’t confuse more activity in the market with higher prices. You must remember that currently we are in a declining real estate market. Though there are months that are more favorable to sell, the prices are rarely increasing making the current time (whenever that is) the most favorable time to sell your home.
There is another reason to move during the fall and winter… Less competition since fewer people try to sell during this time. If you are considering selling in the next 6 months I would encourage you to consider going against the flow… Set yourself apart from others and give yourself a chance to net more money than you will in the spring.
Stat charts where created by daar.org.
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Short Sighted Real Estate Practice Will Ruin This Market
October 14th, 2008 categories: opinion
Our local MLS (the online housing directory) is a service provided to Realtors and home buyers to help them see what homes are for sale and what homes are NOT for sale. When a home is no longer “for sale” yet still has an active status in front of it, this service is no longer a service but a hastle since you homes are not accurate in their description.
This is exactly what is taking place in our current real estate market and what is causing much of the housing issues. Homes classified as SHORT SALES are homes that a seller is seeking to sell for less than they owe the mortgage holder. To do this, they many times need a contract first to convince the mortgage holder to accept less than it’s value. The problem is that many Realtors are recieving offers on properties that home owner agrees to, yet leaves the MLS status as ACTIVE in the computer. Under a traditional sale the home would be considered UNDER CONTRACT so that potential buyers do not waste their time viewing the home while it is not available.
For example; Jan and Will have the money to purchase a home and want to be in to one in a couple months. They begin their home search online but find that many of the homes are under a SHORT SALE status but still appear available. They speak with their Realtor and plan a trip to visit 5 homes on a Saturday. After viewing the homes the come back and decide that they want to purchase home #3 which is a short sale. They send in a contract and begin the waiting process. They understand that the bank will take some time to respond so they hold their breath. After a month of waiting they get a call from their Realtor who tells them that their home has been beat out by another offer that came in. They wonder what happened only to find out that the listing agent never stopped marketing the property for sale and now they have wasted a month and only have 1 month left to find a home.
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Are We Headed Towards Another Depression ?!$?%?
October 10th, 2008 categories: opinion
What an incredible day we are living in…
Within minutes of the markets opening this morning we had already taken another 700 point hit! Inside we all wrestle with what to do and our hearts are filled with fear. To help with your perspective I wanted to share with you an article by a very smart guy who understands what is going on a little better than the rest. This article is from Dr. Richard Marston from the Wharton School of Business.
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Let History Not Repeat Itself
October 6th, 2008 categories: Real Estate News, opinion
This past week our country made history. We saw one the largest decreases in stock value we have in years and our government signed a 700 Billion Dollar Bailout plan to keep our economy from sinking any further.
I spoke to many lenders, Realtors, and spectators during this time and ultimately came to the conclusion that other than the government not too many people knew the implications of this bill. You begin to get the feeling that you are on a plane and hear a loud noise. Everyone knows that something bad is happening but all you are allowed to know is that you can’t leave your seat and the stewardess is going to bring you a complimentary Pepsi while acting like all will be fine.
To assist with all of this co-motion the elections are taking place with both sides magnifying the issues and acting as if these issue would have never happened under their guidance. The truth is, these issues are bigger than that last 8 years of George Bush. Don’t get me wrong, this current administration has way overspent. Nevertheless, it was the Clinton administration that re-emphasized the sub-prime lending market to get low income families in to homes they could not afford.
I remind us of this because the finger pointing is out of control. Both parties have created this issue and we as the American people have created this issue. WE HAVE OVERSPENT. Government doesn’t force us to run up credit card bills or buy homes. Our greed has gotten the best of us and now we need to fix it no matter who takes office. Remember, government if supposed to be FOR THE PEOPLE.
There have been steps in that direction this year. It is much tougher to get a loan now than it has been in the past. This makes my job more difficult but overall creates a stronger economy. This is a time for American maturity. This is a time to take responsibility for our debt. Maybe you don’t need a bigger home. If you can afford your mortgage payments- PAY THEM. Stop walking away and making everyone else clean up your mess. For those who walk away from mortgage payments they can afford, there should be steep penalties and restrictions on them purchasing again.
We can get out of this. The foundation of our economy is strong (no matter what they say), and the sky is not falling.
Stop living in fear of the market. And turn off the news! If more people do this, the market will change. I guarantee it.
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Appraisers Are Trump
October 2nd, 2008 categories: Real Estate News, opinion
The real estate game has changed.
- What you can get a buyer to pay for your home doesn’t matter.
- How much money you need to go to settlement with doesn’t matter.
- Many of your homes details don’t matter.
When selling your home, the price you can get should be based upon what YOU think it is worth. However, buyers will only pay what they feel THEY think it is worth. The delima is that the bank will only give a loan for what THE APPRAISER thinks it is worth.
The bank figures out how much it really is worth by having an appraisal done on the property. They view your homes size and features in comparison to comparable properties in the local area that have recently sold to try to figure out your homes value. This is becoming more of an issue in the current market conditions since prices have declined.
How will prices ever increase in value if appraisals come in a little higher than previous sales? What comparable properties are appraisers to use if the only homes that compare to your home are foreclosures and short sales?
These are some of the issues we are currently dealing with in our market. It is very important in this market to be aware of these issues when pricing your home. Features do matter, square footage and acreage matters, but most importantly not overpricing your home matters since you will not be getting rid of your home for more than the bank is willing to lend which depends on the appraisal value.
Photo from qui si at flickr.
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Which Presidential Canidate Do You Really Support In Loudoun County ???
September 29th, 2008 categories: Loudoun County, opinion
There is no doubt that Presidential candidates view our area as a crucial area for winning the debate. Last week Democratic candidate Joe Biden spoke at Claude Moore Park in Sterling. In the beginning of September Republican candidate John McCain and Sarah Palin campaigned in Fairfax County.
Since this is a real estate blog with daily readers I will resist sharing my personal views concerning the candidates. Nevertheless, since there is a lot of confusion as to who to vote for with the press only pushing their bias I found a site that will help.
Take this short test that will tell you which candidate you agree with the most…..
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Vote For The Continuation Of Down Payment Assistance Programs
September 4th, 2008 categories: Buyers, opinion
Part of the new housing bill passed that goes in to effect October 1st is the removal of down payment assistance programs such as Nehemiah and Ameridream.
These programs have been very helpful for buyers who do not have the full 3%, soon to be 3.5%, down payment required by FHA loans. They allow the sellers of the property to contribute to the down payment required by the lender.
On October 1st this will no longer be allowed. Family members can still contribute to the required down payment, just not the sellers of the property. Sellers can however still continue to pay for the closing cost of the purchaser.
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Buyers Beware Of The Golden Deals
August 25th, 2008 categories: opinion
Caveat emptor is Latin for “Let the buyer beware.”
The traditional doctrine of caveat emptor is encouraging buyers to make sure that they are cautious of the conditions of the property they are purchasing. I am just using it for a catchy title and for the purpose of bringing to light a bank pricing strategy and Realtors who are playing the game out of bounds to the markets detriment.
I get calls weekly from buyers who see homes for sell in the area that are priced over 10% lower than all of the other homes around. Even the foreclosures! Another too good to be true story.
What is going on. I will tell you. Some banks have started pricing homes way below even foreclosure market value. Will they really accept that price. I haven’t seen it happen. They want a pile of offers brought to them. There are times after all of the offers come in, that the bank simply comes back and tells all of the purchasers to bring their “BEST AND FINAL OFFER,” to get people to bump up their price again.
How does this hurt anyone?
- First of all, it continues the appearance of a market decline where legitimate sellers feel that they have to compete with this low price.
- It causes appraisal issues for banks looking at properties in the area. And YES, banks doing FHA loans are now beginning to look at Active comps.
- It constipates a flow of buyers who could be out purchasing many of the realistically priced homes or foreclosure deals.
What are Realtors doing wrong?
- Not taking them off of the market after a contract has been accepted in writing. If you have a contract on a foreclosed or short-sale home and it is not off of the market within 48 hours after it has been signed by the seller or bank it is important that you take action.
You can start by having your agent call the listing agent and reminding them to remove it from active status. If they refuse to remove it (some say the bank won’t let them stop marketing it), there is a strong chance they are in violation MRIS codes (the Northern VA, DC, Southern MD MLS Provider). This can affect your neighborhood, your contract (if accepted), and your chances of loosing a bid. Contact MRIS at (Toll Free): 888-838-8200 to report it.
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Where Has All The Bad News Gone?
July 24th, 2008 categories: Market Statistics, opinion
I have been known to jump the gun. I can’t help it.
However, I am sticking my finger in the wind and sensing that the winds of change have begin to blow. I have been saying it all year when many of my fellow real estate bloggers refuse to (probably out of wisdom). Nevertheless, there is a small shift that is being seen in our local market that we have not seen for 2.5-3 years.
As I mentioned yesterday… Economist typically agree that a buyers market typically means that we have 6 or more months of inventory available. Currently, not including condos, we have around 4.5! Does this mean we are moving in to a sellers market???
I will say this. Buyers who are trying to steal homes from seller are not having as much luck as they used to. In fact, escalation clauses are becoming common place and it is once again just as cheap to buy as it is sell.
I do know that this is one of the best months of year to buy homes so there is something to say for that. Nevertheless, a tipping point is timely thing and would be well appreciated.
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