If you have been looking at the real estate market lately then you have seen the term "short sale." A short sale happens when an owner can no longer make their payments on a home and the sales price of the home is not sufficient to cover the costs of fully paying off all the liens on the home.
In certain circumstances the lender will agree to accept a payoff for less than what is owed and forgive the rest of what is owed on the mortgage. The key words here are "certain circumstances". The seller must be in default and the seller must meet rigid financial guidelines. If the seller is not in true financial distress and is just simply not making payments then odds are they will not be approved for s short sale. In fact less than 20% or so of short sale applicants do get approved and the process can take weeks if not months to negotiate.
While many homes are advertised as short sales and look very attractive in pricing they are in reality not going to qualify and odds are they will be foreclosed on before the process can be completed. In addition these homes are often in disrepair as any one that cannot make their payment typically cannot afford maintenance costs and they are sold as-is. Bottom line is that while they look enticing on paper they are always frustrating and typically a fruitless waste of time.
Thursday, February 21, 2008
Tuesday, January 22, 2008
Fed's Rate Cut
We wanted you to be the first to know that this morning the Fed lowered the discount rate by ¾ of a percent. This is the rate that has a direct impact on mortgage rates. We expect this change to have a substantial impact on the real estate market. Already today we have seen one lender offering 5 ½ % rates with no points! We look for even more aggressive pricing as the day progress’s.
Last July when the sub prime market crashed it “froze” our market leaving many sellers lowering their prices below actual market value and creating a lot of “low hanging fruit”. We expect that the Fed lowering the interest rates will jump-start our spring market early. The lower rates and the “low hanging fruit” mean unprecedented opportunities for the “early bird” buyers.
We have all been reading tales of doom and gloom regarding our real estate market and, it certainly has been better for buyers than sellers. However, while 2007 was certainly no 2004, it was still the 4th best year on record for real estate sales.
Our thinking is that this action may be politically motivated meaning that these lower rates may not be around for long. In addition, the “low hanging fruit” we spoke of will be plucked off the market quickly by savvy buyers. Bottom line, those that act early will reap the greatest rewards.
Spencer
P.S. More good news – Northern Virginia is ranked #3 for new jobs created in the nation – this is what sustains our local market and why our market does not feel anywhere near the pain that other states are feeling. Real Estate is a local business!
We update our local market stats monthly as we compile the information – check them out on our website under Local Information/Stats
Last July when the sub prime market crashed it “froze” our market leaving many sellers lowering their prices below actual market value and creating a lot of “low hanging fruit”. We expect that the Fed lowering the interest rates will jump-start our spring market early. The lower rates and the “low hanging fruit” mean unprecedented opportunities for the “early bird” buyers.
We have all been reading tales of doom and gloom regarding our real estate market and, it certainly has been better for buyers than sellers. However, while 2007 was certainly no 2004, it was still the 4th best year on record for real estate sales.
Our thinking is that this action may be politically motivated meaning that these lower rates may not be around for long. In addition, the “low hanging fruit” we spoke of will be plucked off the market quickly by savvy buyers. Bottom line, those that act early will reap the greatest rewards.
Spencer
P.S. More good news – Northern Virginia is ranked #3 for new jobs created in the nation – this is what sustains our local market and why our market does not feel anywhere near the pain that other states are feeling. Real Estate is a local business!
We update our local market stats monthly as we compile the information – check them out on our website under Local Information/Stats
Monday, January 14, 2008
The Year In Review
What a year we had in 2007. The first half of the year was a definite improvement over 2006 as far as the number of listings that were selling. By all early indicators 2006 was going to be the bottom of the market and we were on our way up. Inventory was shrinking monthly and was 20-25% below 2006 levels. Each month we were selling the exact same or slightly more than we did in the same month in 2006. So our number of sales rose slightly in the first half but our percentage of listings sold rose noticeably.
All that came to an abrupt end in July when the sub prime mess rose it’s ugly head. Inventory spiked, sales dropped, contracts fell out, lenders disappeared and consumer confidence hit rock bottom.
By October though the shock had worn off and our number of single family home sales came back into line with last years numbers although townhomes were still down by 25-30%. This is based on Centreville stats only. This varies by county and varies within the county. (We post all the stats monthly on our web site so you can review by area by visiting www.seln4u.com.)
The average LIST PRICE for ALL single family homes sold in CENTREVILLE in 2007 dropped to 602,293 from 663,621 in 2006. For ALL townhomes it dropped to 366,140 in 2007 from 391,827 in 2006. The total number of townhomes that came under contract in 2007 dropped to 648 from 826 in 2006 and 1,278 in 2005. The number of single family homes that came under contract actually increased to 279, up from 271 in 2006 but down from 434 in 2005.
The average number of single family homes that were available on the market in 2007 dropped (this is a good thing) to 151 from 172 in 2006 but still was almost double 2005’s number of 78. Townhomes did not fair quite as well averaging 274 active listings in any given month in 2007, down from 293 in 2006 but more than double the 127 in 2005. The real disparity comes in how we begin the year in 2008. With single family homes we are starting the year with 128 active listings up only slightly from the 118 of 2007 and 112 of 2006. Townhomes however are starting with 255 active listings compared with 153 in 2007 and 170 in 2006. This is primarily due to the changes in mortgage lending and availability of no money down loans and a higher percentage of foreclosures than in single family homes. Again these numbers are for Centreville only and we will not have the overall Northern Virginia Stats available until next issue. We will post them on our website as soon as we have the information properly formatted.
Overall 2007 will go down as the 4th best year on record at the NVAR and while it did not seem like it the only reason for that was that it is compared to 2003-2005. We sold all of the homes we listed (excluding those we still have on the market) and our days on market averaged just under 41. As this year unfolds we will continue to keep you informed.
All that came to an abrupt end in July when the sub prime mess rose it’s ugly head. Inventory spiked, sales dropped, contracts fell out, lenders disappeared and consumer confidence hit rock bottom.
By October though the shock had worn off and our number of single family home sales came back into line with last years numbers although townhomes were still down by 25-30%. This is based on Centreville stats only. This varies by county and varies within the county. (We post all the stats monthly on our web site so you can review by area by visiting www.seln4u.com.)
The average LIST PRICE for ALL single family homes sold in CENTREVILLE in 2007 dropped to 602,293 from 663,621 in 2006. For ALL townhomes it dropped to 366,140 in 2007 from 391,827 in 2006. The total number of townhomes that came under contract in 2007 dropped to 648 from 826 in 2006 and 1,278 in 2005. The number of single family homes that came under contract actually increased to 279, up from 271 in 2006 but down from 434 in 2005.
The average number of single family homes that were available on the market in 2007 dropped (this is a good thing) to 151 from 172 in 2006 but still was almost double 2005’s number of 78. Townhomes did not fair quite as well averaging 274 active listings in any given month in 2007, down from 293 in 2006 but more than double the 127 in 2005. The real disparity comes in how we begin the year in 2008. With single family homes we are starting the year with 128 active listings up only slightly from the 118 of 2007 and 112 of 2006. Townhomes however are starting with 255 active listings compared with 153 in 2007 and 170 in 2006. This is primarily due to the changes in mortgage lending and availability of no money down loans and a higher percentage of foreclosures than in single family homes. Again these numbers are for Centreville only and we will not have the overall Northern Virginia Stats available until next issue. We will post them on our website as soon as we have the information properly formatted.
Overall 2007 will go down as the 4th best year on record at the NVAR and while it did not seem like it the only reason for that was that it is compared to 2003-2005. We sold all of the homes we listed (excluding those we still have on the market) and our days on market averaged just under 41. As this year unfolds we will continue to keep you informed.
Wednesday, January 2, 2008
Fair Market Value
What is the best price for a piece of real estate? Mortgage lenders, appraisers, and real estate brokers use what is called the "fair market value" (FMV). FMV has been defined as "the price that a buyer is willing to pay and the seller is willing to accept, when both parties are knowledgeable about the property and neither is under any time pressure to buy or sell". Sounds great, but how is this price determined? The starting point for determining a fair price may be an opinion of the value or "comparative market analysis". Such an analysis uses information on similar properties which are: 1) currently for sale, 2) already sold, or 3) expired properties (those which did not sell). Local, national and international trends and market conditions must also be evaluated.By comparing similar properties in each of the three categories and the market conditions, appraisers, lenders and agents come very close to the maximum price that buyers would be willing to pay for a house.
Diamond In The Rough
There are a lot of "diamonds in the rough" for sale. A property with incredible potential may be in a great location, have large sunny rooms and a big yard, but it may also have dated wall paper, worn carpeting, and uninspired bathrooms. If you can look beyond the surface, you may see a house that could be transformed by a little "elbow grease", paint, and new carpets. A house that is structurally sound with all the systems in good condition may be only a few cosmetic repairs away from being fantastic! A home that does not show well is usually priced accordingly. If the price doesn't reflect the condition of the house, the seller may be more willing to negotiate than a seller who has made a considerable investment in preparing a home for the market.Bring your imagination with you on your next house hunting trip! You may be pleasantly surprised to find a diamond in the rough.
Friday, November 16, 2007
Weatherproof Your Home Outdoors
Clean gutters. This will help prevent rotted wood. If you are uncomfortable standing on a ladder, hire someone. Cost: $50 to $100 per cleaning
Check your roof every two to three years. You can pay a roofer to inspect and repair the metal flashings, problem shingles and cracked seals around vents. Or do it yourself with a caulking gun and silicone sealant for less than $10.
If necessary, a professional should replace flashing or shingles.
Remove leaves and sticks from the roof to prevent rot and eventual water leakage.
Cover your air conditioner. Protecting it from the elements in the cold months will extend its life. Covers, sold at hardware stores, are available for window and central-air units. Cost: About $15 for window units . . . more for central air-conditioning units.
Reseal your asphalt driveway. Sealant keeps water from seeping into the asphalt, causing it to crack and crumble when water freezes and expands.
Reseal your driveway every two years – more often if it becomes dull gray instead of shiny black. This takes three to four hours. Cost to hire a professional: $150 to $300 for a standard driveway.
In warmer climates, the sun deteriorates the surface. So even if you live in a climate that stays above freezing, reseal the driveway every four to five years.
Aerate your lawn. An aerator looks like a push lawn mower with spikes instead of blades. It removes plugs of grass and soil and distributes them on the surface of the lawn, allowing rain to penetrate the ground.
Result: A healthier lawn in the spring.
It only takes about a half-hour to aerate an average lawn. Go in with some neighbors and rent an aerator for $80 to $100 for eight hours. Or pay a professional to do it. Cost:$80 to $120.Trim tree branches and bushes so they don’t touch your house or roof. Wind can cause branches to scratch away paint and/or roofing material, inviting mold and wood
Check your roof every two to three years. You can pay a roofer to inspect and repair the metal flashings, problem shingles and cracked seals around vents. Or do it yourself with a caulking gun and silicone sealant for less than $10.
If necessary, a professional should replace flashing or shingles.
Remove leaves and sticks from the roof to prevent rot and eventual water leakage.
Cover your air conditioner. Protecting it from the elements in the cold months will extend its life. Covers, sold at hardware stores, are available for window and central-air units. Cost: About $15 for window units . . . more for central air-conditioning units.
Reseal your asphalt driveway. Sealant keeps water from seeping into the asphalt, causing it to crack and crumble when water freezes and expands.
Reseal your driveway every two years – more often if it becomes dull gray instead of shiny black. This takes three to four hours. Cost to hire a professional: $150 to $300 for a standard driveway.
In warmer climates, the sun deteriorates the surface. So even if you live in a climate that stays above freezing, reseal the driveway every four to five years.
Aerate your lawn. An aerator looks like a push lawn mower with spikes instead of blades. It removes plugs of grass and soil and distributes them on the surface of the lawn, allowing rain to penetrate the ground.
Result: A healthier lawn in the spring.
It only takes about a half-hour to aerate an average lawn. Go in with some neighbors and rent an aerator for $80 to $100 for eight hours. Or pay a professional to do it. Cost:$80 to $120.Trim tree branches and bushes so they don’t touch your house or roof. Wind can cause branches to scratch away paint and/or roofing material, inviting mold and wood
Weatherproof Your Home Indoors
Weatherproof Your Home
A Checklist for Owners
Winter is only a few months away. Spending a few dollars and hours now on home maintenance will help to avoid expensive repairs and save on heating bills over the winter months!
Check window and door seals. Air leaks mean higher heating bills. Refasten loose weather-stripping. To replace stripping, purchase a weather-stripping kit. Cost: Less than $10 per opening.
Deep-clean carpets. When the windows are closed, kicked-up dust will recirculate in the air. Renting a carpet cleaner costs $20 to $30 per day, plus about $15 for cleaning solution.
Clean the furnace. This is important for furnace efficiency – whether it burns oil or gas.
Have your furnace professionally inspected and cleaned every fall. Cost: $50 to $100.
Also change the furnace filter two or three times per year (actual frequency depends on the climate in your area). Filters are located before the cold-air return, usually on the side of the furnace. If you’re not sure how to do it, ask a technician to show you. Standard filters cost about $1 each.
If you have a humidifier next to your furnace: Make sure the technician changes the pads at the annual inspection. Clean pads improve efficiency and prevent dirty air from circulating.
A Checklist for Owners
Winter is only a few months away. Spending a few dollars and hours now on home maintenance will help to avoid expensive repairs and save on heating bills over the winter months!
Check window and door seals. Air leaks mean higher heating bills. Refasten loose weather-stripping. To replace stripping, purchase a weather-stripping kit. Cost: Less than $10 per opening.
Deep-clean carpets. When the windows are closed, kicked-up dust will recirculate in the air. Renting a carpet cleaner costs $20 to $30 per day, plus about $15 for cleaning solution.
Clean the furnace. This is important for furnace efficiency – whether it burns oil or gas.
Have your furnace professionally inspected and cleaned every fall. Cost: $50 to $100.
Also change the furnace filter two or three times per year (actual frequency depends on the climate in your area). Filters are located before the cold-air return, usually on the side of the furnace. If you’re not sure how to do it, ask a technician to show you. Standard filters cost about $1 each.
If you have a humidifier next to your furnace: Make sure the technician changes the pads at the annual inspection. Clean pads improve efficiency and prevent dirty air from circulating.
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