Buyer


On so many levels, but for this blog post it is about the literal Eau de foreclosure.

I have been hitting the showing pavement very hard these last couple of weeks and have seen some phenomenal deals (what that means to me is houses that are a great value for their square footage, condition and amenities)–I have seen some “deals” at every price point. 

But I have no tolerance for the smelly foreclosures I have been seeing lately, no matter the deal!  I appreciate that the entire civilized world is out trying to save a buck right now,  but give me a break, wouldn’t it be money well spent and translate into a higher price for the property if many of the foreclosure properties could be at minimum cleaned up, cleaned out and stripped of offending odors?  Isn’t a empty canvas more palpable then a clearly disregarded and mistreated property?

So buyers beware–and bring a nose plug!  The foreclosure sale is a different sort of animal.  There are minimal safeguards in place to protect the buyers of foreclosure sales.  Read the fine print on the addenda before you sign, for that low, low bargain price you need to be handy and/or resourceful–and just as a little FYI, they are not wild about high time financing and  likely competitors are the contractor or investor with cash in hand–so deal seeking regular buyer get out early, get out fast.

Furthermore, information can be scarce and the foreclosure sale addendum not bestowed on the winner until after price has been negotiated.  But if the bargain deal is truly what you want, it shall be my mission as well.  I personally prefer a more level playing field for my buyers and the foreclosure sale only gives you a price advantage (and sometimes not even that)… it is buyer beware, as-is, where-is.

Like I said, foreclosures are stinking up our market.

I received an email last night from one of my buyers.  It was 3 sentences long and titled “Market Conditions”.  Given the events of 9/29/08, my buyer was concerned as to what this meant now and what the future holds for real estate, here is my answer:

You have asked the million dollar, or should I say the 700 billion dollar question!

I believe it is safe to say the market is currently stalled and waiting to see what the end result will be.  Buyers are currently experiencing difficulty in securing financing if they are putting less than 20 % down as there are less companies willing or able to insure those loans.  I personally closed 2 transactions last week which involved local banks, so houses are still selling, and these lenders (though more cautious than before) were never risky players in the mortgage game.

Houses are selling!  The obvious values are still selling quickly…a 1500 square foot contemporary ranch closed in Griswold yesterday for $270,000 after only 11 days on market; a lovely colonial in Canterbury also closed yesterday for $395,000 with less than 30 days of marketing under its belt.  Both were in the 95% range of list to sell price.  (these are just 2 examples…there are many more)

As to the future, ugh, if I only knew!  But I will predict…some form of a “bail out” will be passed (today likely scared the living daylights out of everyone) and a new president is right behind, which usually ushers in more consumer confidence.  No matter what, everything I read indicates that we are likely in for a bumpy ride for the next 10 to 12 months.

For you, the buyer with no house to sell and funds to invest, this is likely a perfect market!  Only once before in nearly 24 years of doing this business have I seen such a market for buyers of real estate.

Invest in Real Estate!  It is clearly a safer long term bet.

The response to my email was:  Thank you for your response, I guess I will get off the ledge now.

Yes, please do!  This is a time for cooler heads….

Seriously!

3 years ago it was nearly impossible to find a property under $200,000 in Southeastern Connecticut–today the story is a little different:

Per local towns, priced $100,000 to 200,000 active listings:  (this does not include condominiums)

Norwich, 93; Lisbon, 5; Canterbury, 5; Voluntown, 7; Griswold, 24; Ledyard, 27; Montville, 22

It is not, however, a lack of opportunity that is stalling the first time buyers.  I would argue it has more to do with the economic news which I think we can all agree has been at best, bleak.  Consumer confidence is incredibly lacking.  But, for the first time buyer, I simply can not recall a time when the incentives and opportunities have ever been better, allow me to count the ways:

1.  Tax incentive up to $7500.00!  Yep, there are nuances to this but really it does have a very broad reach.

2.  The fixed rate is currently in the low 6 range (there are many who are arguing that it is time to raise the rates to fight ensuing inflation–but I suspect they are keeping them low to try and entice you into the market)

3.  Downpayments are still doable…CHFA 3%; FHA 5%, VA 0%  (yes, 100% financing is incredibly rare right now, but there are still reasonable options)

4.  Mortgage money is indeed still being lent!  In fact, lenders have never been more diligent about securing business and offering tenacious service.

5.  Sellers, REALTORS, lenders, the economy are all vying for the first time buyers business!  This is an envious position to be in…just ask the sellers of a few years back.  Sure, it is about making money but the bigger picture is for the economy to start to improve the buyers need to take advantage of this market just for them.

So, still sitting on the fence thinking prices will go even lower?  Excellent point and one it becomes harder and harder to debate.  How much lower do you think it will go?  5%, 10%, 15%?  In a buyers market, you are indeed free to make that offer now!

The economy needs you, please come out to play..

That would be me..you are very smart! 

I read the economy news, especially housing stuff (been watching Freddie and Fannie pretty closely), and I find myself wondering, if any of it makes sense to most folks?  So I shall attempt to (over) simplify:

NAR says it is a 11.1 month market and the Northeast has seen a 12.6 drop in activity year over year.  You can read all about it www.realtor.org , research department.  (just so you know I do not make this stuff up..)

What does that mean?  We have a lot of inventory because people are not buying.

Why are foreclosures bad?  While aside from the lose of someone’s home, they affect market value for mortgage paying citizens.  Uninhabited properties held in bank inventory must sell, usually at more modest prices.  Foreclosures cost everyone!

What is SubPrime lending and why did it melt down?  Loosy goosy lending parameters that let folks buy property they really could not afford, at higher rates, which made it that much harder to afford.  It melted down because the risk was passed down on investors then these mortgages stopped being paid, investors were losing money and locked up the breaks for obvious reasons.  No more loosy goosy lending.

What needs to happen for the market to improve?  I say consumer confidence needs to improve.  Yeah, I know it is all blamed on housing, subprime markets and rising interest rates…but I contend that steadily rising fuel costs were the starting point for our deflated perspective on our economy.  When gas went over 3 bucks per gallon, is when the wind went out of the sails.   The survey says that a new president will improve consumer confidence (as reported in Realtor Magazine).

And the good news is…we are a short 6 weeks from that!  Now, if only Wall Street could calm down..invest in real estate, it is a safer long term bet.

It was the week of the mom!  And as I am one, I dig those folks.

But this week I simply must acknowledge my favorite mom of the week and her name is Stacy.   She is my lovely client who just sold her old house and slipped into her new condo.  No more mowing the lawn or shovelling for Stacy.

Stacy and I have been together since the end of April, through many showings, open houses and finally an offer, sale and purchase…it was a bumpy ride but through it all my girl kept her head and perspective.  Her goal was an easier place to live for her and her daughter, she accomplished her goal. 

She did it on her own.  She achieved it with class and efficiency–which given some of circumstances was not an easy task (3 weeks of delay, juggling moving, work schedules and the demands of motherhood).  And, of course, the unexpected…things not what they should be.

From home inspection repairs to moving dilemmas, Stacy kept her eye on the prize….even when we got to closing and there was not a smidge of paper to be found…we sat it out and a closing did indeed happen (though I suspect she may never eat Taco Bell again :-)!  Stacy knew what she wanted and went for it, got it and stayed the course.

I admire this mom and not just because she was my client, it goes to what she does everyday, she is a hardworking lady!  And very, very smart because she invested in her future.

Hats off Stacy…hope you love your new place and your world can get back to “normal” chaos!

I have always viewed Labor Day as the end of a fashion season…Oprah says it is a major fashion don’t to wear white after Labor Day…so I had to google to find out the true point.

Low and behold, it is suppose to be a “day off for working citizens” apparently all that hard labor, pays off at least once a year.  So despite what Labor Day ends…summer; it also starts a few things:

The NFL season and college football (NCAA)

The school season..officially, I say (those 2.5 days are a bit silly prior to Labor Day)

And, the 2nd new year for real estate…there is a lot of kickin’ it into high gear prior to the holiday season slow down.

So, relax!  Pat yourself on the back for all that hard work! (maybe that is why you look so tan?)  Put away the white!  And lets sell some real estate in the next 2.5 months :-)!

Happy Labor Day!  Happy Football Season!

Back to school!  Sweatshirt weather!  Football Season!

The Fall real estate market…it is a second new year!

And I believe it shall be a great 4th quarter.   Why, you ask?  Taxes and first time buyer incentives, of course.  Taxes are always a powerful motivator and the new $7500.00 first time buyer tax incentive is nothing to sneeze at…it has a limited time frame, expiring in July of 2009.

I believe it is safe to assume that the expiration date was put in place to provide a little kick to the motivation.  You can check out all the pertinent facts about this “credit” at www.federalhousingtaxcredit.com .

The basics:

First time buyers only

Maximum credit is $7500

Homes purchased between 4/9/08 and 7/1/09

There are income limits (surprise!)

Credit actually works like an interest free loan over 15 years

Whatever the reason, now is by far one of the best times to buy I have ever seen…and that is not REALTOR speak; that is the theory of supply and demand.

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