Rumor on the street is that Wells Fargo and Wachovia that is owned by Wells Fargo is haulting all foreclosure filings until the stimulus package is passed. What could this mean? Could it mean that these two banks are going to work somes miracles for their homeowners in default?
Stay tuned… I will keep you informed!
Friday, February 13, 2009
The TRUTH about Atlanta Foreclosures and Short Sales
With close to 50% of sales reported resulting from a foreclosed or short sale property there is no denying this is one incredible market of opportunity. There are so many foreclosures and short sale properties creating a new lower market value that foreclosures and short sales are not the only perceived values in the market place. That's right, there are just as many desperate owner occupied sellers as there are banks unloading foreclosures. There are three owners fighting for your attention... foreclosures, pre-foreclosures (short sale), and owner occupied. What does this mean for you? An unbelievable deal!
Lorie, why did you say "perceived value"? So you noticed that I said perceived value when referring to foreclosures and short sales. I must get a call on a daily basis from consumers that want to buy a foreclosure or a short sale. When asked their reason for looking at foreclosures and short sales they inform me that they want a deal. Fantastic because a deal I can find them but the deal is not always a foreclosure or a short sale. Lets discuss!
What is a short sale? A short sale is a property where the seller owes more on the property than the property is worth. The bank has agreed to accept less than what is owed meaning they have agreed to a short sale. "Less than what is owed" is not always equal to a "great deal"! It can be a great deal but it can also be market value and not below market value. Short sales require a lot of patience as it can be 3 to 6 months before you have an answer from the bank. This does not allow you to lock in a rate with your lender or truly plan your move. So if you can handle the unknown a short sale might be for you.
What is a foreclosure? A foreclosure is a property that the bank has taken ownership of because the person with whom they gave a loan defaulted on the loan. In both a short sale and a foreclosure situation the bank has BPO's (Broker Price Opinion) performed to determine market value for the property in its current condition. Most short sales and foreclosures are sold as is and with no repairs. The banks look at all the facts and they price the bank owned property also known as a foreclosure at market value. If buyers do not bite then they reduce until buyers do bite... and their goal is to entice many buyers for a multiple offer situation so the price of the home bids up. That is great for the bank! Why do bank owned properties often appear to be a great deal? Banks are unemotional sellers. They are not attached to the property. They only look at the facts and the facts never lie. They know where to price a property and when to reduce. They appear a good deal because they are priced below the owner occupied properties that are overpriced! That's right, overpriced so the overpriced property makes the market priced property seem like a great deal. This all happens right under the noses of owner occupied listings while the owner occupied listing swears their home is worth what they want for their home even though buyers are not bringing offers...and perhaps are not even looking at the home because they do not see a value for the price. In addition, usually a homeowner who could not afford to pay their mortgage could not afford to upkeep the property so that bank owned property could require repairs uncluding cosmetic repairs. Because so many of the homes foreclosed on today are fairly new and in some cases new there are bank owned properties that are move-in ready... more so than ever before! Just as with short sales, a bank owned property may or may not be a great deal. And there are different foreclosures in the market place... some have perks!
What is an owner occupied seller? An owner occupied seller is a property that is not a foreclosure or a short sale meaning the owner is current on their mortgage and still living in the home... or in some cases has already moved before the property was sold but they are still the owners on record. You heard me talk about these properties being overpriced above and that is because in today's market 75% of the properties are overpriced. This explains the high rate of properties not selling. The buyers are there in the marketplace they just refuse to overpay for a home in todays market. With 75% overpriced that leaves 25% price aggressively to sell. These are sellers that are willing to compete with foreclosures and short sale properties. These sellers should not be overlooked... and quite honestly the overpriced listings should not be overlooked either. An overpriced listing, in my opinion, is a listing where the listing agent has either no clue how to price property or is too weak to tell the truth. The seller is the victim of this and sometimes an offer with supporting data brings light to the seller and a deal can be reached. Both with owner occupied and bank owned properties the closing date is scheduled at time of contract and the transaction is much smoother and a lot less stressful than a short sale property.
The bottom line is that this is the best market on record to buy a home. Prices are down significantly and rates are unbelievable. Don't limit your opportunities. Look at all the homes that fit your requirements, place multiple offers (you need an experiences agent to do this), and watch the sellers fight for your business! And by all means utilize the services of a top producing agent such as myself to negotiate you the best deal and the best terms so you are protected! You need an agent to show you how the homes price compares to market value so that you know when you are really getting a good deal and not just buying a home!
For all your real estate needs I hope that you will consider the Homes By Lorie Team for expert negotiations and professional representation!
Contact Lorie Gould
The Homes By Lorie Team
Keller Williams Realty Atlanta Partners
678-428-5841
Lorie@HomesByLorie.com
Lorie, why did you say "perceived value"? So you noticed that I said perceived value when referring to foreclosures and short sales. I must get a call on a daily basis from consumers that want to buy a foreclosure or a short sale. When asked their reason for looking at foreclosures and short sales they inform me that they want a deal. Fantastic because a deal I can find them but the deal is not always a foreclosure or a short sale. Lets discuss!
What is a short sale? A short sale is a property where the seller owes more on the property than the property is worth. The bank has agreed to accept less than what is owed meaning they have agreed to a short sale. "Less than what is owed" is not always equal to a "great deal"! It can be a great deal but it can also be market value and not below market value. Short sales require a lot of patience as it can be 3 to 6 months before you have an answer from the bank. This does not allow you to lock in a rate with your lender or truly plan your move. So if you can handle the unknown a short sale might be for you.
What is a foreclosure? A foreclosure is a property that the bank has taken ownership of because the person with whom they gave a loan defaulted on the loan. In both a short sale and a foreclosure situation the bank has BPO's (Broker Price Opinion) performed to determine market value for the property in its current condition. Most short sales and foreclosures are sold as is and with no repairs. The banks look at all the facts and they price the bank owned property also known as a foreclosure at market value. If buyers do not bite then they reduce until buyers do bite... and their goal is to entice many buyers for a multiple offer situation so the price of the home bids up. That is great for the bank! Why do bank owned properties often appear to be a great deal? Banks are unemotional sellers. They are not attached to the property. They only look at the facts and the facts never lie. They know where to price a property and when to reduce. They appear a good deal because they are priced below the owner occupied properties that are overpriced! That's right, overpriced so the overpriced property makes the market priced property seem like a great deal. This all happens right under the noses of owner occupied listings while the owner occupied listing swears their home is worth what they want for their home even though buyers are not bringing offers...and perhaps are not even looking at the home because they do not see a value for the price. In addition, usually a homeowner who could not afford to pay their mortgage could not afford to upkeep the property so that bank owned property could require repairs uncluding cosmetic repairs. Because so many of the homes foreclosed on today are fairly new and in some cases new there are bank owned properties that are move-in ready... more so than ever before! Just as with short sales, a bank owned property may or may not be a great deal. And there are different foreclosures in the market place... some have perks!
What is an owner occupied seller? An owner occupied seller is a property that is not a foreclosure or a short sale meaning the owner is current on their mortgage and still living in the home... or in some cases has already moved before the property was sold but they are still the owners on record. You heard me talk about these properties being overpriced above and that is because in today's market 75% of the properties are overpriced. This explains the high rate of properties not selling. The buyers are there in the marketplace they just refuse to overpay for a home in todays market. With 75% overpriced that leaves 25% price aggressively to sell. These are sellers that are willing to compete with foreclosures and short sale properties. These sellers should not be overlooked... and quite honestly the overpriced listings should not be overlooked either. An overpriced listing, in my opinion, is a listing where the listing agent has either no clue how to price property or is too weak to tell the truth. The seller is the victim of this and sometimes an offer with supporting data brings light to the seller and a deal can be reached. Both with owner occupied and bank owned properties the closing date is scheduled at time of contract and the transaction is much smoother and a lot less stressful than a short sale property.
The bottom line is that this is the best market on record to buy a home. Prices are down significantly and rates are unbelievable. Don't limit your opportunities. Look at all the homes that fit your requirements, place multiple offers (you need an experiences agent to do this), and watch the sellers fight for your business! And by all means utilize the services of a top producing agent such as myself to negotiate you the best deal and the best terms so you are protected! You need an agent to show you how the homes price compares to market value so that you know when you are really getting a good deal and not just buying a home!
For all your real estate needs I hope that you will consider the Homes By Lorie Team for expert negotiations and professional representation!
Contact Lorie Gould
The Homes By Lorie Team
Keller Williams Realty Atlanta Partners
678-428-5841
Lorie@HomesByLorie.com
Thursday, February 5, 2009
Atlanta Real Estate
Seen the news lately? The metro Atlanta area is experiencing a real estate correction. Otherwise known as a declining market. The decline in the real estate market has affected so many from builders to building supply companies to those that sell the supplies and beyond.
The severity of the decline changes from neighborhood to neighborhood, city to city, and price points. Not only do I track the numbers closely, I have now hired a data specialist to dissect the data from our listing service to bring forth the facts per area and per price point so I can provide the very best representation.
Let’s look at the overall Metro Atlanta area. Sales of single family homes were down 22% in 2008 compared to 2007. With foreclosures and short sales accounting for a large percentage of sales. The median sales price declined 11.7% from 2007 to 2008. When looking at 4th quarter in 2008 compared to 4th quarter in 2007 you will find a decline of 18.1%. We certainly experienced a larger hit in the 4th quarter of 2008. If we remove the intown market from our data the numbers for the suburbs would be less favorable and the intown market is more favorable. Typically, decline starts in the suburbs and works inward while improvement starts inward and works outwards.
This is a market of correction. Unfortunately, we all pay the price for loose lending and a society that has lived in excess. The market will come back around and our property values will increase. Real estate over time brings wealth. We rode some pretty good years where we could own a property for a short time and make a profit but that is not the norm. Real estate has been, is today, and will remain a solid long term investment.
For those who want to buy a home it is important to note that there have been many changes to mortgage qualifications over the past two years. So many changes that most have been impacted. I have always taken great pride in staying well educated to keep ahead of the real estate market and industry including the mortgage industry to ensure that my clients understand the mortgage options presented. I am the first to admit that the changes these past two years have come so often and so fast that my head is spinning. And 2009 continues with even more changes that I would like to share.
First and foremost, interest rates are unbelievable! If you have not looked into refinancing then I would recommend you do so. FHA has made it extremely easy to refinance your FHA loan.
Credit guidelines have changed significantly throughout the past 2 years and have changed once again. As of February 1, 2009 the minimum credit required is now 680, not 620.
Remember 80/ 20 100% loans or 80/ 10/ 10 loans to avoid PMI? Well, second mortgages are now a part of history altogether. That’s right! Everyone will be paying PMI regardless of credit unless you have 20% of appraised value for down payment.
Thought about a second home? That now requires 20% of appraised value also.
I find it important to repeat a guideline change from 2008 because it is a very important change! The guidelines for purchasing a property by renting your currently property have changed significantly and many are finding themselves renting their homes only to have to rent someone else’s home.
The bottom line is that guidelines have changed and I cannot possible cover all the changes. It is very important that you contact a lender with any questions regarding your options for purchasing or refinancing. It is more important than ever to depend on full-time professionals within the real estate and mortgage industry that are with reputable debt-free companies. That is why I am with Keller Williams and why I recommend certain lenders. My clients deserve only the best!
The severity of the decline changes from neighborhood to neighborhood, city to city, and price points. Not only do I track the numbers closely, I have now hired a data specialist to dissect the data from our listing service to bring forth the facts per area and per price point so I can provide the very best representation.
Let’s look at the overall Metro Atlanta area. Sales of single family homes were down 22% in 2008 compared to 2007. With foreclosures and short sales accounting for a large percentage of sales. The median sales price declined 11.7% from 2007 to 2008. When looking at 4th quarter in 2008 compared to 4th quarter in 2007 you will find a decline of 18.1%. We certainly experienced a larger hit in the 4th quarter of 2008. If we remove the intown market from our data the numbers for the suburbs would be less favorable and the intown market is more favorable. Typically, decline starts in the suburbs and works inward while improvement starts inward and works outwards.
This is a market of correction. Unfortunately, we all pay the price for loose lending and a society that has lived in excess. The market will come back around and our property values will increase. Real estate over time brings wealth. We rode some pretty good years where we could own a property for a short time and make a profit but that is not the norm. Real estate has been, is today, and will remain a solid long term investment.
For those who want to buy a home it is important to note that there have been many changes to mortgage qualifications over the past two years. So many changes that most have been impacted. I have always taken great pride in staying well educated to keep ahead of the real estate market and industry including the mortgage industry to ensure that my clients understand the mortgage options presented. I am the first to admit that the changes these past two years have come so often and so fast that my head is spinning. And 2009 continues with even more changes that I would like to share.
First and foremost, interest rates are unbelievable! If you have not looked into refinancing then I would recommend you do so. FHA has made it extremely easy to refinance your FHA loan.
Credit guidelines have changed significantly throughout the past 2 years and have changed once again. As of February 1, 2009 the minimum credit required is now 680, not 620.
Remember 80/ 20 100% loans or 80/ 10/ 10 loans to avoid PMI? Well, second mortgages are now a part of history altogether. That’s right! Everyone will be paying PMI regardless of credit unless you have 20% of appraised value for down payment.
Thought about a second home? That now requires 20% of appraised value also.
I find it important to repeat a guideline change from 2008 because it is a very important change! The guidelines for purchasing a property by renting your currently property have changed significantly and many are finding themselves renting their homes only to have to rent someone else’s home.
The bottom line is that guidelines have changed and I cannot possible cover all the changes. It is very important that you contact a lender with any questions regarding your options for purchasing or refinancing. It is more important than ever to depend on full-time professionals within the real estate and mortgage industry that are with reputable debt-free companies. That is why I am with Keller Williams and why I recommend certain lenders. My clients deserve only the best!
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