7613 AMHERST DR
MANASSAS, VA 20111
List Price: $125,000
Prior Sale: $299,000 8/31/2004
Listing Date: 01/07/08
-58.2%
8269 VERNON ST
MANASSAS, VA 20109
List Price: $160,000
Prior Sale: $355,950 5/01/2006
Listing Date: 01/09/08
-55.0%
4520 EVANSDALE RD
WOODBRIDGE, VA 22193
List Price: $177,500
Prior Sale: $375,000 5/19/2006
Listing Date: 01/05/08
-52.7%
15418 MICHIGAN RD
WOODBRIDGE, VA 22191
List Price: $184,900
Prior Sale: $370,000 3/06/2006
Listing Date: 01/08/08
-50.0%
8234 WYCLIFFE CT
MANASSAS, VA 20109
List Price: $169,900
Prior Sale: $338,900 10/31/2005
Listing Date: 01/02/08
-49.9%
(See "Same-House Sales" sidebar for more)
Wednesday, January 9, 2008
Prince William County -- On the Market
Posted by Harriet at 11:29 PM
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37 comments:
I hope you all don't mind, but I am going to post a few separate comments about some interesting things in PWC. First, a small sampling of new properties that came on the market yesterday:
13007 Bourne, Bristow
asking $459,900
$530,000 3/9/2005
14115 Baneberry, Manassas
$580,000
$707,001 9/7/2005
13146 Kirkmichael, Bristow
$374,900
$500,440 4/7/2005
9504 Wigwag, Bristow
$464,900
$599,900 6/27/2005
Most interesting:
8081 Towering Oak, Manassas
asking $456,000
$610,000 1/28/2005
$558,465 11/2/2004
$50,000 profit after two months
14154 Murphy, Bristow (I think)
asking $559,900
$515,000 4/9/2007
$587,999 1/5/2005
$438,209 11/15/2004
$150,000 profit after two months
It seems as if 9 out of 10 of the new listings that come on each day were purchased in 2005 or 2006, and are asking anywhere from 20-50% less than their last purchase. What is the story behind all these listings? People who could not afford the properties in the first place? People who see themselves owning a depreciating asset and trying to get rid of it sooner rather than later? People who honestly need to move?
Next comment: a couple examples of people trying (in vain) to avoid bringing money to the table.
Then a story about an offer we made.
Here are two houses that are trying to avoid a short sale. They are in an old, established neighborhood right by Old Town in Manassas, but they are small (2000sqft), and one is on a busy road that cuts through the neighborhood:
9409 Nelson, Manassas
asking $560,000
previous price $569,900
$549,900 11/16/2004
$138,700 12/7/1981
$73,500 6/14/1977
$647,100 2006 assessment
$536,300 2007 assessment
At an open house, the realtor asked what we thought about the price, and seemed anxious about convincing the sellers that it was too high.
9101 Park, Manassas
asking $610,000
$570,000 3/3/2005
$665,400 2006 assessment
$539,400 2007 assessment
This house has a pool, but it is a split-level.
My questions for these situations: What choices face the owners? Would they really have to bring $200K or $300K to the table if they sold these houses for something remotely reasonable, like $300K? How would they do that? What the heck were assessors thinking when they said these little old-fashioned houses were worth almost $700K? In MANASSAS? What would turn the corner in prices for this neighborhood, which has not had a single sale for more than a year? Three new pre-foreclosures just came on the market on a more humble street, but several nice houses have been on the market for one or two YEARS, and have only come down to the $600s from the $800K-$900K range in which they started. (Someone pointed out how waiting earns you money--one example is an almost 5000 sqft house with an inground pool that was $624,900 last spring, and is now at $475,000.) Since most sellers are original owners, not like the two examples above, I am trying to get in their heads and understand what would make them let go of their dreams of a huge windfall.
Now for the offer we made.
10185 Bens Way
$394,900
original asking in June $567,000
bank takeover $437,000 in June 2007
$620,000 11/1/2005
$389,900 6/3/2002
$306,165 6/19/1989
$622,100 2006 assessment
$584,200 2007 assessment
We accepted their counter offer of $380,000, with a home inspection contingency. We heard nothing for three weeks, and then the seller's agent said they got another offer yesterday, from an investor willing to pay cash and waive the inspection. FOr some reason, he mentioned the other offer was significantly lower than ours, but the bank preferred a cash transaction. The bank had wanted us to agree that a "declining market designation" on our appraisal would not preclude us from closing. I guess they figure that not having to get another bank's approval for a loan was a very good thing.
We are fine with the situation, with two observations: one, this house will be a great comp for the neighborhood when it sells, since all the other houses are still asking $450-$600K, and two, will it be hard for us to get financing in the future due to this "declining market" thing?
A distressed sale or pre-foreclosure will not count in "comps" by appraisers. It may help other people get in the mindset that their property is worth less.
I suggest not looking for bank owned properties, instead try to lowball someone who has lived there for 10 years or so. They have enough equity to not care as much as somebody who bought in 2005.
My realtor told me recently that there are a lot of investors out there lowballing banks - why bother with that mess when you can likely find something nice for another 20-30k.
Thanks, Doug. I read in the Post that in PWC, some neighborhoods either have had no sales this past year, or only foreclosures that have sold, so they need to look at other, similar neighborhoods to make appraisals/assessments. Would there come a point that there are so many foreclosures, they will HAVE to start to count?
Anyway, we are more interested in convincing people their houses are not worth as much as they think than what the houses are worth on paper. The (vacant) house next to the Bens Way house has been on the market for a year, was purchased in 1989 or so for about $200K, and the owners are still asking $499,000, with the original kitchen, the whole place freshly painted in flat white paint, and no real yard.
If we are going to avoid foreclosures/short sales, you are absolutely right, we need to focus our efforts on houses bought before things went crazy...but these sellers seem to be very, very stubborn.
Last question: who the heck are these investors, and what are they hoping to accomplish? Are they looking for rental properties? Surely they are not looking to flip these houses any time soon, and even if they managed to do so, how much profit could they possibly be looking to make?
They are paying cash for homes at about 30-40cents on the dollar of 2007 prices. My realtor is working with an investment group with several hundred million dollars to spend. They intend to hold them and put them on the market several years from now. In the mean time they intend to rent out some of the properties to keep some cash coming in.
He says its kinda crazy - almost like back in the boom with some groups outbidding others on the same property. Of course they are all sold well, well below the listing price.
Remember that an investment group sees profit in a different way. If they buy 100 million dollars worth of real estate today, thats currently valued at 300 million dollars, then sell it in 5 years for 250 million, that would be like a 5 year bond returning 20% interest.
I keep learning so much here. Thank you! Though reading your insights makes me despair a little bit--first, all this business stuff is over my head, and second, will we ever be able to buy a good house at a really good price?
I disagree!
Foreclosures & short sales do become the Comps for a neighborhood! They may not be the *legal* comps for appraisers to use. But people, like Tabitha, know what these homes sold for & use them for their comparisons.
Anybody who is watching an are/neighborhood knows what the most recent sales went for - and why the heck would anyone pay more that what the recent foreclosure went for???
Guess what - they don't!
I've been through 2 bubbles in my lifetime and have seen it happen first hand!
Flashback to the 80's in Texas - no one would buy my house at 75K when you could buy the house next door to me on the Court house steps for 45K?
Would you?
Tabitha, just be patient. My wife and I looked for a long, long time and I was sure we would never find all we were looking for in our price range in the location we were looking.
Not only was I wrong, the house had so much more and was under what we had planned on spending.
Dont worry so much about getting the absolute best deal, find the best house for you in your price range that meets ALL the criteria you want in a home. I know too many people who got some amazing deal, right next to power lines or a busy road thats a messy hike to schools or an obscene commute.
Dont compromise on whats important for a few $$ but at the same time make sure you are making a sound investment.
As far as the foreclosures, like I said, I suggest staying away.
Tabitha, you are actually agreeing with me - foreclosures affect home prices, but they are not legal "comps" by appraisers. And to answer your question - the only reason why people would prefer your house to a foreclosure is if it is nicer, has more upgrades or is maintained better. If it isnt, forget about selling it!
Er I meant that last comment to Spunky.
Again, Doug, thank you for your wisdom and advice.
Losing out on this house was not a big deal to us because it was not everything we wanted, nor was it the best time for us to buy, but we convinced ourselves it had enough, and it was a safe price. The lesson we are coming away with is that we can get a house that really has all we want, if we wait. But we do worry that we can't wait long enough for that to happen, since we will need to move by the summer.
But after reading your posts, I am more confident that everything will work out in the end.
THANK YOU!
Tabitha,
Are you working with a shrewd real estate agent?
After about a year of just looking on our own, we did get an agent in order to put in the offer on the Bens Way house. He came highly recommended, and we trust him. He seems to be capable of great creativity when crafting an offer. But we intend to continue to do most of the looking on our own.
Thanks, Tabitha.
In your story, I didn't see an agent mentioned and wondered if one had helped and what his/her opinions were about the offer and its aftermath.
It seems rather shocking to me that the bank wouldn't accept a good offer.
Harriet: The word he used was "mystified," because the bank countered us within 48 hours, we accepted the bank's counter immediately, and then heard nothing for weeks. The house had been on the market since June, so we could not figure out why, when part of the bank's counter was closing earlier than we wanted, WHY would the bank suddenly stall? He did not have much to offer by way of opinion, except he was surprised the seller's agent told him as much as he did. We were not too impressed with the seller's agent, who did not show up for a showing (before we had our own agent), did not return our calls, and did not get back to our agent once we had one. Honestly, we did not put much stock in anything the seller's agent said, to us or our agent, because we had such a poor impression of him. Anyway, the seller's agent just seemed to imply that the bank was happy to take a cash offer, even with a later closing and a lower price. Our agent said he replied, "Shouldn't the bank be focused on its net, rather than the financing of the buyer?" The seller's agent had no answer. Our agent just said that if things fell through, the bank could keep our number.
But we were almost relieved by the freakish turn of events, because we acted in good faith on the best info we had, and yet did not have things work out...just not meant to be!
Tabitha said...
"... we accepted the bank's counter immediately, and then heard nothing for weeks."
Real estate offers and acceptances must be in writing (i.e., not verbal.) Assuming you really did accept their counter (in writing), then you have a valid purchase contract. When the bank sent you that signed counteroffer it may have negated the original signed offer you made, but it opened itself to your acceptance of the new terms. And since you apparently did sign the counteroffer, you have the right to purchase the house. You should speak to a lawyer immediately.
We received, accepted and "signed" the counteroffer via email, as it was right before Christmas. We were waiting to receive the addendums and HOA information after that. We were kicking ourselves for accepting all the terms of the counter (earlier closing especially), which we did to keep things running as smoothly as possible. But none of this counts as a ratified contract, does it? Wouldn't that have happened after we reviewed and accepted the addendums?
"My realtor is working with an investment group with several hundred million dollars to spend."
I've heard that too.
My own experience matches tabitha's. The other month, a couple partners and I looked at some houses out there.
One place that might have been 400 in 2005 had been reduced and reduced but only down to the low 3's. We wanted to offer 250 or 275 but were told that "they'd never go for it, so don't bother."
-shrug-
You know... "out there" has a name, actually several names depending on where you are talking about.
Or is that too much effort for you to manage?
Tabitha,
I too was thinking exactly what Lance said, but you clarified it. I'm a layman but I'm almost positive that you'd have had to sign the HOA addendum for the contract to be ratified.
It sounds like it worked out for the best. Your timing should be closer to the end of your current lease, I should think.
Another thing I was thinking of when "grabbing a deal" is that if it really is a good house, the seller's agent will probably know it and tell his friends. It reminds me of a story years ago when a friend's parents wanted to buy the property they were renting in Arlington. The seller's real estate agent told them it wasn't for sale because he was in the process of buying it for himself. In an accidental later conversation with his tenants, the seller realized what had happened and was incensed.
kh,
Is that house still on the market? It would be interesting to follow up on sales prices of properties that buyers were told "don't bother offering X" on.
I believe you are exactly right, Harriet. It is not that we believed the bank had any obligation to us--the question is, why, when they had a solid, willing buyer, did they wait to ratify? The answer seems to be they wanted a different kind of buyer.
And kh, there are other houses we have "felt out," because their asking price was out of our price range, but we had good reason to believe it SHOULD BE in our price range. And we always got similar responses: no way, forget it, that would never be acceptable. And the houses are still on the market, still languishing, and my husband and I joke about keeping an eye on the final sale price, if there ever is one, to see who gets the last laugh. But it really isn't funny, because there are such tragic stories behind many of these houses...
We have been on the other side, but for much smaller amounts of money than face some of these people. I can be glib and say that people who bought their places for $200K in 1991 are crazy for expecting to clear $400K now, but how can they help themselves?
Some people will chose to wait it out or just continue to live there.
They may never sell, or be able to sell their place.
A guy at my office bought a condo in 2004, ended up bidding it up 50k over the asking price. Then he got a home equity loan in 2006 and milked even more cash from it.
He was offered a significant upgrade in position last spring to move to Georgia ( where he could afford a very, very nice SFH for that price ). He put his place up for sale for 6% over what he owed on the loan. No takers. Got a couple lowballers this fall for 75k less than he owes - couldent take it. So he is staying and they hired outside the company for that job.
Doug said...
“A distressed sale or pre-foreclosure will not count in "comps" by appraisers. It may help other people get in the mindset that their property is worth less.
I suggest not looking for bank owned properties, instead try to lowball someone who has lived there for 10 years or so. They have enough equity to not care as much as somebody who bought in 2005.
My realtor told me recently that there are a lot of investors out there lowballing banks - why bother with that mess when you can likely find something nice for another 20-30k.”
Comps for “appraisers”? Come on Doug, it’s been widely reported that the appraisers have been bought and paid for. For a few hundred dollars and a promise to use them again, you can find an appraiser to say anything you want. No question about it, these distressed sales are legitimate comps for potential buyers. Of course, that’s a potential buyer who’s done their homework.
Bank owned properties are a viable source. Left out is the home owner who swears “but my neighbor got $500K last year for their home” The bank has no emotional ties to the property, does not want the property on the books, and it’s simply a business decision. No, they don’t want to loose money, but the longer they wait, they are more inclined to realize that they will.
And last but not least…….why in the world are you listening to a realtor®?
Tabitha said...
“I keep learning so much here. Thank you! Though reading your insights makes me despair a little bit--first, all this business stuff is over my head, and second, will we ever be able to buy a good house at a really good price?”
What gives Tabitha? None of this is hard, none of this is rocket science, and given that you’re asking some simple, basic questions, it’s clearly not over your head and you’re ahead of the sheeple. If you realize only one thing, that realtors (buyers agents or otherwise) want you to pay as much as possible for a home, that’s half the battle.
Robert - I listen to my Realtor because his net worth is over 10M. I was lucky to have used him for the 3 properties I have owned in my life.
As far as foreclosures counting as comps by buyers - well as you can see on this blog - people have a hard time getting the sellers to treat them as such!
You cant just tell someone what they will accept for their house unfortunately!
Tabitha said...
“Losing out on this house was not a big deal to us because it was not everything we wanted, nor was it the best time for us to buy, but we convinced ourselves it had enough, and it was a safe price. The lesson we are coming away with is that we can get a house that really has all we want, if we wait. But we do worry that we can't wait long enough for that to happen, since we will need to move by the summer.”
You’ve lost nothing Tabitha. I have yet to find, or heard of anyone finding the 100% perfect house. Yea, I suppose if you build a custom home on a great lot, you’d come pretty close.
The closest I’ve come to my “perfect” pre-owned home is probably anywhere between 80%-maybe 90%. Inventory is high, for sale sighn are everwhere. Stop looking at individual homes. Find several that meet your criteria, and pit them against each other. Here’s a great way to do it. Make multiple offers. I saw this over at the bloodhound blog-I have no idea how legal it is and if it would hold water-
- Multiple offer letter.-
This offer is tendered as part of a Multiple Purchase Offer. The buyers named above are making simultaneous offers on one or more additional properties. This offer and all of the other offers tendered are conditioned upon and subject to the final approval of the buyers, which will be delivered in writing within three days of sellers’ acceptance of this Purchase Offer, unless deadlines are extended by written agreement of the affected parties. Immediately upon transmittal of the buyers’ final approval of one of the sellers’ acceptance of the offer tendered to those sellers, all other offers in this Multiple Purchase Offer will be unilaterally withdrawn by the buyers.-
Straw buyers and bidding wars worked on the way up-this type of approach should work on the way down.
Tabitha said...
“We received, accepted and "signed" the counteroffer via email, as it was right before Christmas. We were waiting to receive the addendums and HOA information after that. We were kicking ourselves for accepting all the terms of the counter (earlier closing especially), which we did to keep things running as smoothly as possible. But none of this counts as a ratified contract, does it? Wouldn't that have happened after we reviewed and accepted the addendums?”
There’s a saying in the REI; “transmittal is acceptance”. If for instance, a seller faxes an acceptance letter to a buyer, then immediately receives another (better) offer from another buyer, too bad, they’ve already sent the first buyer the acceptance letter. Done deal. Makes no matter of other “addendums” and “HOA info” on the part of the seller, they’ve closed the deal. Now, upon receipt of the “addendums” the buyer might be able to back off from the deal if they find that the addendums are not acceptable.
Fuggetabout it. There are tons of homes on the market. You’ve got time to shop around and find plenty of other homes that you like, probably even better homes. But, now you know that once the seller agrees, that’s it. Keep some wriggle room to back out such as an inspection, “upon suitable financing”, etc. etc.
Doug said...
“Robert - I listen to my Realtor because his net worth is over 10M. I was lucky to have used him for the 3 properties I have owned in my life.
As far as foreclosures counting as comps by buyers - well as you can see on this blog - people have a hard time getting the sellers to treat them as such!
You cant just tell someone what they will accept for their house unfortunately!”
Exactly. That $10M is from making sure that buyers pay as much as possible for a home. Looks like he’s doing an excellent job.
So the sellers “don’t want to treat them as such”, that’s fine, no worries. Let their home continue to linger on the market another 200+ days and follow the market down. Buyers have hundreds, nay thousands, of homes to choose from. No need to get attached to a single home with the seller with his head in the sand.
Unfortunately (for the seller), I can tell someone what I will pay for their house. Two months from now, I’ll offer less.
Robert, thank you so much for these points. I cannot imagine facing this process without the excellent advice I have found on these blogs. I had read a modified version of the "multiple offer" approach on another blog, and it makes sense. Our plan now is to wait til spring, and execute some such plan.
Speaking of which, when should we expect most of the houses to come on the market in the spring?
Tabitha said...
“Speaking of which, when should we expect most of the houses to come on the market in the spring?.”
The selling season is defined as need be by the REI. For instance, locally, I’ve seen a small drop in inventory. Inevitably a realtor will tout “inventory is dropping! Buy now before they all disappear!” Of course, when I point out that prices are down 14% YOY, they quickly respond “it’s not the selling season, things are slow, it’ll pick up in the spring”
Given that, I’ve heard some in the REI say that the selling season starts “the day of the Super Bowl”. Given the number of homes on the market, the selling season (spring) may come early this year as sellers try to beat each other to the punch.
"there are other houses we have "felt out," because their asking price was out of our price range, but we had good reason to believe it SHOULD BE in our price range."
In our case, I felt our range (250-275) was low-fair. The house had been sold new in the late 1990s. The owner purchased it for 145 as I recall.
The house is off the market, I don't think it sold. I'll be watching for it and might try again.
"there are other houses we have 'felt out,' because their asking price was out of our price range, but we had good reason to believe it SHOULD BE in our price range."
I felt our range (250-275) was low-fair. The house had been sold new in the late 1990s. The owner purchased it for 145 as I recall.
The house is off the market, I don't think it sold. I'm watching for it and might try again.
Oh, and Robert, I have some confidence in my ability to figure out this real estate stuff...esp. since my brother up in Ashburn has a firm grasp of the intricacies of the market...but I am always looking for further insights to help our family make the best possible decision.
Robert, my Realtor made almost all his money buying and developing land, not selling overpriced properties. He is, literally, a real estate genius.
Sorry if that makes you jealous, but some people are very talented in the field.
As far as the hundreds of properties, you are absolutely right - but 90% of them are utter garbage - overpriced junk. The remaining 10% of solid homes in nice places, good locations, with nothing wrong - good luck trying to get a foreclosure type price from them!
Doug said...
“Robert, my Realtor made almost all his money buying and developing land, not selling overpriced properties. He is, literally, a real estate genius.
Sorry if that makes you jealous, but some people are very talented in the field.
As far as the hundreds of properties, you are absolutely right - but 90% of them are utter garbage - overpriced junk. The remaining 10% of solid homes in nice places, good locations, with nothing wrong - good luck trying to get a foreclosure type price from them!”
So, he made his $10M making sure the buyer paid as much as possible for real estate (developed or otherwise)……pretty simple concept, and at $10M, I’d say he’s pretty talented too. I just don’t see how jealousy plays a part in it.
90% of homes on the market are “utter garbage - overpriced junk”? Great. The sooner the sellers realize that they are overpriced the better. And according to MRIS data, the recent foreclosure rates and tighter lending standards, I don’t think luck will play a part in further reductions in price.
Robert, he did a great job of vertical development. Buying land in areas he saw potential growth, developing the land ( getting it ready for residential or commercial development ), petitioning for zoning changes and then reselling to developers. Sometimes it would take a decade to complete an investment, and Im sure he lost money in some areas.
He is still doing it, on a smaller scale, and we are considering investing.
if you had to pick between two properties, one in bristow/gainesville area (in a prominent community) w/a brand new home that offers more square footage (and a double garage, etc) OR a resell in centreville (ffx cnty) which is completely updated, and slightly smaller, BUT of the same price - which would you pick? I ask that you answer on the basis of more likely assured growth... In other words, which of the two (areas) is more likely (forecasted) to assure growth in value or atleast stability? we are first time home buyers, expecting a new addition in the coming months... and while we know we could live in either, and have a preference, we don't want to lose sight of how much we could gain or expect to gain (or remain in tact)... note: the new home is well priced, but then again this other resell is one which a builder updated (in every which way one could)... please advise asap.
Read more: http://www.dougfrancis.com/2010/01/connect-real-estate-resolution-for-2010/#ixzz0gnFdkkAK
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