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Thursday, July 23, 2009
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75 comments:
Has anyone else checked out the sex offender registry in VA for their target zip codes?
Virginia State Police
Two in the neighborhood adjacent to the one we're putting a bid on, but, they were probably the tenants, because both addresses are listed as under contract in frankly. More disturbingly, there are 3 currently listed as residing in the TH neighborhoods that surround Terra Centre. The records could be inaccurate and people move with time anyway, but it's oddly discordant with the $50k premium recent buyers have been paying to have their kids be able to walk to that school without crossing roads. (versus what similar THs cost in the rest of Burke). Maybe they're also more well-maintained, or the neighborhood has a better feel, but as much as I have a distaste for Megans law and wish there were a better solution, it's something worth investigating since the (possibly erroneous) data is out there.
Cara,
I looked at my zip before we bought, there's lots of schetchiness north of 7 there and as expected there were plenty of offenders. But only about 3-4 were what I'd consider dangerous to a neighborhood. Lots of old Romeo/Juliet relationships, etc. Are they serious offenders?
Adam,
The ones that were next to me were nothing I felt was too serious. (way in the past) But the statutes covered several possible crimes, so it was difficult to say. Everyone has a different definition of what constitutes scary.
In Terra-Centre area, one of them is less scary to me, possession of child porn? The other two, I can't interpret, they were custodial... which I can't decide if that's worse or better...
The really scary one of the group is off of Coffer Woods. But just one guy...
They really need to fix the sex offender laws so that people don't have to be "afraid".
First off, the laws very by state. So in state (A) a 20 year old with a 17 year old might be a "sex crime", state (B) may not consider it to be. Yet when the "offender" moves to state (B) they still must register as a sex offender even though it is not a sex crime (and may not be a crime at all) in state (B). All that matters is that the person is a convicted "sex offender".
I think these databases need to be fixed so that the "real" sex offenders are listed and people can get a better idea of who lives in the neighborhood. The term "sex offender" and the registration of said sex offenders is far too broad and dilutes the usefulness of such a database. What the database needs to contain are the predators, not all "sex offenders".
But then, this is government. Why do it right the first time when you can do it twice at three times the cost, right?
I am in need of some advice.
There is a place that we really like, but it is currently listed 10+% higher than comps. We really like the place, but have no interest in it unless the price comes down at least 10%. We are thinking of putting a bid in so they know we like it, but are afraid it will just make them mad that we put in a "low-ball" bid. So when they realize their house is priced to high they will still be mad about our bid and will accept someone elses bid that is the same price.
Has anyone been in this situation before and what would they recommend doing?
Speaking of sex offenders, did anyone else hear the NPR story about Miami forcing them to live under a bridge?
http://www.npr.org/templates/story/story.php?storyId=10298070
housebuyer,
I take it that your bid would be more than 10% under their current list?
How long has it been on the market? How long has it been at this price?
Jeff,
If the 20 yr old / 17 yr old example is the best example you can come up with then I'm going to go ahead and say they did a good job with the sex offender database the first time around. Maybe some states need to clean up their laws about what constitutes a "sex offender", but the database itself I see as a valuable tool that doesn't need fixing.
Housebuyer-
I thought 10% less than asking was the "norm" right now (unless your talking about a place in Arlington.....)
My lowballs are generally 20% off list.
Cara is correct to - how many DOM, do they have to sell, is it a nasty divorce....get some more info!
Housebuyer,
I'd suggest- bid what you think is fair/what it is worth. Do not go even lower to give yourself room to negotiate. Explain in the offer that this is your "best offer". Make it impersonal. " We really love the house, this is the best we can do right now". I don't see how they can get upset.
I agree that the database is a valuable tool. I just think that they need to make it better. I mean, it does no good when people search on it and are afraid because of all the "sex offenders". Perhaps they could add a separate option for crimes that are considered "preditorial" as that's the type of criminal that most people are worried about.
If you want another example of a "sex offender" that doesn't exactly give me chills when I'm walking my 1 year old down the street:
http://www.momlogic.com/2008/10/teens_charged_with_child_porno.php
eponymous,
I concur, just give your honest best bid and they might bite. The thing about an overpriced home is that, sometimes, it can be an opportunity, because other bidders aren't bidding.
What are the alternatives?
A) You wait, someone bids more than you would have and the owners are happy, and so should you be.
B) You wait and someone bids less than you:
1) They except that offer and you kick yourself
2) They turn away that offer and eventually drop the list price
C) You wait and they get no bids
1) They leave it at their asking price but the listing grows stale
2) They drop the listing price
What you're protecting against is B1. Best cases for you are B2, C1 and C2. C1 may already be true, in which case I say go for it. If it's not true yet, I say don't bid. Bids more than 10% under in the first (two?) weeks are almost silly, because the owner hasn't gotten any market feedback (i.e. crickets of silence) to tell them that the list is too high.
housebuyer,
You are describing exactly why I'm not actively bidding on homes right now. There are plenty of homes out there where I'd be satisfied with the price if it was only 10% lower. But I know that a lot of people are *still* in denial. I don't want to risk falling in love with a house and having someone tell me my very realistic offer is "insulting" even though they'll go another 180 days without another bid.
I agree with you on that example too. I just don't see it as a problem with the database tool. This is a problem with the laws that classify "sex offender." Write your state representative about that one.
FYI: I'm a computer programmer so maybe that explains why I want to mark this bug as "functions as designed." The comment I took exception to was "Why do it right the first time when you can do it twice at three times the cost, right?" I have no problem with your listed examples not being classified as "sex offender" cases.
tbw,
I can't fall in love with a place until I personally have applied paint and sweat. It's not love without commitment...
But they're not going to tell you that the offer is insulting, their going to tell their agent who's going to reinterpret that for your agent who's going to tell you, yeah, they didn't counter, or, here's their counter, one penny under list.
So what?
Thanks all for the advice! The house has been on the market for a month. The owner lowered the price 1% a week ago, so I guess this means that he/she may be willing to negotiate.
Its actually kind of funny if you submit an offer into redfin that is over 10% below a houses price a bunch of warnings come up. They basically say the average house is selling for 97.5% of list and most people will not even look at offers that are more than 10% below their list price.
Cara,
Why pay a $50k premium to have your children be able to walk without crossing a road? If the walk (especially at the elementary school level) is dicey enough I think FCPS usually offers a bus. So even if you lived somewhere relatively close if it involved crossing Burke Parkway they'll probably offer a bus.
TBW-
I would imagine that Cara's other comment is accurate that either the houses are nicer or it is a better neighborhood. AKA there are a lot of families whose kids all walk to school together and everyone actually talks to each other in the neighborhood.
tbw,
I'm not paying it, I'm just observing the going rate for the price differential. The people who want to pay for it are the people who buy those homes. So far there are enough of them.
Jeremy,
I guess I can clarify what I'm saying and it will make more sense:
I have a small child. I worry about her and don't want her to be put in harm's way. When I look through that database, I want to find the predators that would pose a threat to my child. I don't want to sort through a huge number of people who are not predators and who pose no threat to anyone.
I am glad that they have the database and I find it useful. I just wish that it was "more useful".
Housebuyer - to follow up on what eponymous said, its often not what you say but how you say it.
For example, if your offer is -15% but is couched in terms of "unfortunately, the bank wont quailify us for more" or some similar sentiment, you often perceived as being more paletable than one which is just a mere -15% raw numbers on a page, insulting buyers who stupidly equate their home price as a function of self worth.
At the end of the day, you will have to be firm - your reserve price is your reserve price, and it may not converge with theirs. However, if they have a more nebulous concept of a reserve price, and you can help them get there without insulting them - odds are you certainly stand a better chance than the same buyer who didnt try to placate their misplaced sense of worth.
Housebuyer: "They basically say the average house is selling for 97.5% of list and most people will not even look at offers that are more than 10% below their list price."
It depends on what level of home you are looking at, but I can say that in entry level TH, this is indeed the case.
What spunky said about:
"I thought 10% less than asking was the "norm" right now (unless your talking about a place in Arlington.....)
My lowballs are generally 20% off list."
Is not close to reality right now in the entry level TH sector.
Perhaps more into the fall and you will see that you are able to start at 10% off for entry level TH, but not now, not in the last 2 months...
TH on the market < 14 days are routinely bid up to over asking price.
You have the advantage that the one you like is on 30+ days which means it must have something unattractive to prevent it from going under contract. Either a feature/condition that is deterring buyers, or a seller who has an inflated list price and is unwilling to negotiate.
It sounds like much of the latter and possibly some of the former. The longer it sits in this hot market, the more they are likely to get nervous and negotiate.
CRT, housebuyer,
A month in plus a 1% drop sounds like an invitation for serious offers to me. And CRT's right, that people-skills can make a difference.
This is where good agents can come in handy. I can recommend Jeff Royce from Frankly, he has amazing people skills.
An offer from a discount broker that's also 15% off, makes you out to be a cheap-skate. Hence the warning flags. I'm starting to think Redfin is the Carmax of the real estate world. Sheen of a good thing, used car salesmen out for massive corporate profit underneath.
Also, as others have noted, there is a chance this is intentional on behalf of a seller who is fully realistic.
In terms of pricing, I would often advise clients to list at 10-20% above their RP on the expectation that any buyer will seek to negotiate it down.
In my case its businesses and similar assets, but it equally applies to homes:
If the seller wants 100, he will list at 110.
Buyer bids at 95.
Seller counters at 105.
Buyer goes to 100.
Seller agrees, the deal gets done.
In each case, the parties come away happy. The Seller is happy because he got his reserve price. The buyer is happy because he paid (roughly) 10% below list.
Housebuyer,
To follow up- you hadn't said that you were using Redfin. I recently went 0/2 with Redfin. Listing agents just don't want to deal with them. If I were in your position, unless you have already signed an agency contract w/ Redfin, I wouldn't do it. I would use the listing agent, as long as you plan to be extremely firm in your no negotiating stance. I think that the lure of dual agency is very potent to these agents. Given that the owner may not initially be receptive to your offer, I would want the voice in his ear to be saying (even though for the wrong reasons) "You know, this is a pretty strong offer". Use their own slimy nature to your advantage, but know that they are not working for you. You have to be looking out for yourself.
Crt..that IS NOT how multiple REALTORs are pricing property. I've interviewed..not in this market..you set it low of the market value for bidding wars that gets the sale price up to where you want it to be. If you list like you suggest..you go stale and eventually sell for less..
Homebuyer..I don't know which market you are in but I will say this for PWC..if you are 250-450..its muliple bids and Katie bar the door..under 250 in good condition..blowback and batton down the hatches. 30 days on the market doesn't tell me anything unless I know the price and location. 10% under list..I dunno..I'm seeing tons of stuff at 130 - 160% of 2009 assessed value. I'll give you a hint..look at all price points within the zip code..if SS/foreclosures are being listed at or above 09 assessment...the good days are gone..bottom came and went until some other monster ball drops or something.
Arkey is right on the money with advice for TODAY's (key word) market, from what I've seen first hand.
cara, RE: loving a house with paint, hence commitment:
I am covered in sawdust right now because we are refinishing our endless, endless deck. I think this qualifies me as Romeo/Juliet passionate kind of love ;)
housebuyer, RE: low bid
spunky is right. You need more information. What are the circumstances behind their house being for sale? Without that information, advice is almost fruitless.
If they are truly motivated, and can financially handle a lower sale price, the humble and honest, "This is the most a bank will approve and the most we can afford, and you are getting our best because we think your house is lovely" might take you far. It worked for our dream house, but we knew where the sellers were coming from (a nasty divorce + they owned the house free and clear and had failed to sell a year earlier as values dropped dramatically).
RE: sex offenders (OT)
Putting aside the usefulness/fairness of the database, if you are truly concerned about protecting your daughters (and sons), here are some things my husband has learned after almost a decade of prosecuting and defending these offenders (some suggestions will be very anti-PC, but I'm not trying to be political, just practical):
#1 Trust no one.
#2 Never allow sleepovers.
#3 Dress your little girls like little girls.
#4 There is a very strong link of pornography to abuse. Beware of registered offenders who have ties to child pornography.
I don't understand the "not wanting to insult the sellers" mentality. They didn't care about insulting you by listing their house at 30-100% over the assessed value.
At the end of the day, it's business, and whether they will accept your offer depends on whether they can afford to or whether they'd prefer to wait for a more attractive offer or whether they can just stay put.
I agree that the lowball offers are stronger when the property has been listed for a long time because sellers need to hear silence or negative feedback before getting realistic.
However, I have a friend who got her best offer the first week she listed. She said no, and ultimately ended up selling the place for less than that first offer.
Jeff,
Look at your relatives and friends, while the strangers make news, even trolling the database shows that most abuse happens from those who already have a relationship with the child. The random predator makes the national news because it's thankfully rare.
Arkey - I am trying to explain the potential rationale of this seller, not the market in general.
MJC - I will admit, I am a bit quirky in that my viewpoint is skewed in that I see too many deals go down in flames because egos/emotions get in the way. I often fired clients because they were too interested in getting in the last "dig" in order to make them feel better about themselves.
My view has always been, at the end of the day, do you want to get the deal done or do you only want to get the deal done if you got the last swipe in? If one side would be happy selling at 100, and the other side happy buying at 100, are you big enough to do the deal or are you so angry at the other side you will let it fall apart? Moreso, 5 years from now, will it matter?
For some people, yes it does. They put a high value in on getting the best of the other side. Perversely, ive even seen people make worse deals (monetarily) because they want to leave it feeling like they got the better of the other party on some collateral issue! To each their own I guess...
MJC,
I don't understand the "not wanting to insult the sellers" mentality. They didn't care about insulting you by listing their house at 30-100% over the assessed value.
Yes I am insulted by ridiculous prices so part of it is frustration at them. I just think the whole process is aggravating. I'd rather buy in a market where there is a reasonable asking price and you offer at or around there and get the house.
If they want to reject my price because they have another serious offer then that is great. That's a valid reason to not be able to get a house. But rejecting my offer because they think over the next six months a better one will come along is just so frustrating and ridiculous I will have no part in it.
CRT,
Unfortunately what you describe is probably only 5-25% of the high asking price cases. I think in the $400-600k portion of the Fairfax County and Arlington County markets we see people who think if I don't get x asking price (often well above the 2009 assessment) then I will get it in 2011 or whenever the market "fully recovers." Note these people do not think it's going to take that long to sell at the 2007 price.
We had redfin talk to their agent and he said that the person was in no rush to sell. The house is listed 40% over the tax assessment, but it is 10% higher than houses in that neighborhood have sold in the current market.
So obviously it is not good for us that the person is willing to wait. The area is in the Dunn Loring area.
Another problem is that the darn online real estate listing sites still have outdated assessments. Many are still showing 2008 assessments which often are much, much higher than the 2009 assessments. Many realtors are taking advantage of this and saying a home is asking "below assessment" when that is no longer the case.
I mean it's July for Pete's sake. I can understand why the 2009 assessments did not go on immediately but come on. It's time to get them on there.
housebuyer,
We had redfin talk to their agent and he said that the person was in no rush to sell. The house is listed 40% over the tax assessment, but it is 10% higher than houses in that neighborhood have sold in the current market.
Why are you willing to buy 30% over assessment? Just because some people have paid it recently does not mean that is going to be the market price over the next few years. Plenty of people paid 2006 prices in 2006 and we now realize how ephemeral those prices were.
I'm getting out of a short right now because the sold comps are coming in much lower. I really, really like the place; but I can't pay 10 or 20%+ over comps.
Apparently, there is a back-up willing to close. I find it hard to believe because some of the "solds" are 30% lower.
Oh well; even "hardened" people like me get caught up in how "cute" a place is.
tbw,
That's the local MLS rules, if you list before the assessment comes out, the assessment on the listing is the old one. I don't think it ever gets updated.
Cara,
Thanks. I didn't know that local rule. Sounds like a rule that should be lifted in a market like this. I'm not going to hold my breath that local realtors will want to make it easier for people to see the actual latest assessment on these homes.
CRT..gotcha..and..yes there are those types of buyers and sellers..they look at the dollar value instead of the total percentages..like refusing to deal when it's $10,000 but if you stand back you are only talking 2% on a 500,000 house..are you really going to screw a deal over a 2% difference on a sale..yep..lots of buyers and sellers both guilty as hell..
Someone mentioned buyers letting the sellers know that this is there best offer..all they can afford..well, most sellers aren't around when you look and 9 times out of 10 the buyers agent will contact the sellers agent about "verbal" offers and flat out reject them saying my seller has already turned down more or put it in writting. Quiet frankly we did have one plead poverty for a low-ball but I was of the mind set if you can't afford it at the bottom there would be difficulty paying the taxes and maintenance in the future. I do have a weakness, tho. I have sold 2 homes to military families, one in Cheaspeake and one in Portsmouth. Both screaming good deals because I kept kicking my first husband to the curb and I didn't have to use a realtor.
I think it depends on what your market is. For the SFHs in my region and price range, sold price is less than the last listing price.
tbw,
Why not look at the Fairfax County Tax Assessment site for new data?
Frankly, when someone tells me "this is all I can afford", I tell their agent to start showing them cheaper properties.
CRT,
I agree with your mentality that at the end of the day, egos should be set aside if both parties can reach agreement as to the purchase price. But that's when there is agreement as to the purchase price. My comment was in response to housebuyer who was worried about insulting the sellers with his offer prior to there being agreement over the purchase price. And housebuyer shouldn't be concerned about insulting them with his offer - he should be concerned about getting the lowest mortgage possible, in the same way the sellers were concerned only about getting the highest offer possible when they listed the house at 10% over market.
I realize housebuyer's concern was that the sellers would dislike him in particular and sell to another buyer later at the same price housebuyer wants to offer today. And unfortunately, my response to that concern is this: if you love the house that much that you can't bear to let it get away, then you need to throw money at the sellers to ensure you have that particular house.
CRT - What I really don't understand are buyers and sellers who can't come to an agreement over a small amount of money like $5,000 or sellers who reject a $500,000 offer over $5,000.
TBW,
I can't say that I am insulted at high asking prices; instead, I choose not to do business with sellers who have priced their house so out of line with reality. It's not personal - I can't be insulted. As a rational seller, my only option is to walk away. I know that the sellers either don't need to sell or they can't afford to sell it for less. Or they sell it to someone else who is willing to pay more than me, which is fine. I'd rather spend my time negotiating with people who are prepared to negotiate in good faith. Plus, it's just too much work having to convince someone to drop their price that much farther.
sigh,
contracts not in yet because I decided at the eleventh hour that I wanted specific language to protect us in case this condo development doesn't qualify for conventional financing. It's already kinda-sorta in the financing contingency, as long as we don't submit regional #100 dropping the financing contingency then we're fine if we get a specific rejection from "the Lender", it's just that we didn't specify who "the Lender" is anywhere.
Sigh. so someone else could submit an offer today and beat us to the punch (on a very old listing). I seriously doubt it. And I think someone else buying it first is the least problematic outcome. But I'm still mad at myself, for reading every word of the contract twice but not having it sink in until the next day.
TBW-
I am not sure why the assessment is where it is at. For some reason it fell over 30% last year and basically nothing in that area fell anywhere near 30%
TBW - assessments mean little to nothing. Paying 30% over 09 tax assessment could be legitimate "market value" because the assessments are so out of wack. I would not worry at all about assessment.
Comps are what you worry about and it sounds like that is exactly what housebuyer is looking at.
To all who are "getting frustrated" with looking for real estate to purchase because of the market, I really think you need to realize that the market is what it is.
It was slow and great for buyers. Now it is hot and great for sellers. Either be patient and look with intelligent poise, or wait. There is no point to getting frustrated and worked up over the situation.
I didn't start reading this blog until around Dec 08, but it seemed even then that the overriding sentiment among many prominent posters was that we were heading down and you shouldn't buy yet. Same thing in Jan, same thing in Feb, and same thing in Mar.
It seems that with this bump since May, many of the pessimists are actually looking to buy right now and frustrated at what they are finding and the experience they must go through.
Having bought when I thought the time was right (Feb) and sold when I was able (Apr), my experience pales in comparison to what you guys are now encountering, in terms of the competition.
But I know people who are in your same shoes, and all I can preach to them is patience and understanding. So the process is frustrating for you. It is for every buyer. Be smart, don't rush and overpay, but be realistic. Either be comfortable waiting till prices hopefully come down a bit in the Fall, or make a more aggressive move now.
If you are reading this and posting here, you are more educated than the average buyer and thus have advantage over them. Hopefully you are not desperate and "must buy now" but everyone has their own financial situations.
As for the sentiment of telling a seller "this is the best I can do", I wholeheartedly agree with Va Investor.
Once in a blue moon will you find a seller so desperate to sell that they will take pity and accept your sob story (no offense intended). For the majority of the time, especially in TODAY's market (which was different from when Tabitha bought and was able to do that), sellers don't care anything about your personal feelings on the situation.
Either you can afford their price or you can't. If they negotiate, you can either afford to come up to their minimum or you can't. Telling them you can't afford anything higher on your initial offer may backfire, as they might take another offer that is very similar to yours, because they have more confidence in that person's ability to obtain financing and close on time.
Remember, the seller selecting your offer is a very big risk the seller is taking. After signing the contract and negotiating the inspection items, they are pretty much out of control, and the ball is in your court. The seller will worry about the appraisal, and that you will be able to close when you say you will. They are just sitting there waiting. The more confidence they have in your ability to close on time, the more likely your offer gets selected, especially if there is competition. Telling them up front you can barely afford 10% (or higher) under their desired number certainly is not going to inspire confidence in you. I'm not saying overpay, I am saying things are different right now then they were a few months ago.
Good advice T. It's nice to hear the concerns of someone who recently sold his place. I think a lot of buyers are so focused on their own concerns that they forget to think about the seller's concerns.
hi T,
Did you see, we're putting in an offer?
(a little less than 5% under list, gotta have some room for negotiation, and once you put in an offer the price-tag is not going to get any lower)
We shall see, if they don't like it there's a nice fresh back from a failed contract listing today, on one I do like quite a bit.
Tabitha,
Absolutely, that definitely counts as love!
I recently saw a house that was on the market for 200+ days. It's overpriced, but it looked like a foreclosure proceeding was being instituted, so I wanted to see it while I could. We show up, and our realtor finds out only once he gets the listing agent on the phone that it's under contract. Why oh why listing agent can you not update your listing? Never mind that this house had no pictures and a sparse description. By the way, the house is still listed as active, over a month later.
Cara..we had a heck of a time buying when we moved to Kansas. It was not a sellers market. It was a down and out, slow market. Everytime we wrote an offer the first 3 weeks there, the house sold hours before our offer was submitted. Seems its an insider and I believe realtor game where someone tags it for a buy and lets it sit waiting for a price reduction or whatever then when a real seller comes along the realtor contacts them and they get their offer in first. After all that, the first house we thought we were buying..well, we lost and got kicked out at closing because they claimed it was sold to someone else, yes, and the court agreed. A counter offer had been left to dangle for months. I have horror stories you wouldn't believe. I don't think anything close to that will ever happen here but you never know
T, MJC
agreed, all around. Our realtor's doing a great job of helping us emphasize, that we're totally serious buyers and we most definitely can close.
Cara, Yes, that is great. I hope your buyer (who sounds like he's been sitting for a little while) will bite. 5% is respectable, not knowing anything about the property except for it has sat for a little while. That is the exact type of offer (and property) I think is worth targeting in the insanely competitive market you are looking at. Good luck!
Wow, TBW, tell us how you really feel.
Firstly, I would say to not worry yourself about what other people are buying on this board. Worry about yourself and what you are trying to buy. Insulting people who are buying TH and homes outside the "original DC diamond" and calling them "poor" is certainly not a good way to conduct business.
And yes, you are apparently looking at the $650-800k range, so you should have realized that by my, Cara's, Arkey's and others comments that we are talking entry level TH, under $400k (and often under $300k). That is the market we are describing. I am positive your $800k homes are not moving as quickly, and it does not make anything I said less accurate. So you are right when you think that your market is behaving differently. And with a 1/2 million price tag difference between the two types of properties, I would think that it well should.
I never said assessments were "meaningless", I said they meant "little to nothing", especially as it relates to a list price being an arbitrary % over the assessment price.
Personally, I don't care if the list price is 30%, 20% or 10% over assessed price. It does not affect my offer on that property one bit. Comps do, and what upgrades exist in the house as compared to other properties.
The house in question is "overpriced" because it is 10% above comps. I am guessing that housebuyer has adjusted for upgrades and exact location in his/her "assessment" of the comps.
But, the house is not "overpriced" because it is 30% above 09 assessment.
Housebuyer et al.,
Just spme personal anectodal evidence relating to low-ball offers:
As a seller of a house in MN in 2006 in the 300-400K range, we were anxious to hear ALL offers. We got a low-ball offer, which was 20% off our asking price. We didn't take it personally, we just countered at a higher offer (13% off our asking price) and said, Take it or leave it. He came back 3 weeks later and asked us if the offer was still good, and we were happy to sell it. Not the price we were looking for but we were glad to get a sale as the market appeared to be heading further south.
T,
It's a short sale. So in the end it will all be about the seller's bank. But, right now those are the best deals on the market, we have reason to believe that the bank is on the ball with this one, and we might as well try while we're waiting for the market to cool down a bit. (since we like the place and the neighborhood)
So we'll be out the inspection money if it falls through? Money well spent for making our offer more solid prior to the banks approval.
tbw,
In Burke? These neighborhoods have turned into ones for families with young children. But, according to my co-worker, that's exactly what they were back in 1980. (of course, they were also new then). They're clustered around the elementary schools for goodness sake's. And the prices they're coming down to are perfect for families who don't want to stretch or want one parent to stay home for the first couple years. Which is as it should be.
Not all tiny TH developments are like this, but a lot them are, and those are the ones we're looking at (speaking for myself).
An update on our rental woes (we're renting a house in Vienna and had a note regarding foreclosure delivered to us):
The management company just wrote back and forwarded the response that the owner gave them. She said that she was late on a recent payment and had already contacted the bank to take care of it. They admitted to having the foreclosure notice delivered but as she was delinquent they were justified in doing so (even if they were a little quick on the trigger). She said that it was just a one-time thing and that it won't happen again. I hope so!
So...it makes us feel a little better about our future in the house. Hopefully she doesn't make a habit of delivering her mortgage payments late. I'm comfortable forgetting it ever happened unless we get further information or notices.
I'm with you TBW. There are lots of homes in the madison/oakton school districts that are just sitting there asking over double their 2000-02 sold prices. Their MLS price list history on Redfin is littered with delist/relist entries in an effort to hide the true days on market number. They can keep sitting and rotting as far as I am concerned. We recently resigned our lease for 6 months and will likely do another year at renewal time while they pay all the maintenance, taxes, and insurance on a house they don't want anymore.
I'm with Jeremy (and maybe looking at the same places): those places can rot as far as I care. They've been sitting, and I've got all of the time in the world. Now it's just a waiting game.
Cara,
First of all, congratulations! You must be very excited about having made an offer.
As you're making an offer on a short sale, did you or your agent Jeff have to do much digging around to determine that the bank was on the ball? Does the listing agent seem to have sufficient expertise with short sales?
Much of my real estate search has centered on educating myself about what short sales are, and then on learning about how short sales are not all created equal. I'm interested in whether you had a list of questions you asked, or if you went with that property because "write with confidence" was included in the listing description.
Cara-
If yours is a short sale I would make sure that you are only dealing with one bank. At first we were lead to believe there was only one bank, we later found out that a second bank. I have heard that as long as one bank dealing with a short sale is not much worse than a foreclosure. On the other hand if you have two banks they often quibble over little things and nothing gets done.
My mother just sent me this - from the front page of Yahoo:
http://finance.yahoo.com/real-estate/article/107398/home-sales-all-over-the-map.html?mod=realestate-sell
She who could care less about real estate said, "its says here home prices are rising in Alexandria & Fairfax -- isnt that where you are looking? You better hurry up and buy"
I wanted to reach through the computer and strangle her!!!
I took my earlier comment down but I guess many people saw it or it was e-mailed? I don't think I said anyone here was poor. My point was that because people are not poor I am surprised that they are looking at some homes.
But poor was the wrong word to use and it's too loaded. No, these people were not poor. But I can just say that classmates of mine who lived in THs and condos were families where the parents had blue collar jobs. They would buy clothes from K-Mart. One family I visited did not have a phone because they could not afford it.
I just listen to how many of you describe your finances and it just sounds to me like you are the types of people who when I was growing up would have bought a SFH. In fact, many of you are doing better income-wise than families I knew with SFH.
Now, maybe Burke (like Reston?) was a little different. Perhaps because of the new urbanism movement in both places the THs were viewed differently. I can just say what my life experience was and as I said in the now deleted commented -- maybe there has been a change in what people can expect in a home.
I will just say though that in my SFH neighborhood we had plenty of stay at home moms or moms with mom friendly jobs or moms who didn't work when the kids were young and went back to work. I didn't grow up in a McMansionville SFH subdivision. Maybe in one of those you would have seen more nannies or whatever.
Also, when I'm describing homes that are asking $700-800k. These are not McMansions. These are average sized homes. The McMansions in these school districts are usually asking $1M+. So, again, I'm don't think I'm describing excessively luxurious housing.
Housebuyer, as a former seller, I'd offer the following.
Your best and least "insulting" reason for the offer you are making is that you've done careful research, that the comps truly are comps, and therefore yours is a fair market offer. Your agent and the seller's agent can determine whether there is missing info, etc. No good agent can find that insulting and if your sellers do even after their agent goes thru the data with them, then that may not be the house for you.
The Anonymous,
The good news though is that the article your mom found linked to this one which noted:
Another potential source of fog: uncertainty over the actual sale inventory, as some would-be sellers keep their homes off the market and as banks process a growing glut of foreclosures. (Calculated Risk offers some interesting historical charts here on inventory.)
“While recent inventory trends suggest improving trends, we remain concerned that these stats are not including a substantial amount of the foreclosures currently being held by banks or the growing backlog of ‘pent-up’ foreclosures as new delinquencies continue to rise,” writes Daniel Oppenheim, a housing anaylst at Credit Suisse.
I've always been agnostic about the shadow inventory argument but it is interesting a housing analyst at Credit Suisse is saying it might be true. I don't think people can claim that's just some crazy blogger.
Oh and here is this one
WSJ Are Banks Holding a Shadow Inventory of Homes
For example, notices of default, which mark the first step in the foreclosure process, jumped by 10% in California last month from the previous year, according to ForeclosureRadar. But notice of trustee sales—the second step in the process, where lenders set a foreclosure sale date—fell by nearly 15% in June from the same month one year ago. (The L.A. Times housing blog has more).
Interesting.
"TBW said...
The Anonymous,
The good news though is that the article your mom found linked to this one"
LOL - I just had the thought of having to explain "shadow inventory" to my mom (Shudder)...
tbw,
I'm with you on the TH, SFH thing.
My dad wasn't blue collar, but not white collar . . . torquise??
He worked for INS for 10 years in the 70s and then was a sales rep afterwards. He had a basic bachelor's degree from some po-dunk college in International Affairs.
At my age, my dad had 2 kids, wife (stay at home), and had a SFH on >1 acre, he never bought a TH/condo.
Me, I have a master's EE from a top-ranked school, much better job than my dad had at this stage in his life, 1 kid + wife (stay at home) and the best I could afford even w/ the drop in prices by normal rules is a condo/TH . . . !!
I'm sorry screw that!! Something is still seriously messed up here. Talk about a drastic cut in the standard of living.
I really think that in general people have not realized how far our real standard of living has fallen. You have to work harder, longer hours, dual incomes . . . etc. just to afford a place similar to our parents. The only reason why we haven't seen it so far is b/c of the massive credit bubble.
/rant off
GTE have you seen this by Elizabeth Warren
http://www.youtube.com/watch?v=akVL7QY0S8A
My dad was a programmer at Standard Oil, Yes
he had some great education, but, he really
didn't make much. He was making 22K.
He owned a nice little ranch house, on a 5,000 SF lot
in a nice suburb. He took the train every day, we could live with one car.
He gave me a hard time when i was in my 20's saying "I had a house and kids at your age"
I replied "I don't drive a very good car, and my car still cost me more then your first house. I have college loans that cost more then your first house"
So I'm making 2 mortgages just to live like a rat.
Frankly Liz Warren is right. The middle class is
living strung out to the very edge. WTF.
"I really think that in general people have not realized how far our real standard of living has fallen. You have to work harder, longer hours, dual incomes . . . etc. just to afford a place similar to our parents. The only reason why we haven't seen it so far is b/c of the massive credit bubble."
This is my concern as well.
Maybe this isn't true outside of DC, but salaries just don't appear to have kept up with costs over the last 10 years. Housing prices are one big component of that, but I don't think they are the only one.
I wonder if the middle class really is disappearing.
My big question is, is this a symptom of all the debt, or is all the debt a product of the erosion of the middle class?
That is to say, does it appear prices are running away from incomes because people are borrowing and spending in an unsustainable manner. (The housing bubble scenario.)
Or are people borrowing like crazy trying to maintain the middle-class lifestyle they expect but no longer seem to be able to achieve without going into debt?
REdealSEEKER, housebuyer,
We have not inquired as much as we should have. Assuming they counter (which may not be the case, they could just accept) I think we will have a good opportunity to make futher inquiries.
Supposedly there's only one lender, supposedly the last contract fell through because the buyer lost her job, and the a broker making a broker's opinion for the bank had "just called" the listing agent the other day, so the bank was moving forward with the process.
We've shown our seriousness, if they give us the opening to ask them to prove their's by countering the offer (which they might feel they have to as the one under consideration was supposedly for list, i.e. what they changed the list to after getting the offer) we'll ask them to prove their's.
Thanks for the reminder.
tbw, Leroy,
I think what Leroy is saying is what your seeing is not just here it's the whole country.
Elizabeth Warren certainly thinks the debt is a symptom of the erosion, with people trying to live their parents lives with less means to do so relative to prices.
To a large extent, the townhouses were built because SFH prices had gotten out of reach. At least all the recent builds. They created a new rung on the housing ladder, because the steps had gotten too wide. The discordance comes because affordability for SFHs around here was so recent. But they've been unaffordable in the suburbs of many other coastal cities or north shore Chicago for a long, long time. And DC area incomes have been high for longer than SFHs have been expensive.
If the cycle of diminishing middle class livability is not broken country-wide, then it won't be broken here. And the truly reasonable days may be gone, replaced by a new rung on the housing ladder. But it is the hope of many here that this national housing crisis, national personal debt crisis, will somehow break the cycle. And bring affordability back everywhere. We shall see.
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