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Wednesday, June 30, 2010
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25 comments:
Signed a short sale for single family home in Ashburn,VA for $515K and bank approved the short sale. Its a 4 year old SFH and the seller baught for $725K. The Zillow shows $590K value for the home. The loudoun county assessed value is $530K.
Suggest to go forward to buy or back off from the contract.
sai,
We'd need more info than that. How does the price compare to the comps, both SS, REO and real sales?
Are there any comps? You can use frankly to search solds fairly easily to get them if they exist. (link on main page, then search for the home you're buying then click on solds under your neighborhood, and check out current listings too, if there aren't enough comps broaden to a zip code search).
If the price is at or below comps and you like the place, go forward. You'll need to assess general maintainence, repair, and finishing levels to determine what "at comps" means for you.
Basically, sure, Zillow and Loudoun suggest you're getting a discount, but those aren't accurate enough to form the basis of a major life decision. You apparently offered $515k, there must have been some basis underwhich you arrived at that number.
Or are you asking if we think Ashburn is in for more pain? Not my local region of expertise.
sai-
I agree with Cara's comments. My only additional point is that if there is a lot of damage you find during the inspection you can always go back to the bank and try and negotiate the price lower with the threat that you will walk if they don't agree
Appreciate your responses and Backed off from Short Sale contract yesterday. My agent pushed me to move forward but said "No" in current tough economic situation. My Agent got upset ant didn’t reply my Email. I’ am not looking for future appreciation and trying to sell after 7 years, if I want to move out due to job changes with some equity. But unsold inventory from the banks may lower prices in future selling. The house needs $15K to $20K to finish basement and also not having any upgrades. Nice Belmont Country Club with gated community. This is my first time home buying experience and thank you in advance for any suggestion.
sai,
Is there an "out" by which you can "back out" without penalty?
How do you know if your agent is upset if they didn't reply?
I'm just a bit confused as to what it is that you know now that you didn't know when you put in the SS contract that is making you back out now? Getting a bank approval for a short is pretty darn lucky...
One thing you know...interest rates are lower.
Robert-
It looks like you were correct that interest could in fact go lower. I still expect that after the tax credit is gone we will see prices continue to fall (so we will not see the price recovery you expected), but kudos for being the one person who several months ago thought that rates could get lower.
how about this baby?! can't wait to see its pictures/in person.
MM, why not consider making an offer a bit over assessment on this one? It looks nice and has been on the market awhile.
Harrison
Backed of SS with out any penalty and Agent called me to sign the release contract. Still there is any room to ask lower the price from $513K. Will Seller put the house back on market with $513 Bank approval? Or Bank will foreclose the home. I will say sorry to seller if my decision makes them bad. Thanks for your Replies and it educates my self for future buying.
sai said...
My agent pushed me to move forward but said "No" in current tough economic situation. My Agent got upset ant didn’t reply my Email.
Agents are entirely self-serving. Your agent didn't care at all about whether it was a good purchas or not, their commission would have been over $15,000 had you bought the house. Just goes to show who you can't trust in this world.
sai,
If your initial offer was under %513k, yes you could have countered their offer. I don't think it would have made any difference, but I've never tried it either.
Most likely, yes the seller will put it back with a note saying something like "bank approved SS at $513k act now, can close by X date!" And if $513k is actually a proper price for it right now given its particular finishing levels and the lack of an extended SS process, then it will find a buyer. And the fact that you waited until getting a real answer from the bank will be a very large part of the seller's ability to sell. So, you've more than done your part for the seller.
I don't see why the bank would foreclose now, just because one buyer backed out. But I'm not a bank.
(with a guarunteed quick close, it might even get bid up, or if the price really is too high, then it will sit again even with the known bank pre-approval)
MM-
I assume the house needs a ton of work based on the comments, but it may still be priced correctly, so if you can qualify for a renovation loan or you have ~$100k to spend on renovations it may be a good buy.
sai,
I know exactly which house you're referring to. I made my husband drive by it, LAST YEAR, when it was on the market. We decided against it just because it's so deep in the country club, that it would add 10 minutes to my husband's commute just to get to the front gate. Otherwise, that location affords a lot of quiet and privacy.
So, you've been waiting 7 months--that has been a long wait. But to be expected for a short sale. Have you been looking at other places in the meantime? I have a house under contract, and have been waiting since January. Not a peep from the bank about our offer. But I'm keeping my options open, and I'm searching as hard as I did before we had a contract, to not have all my eggs in one very uncertain basket.
If the market only declines 5-10% as housebuyer has been asserting, I think you'd be okay paying 513k. I've seen similar houses, foreclosures included, on that street sell for around 599k, with the basement unfinished. Take a look at the comps on franklymls.com.
Another note about the cost of finishing the basement, assuming you'd like a bathroom and some nice features like good flooring and/or a wet bar, total cost could easily come to 25 - 50k.
Isn't it standard in Virginia short sale contracts to allow the buyer to back out within a month of the seller's signature if the bank has not yet ratified it?
SAI-
also, be aware that parts of Ashburn are a warzone
also, be aware that parts of Ashburn are a warzone
Really? Where? I assume you're not talking about BCC.
First I was firm on $513K with seller $5K help. But bank counter $528K in March 2010 and my agent try to convince me to go for it. But I stayed firm on $513K with seller $5K closing help. Last week agent said bank OK with $513K and seller backed off not to pay $5K closing. I heard double dip news and didn’t negotiate for closing. Agent kept silent and asked me to move forward with out $5k closing help. Seller is also part time realtor. My thought was seller thinking that the house can sell easily after $513K bank approval with out seller closing $5K. Thanks for your replies.
Ace,
you mean in the low $600s? that'd be a huge discount but i guess it's worth a shot for it being on a busy street and unupdated...
i'm tempted, tks!
"Remarks taken out of context are not often an accurate depiction of a writer's thoughts."
As always va_investor, those remarks were not taken out of context and I provided a link to the discussion where you made them.
"That said, the disparity of price increases among the tiers was fact that was ignored by the "it's moving in" crowd and others (such as you?) predicting 40% drops in N. Arlington by 2007 or 2008. How'd that work out anyway?"
This is of course a lie, I never made any such prediction.
I suppose if you had a shred of integrity you would just go ahead and retract this lie, but I can't say I am going to hold my breath.
"Was there concrete evidence of a "burst" in early January of 2007?"
Of course, mountains of evidence. Why do you think so many observers were openly discussing the bubble during that time frame?
Why do you think you were posting on a blog called "bubblemeter" during that timeframe?
Just because you couldn't recognize the biggest real estate bubble in US history even has it stared you in the face doesn't mean many others couldn't/didn't.
"I never said prices would continue up. In fact, I mentioned ad nausium that I had not put new money in the market since 2003 and was quite surprised that the craziness continued beyong that."
Uh huh, you also said that you thought it was equally foolish to predict major price declines as increases and that you thought it was a good time to buy...
"I often played devil's advocate to the "blood in the streets" crowd and the younger generation that believed the world would fall apart, yet they would be unscathed."
LOL
I guess that is the closest you have come yet to admitting your various predictions/advice proved to be grossly inaccurate...
Of course you never made any mention of the fact that you were "playing the devil's advocate" while telling people it was a good time to buy. That would have been a pretty decent thing to do don't you think?
In case anyone cares,
VirginiaMLS.com has the updated inventories, which I prefer in the plotted forms here:
http://www.recharts.com/nova/nova.html
Of those counties covered in these charts only FFX and Loudoun still had noticeably rising inventories throughout June. Arlington and Alex were definitely consistent with flat, PWC might be up, might be flat, but it's not up by much.
Even the ones that are up are only weakly so:
6/29/2010 FFX 3663 available 7005 total
6/29/2010 LO 1699 available 2868 total
versus:
6/1/2010 FFX 3494 available 7121 total
6/1/2010 LO 1609 available 2872 total
Available inventory in both are only up ~5%, while things must have been closing because total inventory is down.
But in individual zips your mileage may vary.
Cara-
Thanks for posting the inventory, it looks like inventory is definitely up across the region. I am not sure I would try and draw conclusions about inventory on some of the individual cities/counties, because the numbers are small and volatile so it could just be noise on what is up, down, or flat. I think the real interesting information will come once the summer buying season ends. I want to see how much of this inventory is mandatory and will stay during the fall vs. going away and coming back in a year or two.
Without trying to score points on other posters, I do try and publish sales prices vs Assessed prices on properties i've been chasing in DC.
Certainly there have been lots of 30% drops and even 40% drops. Many of which were in the middle of remodeling where tremendous expenditure had been made.
http://franklymls.com/DC7249699
was Assessed at 357K, sat 670 days on market, finally sells at 215K
including the Buyers bribe.
Thats' a 40% down on North Capitol Hill.
Now is Georgetown down 40%? heck if i know, but, lots of people have taken a heck of a pounding in NE DC and SW DC.
Are there people gutting out mortgages knowing that they are 25% underwater and may not be able to sell for a decade? Sure.
Will at some point they either take losses or walk away? Not sure.
I knew a guy bought in the 87 Bubble, needed to sell in 91, had to write a 20K check to get out at closing.
That sure sucked male genital organs.
Jeremy said
Talk about a stubborn seller, FX7192483. 243 days at the same price before finally lowering it.
http://franklymls.com/FX7192483
Seems odd to me that the home has a wrought iron gate in front of the entrance. Why? It's not like there is a crime problem in Great Falls.
The realtor noted Most houses this model have additions. Looking at recent solds in the HOA it appears that most comps had much nicer interiors too. Another reason this one is not selling.
Belmont country club would make me nervous as a potential buyer because prices have come down *so* much since the peak. It just seems unstable for the neighborhood to be full of people who paid $1,000,000 for a house currently worth 650k. Irrational, right?
That house in Great Falls is mostly hideous but there is something about that tiki thatch wet bar.
MM - I'm totally interested to see what that $519K house looks like as well.
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