As of this morning there were 788 re-sale homes (SF 1,2,3) currently on the market in areas 1 - 7 within our MLS. THIS, BEFORE we move into our historically busy months of homes being placed for sale.
Here is a potential challenge that I see headed our way:
Let's consider buyers that purchased their new construction homes for $230 K - 260 K or more a few years ago, that now will attempt to sell their homes because they have received orders and must leave the area. In the seller's mind, if they purchased a home for $250,000 three years ago, surely it must be worth $270,000 now (or so they believe). That difference should cover the VA funding fee they paid when they purchased, as well as the real estate agents' fees, concessions they will make to the buyer, and any repairs that might be required. THIS JUST TO BREAK EVEN !
You would think that this is a reasonable assumption.
But wait just a minute...the builder that was constructing that home a few years ago for $250,000 is STILL building the same home at the same price of $250,000! (AND IT'S NEW!)
But there's more:
The builder is providing a LARGE amount of seller contributions, (for example significant amounts toward buyer closing costs and "use as you choose" money) that, more than likely, the re-sale home does not have available to offer.
You tell me which home sells.
The home sits on the market because the sellers are not in a position to be more competitive. They begin to get worried when the home doesn't sell...they have you place the home on the rental market in addition to the sales market...but because it is a higher end rental and there are other sellers in the same boat...the home isn't competitive on the rental market either.
Now the sellers have executed their PCS move, the home is vacant, the seller is paying for a rental at his new duty station and does not have the money to continue making the mortgage payments on the home for sale here.
WHAT DO WE DO TO HELP?
If you think about it, this is a VERY REAL scenario in the near future.
In my opinion, we MUST get some knowledge and information about the Short Sale process to meet the needs of potential future clients.
Wednesday, February 24, 2010
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