Windermere Real Estate/BI, Inc.
Clients who want an extreme deal, often ask me that. As someone who has stood on the court house steps for clients and been through the drill, I can tell you the foreclosure process is not as easy as it seems. The main item clients do not realize is that they are often, in addition to the price paid in cash at auction, assuming additional loans and liens on the property. Which means the new owner, in most cases assumes that debt. There is a great deal of research that should be done before you throw down cash on the court house steps. However, in many markets, like California, where I started in real estate, foreclosures and short sales are flooding the market and how to wade through the process needs to be part of an agent’s skill base. Below are the foreclosure numbers nationwide for the first quarter of 2008. Here, in the Seattle area, we have seen an increase in numbers, they are up 41% from the first quarter of 2007, but compared to California, we haven’t seen anything – and hopefully, we will never see any numbers like those below in the top 5.
HERE ARE the five areas that had the highest foreclosure rates in the first three months of this year:
1: Stockton, Calif., 1 in 30 homes in foreclosure
2: Riverside/San Bernardino, Calif., 1 in 38
3: Las Vegas/Paradise, Nev., 1 in 44
4: Bakersfield, Calif., 1 in 51
5: Sacramento, Calif., 1 in 55
Washington-Oregon metro areas
48: Tacoma, 1 in 204
69: Portland-Beaverton, Ore./Vancouver, Wash., 1 in 326
81: Seattle/Bellevue/Everett, 1 in 517
Skill on the part of the agent and patience on the part of the seller. The market, as we know, is not as swift as we all idyllically remember. The key, I believe, for the sale of a home boils down to two key factors – price and location. A home priced right, or a bit below market, will eventually sell. A home in a good location, priced decently will sell. When we had to sell our home in the “down market” of California, I was an agent and I had learned those two rules. We were planning to move over the summer, as many folks do, so that gave us a smallish window of time to work with. It was May 1st and ideally, I wanted my kids to be settled in our new home, in our city, by Labor Day Weekend. We lived in a good location, but we still needed to be right on with our price to make things happen quickly. I could have started our house out $25K or $50K higher than what we ultimately did, but chances are we would have still been sitting in that house or at least sitting on our mortgage come Labor Day. Think about the math 6 months or 12 months of a double mortgage, your old mortgage being say, $3K a month – that is $18K or 36K, right there. Not to add in the maintenance of the home, fees for a bridge loan, if you needed one to buy a home before your old one sold, and the biggee, the emotional stress of having your life in limbo. So, in the crummy Californina market, we priced our home correctly, at market value, and it sold in three days. So, by the 4th of July, we were in our new home.
I read this article on Seattletimes.com today, and thought it fitting to post the pointers of the article here :
• Don’t base the price on what you paid or what your neighbor got a few years ago.
• Do examine the prices of homes for sale in your neighborhood, as well as the prices of comparable homes that have sold in the past three to six months.
• Don’t pick an agent simply because he or she suggested the highest list price.
• Do pick an agent who offers a thoughtful explanation for the price he or she is suggesting.
• Don’t go overboard with remodeling. Rarely can you recoup the cost.
• Do make minor improvements so your home is in as good as, or better, shape than the competition.
• Don’t set your price based on emotional attachments and cherished memories.
• Do ask your agent to reassess the competitive landscape every few weeks to make sure your asking price is in sync with the market.
• Don’t be stubborn. If weeks go by without any offers, the price most likely does not reflect the value of the home. It’s time to consider cutting the price.
• Do be patient. You might have to wait longer for buyers to pull their money together now that lenders have toughened their standards.