Sarahiously Speaking

So, whose market is it anyway?  Is it a buyer’s market?  Or, is it a seller’s market?  I’ve been saying it for 4 years now, it’s neither.  It’s a bank’s market.  This is not to say that banks are coming out rosy in real estate transactions.  Many banks are still losing money on individual transactions., even if their reported earnings include profits.  However, in a market that consists mostly of short sales and foreclosures, banks have the upper and.  On the selling end banks set the price they will accept for the sale and on the buying end banks order the appraisals and decide if the property is a good investment.  With the majority of the transaction in the bank’s hands, it’s a bank’s market. 

If banks have so much power, how much can you negotiate when trying to purchase a home?  I’m going to go ahead and lay this out there, this country has lost the fine art of negotiation.  Most consumers are looking for a “win.”  Very few consumers know how to pinpoint their breaking point when it comes to purchasing and even fewer can determine the seller’s breaking point.  Without these skills, negotiations can go south fast. 

The first step in negotiating real estate is figuring out, as the buyer, how much you want the property.  Your desire to obtain the property will determine your starting point. 

The second step is determining what comparable properties are selling for in the neighborhood and area.  Some real estate agents will price a property well under comparable sales in hopes of obtaining multiple offers.  When in a multiple offer situation, be wary of relying on being the highest offer.  The home will still need to appraise.  Highest is not always best.  On the flip side, if a home is priced much higher than comparables, it may be signalling an unreasonable seller. 

The third step is investigating the other conditions you will be including in your offer.  If you want a home inspection and expect repairs to be made, you may want to consider offering closer to market value.  If the property is sold “as-is” you need to weigh how many apparent repairs are needed in to your offer price.  Many “as-is” properties are priced with needed repairs taken in to account.  It is also important to remember that “as-is” means “as-is.”  The more conditions/ contingencies a seller sees, be it a bank or consumer, the less likely they are to favor your offer. 

After compiling all of this data, make an educated offer.  Real estate is not a game, especially if you really want the property.  If you treat it as a game, you may come out on the losng end more times than not.  It’s much harder to resubmit an offer once a seller rejects an initial offer or is offended by an original offer.  I’m not saying give the seller exactly what they want, but if their listing makes sense, make sure your offer makes sense, too.

October was none too shabby.  Low interest rates are fueling the market right now.  It will be interesting to see what happens to the market as banks release more of their foreclosure inventory.  The REO properties are coming.  The market inventory should increase after the holidays and we could see prices dip to stay competitive.  We are definitely not out of the woods yet and should expect at least another 4 cycles of foreclosures before we can see teh hint of light at the end of the tunnel.   

Fredericksburg City

• 79 days on market – this is 38 days less than in October 2010
• Sellers received, on average, 90.5% of their list price when the home sold
• There is 5.8 months of inventory on the market
• 18 homes sold in October 2011 – this is 3 more than October 2010.
• The most popular price range was $200,000-$299,999.
• The median sold price was $210,250, compared to $219,000 in October 2010.
• Financing Terms:  Conventional – 4, FHA – 2, VA – 4, Cash – 7, Other – 1

Orange County

• 121 days on market – this is 33 days more than in October 2010
• Sellers received, on average, 91.1% of their list price when the home sold
• There is 12.84 months of inventory on the market
• 25 homes sold in October 2011 – this is 5 more than in October 2010
• The most popular price ranges were $150,000-$199,999.
• The median sold price was $153,000, compared to $183,255 in October 2010 
• Financing Terms:  Conventional – 3, FHA – 8, VA –2, Cash –8, Other – 4

Spotsylvania County

• 82 days on market – this is 15 more than October 2010
• Sellers received, on average, 92.8% of their list price when the home sold
• There is 4.87 months inventory on the market
• 126 homes sold in October 2011 – this is 5 less than in October 2010 
• The most popular price range was $150,000-$199,999
• The median sold price was $178,000, compared to $184000 in October 2010 
• Financing Terms:  Conventional – 32, FHA – 36, VA – 24, Cash – 25, Other – 9

Stafford County

• 63 days on market – this is 7 less than October 2010
• Sellers received, on average, 95.3% of their list price when the home sold
• There is 4.04 months inventory on the market
• 123 homes sold in October 2011 - this is 9 more than in October 2010 
• The most popular price range was $200,000-$299,999
• The median sold price was $246,000, compared to $263,550 in October 2010 
• Financing Terms:  Conventional – 28, FHA – 31, VA – 43, Cash – 17, Other – 4

Prince William County

• 54 days on market – this is 11 more than October 2010 
• Sellers received, on average, 96.4% of their list price when the home sold
• There is 3.58 months inventory on the market
• 394 homes sold in October 2011 - this is 53 less than in October 2010
• The most popular price range was $200,000-$299,999
• The median sold price was $244,500, compared to $250,000 in October 2010
• Financing Terms:  Conventional – 101, FHA – 153, VA – 77, Cash – 56, Other – 7

Caroline County

• 121 days on market – this is 33 more than October 2010 
• Sellers received, on average, 89.1% of their list price when the home sold
• There is 6.25 months inventory on the market
• 32 homes sold in October 2011 - this is 2 less than in October 2010
• The most popular price range was under $100,000-$149,999
• The median sold price was $137,500, compared to $150,950 in October 2010
• Financing Terms:  Conventional – 12, FHA –10, VA – 2, Cash – 4, Other – 4

All data provided by MRIS.

Just a few days ago, Redfin unveiled it’s newest, latest, greatest thing in real estate – The Scouting Report.  The Scouting Report ignited a firestorm in the real estate community almost immediately.  What seemed to be designed to help consumers evaluate turned out to have alot of bugs and inaccuracies.  Redfin admitted, a day after launching The Scouting Report, that there were at least 12 bugs with the program.  The quirks in the system weren’t the only problems with the program.  It appears that Redfin was also indexing agents’ names. This means that if a consumer searched for an agent through Google, then Redfin would pop up in their search as one of the top options.  If the agent is not a Redfin agent this can cause some problems.  The brokerage disclosures for each agent were not readily apparent to the sites’ readers.  This directed internet traffic away from the agent’s brokerage and to Redfin.  This practice is frowned upon in the real estate industry because of the way information was presented to the public.  Many agents expressed that they do not mind their sales statistics being available to consumers; they just want that data to be accurate. 

How Would You Rate Your Last Agent?

What I think it boils down to is that statistics don’t tell the whole story.  The Scouting Report reported information on average days on market for an agent’s listings, average number of listings that had price drops, average sales price and sales price range, etc.  While Redfin now acknowledges that there were “bugs” in the days on market data; seeing an accurate number of days doesn’t tell you if an agent is good or not.  There are a variety of reasons why a home sells quickly or languishes on the market.  Many consumers would think that less days on market would be a good thing.  However, less days on market may be due to under pricing, or having a specific buyer in mind when a property is listed.  A lengthy time on market may mean that the seller has set a list price that is higher than what the market will bare.  Or, the property is very unique and requires a unique buyer.  The numbers mean nothing without context.  This is just ine example of why a rating system, such as this one, is not what it may seem on the surface. 

After many complaints and several Multiple Listing Services pulling their agent information from Redfin all together, The Scouting Report 1.0 has been taken offthe Redfin site.  The Northern Virginia MLS  (MRIS) was one of the mls’s that took this action.  It seems that The Scouting Report is a good idea in theory, but there are just too many variables in real estate transactions to make it work effectively and accurately.  MLS data relies on mls members (agents) to inport accurate data.  Let’s face it, mistakes are made.  If any rating system pulls human-imported data, then there is a great chance that errors will be reported as accuracies.  Redfin’s reference to their report being a 1.0 tells me that they may try to relaunch at a later date.  It will be interesting to see if that system will also be an “opt-out” instead of a “opt-in.” 

So, what’s the best way to evaulate a agent before you hire them?  It’s simple.  Ask questions.  If sales stats are important to you, have the agents you interview bring their sales stats with them.  Every agent knows how many deals they have successfully completed.  It shouldn’t be hard for them to answer questions about them.  You can also check the Department of Professional and Occupational Regulation for any state regulation violations.  You will need the agent’s full name to look up this data.  See if the agent has a Facebook profile, Facebook business page, and/ or Twitter account.  You can learn alot about a person by how they interact online.  The important thing to remember is that any agent rating system will be flawed.  Be prepared to seek out those flaws and do your own research.

I know you’ve heard about the great bed bug infestation that has hit the United States.  Well, it looks like it has finally made its way to Fredericksburg.  There has been an uptick in bed bug reports to landlords and doctors across the area.  The important thing to remember is that bed bugs are not a social class epidemic.  The can be found in any house, clean or not.  Keep in mind that many bed bug infestations happen in hotels and college campuses, not low-income houses.  Bed bugs feed off of human blood, not dirt.  So, as long as you have blood in your body, there is a chance you can have a bed bug infestation.  No one is immune from these little critters.  Makes you feel all warm and cozy, huh?

So who is responsible for the costs of exterminating bed bugs in a rental property in Virginia?  The quick answer is:  The Tenant.  That’s right.  Unless the tenant can prove that the landlord knew, or should have known there was an infestation before the tenant occupied the property, then the tenant is responsible for treatment and remediation.  The Virginia Residential Landlord Tenant Act also requires the tenant keep the premises free and clear from any bug infestation.  Section 55-248.16 states:

The tenant shall … keep that part of the dwelling unit and the part of the premises that he occupies free from insects and pests.

So, landlords will argue that it is the tenant’s responsibility to treat and remediate bed bugs at the tenant’s expense.

If you think your bed bug infestation is the fault of your landlord, you need to document everything and contact a local attorney.  There is no guarantee that the cost of bed bugs will end up getting paid for by the landlord.  Moving out in the middle of the night is also not an option.  The landlord has a right to sue a tenant who has abandoned the property for lost rents, cleaning fees, and pest remediation.  You may not live there any more, but you’ll still get a bill for the bed bugs.  So far, Virginia has not had a bed bug case go to court.  It is hard for lawmakers to address an issue if they haven’t acknowledged there’s a problem.  It’s kind of like a out of sight, out of mind mentality. 

What does bed bug treatment look like and how much does it cost?  Simply washing linens, clothing, and carpets isn’t going to rid you of bed bugs.  These little guys are super great at hiding.  The extermination of bed bugs includes using monitoring devices, removing clutter where bed bugs can hide, applying heat treatment, vacuuming, sealing cracks and crevices to remove hiding places, and using non-chemical and chemical pesticides.  Because the treatment process is so intense, the cost is much higher than the treatment of other insects and pests.  Getting multiple quotes from reputable pest control companies is highly recommended.

I’m giving August a thumbs-up, but barely… just barely.  Inventory is pretty low, which is actually a good thing as we head into the fall selling season.  However, rumor has it that banks are releasing a new wave of REO properties in the next month or two.  This should create longer days on market and more months’ inventory.  Unfortunately, sales price ratios will most likely also see a decline.  Those pesky banks!   

Fredericksburg City:

• 84 days on market – this is 67 days less than in August 2010
• Sellers received, on average, 98.5% of their list price when the home sold
• There is 5.8 months of inventory on the market
• 20 homes sold in August 2011 – this is 4 more than August 2010.
• The most popular price range was $200,000-$299,999.
• The median sold price was $220,000, compared to $283,500 in August 2010.
• Financing Terms:  Conventional – 8, FHA – 5, VA – 3, Cash – 2

Orange County

• 116 days on market – this is 31 days less than in August 2010
• Sellers received, on average, 89.5% of their list price when the home sold
• There is 7.95 months of inventory on the market
• 41 homes sold in August 2011 – this is 10 more than in August 2010
• The most popular price ranges were $100,000-$149,999.
• The median sold price was $150,000, compared to $160,000 in August 2010 
• Financing Terms:  Conventional – 16, FHA – 6, VA –1, Cash –14, Other – 4

Spotsylvania County

• 75 days on market – this is 20 more than August 2010
• Sellers received, on average, 93.8% of their list price when the home sold
• There is 4.19 months inventory on the market
• 157 homes sold in August 2011 – this is 20 more than in August 2010 
• The most popular price range was $200,000-$299,999
• The median sold price was $187,000, compared to $200,000 in August 2010 
• Financing Terms:  Conventional – 38, FHA – 41, VA – 40, Cash – 32, Other – 6

Stafford County

• 66 days on market – this is 5 more than August 2010
• Sellers received, on average, 95.3% of their list price when the home sold
• There is 4.7 months inventory on the market
• 120 homes sold in August 2011 - this is 43 less than in August 2010 
• The most popular price range was $200,000-$299,999
• The median sold price was $225,000, compared to $249,625 in August 2010 
• Financing Terms:  Conventional – 31, FHA – 30, VA – 41, Cash – 17, Other – 1

Prince William County

• 53 days on market – this is 10 more than August 2010 
• Sellers received, on average, 96.8% of their list price when the home sold
• There is 3.10 months inventory on the market
• 498 homes sold in August 2011 - this is 89 less than in August 2010
• The most popular price range was $200,000-$299,999
• The median sold price was $277,500, compared to $265,000 in August 2010
• Financing Terms:  Conventional – 156, FHA – 143, VA – 116, Cash – 74, Other – 9

Caroline County

• 95 days on market – this is 2 more than August 2010 
• Sellers received, on average, 88.7% of their list price when the home sold
• There is 5.78 months inventory on the market
• 33 homes sold in August 2011 - this is 10 more than in August 2010
• The most popular price range was under $100,000-$149,999
• The median sold price was $110,000, compared to $150,000 in August 2010
• Financing Terms:  Conventional – 7, FHA –11, VA – 3, Cash – 7

All data provided by MRIS.

I get a ton of emails from all over the United States regarding short sales.  In most of the emails I am referred to as a “short sale expert.”  I always cringe at this term.  “Short sale expert.”  BLECH.  What is that anyway?  I also find it fascinating that any real estate agent would want to be referred to as a short sale expert.  The term “expert” should just be abolished from the real estate industry, in general.  With today’s market, it is very hard to be an expert.  The market changes daily.  The rules, if they are being followed, are changing as fast as the banks change ownership.  Calling yourself an “expert” is just asking for a lawsuit or a licensing complaint. 

When ever anyone claims to be a “short sale expert” there are a few questions you need to ask.

1.  What qualifies them as an expert?  – It’s easy to put “expert” after your name.  But, what makes you an expert?  Is it the number of successful closings?  Number of listings taken?  Did you earn the word “expert” by taking a class, getting certified, or obtaining a designation? 

2.  How many short sales have they closed? – You can’t be considered successful as a short sale agent unless you are closing short sales.  What type of short sales are you closing?  What!?!  There are different types of short sales!?!  Yes, there are.  Each bank has their own guidelines, each investor has their own guidelines.  Loan types handle default differently.  Handling a VHDA short sale is much different than handling an interest only, investment property short sale. 

3.  How many short sale listings have they taken?  – If an agent has listed 100 short sales, but only closed 20, there’s a problem.  They aren’t a short sale “expert”.  They are an “expert” at listing short sales.  There’s a difference.  Listing/ Closing ratio is important with this type of transaction. 

4.  Who negotiated the short sale?  – I’ve noticed a trend that many “experts” aren’t actually negotiating their short sale listings.  They are hiring a 3rd party to negotiate for them.  I often question how they can claim being an expert.  The hardest part of a short sale transaction is negotiating with the bank.  There is no magic algorithm for getting a short sale approved.  If there was, a computer program could negotiate for you.  That would make real estate alot easier! 

In my opinion, any one claiming to be a “short sale expert” is just trying to sell you something.  You might want to purchase a bag of colorful beans while you’re at it.  Short sales are a complicated real estate transaction that shouldn’t be taken lightly.  Being an “expert” doesn’t get you results.  Working this type of transaction continuously can increase your likihood of success.  Experience increases your liklihood of success.

You know what the best feeling in the world is?  Giving a deserving cat or dog a forever home!  This week Sarahiously Speaking is featuring two animals who have been at the Fredericksburg SPCA for over a year.  It’s time these furry friends found a permanent home!

Meet Lemoncello! 

Lemoncello

Lemoncello is a 2 year old spayed female.  This beautiful girl has been at the shelter since July 2009.  She is a very sweet little girl who enjoys sitting in your lap while you pet her.  She is best with children over the age of 10.  She loves to run and play.  There are quite a few black cats that have been waiting for new families at the shelter for over a year.  Don’t make Lemoncello another statistic!  Take her home today!

Meet Nigel!

 

Nigel

Nigel has been at theFredericksburg Animal Shelter since January 2009.  That’s 2.5 years with no family!  He is a very sweet, almost 4 year old Terrier/ American Pit Bull.  His new family should have a fenced yard so he has plenty of romping room in the safety of his own back yard.  Like any dog, obedience classes would do him some good.  He needs an experienced dog owner.  He’s good with other dogs and adults.  He loves toys and is very playful.  If you need a friend to lounge on the couch with, Nigel’s your guy!   

 

The adoption fee for Lemoncello and Nigel has been reduced to $25!  That’s an incredible deal for a new best friend.  Microchipping is included in the adoption fee. 

If you would like to meet Lemoncello or Nigel, please contact the Fredericksburg SPCA at (540) 898-1500.

The Fredericksburg SPCA is located at 10819 Courthouse Road Fredericksburg, VA 22407.

Ferry Road Closure

Update 08/19/2011 – Ferry Road has been reopened!  Work has been completed early and the road is now open to all traffic!

This road closure will probably affect more people than one would imagine.  Ferry Road will be closed August 16-23.  The railroad tracks near the the McDonald’s just feet from the Rt3/ Ferry Road intersection is being repaired.  There are several alternate routes to avoid the construction.  Town and Country Drive saw some pretty heavy traffic this morning as drivers cut across from White Oak Road and Ferry Road.  The neighborhoods of Argyle Terrace, Argyle Heights, and Hillcrest Terrace offer a cut through from Ferry Road to Rt.3 (Kings Hwy).

A Positive Month for the Market

Fredericksburg City:

• 57 days on market – this is 78 days less than in July 2010
• Sellers received, on average, 92.5% of their list price when the home sold
• There is 6.76 months of inventory on the market
• 17 homes sold in July 2011 – this is the same as July 2010
• The most popular price range was $200,000-$299,999.
• The median sold price was $265,000, compared to $283,250 in July 2010.
• Financing Terms:  Conventional – 6, FHA – 2, VA – 3, Cash – 5, Other – 1

Orange County

• 169 days on market – this is 81 days more than in July 2010
• Sellers received, on average, 85.7% of their list price when the home sold
• There is 9.2 months of inventory on the market
• 35 homes sold in July 2011 – this is 8 more than in July 2010
• The most popular price ranges were $100,000-$199,999.
• The median sold price was $145,000, compared to $163,000 in July 2010 
• Financing Terms:  Conventional – 7, FHA – 8, VA –8, Cash –9, Other – 3

Spotsylvania County

• 93 days on market – this is 25 more than July 2010
• Sellers received, on average, 94% of their list price when the home sold
• There is 4.51 months inventory on the market
• 148 homes sold in July 2011 – this is 15 more than in July 2010 
• The most popular price range was $200,000-$299,999
• The median sold price was $195,450, compared to $199,900 in July 2010 
• Financing Terms:  Conventional – 31, FHA – 45, VA – 39, Cash – 27

Stafford County

• 57 days on market – this is 2 less than July 2010
• Sellers received, on average, 95% of their list price when the home sold
• There is 3.71 months inventory on the market
• 157 homes sold in July 2011 - this is 11 less than in July 2010 
• The most popular price range was $200,000-$299,999
• The median sold price was $245,000, compared to $242,500 in July 2010 
• Financing Terms:  Conventional – 39, FHA – 35, VA – 61, Cash – 16

Prince William County

• 47 days on market – this is 8 more than July 2010 
• Sellers received, on average, 96.8% of their list price when the home sold
• There is 2.79 months inventory on the market
• 558 homes sold in July 2011 - this is 17 less than in July 2010
• The most popular price range was $200,000-$299,999
• The median sold price was $260,000, compared to $251,000 in July 2010
• Financing Terms:  Conventional – 161, FHA – 211, VA – 115, Cash – 64, Other – 6, Seller Financing – 1

Caroline County

• 98 days on market – this is 20 more than July 2010 
• Sellers received, on average, 89.6% of their list price when the home sold
• There is 6.93 months inventory on the market
• 28 homes sold in July 2011 - this is 3 less than in July 2010
• The most popular price range was under $200,000-$299,999
• The median sold price was $158,500, compared to $126,000 in July 2010
• Financing Terms:  Conventional – 6, FHA –8, VA – 4, Cash – 6, Other – 4

All data provided by MRIS.

Dorothy Hart Community Center Parking Lot (9pm)

I’m sitting in my family room at 8:55pm listening to construction vehicles two blocks away.  Some may wonder why I’m listening to construction vehicles at 8:55pm.  Well, the City of Fredericksburg has decided that it’s time to dig up the parking lot at the Dorothy Hart Community Center on Canal Street.  Having just renovated my house and also lived with my neighbors putting an addition on their home, I could swear that there are noise ordinances dealing with construction and demolition.  So, I decided to look them up.  In fact, there are noise ordinances for construction and demolition. 

According to Ordinance No. 03-21

Construction or repair of buildings; excavations of streets and highways; unloading of construction materials. Sound emanating from the construction, demolition, alteration, or repair of any building, from the excavation of any street or highway, or from the unloading of construction materials that is plainly audible across a property boundary between the hours of 7:00 p.m. and 7:00 a.m. on weekdays or between the hours of 9:00 p.m. and 9:00 a.m. on weekends and holidays.

Well, it’s a Thursday night.  It is now 9pm.  I can still hear loud construction equipment working on the parking lot.  So my question is:  Why does it appear that construction on City property can violate the City’s noise ordinance?  Oh, there’s a loophole?   Yes: 

The city manager shall be authorized to issue permits to persons allowing the production of noise that might otherwise be prohibited under this article, provided that such permits shall be limited to a specific event, time period, or activity. Such permits shall be issued in accordance with regulations promulgated by the city manager and published in the city administrative manual.

So, the city manager can grant a permit for the city to work well past the time the city has set forth as acceptable times to make loud noises.  Of course!  That makes perfect sense.  This is the same City that has razed historic buildings, recently, without cause.  As a tax payer in Fredericksburg City, I’m getting a little tired of city officials operating under a different set of rules.  I’m tired of city officials applying city ordinances and codes willy-nilly, whenever it serves their purposes.  I’m getting tired of my phone calls not being returned by city officials.  I’m tired of being treated like I don’t pay their salaries when I need their services.  And tonight, I’m getting tired of listening to a construction crew dig up a parking lot and crush the concrete into tiny pieces.  It’s not like I live in a business district.  I live in a residential part of town.  I can’t imagine what the home owners across the street from this parking lot are thinking right now. 

I find it interesting that the City of Fredericksburg doesn’t have enough money to repair roads, but they have enough money to repave a parking lot reserved for official city vehicles.  I’m sure those vehicles will be much more confortable sitting on their fresh asphalt in a few days.  Meanwhile, I have an 8 month old who keeps getting woken up by this construction.  By the way, it’s 9:12pm and they’re still working on this parking lot.