Sarahiously Speaking

A few weeks ago I was contacted by a local REALTOR.  She alerted me to a problem she was having with her rental properties and Craig’s List.  It appears that someone is stealing her rental listings and posting them!  They are even using this REALTOR’s name in the ads.  (And one advertisement actually had the name of the owner of the home listed).  Here’s how the scam goes:

1.  Person posts a property for rent using the REALTOR’s pictures and name, but for less money than what it is actually on the market for.  All of this information has been gathered from housing databases on the internet.

2.  Prospective renters contact the “REALTOR,” via a free email address that has been set up, to inquire about the property.

3.  The “REALTOR” sends the prospective tenant an email application that is really just a few questions about yourself including:  Your Name, Your Current Address,  Your Age, Your Marital Status, Your Occupation, and Your Cell and Work Phone Numbers.  By the way, you have just given more than enough information about yourself to have your identity stolen. 

4.  The prospective tenant fills out the questionnaire and email it back to the “REALTOR.” 

5.  The “REALTOR” contacts the prospective tenant in a few short days and lets them know their application has been approved.  The “REALTOR” then gives the prospective tenant an address they can send the security deposit and first months rent to.  (Or) The “REALTOR” will set up an appointment to meet the prospective tenant at the rental property; putting the prospective tenant in danger!

6.  The prospective tenant never receives keys to the property and can not track down the person that they sent the money to.  Or, the prospective tenant does receive keys and moves into a property that they have no right to live in.  This results in a lengthy court battle between the tenant and the actual owner of the property.  Or even worse, the prospective tenant is mugged at the property showing.

If you are looking for a rental property there are some important things to remember.  First, anyone can post anything on Craig’s List!  There is no way of proving the advertiser has the right to sell or rent the product.  Second, google the listing.  If the home is for rent through a real estate company you should be able to find the information on multiple websites.  Third, if the price looks too good to be true, it usually is.  Make sure you research the average rental costs in the area you want to live in.  Fourth, no owner will conduct a rental transaction entirely over the internet!  It’s just not going to happen.  If there is an absentee owner, they will most likely hire a real estate company to promote the property and their best interests.  If an owner of a rental property is requiring everything to be handled over the internet, walk away!  Fifth, if you are going to view a rental property, do not go alone.  Always take a friend with you.  And, never view properties after dark.  Sixth, hire a REALTOR!  REALTORS can help you find rental properties.  REALTORS also have access to databases that allow them to verify property ownership and can help verify that the property is not on its way to foreclosure. 

Don’t fall victim to the latest real estate scam!  If you come across one of these scams, contact your local sheriff’s office and file a complaint.

Recently, I was asked a question about the effect of street parking on property values in a neighborhood.  I thought about my answer for several hours, actually slept on it, because the answer is more complex than one might think. 

There are two types of neighborhoods I will deal with, the city neighborhood and the subdivision.  The easiest to tackle is the city neighborhood.  In any city, small or large, parking is usually scarce.  Fredericksburg City is no exception.  However, if you are going to live downtown, you accept the notion of street parking.  Heck, you’re happy if there is enough room on the street to park two cars in front of your home.  In a city setting, street parking is a way of life and generally accepted.  Therefore, off street parking is an amenity residents will pay for.  A home in downtown Fredericksburg with off street parking, we won’t even get into the existence of a garage, is in demand.  Because the supply of homes that have off street parking is small and the demand is high, buyers will typically pay more for homes with off street parking than for similar homes without off street parking.  Simply, it’s the law of supply and demand. 

Subdivisions are another story.  Buyers who want to move into a subdivision typically don’t want the stress of city living.  Subdivision dwellers have come to expect maintained lawns and off street parking.  Therefore, the presence of cars parked on streets in subdivisions can effect the marketability of a home.  Marketability translates into list price vs. sales price.  Let’s look at two homes in the same neighborhood listed at the same price (traditional sellers).  The first home has granite counter tops, neutral paint, new carpet, hardwood floors, a two car garage, and is in move-in condition.  The second home has granite counter tops, bold colors throughout, older carpet, and a two car garage.  If both are listed at $350,000, which one is more likely to get a contract first?  The move-in ready home will get the contract first.  The contract will also reflect a contract price closer to the list price than the second home.  Why?  The first home is aesthetically pleasing and appears to require little maintenance.  The home is visually appealing.  This is marketability. 

When buyers look at properties in neighborhoods that do allow street parking they tend to offer less than list price.  The cars on the street give the appearance that the garages aren’t big enough, or that there are too many people living under one roof.  Neighborhoods can begin to look unkept as the streets get more crowded.  Over time, the continued discrepency between list price and offer price lowers the overall sales price in a neighborhood.  In a buyer’s markets, this can have a severe impact on some subdivisions.  Not only is the subdivision battling falling prices due to external factors (economy), but the subdivision is also battling marketability issues with current home buyers.  Buyers are still looking for the American dream.  They still want the picturesque American neighborhood.  The closer a property fits a buyer’s mental image of their new home, the closer the offer price will be to list price.  In this market, sellers should be doing everything in their power to make their property as marketable as possible.

Fredericksburg City:

• 197 days on market – this is 57 days more than in January 2008
• Sellers received, on average, 81.6% of their list price when the home sold
• There is 9.86 months of inventory on the market
• 14 homes sold in January 2009 – this is 2 more than in January 2008
• The most popular price range was $100,000-149,999 and $200,000- 249,999 equally. 
• The average sold price was $225,459, compared to $338,775 in January 2008

Orange County

• 153 days on market – this is 37 days less than in January 2008
• Sellers received, on average, 79.15% of their list price when the home sold
• There is 32.08 months of inventory on the market
• 12 homes sold in January 2009 – this is 4 less than in January 2008
• The most popular price range was $140,000-$159,999
• The average sold price was $218, 940, compared to $262,764 in January 2008 

Spotsylvania County

• 135 days on market – this is 49 less than January 2008 
• Sellers received, on average, 86.65% of their list price when the home sold
• There is 12.6 months inventory on the market
• 85 homes sold in January 2009 – this is 14 more than in January 2008 
• The most popular price range was $250,000-$299,999
• The average sold price was $237,421, compared to $294,604 in January 2008 

Stafford County

• 144 days on market – this is 14 more than January 2008 
• Sellers received, on average, 85.62% of their list price when the home sold
• There is 10.24 months inventory on the market
• 91 homes sold in January 2009 - this is 34 more than in January 2008 
• The most popular price range was $200,000-$249,999
• The average sold price was $254,804, compared to $314,285 in January 2008 

Prince William County

• 103 days on market – this is 32 less than January 2008 
• Sellers received, on average, 90.23% of their list price when the home sold
• There is 5.17 months inventory on the market
• 647 homes sold in January 2009 - this is 335 more than in January 2008!
• The most popular price range was $300,000-$399,999
• The average sold price was $210,255, compared to $318,859 in January 2008

January is typically a pretty slow month for several reasons.  First, consumers are still getting over the holiday spending spree.  Second, inventory is usually lower because most traditional sellers don’t want to market their homes during the holidays.  The weather also plays a factor in the productivity for the month.  But this January had three factors we haven’t seen in a while.  The election of President Barack Obama has helped fuel consumer confidence and the real estate market.  This confidence has flowed over to the lending industry and created lower interest rates and the availability of money to lend.  The third factor is one of supply and demand.  In November, at least two large lending institutions put a moratorium on foreclosures during the holidays.  This created a decrease in available homes for prospective purchasers and an increase in demand for homes in good condition that were available for quick delivery.  All of these factors created a perfect storm for a productive January market.

Now, there are always nuances to any real estate market.  Fredericksburg City is always a tough market to read.  Unless you consistently work or do real estate business in Fred City, the numbers look gloomy.  However, the inventory in the City has been very low recently and what is available may not meet the needs of today’s home buyer.  I am seeing more investment sales than owner occupied sales within the city limits.  The good news is that with slow down in the overall pace in Fred City, there are still only 9.86 months inventory on the market.  This is a much better number than what we have been looking at in recent months. 

Prince William County is consistently racking up huge numbers in all columns except price.  However, Prince William County has an abnormally high rate of foreclosures and short sales.  Yes, this is most likely due to abnormally high incidences of predatory lending in that county.  But don’t let the numbers fool you.  Prince William County real estate is extremely competitive.  There may be an abundance of listings, but not all of them are move-in ready.  Buyers looking in Prince William need to be ready to compete with multiple offers and think about making offers higher than list price.  You also better be ready to move fast if you like a house.  The good ones go quickly.

It’s time to get your frozen custard on!  Carl’s is open for the season starting today!  What better gift could you give your Valentine than a frozen treat from Fredericksburg’s favorite dessert stop!  Let’s stimulate the economy and get some sundaes!  WhooHoo!

A day dedicated to one of the greatest inventions of all time.  But, somehow I always manage to be without my umbrella on a rainy day.  I have them stashed everywhere, yet, I can never find one.

Here are some tips to remember when you are starting the Short Sale process and interviewing potential Listing Agents.

1.  Your first step if you are facing a possible Short Sale on your home is to contact The Homeownership Preservation Foundation.  This is a non-profit organization set up to help families facing foreclosures.  Their hotline is open 24 hours a day/ 7 days a week.  This is one of the most helpful resources available to families in financial crisis.

2.  Try to stay no more than 2 payments delinquent.  Some sort of payment is better than no payment.  Keeping the lines of communication open with your mortgage company can pay off in the long run.   

2.  Interview several REALTORS!  Not all Listing Agents are created equal!  You need to have choices during this stressful time.   

3.  Do not disclose personal financial information unless you know you are going to hire that REALTOR.  The information you tell a REALTOR during an interview is NOT confidential.  If you do not hire that REALTOR they can use the information against you is they happen to have a buyer that wants to look at or make an offer on your house.

4.  Hire a REALTOR who has experience in Short Sales.  Many of the local real estate associations are offering agents free and low cost Short Sale training.  Your Listing Agent should have at least 12 hours in Short Sale training; that is only 4 classes!  The Short Sale process is constantly changing and your agent should have all of the up-to-date information at their disposal!  You should request proof of classes taken, as well as, proof that the REALTOR has successfully closed Short Sales. 

5.  Hire a REALTOR with experience.  There are not many instances where I say that time in the business matters, but this is one instance when it actually does.  REALTORS who have been in the business more than 4 years have seen a high and low negotiation market.  Negotiations are a part of today’s real estate market.  Your REALTOR needs to understand and be comfortable with the process of win-win negotiations. 

6.  Understand who ratifies a contract in the state of Virginia.  This is where most inexperienced REALTORS go wrong.  Even though the bank has to approve a contract on a Short Sale property, the Seller and the Buyer are the only parties to the contract.  The Seller should sign off on the contract and ratify it before they send the contract to the bank for approval.  The bank is a third-party.  They are a contingency, just like a home inspection.

7.  Hire an attorney!  You can also hire a Settlement Company that has an attorney on staff that can conduct the closing for the Seller; the Buyer can still choose their own Settlement Company.  The attorney will help you with all of the paperwork the bank is going to ask for before they agree to the Short Sale.  The attorney can also help  facilitate the Short Sale in a timely manner. 

8.  Explore your future housing options with your REALTOR.  Your lower credit score will effect your ability to rent a home.  You need to decide your best course of action. 

9.  Be patient.  Short Sales are a waiting game!

I am proud to be an alumna of Alpha Phi Fraternity which has promoted awareness for Cardiac Care and Research since 1946.  Being a part of an organization that has raised more than $1 million toward this cause has been a lifestyle changing experience for me.  Heart Disease is the leading cause of death for women in the United States.  One in four women will die from Heart Disease while one in thirty will die from breast cancer.  Risk factors for Heart Disease include:  high blood pressure, high blood cholesterol, diabetes, smoking, being overweight, being inactive, having a family history of early heart disease, and just being a women over the age of 55.  However, four simple lifestyle changes can reduce your risk for Heart Disease by up to 82%:  eating right, being physically active, not smoking, and maintaining a healthy weight.  If you are making choices that put you at a greater risk for Heart Disease then today is the day to make your heart a top priority.  Your family and friends need you to have the healthiest heart possible.

I was asked a question today, while showing houses, that I get asked frequently, “What’s the better deal, a short sale or a foreclosure?”  For the first time, I paused before answering.  My answer used to be that buying a foreclosure was definitely a better deal; and for the most part I still thinks this is true.  However, short sales have begun to morph themselves as banks reevaluate their short sale approval process.  In the beginning of the short sale market, banks were not very good at negotiating the sale in a timely manner, if at all.  There are horror stories of buyers waiting upwards of 9 months for a bank to come back with some sort of answer.  (By the way, as a buyer, you should never wait 9 months for a house unless it is truly a one-of-a-kind special, special house).  Most short sales that were entered into the regional MLS database did not sell.  Some numbers I saw had only 5% of short sales escaping foreclosure. 

Starting at the end of the summer 2008, the tides started to turn.  This is about the point when the short sale and foreclosure market started setting the market price of all homes.  This happens when there are more short sales and foreclosures than traditional sales in a marketplace.  This is also the point when banks started seeking acquisition opportunities and bail out money, which spurred their interest in mitigating losses and facilitating short sales.  All of the short sales I have closed in the last 6 months have settled within 60 days of ratification (one took 90 days because of an appraisal issue).  With banks making the short sale process a bit more tolerable, short sales and foreclosures setting market prices, and low interest rates on mortgages, short sales are gaining ground on foreclosures as a viable option for some buyers. 

Unfortunately, there is no clear answer for which one is a better deal.  As I’ve stated in previous posts, there are no “deals” out there.  The price is what the price is.  Today it may look like a great deal, but tomorrow prices could plummet again and it doesn’t look like such a great deal anymore.  It will only seem like a good deal when prices stop falling and homeowners can begin to build equity again.  Buying a home should be a long term investment.  Buyers should focus on the long term advantages of owning their own home and the long term possibility of building wealth in their home.  The more important question in today’s market is – Are you the right buyer for a short sale or a foreclosure?  (More on this soon!)

Oh what would we do without our weatherpersons?  Funny thing about Fredericksburg area weather is that it’s not actually for Fredericksburg.  We either get Sterling, Virginia weather forecasts, Richmond, Virginia forecasts, or Washington, DC weather forecasts.  So, if a Fredericksburgian (did I just make up a word?) never looks prepared for the weather, there’s a reason.  We don’t know what the weather will be!

Once again Americans mess, I mean, enhance, with the original.  February 2 was also celebrated in Roman times, but not as Groundhog Day.  Hedgehogs are predominate in Europe and every February 2 the hedgehog would emerge from hibernation and predict the winter/ spring season.  If the hedgehog saw it’s shadow, then there were 6 more weeks of winter.  Since there are no native hedgehogs in the Americas, we adopted the groundhog as our most accurate weather predictor.  (Didn’t think you’d get a history lesson here, did you?)

On a bit of a side note, I owned a pet hedgehog in college.  It is very similar to owning a hamster except the hedgehog has a few bad habits.  Their spikes are very sharp and they aren’t afraid to use them!  They also take spit baths which are just gross!  But all in all, Blanche the Hedgehog was a fantastic college pet!