Sarahiously Speaking

Well, I’ve been saying it for several months, but now USAToday is reporting that homes are starting to see multiple offers.  In the past 6 months, 10 out of 11 clients of mine have found themselves in a multiple offer situation at least once during their home search.  One client wrote 4 offers before finally being the only offer on the home he eventually purchased.  The lower price ranges are attractive to first time home buyers.  Many first time home buyers don’t feel equipped to handle large repair lists or want to invest time repainting a home.  If a home is well priced and is in move-in condition, the home usually attracts several buyers who are willing to pay over list price.  However, lower price ranges aren’t the only homes experiencing competing bids; higher priced homes are enjoying multiple offers, as well.  There is a high demand for well-maintained homes priced between $450,000 and $600,000.  A buyer needs to put their best foot forward when making an offer in this market, especially when there is high interest in the property.  When competing for a foreclosure, most banks will ask each buyer to put their highest and best offer on paper.  The bank will look at all of the highest and best offers and pick the most attractive offer. 

This is not to say that sellers are completely in the driver’s seat.  There are still concessions sellers have to be willing to make, such as settlement date and closing costs.  But if a seller wants to sell their home quickly and create an atmosphere for multiple offers, the key is price, curb appeal, neutral colors, some upgrades, and a clean, well presented home.

The real estate market is beginning to see a trend in the time it takes to close on a property.  Unfortunately, it is taking longer to close than it has in the recent past.  Gone are the days of 15-21 day closing periods.  We are now seeing closing periods of 45-60 days on average.  However, buyers in this market usually don’t have 45 days to wait to move into a home.  Many times buyers need housing in 14-30 days.  Combine longer closing periods with an abundance of short sales.  Even though we are being told that banks are streamlining the short sale process, short sales are still taking upwards of 6 months to get approval.  So, where does this leave today’s buyer when it comes to housing between the sale of one home and moving into the new home, or waiting out the short sale approval period?  Many buyers have begun to reexamine pre-occupancy. 

For those of you not familiar with pre-occupany, it is the act of a buyer taking possession of a property before settlement for an agreed upon fee.  The buyer typically pays a security deposit to the seller and a monthly fee, much like a rental payment.  I’m here to tell you that pre-occupancy is a bad idea in this market for a number of reasons.

The seller is a bank in a foreclosure transaction.  I have yet to have a foreclosure bank agree to pre-occupancy.  Why?  If a buyer moves in to a foreclosure before they settle and then realize that there may be more work involved with the property than they originally thought, the buyer may be tempted to move out, default on the contract, and refuse to settle.  Banks are also not equipped to be landlords.  Foreclosure banks already sell properties “as-is.”  What happens if something breaks while the buyer is pre-occupying?  Who is going to fix the problem?  The Virginia Landlord Tenant Act requires some repairs to be made by landlords, banks don’t make repairs.  Pre-occupying a foreclosure isn’t compatible with the way foreclosure banks do business. 

Short sale pre-occupy is an even worse idea.  The sale of the home is contingent on third-party approval.  This approval can take up to 6 months; I’ve seen it take 9 months.  What happens when a buyer pre-occupies a home and then 4 months later the short sale bank denies the short sale?  The buyer gets to move out of the property and into temorary housing while they look for another home.  Or even better, the short sale/foreclosure bank evicts the would-be buyer.  What a headache!  Pre-occupancy agreements involve paying monthly fees, rent payments, for the time the buyer moves in to the time the buyer settles.  Most short sale sellers are already not paying their mortgage.  As a REALTOR, I can not reccomend that any of my buyers pay money to a short sale seller and hope that the seller actually pays their mortgage with it.  Again, it just doesn’t make sense.    

Believe me, I know moving is stressful, especially when you are afraid you aren’t going to have a place to move to.  I’ve would never recommended pre-occupancy, no matter what the market looks like, but pre-occupying a foreclosure or short sale is not the best solution and may cause more problems than you are equiped to deal with.  Talk to your REALTOR about available alternatives to pre-occupancy.  Also, make sure you begin your new home search in time to meet your moving deadline.

It’s that time of year again!  It’s time to celebrate Cinco de Mayo!  First, a little history lesson, Cinco de Mayo does not celebrate Mexico’s Independence Day.  Mexican Independence Day is September 16th.  Cinco de Mayo celebrates the victory of 4,000 Mexican soldier against8,000 French soldiers on May 5, 1862.  This battle was the first time the French had been defeated in 50 years and it was the last time the Americas were invaded by a foreign army.  Cinco de Mayo is a regional holiday and is not celebrated in all of Mexico, but many other countries use the day to celebrate Mexican heritage. 

Where will you celebrate Cinco de Mayo?  Here are a few Fredericksburg suggestions:

1.  El Charro- This is my my favorite Mexican restaurant in Fred.  Located at 4611 Southpointe Pkwy off exit 126 (I-95).  The restaurant features a large bar, ample seating, and a large projection screen tv.  Drinks specials are offered throughout the year.  The prices are good and the food is great!  I usually get the #5 or the steak fajitas.  Free chips and salsa are served as soon as you sit down.  The waitstaff is friendly and fast. 

2.  Pancho Villa -Multiple Fredericksburg locations including: 10500 Spotsylvania Ave, 754 Warrenton Road, and 155 Garrisonville Road.  I hear alot of people talking about Pancho Villa, but I still prefer El Charro.  Expect Pancho Villa to fill up fast tonight because they are better known in the community.  Most of their locations offer ample seating and the service is pretty fast.  Prices are reasonable for Mexican food.

3.  Carlos O’Kelly’s -2306 Plank Road.  Yes, I am suggesting an Irish/ Mexican restaurant.  Actually it is just a Mexican Restaurant, if memory serves me correctly.  Parking is limited, but the restaurant offers plenty of seating.  Prices are good and the food is pretty good, but this is a large chain and you do loose some of the authenticity with large chains. 

4.  Chili’s - Several Fredericksburg locations including:  3104 Plank Road and 100100 Southpointe Pkwy.  If I had to choose a place to celebrate tonight, this would be my second choice.  Yes, it is a chain; yes, it is barely Mexican food.  But, the fajitas are great and the drink specials are awesome.  This is the most expensive of my suggestions, but it does offer something for everyone.   

Happy Cinco de Mayo!  And remember, celebrate responsibily!