Equity loss, governemt to the rescue?

The other day while listening to the radio a home owner called in regarding his equity, or lack of equity in his home.   His argument was that because the real estate market had crashed, resulting in a loss of equity, the government should step in and change the principle of his loan.   In other words, the government needs to force the banks to eat the difference between his purchase price and the current market value.   While listening to this particular home owner, I wondered if he had purchased a new car. If he had it may have cost hime between $15K to $25K,  as everyone knows the minute you drive off the lot, it is no longer worth the purchase price, you are upside down.  Would this same radio caller also expect the government to force the bank to eat the difference between his purchase price and the current fair market value of the car as well?

From a strictly emotional point of view one could reason that this makes sense.  However,  lets look at this from another perspective.   If the same home owner/ caller  had earned $100K in equity would it be realistic for the for bank to request that he not only pay off his mortgage, but also pay the bank 25, 35 or 50 percent of the profit, after all the bank took the risk on the home buyer?

This radio callers call actually resonates with many potential sellers that I talk to on a regular basis.   It is unlikely that the government would ever force banks to re-adjust the principle of home loans.  The government has set up programs like HAMP and HAFA to help home owners who need to sell.  Though these programs are not available for government backed loans like FHA and VA.  The other option for sellers who can not longer afford their homes, due to financial hardships is to sell the home as a standard short sale

Virginia’s Fist Light Rail, the Tide, debuts in Norfolk

This week was the grand opening of Norfolk’s Light Rail best described as a small electric train that runs from EVMS to Newtown Road ( the border of Virginia Beach and Norfolk ), the entire ride from one end to the other took about 45 minutes including time spent stopping at 9 stations , there are 11 in total.

The new light rail system allows residence and tourist the ability to easily access key attractions in the city. Including MacArthur mall, Harbor Park, Norfolk State University and many others. The ease of access will allow residence the ability to go from their homes and hop a ride to any of the 11 stations. Several of the stations offer buss transfers as well.

The EVMS/ For Norfolk station is located in West Ghent, with home prices averaging $290K within a mile from the station. The Ghent area of Norfolk offers shopping, restaurants and coffee shops. The attraction of this area has always been the location of the homes to the shops. Now this has been extended to MacArthur mall and Military Mall due to the light rail.

The economic impact of the Tide was evident to the store operators in MacArthur mall.  Sales were up more than they expected, some stores even ran out of inventory.  The Tide, is going to be as important to Norfolk as the D.C. Metro is to Washington.  But even it has branches into the neighboring cities, at the moment the Tide only crosses Norfolk.

Buying Foreclosed homes in Virginia

Considering purchasing a foreclosed home in Virginia Beach, Chesapeake or Norfolk? Are you leaning towards a foreclosed property because of the instant equity you may earn? I am writing this blog to shed some light on the subject of purchasing foreclosed property.

I have toured many foreclosed properties, and have had a number of clients even purchase these properties but always with the understanding of what they are getting into.

Many home buyers are tempted to purchase a foreclosure because of the instant equity. That is, a comparable home, in the same neighborhood would sell for 5K, 10K or 15K higher if it wasn’t a foreclosure. I have heard this many times. When comparing the foreclosure to the standard listings that are available, the buyers learn that the subject property [ foreclosed ] needs new windows, havac, carpet, water heater, roof and that the list price of $220,000 is reflective of the current condition compared to the local comps. Even if the bank were to agree to a price, and to replace the hvac system, a savings of about $5K, the property is generally an as-is where-is deal.

Lets assume, that the bank accepted an offer of $215K and replaced the hvac system. After the home buyer puts on a new roof, carpet, paints, windows and appliances can easily bring the total cost up to 230,000 in a neighborhood where the current comps are between $230,000 and $240,000.

To make matters even more interesting, the banks will allow and encourage the buyers to obtain a home inspection. However, since the home is being offered AS-IS WHERE-IS the bank isn’t obligated to do any repairs, and if they are requested to do the repairs the bank generally requires 3 bids and this takes a lot of time. I have seen banks take over a month to actually order a termite inspection and repair, this resulted in a closing date extension.

Foreclosed properties also have a ‘special warranty deed’ associated with them. A deed transfers ownership of real property, in the case of a foreclosure a special warranty deed is used. Meaning that the grantor “seller” is only guaranteeing the title against defect arising only during the banks ownership of the property and not against the defect existing before that time.

It is highly suggested that the homeowner purchase title insurance.

Purchasing a foreclosed property may also require special financing options such as 203k loans. This is due to many loan products from FHA, VHDA, etc require that the house be livable and in good shape. This is part of the appraisal process, knowing your loan product, and the requirements of the loan product will be an important determination.

I am available for consultations by calling 757-839-3954 or emailing me at seanschroeder@757realproperty.com

Buyers and Sellers are now in sync with each other.

After the real estate bubble popped, home values declined at a steady and dramatic pace.  Unlike the buyers of the real estate bubble who were more than happy to offer $10,000 over list price  by using their 401k’s , or taking out a second mortgage.  The home sellers of the real post estate bubble, where unwilling to lower their home prices to match the market value, still believing that their home is still worth the price that they paid for it, an unwilling to use their 401k’s or other savings to make up the difference.   That was 2009 and 2010.

Today, when we look at the home sale prices vs list price we see that the sale price is very close to the list price!  This means that after two years, home buyers have stopped looking for “a steal”  and sellers have realized that they can’t price themselves out of the market by over valuing their properties.   Both the buyer and seller have finally found that happy middle ground were both can walk away with their heads held high.  The seller can say he didn’t just give it away, and the buyer can say he didn’t over pay.

Real Estate Market information for Virginia Beach

The average home sale is a 3 bedroom at 1900 sq ft sale price of $238K and a list price of $245K leaving only a 4% difference between list price and sale price.

Sean Schroeder Real Estate Agent

About Me: Sean Schroeder, Agent with The Real Estate-Xchange

I am a life long resident of the Hampton Roads area. Obtained my real estate license in 2004.  Since obtaining my license, I have been involved in a variety of real estate transactions including Commercial, Residential, Property Management as well as helping homeowners avoid foreclosure.

What sets me apart from the other agents in the area?

Simply put it is my Approach! I want to provide over-the-top customer service. I am able to provide custom packages to my clients, kind of an ala carte approach, check out our testimonial. All that I ask from anyone interested in buying or selling a home in Hampton roads is that they give me only 30 minutes to sit and talk about their needs.

Visit 757realproperty.com for more real estate information

Sean Schroeder, Virginia Beach Real Estate Agent

 

Sean Schroeder, REALTOR
The Real Estate-XChange
517 Baylor Ct.
Chesapeake, Va. 23320

757-839-3954
seanschroeder@757realproperty.com

Sale prices versus tax assessment

Is City Assessment of any real value, other than to the City?

I like looking at numbers, specifically numbers that have some bearing on the real estate market in the cities that I work in. I ran a simple MLS report looking for all the SOLD transactions in the City of Chesapeake between 3/9/2009 and 4/8/2009.

The resulting report showed 181 Sold Listings, the average sold property is a 3 Bedroom, 2 Bath, 2,095 Sq. ft home with a sale price of $272,000 sq. feet with an average of 97 days on the market.

I then looked at city assessments versus the sale price on the average home sold. I ran my second report based on the average sold home in Chesapeake, Va., with a sales price between $260K and $280K, and a closed date between 3/9/2009 and 4/8/2009.

The resulting report only identified 12 homes out of the original 181 sold homes in Chesapeake. The average sale price of these homes was $270,000 for a 3 bedroom, 2 bath home with 2,013 sqr feet.

I then looked at the sale price and the tax assessment of each home. Here is what I found:

8 out of 12 homes sold for less than the city assessment!

In the cities I work in, the city assessment should reflect the Fair Market Value of a home. In the sample case, I found that the city of Chesapeake Va, was off by an average 7%. On a home assessed at $200,000 the actual Fair Market Value would be about $186,000. Currently the city of Chesapeake charges $1.04 per $100 of assessed value in Non-Mosquito controlled areas.

Assuming the city over valued a home by $14,000 resulting in an assessment of $200,000 the tax paid will be $2,080. The tax paid on the fair market value, $186,000 would be $1,934 resulting in a difference of $146. According to the City of Chesapeake, there are 72,000 homes. If just half of these homes pay $146 over what they should be, the City of Chesapeake Va. may be over charging the home owners by as much as $5,256,000.

Military Relocation to Virginia Beach.

Realty Executives - Virginia Beach, Norfolk and Chesapeake

You just received your orders to transfer to NAS Oceana, Dam Neck, NOB, Naval Station Norfolk or any of the other bases in Virginia Beach and Norfolk. Now you need to determine your next step.

A military relocation to a new city can be very stressful, and in some cases complicated. After all, you are packing up your family, your property, and saying goodbyes to friends and family, then moving it to a new home possibly across the country. This is no easy task!

My job as a military relocation specialist is to help make the entire process as easy as possible. To work with you and your family, to find that PERFECT place that you can call home. As a professional Real Estate Agent, helping the military members of the US Armed Forces relocate to Virginia Beach is my top priority. I can provide you with great tools, at no cost to you. These tools can help you search and categorize all of the available homes that meet your specifications.

Whether you are looking to purchase or sell a condo, townhouse, single family detached in Norfolk, Virginia Beach, Chesapeake, I am here to help you with all of your real estate needs.

View homes for sale in Virginia Beach and the Hampton Roads area at Hampton roads home listings

Feel free to call me at 757-839-3954 or email me

Cash In Now With The New Homebuyer Tax Credit For First-time Homebuyers As Well As Current Homeowners

By now you’ve heard the new law, The Worker, Homeownership and Business Assistance Act of 2009, went into effect November 6, 2009, which extends and expands the first-time homebuyer tax credit, making it available to move-up buyers and expanding the income limits for purchasers.

Under the new law, home buyers have until April 30, 2010 to enter into a binding contract to qualify for the tax credit and purchase must be settled until June 30, 2010.

First-time home buyers, a buyer who has not owned a primary residence during the three years up to the date of purchase, with adjusted gross incomes up to $125K (singles) or $225K (married) can get the maximum $8,000 tax credit. Homebuyers with an income over $145K for singles or $ $275K for married may be eligible for reduced credit.

Current homeowners, a buyer must have owned and used the same home as a primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of new home, meet the same income requirements the first-time buyers, are eligible for a credit of up to $6,500.

Taxpayers have the option of claiming the credit on either their 2009 or 2010 tax returns for all qualified home purchases in 2010.

Buying a foreclosure in Virginia Beach

When purchasing a new home, foreclosed properties look like a great opportunity, and in many ways they are.
Here are some points to keep in mind when purchasing a bank owned/ foreclosed home.

• Know what bank owns the house, and who they have hired to handle the property
• Get a good inspection on the property before submitting the offer
  • HVAC ( Heating and Air Conditioning )
  • Termite
  • Plumbing
  • Electrical

  Many Class B contractors can conduct a home inspection, or really good home inspector ( be sure he has a back ground in construction and the local building codes )

Once you have the above information, with pictures you are ready to make an offer, or even decide not to make an offer.
Even though the inspections may cost a little, it is money well spent.

In addition, it is highly recommended that you have a complete title search and purchase title insurance. Bank owned properties only have a ‘special warranty deed’ meaning that the bank is only liable for defect occurring while they owned the property. This is different from the deed provided from a home owner via a standard sale.

Debt talk on in Washington — I want to rant!

Over the last several weeks all that has been on the news is the President Vs Congress on the debt ceiling. Much of the noise is that the major credit rating agencies are worried that increase risk exists with our ability as a nation to repay our loans. They are worried now? A few years ago we had banks giving loans to those who did not qualify, so called sub-prime loans. Many would argue that those lending practices got us into the mess that we are in now.

In my opinion, if a bank where to look at our finances, as a country, our out of control spending, and lack of revenues that the country would only qualify for sub-prime loans. If you can’t afford to pay back the money than the loan should not be given and the consequences should be expected. A hit to ones credit. The three credit agencies should lower the credit rating of the US.

I find it amusing that our politicians can not trim the fat from our countries spending. Those in Washington, expect for the Commander and Chief are businessmen, most understand budgets. There is a document that they can look to for guidance the Constitution, If it is not in the Constitution, that is, if is is not a Federal obligation/power given from the States trim it! Start with the National Education Administration, work your way to social welfare programs. I agree there should be a type of safety net, not a life time entitlement, but those safety nets should come from the State.

Most households can’t sit down, and say to all the members, “Lets raise our Debt Limit” and expect the banks to lend us money based on our self imposed credit limit, this is exactly what the Federal Government is doing. What has ever happened to the ‘Good faith and credit’ of the United States? We have money that has no tangible value, try to trade it in, if you take a $5 bill to the bank you will get 5 $1 bills, if you trade the $1 bills in you’ll get coins, what can you trade the coins in for? Our currency is only tied to the Governments Good faith and credit as rated by the 3 credit agencies and view by other countries.

I believe that our politicians have no desire to solve this problem, there will be no real reforms, or cuts. Social programs will continue to be paid for, while the military suffers cuts and the American people are levied with higher taxes both at the registered and embedded. Eventually bonds will lose value resulting in interest rate increases.

Selling a home, offer the same incentives that new home builders do

New home builders have known for years, that if they provide the right combination of incentives that make sense to the consumer they will sell homes. To provide these incentives they have to average the costs among the communities total inventory.

The biggest incentive that is offered to the consumer, aside from the modern home, are the closing costs, second is the home warranty. As an agent who represents resale homes, we have a program that provides the same options to the home buyer.

The most common feature we can suggest are pre-home inspections, and a home warranty from someone like Home 2-10. This warranty covers the major systems of a home, much like a warranty for a new home would. The biggest dollar ticket that the new home builder offers are the closing cost.

We have a program that will cover the buyers closing cost, the terms are similar to new home construction as well, allowing you, the seller, to remove that cost from your list price! The buyer will have to meet certain conditions to receive this incentive. Consider this, average home sale in Hampton roads is 275,000 and closing costs can range up to 8,000 dollars. As a home seller this is $8,000 is generally worked into the sales price of the home, meaning that when the home is sold you either have to pay $8,000 or some portion of it, or you get $X minus the $8,000. Using our program, the buyers closing costs are covered, and you walk away from the closing table with more money in hand!

If you are interested in selling a home in Hampton roads, and you want to save money in doing so call me for your no obligation consultation.

Home improvement ideas to add value to your home!

Informative information wheather you are buying of selling a house.

http://www.houselogic.com/media/flash/HouseLogicWidget.swf

Buying, selling or if you have a home you need to rent out I am available to discuss your real estate needs. 

 

Multiple offers Really! I thought homes weren’t selling?

It is amazing, almost unexpected, but it is great news!

Just last week I was calling agents to schedule times to show homes, I had about 6 homes on the short list.  When finished I found that 4 of these homes where under contract, but 3 of them had multiple offers being negotiated!

What did these homes have in common that resulted in these multiple offers?  I believe it is simple.  First they were PRICED RIGHT, more on this latter, and second they were on the MLS and other real estate related websites such as Realtor.org Listing agents, as we are commonly referred to are now online marketing experts!  We have to have the online tools to help promote the homes that we are ‘listing’ and to drive traffic to the homes site and this is were we rely on blogging, Realtor.org, and many other specific online tools including the MLS.

The MLS is the key to co-brokering, it allows agents to search for homes, that meet their clients needs, based on specific specifications including price.  Home buyers are savy, and agents don’t want to waste their time or their own with overpriced homes.  In today’s market homes that are Priced Right, stand the best chance of being shown, and eventually having an offer, maybe 2, written on it.  When a home is listed, in essence, the home owner is putting forth the first offer.  He is saying, I am offering you $X to purchase this home, I call this the initial offering.  It is up to the buyer(s) to determine if the offer is fair, or too high, and if they are willing to counter.  In today’s over saturated marketing, if the buyer believes that the price is too high, he is unlikely to make a significant counter to the offer.  Instead he’ll go down the street.

I proposal in toady’s market that home sellers have a serious look at their neighborhood, remove the emotion and with the help of an experienced agent determine the fair market price of their home.  Forget that you have new 12″ tiles and new carpet in the house, a home is expected to have floor covering, it is only when it is in poor condition that these items are relevant.

 

Sean Schroeder, REALTOR
Realty Executives

757-839-3954
sean@757realproperty.com
927 N. Battlefield Blvd. #200
Chesapeake, Va 23320

Simplifying the home selling process

Introducing a simplified solutions to selling homes.

Are you trying to sell a home, or considering selling a home? Most home sellers can sell their home without the need of a traditional real estate agent. That is, they can show the house and negotiate the deal themselves. So, why hire a professional real estate agent?

Listing agents will give these reasons to use traditional listing services:
- Experience Negotiating
- Ability to handle large amounts paper work
- Access to trends, pricing information and understanding of fair market value
- Large access to buyer agents ( over 90% of home buyers utilize a buyers agents )
- Protects your best interest
- Provides a buffer between seller and buyer.
- Understands the entire process and knows the key players
- Has access to products and services not available to the home seller.

While, these are all very true statements, you will rarely hear a listing agent talk about how he will sell your home. The reason for this is that listing agents are really marketing agents – we specialize in marketing homes to buyers and their agents. This is fact the KEY to a successful real estate transaction is getting the property in front of the buyers agents.

If you would like to learn about a system that marries the best of the Traditional listing services and the For Sale By owner services contact me today.