Reduce the Price of Your House When Rates are Falling?
March 25th, 2009 categories: Market Trends, Selling Strategies
We’re in a recession. The worst since the 1930’s.
Have you heard that yet? So have I, but guess what - we’re still selling homes in Denver!
I’ve said it before, Denver is weathering the storm better than many other areas. It’s not only me and other exuberant Realtors pushing an agenda - read it in the NY Times and see it on NBC - Denver’s stability is news.
Still, our higher priced homes are taking longer to sell and have fewer showings while they’re on the market than the mid-priced homes. Medium priced homes that are overpriced relative to their competition are stalled too. It’s a buyers market!
A seller recently asked, “rates have come down more, why should I drop the price of my house now?” Uh, well Mr. Seller, because if you can’t get showings now, when Mr. Buyer’s purchase power just went up again - you’re overpriced!
I really wish it weren’t so. I wish your home and mine were still appreciating at 10% a year. I wish that you could get “what you need” or “what you paid for it” or “what your neighbors got 18 months ago.” I would love to skip the part of the listing presentation where I tell you your house is worth $400,000 less than you want me to list it for. I have some wonderful listings that we priced 18 months ago that could have benefited from my crystal ball (it’s been on the fritz lately). I might have suggested back then that we not be quite so aggressive.
I’m suggesting it now. Two weeks ago I essentially walked away from listing a house that I’ve always loved when I drove by. I had to suck it up and deliver the news to the sellers what today’s value is. I knew that would be the kiss of death, that they would pick the broker who told them what they wanted to hear. It’s listed now for $250,000 more than it should be.
Strike while the iron is hot. Drop the price until you get showings. After 25-30 showings, drop it again if you don’t have an offer.
I’ve closed 4 sales in the past 40 days - all high priced homes relative to the average in Denver. What got them sold was that they were aggressively priced relative to their competition. As rates go down and buying power goes up, use that to your advantage to gauge where the market rates your house a value. Get your price there and you will sell it.
Surf Denver Real Estate at www.GretchensDenver.com!
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Top 5 Tips for Short-Sale Buyers (In Any Price Range)
March 22nd, 2009 categories: Market Trends
You may be interested in making an offer on a property that is listed in the MLS as a “short sale”. My highly educated, former physician father recently asked me exactly what that term meant and how it differs from a “foreclosure.” His question offered me a glimpse that our Realtor-lingo isn’t always understood by the general public.
In Denver, we’ve seen many more homes come on the market lately as short sales. Here’s a list that could help you if your dream home happens to be a “short sale”:
1. Make any offer you deem reasonable. When a house is on the market and the seller owes more than he can sell it for, but it’s not in foreclosure yet - you’ve got a short sale. The seller and his broker will need to negotiate with the lender(s) holding the notes to accept a shortage. Also called a deficiency. The seller’s real estate broker will try to get as much for the house as possible because that’s her job. But you can offer anything you want (don’t make it ridiculous and waste everyone’s time) because ultimately it’s the bank that will be deciding how much they’ll write off.
2. Prepare to wait weeks for an answer. Sometimes weeks and weeks. The bankers are either overwhelmed by the piles of short sales and foreclosures on their desks, or they’ve got their heads comfortably resting on those stacks of files with zzz’s in a little bubble over their heads. You decide which.
3. Don’t expect much on the inspection negotiations. The banks usually want the sale to be “as-is.” This doesn’t abrogate your ability to conduct an inspection, and you always should. However, prepare to fix most of what you turn up yourself. They sometimes surprise us and fix a few items, so you can always submit a list. Just be prepared to make the decision to move forward without most repairs. Remember, the seller is fast approaching foreclosure, and probably doesn’t have any money available to fix anything either.
4. Know what a “Deficiency Judgment” is. For years, banks would file a judgment against a seller for the deficiency in the repayment of the loan. Even though the bank agreed to accept a short sale, they still wanted some sort of repayment. They would negotiate with the sellers to repay in small amounts over several years as an unsecured note. The hammer they held over the seller was a recorded judgment of deficiency. Not as bad on your record as a foreclosure, but still not great. Lately, we’re seeing more banks just writing off the deficiency, and not requiring a seller to repay it or assume a deficiency judgment. Depending on the bank’s stance with the seller, you may have less negotiating room when the seller is faced with repaying the deficiency.
5. Have your own loan lined up and ready to go. You wait and wait for an answer, and then you get the o.k. Now you’ll need to hurry up and get the property closed. Once the bank approves the short sale, they typically want it closed right away. Have your ducks in a row so you can move quickly.
Short sales happen in every price range. I typically work with higher end clientele, often cash buyers, and still we’re seeing short sales crop up. If you find your dream home and the seller is struggling, have some sympathy and then go in and get a great deal!
Search Denver properties on my fabulous website, www.gretchensdenver.com. You’ll have access to nearly every available property in the Denver MLS, be able to map properties, and find relocation information too!
Buying a foreclosure or short sale? Read here about easy remodeling tips!
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Building a New Home Wonderland in Denver
March 15th, 2009 categories: Market Trends
I’ve been reading the news about home builders throughout the U.S. cutting back, downsizing or going out of business altogether.
Here in Denver, Colorado we’ve lost Village Homes, John Laing, and more. McStain is hanging on by a thread. The downturn in real estate is taking its toll. I hate to see builders leaving our city and the resulting job losses, but it may be a good thing for construction to slow down a bit - and for builders to realize that their business model is as important as throwing up houses.
One local builder that seems to be weathering the storm is Wonderland Homes. They’ve managed their business affairs well enough to hang in during the downturn and are turning the corner.
Wonderland has sold 10 homes since the beginning of this year. Steve Phua, Director of Operations, attributes this to the price point they build in. Their primary price is mid-$200,000’s to mid-$300,000’s. Wonderland builds a good house for that price, and buyers are thrilled by the floor plans and finishes.
Steve also told me that location is another important factor, and their developments closer into Denver seem to be faring better. Their main location is at the former Stapleton airport, now the Stapleton redevelopment area. Stapleton is a great new urban neighborhood full of families, parks, schools and offers great walkability.
Denver is fighting off the doom and gloom. Home resales and new construction are both experiencing a pop in activity since last year. Contact me if you’d like to see homes in Stapleton or any other area of Metro Denver. You can begin your online search at www.GretchensDenver.com!
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Denver Colorado Real Estate | February 2009 Market Statistics
March 7th, 2009 categories: Market Trends, Real Estate News
It’s that time again! Time to review the performance of Denver’s real estate market in February.
Stocks are plunging, national employment numbers are falling and yet our real estate market seems to be weathering the storm. We may be on shaky ground, and we are still seeing some prices falling, but deals are coming together and most buyers are able to find financing at great rates. In fact, 4,183 homes were put under contract in the month of February - a 9.19% increase over January.
We’ve added inventory since last month, and currently have 20,059 properties on the market. The increase in inventory is reflective of sellers who waited out the holidays and had their house ready to sell after the first of the year. I would expect to see this number continue to rise over the next few months, but hope that the increase is slight enough to keep the days on market below 5 months. If the days on market rises significantly, prices are at risk to drop further.
The reduction in sales prices from a year ago is influenced by the mix of houses selling. The middle tier of homes are selling much faster, thus the prices appear to have dropped 14.63% since last year. You will also note that we had a price increase since January by 2.19%. That’s a fabulous sign for our market. Many sellers are reducing prices to get their homes sold which is clearing out the inventory, but has depressed the average price.
I’ll say it again - you want to buy low and sell high. Too many people are selling low right now in too many markets. Denver’s real estate market is showing signs of recovery. Now is the time to buy low. Don’t look back and see that you missed your opportunity.
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