Opportunity
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You'll get a great deal on a Founders Way condo right now, with over $10,000 of builder incentives! |
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Buyers at Founders Way will currently receive these great promos from the builder:
Buyers at Founders Way are often attracted to:
Find out more about Founders Way:
Full Disclosure: I represent the Scripture Communities, the builder/developer of Founders Way. | |
Unwillingly keeping your townhouse might be your best (unintentional) financial move yet! |
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As I pointed out a few days ago, if you bought a townhouse a few years ago, you might be in a position where you can't sell it -- and thus end up being an accidental landlord. But there may be some unintended very positive consequences for keeping that townhouse. Let's examine what might happen if you kept your townhouse for the remainder of the term of your mortgage. In the illustration above, let's imagine you bought your townhouse for $160K in January 2005 and financed 100% of the purchase price. You stay in the townhouse for seven years, and then move out of the area for a new job. Faced with a tough townhouse sales market, you feel forced to keep the townhouse. What happens next.....
As you can see, after investing $0.00 on Day 1, you end up having a cumulative $230,352 benefit after 30 years. Wow! So, can this make you a bit more optimistic about being (or feeling) forced to keep your townhouse? | |
Great news for buyers! Average 30-year fixed rate mortgages at only 4.15% per Freddie Mac. |
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The downgrade of the United States' credit rating sure helped mortgage interest rates! Wow! The average rate on a 30 year fixed rate mortgage is now 4.15%. This is certainly a great time to lock in a rate and buy a house. You will likely be locking in your housing costs to the lowest possible point they could be for the near-term future given both low interest rates and low median home values. | |
Per The Atlantic: Is Now the Right Time to Buy a Home? |
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For your daily real estate reading, consider perusing this article from The Atlantic a few weeks ago entitled "Is Now the Right Time to Buy a Home?" The author considers factors such as:
Again, enjoy the read of "Is Now the Right Time to Buy a Home?" | |
Real Estate: the best buying opportunity of a lifetime? |
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Mortgage interest rates continue to decline in April 2011 |
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After interest rates climbed nearly a full percentage point (4.2% to 5.0%) between October 2010 and February 2011, they have started to decline again over the past several months. April 2011 marks the second straight decline down to the current average of 4.8%. Please note that you may be able to obtain an even lower interest rate than the average rates shown above depending on your credit score and other details of your finances and home purchase. Current rates offered via WellsFargo.com include:
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Do you own (and live in) a townhouse in the City of Harrisonburg? |
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Do you like playing Monopoly? If you bought a townhouse between 2000 and 2005 in the City of Harrisonburg (perhaps in Liberty Square, Beacon Hill, Avalon Woods or Harmony Heights) I would encourage you to check with a lender to see if you can buy a second townhouse. I have many clients who bought two-level townhomes between 2000 and 2005 and bought them for anywhere between $100K and $125K. As a result, their mortgage payments are somewhere in the neighborhood of $700/month including principal, interest, taxes, insurance, and homeowners association dues. ($115K purchase price, 100% financing at 4.5% over 30 years) That townhouse can very likely be rented in the current market for $850/month to $900/month. There continue to be isolated opportunities to buy re-sale townhouses in these same neighborhoods for around $125K to $140K. The new mortgage payment could thus be around $800/month including principal, interest, taxes, insurance, and homeowners association dues. ($135K purchase price, 96.5% financing at 4.75% over 30 years) Monthly cash flow now: Mortgage payment (etc) = -$700 Total cost = $700/month Monthly cash flow after acquiring a second townhouse: Mortgage payment (etc) on 1st townhouse = -$700 Rental income from 1st townhouse = +$850 Mortgage payment (etc) on 2nd townhouse = -$800 Total cost = $650/month You'll actually lower your monthly costs by $50 by acquiring a second townhouse. Furthermore your tenant will be paying off your first mortgage for you, and you will own approximately $270K of real estate instead of only $135K. So, what do you say? Are you ready to invest? | |
There Are Buyers Waiting In The Wings |
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I recently listed a home in Barrington that, in the first month, had multiple showings and two offers. One of the offers was accepted, and the property will be under contract later this week. Oh wait, think for a minute about the price range that this home was in -- over $400,000. Does that price range strike you as particularly hot right now? There were 57 home sales in Harrisonburg and Rockingham County during March 2011 (as reported thus far), and only one of them was a house over $400,000. So no, the housing market over $400,000 isn't tremendously active right now --- but there seem to be buyers waiting in the wings, waiting for good opportunities to present themselves. It was somewhat humorous when the property first came on the market, as I relatively quickly had showings scheduled by Realtors who had shown my other similar listings in Barrington and Lakewood during the recent months. It was clear that these buyers were just waiting for the right property to come along. What does this mean to you? While there are no guarantees, if you price your house well, and it is marketed well, you might just have a chance to sell your property, even in a not-quite-so-good-yet real estate market. | |
FHA Adjustable Rate Mortgages For Only 3.625% |
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As of today, you can obtain an amazing 3.625% interest rate on a 5/1 adjustable rate mortgage through FHA. Until recently, I had thought that 30 year fixed rate mortgages were the only product offered through FHA, but Oguz Sengul pointed out that FHA also offers a 5/1 ARM. A "5/1 ARM" is a mortgage that has a fixed rate (3.625%) for five years, and then can adjust once every year. If you anticipate only being in your home for 3, 4, 5 or 6 years, this can be a fantastic loan program to consider! | |
Fortune Magazine: It Is Time To Buy Real Estate Again |
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Fortune Magazine makes some bold predictions after LOTS of detailed analysis.... Click on the image above (or here) for a PDF of the entire article, which deserves a careful read. To entice you to read the entire article, consider the following excerpts....
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So, would it be a good time to buy a house right now? |
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A colleague asked me this question at a meeting of the Shenandoah Valley Builders Association this evening: So, would it be a good time to buy a house right now? I responded that it would be, IF.....
But if you do meet my rough qualifiers above, now can be a fantastic time to buy, as you'll get to take advantage of:
P. S. There are plenty of other aspects of your particular scenario that could weigh your decision more or less towards buying. I'm happy to work with you to talk through that decision making process. Let me know if that would be helpful to you. You can reach me at 540-578-0102 or scott@HarrisonburgHousingToday.com. | |
There must be some good deals out there -- we've seen a LOT of price reductions lately! |
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When I log into our MLS (multiple listing service) I see a variety of early indicators about the present state of the market. I'm confronted with information about the number of new listings, the number of sold listings, the number of price changes, etc. These numbers usually don't vary too much during the course of a month --- other than on weekends, when the numbers dip, and on Mondays when they generally rise. The "price change" statistic, however, has been quite astounding of late. For example --- in the past 30 days there have been 235 price changes on properties in our local MLS (Harrisonburg-Rockingham Association of Realtors). All of these properties aren't in Harrisonburg and Rockingham County, but I think it becomes pretty evident that there are a lot of motivated sellers out there, showing that they are ready to sell by lowering their list prices. Perhaps an equally disturbing statistic that also faces me when I log in is the number of new listings versus the number of sales. In the past 30 days there have been 68 sales, and a whopping 226 new listings. This includes all areas and all property types, but regardless, that's an imbalance I don't like to see. Oh, and yes, the graphic above is illustrating an actual sales pitch I received by e-mail this past week. A currently listed property will have a $2,000 price reduction each week --- presumably until it sells! | |
Buying a Foreclosure |
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If you are in the market to buy a home, some of the properties you might be considering are foreclosures – but there are some distinctions to be aware of at different stages of the foreclosure process. It is possible to buy a home from the owner before they are foreclosed on even if they cannot pay off their mortgage – this is called a short sale. Or, you might buy a property at the courthouse steps when it is being auctioned – this is called a trustee sale. Finally, if a property does not sell at the auction, you can buy the property from the lender after they have taken ownership of the property – this is called a bank owned property or REO property. Short Sales: Some homeowners must sell their home, but market conditions won't allow them to sell it at a high enough price to be able to pay off their mortgage(s). In this example, a homeowner might have a $250,000 mortgage balance but can only sell the property for $230,000. As a prospective buyer, it is sometimes possible to purchase this type of a property through a process called a "short sale." In such an arrangement, the homeowner petitions their lender to accept less than the full payoff of the mortgage and in return to still release the deed of trust so that ownership of the property can be transferred over to you, the new owner. This can benefit the lender, as they skip the time delays and cost of the foreclosure process. This can also benefit the homeowner, as a short sale will have a slightly lesser negative impact on their credit as compared to a foreclosure. As a buyer, however, you must know that there are challenges to buying a property as a short sale. The biggest challenges of late seem to be the uncertainty of the purchase and the time table. Even if you and the homeowner agree to a price of $230,000, the homeowner's lender must still agree to accept that price – since it won't allow the homeowner to pay off their $250,000 mortgage balance in full. This process of waiting to hear back from a lender, and then complying with all of their various terms can sometimes take 60 to 120 days – or longer! Trustee Sales: If a short sale does not take place, and a homeowner is behind on their payments (or not making them at all), eventually the property will be sold by the lender on the courthouse steps. Buying a property at a "trustee sale" can be exciting, and can be a great opportunity – but there are challenges as well. If a property to be sold at a trustee sale is also listed for sale with a Realtor, you can usually view the property ahead of time by calling your Realtor. Otherwise, you will likely not have the opportunity to see inside the property before the trustee sale, and thus you will not know too many details about the condition of the property. Furthermore, your purchase of the property at the trustee sale cannot be contingent upon viewing the property, or inspecting the property. In this instance, you are purchasing the property in "as is" condition, regardless of what you then find out about the property. It is also important to note that many times the lender will have an opening bid at the trustee sale that is close to (or sometimes higher than) the amount that they are still owed on the mortgage. Thus, in the example above, they might make an opening bid of $250,000. As a result of this opening bid process, many (or most) properties available for purchase at a trustee sale are not great opportunities. Occasionally, a property will be foreclosed upon that has had a mortgage in place for many years, whereby the balance of the mortgage is much lower than current market value – these are great opportunities for a buyer. Bank Owned Properties: If you don't buy the property before the auction (as a short sale), and don't buy it at the trustee sale, you'll have a third opportunity to buy it once the bank owns it. These properties are called "bank owned properties" or REO properties ("real estate owned"). Oftentimes, the prices on these properties are quite realistic, if not under market value. It would not be atypical for a house such as the one mentioned above to come on the market after the trustee sale at a price of $210,000. In such an instance, you should expect to be buying the property in "as is" condition, and you will also be buying with a slightly different contract document. Most lenders have a long standard contract or contract addendum that spell out a variety of additional contract terms designed to protect them from any future liability – and rarely will a lender agree to have these contract documents changed in any way. As you can see above, oftentimes buying the property as an REO property is where the best opportunity lies. When a home goes into foreclosure it is often for very sad and unfortunate reasons – such as the loss of a job – and I do not wish such circumstances on any homeowner. However, if you are a buyer in today's market it is important to be familiar with different methods for buying a property when it will be, is being, or has been foreclosed upon. For information about upcoming trustee sales, please refer to HarrisonburgForeclosures.com. For information about purchasing a property as a short sale, or purchasing a bank owned property, please e-mail me at scott@HarrisonburgHousingToday.com or call me at 540-578-0102. | |
Home buyers are probably getting GREAT deals these days, right? |
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In a lot of ways, they are --- but it's not as extreme as you might think. After observing several houses go under contract at fantastic prices I was pondering aloud that it seemed that finding the right price would make buyers appear . . . because you'd be offering them a great deal. That prompted someone to ask me about current price per square foot prices for houses --- and whether buyers were getting great deals these days. Thinking about one of the houses that had recently gone under contract, I commented that yes, houses are DEFINITELY selling at GREAT price per square foot rates. That will teach me to make a broad statement based on one or two data points. This evening I dove into the data to take a closer look --- and to confirm what I was quite sure to be true. To get the best possible sense of the deals buyers are getting these days on a price per square foot basis, I decided to narrow down the sold properties I was examining. If I examined all properties of a variety of sizes and ages, there would be so many variables at play that it would be hard to draw any conclusions. Here's how I limited my two sample sets of data:
My second data set examined homes matching the same criteria that sold during 2010 -- there were 35 such homes, and they sold at an average of $111/sf. Hmmmmm......$4/sf better than a year ago.....is that a great deal for a buyer? That provides a $8,000 savings on a 2,000 square foot house. Instead of buying the house for $230k (in 2009) you'd have paid $222k (in 2010). That doesn't seem like an extraordinary cost savings to buyers --- so perhaps in the aggregate buyers aren't getting amazing deals now (compared to a year ago), even though they are getting slightly better deals. Examined one other way, 26% of these houses sold for less than $100/sf in 2009......and in 2010, 29% sold for less than $100/sf. So, it seems that while there are some isolated AMAZING DEALS in the current real estate market, you probably won't be able to get a FANTASTIC DEAL on EVERY house that's out there. But, of course, every seller trying to sell their house right now would like me to remind you that:
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If the price is right, the buyers will appear! |
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In a somewhat turbulent real estate market, it is often difficult for a seller to determine an appropriate list price. Many sellers are certainly trying to find it.... 148 of the 802 active residential listings in Harrisonburg and Rockingham County have seen a price change in the past 60 days. So, what does it take? Is there a magical number, below which a house will instantly sell? Sometimes there is! A house that has been listed with our company for over a year has seen quite a few price reductions, but the most recent change in price (-$20,000) apparently brought it to a price where it was much more marketable! After over a year without an offer, there were four offers on this property within a 10 day period! That house is now, thankfully, under contract --- though two of the hopeful buyers each increased their offers to fight it out for the opportunity to buy this now very well priced home. Reducing (and reducing, and reducing) the list price of a home until it sells won't always work -- but in a decent number of cases, if you really do want to or need to sell, getting below a certain price point can all of a sudden create a flood of buyer interest. | |
Founders Way Condos Proving Popular With Buyers |
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Full Disclosure: I represent the developer of Founders Way. Harrisonburg home buyers haven't had too many condo options to choose from in the recent past if they actually wanted to live in the condo....
Now, however, there is a new option in town --- Founders Way Condominiums. The condos at Founders Way feature 2 or 3 bedrooms, and start at only $142,900 (see all pricing). These newly built condos feature upscale kitchens, an open floor plan and spacious master suites -- think hardwood laminate floors, granite countertops, contemporary lighting fixtures, nine foot ceilings, decorative archways and colonnades, etc. Oh, and quite a few of these new condos are selling! The community will eventually consist of 72 condos -- but for now the first building of 12 has been constructed, and the condos are at various stages of completion. Of the twelve condos in the first building at Founders Way....
Let me know if you'd like a tour of Founders Way --- I'd be happy to meet you on site. You can reach me at 540-578-0102 or scott@HarrisonburgHousingToday.com. | |
Hidden Opportunities in Real Estate |
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"There are deals to be had" one of my clients commented to me today as we were discussing the local market and a particular property that he was considering. I agreed, but we then both remarked that many of them are hidden opportunities. With many more sellers in the market then buyers, there are certainly some sellers who are getting fed up with waiting around to see when their house will sell. They either really want to or really need to sell NOW! Some of them, however, haven't yet adjusted their asking price to communicate that to the outside world. How do we discover these hidden opportunities, you might ask? Unfortunately, many of them can only be discovered by making an offer to purchase the property. Does it need to be a written offer, with all of the details spelled out? Yes -- to truly find out how much of an opportunity might exist with a given property you are much better off making the offer in writing, with all the details such as price, closing date, financing terms, inspection contingency, etc. Now, of course, there are always some opportunities that stare right out at you --- prices on houses that are obviously lower than they should be. However there are quite a few other houses on the market right now that could be purchased at a price that would likely be very compelling to you --- but we won't know that until and unless you make an offer. There are only two risks in making a low / low-ish offer to see how much flexibility may exist in the pricing of a house. First, you may become emotionally attached to the house, and decide you'll pay whatever it takes to get that house of your dreams --- this could be problematic, so let's discuss it if you know you are prone to such inclinations. Second, you might actually buy the house at a price that you're excited about --- oh wait, that would be the goal! While there are plenty of houses on the market (maybe most?) where you won't find much negotiating room, there are always some where you'll be pleasantly surprised at how much you can negotiate on price. Let's find them! | |
Per CNNMoney.com, "Buying a home now is a no-brainer" |
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The market is slow, prices have slowly declined for the past few years, and likely will for the next year --- could this still be a good time to buy? Ali Velshi from CNNMoney.com says yes. (Thanks for the tip, Sue!) Velshi's logic is that even if prices fall a bit more, that today's super low interest rates make it a terrific time to buy: "Buying a fairly priced home at today's rates may be the best deal you will ever get." I tend to agree with his logic. You see, if you're going to be in a house for the next five years, and are considering the purchase of a $250k home, you're better off to buy it today at 4.25% than to buy it a year from now at $240k with a 4.75% interest rate. Assuming a 20% down payment....
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A Rising Tide . . . Your House Will Be Worth More Later, But So Will Their House! |
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It is said that a rising tide lifts all boats. Apparently, there are some larger political or economic meanings to the concept, but for today we'll just consider it within the context of the local real estate market.
"You see -- if we wait until later to sell your house, you'll be able to sell it at a higher price -- but the owners of the house that you want to buy will also be able to demand a higher price for their home!" The rising tide lifts all boats! Put another way, it's o.k. to sell low in a tough market, as long as you are also buying low in that same tough market. This is especially important to remember given today's low interest rates. Let's compare buying now versus buying later....
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Founders Way, New Condo Community in Harrisonburg, Wins Parade of Homes Awards |
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If you haven't stopped by Founders Way yet to see these newly finished condominiums, you might want to considering doing so this coming weekend during the SVBA Parade of Homes. Founders Way won several awards including Realtors Choice, Best Interior, Best Exterior and Best Overall. But let's give Founders Way some context.... There are lots of townhouses for sale in Harrisonburg priced around $160k, with 1300-1400 square feet. The condos at Founders Way are similar ($160k, 1300-1400 SF) but they have some significant differences.
For more information, visit FoundersWay.com or call me at 540-578-0102 to schedule a time to look at this very new and very exciting product in our market. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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