Friday, January 18, 2008

Just A Thought.

I have a couple who are looking to buy and they really like this
neighborhood, it is older but still with many nice homes with bigger
lots. The homes are not that modern they are built around mid 90s.
Some homes are upgraded, some are mostly just original but with
fresh paint, new carpet, new kitchen counter and or cabinets.
Prices are reasonable around $490,000 to $550,000.

We drove around the neighborhood of 250+ homes and we only found
about 4-5 homes for sale. The buyers also noticed that too.

Well, guess what, the neighborhood is well established, people
bought long time ago and they have accumulated enough equities
in their homes to stay put or perhaps move up.
(One neighbor moved to the wine country, they built their own home
plus inlaw's home on 5 acres lot, it is approx. $1.6 mil now).
In this neighborhood, most of the home owners probbly have steady
jobs and older kids perhaps with part time jobs.

In the meantime I have a listing in a new neighborhood, it was built
by Lennar in 2005. The homes are all beautiful and all upscale with
granite tops, travertine tiles or wood floor, mostly 5 or 6 bedrooms
with 4 to 4.5 baths. Some homes are truly gorgeous with upgrade in
the front yards as well as backyard.

Guess what, people bought in 2005 with Adjustable Rate Mortgage,
low down payment, low interest rate. Now it's 2008 many mortgage
interests for these home owners became much, much higher. For
example some payment increases anywhere from $500 to $1500 more
per month. No wonder, there are at least 30 homes for sale in this
area. People got into a bad loan and now they are either stuck or
needs to get out. I hate to tell you how much some of these
gorgeous homes are sold for. One of the problem is that since your
home is worth what the market will bear and the appraisers also look
at the neighborhood to see how much homes are sold for in the last 3-
6 months and it does not matter how much you bought it for.

It is not a pretty picture and believe me, the realtors who listed
these homes will spend tons of money for advertising and expenses
out of their own pockets TO HELP the SELLERS!! Some bank owned or
short sale properties are taking long time to sell and must be
priced competitively otherwise forget it. The buyers / investers are
looking for the cheapest house in the neighborhood. That is driving
the price down as well. Forget the existing lenders, they are
horrendously slow in the approval process when working with them.
For shortsale home, if we are lucky and have a buyer, the lender
might just approve 1% commission to the Realtors. What a joke.

I was on the phone for 4 hours one morning trying to talk to them
about processing the home for sale, they transferred me all over the
company. I had to put the phone on the speaker so I can do something
while I waited for someone to answer. Besides all the paperworks
they asked you to fill. All these work just to help the sellers.

In this market, all we can do is to work harder to help the sellers
sell their homes, without even thinking about how much we are going
to make. Some agent will not touch the shortsale, they think that it
just wasting their time.

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