Friday, June 20, 2008

LOWERING LISTING PRICE OF MEMPHIS REAL ESTATE

Many Memphis home sellers are wondering when and how much to lower their listing prices in order to sell their homes. Memphis is not a market where home values shot upwards each year, which is why the seller's dollar goes so far in purchasing Memphis real estate.
It may be time to "get real" about pricing to sell, because it seems like buyers are shopping less with emotions and more "looking for the best deal" in mind. For that reason, it may be time for a seller's reality check before their home sits on the market for too long. The following may be signs of being overpriced for the current market:
1) Very few or no showings. The first couple of weeks on the market is the best time to be priced right along with having your home in order.
2) Some showings..but no offers.
3)Similar homes in the area selling for less. The median home selling price must be continually monitored and your home's asking price must be in line with current home selling prices.
4)Repeated negative feedback. In this case, the seller either needs to correct issues causing the negative feedback, or if not correctable, the change the asking price accordingly.

In this market, it is easy to "blow it" by overpricing.

Thursday, June 19, 2008

FOUR GREAT REASONS TO PURCHASE A MEMPHIS HOME NOW!!

The National Association of Realtors and of course the Memphis Area Association of Realtors, are doing their best to help stimulate the home buying and selling market. Each organization has programs in place to keep the market alive and well no matter how much bad press it gets. As a matter of fact, much of the bad press simply makes recovery of our market even harder.
At any rate, there are good reasons to buy a home in the Memphis real estate market and here they are.

1) Mortgage rates are still hovering around 40 year lows. Today, rates are around the 6% mark as they were 45 years ago!
2) Inventory is at a 15 year high, with over 12000 homes for sale in the Memphis real estate market. Normally, there are around 7 to 8 thousand homes on the market. This gives more choices to find the right home for your family.
3) FHA is just now announcing higher low amounts available in our area for individual mortgages, allowing higher dollar purchases for those who qualify.
4) If you have been renting while waiting to purchase, you are losing out on the two best tax deductions of mortgage interest and property taxes. Both of those make home ownership a much better financial position rather than paying the mortgage on rental property for someone else while your funds give you no return when they are used for rent rather than a mortgage payement.
So there you are….four good reasons to Hop the Fence and find the home that will suit you and your family.

Wednesday, June 18, 2008

More Memphis Foreclosures

I wanted to follow up on my list post. Some clients have found a web site while they are looking to find a foreclosure windfall to purchase. This web site is Realty Trac. This web site gives limited information regarding foreclosed properties, in an effort to get individuals to pay them the membership fee to join their web site. Once you join, you are able to get all the information about the properties they have on their site.
Now let's talk about those properties on their site. Several of the homes our clients found, did have enough information, that I could find them in the local MLS. They were listed for anywhere between 45k to 80k more than the price mentioned in Realty Trac. Today, they emailed a home showing 94k as a price. The footnote on this property states that :
This property is a Notice of Default. This is the initial document filed by an attorney or trustee on behalf of the foreclosing lender that starts the foreclosure process.
So basically, they are reporting the loan balance and not the asking price for the property once it is listed. This can be deceiving to individuals who don't understand that this web site survives on the membership fees and any information (or lack of information) they can provide to induce you to pay this fee is to their benefit. Thus, they are preying on people, who as mentioned in my last post, are looking for a financial windfall by purchasing a home for pennies on the dollar. This just feeds the notion that most home buyers today can find and purchase homes for half price. Perhaps this is possible in areas of the country where home prices skyrocketed due to loaning practices, but that did not take place in the Memphis area. This is why we were not "on the bubble" as many parts of the country were, and also why our real estate values are pretty solid in fact. That's not to say that we too are not suffering from the "value bubbles" that were in place in different parts of the country. Home buyers that do want to purchase a home in our area, and they are moving from those "bubble affected" areas, find that they can not sell their homes to easily and therefore can not purchase a home here in our area...the bad domino effect.

Friday, June 06, 2008

MEMPHIS REAL ESTATE FORECLOSURES

Memphis homes in foreclosure, like most city’s real estate markets today, are easy to find but not always so easy to purchase. Consumers receive the message from media hype, that they can find real bargains or even achieve wealth by purchasing bank-owned homes. In rare cases, a buyer may find a foreclosed home that is in fair conditon. Unfortunately, this is the exception and not the rule. Most foreclosures, even those advertised as needing some “TLC”, are usually in need of major work. Many have been stripped of light fixtures and appliances, and have been treated unkindly, to say the least, most likely by the owner that was foreclosed on or the tenant that was forced to move out.
Real estate agents are bombarded with information on how to get rich selling foreclosures and emailed offers to teach Realtors on how to become an expert at marketing this type of property. Opportunities do exist for investors and agents who want to run a high-volume, low-commission business, but the homes and the opportunities are not as wonderful as the marketing leads us to believe.
Foreclosures are a growing part of the inventory and Realtors work with them because we have buyers who say they want to find a “deal” on a foreclosure. The process of buying a home from a bank is different than buying it from a private party—it is slower, and there is more paperwork and it always seems as if the bank is in no hurry whatsoever to close one of these transactions. Not to mention the very poor condition that most of these homes are in, leaving a Realtor chasing a turkey… for a buyer looking for the golden goose.
Buyer’s may wait a week or so to get a response from an offer on a foreclosed property, and the answer may be a counter offer or a rejection rather than an acceptance. Banks would like to get as much as they can for these homes to cut their losses, so they are in no hurry to take the first offer or a lowball offer.
Unless a buyer has years of experience in buying this type of property, they will have no idea what they may be in for after a purchase. It’s not the easy to see repairs that are the costly repairs, but the “hidden” repairs and “surprise repairs” that take the value added profit or added equity away from the investor. If a buyer ends up with so much invested in repairs that the homes value is worth less than or the same as the amount invested, then they now own a home where they are waiting for equity to buiid, not much different than if they had just purchased a home in good conditon that was not a foreclosure.About 25 to 30 percent of the inventory of available homes are foreclosures in our area and that number is growing. It will be interesting to see how this shakes out in a few years. The number of foreclosures locally and nationwide have a measurable impact on the fabric of our neighborhoods and on our economy. Although someone always figures out a way to make money off of this scenario, it is not evident who will be the winners and who will be the losers. One thing is for sure, this entire market shakeup will have to work itself out, or the spiral will grow stronger and pull our entire economy to it’s knees. Lets hope this does not happen.