Distressed Properties Finally Influencing Tallahassee Real Estate
For those who have been watching, the Obama Stimulus Plan seems to be moving forward for him to sign it into law now. While I am no expert on the subject, it appears to contain roughly 286 billion dollars in tax cuts and 54 billion dollars for cash-strapped states, the package contains 311billion dollars in appropriations, including 120 billion dollars in infrastructure, 14.2 billion dollars for health care, 105.9 billion dollars for education and training.
It also includes more than 37.5 billion dollars for energy infrastructure, 24.3 billion dollars for those impacted by the economic crisis and 7.8 billion dollars for law enforcement and other programs. But what about a real estate stimulus you might ask ....
The Obama Stimulus Plan Moves Forward Without $15,000 Housing Tax Credit
While there is still a tax-credit program for first-time home buyers, the $15K tax credit for home buyers has been pulled from the Obama Stimulus Plan. But this is old news you say.... Well, how about this for a little different view.
The Banks Have Been Stone-Walling Foreclosures
That's right. Many mortgage lenders and banks around the country have been sitting on their hind quarters, waiting for "the plan" that would bail them out of all of their bad loans. They were hoping for a stimulus package that would get buyers to start heavily-buying homes and that all of their "toxic assets" (read that as loans they have on the books of which they are not receiving payments) would be satisfied in with the sale of the homes. Not gonna happen...
Banks Will Be More Aggressive In Selling Distressed Properties
Now that the writing is on the walls, mortgage lenders will now need to move forward liquidating their non-performing assets. No longer will they sit back and hope that the Government will bail them out, it's time to move on. This means that we should expect to see the closing times reduced for Tallahassee short sales.
Be Prepared If You Need To Sell Your Home Short
The first advice I give to anybody who is thinking about selling a home short is to work with an expert. Just about every active REALTOR has been involved in one or two short sales, but it takes 5 or more to really understand the processes involved. You see, each and every different lender has a different (and changing) process for handling distressed properties.
The second bit of advice I give to people selling their home short is to be prepared. Dave Peeples, of ShortSaleBlogger.com provides great advice for getting ready to perform a short sale in What Goes In A Short Sale Packet (and Why)?" and also hosts one of the highest trafficked sites (at ShortSaleBlogger) on the web that is dedicated to the Niche of Short Sales.
Short Sales And Foreclosures To Increase Influence On Market
In the recent past, a home buyer who needed to close on a home in a normal, 30-45 day cycle could not really look to buy short sales. The process of working short sales through a bank took a long period of time, so only buyers with very flexible moving capabilities were able to "play the game" in order to get a great deal on a short sale home.
But that is all going to change now. Banks are no longer wondering if the Government is going to be there for them. They will commit to removing these non-performing assets and they will do it with more urgency than we have ever seen.
Foreclosures Are Not Just Ugly Properties
Another thing to consider is that short sales and foreclosures are occurring at such an alarming rate that many of these homes are actually meticulously maintained and in excellent shape. We have recently observed that a 2008-2009 foreclosure or short sale "looks much different than a foreclosure prior to 2008. Many of these homes have been well-maintained and economic hardships may have resulted in a seller relocating to another state withnegative equityin their home, an inability to continue to make the mortgage on a home, etc". Regardless of the reason, the rush of these properties hitting the market represent real competition to existing homes for sale in Tallahassee.
2009 To See Strongest Pricing Pressures
Because there is already a glut of homes on the market, the timing for these short sales and foreclosures streaming into the market could not be worse. While many current home owners have stood-by there price, banks will not be doing so. They will slash their prices until the homes sell. And these homes will compete with those already on the market.
Remember, if you have to sell a home in Tallahassee, make sure you price it correctly from the start. The initial market position is so important that making a mistake here could cost you tens of thousands of dollars or more. And if you do not absolutely need to sell your home, then stay in it and please pull it off the market. We continually stress the importance of inventory reduction, and pulling your home off the market is an excellent step in the right direction.
You can always look to our Short Sale And Foreclosure Summary in order to see what is brewing in the world of distressed properties in Tallahassee. This is a part of the market that historically is statistically insignificant, but that is all about to change.
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Discussion
Fascinating. I'm really interested in seeing just how much this affects pricing in Tallahassee. I'm especially interested in seeing if this will increase the availability of homes priced within the reach of first-time home buyers. I see a lot of homes above 200k's dropping their asking price, but not much in the low 100k range (especially that is in good condition).
Will this 'tough love' from Obama help us reach the true bottom sooner? Or, would the tax credit have delayed the inevitable? What is your opinion?
Hey Sarah. I think we're seeing prices drop across the board, so yes, you'll see more homes priced in the $100's (including one in great condition).
New announcement from President Obama yesterday addresses mortgages and the housing market profiundly - does this change your outlook?
Hey Noel, this is a great question. What I am saying is that when any type of market (not just real estate) hits an extreme cycle, that is when many opportunities are created because too much greed (in a sellers market) or too much fear (like our current buyers market) are ruling the market. The discount that you will have to take (read that as loss) is much larger than it will be if you wait until the market returns to a balanced condition (6 months supply of homes).
Our current market is the worst I've seen in my 18 years in the business. I am fairly sure that 2009 will not be the turn-around year, and everything that I'm measuring indicates it will actually be worse than 2008. So, here's the million dollar question...
Do you absolutely have to sell? If you are determined to downsize this year, do it. You will not get the same money out of your home at the very bottom of the market than you would at a recovery. But I would do it now if it means a better quality of life for you and your husband, and the money differential is tolerable.
The people that will be selling their homes are the ones that entice buyers to buy! Read that as first-rate market practices with properties that are priced to sell. Everyone else will not sell (regardless of how much they would like to). If you are in the latter group, do yourself a favor (and everyone else who owns a home in Tallahassee) and pull your home off the market. It will reduce inventory and help us get to the turn around quicker. So, in a small way, I'm saying "limbo" will last a shorter period of time if your home is off the market.
Noel, I know this news is disappointing and very upsetting. There are a lot of people in similar circumstances. I'm happy to meet with you and your husband to help you make your decision, if necessary.
Your blog quote:
Remember, if you have to sell a home in Tallahassee, make sure you price it correctly from the start. The initial market position is so important that making a mistake here could cost you tens of thousands of dollars or more. And if you do not absolutely need to sell your home, then stay in it and please pull it off the market. We continually stress the importance of inventory reduction, and pulling your home off the market is an excellent step in the right direction
My Question?
We don't absolutely have to sell but we absolutely want to downsize now! We're ready to retire but we are being penalized for being responsible American citizens. What does your blog mean, everyone who absolutely doesn't have to sell, should not sell, sit on it for 1, 2, or more years? Stop your life and be in limbo?
Hey Charlie,
I was able to listen to a little bit of his press conference in Arizona and have not reviewed the latest in detail, so my short answer is "not yet." I will be addressing this in great detail in the next newsletter that goes out in about 10 days.
Hey, please correct...you put hanna instead of Noel. tks
We have poor credit, expensive babies. We managed to get a Mortgage through a private lender. He is our second private mortgagor. We have lived in and paid our mtg for 4 years prior to that we rented this same house for 3 years (stability). We just found out TODAY that our private lender who borrowed from a bank here in Tallahassee has not paid his mtg since Dec. 08, I thought since we are on the Deed we were protected against this. Or that we would be notified immediately when he did not pay his mtg. on this property. It doesn't matter what I thought now, it looks like we are in trouble. I cannot allow my family (with 3 little girls) end up on the street. WE PAID every month. Still waiting for a lawyer to reply he/she does not have a conflict and can advise us. I tried to look online for advice on the Obama Mortgage Stimulus Plan, for a hint of what we could qualify for, or do now since time is of the essence. I did not find out what was a true website to get real answers. All I found was sites for brokers and lenders trying to get info to solicit me into refinancing. I am sure we will not qualify, that is why we had a private lender. ADVICE, anything??? HELP Tami
Tami,
I am sorry to hear about your current situation. I recommend you seek advice immediately from a real estate attorney (Smith, Thompson, Shaw & Manausa 850-893-4105). If you contact me via email/telephone, I have a few more questions to ask in order to give you some better advice.
When you say "private lender," do you mean "owner financing?"
Thank you for the response. I read this too late to call you. I will try to clarify a little more.
It has been a total of 81/2 years we have lived in this same home. We first rented this property for 4 1/2yrs., then purchased this property from the (4)four investors who were the same people we rented from, they financed us. It was a 2 year mortgage. When it was time to get a new mortgage, we could not get one (expensive babies/medical bills) so we sold our property to the current "private lender" whom turned around the same day and sold it back to us (which would make it "owner financing" a second time) for the current mortgage we are/were paying him. We have a Warranty Deed, a Borrower's Affidavit, a Mortgage Deed, and a Mortgage Note between him and us. He had obtained an investment mortgage from a local bank using the property in question as collateral (I guess) . In trying to get to the point, I may have made this too wordy.
We work so hard to do the right thing. My husband is self employed and his industry is VERY slow, several are out of work or business. My husband and I are greatful that he has work and is in business. We have done nothing wrong, and did not bite off more than we can chew or pay. Paying is what we were doing. Money is tight, so retaining a lawyer is going to hurt. Being so upset that we are loosing our home due to an others default, I almost don't care who knows this man did us wrong. I know times are tough for all, boy do I KNOW. Hope this is not too much information for public domain.
Help.
P.S. Oh by the way, the first lawyer returned our call finally to say he has several conflicts of interest. Second lawyer says he can see us next Tuesday. I do not want to wait that long.
Hey Tami, I spoke with an attorney and have emailed you the contact information.
Just checked my email, thank you for the referral. I will make the call tomorrow.
I do not know why I picked your shoulder or blog to cry on when I got this bad news, but I do appreciate your involvment in helping me to possibly solve this problem. Hopefully I haven't worn out my welcome.
Will keep you posted,
Tami
Good luck Tami, I hope he can help.
Mr Manausa,
Well, I met the lawyer you referred. He is nice, confident, and helpful. I am convinced to sign with him and proceed in the way has suggested. On the other hand, my husband is convinced that we need to pursue a different 1st direction. This other direction would be a conflict for your lawyer. The decision will be made by 10:00AM.
Oh, by the way. My husband knows the lawyer and visa versa. My husband did all the finish carpentry on his (the lawyer's) house. He did not get an opportunity to build the cabinetry in the home, eventhough he has a custom cabinet shop. We hear that the Uncle whom followed my husband around for days is still very impressed with the work. If you need any custom cabinetry please call Dave at (850)879-8363.
Thanks for ALL your involvment. You are a good person.
Tami
I'm glad he helped. Good luck!
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