August 13, 2008
Clark wants to share some information that could impact those in the housing market as potential buyers of distressed real estate and those trying to sell a home in a neighborhood that has foreclosures.
In economic terms, we're beginning to hear that "capitulation" has come. What that means in plain English is that banks have sobered up and are dropping their prices on REO (real-estate owned) properties, according to The Wall Street Journal.
Previously, the banks had been asking unrealistic prices that were comparable to the outstanding loan balances on foreclosed properties. No wonder they didn't get any bites!
So it may be worth your while to make another offer on REO property right now. The banks are more likely to be humbled after sitting with that house in inventory for this long.
On the other side of the ledger, capitulation means that you should probably have a new target price in mind if you're selling in a foreclosure-riddled neighborhood.
Think about it this way: If REOs sell after banks come down in price, then those lower sale prices become the comps you're competing against in the area. It's incumbent on you as a seller to photograph the sad, rundown foreclosures so that buyers can see exactly why they sold for less than your house. That way you can justify asking a higher price for yours.
Meanwhile, Zillow.com is reporting that roughly 30 percent of people who bought during the last 5 years are upside-down in their homes. Zillow also has a new feature that allows you to see national home value trends on an interactive map of the United States.
Of course, talk of lower home values comes with Clark's usual caveat: Don't worry if you're not selling right now. None of this impacts you. In fact, you can use the decline in home values to contest your property taxes. Check with your local tax assessor for details on entering a dispute.
August 12, 2008
How do you think other people drive? The average person would say that others are terrible behind the wheel -- while they perceive themselves as great drivers.
The average homeowner has a similar psychology when it comes to home value. The belief is that "my home has gone up in value over the last year, but surrounding homes have not," according to a Zillow.com survey.
The real danger of this kind of thinking occurs when you go to sell your home. If you believe your own hype and overprice your home, you'll probably wind up getting less than if you priced it right upfront.
Here's why: When you first list your home, you get an influx of traffic from agents and investors. If you're overpriced, agents won't bring any clients back to show your home and no investor will buy it. You become a stale listing.
If you really want to sell your home quickly, try listing at a price that's "low aggressive" -- that is, low enough below what others are offering so that you look like a bargain.
Clark learned this lesson the hard way. Back in 1996, he and his wife overpriced a home they had for sale. It took them 14 months to get the house sold and they had to carry 2 mortgages during that entire time. They wound up really having to cut the price to entice agents to bring clients around.
July 17, 2008
If you've been in a house for 5 years or longer, chances are you may be grossly underinsured for homeowner's coverage. In fact, you'll only discover it after a catastrophic loss when it's too late.
... More
July 14, 2008
Another day, another wrinkle in the mortgage crisis and its impact on other sectors of the economy!
... More
July 9, 2008
We live in a time when "Dare To Be Rich" foreclosure schemes are pushed via infomercials, web ads and more. If you believe the hype, foreclosures are the hottest deal since sliced bread.
... More
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