March Bank Owned Buyers Guide Available

The Avery-Hess March 2009 Bank-Owned Buyers Guide is now available. This guide features a selection of Bank-Owned properties, tips for purchasing them and information about financing as it pertains to these homes.

You can obtain your copy of this guide through an Avery-Hess Sales Associate or by contacting CustomerCare@averyhess.com.

Don’t forget to search for all the Active Homes on-line at: www.averyhess.com

The Ant and The Grasshopper Shop For Real Estate

The famous Aesop fable tells of how the ant prepares for winter and the grasshopper does not. Inevitably, the grasshopper relies on the ant to help him through winter, hopefully teaching the grasshopper a lesson for next year: Improvidence never has a return.

The same attitude applies to our current real estate market. Those who are not preparing to buy a house in this depressed market may end up spending more in the future. Just because everything looks cheap now, arguing that it will be cheaper later doesn’t help you in the long run. You can miss out on some of the great advantages available only at this time: low interest rates, tax incentives, buyer’s market, elevated supply of homes.

The ant in spring and summer sees the bounty available at this time of year and prepares for winter, while the grasshopper rationalizes that he can do just fine on what he sees available now. 2008 has seen some amazing reductions in home prices, making it more affordable for new buyers to take advantage of home ownership. The truth is that it’s cheaper to buy an existing home now than to try and build a new one at current construction costs.

Whether you are a renter looking to buy your first home, or a current home owner thinking about getting a larger home, or even downsizing, now is the time to act. If you can afford it now, then don’t let this market pass you by. An agent like myself can help you find solid deals and help you negotiate favorable terms for your purchase. Get ready for winter with a home purchase this spring and summer!

Visit my website to get started today!

The Recession is a Terrible Thing to Waste

This was the theme of a live national simulcast presentation I recently attended. The participants were all nationally recognized authorities who shared their collective expertise and opinions concerning the current state of real estate and the economy. The following summarizes the discussion.

We all know that the media has been reporting doom and gloom in the real estate markets. What is important to remember is that real estate is truly local. What is happening in California, Arizona and Florida does not accurately depict the conditions in the Washington, DC region. In fact, what happens in Prince William County does not necessarily reflect what is happening in Arlington. So while the nightly news is lamenting the bad economy, there’s no need to sink into a deep depression. In the past 100 years there have been 8 recessions and one “Great Depression”. However, each event was followed by a period of strong economic growth and prosperity. Last year we were outraged when gas prices soared above $4.00 per gallon. Does anyone remember 1973 when we waited in gas lines for hours only to find they ran out just before we got to the pump? In the last few years as house values declined consumers could no longer use their homes as ATM machines to tap into equity. Did we really believe that house values would continue to appreciate 20% year after year? Can anyone recall scenes from the 1930′s of people standing in food lines having lost their jobs and homes?

The point is, as bad as it feels now, it has been a lot worse, and it will certainly get better. As you look at the chart below, keep in mind the  Gross Domestic Product (GDP). The GDP is a snapshot of the true economic health of our economy. It shows the value of goods and services produced and includes consumer, investment, and government spending, plus the value of exports, minus the value of imports.

Years                    Key Indicators                        Stocks                           GDP

1929-1939          Unemployment 25%                 Dow down 89%              Down 11%
1973-1975         Inflation rate 21%                       Dow down 45%              Up 18%
1981-1982          Prime rate 18.87%                      Dow down 24%              Up 4%
1990-1991         653 failed banks & S&L’s           Dow down 21 %              Up 3%
2001-2002        Nasdaq down 78%                     Dow down 38%               Up 8%
2008                 $6.2 trillion market loss             Dow down 42%               Up 1%

With the exception of the depression era, during all other recessions the key financial indicators were negative but the GDP continued to grow showing that Americans still spent money purchasing goods and services leading to an upturn and recovery. So rather than complain about the economy and wait to see if it gets worse, take advantage of the best time in decades to purchase a home. First time homebuyers have an incredible opportunity. With affordable house prices, historically low interest rates, and an $8000 tax credit there has really never been a better time to buy a home. The tide will turn, inventory will shrink, prices and interest rates will rise. The tax credit is only good until the end of November. Don’t wait. Don’t let a great opportunity slip away.

Realtors are not Car Salesmen: Avoiding gimmicks and ploys to get the help you WANT!

Have you ever seen a realty advertisement claiming “We will save you $10,000 or give you $1000 back at settlement!” or “We guarantee to sell your home or we will BUY IT FROM YOU!” Sometimes you get an 800 number to call for home sale information, prompting you for phone numbers and address, as well as when you are looking to buy a home? These are very clever sales techniques that have popped up over the past few years during the real estate bubble, and sales coaches in real estate still peddle this product like old-fashioned snake oil.

If you hate sleazy sales techniques as opposed to actual information, then the previous three examples are important to avoid. You will get a licensed agent who can impress you with big numbers, but may only have a successful sale one out of every three listings or buyers they come across. Wouldn’t you hate to be part of this Realtor’s failure rate that equals no sale of your property or no new home for you to occupy? It may not cost you any money to pay him, but it can cost you time, which is often just as valuable.

The most important sales technique is honesty. The second most is offering product to a client that they actually want and will use. Web-based technology for buyers and sellers to get hands-on information about the real estate market is what people are now demanding. The age-old drama of sleazy salesmen pushing you to take a deal that they make sound good doesn’t fly.

Avery-Hess is on the cutting edge of Web 2.0 technology that offers every tool homes sellers and buyers are looking for- including agents who are updated on the new technologies in addition to the rules and regulations of real estate transactions. The MY-LIFE search at AveryHess.com as well as my personal website search feature many more search options under the “advanced” tab, including maps of location and pictures. These searches also show completely updated info from the MLS, which means they are currently available. Another feature for home sellers is the Home Value Search to give prospective sellers an idea about how their neighborhood is performing in the current real estate market. Are values going up, going down, or stable? This tool gives you that information.

Investors should not get suckered into paying for foreclosure information- especially outdated information. Realtors get up-to-date information about short sales and foreclosures every day as part of their membership in the local MLS. Investors should find Realtors who are familiar with investor lingo and technique. A savvy Realtor can help an investor get local information on rental pricing to make the best possible decision with their money. Paying for foreclosure information is the same technique used to sell other snake-oil products on a web site that has promised you everything from gift cards to XBox 360 game systems and free hotel vacations after making some absurd purchases for junk you don’t want or even need. Use free foreclosure information from a website like Avery Hess and get in touch with a Realtor to help you.

The new REO Speed Wagon:Why are foreclosures growing in popularity?

My first involvement in a real estate transaction was on a foreclosure property in Silver Spring. The property was in total decay, and needed everything improved and replaced- except for the bathrooms. What made it so attractive was the price. That was one of the few that would have been available over a decade ago. Now, everywhere you look there are foreclosure properties and everyone wants to see them- warts and all! Let’s explore some of the benefits and problems involved in REO transactions:

Price: The oldest trick in the real estate brokering game. Drop the price low enough, and people start to pay attention. This was the original motivator for looking at foreclosure property- getting a deal!

“Handyman Special”: This one showed up recently from property flippers looking to make a quick $5000 from market information inequalities (and not having to hold a broker license). There is some truth to this ad copy: it implies that the home is a better deal because it needs work, and the savings partially comes from “sweat equity.” Fix it yourself, sell it, and reap the profits!

“Fixer-upper”:Much more honest than the former statement, because most people don’t have the time or skill to fix all of the problems in the home. This means that a purchaser needs to know about the obvious problems as well as the not-so-obvious ones that could cause trouble down the road

“Immediate equity”: This means that a house is so far below market that, even after accounting for the cost of repairs, there is still room for additional equity.

Here’s the real deal: Unless a homes is being sold 20-30% less than all other homes, with no more than 15-20% of the savings going into repairs, then you aren’t getting a “deal” in any market. It’s important to understand where each market stands and how much work really is needed in order to realize a good deal.

Get the help you need before looking! It is imperative that you work with an agent, like myself, who anticipates all of the issues surrounding  these properties. This way, you can get the direction and guidance necessary to turn a forlorn property into your new dream home. Rehab allows you to totally invest new life into a run-down property, and end up with a better final product than a normal sale- but that’s a discussion for another time!

Lions and Lambs

You’ve heard the expression “March comes in like a lion and out like a lamb”. Well, March certainly came in like a lion blanketing the northeast with a major snowstorm. So, if the expression holds true it will go out like a lamb bringing us warm springtime weather. In the real estate world there’s another expression that the spring market really begins in late January or early February. But it’s not too late if you are thinking of putting your house on the market.

Housing inventory is finally beginning to decrease for the first time in several years. When the glut of foreclosures and short sales inundated the market, private sellers could seldom compete with the low prices being accepted by banks. In December, Fannie Mae and Freddie Mac announced a 30 day moratorium on evictions. It was done for a number of reasons not the least being the good PR they needed by not evicting folks during the holidays and cold weather. The moratorium was extended twice but it appears that it will not be extended again. However, both Fannie & Freddie are putting in place programs for qualified homeowners and tenants to remain in the property on a month to month basis while the house is marketed for sale.

For sellers, now is a good time to put your home on the market. With inventory down there is less competition. Spruce it up, do a little landscaping, and price it right. Be realistic, and your home will sell. For buyers, the time has never been better. Real estate follows the laws of supply and demand. For years the supply was low and the demand was exceedingly high. As a result prices skyrocketed out of control and creative lenders allowed people to take on mortgages they really shouldn’t have. We know what happened. People lost their homes, the banks were overwhelmed with inventory and the formula changed; exceedingly high inventory and a very low demand. Prices plummeted. The banks began to sell off their inventory because the interest rates dropped and there were good deals for wise buyers. There are still a lot of foreclosures on the market, but the numbers are getting smaller. Real estate is also cyclical and it won’t be long before the inventory shrinks and the buyer demand increases. Prices and interest rates will go up. Don’t be left behind and regret not having made the decision. Buying now assures you that in just a few more years you’ll be building back your nest egg. Be a lion. Fire your landlord. Stop making his mortgage payment for him and begin to experience the satisfaction of home ownership and tax deductions.