Townhomes and Condos – They can be Easier to Sell Right Now

February 26th, 2007

With the dramatic increase in inventory in recent years, the number of townhomes and condos for sale has risen dramatically.  Where once there may have only been 1-2 units for sale in a development, there are now likely 1-2 other units (or more) with the exact same floor plan.  Given that builders typically do several developments in the same or neighboring cities, there can be a large amount of competition within just a couple miles.

While everyone would agree that it is a boon for buyers, almost all of those people would also say it is a detriment to the seller.  While the competition is high, that also means that it should be much easier to determine at what price a seller’s townhouse or condo will sell for, given its current condition, view/location, and updates.

In this market sellers that try to argue that their’s is worth more than the one next door because of XYZ will struggle but those that look at the competition and the comparable solds and price accordingly will find that the sales process isn’t as bad as they thought.  Buyers can choose the house in the best condition AND with the best price.  If you’ve got that, you’re home free.

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How Many Houses are Too Many for Buyers?

February 26th, 2007

In this slower housing market, there’s a huge supply of housing available for buyers to look at.  The problem with this amount of supply is that it is hard for some buyers to make a decision on what they want and go forward and make an offer.

In the days when houses sold in days, if not hours, and there was a huge undersupply of housing, buyers had to act quickly to make an offer on the house the liked the most.  In today’s market there’s no urgency and no scarcity, so the buyer has no outside encouragement to make an offer quickly.  In the last year I’ve worked with two different buyers that have looked at over 50 homes without making an offer.

Buyers need to keep in mind that while choice is nice, it can also cause you to lose focus on what you’re really looking for.  It is important to have a list of your “must-have features” and to really understand what price point you’re comfortable with and stick with both of them.

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Bad Lender Almost Ruins Closing – Good Lender Saves the Day

February 22nd, 2007

Here’s a recent experience I had with a client… may the tale help you avoid the same troubles. 

The buyer interviewed several lenders of his own choosing and settled on one that had appeared competent and had the lowest fees/interest rate and was supposed to close at 1pm on Wednesday.  At 3:45pm on Tuesday, I got an email from my buyer saying that the loan officer could not get the loan closed because of further documentation he needed to provide that was never asked for up until now.  This documentation would have taken approximately 2 weeks to procure.  His email was one of desperation… he thought he was dead in the water!  He said to me: “Aaron, can Edina Realty Mortgage help?”

Cheryl Stuntebeck and I conferenced in with him and they got to working on an application for him, with Cheryl working late into the night on Tuesday.  Wednesday morning came and we find out the original loan officer was refusing to reassign the appraisal, had instructed the appraiser not to assist my buyer, and had cancelled the 2nd mortgage as well.  She told me that she wouldn’t let this file go and that she was going to do everything she could to keep him, though she couldn’t get him closed for approximately two weeks!

Throughout the day Cheryl worked with the underwriter, loan processor, closer, operations manager, site manager and appraiser to see that my client got through the whole process quickly.  Our original closing was scheduled for 1pm on Wednesday… we closed at 5pm that day… barely 24 hours after all of this drama had started.

While I very regularly work with Cheryl on my clients’ purchases, I’ve also had great success with other loan officers that the buyer has selected or that I have recommended.  What has been driven home for me here though is that the relationship with the loan officer (and closer too!) is critical.  In the future if my buyers do not have a previous relationship with a loan officer, I am going to more ardently encourage them to consult one of the loan officers that I have worked with.

The steps to buying a home involves many people throughout the process, any one of whom can either make your purchase a success, drive you nuts during the process, or outright ruin it for you.  I am very happy to have a team that was able to swoop in and save the day with such amazing results.

 

Search Terms:

  • almost closing but had to have second lender

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Radon Gas – What You Should Know

February 16th, 2007

Most people have heard the word radon before, but many probably do not understand what it is.  As found in the EPA’s “A Citizen’s Guide to Radon”: 

Radon is a cancer-causing, radioactive gas. You can’t see radon. And you can’t smell it or taste it. But it may be a problem in your home.

Radon is estimated to cause many thousands of deaths each year. That’s because when you breathe air containing radon, you can get lung cancer. In fact, the Surgeon General has warned that radon is the second leading cause of lung cancer in the United States today. Only smoking causes more lung cancer deaths. If you smoke and your home has high radon levels, your risk of lung cancer is especially high.

I was recently working with a buyer who during the inspection process also requested a radon test because he was planning to put an office in the basement and consequently would be spending a lot of time there.  When we received the results back from the test we found out that the levels were significantly above the EPA action level of 4.0.

At first I thought: “damn, this could be really expensive to mitigate.”  After speaking to my colleagues and to a couple of mitigation contractors, we found out that the process is relatively easy and not very expensive at all.

The process typically involves digging a hole in the foundation about the size of a 5 gallon pail and then installing solid PVC piping from the hole up through the roof line, with something similar in size to a bath fan installed in the piping in the attic.  This fan exhausts the radon gas up and out the roof where it dissipates quickly.  In houses that have a drain tile system installed the installation can typically get the radon levels below 1.0 because of the efficiency of the drain tile at getting a broad suction around the foundation.

Once the system is installed the contractor will run a second test to confirm that the radon levels have been brought down within safe limits.  If the level is still elevated, a larger fan typically resolves the problem.

Depending on the contractor chosen and the difficulty of the work to be done, most projects are in the $1000 – $1800 range and can be completed in a day!

The contractor we used for my client’s home was Brad Nyberg from Quality Radon, 612-521-3580.  He did a great job and has nearly two decades of experience installing these systems and has been training others for many years as well.

Posted in General, Info for Buyers, Info for Sellers | Comments (1)






Banks Tell Sub-Prime Mortgage Originators to Take Back Their Garbage

February 15th, 2007

A colleage of mine forwarded me an article entitled “Mortgage Hot Potatoes” from the Wall Street Journal that discussed how banks like Merrill Lynch, J.P. Morgan Chase, and HSBC Holdings are excercising clauses in their purchases of sub-prime loans from mortgage originators to make the originators take them back.

These clauses apparently state that if a borrow defaults early in the repayment period or if the loan had underwriting defects, such as bad appraisals, that the originator must buy back the loan.  Needless to say that this allows the big banks to keep the good loans and kick back a large portion of the bad loans back to the people that shouldn’t have lended the money in the first place.

While this process will prevent the big banks from hemmoraging too much profit margin, it will put some (or possibly a large number) of the subprime lenders/originators out of business.  Many of these lenders/originators have limited assets and use corporate lines of credit to finance the loans they close until they can resell them to the bigger banks. 

When these banks send these loans back (for failure to pay), this means that the subprime originator has to borrow against their line of credit, reducing their ability to make new loans.  If enough of these loans get sent back, the mortgage originator may consume all their credit line with these bad loans and may not be able to fund closings on their new ones.

Enter the headache for buyers and sellers: Imagine sitting at the closing table waiting for a wire transfer of the buyer’s funds and come to find out that the buyer has no funds because the originator has no money! This scenario will come true, it is just a question of how many originators will have the problem.

In the last few years lenders really softened up their lending requirements, allowing a lot of low credit score borrows to go “stated income” or “no doc” loans which basically paired up risky borrowers with risky loans.  In the rush to make as much money as possible, some mortgage brokers/originators went one step further and either omitted or falsified information on the applications to get buyers approved that shouldn’t have.

Because we are still in a rising interest rate market and we haven’t exited the housing slowdown, there’s still a long time for these loans to go into default and come to the attention of the big banks that bought them.  As more of these loans come under scrutiny, I think we’re going to see much larger problem than many expect.

If you’re buying or selling a home, it is eminently important that you know where the money is coming from and that the lender will still be in business at closing!

Posted in General, Info for Buyers, Info for Sellers | Comments (0)






Why a Web Site is Like an Open House

February 6th, 2007

Four years ago I started my web site and started promoting it on my business cards, brochures, etc.  About two years ago I realized that I needed to spend more time promoting my web site online than offline and slowly saw an increase in traffic.  Then about a year ago I redesigned my site, started participating in forums, and blogging in earnest.

Today I now average more than 200 visitors per day to my web site, but alas, I’m lucky if I get one inquiry per day that comes through it.  Then I thought about it… a standard web site is like an Open House in that I’m inviting people to come in to see what I have to offer them (commentary, community information, for sale homes, and sold home search) but it’s an Open House where no one is home.

I’m currently implementing a click-to-chat feature on my site that allows my visitors to quickly ask me a question if I’m sitting on the computer while they’re visiting my site.  I’ve had a couple people use the tool so far and I’m hoping that more of you will take advantage of this feature in the future.

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Edina Realty
612-605-2252
Edina Realty Aaron Dickinson
Licensed in MN


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AaronSOLD.com is not a Multiple Listing Service MLS, nor does it offer MLS access.
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