November, 2007
Tomorrow is the annual Jaycees Christmas Parade in downtown Fredericksburg. And, to facilitate the Christmas spirit, there is even a chance of snow tomorrow evening. The following information was found on Fredericksburg.com:
“FREDERICKSBURG EVENT: Fredericksburg Jaycees Christmas Parade WHEN: Tomorrow, 5:30-7:30 p.m. WHERE: Downtown Fredericksburg, up Caroline Street, up Amelia Street, down Princess Anne Street THEME: “A Colonial Christmas” to celebrate the 400th anniversary of Jamestown PARKING: The city’s 297-space parking garage, at the corner of Sophia and Wolfe streets, has a special $2 cash fee tomorrow. Free spaces are available in public lots on Sophia Street, and along streets, except along the parade route. (The city will tow cars parked there after 3 p.m.) Also, FREDericksburg Regional Transit will run a free shuttle bus from Dixon Street Park to the corner of Lafayette Boulevard and Princess Anne Street. The shuttle will run continuous loops from 5 to 8 p.m.”
More info and parade facts can be found on Fredericksburg.com.
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People across the country are pulling out all the stops trying to invoke buyers to buy their properties. They are offering fluffy incentives, like new cars, utilities paid for a year, house payment paid for 6 months, huge agent bonuses, etc. The fact remains that one thing and one thing only works in this type of market… drop the price! It IS that simple.
The pure and simple truth is that when you are in a solid buyers market, like we are now, there is a reason. The reason is that about 80% of the homes are overpriced. The buyers are telling you on a daily basis that the price is too high, when they don’t show up and/or don’t make an offer on your home.
More evidence to this point, is the fact that while 80% of the homes are overpriced, the remaining 20% of the homes are priced to sell. Those homes are selling and often getting multiple offers. This is simple economics and the fact that sellers don’t want it to be true, doesn’t change the truth.
Just like the point I made in a previous article, Consumers Are Price Conscious. In an article by Lauren Baier Kim on the Real Estate Journal website, she offers this information,
Price discounts are the most effective way to get your house sold in today’s housing market, according to a Bloomberg.com article by John F. Wasik. “Buyers just want price,” he quotes one real-estate broker and consultant based in Stuart, Fla., as saying. “Buyers have become more educated and they can easily cut through the fluffy incentives,” he says.
When the price is right for buyers to move, they start buying homes. The market balances into a stable market and the recovery process begins. That is a simplification of what needs to happen, but the truth is there.
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I live on the south side of town near Cosner’s Corner. Since January, on a daily basis, I have driven by the Race Trac gas station on Route 1. Race Trac, was sometimes rivaled by WaWa, but usually they still had the best gas prices in town. That was evidenced by the fact that virtually anytime of day, you had to wait for a gas pump, despite the traffic nightmare of getting into and out of the station lot.
Recently, the Race Trac gas station on Route 1 near Southpoint changed. It is now a Sunoco. Instantly, the patronage died off. Everyday since the change happened, I have noticed that there are now many pumps free when I drive by.
Race Trac offered essentially the same product as everyone else in town… but for a lower price. As a result they brought a steady stream of customers to their pumps and their store. The instant the customers had the idea the value concept was gone, they stopped coming.
The same thing is true of real estate buyers in the Fredericksburg real estate market. They have thousands of homes to choose from. So what makes them come see your home and become a customer… write an offer? The concept of value, which relates directly to price.
You have to offer the same home for less money than the competition. Or, a better home for the same price as the competition. Otherwise, the customers won’t come… just like Sunoco.
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We had the pleasure of selling this lovely home on 4210 Stonehaven Way, Fredericksburg, Virginia in the Stonehaven section of Lee’s Hill South.
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You may recognize the line from the late sixties and early seventies television sit com Family Affair. This line was usually uttered by either Buffy or Jody when they were awed or surprised by something that happened in their lives.
That line escaped my lips recently when I saw the price of a resale disclosure package in Lee’s Hill. The typical homeowners association (HOA) resale disclosure package costs between $100 and $150. In this case, in Lee’s Hill, including a processing fee for ordering the package online, the price was a whopping $277.
Granted the package is LARGE and I am sure it makes for incredibly fascinating reading, but $277!
The law requires that the seller provide a current copy of the homeowners association documents to the purchaser for their review. So, for those who live in a community with an HOA, the only choice is to grin and bear it, after you exclaim Wow Wee Uncle Bill!!! Or, whatever it is that you might say under the circumstances 
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We just sold the property located at 188 John Paul Jones Dr, Ruther Glen, Virginia 22546. This home is located in the Lake Caroline community. Congratulations to the buyer and seller.
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It is an uncommon occurrence that a homeowner will remove equity from their home without impunity. The word impunity, according to dictionary.com means: exemption from punishment, penalty or harm. There isn’t necessarily punishment or harm involved when equity is removed from a home, but there is usually a penalty. Particularly when that homeowner later wants to sell the home.
We often see homeowners who have accrued equity in their home over the years they owned it. But somewhere along the line, they took out a home equity line of credit or refinanced the home and withdrew money. That money went for vacations, cars or just daily living expenses.
Then a little later they decide to sell their home. The problem is that now they have already removed the equity the home built and that money is long gone. The home is not going to sell for more than the market will bear just because they need the extra money. Market value is market value, regardless of the seller’s circumstances.
They are often then flabbergasted that they have made no money on their home. Or that they cannot even sell it for enough to pay everything off. They have long forgotten that they DID make money on the home… they just took it out early. Now, the penalty of that move sets in. They either can’t sell because they can’t pay off the mortgage, or if they do sell, they don’t have the money needed to buy their next home, because the equity is gone.
Real estate is a good investment and can make the investor a significant amount of money. But you are only going to be paid once… while you own it or when you sell it.
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Typical wisdom tells people to not list their home during the holidays and wait for Spring. There are a couple of considerations to ponder about that strategy. First, with as much housing inventory we have had on the market recently, it only stands to reason that there will be even more in the Spring. Additionally, consider the following thoughts:
* People who look for a home during the holidays are typically more serious buyers
* The supply of listings usually will dramatically increase in January, so there is typically less demand in January than in December.
* Houses show better when they are decorated for the holidays
* Buyers are more emotional during the holidays, so they are more likely to make a buying decision and pay a higher price.
* By selling now, you can be in a position to buy a home in the Spring with no contingencies
As a general rule, sales drop 10% from November to December, but then drop an additional 25% in January.
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Numbers often help put things in perspective. In the Fredericksburg region, less than half the number of homes sold in October 2007 as compared to October 2005.
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One of the things I hear time and time again is to beware of mortgage brokers. I have heard this from Realtors, and other lenders. My response is “Really, why is that?”
Most issues involving mortgage brokers comes down to the fact that the individual broker was dishonest or unethical. In most cases this occurs because the buyer shopped the interest rate and chose who “told” them they had the best rate, regardless of the reputation of the broker.
I have worked with a mortgage broker for years who consistently provides my buyer clients with a better loan/mortgage solution than the direct endorsement lenders, including BIG credit unions. On top of that, I know that the service this broker offers is beyond excellent.
So, when I read a couple of blog posts recently from Russ at Smart Mortgage Advice, I felt they were articles our readers should see. These articles give you a very good idea of how mortgage brokerages work and can, in many cases, offer better value than direct endorsement lenders. So, go read, What Gas Stations Can Teach Us About Mortgage Brokerages. Read that one first, then the follow up post as well.
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