Subscribe!Welcome! This blog tracks the real estate market in the Central Shenandoah Valley, featuring market data and analysis, an exploration of common buying and selling questions, and candid commentary on all things real estate.
If you are interested in discussing any of the topics on this blog, or the details of your specific real estate situation, call or e-mail me!
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What if you could buy a house for $100.00!? |
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 In some real estate markets, home owners are turning to a raffle to try to sell their home. (Thanks to Josh for the tip!)For example, Angela Schaab in Grand Rapids, Michigan is attempting to sell her boardwalk condo by selling 2,500 $100 raffle tickets. As of today (9/27/2008) she has sold 235 tickets. Or, read the story of several owners attempting raffles in the Wall Street Journal's Raffles: Real Estate's Latest Game of Chance. So --- what do you think? If there were a house on the market in Harrisonburg, and you could buy a raffle ticket for $100 --- would you buy one? | |
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Three small, but significant words . . . "on or about" |
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 The "Settlement" section of a standard Virginia real estate contract reads....Settlement shall be made at the office of the Purchaser's settlement agent on or about October 1, 2008. Did you catch the three small words so innocently wedged between the location and date of the closing? The meaning of those three words (on or about) is often overlooked! Some sellers think, or assume that the date filled into the contract will be the actual closing date. It very well might be --- but oftentimes a buyer or seller's circumstances will shift it a few days in either direction. So, the first thing to remember is that it is usually just a close estimate of when the closing will occur. But what happens if (in the above example) a buyer informs the seller that they won't actually close until October 22nd --- three weeks later. May the seller indignantly demand that the buyer close on October 1st, OR ELSE? Contractually, no! "On or about" is typically understood to mean plus/minus 30-60 days, depending on the attorney. That certainly allows for some flexibility, and this is the second thing to remember --- the standard contract language will not allow you to precisely plan the day or week of closing. So, what is a seller to do? BAD: If you need to close on a precise date, or no later than a particular date, you'll want to add "time is of the essence" to the standard contract language. With such language, if the settlement does not take place by the date in the contract, the contract automatically becomes null and void. Of note -- I rarely suggest using "time is of the essence". Having the contract "die" after a certain date usually doesn't help either the buyer or the seller. If the buyer wants to buy, and the seller wants to sell, and the final closing documents are one date late, should the deal really automatically die?? BETTER: A better option is to introduce a (positive or negative) financial incentive for the buyer to close in a timely fashion. Perhaps a positive financial incentive for closing on (or before) the scheduled closing date. Or, an increased purchase price or other penalty if the closing is more than X days later than scheduled. BEST: Leave well enough alone --- don't change the standard contract language. Understand the above, but be flexible and willing to adjust, within reason to make the closing process smooth and successful. I hope this is clear --- feel free to leave a comment below, or call/e-mail me for further clarification. | |
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What is market value? |
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I received a call the other day from a Realtor who was representing the seller of a house that I had showed to some of my buyer clients. I was informed that "the owner just had the house appraised, and the appraisal came in $20,000 above the asking price." I believe the conclusion that I was supposed to come to was that the house was a great deal, even at the asking price.
Certainly, this is a bit ambiguous, but my main point is that we can't make any assumptions about what the market value is of a house. | |
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Price Points: estimating housing payments... |
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I often have conversations with people considering their first home purchase who want to first get an idea of how much they would have to pay for housing on a monthly basis. I have devised an Excel mortgage calculator that I can use to give them a rough idea, or I recommend that they call a lender to get pre-approved. | |
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The effects of motivated, equity-laden home sellers |
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As I regularly mention, even though home sales are down in this area (the number of properties being sold) -- median and average prices are staying steady or increasing slightly. And yet, there is an interesting phenomenon going on that I have observed several times lately in different neighborhoods in Harrisonburg... | |
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The time-value of an interest free $7500 loan to first-time home buyers |
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Over the past few weeks I have been explaining to many first time home buyers that if they buy a home before July 1, 2009 they can take advantage of a $7,500 tax credit. Some, though, have been less than enthused because the full $7,500 tax credit has to be repaid over 15 years. Yes, that's right --- even though you will pay $7,500 less in taxes for the tax year in which you make your first home purchase, you do have to repay these tax savings in years three through seventeen. I thought I'd take a look at the value of what is essentially an interest free $7,500 loan. For this analysis, I am examining the aggregate savings from not paying interest on the $7,500, using a current interest rate of 6%.  As you can see --- over the course of the 17 years, you save a total of $4,050. Thus --- even though you are paying back the $7,500 tax credit, it is still at a significant ($4,050) savings. | |
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Go For The Gold: How to compete and win as a home buyer |
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Are all buyers created equal? Certainly not --- especially from a seller's perspective in our current market.  Here's how I would rank buyers, from the most exciting to sellers (#1) to the least (#9)...
The good news is that you can (sometimes) take steps to move up this list:
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"First Time" Home Buyers --- Act Now! |
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 If you haven't owned a home in the last three years, you have a unique opportunity if you buy a home in the next 11 months (before July 1, 2009).The new Housing Bill signed into law by the President this week provides a $7,500 tax credit to first time home buyers (anyone who hasn't owned a home in the past three years) with income up to $75,000 for single people and up to $150,000 for married couples. When do I get the money? A $7,500 credit will be applied to your income taxes for the year in which you close on your new home. This doesn't reduce your taxable income by $7,500 (a tax deduction) --- it reduces the taxes that you pay by $7,500 (a tax credit). I've heard I have to give the money back? Yes --- the $7,500 must be paid back over 15 years, starting two years after you take the tax credit. This is an additional tax liability of $500 per year for those 15 years. So if I have to pay it back, why is this tax credit so exciting? In essence, you are being provided with a $7,500 interest-free loan. This can be the needed advantage for first time buyers to know that they can make a home purchase work for them. The $7,500 will certainly make up for what you paid for closings costs (in most loan programs) and even part of your down payment. If you have more questions, check out this list of frequently asked questions. | |
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$7500 interest-free loans, and other perks of the housing bill |
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The president is expected to sign a new housing bill today (July 29, 2008) that may have significant implications for current and hopeful homeowners. Here are a few highlights:
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The tables have turned --- SELLERS are now making offers! |
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 Here's an interesting phenomenon --- in most real estate transactions, the buyer makes the first move, by submitting an offer to purchase a house.In stark contrast to this (time-proven?) norm, I have recently had several Sellers make an offer to sell. More specifically, when it became known that a buyer was seriously considering the purchase of the seller's home, the seller proactively either:
If you are a seller, considering such a strategy, I would advise you to consider that:
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Can I search for homes on your blog? |
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 I have had several people ask me this lately --- people who are planning to move to the Shenandoah Valley, and have been reading my blog to better understand the local real estate market. These two blog readers asked whether they could search for properties for sale on my blog.Can you? You bet! From my blog, you can click on the "Searching" tab on the top menu bar. (Or, since you're reading this post, you can click on the search image to the right). My hope is that you'll find that searching for homes in Harrisonburg and Rockingham County has never been easier. We give you quite a few search options: sdfs
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Seller: "C'mon -- do your job -- convince those buyers to buy!" |
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 If only it were that easy!When I am representing a homeowner in the sale of their property, I am:
The reality is that I often don't have that opportunity! Most buyers these days are working with a Realtor and thus have someone representing their interests. I can talk the ear off of their Realtor to try to convince them of the merits of the house that their client has viewed, but I don't have the ability to directly affect the buyers' decision making. Alas, in a market where sales are much slower than previous years, most homeowners really wish that I (or their Realtor) could make that connection with the potential buyers --- and somehow, somehow, convince them to buy! | |
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If you are looking for more details on a property --- don't hesitate to ask --- it's quite simple to send you the detailed MLS datasheet |
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These days, most real estate web sites allow you to view properties listed by any agent or company in the area. My web site works this way --- when you are searching for properties, you won't just find properties being marketed by Coldwell Banker Funkhouser Realtors. But what you see on a Realtor's or Brokerage's web site is a subset of the information that is in the MLS (multiple listing service). Here's an example of what you would see for the property located at 409 Diana Court --- a spacious, like new duplex with 1900+ square feet on the south end of Harrisonburg.  But perhaps you would like more information about a property that you are looking at online. If so --- just e-mail me (scott@cbfunkhouser.com) or call me (540-578-0102), and I'd be happy to provide you with the fuller report on the property available through the MLS. Here's what that looks like...  The information you find on my web site, or any other public web site, is limited to the fields that our local Realtor association allows us to display on a public web site. The other details can certainly be helpful, so please e-mail (scott@cbfunkhouser.com) or call (540-578-0102), if you'd like to see the full report. OH --- and if you're looking for even MORE information, don't forget about the many online resources for researching properties in Harrisonburg and Rockingham County. | |
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"Price Reduced" - Are Most Asking Prices Headed Down? |
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 Driving around town, you might see quite a few "Price Reduced" riders on real estate signs. Have you ever wondered whether most sellers are holding fast, or reducing their asking price? Let's take a look....In Harrisonburg and Rockingham County, there are currently 953 residential properties on the market (single family, townhome, condos) without a contract on them. In the past 30 days (June 2008), 134 of those properties had a price change (that's 14% of the active inventory). I'm going to assume most of those were price reductions, although some could have (??) been price increases. (It isn't possible via our MLS to see en masse whether the prices went up or down). In the past three months (April, May, June 2008), 293 of these properties had a price change --- that's 31% of the active inventory. And if we look at all of the listings to see how many have, versus have not EVER had a price change, here's what we find: 384 listings have had a price change (40%) 569 listings have NEVER had a price change (60%) This is rather interesting (in my view), as I suspected that most owners may have reduced their price at some point while it has been on the market. But in fact, most home sellers (60%) have NEVER reduced their asking price. Here are some other interesting stats looking at how long properties have been on the market. | |
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If you know what you're going to buy --- buy now! |
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Some would say that as a Realtor, I am a salesman. In fact, when I am representing a Seller, I am working diligently to sell their house. But when I am representing a buyer, I view my role a bit differently.... |
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Understand current market value before making an offer! |
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It would seem that many buyers in the market today are hesitating before making an offer because they are unsure of the current and future value of the home they think they want to purchase. |
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A Reminder --- any Realtor can show you any house... |
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 Many things in real estate aren't exactly self explanatory. Over the past month I have had conversations with three first-time home buyers who didn't realize that I could show them any house listed by a Realtor in the Harrisonburg and Rockingham County area. As I stopped to think about it, I realized that many people who have never bought a home may not realize that fact. So here's how it works...
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The Psychology of Home Buying in Today's Market |
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 For those of you who regularly read articles on my blog, it is likely apparent that I thoroughly enjoy data, number crunching, analysis, etc. But sometimes my counseling background (Masters of Education in Counseling Psychology, CSPA) slips in, and I give the data some rest to look beyond the numbers.These three perspectives on our current market were developed through conversations with several clients over the past few weeks, and I believe they offer valuable insight into our current market in addition to what the numbers would suggest. Place and Space Most people realize that in our current market, there are some great opportunities to get a good deal on a home purchase. The supply of homes for sale is higher than it has been for several years, and the amount of buyers in the market is lower than it has been for several years. Given this dynamic, some sellers, Realtors, market observers are curious as to why more buyers aren't finding a great deal and moving forward. I had a conversation recently with someone who isn't even in the market to buy right now --- but who shared a valuable perspective with me. They suggested that for most people, buying a home isn't really about "getting a great deal" or "taking advantage of the current market dynamics" --- it's about buying a place that feels like a home and space that serves one's needs. That is a keen observation --- because there are plenty of deals to be had, and buyers can definitely take advantage of current market dynamics. But perhaps buyers aren't snapping up homes because they are waiting to find the perfect place and space to call home. The Psychology of Fear Just listen to the news, or your neighbor, and you'll soon know that the economy is terrible right now. High gas prices --- a declining national housing market --- higher food costs --- soaring health insurance costs, and on and on. All of these economic conditions can make people (home buyers, especially) fearful for their financial future. And thus, even though home values in Harrisonburg and Rockingham County haven't seen declines like some areas of the country, many buyers are hesitating to purchase --- and some of them are doing so out of fear for what the economy may look like over the next few months and years. The Power of Hope Beyond the effects of feeling fearful about the future, I would also suggest that home buyers need to feel positive and hopeful in order to be excited about buying a home. Sometimes this can be a self-contained hope --- hope for how a home will make life better for their family. But sometimes those outside influences (such as our current economic situation) can sneak in and steal the hope away. To truly understand our current market, it is essential to not only consider the data but also current market psychology --- as either can have the upper hand in shaping our real estate market now and into the future. | |
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We have been trying to sell our home FOREVER!!! |
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A lot of people feel this way right now --- that they have been trying to sell their home for many months (or longer) without success. This situation is mainly a numbers game ---- closings are down 23% this year, and new listings are up 43%. Clearly, there are many more sellers in the market than there are buyers, which creates the impatience for selling. To put your situation in perspective, let's break down the listings that are currently for sale in Harrisonburg and Rockingham County: This information is showing how many months these sets of properties have been on the market without having sold: On the market for 0 - 6 months = 656 properties On the market for 6 - 12 months = 208 properties On the market for 12 - 18 months = 66 properties On the market for 18 - 24 months = 20 properties On the market for 24 + months = 8 properties (yikes!) If your house as been on the market for a few months without having been sold, don't despair --- it is just taking a bit longer for these properties to sell. | |
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Do you think the couch would fit over there?? |
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 One of the fun tools that I use as I work with buyers is my laser measuring device. This handy device uses a laser beam to measures the distance across a room --- with a click of a button we can measure from wall-to-wall up to 50'.I always keep it in my car, and bring it into most houses that I am showing buyers. Some of my clients aren't too concerned with the specific dimensions of the rooms in the house --- but for those who are, we can quickly capture the dimensions of each room as we tour the house. It even gets a bit more fun, as many of my clients have become quite accurate with their guesses of the room dimensions --- as we look at houses, they refine their visual measuring skills by trying to be as accurate as my laser measurer! Are you up for the challenge? | |
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Scott Rogers
Coldwell Banker
Funkhouser Realtors
540-578-0102
scott@cbfunkhouser.com
Licensed in the
Commonwealth of Virginia
Nope. But then I have never bought a lottery ticket either. I'm not sure that it would go over very well in a small-ish city like Harrisonburg -- and $100 is still a fair amount of money to 'blow' for most of us.
September 28, 2008 8:54 pm
Laura -- I too was wondering about the effect of being in a smaller area. Grand Rapids had a population of 197,800 in the 2000 census --- so the condo raffle lady is hoping that 1.26% of that population would buy a ticket. If 1.26% of Harrisonburg's population (40,468 in the 2000 census) bought tickets, that would only be 510 tickets. So......if she sells 2500 tickets, she is able to get $250,000 for her condo. The 510 tickets sold in Harrisonburg would only provide someone with $51,000 -- not as exciting!
(Yes, people could buy multiple tickets, and people outside of the area could buy tickets, but that might happen at the same proportional ratio).
September 28, 2008 9:05 pm
It gets better! Someone bought a house in Michigan off Ebay for $1.75!
http://www.yourhome.ca/homes/article/509446
October 2, 2008 3:23 pm
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