Statesville NC September 2011 Market Update

The Statesville real estate market has been a roller coaster this year to say the least.  For a market that is normally busy in the spring and a little quieter in the summer, this year has been to opposite for me.  My spring was a little slow going and the summer was HOT!  Not only have sales increased this summer, the foreclosure market seems to be slowing, giving “regular” sellers a better chance of selling their homes.  Statesville has always been known to have plenty of affordable homes and our current market stats show this fact.  You will see in the charts below that the average sales price for homes sold since January 1, 2011 is $108,708 and I can attest to the fact that most of our sales have been for homes under $140,000.   We have a large investor market in Statesville for homes under $90,000 and the numbers show that increase.

 

On the brighter side, I have also experienced a larger demand for homes over $150,000 than we have seen in previous years.  Prices on those homes have dropped slightly and buyers are finally taking notice and taking advantage of some great deals on these homes.  The biggest hole in our market now is the availability of new construction.  New homes that had been foreclosed on in the past several years have been sold and builders are still not constructing many new homes in our area.  We have a few “track” builders that are building some spec homes but custom homes are non existent.
Currently in Statesville, we have 496 active listings with an average list price of $195,928 and an average Days on the market of 184 days.

*All information obtained from Carolina Multiple Listing Service

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Since January 1, 2011 – Statesville has had 348 single family residential homes sell with an average days on the market of 136 days.  This compares to 376 listings sold for the same period of 2010 with average days on the market of 135.  Of the 348 sales, 100 were categorized as a Foreclosure with an average sales price of $72,109.

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This chart shows the fact that our foreclosures in Statesville have fallen to only 3.6 months of inventory verses 21.5 months for regular resales and 19.4 months for short sales.  The question is:  Will we see more foreclosures in the future or will the cooperation of the banks with the short sales and loan modifications finally slow the foreclosure market? image

 

 

 

 

 

 

 

 

 

In the end, the Statesville market is continuing to improve in certain areas and stay stale in others.  Homes over $200,000 still struggle to find buyers while we see multiple offers on homes under $200,000.  There are bright spots in every market and the Statesville market is no exception.  With interest rates at close to 4%, the USDA 100% program going strong for rural areas and prices holding steady – our market looks pretty good right now.

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Negotiating the deal! What to know BEFORE you place an offer.

Realtors_Care_Day

This article is an excerpt from my weekly buyer blast that I send every Friday.  I have been experimenting with other days of the week but you will receive it at least once per week.  I send out a List of area Foreclosed and Distressed Properties in the Statesville, Mooresville, Troutman areas of Iredell County.  I also include Charlotte and Catawba on occasion.  If you would like to receive my weekly article and Foreclosure listings, please SIGN UP on my website and I will add you to my list.  I will not call or bother you, just provide you with helpful, useful information.

Today I am out working in the community as a site captain for Realtors Care Day 2011.  Our local Realtor Organization will be working on over 20 homes from Statesville to Charlotte.  Over 600 Realtors will participate and help out our fellow residents that are unable to maintain their homes.  It is always a pleasure to see my fellow Realtors come together for such a good cause! 

You can keep up to date on happenings in Statesville by "liking" my Fan page on Facebook.  I try to post timely articles of local events, new listings, new businesses, market updates and much more. 

 

This week I would like to talk about the negotiation process.  Many first time home buyers are unsure of what happens when you finally find a home you like and want to make an offer.  It used to be a much easier process before the "foreclosure" and "short sale" era (as I call it).  Normally you would sit down with your buyers agent and look at area comps to find a good price to offer initially, decide on the amount of earnest money to deposit (this is your "good faith" money), set the proposed inspection and closing dates, decide if there are any other conditions you want to include, sign and present the offer to the seller along with your pre-qualification letter.

Here is a link to the basic process offered by REBAC (Real Estate Buyers Agent Council):
Negotiating Process for Buyers

Today, however, you need to know much more about presenting offers such as:

Is it a HUD house?  This process is completely different and involves submitting a bid online to HUD on their paperwork and adhering to a VERY strict timeline.  Your buyer’s agent will need to understand the different types of HUD home offerings, the required timelines and earnest money, any "escrow" amounts for repairs and type of finance programs. 

Is it owned by Fannie Mae or Freddie Mac?  These homes may offer specialized finance programs with other incentives and home warranties.  They will have their own bank addendums and instructions for submitting offers to them.  They prefer shorter closing times but are relatively easy to work with.

Is it a Short Sale?  These homes are much more difficult to work with.  The home has not foreclosed and the lender may agree to accept less than is owed on the home however, the process is painfully slow and may take 4-6 months to get an answer.  Please be sure you have an experienced agent before attempting one of these!  Your offer is submitted to the seller for acceptance first and then to the bank for approval, then the mortgage insurance company and then possibly Fannie Mae or Freddie Mac or HUD.  If there is a second mortgage on the home, it gets even more complicated.  Get an attorney upfront to do a title search and know what you are walking into.

Is it owned by another bank?  All banks will have their own addendums that will need to be signed after your offer has been accepted.  You need to be sure you read them thoroughly and know what you are signing.  It is a good idea to have your attorney read them over before finalizing them.
Here are some links from some of my past Blogs that offer additional information:

A few things to consider before purchasing a distressed property

03-10-2011 23:58:47 PM

I have been working with lots of buyers of foreclosed or distressed homes lately and wanted to give you some hints on how to make this type of purchase a little easier.  First, let’s talk about Short Sale Properties:  A … Continue reading →…»

How to Purchase a HUD home in North Carolina

02-10-2011 14:23:57 PM

How to Purchase a HUD home In recent months, there was a huge backlog of HUD homes that were held up for closing in NC and changes were made to try and streamline the entire process.  There are now three … Continue reading →…»

What is this new "Due Diligence" Fee in North Carolina and how does it affect me?

01-26-2011 17:16:00 PM

I know I will be explaining this question for a long time to come!  As of January 1st 2010 in North Carolina, we no longer have just the Earnest Money deposit option on the Offer to Purchase Sales agreement.  Our … Continue reading →…»

Why do Lender’s counter an offer for more than the current list price?

I was recently asked the same question by two of my clients here in Statesville NC, that concerned short sales and foreclosures and I thought I would share with you the answer as it may be helpful during your home search.

Foreclosure

QUESTION:  Why do lenders counter an offer higher than the current list price on distressed Properties in Statesville NC?

ANSWER:  My first response would be “Who knows why lenders do what they do!” but the true answer would be this:  On a short sale, the lender is agreeing to accept less for a property than what is currently owed on it to prevent the home from going through the entire foreclosure process and avoiding some cost for the lender.  The list price is set by the Listing agent to attract buyers and get an offer to send to the bank.  Most lenders do not “pre-approve” the sale upfront and have no idea what the current list price is until you send them an offer.  Once an offer is received, it is sent to the loss mitigation department along with the listing agreement, seller financial documents and hardship letter, recent comps and many other things for the lender to review.

The loss mitigation department then contacts a local agent to do a Broker Price Opinion of value and once that is completed the entire file is sent to a bank negotiator.  The negotiator then makes a decision based on the information they have as to whether they will accept an offer or counter the offer. They will review the estimate HUD Settlement Statement that has been sent to them and make a decision based on the “net to the lender”.  Often times, they will counter much higher than the current list price because they are not willing to take a large loss. I have seen more times than not, this usually comes back to bite them in the butt because the buyers back out due to the delays. The house then sits on the market for a extended amount of time and it eventually forecloses anyway. I have seen many times, the house come on the market after foreclosure for an amount less than the offer they received during the short sale period.  I say…..Serves them right for being so difficult!  What is important to know is that a Short Sale transaction is very difficult and lengthy- so be prepared.

Occasionally on foreclosed homes, the lender will counter higher than the list price that THEY set just to try and get a higher amount but this tactic does not happen often and when it does, the lender usually looses the buyer.  I will say that closing a foreclosure is much easier and faster than a short sale.  If you have other questions you would like to have answered, feel free to send me an email and I will post it here for you or on my blog.

Continue reading Why do Lender’s counter an offer for more than the current list price?