Fannie Mae Down Payment Requirements Lowered
Author: Jeff Edmisten | May 16, 2008
Great news from Fannie Mae! On Friday of last week, Fannie has lowered the down payment requirement for homes being purchased in an area that is considered a declining market. This is Fannie Mae’s way of helping to deal with a struggling housing market. They will now require 3% or 5% for all the loans they guarantee, and this is good news for a lot of buyers in the Fredericksburg real estate market.
Topics: Real Estate Finance |
No Comments » | Trackback
What Goes Up Does Not Come Down - Real Estate Tax Assessments
Author: Jeff Edmisten | May 16, 2008
“What goes up does not come down.” That is a quote from a friend who recently attempted to have the City of Fredericksburg re-evaluate the tax assessment on his little sliver of Fredericksburg real estate.
A couple of weeks ago, my friend asked me if there was any chance his home would sell for $460,000. After taking a look at the numbers, the answer was an emphatic no. However, his tax assessment is right around that number. My friend thought, like any good citizen, that he could go and present evidence that his home is not worth the assessment, and through some logical process, have his assessed value lowered. Wrong.
Despite the fact that we developed irrefutable evidence that the home, at best… at best, would sell for $350,000, my friend was told, oh well. If you want it changed, you have to file suit. Give me a break! The City knows that it would likely cost him more than the difference in taxes he would pay, to file and manage the lawsuit.
And, generally speaking, when a real estate taxing authority lowers assessments, they raise the tax rate. There are few government entities who are readily capable of handling any type of budget cut. Undoubtedly the local governments coffers boomed, right along with the real estate market in 2004, 2005, and 2006. Tax assessments certainly went up very quickly during this time frame. But, are they willing to accept the fact that the market has changed, and their tax revenue should reflect the change?
Yesterday, I was working on gathering data for a client, so they could see the difference real estate taxes from jurisdiction to jurisdiction, would make in their monthly house payment. I used a base number of homes selling for $200,000, and looked at the following real estate markets; Fairfax real estate, Prince William real estate, Stafford real estate, and Spotsylvania real estate. On homes selling for around $200,000, these were the average tax assessments:
County - Selling Price Average - Tax Assessed Average
- Fairfax - $200,000 - $386,000
- Prince William - $200,000 - $350,000
- Stafford - $200,000 - $320,000
- Spotsylvania - $200,000 - $240,000
This was a random sampling, and may not reflect the counties overall average. But, it does demonstrate the fact that tax assessments in most jurisdictions are woefully high.
Shifting gears to people selling Fredericksburg real estate, and those looking at homes for sale in Fredericksburg. Does this information mean that the tax assessment is irrelevant to market value? Yes, and no.
Yes, it does mean that in most cases, the tax assessed value will look nothing like the sales price the home will bring. But, no it’s not irrelevant. While almost no reasonable person can explain how an assessor arrives at a home’s value, there is a formula used. That formula means one important thing, that when taken in totality, the assessed value is an impartial judge of value.
What I mean by that is that an assessor has no vested interest in valuing my home with any formula different than your home. So, if my home is assessed at $300,000, and yours at $400,000, then your home is likely more valuable. They may not bring those numbers, but yours will bring more than mine.
There are few real estate agents who understand the formula to use tax assessment values, when determining a home’s true market value. But there is a formula, and it is quite consistent. Once I was taught, and learned to use the formula, I have, in most cases predicted a home’s selling price with remarkable consistency.
So, as a seller of Fredericksburg real estate, you may be growling at the tax assessed value on your home… because “What goes up, does not come down.” But, from a buyer’s perspective, when looking at Fredericksburg homes for sale, have your agent show you how this formula indicates the home’s market value. Then you will know what you should offer for any particular home.
Topics: Fredericksburg Real Estate, Quantico Real Estate, Spotsylvania Real Estate, Stafford Real Estate |
2 Comments » | Trackback
Top 1 Million
Author: Jeff Edmisten | May 15, 2008
Just a little update on the status of the Fredericksburg Virginia Real Blog. Technorati, is a popular blog directory service. It measures the popularity of a given blog as compared to all other sites that have been submitted to its system. We have hit a milestone, by now being ranked within the top one million blogs in the world, and there are many millions of them. This ranks us in the top 1.32% in terms of traffic, of all the blogs in the world.
Thank you to all those who visit, and return on a regular basis. This blog is a labor of love, of sorts. A lot of time, work and dedication goes into it, and in trying to help our clients be the most informedin the Fredericksburg real estate market. If you haven’t done so already, please click here to subscribe, so you don’t miss any important information.
Thank you again!
Topics: Fredericksburg Real Estate |
No Comments » | Trackback
“I Better Never Hear of You Running From a Fight”
Author: Jeff Edmisten | May 15, 2008
This is not like my usual articles, but thought it was worth describing. Early in my childhood, my father passed on a warning, for lack of a better term, that had been passed on to him by his father. I can still hear his words, “I better never hear of you starting a fight, and I also better never hear of you running from a fight.”
All of my life, I steadfastly lived part of that admonition - I have never run from a fight. If my father is reading this, he may or may not already now, that once - just once in my life, I started a fight. I have only lost one fight in my life - and as fate would have it, it was the one I started. That’s not really true, no-one ever really wins a fight.
But, the important thing is I have never run from one. I have wanted to mighty badly before… but I didn’t. Back when I was in the Marine Corps, I was in a bar that erupted in a full fledged brawl. I grabbed my keys and danced around the fists and beer bottle projectiles to the door and left. I wasn’t running, I just didn’t have a dog in that particular fight.
Why I am telling you all of this? Because today I ran from a fight. Here is how it happened. I was previewing a list foreclosure homes for a couple of investor clients. I had just entered the second home on my list, and was standing in the living room. Suddenly, I realized I was not alone in this home. I heard movement at the back of the home.
Now, this was a perplexing thing, because the home is vacant. The door was locked when I arrived, and no windows were open or broken. No cars were in the driveway. So, of course, I was wondering who was in the home. I slowly and quietly began searching the home.
Finally, I reached the conclusion that I must have imagined the sounds of movement. So, I relaxed and began snapping photographs. Then, I stepped into the family room of the home, and came face to face with a situation I was not prepared to handle.
Staring me in the eye, and despite my obvious manly brawn (tongue in cheek) I found an enemy that was poised for battle. I stared at him, and processed my options. I could fight, and without any reservation, I can say I would lose. Despite the fact that he wasn’t huge. I could ignore him, and he would probably still take me to task. Or I could run.
I am not hesitant to admit, that as I pondered my options, shame was not a consideration. So, in the Milli-second it took to process the sight of my enemy, and weigh my options, I turned tail and ran like the wind blows…
So let me tell you about the enemy. The enemy wasn’t a man - but rather, he was a big ole, black and white skunk! And, as far as I am concerned he can have that house! Sorry Dad, but today I ran from a fight. I know you taught me not to run, but I also fervently believe you didn’t raise any stupid children.
Topics: Fredericksburg Real Estate |
1 Comment » | Trackback
Adding your home to the list of homes for sale in Fredericksburg? Don’t sink big money into improvements
Author: Jeff Edmisten | May 15, 2008
As a Realtor in normal course of business in the Fredericksburg real estate market, I have many occasions to consult with people who are considering selling their home. For about the last year or so, a common conversation has taken place. The theme of that conversation has the seller asking if they should make improvements to their home, in an attempt to sell for more, and net more money. My normal response in this market, is no, don’t do it.
Don’t misunderstand. I do think you should get your home in tip-top shape, and pay particular attention to the home’s curb appeal, sprucing up the lawn, landscaping, and outdoor living areas. I do think you should attempt to put your home’s best foot forward. But, I do NOT think you should be investing big bucks into additions, and most makeovers that home sellers often consider.
I have advised most of these sellers, that we are in a market where, “price is king.” Buyers who are looking at Fredericksburg homes for sale, are looking for value, and lots of it, in the form of rock bottom prices. Sinking a lot of money into big home improvement projects will often, in a market like this one, actually mean you net less money when you sell.
A recent article in the Wall Street Journal online stated essentially the same thing…
The slumping housing market has made remodeling much trickier. When house prices were climbing ever higher, buyers knew they could spend big bucks to expand their homes and still make a profit when it came time to sell. But today, a buyer who spends unwisely on remodeling may be simply digging a deeper hole when it comes time to move.
Further complicating the equation: Even though housing prices are slumping, construction prices have continued to climb. That means adding that new bath will cost more, even as it contributes less to the resale value.
Topics: Fredericksburg Real Estate |
No Comments » | Trackback
Holding Out For Top Dollar
Author: Jeff Edmisten | May 15, 2008
Last night I viewed a topic posted on one of those “Ask An Expert”type of websites. The topic was about valuing and selling a particular piece of real estate. The property was not in the Fredericksburg real estate market, but frankly, most markets in America right now are similar to ours.
The topic poster asked how to value this property, and find buyers for it. An “expert” posted a reply that is paraphrased like this: When dealing with real estate agents, take their advice, but keep in mind most of them prefer a quick sale, rather than holding out for top dollar.
I couldn’t help but laugh out loud, at the “expert” response. A good real estate agent will show you how to price your property to sell at current market value, which ultimately should result in a quick sale. A quick sale is relative to the current market conditions.
I can show you case after case, where sellers “held out for top dollar,” only to lose tens of thousands of dollars. I have an acquaintance, who did not listen to my advice on pricing their home. They listened to another Realtor who told them to price the home much higher. The home, of course, did not sell at the higher price, because it was way above market value. In the six months they had their home listed with the other agent, the property value dropped almost $30,000.
This is not a single time occurrence for Fredericksburg homes for sale. I can show you many, many people who have lost lots of money by “holding out for top dollar.” Another problem with this mindset is the buyer’s perspective of the property.
When a buyer is considering homes for sale in Fredericksburg, or in any market for that matter, when they see one that has been on the market far longer than is normal for the market, they start asking, “What is wrong with this property?” They then say, “Let’s make a low offer and see how desperate they are?”
The percentages are quite high that this is what is going to play out, when you “hold out for top dollar.” Because that statement in and of itself, is a misnomer. Top dollar is current market value… not some price applied that is substantially above market value.
The only real exception to this rule, is a property that is so unique, that a buyer recognizes they cannot get one like it anywhere else. Then, MAYBE, you can hold out for a higher price for that one unique buyer. But this is a situation that applies to a very, very limited portion of the Fredericksburg real estate market.
Topics: Fredericksburg Real Estate |
No Comments » | Trackback
How To Buy a Fredericksburg Real Estate Market Foreclosed Home that Needs TLC
Author: Jeff Edmisten | May 14, 2008
Any buyer who is looking at Fredericksburg homes for sale, in virtually any price range, has found that a majority of the homes offered are foreclosures, or short sales. Very few people are surprised by that fact, any longer. What may surprise some people, is the condition in which these homes are presented. Some of them are in pristine condition - but many others need some work, or some TLC (tender loving care) as agents like to say.
That TLC may include major issues, like roofing, heating systems, etc. More often though, they need more minor, and cosmetic improvements. They may need new appliances, new carpeting, new drywall, or some other hardware. See the photos in my recent article (Everything But the Bathroom Sink - Fredericksburg Real Estate Foreclosure) for an idea of this issues about which I am speaking.
So, now the issue often presents itself like this. A buyer has decided they are ready to purchase some a home, and begin actively looking at Fredericksburg real estate. As they look, they discover that most of the Fredericksburg homes for sale are foreclosures in need of TLC. They then start to crunch numbers, thinking well, there are some fantastically priced homes out there. But, if we buy, we need money for carpet, appliances, etc. They then start believing that they do not have the money to purchase a home.
This is where selecting a competent real estate team, who understands how to make this happen in this market, is critical. When I speak of a real estate team, I mean a Realtor who understands the market, knows how to negotiate term and conditions that are favorable to you. And, a lender who knows what programs are available, and more importantly, knows how to use them. There are ways to purchase a home, make the improvements, and have very little, if any money come directly out of your pocket.
There are loan programs available to lenders who are on-top-of-their-game, that allow buyers to include repair costs in their financing. So, a buyer can find a home in the Fredericksburg real estate market, that is priced extremely well, which they can buy, make the improvements, and own a fantastic home… for far less than they often anticipated.
Additionally, in many instances, the down-payment and closing costs can be paid by the seller, or included in the financing as well. So, if everything is negotiated properly, and the lender knows their stuff - it is entirely feasible for a buyer to purchase the home, make the improvements, and move in, with nothing, or almost nothing out of pocket.
The Fredericksburg real estate market is ripe with these kinds of opportunities. The kind of opportunities that can allow someone to stop paying rent, and become a homeowner, very quickly. The ball is in the buyer’s court, they just have to choose the right tool for the job.
Topics: Fredericksburg Real Estate, Real Estate Finance |
No Comments » | Trackback
Selling Your Home? Choose a Realtor with High Organic Search Results
Author: Jeff Edmisten | May 13, 2008
An interesting thing happened this morning. I had a Spotsylvania government employee call me. He didn’t call me about buying or selling a home. He called me because he needed some contact information for a specific homeowner’s association.
I found that a bit odd, so I asked, “How did you come to call me for this?” His reply, “Google.” He had Googled a particular subdivision, and I was the first name he found. This leads to an interesting point that many experts have made in recent months - When you are selling your home, it is important to choose a Fredericksburg real estate agent who ranks high in organic search results.
Let me first explain the term organic search results to those who may be unfamiliar. The term organic search results, means that if someone goes to Google, and performs a search, they will likely get two types of results. Paid results, and organic results. The paid results sometimes appear at the top, bottom and side of the resulting page. Those results change depending upon the customer’s budget amount, and formula for using the budget.
Paid results for an agent may appear now, but be gone in an hour, not to appear again until tomorrow, or next month. Organic search results, are the ACTUAL results that Google found relevant to the search. They are the meat of the resulting page. They usually do not disappear, or move up or down very rapidly.
So, how is this important to someone selling their home? It’s important for several reasons. First, let’s assume you live in the Artillery Ridge Community, for example. A potential buyer decides they want to live in Artillery Ridge. They visit Google and type, “Homes for Sale in Artillery Ridge.” The resulting page shows this blog in the number one spot. Guess which site the buyer is likely to visit next? That gives my team the opportunity to discuss their needs, and see if one of our listings fits their criteria.
Secondly, choosing a Realtor who ranks high with organic search results, ensures you are working with a Realtor who meets and works with a lot of buyers. I just did a test of a few communities:
- Homes for Sale in Village of Idlewild
- Homes for Sale in Artillery Ridge
- Homes for Sale in Holleybrooke
- Homes for Sale in Kingswood.
This blog is first, or on the first page for each of these communities, and there are many others. I am not writing this to convince you to list your home with my team. I am writing it to convince you to utilize a Realtor who knows how to leverage the Internet.
The Internet is the single greatest tool in marketing your home, and the only resource with nearly infinite staying power. There are very, very, very few agents in the world who could afford to keep print advertising in the buyer’s eyes as long as it can be done on the Internet.
Good luck in selling your home, and choose your Realtor well.
Topics: Fredericksburg Real Estate, Spotsylvania Real Estate, Stafford Real Estate |
No Comments » | Trackback
7 Tips for Filling Out An On-line Loan Application
Author: Kim Thagholm | May 13, 2008
Lately, I have had more and more requests by Realtors in the Fredericksburg real estate market, asking for a pre-approval letter that will enhance their buyer client. Essentially, what they are asking is, how can I make my buyer stand out against the buying competition, and make the process smoother. One way to make that happen is to allow me to help educate the buyer. Often, I ask my clients from out of the area, or overseas, to go to my website and fill out a loan application. Ideally, they would do this BEFORE they go out looking at Fredericksburg homes for sale, with their Realtor. When they do so, here are a few tips to improve the process:
- Fill out the application as accurately as possible
- Provide a 2 year address history,
- Provide 2 years of employment history
- You will likely not have a property address at this point, so simply type in 123 Main Street My Town US. This will be completed more fully once you have picked a property.
- Provide a copy of one month of pay stubs,
- Provide W2’s for the previous 2 years.
- The final item is to provide a copy of your bank statement.
Armed with all of this information, I can truly send everything to the underwriter. Ultimately, this allows me to provide a strong pre-approval letter, that will make the process go far more quickly and smoothly. That is something that benefits everyone involved in the transaction. Especially, when you find yourself attempting to purchase a piece of foreclosed Fredericksburg real estate, from a bank who often slows the process down. The more ready you are, the better off you will be.
Topics: Fredericksburg Real Estate, Real Estate Finance |
No Comments » | Trackback
Monsoon Like Weather Conditions
Author: Jeff Edmisten | May 12, 2008
It has rained so much, I believe I the Smallmouth Bass have begun eating the grass in my lawn. My kids couldn’t stand it anymore, and had to get outside, even if only for a few minutes. This is what the weather was like here in Fredericksburg on Mother’s Day.
Topics: Not About Work |
2 Comments » | Trackback
« Previous Entries