My grandmother thinks I’m broke!
The other day she calls me and says in a thick accent,
“Are you still able to feed yourself? Why are you still in Real Estate.”
I asked why, and she proceeds, “I keep reading in the paper (more…)
(Update 6-16-08: This post was featured in the Washington Post)
I wrote about my distaste for Short Sales (aka Fake Listings), and how only 5% close in Northern Virginia (as of 2-08, but that might be changing). I guess now my distaste has shifted away from Short Sales, and more toward clueless (more…)
Disclosure: I am not a financial advisor. This is not financial advice, and you’d be an idiot to follow what I do personally.
I personally only own ONE “stock”, and that is called SPY. The #1 bought and sold stock in America, meanwhile most individual investors don’t know about it.
It is an Index Fund (also called an EFT, Exchange Traded Fund) that has all of the S&P 500 rolled into one stock with virtually no fees and no annual maintenance. Motley Fool 
wrote that “3 out of 4 mutual funds (more…)
I officially have 100% proof that we have officially hit rock bottom.
No other indicators from NAR or the government have been as accurate as the proof that I have. I found a 100% correlation!
When My MOM SELLS, (more…)
I am officially launching FranklyMLS.com, the The First Wiki MLS!
Where BUYER AGENTS, in Virginia and DC, from multiple brokerages come together to ADD information and photo albums to listings they visit. MORE DATA & 1,000+ MORE PHOTOS!
THE “OLD 1.0 WAY”: (see all 31 MLS search engines here)
1) One-Way Information. “Here are homes for sale, as marketed by the listing agent. Take it, trust it, or leave it.” 
2) Photoless MLS Listings!
Sure they sell for $15,000 less but they are a pain for everyone. Oftentimes foreclosures or a listing by an underpaid or sucky agent have no (more…)
Update 3-19-09: This post is OLD. See new Post from 2-09 Short sales are closing, if done correctly. They can be the best “deal” (I hate saying “deal”). The post below is still great background info.
Update 1-22-09: Still reading this #1 blog post on short sales for a background on the process? Well it was written over a year ago. Short Sales are now closing MUCH more frequently in SOME areas (an 0 in areas like McLean). Subscribe to this blog for I plan to run some numbers on the % that are closing. My guess is the range is 1 in 3 (vs 1 in 20) before. However closing rates can be as high as 80% if your buyer agent asks the listing agent these questions: Top 10 Short Sale Questions.
(Update 6-16-08: This post was written on 2/08, this marketplace is changing ever month. Make sure to subscribe to the blog to get updated on the marketplace, like an upcoming post on more Short Sales starting to close.)
As of 2-08, most Short Sales in Northern Virginia are what I call “FAKE Listings.” (note that this is Virginia, every area is drastically different)
Only 1 in 20 sells.
In Arlington only 3 have sold out of 65 attempts.
I briefly went over Short Sales when I defined all SOL Homes including REOs, Bank Owned Etc. But Short Sales need more attention, as they are very tricky and misleading.
A Short Sale is a listing for sale that requires “Third Party Approval.” That means that 1, or 2!!, banks are owed MORE than the list price.
For Example:
The Theory Behind Short Sales: Banks would be better off to accept a loss now, versus going through the legal expense of a foreclosure, just to end up selling it for less later. Win win, right? Wrong. Read on.
Bank Trick 1: “Sure, we will consider a Short Sale, IF YOU KEEP PAYING US.”
Yep, a bank sees a desperate seller, and a potential $50,000 loss. They then mislead them into thinking that they might consider taking a bath on the deal IF the owner keeps paying their mortgage. The bank then ignores offers for 2-4 months in order to squeeze out another $2,000 x 4 or $8,000 profit. Brilliant. The bank then takes it over after foreclosure and sells it for $10,000 OVER the Short Sale List price. $18,000 better off, NOT doing a Short Sale.
Bank Trick 2: Sometimes the bank has mortgage insurance and it is CHEAPER for them to let it foreclose versus allowing a Short Sale, which is NOT insured.
For example, I was at an NVAR short sale class and a Realtor asked the speaker, “Why after 60 days, calling 2 times a day (120 calls) with a full price Short Sale offer, did the bank not call us back?” The speaker claimed it was due to an overworked staff.
I asked:
She was pissed. She realized that she had been “had.” But this goes on ALL THE TIME. It can take MONTHS to hear back.
Another example:
The moral here is banks are not dumb and the market isn’t so horrible that they will take all these lowball offers. They sold it for $10,000 OVER the previous list price (which probably had lower offers).
Reston homes from $300k to $400k.
- 20 Active “Short Sales” in Reston (watch out for “Not a Short Sale” listings)
- 73 were Withdrawn, or Expired.
- 3 Under Contract (1 under contract since Nov 2007! Many UC do not close.)
Arlington Short sales.
- 25 Actives
- 37 Withdrawn
Only 3 have sold in ALL price ranges in all of Arlington in the last 2 years.
In Alexandria, only 8 have closed in 2 years out of 80 attempts.
(most were at list, or 2% under list, some were $20k over list)
I show this, so you don’t think “Wow, they are desperate, we can now lowball. These 3 were the ONLY successful ones. Probably because they gave the bank a real offer.
Ok, so enough already with the War N Peace, what should I do?
Advice for Regular Sellers
Advice for Sellers Facing Foreclosure
Advice for Buyers looking for a “steal” (see “deals” post)
Advice for Buyer agents & Listing agents
If you get one to close, change the remarks to SHORT SALE, NOT TO BE USED AS A COMP in hopes that the appraiser will take that into consideration and not trash the neighborhood (buyer agents, demand it of the listing agent to try to help your client’s “deal” not turn into destroying his own investment).
Sidenote: A home should NOT go under contract until the BANK signs it, but many agents will make this mistake. The seller signing it means nothing, and it should stay on the market as Active.
Here are a sellers’ options (please comment if you know of more options) :
New Trick: Now that Short Sales are getting a bad wrap, some listing agents are NOT disclosing that it is a Short Sale.
Conclusion as of 2-2008: Short Sales in Northern Virginia suck.
Question: Realtors, should you have a “No Show” policy for Short Sales that aren’t approved by the bank? Are they really “for sale” if the owner (the bank) doesn’t even know about it? Feel free to just tell your clients “read this blog.”
Please report typos.
p.s. See Washington Post Article on Short Sales
When I say “Buying a Listing,” I’m not referring to the actual act of buying a home. Instead I am referring to industry agent to agent jargon. It refers to an unethical trick where some listing agents will inflate the recommended list price in order to win the deal.
I have referred to my mother several times in my blog. I’ve learned more about real estate from her than anybody else, oftentimes from (more…)
So you are buying a Virginia bank owned property, and REO or a Short Sale? You need to understand the various bank addendums that accompany them, or you might miss a $3,000 hidden fee.
But first, a quick background. Agents that are members of NVAR, and are REALTORS, use a 15 page contract that was painstakingly (more…)
So you’ve just looked at 10 homes and your brain is fried.
Everything starting to look alike? Oh No!
The solution: Buyer Agent Photo Albums.
Your buyer agent should be taking 30-50 photos per house (more…)
On the heels of our discussion about legislation to remove the Phantom Tax associated with short sales, (see my quote in the Washington post on Short Sale) there is also legislation out there to freeze Adjustable Rate Mortgages for (more…)
Below is my quote in today’s Dec 7th 07 The Washington Post story, “Those Who Avoided Risk Call Plan a Raw Deal”
Part 2 to my: Current Sellers “Wait Till Spring”? Yeah Right. Lose $10,000, which focuses on sellers that put their home on the market around September and whether they are better off trying to get a deal done in December, vs waiting until Spring to get a higher price. My data showed that they got $10,000 LOWER if they waited until Spring.
The question that I still have is:
If you have a home for sale that is “ready” (a fully staged Arlington Virginia Home), are you better off (more…)
I was reading The Washington Post on Sat November 24 and I came across their “Real Estate Trends” report for Fairfax County. They compared the first 6 months of 2006 to the first 6 months of 2007, excluded condos, and they used data gathered through the courthouse (ie. not the MLS).
Out of the 47 zip codes, they said the #1 fastest growing zip code was 20170, Herndon at +14.4%. (more…)
Punchline: Buy homes with No Additional photos= Save $15,000 on a $400,000 house.
Buyers LOVE seeing tons of photos for each listing online. I think Realtor.com said that listings with multiple photos get seen 6 times more than listings with 1 photo. The tendency for buyers is to see a photoless house and think it is garbage and skip to the next listing (more…)
Buy like a Realtor!
This post is a link to a 6 minute video showing the process involved in buying a Bank Owned Property in Arlington Virginia, by a Realtor. Megan Buckley, a Realtor with FranklyRealty.com, recently bought her REO home in South Arlington. It was bank owned.
Foreclosures aren’t as frequent as people think in Arlington, and I still suggest looking at everything, but it is possible to get one for a deeply reduced price versus the previous owner’s purchase price.
The FEVER was lost for two years, but it’s BACK!
My Virginia Real Estate blog showcases the trends before you ever knew they existed. This is a new trend, and it is on fuego. Problem is, is it real?
The message is slightly different, but the bottom line is still there: Buy Foreclosures, Flip (more…)
I rarely write commentary about news articles but this one stood out.
I was intrigued by Dina ElBoghdady’s exposé today: Realtor Discourages Use of Outside Lenders, Long & Foster Pushes Own Mortgages, where she questions an email sent by Mr. Foster to all Long & Foster agents.
She wrote, “[The email] ch
astised his workers for funding mortgages through Bank of America more than 2,200 times last year [vs using L&F owned Prosperity Mortgage].” (more…)
When two of my blog readers send me WSJ articles on the same day, you know something big is up.
Appraisals 101: An appraisal is a report that is supposed to be a 3rd party impartial review of a property (usually under contract) to make sure the price is in line with recent closed sales (not counting houses still “for sale”). This protects the bank from (more…)
NVAR Realtor update: Have you voted for me yet? Voting ends Thurs Nov 2 at NOON! Go to www.NVAR.com/vote Know a No. Va. Realtor? Let them know. More info at www.ChooseFrank.org
This is the Results Show for the Parkside of Alexandria Auction yesterday (Sun. Oct 28) at Hilton in Alexandria. As background make sure you read: Parkside Alexandria 47% Off Auction
About 300 people showed up. Of which, over 100 were registered buyers with an auction number. About 50% of those had attended an auction practice the night before. Also about 75% of the 100 were 1st-timers at an auction.
To the right is the price sheet and my notes with what went for what.
Below is a Youtube of an Auction for a 2br 2 level townhouse. Minimum bid is $225k
The event was publicized as a “one-in-a-lifetime opportunity”, as if units MIGHT go for $225,000 for a 2 level 2 bedroom 1.5 bath townhouse. Well that didn’t happen. For the units starting at $225,000, they were immediately bid up to $275,000 and the range ended at $287,000, most sold at $300,000, and the highest close was $306,000. Keep in mind that some units are MUCH closer to 395 and some came already upgraded with Hardwoods and Granite.
The developer even added Hardwood floors midstream as a “free upgrade” for SOME units that currently have carpet.
The 3 bedroom units had a minimum price of $275,000 with a “Last Asking” price of $390,000. These units sold for a low of $351,000 and a high of $362,000.
Below is a video of the 3 bdr with a minimum starting bid of $275k
Now did these people get a great “deal.” Maybe. I’m not sure. What I can tell you is it wasn’t at a “no-brainer” price that investors could buy it and easily flip it the next week for a $40,000 profit (don’t think the thought didn’t cross my mind), but if a buyer was looking to live in it, and was considering the units at $340,000 list, sure, they got 10-15% off.
If you are still interested in a unit, let me know. Sometimes they have units that come up if one of the buyers backs out. Megan, an agent with FranklyRealty.com used to live at Parkside and recently sold a unit there for $330,000. She knows the pros and cons for each unit. I believe the developer is now cooperating with Realtors (they were giving 66% less for Realtors during the Auction vs during regular sales), so it shouldn’t cost you anything to have representation.
- Written by Frank Borges LL0SA- Broker/Owner FranklyRealty.com
703-827-4OO6 Please report all typos, I don’t like looking stupid. If you like this post, sign up for new blogs daily, use the form on the right of the page.
Videos at YouTube.FranklyRealty.com
Update, Mon Oct 29 07: After reading about this auction, go over to the Parkside of Alexandria Auction RESULTS show (with videos).
Update 2-21-08: Eos 21 Just announced an Auction. More soon.
Just on the heels of my article New Construction Bargains: Risks or Rewards? on whether the “deals” at new condo constructions like Phoenix Condos in Arlington, were good ones, I get an email about Parkside Alexandria having an Auction on Oct 28th 2007.
Their advertisement is based on a “Minimum Selling Pr
ice”* of $225,000. These units went for as high as $425,000 in the heyday!
If they sell for that price, that is about 47% off! So NOW is it a good deal?
Again, I’m not saying to avoid new constructions since they might offer a deep discount versus a similar resale unit, but you have to look at their inventory levels and the risks of them unloading units like the condo townhouses of Parkside Alexandria.
Remember, it can ALWAYS go lower! No matter how much of a deal you think you are getting, it can always go lower. So when do you buy? Perhaps only when you are ready for the long term hold and can ride out any waves, or like I say in my Attn. Market Timers! The EXACT Best Day to Buy!, the day that you stop caring about finding the best day to buy, and simply want to enjoy YOUR house.
So what about this 47% off sale? Is that a good deal? Is THAT the bottom? I don’t know, but, like a broken record… it can always go lower. You would think that at that level of slashing, it can’t go down any more, but you never know. Nobody would have thought that they would have pulled back from $425k to $325k. That would be unheard of! Now at $225k… ???
Mad Money’s Jim Cramer put it well… He said the single best time to buy the Nasdaq Index was when it fell from 5,000 to 4,000. But so was 3,000, and 2,000 and 1,500!
Is your risk LOWER than somebody that bought a house at $300k or $400k, sure, but there is still risk. Risk has to be evaluated and measured versus the potential reward and return. Will buyers at $225,000 make a killing? Very possibly. Is it a “no brainer” for a Virginia real estate investors to jump in? I don’t know. Not for me, but then again, I’m too conservative and conservative people miss all the great opportunities.
* Minimum Selling Price MSP is a “reserve auction.”
Sometimes reserve auctions are fake since the reserve isn’t published and is sometimes right up near list price. They can be designed to entice potentially interested buyers to bite. For example if three people put in low balls below the reserve, the homeowner will just counter like a regular contract.
At the Parkside at Alexandria the MSP is published and is significantly under list price, with the hopes of attracting enough buyers to hopefully have people bid up from $225,000 to as close as full list price as possible. But then again, they might all go at $225k (for the 2 level townhouse). I’ll try to go to this event and report on it. I bet the attendance will be pretty good. Here is more info: ParksideAlexandria.com Here is the ad
What will other builders have to do to avoid the INCREASE in buyer fears that this will create? Will they agree to put $50,000 in escrow for a year to insure that the builder won’t drop auction off the rest of the inventory? If they don’t offer some insurance, buyers might just wait and wait and wait and these auctions might become more frequent because of it.
Which project will be next??? Sign up for this blog (upper right corner of blog) for free to make sure you are kept up to date on the marketplace. or Subscribe in a reader.
Feel free to forward this email to others that might be interested.
- Written by Frank Borges LL0SA- Broker/Owner FranklyRealty.com
703-827-4OO6 Please report all typos, I don’t like looking stupid. If you like this post, sign up for new blogs daily, use the form on the right of the page.
Here are other new construction communities: Parkside of Alexandria, Eclipse, Parkside of Courthouse. Condominiums at Carlyle Square, Bryon, Palatine, Phoenix, Turnberry Tower, Odyssey, Hawthorn, 1800 Wilson, Westlee, Vantage Merrifield Town Center, Bromptons, Brittany, Bearings in Old Town, Renaissance 2230, Park at Courthouse, Butterfield, Mercer. Parkside Alexandria
