Homeowners who purchased in 2009 are selling for profit!

I've been out showing homes this week, mostly townhomes in the Woodbridge, Lake Ridge and Dumfries Virginia area in the $200,000 to $300,000 price range and I've noticed something. This information below is great for sellers however it is something that home buyers need to pay attention too.

Whenever I help someone buy a home. I make sure to do the research on how much the seller paid for the home:

• I also check the to see  how much the tax assessment is.
• I check to see if their appears to be signifigant improvements to the home that would dictate a higher asking price.
•  I check to see how is the home priced compared to other homes that have recently sold in and around the community where the home is located.
• I also look at the subsidy trend. ( Subsidy: the amount the seller paid towards the buyers closing costs)

Well this month I have noticed many homes that are on the market that were purchased in late 2008 and 2009 as distress sales such as short sale or foreclosure homes are doing quite well. This is good news for anyone who purchased a home in 2008, or 2009 who is thinking of selling or renting.

For example:

1. I met with a prospective seller a few weeks ago. The homeowner purchased the home for $159,900 in late 2008 here in Lake Ridge. The home was a bank foreclosure. The basement needed drywall repair because the bank contractors had removed the drywall half way up the wall and removed all flooring in the lower level. The home was purchased as is. Fast forward to 2012. That home now has a lovely finished basement. There have been no issues of water problems since purchase. The home today would sell for $217,000! That is an increase of over $57,000! This owner can sell their home or rent their home for a positive cash flow!
2. I showed a home in the Dumfries Virginia area. The home was purchased last summer as a short sale with a Cash Purchase from an investor under $$150,000. It is listed in the $220,000 price range.  The home is gorgeous from top to bottom and the next homeowner will get a fabulous house. The investor who is doing a quick turn around is helping the neighborhood by restoring the home to like new condition. It was a joy to show!
3. I showed another home in Dumfries the other day.  When I did the research for the buyer, I could see that this huge townhouse had been purchased back in 2009 as a short sale. The VA buyer purchased with a Zero Down Payment, financed their VA Funding Fee and right now in 2012...they not only can break even, they may pocket a few thousand dollars.

Sellers Beware:

If you purchased a home using the Home Buyer Tax Credit, keep in mind, when you sell or turn your home into a rental you may have to pay the Tax Credit Back. Read more here.. $8000 Tax Credit Revisited

Buyers Beware:

As you look for your new home, it is not as simple as just going to look to see which one you like. If you NEED the seller to pay your closing costs, and you are looking for a steal of a deal...chances are you will have to search a little longer to find a seller that has enough equity who will negotiate. In today's market many homeowners who purchased before 2007 are still upside down and cannot sell. If they do sell, they are sold by short sale and most banks are not accepting offers under Fair Market Value. Our market is correcting and so you need a strong agent, someone that can do the research and help coach you on all of your options.

So the great news is the Prince William County Virginia real estate market is in a correction. Inventory in some prices are still very low. For example if you are hoping to find a home under $225,000 pickings are slim. Between $300,000 and $400,000 for a single family home is a very competitive market. Homes priced above $400,000 nearing $500,000 and above you will have more to choose from.  If you need help...just call me. If I can't help you, I will be happy to guide you in the right direction.