I know I’m going to get some heat for writing this, but it’s genuinely how I feel. So before you start to send me hate E-mail, consider this an editorial opinion piece. Will it pan out exactly as I see it? I sincerely doubt it. Is there a chance that some of what I’m writing about could possibly happen? Who knows. Either way, I’m not an oracle. I’m just somebody that eats, lives, and breathes this every day.
What types of sellers am I appealing to? I am reaching out to ANYONE that is considering selling, especially those who are facing foreclosure. If you’re facing foreclosure and haven’t explored a LOAN MODIFICATION (which I am strongly opposed to—another blog, another time—but I nonetheless have to acknowledge that it has WORKED in STATISTICALLY LOW NUMBERS) or a SHORT SALE, WHAT ARE YOU WAITING FOR? I am also referencing the type of seller that IS NOT FACING FORECLSOURE—but has been SUFFOCATED by their mortgage and has decided that being a SLAVE to their HOME is not their version of the AMERICAN DREAM. And finally, there are those sellers who just want or have to sell for a variety of reasons: relocation, new job or transfer, retirement, moving up, downsizing, dissolution, and/or probate. Whatever, the type of seller you are, I BELIEVE the TIME TO SELL is NOW.
I’ve written about the current market conditions in my local market in Los Angeles, CA in prior blogs so if you’d heard my analysis of what’s going on, feel free to skip the next paragraph. If not, visit : http://wp.me/pCS95-1M
REASON #1 : IT’S A SELLER’s MARKET. Short sales, retail, REO, Probate sales—WHATEVER—are selling so long as the property is priced at market value. In fact they are selling above the list price! I’ve seen this and experienced it firsthand. So sure, you could wait for the market to turn around and for values to rise again in several years—and in the meantime continue making the mortgage payment (the majority of which is interest for the first MANY years) in the form of your holding fees. People may argue that it’s a buyer’s market right now, but my gut reaction is that I disagree—AT LEAST FOR NOW. As a seller I would PREFER having the option to pick from the BEST of the BEST of multiple offers versus having only one offer to negotiate with. For those of you who aren’t in dire straits, and don’t NEED to SELL, but WANT to SELL the timing couldn’t be BETTER. Take advantage of what I foresee as a TEMPORARY RISE in prices BEFORE the REO’s hit full tilt. Again, I could be wrong, but based on the numbers of NOD’s (notice of foreclosures) vs. the numbers of actual REO’s on the market—something’s got to give.
REASON #2 : HOLIDAYS. We are slowly but surely approaching the HOLIDAY SEASON. Sales tend to SLOW DOWN a bit during the holidays AND there’s historically LESS COMPETITION amongst other sellers, BUT—there are also LESS BUYERS. If my REO instincts are correct, expect the banks to begin unloading their inventories of REOs (foreclosures) in greater quantities. Once this occurs, we should shift from a shortage to a normal 6 month supply, and depending on how soon the banks release the properties we could actually start to see a surplus again. What does this have to do with selling now before the holiday season? Supply & demand. If the supply increases sometime next year, the demand declines, and I expect us to go back to the days of a 2% decline per month. So it’s like a double whammy. There is a REDUCED BUYER POOL in the 4th quarter and who knows how many new properties will TRICKLE or FLOOD into the market 1st quarter 2010 creating the potential for INSTANT COMPETITION. All the while, you’re still making mortgage payments (again—which is interest for the first MANY years) So do the math, that’s about 3 months this year and who knows how many more months of the new year having to continue making the payments until we can unload it.
REASON #3 : FHA TAX CREDIT ENDS SOON. If you haven’t heard by now, our government has been providing a TAX CREDIT of 10% (maximum $8,000.00) for first time home buyers. This tax credit will end on Dec. 1, 2009. Believe or disbelieve in its effectiveness, but the reality is, it has breathed new life into the sales of existing homes. For more details on this tax credit and if you qualify email Chase@REOheaven.com .
REASON #4 : EVERYTHING IS NEGOTIABLE IN THIS MARKET. This statement has never been more true. We all know the state that the economy is in. Every day I am receiving dozens and dozens of emails of different service providers: Escrow, Title, NAHD, Home Warranty, Termite, Contractors, and Plumbers offering discounts for their services. Services, which by the way, are ALMOST ALWAYS (that’s an oxymoron isn’t it?) are expenses that are STANDARD SELLER EXPENSES that have to paid. I don’t condone haggling for pennies, but if you can get yourself a break on some of these expenses WHY NOT RIGHT?
I don’t believe in selling by fear, and I don’t believe in convincing people to do things that they don’t feel 100% confident in. I feel for the families that have been adversely affected by our current situation—especially those that were taken advantage of by predatory lenders. You may agree or disagree with what I’ve stated, but we’re all involved in something that will be written about in history books for years to come. One thing that I am sure of is this: the UNITED STATES will RECOVER from this—just like we ALWAYS DO.
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