Wednesday, March 18, 2009

Q: I'd like your list of all the cheap foreclosures on Vashon.

I've seen ads on TV saying you can buy houses for just a few hundred dollars and that's what we want to do. We see ads for house that are only $75,000 or so on TV. Even if it's a fixer, I think my wife and I can do the work.

A:
There are very few houses for sale here that are in foreclosure, but I can send you those listings. I must warn you however, that you won't be buying any house in Washington for a few hundred dollars down. That may work in Florida or Alabama, I don't know, but the banks that have foreclosed on these houses want well-qualified buyers with good credit, a reasonable down payment, and sufficient income to cover the payments.
You need to meet with a reputable lender to find out what you are qualified to spend on a house and to get pre-approved. A pre-approval letter is almost always required on all offers on properties owned by banks.

Although prices have dropped here, like elsewhere, our lowest priced homes are in the mid to high $200,000 range, but most are over $300,000. That's still a bargain for Vashon but certainly not the prices you're seeing on television.
We experienced a drop of about 8-12% over the last year, and for Vashon, that's significant. Some of the few foreclosed homes we have are listed even lower. It's possible to get a house here for well under its assessed value, but that's still likely to be over $250,000 at the lowest end.

Some of the foreclosures we have are high end homes. That means you might be able to buy a house that would have sold for $650,000 a year or so ago, but can be purchased today for $525,000. That's an incredible deal.

You should also be sure that a lender will be comfortable helping you buy a "fixer." Some fixers will need a construction loan and that's a different kind of loan with different requirements.

Tuesday, March 10, 2009

Q: In these bad economic time and awful real estate market I was surprised when a neighbor’s house sold in just a couple of days.

What’s going on? I thought no one was selling now? It was a real crummy place too. Are things just better on Vashon?

A:
To start with, Vashon is something of a boutique market all of the time, so we don’t necessarily follow national or regional trends. However, our market has been slower over the last 10 months or so than usual and we have suffered a set back in prices and values.

What you saw with your neighbor’s property was a very well priced property for this current market. Yes, it was a “fixer”, but priced a one. It was in a prime location and had a great potential which is what a lot of buyers are looking for.

Any house will sell, even in a slow market, if it’s priced right. That has always been the secret to a fast sale. There have been more sales in the last few weeks than even at this same time a year ago, and that’s hopeful.

The listing agents have a responsibility to price the property to sell in this market and to be sure their sellers are well prepared. If the house is clean, tidy, is in a desirable location, and priced well, it will sell.

Many sellers are hoping that their particular home will be worth more than competing properties. That’s rarely the case. Their agents can take them to see their “competition” and that can help them see their home in a more realistic light.

There are lots of buyers out there, but they are looking for a really good deal. They also read the newspapers and watch the news so they expect to find a real bargain or, at the very least, a very good value for the money.

Your neighbor was well advised. It’s also good to remember that since they’ve owned it for many years, they still made a tremendous profit over what they paid for it.