JODRealty Blog by Jerry O'Donnell

Shadow Inventory?

Jerry — Wed, 11 Nov 2009 14:04:57 +0000

Below is a link to an article on the existence, or not, of something known as the “shadow inventory”. This is supposed to be houses that banks have foreclosed on but have not put on the market, hoping to wait until the market improves, AND so they don’t have to show the loss on their books.

Come-Out-Come-Out-Shadow-Inventory

The article shows clips from numerous other articles that say there is or is not such an animal as shadow inventory.

My take? I think there are a lot of homes being held back, or ones on which banks are delaying foreclosure, mainly to keep from recognizing the loss. A tsunami of houses? Probably not. But still a wave that could drag you out to sea if you’re not careful.

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Repairs - And How I’ll Deal With Them When I Sell My House, I Think

Jerry — Thu, 27 Aug 2009 22:57:16 +0000

I think the saying “You sell your house twice” is VERY true. Once, to get it under contract. Twice, to negotiate repairs after the inspection. Repairs can be a major roadblock to a successful close. You spend all that time and effort to market the house and get it under contract, and then you have to sweat the inspection. And you know they ALWAYS find something! And have you noticed that each year the inspectors seem to focus on a “new” issue. One year it was wobbly fans, then mold in crawl spaces, then broken seals on windows. It just grows and grows.

After dealing with the repair issues on a lot of listings, I think I am going to tackle my repairs somewhat differently. As I mention in my post “Get Top Dollar For Your House”, you should have an inspection done BEFORE you put your house on the market. I will do this, make any major repairs that are necessary, and then sell the house “AS IS”! No more repairs will be done! You want the house, you deal with the minor issues. I will give them the inspection report and let them have their own done, too. But they will have to do it before they put in the offer, cause I ain’t dealing with repairs when I sell! They can adjust the original offer to take any repairs into account, if necessary.

I plan to sell my house ONCE.

(Of course you should be keeping your house in great shape anyway. It is probably still your largest asset.)

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Why No Open Houses?

Jerry — Tue, 25 Aug 2009 11:49:22 +0000

I am not a fan of Open Houses in my area. Why? Here are some reasons:

1. Safety of Agent - I have read about too many agents being killed by some nutcase at an Open House. You need at least two people, preferably more to safely hold an Open House. One to man the door, and one to escort people around.

2. Safety of Homeowner - An Open House is the perfect time for complete strangers to “case” your house. What better preparation to plan a robbery? It is also a great opportunity for addicts to rifle through your medicine cabinet and take any medications you might have.

3. Very little chance of a REAL buyer showing up. For normal Open Houses, not model homes in a development, there is only a very slight chance you will get any hits on your home. A serious buyer has an agent, will find your house on-line, and make an appointment to see it. Mostly you will get some neighbors who always wanted to see your house and people looking for decorating ideas.

4. Like it or not, Open Houses are mainly for agents to get buyer leads, particularly new agents. That won’t make me popular, but I don’t care. It is the truth.

Any one of these is reason enough not to hold Open Houses.

Want to discuss it more? Give me a call.

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Why The Worst May Not Be Over For Your Home Value

Jerry — Mon, 24 Aug 2009 13:21:08 +0000

You hear and read a lot about how the economy is showing signs of recovery. Government and media spokesmen say they see “Green Shoots” of growth. I’m not buying it.

Here is one reason - “Hidden Backlog of Foreclosures”. This article, on a great blog, details how there is a huge amount of foreclosures still to come. Delinquencies are still rising on home mortgages. Down the road this means more foreclosures are coming. Not only that, but a huge percentage of people now have NO EQUITY in their house, or negative equity (owing more than their house is worth). This puts quite a damper on their desire to buy more stuff!

Then there is the commercial real estate market - “Commercial Property Values Fall as Rent Drop Forecast”. This has only just started and is forecast to get much, much worse.

All this, plus the mounting deficits, cap & trade, etc., has a direct impact on the value of your home.

Doom and Gloom? Maybe. But you need to know the facts, both good and bad, to make intelligent decisions. The above links are only two of the reasons why I think the government and media “elite” are wrong. I think we will eventually come out of this depression, but only after the government gets out of the way and quits making things worse. That may take a while.

In the meantime, take care of your house as much as possible. If you have to sell, you want it in great shape!

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Get Top Dollar For Your House, Again

Jerry — Wed, 03 Jun 2009 19:31:19 +0000

I thought this was so good when I first published it, I figured I would post it again:

If the time has come to sell your house, you will surely want to get the highest price possible for it. Below are some suggestions, based on years of experience, that will help you get the most for your home, whatever the current market is like. Yes, you will have to spend some money up front. But better to spend it now than rush around in the weeks before closing trying to get a good plumber, electrician, etc. You will also be prepared for the buyer’s inspection.So here goes (not in any particular order):

1. Get a home inspection. Yes, pay $500 bucks or so to get a full home inspection. This will tell you all you need to know about your house. Generally I recommend you fix everything. Some will be super simple and you can do it yourself if you are handy. Some, like plumbing and electrical, will require a professional. Get a pro and keep the receipts. This might costs hundreds, or even thousands of dollars, but you will reap the rewards at closing. Advertise as pre-inspected and make the inspection available to buyers. Trying to hide problems never works.

2. Mold inspection. Get one if the home inspection recommends it or if you know there is visible mold in the crawl space. This is the new “red button” for buyers. The mere mention of mold, which is in EVERY house in the world, strikes terror in the buyer’s mind. A mold inspection by an independent inspector will cost about $300, depending on the size of the house. Fix as suggested. Yes, more money spent.

3. Clean!!!!!!Clean like never before! It is easy to become comfortable with a certain level of “mess” in our houses. Buyers want their own mess, not yours. Either break out the rubber gloves and cleaner or call in the pros and tell them you want the deepest cleaning they have. This will really help sell your house. The hard part is keeping it clean as time drags on. Don’t falter. It’s not fun but it IS necessary to keep it clean and smelling fresh. (Change your air filters a lot.) This includes the garage, decks, and any sheds!

4. Remove collections. Your frog collection is wonderful, but it is time to pack it away. You will be moving everything anyway, so get a headstart and pack up all your collections. Plus, do you want your expensive items out where children of buyers can get at them?

5. Reduce furniture. It is amazing how much can get packed into a house over the years. Now is the time to sell, store or donate some of it. You want to open up the house and let buyers see how big the rooms are. Stage furniture for maximum impact.

6. The dump is your friend. Get rid of all the garbage, broken items, etc. Be brutal. Take it to the dump and be rid of it. If it is in good shape, donate it and get the tax deduction. Or sell it and get the cash.

7. Paint. Do it yourself or hire someone, but do it. It is easy, quick and cheap. Inside and out. And it has a tremendous impact on the curb appeal of your house. This one task probably has the greatest return on time spent. Keep colors neutral.

8. Clean your yard. Mow, mulch, get rid of “yard art”. Your yard will be the first thing a buyer sees. You want it to shine. Drive around your neighborhood and see what houses stand out to you. Copy them. Power-wash your sidewalks, decks and driveway.

9. Hire me as your listing agent.

Does everyone do these things? No. Most don’t. They are reluctant to spend the money up front. They think they will just take a few bucks off the asking price if the buyers wants stuff fixed. Big mistake. The buyer will invariably demand WAY over the actual cost on any item. And you will be scrambling to fix items between the inspection and closing. Not a good thing.

The question is: Do you really want to sell your house? If so, then you should do everything possible to get it in prime condition. The above suggestion will go a long way in helping you do that. Give me a call if you want more in-depth advice.

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Still More On Where Home Prices May Be Going

Jerry — Mon, 09 Mar 2009 14:26:12 +0000

I jsut read an article on a website that gives some info on where house prices are going nationally. The answer is probably down more. The article is entitled, “Case Shiller and CAR Analysis February 2009 Release“. Not a thrilling title, but go check it out anyway. Nationally housing prices are WAY down. Based on history, they may have a lot more to go. In this Chapel Hill market we are somewhat insulated from the national market, but were are not immune.

All the more reason to get your house in tip-top shape if you have to sell.

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Almost Showtime!

Jerry — Tue, 24 Feb 2009 18:28:33 +0000

It is late February. This is the time of year people are getting ready to put their house on the market. This year should be particularly interesting given the rather horrendous state of the national housing market. Chapel Hill isn’t as bad as certain parts of the country. Still, things have slowed some, and an overpriced or improperly prepared house will SIT, for a long time!

If you are planning to put you house on the market this Spring, now if not too early to get going. In a previous post I told you how to get your house prepared. Here is the link:

Get Top Dollar For Your House

Read it and feel free to contact me for any questions. There will be no short cuts this year. If you really want to sell your house you, and your house, MUST be prepared!

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No Magic Lamps

Jerry — Tue, 06 Jan 2009 14:12:02 +0000

The real estate market of today is a great example of a classic bubble. Like the Tulip mania hundreds of years ago, people got caught up in the excitement of ever rising prices. Flip a house, make a fortune over night! A lot of people made a lot of money. Lasted a good many years, too. Then reality comes crashing down on the party. Nothing rises forever. Now, a lot of people have lost a lot of money. A lot are just treading water.

There is no magic lamp when it comes to fixing this problem. The only thing that will work is time. Excess inventory needs to be sold. It will be, eventually. And reality needs to return to the mortgage market. Frankly, a LOT of people bought houses that should not have. No money down, no income verification loans should never have been offered. A lot of the blame is on the federal government and the horrible Community Reinvestment Act. But most of the blame is on us. No one forced us to buy beyond our means. We did it willingly, and now we suffer the consequences.

Maybe, in the long run, this will be a good thing. Some of us will learn from this. We will start to save again. Start to live within a budget. Good things, all.

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Stoneridge/Sedgefield Update

Jerry — Mon, 05 Jan 2009 14:12:52 +0000

Very little activity in this neighborhood over the past six months. Only two houses closed. (One of them was MY listing, thank you very much!) There is one currently under contract. That’s it. Wow!

Here are some details:

Sold - 6012 Turkey Farm Road (my listing) - Original List price - $599,000 - Sold price - $576,000 - Days on Market - 60. Not bad!

Sold - 102 Foxridge Court - Original List Price - $439,000 (with original realtor) - Sold Price - $420,000 - Days on Market - This house shows only 15 days on market. However, it has been on the market WAY over a year, with two Realtors. You need to take days on market with a grain of salt.

Pending - 101 Ironwood Place - Original List price - $447,000 - Last list price - $369,000 - Days on market - 214.

As I said, that’s it for this neighborhood at the moment. Since I live in Stoneridge I’ll be keeping and eye on things. If you have questions, give me a call or shoot me an email.

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How Bad Is It?

Jerry — Sat, 03 Jan 2009 14:49:51 +0000

Which smiley face looks best for the current real estate market? Just looked up some numbers for November 2008, the most recent available. They are for the Triangle area. They don’t look great. Could be worse, though. For the month of November closing are down 42% from November of last year. That is amazing! This is the lowest amount of monthly closings since January 2000! (Personally, I think closings, where the house ACTUALLY changes ownership, is the best figure to look at. Pending sales can always fall through, and For Sale figures are pretty worthless.)

There is some good news. If your house happens to be in the $200,000 price range, you have a better chance of closing. Final sales prices on these house are close to their asking price. That is a good thing. It means if you have to sell you should not be hurt too much in this area. But price your house correctly! Bad news - if you house is over $400,000, be ready to sit in it for a while. These houses are not moving very well.

How about just Orange County? OK. Closings November 2007 - 97, closings November 2008 - 38. Ouch! Months of inventory Nov. 07 - 10.3, Nov. 08 - 18.2. Double ouch! If you must sell, do it right. See my Get top Dollar For Your House post below.

Why do I post bad news? Do you want the truth or warm, fuzzy feelings? As your broker, expect the truth from me, even if it is “less than pleasant”. Want more info? Email me at jjod3@earthlink.net.

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