Fredericksburg's Real Estate Voice

The Good News Balance

Amid all the negative publicity the housing market has received lately, real estate is still a good investment.  Despite the "lack of confidence" from buyers, it is, has always been and will always be a good investment.  Don't believe it?  Consider the statistics.

The average homeowner in the United States lives in a home between 3 to 7 years.  The following represents the average sales price of homes in the Fredericksburg real estate market, which includes the City of Fredericksburg, and the counties of King George, Caroline, Stafford, and Spotsylvania.

2007 - $357,900
2004 - $302,680
2000 - $160,719

Despite the radical swing of the market over the last two years, if you go back to the three year mark, the average appreciation in 3 years is 15.5%.  Despite how the market is perceived currently, there still are few investments as solid as real estate.

The average renter pays between $14,000 and $15,000 each year in rent, that allows no tax deductions, doesn't work toward equity in any way and certainly offers no short or long term return on investment. 

Jeff Edmisten
The Edmisten TEAM
Keller Williams Realty
(540) 538-7222
jedmisten@kw.com

Foreclosure Terms

I am often asked one of the following questions... What is a short sale?  What is an REO? 

Why am I being asked these questions so much lately?  Because foreclosures are a force in the Fredericksburg real estate market now.  I did a quick, cursory search in the MLS before writing this post to see how many foreclosures are in the Fredericksburg area.  My quick search netted 413 foreclosures.  If I were to do a detailed search, I think the number would be considerably greater.

The fact of the matter is that somewhere between 12% and 20% of homes for sale in the Fredericksburg, Virginia area are in some stage of foreclosure situation.  That is a frightening statistic.  But here is the other consideration from a seller standpoint... foreclosures are partly responsible for driving ALL home values down.

But today's topic is Foreclosure Terms.  So, here are the common terms that are now strongly relevant:

Foreclosure - The lender invokes the "Power of Sale" and auctions the property.  The owner is in default.  The property is often auctioned at the courthouse steps.

Real Estate Owned (REO) - The lender has purchased the property back from the foreclosure sale, then offers the property for sale.  These are often listed through traditional means with a real estate brokerage.  The Bank is now the owner and seller of the property.

Short Sale - This is a situation in which the lender will accept a payoff of the mortgage for less than is owed.  This is much more common than ANYTIME in many years, because of the falsely inflated market of 2004 and 2005.  Prices dropped in late 2005, 2006 and 2007 resulting in current market value being less than what was borrowed.

If you are a buyer, some of these situations offer some strong value opportunities.  If you are a seller who is struggling to get their home sold, or is facing serious financial struggles regarding your mortgage, you need to educate yourself on these terms and how they can affect you.  Let me know if you need additional information.

Jeff Edmisten
The Edmisten TEAM
Keller Williams Realty
jedmisten@kw.com
(540) 538-7222

Fed Cut 1/4 Point

Yesterday, as I reported and predicted (see October 21 posting here) the Fed cut the interest rate another 1/4 point.  As I mentioned in that post, for buyers the pot is SWEET. 

Here is another prediction for you.  I predict that everyone who reads this post will meet someone in the relatively near future who regrets not buying right now.  See the post Now Is The Time To Buy for more thoughts on this.

But mark my words, every one of us will meet someone in the future who missed the boat and waited too long to purchase a property or properties.   I say properties, because now is the time to buy rental investment properties.  I had a client that sold ALL of their rental investment properties at the perfect time in June 2005, just as the market peaked. 

When I questioned their plan, they said, "We bought low and now we are selling high.  When the market drops.... and it will, we will buy again."  They called me today to begin acquiring another round of rental investment properties.

Whether it be because of fear, waiting for the market to meet the bottom, or a host of other reasons, many buyers will miss a great opportunity to BUY LOW.  Which of course means they cannot sell HIGH.

Jeff Edmisten
The Edmisten TEAM
Keller Williams Realty
(540) 538-7222
jedmisten@kw.com

When You Don't Understand the Process...

This afternoon I sat in the waiting room of a couple of the most respected orthopedic surgeons on the east coast.  My son was waiting to have stitches removed from a surgery incision. 

As we sat there, I noticed a woman sitting across the waiting room from us.  What drew my attention to her was the fact that each time the receptionist called someone's name to accept their co-pay or double check insurance information, this woman became more agitated.

After about 5 names had been called, she couldn't take it anymore.  She stood up and marched to the desk and made a complete... let's say... donkey of herself.  She ranted and she raved and she cursed the receptionist for not calling her to take her co-pay.

Accolades to the receptionist, because I think I may have handled it a bit differently if someone were in my face like this.  But the receptionist calmly waited out the storm, then looked the woman in the eye and said...

"This is a follow up visit for you, there is no co-pay needed.  And just so you know, I am very competent at my job.  I wouldn't walk into your office and assume I know how to do your job and... we both now know you don't know how to do my job.  The doctor will be with you shortly."

I laughed out loud at this response.  Then it struck me that we all do this.  I have assumed that I know better than my... mechanic, pastor, manager, coach, etc... at doing their job.  I have also had many people assume there is no skill involved in real estate and that they know how to do my job.

If it is not our profession, we likely do not fully understand the process.  We should ask, to learn, not assume we KNOW.

Jeff Edmisten
The Edmisten TEAM
Keller Williams Realty
(540) 538-7222
www.jedmisten.com
jedmisten@kw.com