Posts Tagged ‘seattle home sales’

So in my last post, I explained the difference between short sales, distressed properties, foreclosures and bank owned property.  Still confused?  Don’t feel bad.  There are many agents who don’t know the difference either.

Short Sales however are when a seller is trying to sell a home but will not make enough money from the sale of the home to cover what is owed on the mortgage and the closing costs of the sale.

In this situation the bank, who is going to take a loose on the sale, needs to approve the sale.

I am sure you won’t be too surprised to find that when big banks get involved, the situation gets complicated.  In fact I have found that the bigger the institution generally the slower the process. 

Getting bank approval can take anywhere from a few weeks to several months. 

You make an offer on a short sale home the same way you would any other home.  Since the seller is not going to make any money on the sale anyway, they are more then happy to accept almost any offer.  The offer then needs to be forwarded to a bank.  Where it generally sits for a long period of time.

In the eyes of the bank they are in no hurry.  The longer they wait, the longer time for a potentially better offer on the home to come in is and the more time the owner has to come into money and decide to not sell. 

In my experience the entire process takes on average 4-5 months.  During that time you will not hear nay information from the bank at all.  Your buyer’s agent can not contact them either.  It is like you sent an offer off into the wild blue yonder. 

It can be very frustrating.

The banks almost always have the following rules in effect.

1. The bank will not make any changes to the home.  You are free to do an inspection, and should, but unless it is a major item that will prevent the sale of the home, they will not fix anything.

2.  The bank reserves the right to receive and consider any and all additional offers that may come in on the home.  Short sales tend to be priced somewhat low and get a decent amount of attention.  If another offer comes in, it gets forwarded to the same committee and we all wait for a decision. 

Again, very frustrating and time consuming.

3.  The bank reserves the right to change it’s mind and the components of the offer at any time.  The agreement to sell is between you and the seller, but the bank has the right to refuse to allow the sale for any reason at any time. 

It isn’t uncommon for the rules to change and a buyer to have to come up with additional cash after a previous deal has already been approved. 

The bottom line is that short sales are long, frustrating, and cumbersome.  The bank holds all the cards.  Despite the fact that it is them that wrote a bad loan and the market that is dictating the price and their client who is forced to sell, they will hold you over the fire to get as much out of you as they can.

If you have the stomach for it, you can get a great house at a great price.  The financial problems of the previous owner are no longer your concern after close and the bank has no more claim to the home.

Still, short sales are not for everyone.  I have had many clients try and change their minds against short sales.  Those that have seen it through to the end, are split about 50/50.  Half say they would never do it again, and half feel it was worth it.

Hope it helps.

Give me a call if you need help.

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Rob Graham, Seattle Home Buying Expert

Windermere Real Estate

206-321-6349
robgraham@windermere.com

www.robgrahamrealestate.com

Popularity: 3% [?]

The Seattle housing numbers are in for March and here is the story.

• There were far more homes sold in March then just a month ago.
• There were more pending transactions in March then during any month over the past 20 months.
• Much of the lower priced inventory is being bought up and fast. 
• April should see a continued decrease in inventory.
• Median home prices for home sales should continue to go up as lower priced homes disappear off the market.
• In March, Seattle was actually a balanced market, no longer a seller’s market as we have grown accustomed to.

Seattle Home Sales jumped from 177 single family homes sold in February,  to 239 homes in March.  A leap of 35%. 

What is even more incredible is the pending sales.  Pending sales are those that are currently under contract and expected to close in the near future.  Pending sales in February were 249 homes.  Pending sales in March however were a whopping 404 single family homes.  

That is more pending sales for a given month than we have seen since the summer of 2007. 

That is a lot of sales and great news for the overall market. 

A deeper look at the numbers shows that median price of homes sold in March saw a modest increase from $340K to $347K.   This is not to suggest that home prices are increasing, but I would suggest, that since many of the lower priced homes have been getting bought up over the past two months, buyers are starting to nibble at higher priced inventory. 

Speaking of inventory, not surprisingly given the number of sold and pending home sales in Seattle, inventory has dropped dramatically.   In February we were looking at 7.8 months of inventory.  This means that at the current pace, it would take 7.8 months to buy up all the homes currently for sale.  This number however dropped significantly in March.  March’s inventory number is a svelte 5.7 months of inventory. 

Keep in mind that inventory of between 3 and 6 months is generally considered a balanced market, not a buyer’s market as we have seen over the past many months. 

Given the pending numbers from March, the inventory will only drop in April. 

Stay tuned.  Over the next few days I’ll show you what median home sale prices are doing in specific regions of the city and how long homes are taking to sell. 

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Rob Graham, Accredited Buyer’s Representative

Windermere Real Estate

206-321-6349

robgraham@windermere.com

Popularity: 2% [?]

Here are a few more statistics for the Seattle Metro area for the month of January 2009.

Days on Market:

This graph is pretty easy to understand.  It shows how long it is taking homes to sell on average for a given month.  January shows 105 days on average to sell a home.  The same was true for December.  If you want to see the silver lining, after 6 straight months of increasing time on market we finally had a leveling off.  This is especially noteworthy when you consider that January is typically the slowest month of the year.   Still 105 days is a long time.  Also, keep in mind that that is the average time for the homes that sold.  This does not take into consideration the fact that in the neighborhood of 50% of listings did not sell at all last year.  So looking at it this way, these are actually the lucky 50%.

Inventory:

This chart requires a little bit of explaining.  Inventory is what we use when we are talking about it being a buyer’s or seller’s market.  Inventory is the relationship between how many homes are on the market and how fast they are selling.  We usually talk about inventory in terms of months.  The current inventory number for the month of January based on pending sales is 6.0 months.  What that means is that if no more homes came on the market, at the current rate of sale all the homes currently for sale would be exhausted in 6 months.

So what kind of market is that?  Surprisingly a very weak buyer’s market.  Here are some general guidelines:

0-3 month’s of inventory = Seller’s market

3-6 months of inventory = Balanced market

6+ months of inventory = Buyer’s market

The logic goes like this.  The more homes available and she slower the rate of sale, the more it favors buyer’s.  The fewer homes and the quicker the rate of sale, the more it favors sellers.

The ranges are disputable but I think most people would be surprised to see that we are not as buyer friendly as we once were and if current trends continue will be in a balanced market in Seattle sooner then later.  In fact, looking more specifically at specific areas of Seattle, NE Seattle, NW Seattle, and W. Shoreline, are already experiencing a balanced market.  Is this a temporary glitch or will more neighborhoods follow?  Only time will tell.

I’ll do my best to keep you posted.

Related Topic:

Average Seattle Home prices January 2009

Seattle’s January 2009 Housing Statistics: Homes for Sale,

Sold and Pending

Give me a call if you need help.

Rob Graham, Accredited Buyers Representative

Windermere Real Estate

206-321-6349

robgraham@windermere.com

Popularity: 2% [?]