The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty. -- Winston Churchill Today’s Real Estate is certainly an opportunity. Is it challenging? YES - For sellers and buyers (and agents!). There is a shortage of inventory of good homes. (You know this one by now; its code for, “Excellent condition and Priced well”). Buyers are having a difficult time locating homes that fit their needs and dreams. Sellers are having a difficult time meeting the appraisal price – not just in Barkers Ridge --- this is a national issue. “Diane, what do you mean, and how does this affect me?” In general, 1. When a buyer and seller go under contract, the buyer’s mortgage company sends out an appraiser to see if the home is worth the money they are lending, a. He/she compares the subject home to the most recent sales in the neighborhood; b. Sales must be no older than 4-6 months; c. Should be close in size to the subject (300 – 400 sq.ft.); d. Should be similar condition – or adjustments are taken. 2. The appraisal must come in at Sales Price or Greater, or, a. The buyer must come up with more down payment; b. The seller must come down on the sales price (guess which one usually happens!); o r c. The transaction dies! 3. “But my house is APPRAISED on HCAD for more than I’m asking for it now?” a. HCAD is only for TAX purposes, done by the county, not the bank; b. They don’t actually come Appraise your home – they assess a general square footage price for the subdivision that is assigned to your home; c. Some owners fight their taxes, and keep their assessed value lower than market value; d. Some owners never question their assessed value, and their taxes are much higher than market value. 4. “I refinanced my house 18 months ago for much more than my current Asking Price; I don’t need a new appraisal, do I?” a. Appraisals are usually only valid for a very few months (because a valid appraisal must have RECENT sold comparables); b. The new mortgage company likely will not accept an older appraisal 5. “But, the sales for the last few months are lower sales – the market is better now!” a. AND THEREIN LIES THE PROBLEM! b. Appraisals are a tough OPPORTUNITY, at best! I believe the most challenging event in today’s real estate market is the APPRAISAL. Remember a few years ago when it was ‘mold?’ That seems so easy now! We are headed into a Spring market – typically prices are higher than the Winter market. However, the appraiser (who has very strict guidelines to follow), has to use historical WINTER data to appraise your SPRING sale. If most of the comparables, or ‘comps’, are in very good overall condition, he can’t allow a much higher appraisal for your home. Now, if your home has a pool, hardwoods, an oversized lot -- thank goodness, you just may be in business! If, however, your home is simply nice, clean, desirable, has original counters, floors, and very few upgrades, you are at the mercy of the appraiser. In many cases, the appraiser’s hands are tied. But, he does have a copy of the contract sales price; I do believe appraisers are shooting for a value equal to the sales price. Let’s help them by presenting no roadblocks: clean – clutter-free, beautiful yards, meaningful upgrades: floors, counters, appliances, fixtures…(call me before you upgrade – I am happy to give you my honest opinion). Many sellers say, “I just won’t sell to this guy; I’ll wait for the next offer!” Remember, unless the buyer is paying cash, appraisals are the heart of the purse strings, even for the next guy. And, appraisers can’t ignore foreclosures any longer. A couple won’t hurt, but when a significant portion of the ‘comps’ are foreclosures, they may affect the sales price. Currently, 3 of the 8 ACTIVE homes for sale, 1 of the PENDINGS, and 1 of the SOLD’s in Barkers Ridge are FORECLOSURES. Last year, 6 of the 31 MLS sales were foreclosures – approximately 20% of the sales. Some subdivisions in our area (77449) have been over 50% foreclosures. Difficult -- yes. But, I am optimistic about it! Prices are on their way back up, and I have had some very tough appraisals come in at sales price. So, congratulate your neighbors and their realtors when they are able to impress the appraiser (J)! Note: I will be adding a “Foreclosure Section” to our Statistics Table Below. NOTE: EMAIL ME, and I will set your home address up on an AUTOMATIC MONTHLY Market Analysis for Barkers Ridge – complete with real SOLD prices! I will be changing to a different format than you are accustomed, but it gives better information. The BEST thing, YOU DON’T EVER HAVE TO TALK TO ME – it is automatic in your INBOX monthly. This chart illustrates the big price hit Barkers Ridge took beginning the last quarter, 2008 through the first quarter of 2009. The green dots to the right give price scenarios depending on upgrades/updates, location and seller’s selling position.
Statistics
for Barkers Ridge – 2009
Statistics for Barkers Ridge – Jan. 2010 – March 4, 2010
*All sales data is per HAR MLS. --I'm a great believer in luck and I find the harder I work, the more I have of it. Thomas Jefferson.
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