Negotiating in Charlottesville’s Buyer’s Market
When responding to a counter offer on a condo in Charlottesville this week, this was my response as the Buyer’s Agent, with some edits for this post. Seller is asking nearly $200k; we offered $184k.
There are currently (not including any unrepresented Sellers) ten active two bedroom condos on the market in [this development] - more on the market at the same time than ever before, and one under contract.
The average days on market for condos in this development is 62 days. Median Price per square foot of these properties is about $150/square foot; your unit is very nice, but …
In response to the Subprime market collapse, lenders have already begun to significantly tighten their standards.
My client is very informed as to the current state of the condo market in Charlottesville and these are some of my clients’ concerns:
1) It does not have blanket Fannie/Freddie approval - each unit has to be looked at and analyzed by the lender.
2) One owner owns more than 10% of the units.
3) There is a high concentration of investors in the [this development] development
4) Low downpayment (95-100%) financing is getting harder and harder to obtain - many of the buyers who seek to purchase in [this development] are first-time homebuyers moving from rental to purchase.
5) The condo fee is now $190/month.
6) The highest price paid for a condo in [this development] is $200,000 last July; frequently (especially with appraisals being actually reviewed now) dismiss the highest and lowest prices. Last July was a much different market.There may very well be a ready and willing buyer out there for this condo, but it’s the able part that may provide the challenge. An appraiser, who is working for the lender, may not agree with a higher asking price. I spoke with an appraiser this afternoon to verify my thinking. He said that appraisers now are looking for transactions “as close to today as possible;” as the market has changed so much so fast.
My client is putting at least 20% down, has nothing to sell, and has been pre-approved by a very reputable, local lender.
Very good related story at Noah’s Urban Digs, with this important paragraph:
THE MONTHLY COSTS TO CARRY A PROPERTY IS DIRECTLY RELATED TO THE AFFORDABILITY OF THE PROPERTY ON THE OPEN MARKET. PUT SIMPLY, THE HIGHER THE MONTHLY COSTS TO MAINTAIN A PROPERTY THE LESS AFFORDABLE THE PURCHASE PRICE WILL BE TO THE BUYER POOL
I also pulled from some of knowledge found in the comments of this post that I wrote last July.
My goal in this was to negotiate the best price for my client, and in doing so to provide the facts that we were considering. The challenge is to present the information as facts, not emotionally-driven opinions.
Take a note: in Charlottesville, we’re not in a Seller’s market anymore.
We have a Contract, tentatively scheduled to close in May.
Technorati Tags: albemarle, charlalbemarle, charlottesville, condo
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One of the great things about Charlottesville
Is the vast amount of cultural activities - from Jon Stewart at the John Paul Jones Arena to Bobby McFerrin at the Paramount Theater to Vince Gill at the Charlottesville Pavilion to They Might Be Giants at Starr Hill. There is almost always something to do. Unfortunately, with most tickets to these events being (well) in excess of $50 a pop, the audience can be quite limited.
For a (nearly) complete listing - visit Pollstar.
Technorati Tags: albemarle, charlalbemarle, charlottesville, music
cvillenews has a new look
Celebrating six years of community blogging, Waldo revamped cvillenews yesterday. cvillenews has been a leader both locally, regionally and probably nationally for local blogging.
Much of the talk in the real estate net has been about local blogging, but cvillenews has been doing it much longer, purely for the benefit of the community. Much of what I learned (and have implemented on a much smaller scale in Crozet) about local blogging I have learned from cvillenews. Here’s to six more years.
Technorati Tags: albemarle, charlalbemarle, charlottesville, hyper-local
Signs, signs, everywhere there are signs
There’s a crackdown underway. A sting operation, if you will. The City of Charlottesville (and the County of Albemarle, other localities and the VDOT) are letting it be known that signs are not to be displayed in their rights-of-way.
See this letter from the City. This ordinance applies to Unrepresented Sellers as well.
Coincidentally, the Real Estate Bloggers noted a similar strategy being undertaken in their market, and The HooK had a great story in 2004 about the proliferation of real estate signs.
Believe it or not, signs are one of the most important part of a marketing strategy.
All that talk about CF lightbulbs
And then this from Treehugger:
Unfortunately, new research shows that the mercury released when an energy saving bulb is disposed of is in a form more able to enter the food chain than that released by power stations.
Technorati Tags: green
Tuesday Links - 27 March 2007 - Green stuff and foreclosures
Are there “Victims” in Foreclosures? Or is holding people accountable for their decisions unreasonable?
Short Sales in the Luxury Home Market - I am curious to see what happens to this segment in the Charlottesville area; I have heard already of anecdotal pain. Translating anecdotes into data is the next step.
New vs. Existing Home Data; my local analysis is coming the first week of March.
EcoHome Guy’s blog (hat tip to Living Green)
“Zero is the new black” - sustainability is not a fad. Better to get ahead of the market before the government screws things up by mandating arbitrary regulations proscribed by the highest bidders.
Local Government for sustainability
Sad but true graphic on homelessness
Technorati Tags: ecobroker, green, sustainability
Good Faith Estimates
I have been working on a post about Good Faith Estimates (GFEs) for some time now, and Rhonda Porter at RCG wrote a great post about the same subject last week. When you are seeking to purchase a home, the lender should give you a Good Faith Estimate showing what your estimated closing costs will be.
This is a Good Faith Estimate provided to one of my clients by a BOB (Big ‘ol Bank) and presented as having no points.
(Full PDF here)
Equally, if not more egregious is that this was 45 days from Closing and they were offering a 30 Day Lock. What happens when on closing day, the rate is .5% higher than the lock and the buyer no longer qualifies? Or does so painfully, with great sacrifice?
The lender (whom I recommended) was upfront with his fees, which were far less, didn’t try to slide in bogus fees, and is closing the loan within $130 of his original GFE - to the Buyer’s credit.
Lessons learned:
- Compare lenders.
- There are unscrupulous people out there.
- Work with those you trust.
Technorati Tags: charlalbemarle, charlottesville, mortgages
Teachers
Chris at the New Dominion has some thoughts on the matter.
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