Optimistic B…, Home Buyer in Egg Harbor Township,...

The large inventory of "short sale" homes in Egg Harbor Township deter serious buyers like us from moving forward with a purchase. Any?

Asked by Optimistic Buyers, Egg Harbor Township, NJ Wed Dec 23, 2009

suggestions? Our hearts go out to the seller's of these properties. However, there is that fear that we don't want to end up as a statistic down the road in a similiar situation. We have watched patiently and saved our money to buy our "perfect" home. Is now the time to take that "leap of faith" with pre-approval letter and earnest money in hand? We are aware of the 8,000 incentive, but seek more encouragement than that to dive in! From: Patiently Waiting Buyers

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Hi Again Buyer -

Regardless of a few, for whatever reason, negative posts here. All short sales are not money pits. There are some, no many, forclosures that are just that.. bad money pits due to the homeowners mostly abandoning thier properties and not caring and the bank not maintainingthe properties.

Short sales are a different animal, these are properties that most of the time the owners are still living in their homes and trying to sell and get out of their current situation. Are someof these in bad shape.. yes. But most short sales I have been in have been maintained. I recently sold one that had a brand new $25,000 kitchen, new baths and a whle tin of upgrades.. including a 6k viking stove, bosch appliances and granite. Sold at a VERY,VERY good price. 100k under market.

A lot of agents are not educted in the process of listing or selling short sales, that is the main reason for hesitation when you ask an agent to see short sale or forclosed properties. This is the reason why you need an agent that is educated in short sales and foreclosures.

Make sure you get a CMA from any realtor on the properties in the area.. yes, get one for the past year.. then ask for the previous year sales and the year before that... get a good understanding off the market.. the highs and the lows. This way you will have an idea of the complete area of home sales and you should be able to get a good bead on what is happening.

Ask whomever you work with about their short sale knowledge and how many they have listed and closed. Unfortunately for you, I am not in your area to help you out.
2 votes Thank Flag Link Wed Dec 23, 2009
Hi there - you sound as though you are following a conservative well thought out strategy - while no one can predict with certainty whether the market will continue to decline, flatten, or begin a slow rise - but one thing is for sure, and that is the practicing the basics of good judgement are your best course.

So, my recommendation is "yes", proceed if you are ready and consider opportunities that fall comfortably within your means. The banks are much more conservative themselves so there is less likelihood that you will be encouraged to do something that overleverages you. But do be careful, buy below your means and don't overleverage yourself. This will give you a buffer that should help you sleep at night.

A short sale is a property that whose market value is below what is owed to the bank. Evaluate opportunities with an eye towards avoiding this possibility for yourself.

Good luck to you!
Happy Holidays,
Jeanne Feenick
"Unwavering Commitment to Service"\
Find success at http://www.feenick.com
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Wed Dec 23, 2009
Hi O.B.,

In this case, the recommendations of self-serving realtors happen to be in line with reality. Short sales and REOs have driven down prices, and interest rates cannot stay this low for much longer. Once the economy really gets rolling again, and inflation becomes a looming threat, the Fed will reverse course and mortgage interest rates will start going up. So, for that matter, will home prices. I think that could happen as early as this Summer. Combine that with the homebuyers credit and now is probably a good time to move forward.

Keep in mind though: That does not mean you should buy a short sale or foreclosure. These homes are sometimes a good deal, but most of the time they are not. They are usually poorly maintained and need cash put into them after you close. Also, you can go into contract on a short sale, wait for 4 months for all the ducks to line up, then have the bank sell to a higher bidder or decide to foreclose after all and the house winds up in a sheriff's sale and you wind up having wasted a lot of time and effort. And if in the mean time interest rates go up? Double whammy!

I would advise you to move forward, but buy a normal house from a normal seller who has properly maintained the property and is actually able to sign the contract and convey title.

Good luck!

-Marc

Marc Paolella
Relocation Director
Member: Worldwide ERC
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Licensed Realtor NJ
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Century 21 Joe Tekula Realtors
Agent of the Year 2008
Agent of the Year 2009
Owner: Sands Appraisal Service, Inc.
Phone (direct): (973) 584-4235
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1 vote Thank Flag Link Wed Dec 23, 2009
If your employment outlook is good...now is the time to jump in. Interest rates are low, and as you mention inventory is high and there's the tax incentive!

If you have some homes in Egg Harbor, other areas of Atlantic County, or southern Ocean County (Little Egg Harbor, Tuckerton, Manahawkin, Barnegat or Waretown, give me a call!

Good luck, it's a big decision but I don't think you'll regret it!

Laura Giannotta
Keller Williams Realty - Atlantic Shore
609-384-6121
1 vote Thank Flag Link Wed Dec 23, 2009
"Our hearts go out to the seller's of these properties. However, there is that fear that we don't want to end up as a statistic down the road in a similiar situation."

Yes, it is unfortunate that many people are facing these tough situtions. But, these situations create opportunity for people that have been waiting for the right moment to take their "leap of faith" and aquire the home that they have been waiting for. Due diligence is the key to any transaction and it sounds to me that you have been planning for this moment. If you have all your ducks in line and find the right property now is the time to buy. You have to do what is best for your situation and if that means the opportunity is in a short sale, then you would also be helping someone out that is in trouble. You sjould look at a short sale in a positive way from your standpoint.

Good Luck!
1 vote Thank Flag Link Wed Dec 23, 2009
Dear Optimistic Buyer,

Now is the best time to buy. Of course there is the $8,000 incentive for first time home buyers. There is also a $20,000 grant for down payment and closing costs in Atlantic County and lots of inventory. Another great reason to buy now is that interest rates are at historic lows. And rates will be going up. So for every percent that rates go up that is a 10% decrease in the price of the home that you can afford.

Please contact me. I would like to meet with you and further educate you on the opportunities in the market and answer any questions you may have. Please contact me at 609-338-3773.

Best wishes,

Matt
Web Reference: http://HavilandGroup.net
1 vote Thank Flag Link Wed Dec 23, 2009
Kudo's for being so financially proactive on your own! I alone predict strong declines in the market this year if that helps you decide. You can follow the link below to read "My 2010 Real Estate Price Prediction" in it I talk about four of the major factors that I think are going to drive down the value of homes this year. If your comfortable where your at, then I would stay put and wait things out at least another year and continue saving up a larger down payment. The combination of a larger down payment, and decreased home values can help place you into the home you've been waiting for without the headaches of worrying about wether or not you can afford it.
0 votes Thank Flag Link Mon Jan 11, 2010
One of the things to consider when purchasing in a high short sale driven market area is what on avg is happening in that market area. Absorption rates tell the picture of what is actually going on in any given area. While market conditions could go south, for the most part price stabilization has occurred. Do not look at CMA's they are not a true picture of what is happening in the market. You must look at inventory solds actives and days on the market to get a true picture what is happening.

Your due diligence is good. And you should be concerned but make sure you are informed so not to miss out on a home you really like because you are afraid of distressed sellers bringing down values. They really are temporary stress factors on the market. Look at what has happened with values in the last 6 months especially. Have your agent explain the report to you. .

Just because a short sale is selling at a lower price does not necessarily reflect the total market of an area. It certainly puts stress in that market but ultimately after they have all sold the market becomes more realistic. Short Sales and REO's only stress a market, it is the panic selling that really affects conditions. As soon as those distressed properties are gone, you'll see a more relevant market. Consider short sales mostly approx 10-15% below market. This is an average of course but a good price point to begin.

I would be more concerned with REO's in an area than Short Sales. Short Sales are merely an assistance to homeowners and banks who need to sell a home without the foreclosure process. At least these homes are mostly in avg to good condition because they are lived in. REO's are vacant and taken care of.

Good luck and make sure you get a good picture of what you are buying, not just look at short sales. Get a market absorption analysis.

Larry Sarlo
Weichert Realotrs
609-868-1171
lsarlo@comcast.net
0 votes Thank Flag Link Wed Dec 23, 2009
One more thing. The large inventor of short sales and distressed properties mean a great opportunity for home buyers. Even if you don't purchase one of these properties they are priced below market value and bring the prices down for "normal" sellers.

Best wishes,

Matt
Web Reference: http://havilandGroup.net
0 votes Thank Flag Link Wed Dec 23, 2009
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