Home Buying in 20120>Question Details

Saaxir, Home Buyer in 20120

why priceses are going up in centreville, VA area. I put 4 offers and losted to someone else. are there investors driving the demand up.?

Asked by Saaxir, 20120 Thu Apr 8, 2010

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Joseph Gheitanchi’s answer
I typically go to courthouses and purchase properties with my clients in mind, these properties never hit the market, becuase there are not listed, we clean them, evict the occupants if there, remodel if needed and then give it to them, if on the other hand we do not have clients for the properties we obtain then we put them on the market and then every agent would have access to them, so this is another way to purchase as well.
1 vote Thank Flag Link Thu Apr 8, 2010
Saaxir:
Some good answers posted below by my colleagues! I am working with clients in that area; Several foreclosures and they are moving fast + short sales tat are taking awhile + very few regular sales. Agents need to look regularly at the various distressed sale sites. Yes, time is running out on the tax credits so that has increased the urgency on the part of buyers. Also, interest rates are now beginning to tick up - that also creates demand. If you do not have a buyers agent, contact me.
0 votes Thank Flag Link Fri Apr 9, 2010
All of the above answers were right on, low inventory for medium affordable priced homes anywhere in Fairfax County make it very difficult to get your contract offer accepted. I had a first time homebuyer looking in the Centreville area and we lost out on 10 contracts before my buyer understood he had to offer more then the asking price or at least one better than any of the other contracts, and write a serious deposit (escrow check). Get your offer in early, and consider having the contract contingent only on appraisal. Sellers will accept the cleanest, strongest contract. You have to decide what getting that property is worth to you and then go for it! Good luck.
0 votes Thank Flag Link Fri Apr 9, 2010
Good answers below. In brief, the market is very hot for lower- and medium-priced homes in Centreville. You have to make sure you get an offer in early, that it's price competitive, and that your other terms and conditions are attractive, too.

No, it's generally not investors. Investors don't compete against "retail" buyers such as yourself, because retail buyers are willing to pay much more than investors. That happened a lot in Manassas and Woodbridge about a year ago. Investors were picking up a lot of properties. Then, around about March 2009, retail buyers decided to re-enter the market. That meant that Manassas townhouses that investors had been buying for $80,000-$100,000 suddenly jumped in price to maybe $130,000. They were still great deals for retail buyers, but no longer for investors.

You're mostly competing against other people like yourself who are looking for affordable housing.

Joseph describes one technique that can work. You might also find investors selling properties--not ones they've just bought, but properties they bought a year or two ago as "buy and hold" properties or to offer as lease-options. Some will use Realtors to sell their properties. But others won't; they do it privately and you'll never see the properties on the MLS. (Or, around here, it's MRIS.) There are also some Realtors (I'm one, and I know another extremely good one in Centreville) who work largely with investors. In many of these scenarios, you're eliminating much of the competition because the property isn't on the market in the MLS.

Ask your Realtor for additional guidance. But I suspect that, to be successful, you'll need more than: "Well, all we can do is keep making offers and hopefully we'll get lucky." Not saying your agent will respond like that, but if he/she does you may want to pursue a more successful strategy.

Hope that helps.
0 votes Thank Flag Link Fri Apr 9, 2010
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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My colleagues do an excellent job of answering your question so I will just add a few small but powerful points.'
I suspect your offers are somewhat low in comparison to others..which is part of the reason you will not get the home. The other is HOW your offer is written. There is a lot more to it than "filling in the blanks" as you see so often. You must get creative. There is indeed demand..but that is what pushes price up. You can sit on the sidelines and watch or get in the game. One of my clients put it best recently when talking about the bids. Buyers market..in this sense does not necessarily mean getting a home at 10% 5% or even 1% under list..it simply translates to getting a property at prices not seen since 2004..with great rates to boot.

So go out there and get creative with your offer and sweeten the deal a little. Your frustrations will subside and you'll get a new home!

Good luck,

kind regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
Erik@AskMeAboutHomes.com
0 votes Thank Flag Link Fri Apr 9, 2010
In certain price ranges (like under $350 or so) it is incredibly competitive....the lower the price point, the more competitive it is. Investors are out there - and it is creating competition. This is why Fannie Mae can't consider investor offers on their properties for the first 15 days of marketing now (an effort by the govt to help owner occupants). Adding urgency is the expiring tax credit, the recently increased FHA fees (people were trying to avoid them) and the expected increases in mortgage rates. I think Joe's comment is interesting. What seller wouldn't want to get the most for their property? This seems strange to me... almost suspect, but maybe that is because I see so much YUCK in this market that I have to protect my clients from. I am sure there are great good hearted people out there purchasing properties at great financial risk for the good of strangers, and maybe Joe is one of them? Dan sounds like he might be caught in the same situation as you. The thing is that I don't think that we'll see significant returning weakness in the lower price points here in No Va until and unless mortgage rates reduce affordability levels. Dan's in another area. Most people don't realize in a recession with govt spending to stimulate the economy, 10% of the fed's dollars go into the DC Metro area (aka Centreville) strengthening our local economy, especially compared to the rest of the country.

Hopefully you're getting good guidance about how to write your offers by having selected a great buyers agent. I talk a little about the nuances of how to write a competitive offer in this blog (from 2008 where I mention multipl offer situations - that was 2 years ago!!)... and the blogs it links to.

If you're not working with an agent and I can help you, please feel free to contact me: VChrisner@KW.com
0 votes Thank Flag Link Thu Apr 8, 2010
I would not be surprised to hear that a lot of first time buyers are bidding prices up very high to get the "free" $8,000. Wait a few months, if that is right prices will drop and buying activity will drop.
0 votes Thank Flag Link Thu Apr 8, 2010
The market has been picking up here in MA. I think that the new home buyer tax credit has been helping out the situation. Also, I think that a lot of investors were on the sidelines waiting for the market to stabilize and the spring tends to be a busier home season as well.

Have you been putting in low offers?
0 votes Thank Flag Link Thu Apr 8, 2010
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