Joe Patton

Sucks, doesn't it? I don't know about anyone else, but I have felt the pinch in my business. Not to say things are at a dead stop, but I have shifed down a gear for sure. I was always under the impression (false maybe) that if I provided the very best possible service to my clients, there would always be enough business to keep me going and provide for my family.... Can't give top quality service (or lousy service for that matter) if there are no buyers to move property. Even if you have listings, they still won't move without a ready, willing and able buyer.

Which brings me to my point. Ready, willing and able buyers. Between the current economic conditions in the nation, the presidential election, high foreclosure rates and many more unstable mortgages, and the government's unprecidented interferance in our "free markets" its a wonder we aren't having a mass exsodus to Cananda and Mexico. If you have a stock portfolio you probably just took a nasty hit. Even people who a month ago didn't know what the Dow Jones or NASDAQ was, are scared. The fear mongering by the media about house price declines and the stock markets is enough for anyone without a degree in economics to go hide their money in a mattress.

You add on to that the questionable lending practices from the last 5 years or so and the fact the the lending market has tightend up its parameters significantly, anyone without solid credit and down payment money is being knocked out of the buyer pool pretty quickly. Utah has gotten used to the days of 0 down or seller paid down payment assistance and closing costs. While the closing costs are still available, down payment is not something a lot of borrowers have in spades, or at all.

Okay, enough fear mongering of my own (and I complain about the media!). On to the good stuff!
Utah has a growing econemy. 70 to 80 thousand people are going to move to this state in 2008. I haven't seen the projections for 2009 but if they follow the trend for the last 3 years it will be 50,000+. There is still job growth in our state. While the inventory is still deep in terms of housing, we are depleting the "new construction" inventory in most areas. This state still has plenty of affordable housing. Even in the high end counties you can still find a place for under 250k. In some areas you can still find a place for under 150k. Nice stuff too, not in the bario. That is remarkable given the states that surround us.

What is it going to take for buyers to come off the sidelines and into the game? In my opinion, it will take more general stability than we are seeing right now. Too many factors, real or imagined, are keeping people scared or at least hesistant. Once we feel a "bottom" to the housing price decline and start hearing something on the news other than financial meltdown, and we have a new president (regardless of who it is) we should see people start to come back to the market. I heard a figure a couple days back on a popular business news program that I watch regularly. There is something like 3 trillion $ (yes, trillion with a "t") sitting in cash on the sidelines being held out of the markets by private investors right now. What do we think is going to happen when those flood gates open and 3 trillion dollars shows up in the market place? Can anyone say economic boom? And do we really think none of that money will be used to buy up the deep real estate inventory?

This is still America.... the most prosperous nation in the world. We will come out of our bumpy spot. We will have to fix some things first and let some other things fall on their face. But once we pick ourselves up and dust ourselves off, we will be fine. Right back to the good times. So work those buyers that are out there and service the listings you have like there is no tomorrow! You make a great point.... there are some fantastic buys out there right now. Keep your chin up and keep on keepin' on!

Written by a guy who knows very little about nothing much! - Thu Oct 30 2008, 06:11

Shawnte,
First, let me say I am not a lawyer. I have no ability to give legal advice so this is not legal advice and should not be considered legal advice. If, for any reason, you feel like you need a lawyer, get one.

It sounds to me like you have read the situation correctly. It does sound like they went over their deadline for evaluations and inspections. I'm assuming that you did not recieve and sign an addendum giving them more time to complete their tests or giving you a deadline to complete your repairs? What were the other deadlines in the contract? Loan denial deadline, etc...? Was their ability to borrow shaky? What other clauses were incorporated in the contract? Were there any addendums to the original contract? If there were, did they have any provisions that were not met that would allow the buyer to back out without penalty?

You said you are using a Realtor so I'm assuming you are using a standard REPC or real estate purchase contract. In the REPC under section 8. "buyers right to cancel based on eval. and insp. how did they fill out 8. e. ? If they checked that their obligation to purchase "is" based on buyer approval of the following tests and they specified any tests, they may be able to back out and keep their money. 8. d. could also be relevant. Did they state the reason for backing out? 8. d. pertains to the buyers abitlity to obtain homeowner's insurance at terms, cost and availability suitable to them.

Given how little I know about the contract you are in, all of this is just guess work. My suggestion is to ask these questions of you Realtor and have him or her explain exactly what happend. What was the reason for the buyer to back out. If this is not explained to you to your full understanding, ask to have the agents broker go over it with you. There is only about 100 different things that a buyer can use to get out of the REPC so the reason may seem kind of lame to you.

More or less, the REPC is weighted to protect buyers. Sellers are protected fairly well, but the "outs" are mostly in the buyers favor. If they filled out the contract correctly and gave themselves plenty of "outs" they may very well be able to keep their money. Deffinately question your agent in more detail. You have a right to answers. Good luck. - Wed Oct 22 2008, 22:46

Susan, all I can say is Wow. That is going to be a bit difficult to call. There are only 27 properties listed on the MLS currently in all of Sevier county and 0 in the town of Joseph. None of them even sort of resemble your property. An appraisal that is 5+ years old is not going to help much unfortunately. I would recommend having a new appraisal done. Most appraisers charge between 300$ and 400$ and you can usually find them in the phone book. Also, the local bank, credit union or mortgage lender should have connections to a couple in the area. This will give you the best shot at a range of current value. Kinda lame to have to lay out some cash up front, but its going to get you really close to what the buyer's lender is going to see as the value.

Small towns in low population counties can often have a very low property turn over rate and because of that, it can be tough to find comps on anything. I did notice a large amount of "to be built" properties listed that were around 145k which should help you if you go to market. Yours will be more affordable than some of the others around it, especially if the buyers don't need a larger home.

So, some suggestions to get maximum value and buyer interest: make it a cute as possible. Everything in the yard should be trimmed and neat. the grass should be green, the fence (if it has one) should be in good repair. Make sure you have some curb appeal going in your favor. People form major judgments about a house in the 10 seconds it takes to walk from the car to the front door. Outside, the house should tell people: "I'm a good value and you won't regret buying me".

On the inside: The house should smell good! I can't stress this enough. Think of what a turn off it is if you walk into a house and smell urine, musty wet smell, cigarette smoke, etc... Psychologically, people HATE bad smells. So air it out and get some air freshener, have the carpets cleaned or replaced. Whatever it takes to get it smellin' fresh. Even if you do little or no other repairs, this one will get you offers. If you are going to do repairs, remember the price range you will be in and try to focus on your potential buyers needs. Don't put granite counters or upgraded appliances. go with more in-expensive brands and finishes. Always remembering that functional and clean are the #1 most important factors in lower priced homes.

Good luck with your property.
Joe Patton
Century21 Golden Spike Realty
jkpatton@century21.com
801-391-9811 - Wed Oct 15 2008, 17:05

Erica,

I'm going to answer these questions one at a time to the best of my ability and I'll try not to put you to sleep.

First, "are housing prices in Vernal inflated"? No, not really. If you look at conditions in the market place, there is a high demand for affordable housing currently going on in Vernal. This causes a supply shortage and prices to rise. High school economics, I know, but the reason behind the supply shortage is that this area of Utah has an incredible amount of natural resources that are in high demand right now. Natural gas, oil and oil shale being the big ones. There is also a Utah State University campus being built in Vernal. The companies bringing employees to the area have had to resort to housing them in hotels until more affordable rent space is constructed. All of these companies are going to continue to need housing, but new construction projects (especially town houses) are popping up all over. Unfortunately, affordable houses ride the coat tails of all housing price increases. Yes, eventually supply will equalize with demand (I think you are getting close to that happening even as I write) and pricing will eventually level out or even fall. Your guess is as good as mine as to when you might see any serious decrease though.

Second, rent pricing is going to follow the housing demand pretty closely, and maybe even overtake it because some of the influx of workers only require temorary housing. Utah is seeing a VERY low rental vacancy rate state wide (like 1.8 or 2%). Plus you have a bit of a credit crunch still effecting borrowers. Lenders have tightend up their parameters on who can borrow. So in a high demand place like Vernal... you can see where I'm going here. Sorry.

Third, Boom/bust cycle. Not likely that you are going to see a severe drop in prices given the current economic conditions nation wide. Oil shale is the new energy buzz word and we currently have 2 people running for president that are wanting to expand domestic oil production. Congress is also feeling the pressure from voters and no matter which political party you follow, pretty much everyone is wanting more domestic energy production. That means Utah is going to have demand put on us to answer some of these needs and since it is unlikely we are going to make wind farms on the salt flats, or put solar panels on every roof top, oil shale and natural gas are going to be in high demand for some time to come. Vernal has both. In spades.

I hope I didn't make you pass out with the long winded explination, but that question sparked my inner nerd and I guess I can't help myself.... This is the kind of stuff my wife has to put up with all the time. You can call her for some horror stories of my long winded diatribes if you would like. She has threatened me with duct tape more than once.

I hope you are able to connect with a good Realtor to help you decide on which housing choice is best for you. The benefits of having local insight as to what is happening in the market place and what is, or is not a good buy are priceless. Especially to a buyer. 99% of the time buyer agent commision is paid by the seller, so your agents help is pretty much free to you. Good luck!

Joe Patton
Century21 Golden Spike Realty
jkpatton@century21.com
801-391-9811 - Tue Oct 14 2008, 21:09

Well Becky.... yes, and no.... The chances that an agent would put that in the listing info is slim to none, at least I have never seen it. Doesn't mean it never happens, but its gonna to be rare. That means that the listing agent of any property you are interested in is gonna have to know the house well enough to remember that the basement in that particular listing is extra tall and, that you, or your agent is gonna have to call around and see if anyone has something like that in their inventory. I have been in houses that were built with 9' ceilings in the basement, but that was in North Ogden/Pleasant View and it was easily a year ago. Not much help to you in the North Salt Lake area. But if they build them like that up here, there has got to be a builder or two who used a house plan with extra tall basement ceilings in Southern Davis County or Northern Salt Lake County, given how much new construction has been going on for the last 5+ years. This may take some serious hunting to find the right set up for you and may also cost a bit more. Things are a little soft in the marketplace right now and especially in newer contruction (which is probably your best bet to find what your looking for). I have to ask, have you thought about building a home?? I know alot of people turn green at the idea or are unsure how to actually get something like that started, but a good Realtor would be able to help you and home builders are going to be very hungry right about now, which means they should be bidding low and knocking each other over to get your business. Building lots are also plentiful and soft in their pricing. I own one lot and have a couple listed that I would LOVE to get rid of, again, they are in Weber County so they probably won't help you much, but you get the idea. Who knows, you might even bump into someone who has exactly what you're looking for right here on Trulia. If you have anymore questions and would like to just "pick my brain", give me a ring or send me an email directly. 801-391-9811 or jkpatton@century21.com Good luck and I hope you find what you need soon!

P.S. I have no idea what your husband must have to put up with being close to 7' tall.... I'm only 6' tall and as it is I find myself in places and situations all the time that even I'm too big for.... nothing worse than having the shower head hitting you mid chest and always having to duck to get your hair wet.... I guess getting stuff off the top shelf is a cinch though.... - Sat Oct 11 2008, 19:04