Ben Mills

As a rule, I tell my clients to limit the number of separate categories they ask for. What I mean is, if you are looking to get a lower price and closing costs then stick to that. Have your agent tell the seller's agent, "I know we did not give your seller the price they wanted but we are not asking for the moon and the stars." I find when agents give me a list of things which are not offered by the seller such as a lower price, all closing cost, carpet allowance, washer, dryer, riding lawn mower, their mother's sewing machine, and the curtains that were made out of the seller's wedding dress (don't laugh this one's true), the seller becomes overwhelmed and more often than not, the seller instructs the agent to tell the buyer's agent where the buyer can go. If the client asks me my opinion is and the house is a good fit, my question is, "Do you really want his house?" If they do, they usually are more realistic and if not they tell me, "If I can get it at this price." - Thu Jul 10 2008, 14:21

Remember when the stock market crashed in 2002? People pulled what money they had left in the stock market and put it in real estate because over the long haul, it is very secure. Well that created the wanna-be investor and flipper heaven. Everyone seemed to be or know someone who was buying real estate as an investment. That created a shortage of available properties for the buyer of the primary residence. In turn, home values steadily rose in the majority of communites. The investor continued to reinvest every dollar they could get their hands on in as much real estate as possible which meant getting second and third mortgages and home equity lines. At the same time, mortgage companies relaxed their lending guidelines and created new and unbelievable programs that seemed to good to pass up. While all this was going on, incomes were increasing but not nearly at a level that home prices increased. Therefore, the market started to slow down but still investors continued to buy. As the war in Iraq continued to strain government resources, the news that many of the oil fields have either peaked, meaning that basically they are halfway empty, and the inevitability of India and China's growing use of oil, causing the world to focus on future resources causing the gas prices to skyrocket. Increased negative media about possible foreclosures due to adjustable rate mortgages brought home prices to a halt. Lack of return on investment because the investors gain was coming from the equity and not the rent caused investors to start dumping their properties which increased inventory. Due to this excess inventory, the market turned from a seller's market to a buyer's market within months. For a time, it seemed as the phone stopped ringing and the buyers were non-existant. Agents continue to educate themselves on short sales, foreclosures, and dealing with sellers in dire situations. Its not fun but its what we have to do. People who have bought in 2005 and later are hit the hardest right now.

As for the houses in Virginia Beach which are built in the 50's there are not too many. Aragona sticks out in my mind of the 1950's neighborhood. It is a very large area but there are trade offs with everything. I was born in Norfolk where most of the houses were built prior to World War II specifically for the military. Most of my family and friends grew up in a 1940-50 home where many have added room additions and bathrooms, I moved to Virginia Beach in 1991 because things were newer and prettier, the schools were better, and I got better service a restaurants. Norfolk has done many things to improve the city since then and I have thought about one day moving back but I am staying put for now. The only problem in Virginia Beach is there is so much to do. You may never know your neighbor more than a wave because eveyone is so busy. In Norfolk, you know everyone on your block and their children.

I see houses everyday and I can tell you most neighborhoods in VB are not shabby. - Thu Jul 10 2008, 14:04

Hi Flo,

I am a Virginia Beach agent so just keep that in mind but I would like to tell you what I might do if you walked into my office out of the blue and asked me this question. It may sound silly but I would probably ask you why do you want to buy a bank owned or pre-foreclosure (I am not sure if anyone had ever used that term before this market). In our market, many investors and wannabe investors, for that matter, have thrown in the towel because it is not as easy as it was just a year ago to sell the property. Furthermore, you still see these same people at the foreclosure sales just not as many of them which mean the "pros" are having a hard time. Am I saying it is not possible to find a deal? Absolutely not...but you may have to change your definition of "a deal." In addition, it will most likely take more time and/or effort than you would expect. Also remember, many full time investors pay cash.

Maybe that is not you at all. Maybe you asked because you are looking to live in the property as your primary residence. In this case, my advice would be to not buy your home because you saved a few dollars but because it is the best possible living arrangement that you could have made with the terms that you can manage. The best chance for success in this case would be to contact a local real estate professional. Do your best to explain what is important to you in a home such as its proximity to schools, jobs, entertainment etc. An agent will be able to narrow the search based on your criteria and save you alot of time and gas.

And finally, have your local agent do a market analysis on any home you buy. Just because they bought it for $800,000 just 2 years ago does not mean it is a deal at $790,000. Do not forget a home inspection. Depending on what type of foreclosure it is, there are specific procedures, disclosures, and paperwork that must be done properly. An agent will make sure you are covered. Best of Luck in Cali! - Thu Jun 12 2008, 13:03

Jeremy,

Other than finding a qualified real estate professionaI, I think the biggest issue in short sales is timeframe. Since the mortgage companies are all different, there will be different timelines. Some could take 30 days or less and some can take 90 days or more. There also could be unforeseen or other issues such as a second or third mortgage, or a tax lien which could make things more complex and/or drag things out. Make sure you have the time to wait for an answer and have a "plan B" in case it all falls through. - Wed Jun 4 2008, 09:40

Since short sales typically come with alot of emotions on the sellers part, I would recommend that you obtain the services of a local real estate professional to represent your interest. I would talk to the broker of one of the larger reputable companies and be clear that you want an agent experienced in short sales.

Keep in mind that most agents are attending seminars on short sales to bring them up to speed. Also keep in mind that some smaller mortgage companies do not have loss mitigation departments and therefore are learning the ropes themselves. The mortgage companies were simply not staffed to handle customer issues like we are seeing now.

For fair market value for contract writing purposes, an experienced real estate professional is invaluable. There is not one online service that can provide a professional opinion on price that I would trust myself. There is more to real estate market analysis than just numbers.

Another option is an appraisal. Some appraisals are offering pre-sale appraisals at a discount. Ask your local real estate professional for references. - Wed Jun 4 2008, 09:28