On July 30th Pres. Bush signed a major housing bill (HR 3221) into law.  As part of the bill, Congress created a new, temporary tax credit to provide some incentive to buy a home.  Here’s a quick check list to see if you qualify:

• Bought and CLOSED after April 9th, 2008
• YOU MUST CLOSE BEFORE JULY 1st, 2009
• Must be your first home (or you must be an individual who has not owned a principal residence in 3 years)
• You must make under $75,000 or have a joint income of less than $150,000 (you still get partial credit if you are over)
• The credit is 10% of the purchase price of the home, with a cap at $7,500
• Obviously, this property must be in the US
• Finally, you must have use Joshua Jarvis as your Realtor (ok, so I am kidding about that one)

With the current market conditions it’s likely that if your home has been on the market, you might have had a price reduction.  What’s interesting is where you end up.  Look at the prices, are you Wal-mart priced?

What’s Wal-Mart pricing?  We all know that the tried and true method to get us to buy something is to price it at what the seller wants, say $5 then knock a penny off, to $4.99.  Our mind says, “Aha, $4!” when we just paid $5 for the item.

Well some agents and home owners have the funny misconception that Wal-mart pricing is the way to go with homes.  The fact is that Walmart pricing absolutely works for home buyers too.  It works, against you because of one key difference…

AT WALMART, YOU DON’T NEGOTIATE.

So buyers see your price at $399,900 and they think, “Great it’s $399K.”  At a bare minimum, you’ll be getting an offer less $900.00.

It actually goes much further then that.  This is not simply some idea that I’ve come up with (although I would not fault you if you thought that).  No, this concept has actually been backed up by Cornell University.

Using data from 27,000 real estate transactions in two U.S. markets, they found that buyers paid higher prices when asking prices were more exact [like rounded numbers].

People learn to associate precision with smaller magnitudes, wrote the resarch team led by Manoj Thomas. 

Furthermore, with this new generation of home buyers using the internet, it makes absolutely no sense to ever list your home at a price that does not take advantage of this. 

A home priced at $324,900 will only appear for hom buyers searching $325K and down.  However, if the home were correctly priced at $325K, home buyers from $350K (in a search from $350 to $325K) and under would see this home.  The reason for this is that most internet search engines use 10’s and 25’s, not 99’s. 

So next time you get ready to put your home on the Atlanta Real Estate market, be sure not to price it like good ole’ Sam Walton would.

Are you waiting till prices drop further?  I have two KEY questions for you.

1. When is the right time to buy?
2. When do you know where the bottom is?

I’ve gotten several questions from new buyers and other from my previous blog post about short sales that I’d thought I’d right a little something about Short Sales.

A short sale is what happens when the bank takes less then what they are owed.   For example,  a buyer buys a home for $150,000 in 2007.  Unfortunately, they lose their job in early 2008 and cannot pay their bills.  They try to work something out with the bank on their late payments and their account rep suggests a short sale (not usual).  From there they put the home on the market with a Realtor and get and negotiate a sale for $125,000.  They avoid foreclosure, eviction notices and investors knocking on the door at all hours… well maybe.

The real world isn’t so clean.

What has to happen in order for a bank to consider a short sale:

• Some sort of hardship - job loss, death in the family, medical bills (KEY: MUST BE DOCUMENTED HARDSHIP)
• Must be "upside down" and owe more than the home is worth when sold through a Realtor

Some things that will absolutely help you if you are in this situation:

• Go look and get approved for an apartment or rental immediately
• Keep all documents for eveything as soon you know you’re falling into foreclosure
• Don’t be fooled, filing bankruptcy can help you stay in the home longer but won’t stop the foreclosure process.

Benefits of a short sale to owner

1. Get to stay in the home a little longer with no payments.
2. Some lenders look at it as slightly better than a foreclosure when purchasing another home.
3. Some banks will NOT make you sign a promissory note!
4. Avoid foreclosure process.

If you have any questions, feel free to comment or e-mail me.

That’s one word that is tough to use in this current real estate market. Nothing is predictable right now. Months that historically good are bad and ones that bad are good. Weekends you’d think would be full of showings are filled with people going to see Batman.

The best slogan I’ve heard in a long time is “Don’t Wait to Buy, Buy and Wait.” I thought it was very telling. In what other market can you buy a 2000 Square Foot all brick ranch for $140K that should retail for $200K in 3 years with little to no work.

As mentioned in another article, St Marlo is a great place for executive homes and deals on them. With an average price of $1 Million, you can get in to a foreclosure for less than $600!

Homes like the one I listed on 3551 Bogan Mill Road or 4850 Shellnut Path would have sold in 30 days. Now they are steals, ripe for the taking.

Good news for the Jarvis Team is that we are officially down 1% for year compared to last year, which was the best year ever.

We’ll see how this year ends.

..

Oh, and By the way, I’m NEVER to busy for your referrals.

It used to be that if someone wanted to be in the home by the end of August, they could start looking in July. Not so anymore with the current market conditions.

With the sheer number of homes on the market, it’s taking longer to find that perfect home. What’s not intuitive is that if you have found that perfect home then it’s highly likely that someone else has their eye on it as well.

So in essence there are a TON Of homes on the market, but not many great deals.

The other thing that is causing longer “start to finish” times is that there are so many foreclosures and short sales on the market. Obviously, everyone wants a deal, but these things can be ridiculous. In many cases, it may take up to 6 weeks just to have an accepted contract on a short sale home… assuming that the bank and the seller are willing.

Foreclosures are a bit different, but the biggest problem with them is the multiple offer scenario. This scenario could add two weeks to the process. In addition, the banks generally want the buyer to close at an extremely inconvenient location with unheard of precision. What do I mean? I mean they would like you to have everything you need to physically close the property up to 5 days before you actually close.

Finally, with the “mortgage meltdown” there are loan officers and lenders running around trying to make deals and create deals. Some of them are not used to the new market conditions. Not only are they wasting client’s time but they can also cost them money, to the tune of $100 a day.

So if you’re thinking of closing at the end of August, you might just want to start looking… THIS WEEKEND.