Here are the six most important things everyone needs to know about the 2011 Idaho real estate market:
1. Short sales are no longer a total nightmare. When the market first turned south, short sales were often taking six months or longer to complete. They were horrible to manage and had a high rate of failure. The majority of banks have now had time to react to the market and have assembled internal systems and resources to manage the short sale process much more effectively. Today’s short sales are often approved in as little as 60 days and sometimes much sooner.
Your best bet: Make absolutely certain that the seller’s lender has all the information he or she requires, and follow up frequently.
2. Homes are receiving multiple offers again. Not the crazy, “bid up the price above market value” offers of five years ago, but the “I see real value here and I’m willing to pay for it” type of offers. Buyers and investors are sensing a market bottom and have re-entered the market in significant numbers. Properly priced homes are generating substantial interest, and buyers are again facing competition when submitting offers for the best-priced homes.
Your best bet: Secure a market value estimation from your broker so that you can construct offer terms that balance your equity objectives with the probability of securing the property.
3. “As-is” doesn’t always mean “as-is.” Bank-owned listings almost always include an “as-is” clause. However, if the home has material defects that would affect a buyer’s ability to secure financing, the bank can often be persuaded to invest in repairs.
Your best bet: Identify repairs that your loan type (FHA, VA, etc.) will require and submit the repair requests with language that indicates that the repair requests are financing-related. Alternately, if your repair requests are not financing-related, attempt to negotiate a price reduction in lieu of repairs during the inspection phase of your transaction.
4. HUD homes are hitting the market in a big way, but definitely don’t expect to get these properties at list price. A HUD home is a residential property acquired by the U.S. Department of Housing and Urban Development as the result of a foreclosure on an FHA-insured mortgage. HUD’s strategy on many of its homes appears to be to list at asking prices significantly below the market to generate immediate, substantial interest.
Your best bet: Expect the majority of HUD properties to sell at the mid-point between the list price and the actual market value or above and take this into account when structuring your offer.
5. Short sale sellers are now often being asked to sign notes. A short sale exists when the proceeds from the sale of a home are not sufficient to satisfy the loan and the seller is unable to make up the difference. Sellers’ lenders are now often asking sellers to sign a note for the amount of the deficiency and make small monthly payments. Many sellers are simply not financially capable of doing this.
Your best bet: Stand firm in your negotiations and ask for a release of liability. Banks are making bottom-line decisions. The bank’s costs in a foreclosure are substantial and approving the short sale without the deficiency note will still often be in the bank’s best interest.
6. The Internet is where it’s at. Roughly 90 percent of homebuyers use the Internet to shop for homes. If you have a property to sell, one major consideration should be the online market reach of your listing brokerage.
Your best bet: List with reputable real estate agencies, such as Atova. Only they can feature your property for sale on IdahoRealEstate.com, BoiseRealEstate.com and BoiseIdaho.com. These websites reach thousands of potential homebuyers every month.
Today’s real estate market is evolving quickly and transactions of all types are more complicated than in years past. Every transaction is unique. Consult with a broker or attorney prior to making any real estate-related decision.
This column was written by Steve Barbey, a real estate broker and owner of Atova Inc. He can be reached at (208) 724-8169.