A Quiet Market in Warren County

Yes, we all know the market has been tough over the past 18 months, with prices falling in Warren County and surrounding areas during the last 8 or 9 months of 2006 in particular. The indications are that prices may have now leveled out, and with mortgage rates staying low, there has been cause for cautious optimism that the buyers will come out of their shells as they begin to feel more comfortable.

But what I am now seeing is a series of new listings coming on to the market with inflated prices, suggesting that the sellers believe we are about to embark on a bouyant market. Have I missed something? Please tell me, where is the evidence? Year to date unit sales in Warren County are 18% down on this time last year, and homes under contract are a whopping 38% down.

Even more worrying, there are again nearly 500 homes on the market in the county (492 in fact, 37% up on last year and more than three times the number from 2 years ago ), and I'm looking out at several more inches of fresh snow as I write, so I'm sure we are still in the winter. Based on the sales in the first 2 months of the year, that is a massive 15 months supply. If you want your home to sell, it has to stand out against the many others that it is competing with. It is not a market for "let's try it at that price and see if we get any bites".

So yet again, I am going to get on my soap box and preach. Here goes . . . it doesn't matter how much you WANT for your home, or how much you NEED for it. The market will dictate the price, and if you don't show willing to meet the market (with a realistic asking price), then the market won't come to meet you. Overpriced homes will not be shown, or at best, the wrong people will be viewing the home, as they will be expecting more for their money.

It has been a hard lesson for many over the past 18 months, but it seems there are still those who haven't learned from it. So come on folks - you know who you are - get real, and price your home as if you mean to sell it. You do want to sell it, don't you?

Dangerous "Expert" Tips

I just had to comment on something I saw on "Today" this morning on NBC. The channel's proclaimed "real estate expert" Barbara Corcoran was interviewed by Meredith Viera, and gave out some tips for Buyers. There were several tips which in my mind were quirky, but here is the one that frightened me . . . once I heard it, I backtracked on my Tivo to make sure I didn't hear it wrong, and noted down her words. This is what she said, verbatim:-

"Offer all cash if you are pre-qualified for financing. Most people know they can get the financing, and then go in and say their bid is based on financing. It doesn't make any difference. What you should be doing is say 'I'm an all cash buyer'. You've got the financing - go in as an all cash buyer".

Oh dear!! Please don't EVER think of doing this, and don't try to encourage your Realtor to do so either. If you intend to support the purchase with finance, then you should be stating the fact in the offer, and making the offer conditional upon that finance. Why? Because (1) it is a material fact, and by following Barbara Corcoran's advice, you (and your Realtor) would be in great danger of misrepresentation; and (2) because if for any reason you ended up unable to get your finance (for instance, you lose your job?), the inability to raise the funds would be no defense, and you would be in default on the contract. This would risk your escrow deposit at best, and leave you being sued at worst (Please note: I am not a lawyer, so this is a personal opinion only - if in doubt, take professional legal advice).

It does worry me when people speak on TV to a large audience that regards them as "an expert" on the subject, but then give advice that is ill-conceived, misleading, or downright dangerous. Let me assure you - the person who knows best how to help you with purchasing or selling real estate is your Realtor, and your Realtor alone. Not your relatives, neighbors, work colleagues, and - worst of all sometimes - "experts" on TV!

Talking of which, I had a settlement yesterday on a property on High Knob, here in Front Royal. As we were doing the final walkthrough, Carson, the buyer, said to me "I've been worried because everything has gone so smoothly, yet everyone kept telling me about all the problems and nightmares that were going to happen". No problem Carson, you were in the hands of my excellent recommended mortgage guy Adam Huddleston, owner/broker of Integrity Home Mortgage; and of course in the hands of an experienced Realtor who has sold over 300 properties in and around Warren County, Virginia, over the past seven or so years. Experience counts for a lot.