Which of these is the screamin' real estate bargain?
Which of these is the killer real estate bargain? (See the answers below--these are true stories based upon real estate sales in Sonoma County over the last year--details have been eliminated for obvious reasons.) 1) an REO (bank-owned) home in Rohnert Park/Cotati that sells for $304,000 with 19 offers. Original asking price $256,000. Nearly 20% over asking price. 2) a country property in Healdsburg with two cute cottages that nearly sells for $137,500 under asking price. 3) a country property in Sebastopol that sells for full asking price ($1,750,000) with four cash offers. 4) an REO in Santa Rosa that sells for asking price with two offers. 5) a cute country property in Sebastopol that sells in a week for 95% asking. 6) a fixer (read:teardown) with a bad floor plan on a busy street that sells after a year on the market for 50% of the original asking price. 7) a cosmetic fixer on a great lot with good bones and multiple offers, sells 5% over asking. 8) property someone buys from a friend of a friend before it hits the market at 10% less than the supposed listing price because the seller doesn't want the hassle of selling or to pay commissions. ANSWER: 1) A BARGAIN--Are you crazy? The buyers paid $48,000 over asking. Yes but the bank significantly underpriced the property by not attributing enough value to the oversized, landscaped 1/3 acre lot with its own redwood tree and raised beds for gardening. A most unusual feature that attracted a horde of buyers. Fortunately my wonderful clients prevailed and bought a home for the price that was their target price all along. Now they have a house payment lower than the rent they were paying previously, before taxes. For their first home, a bit of country in a great commute location, with no repairs beyond their budget or skill set. It even appraised at full price. 2) A BUST: It seems like a bargain on paper, but what if the original sales price was about $175,000 too high and the property sits and sits and sits. Even with a $137,500/16% price reduction, the buyer might be paying too much. This property is still sitting on the market racking up interest and taxes. 3) A BARGAIN: A great retreat property that sold in...
Have we hit bottom in the Sonoma County real estate market cycle?
Actually the only way you know is when it has passed by. A few weeks ago an agent friend and I were visiting as I fed the horses one early spring evening. She was telling me of the difficulties she was having successfully securing a home for first time buyers. This a great agent with many years of experience who was working with entry level low income buyers in Sonoma County. They were looking for a home priced under $200,000 in the Santa Rosa city limits. They were pre-approved for FHA financing with the reputable lender who had referred them to my client. They are eligible for a $10,000 down payment assistance from the city of Santa Rosa which will subsidize their down payment. Their income and credit qualified them for an FHA (Federal Housing Administration) loan. Although they qualify for the federal government first time buyer $8,000 tax credit, that cash won't reach their pockets until after the sale has closed. This couple was competing in many multiple offer situations with all cash investor buyers or other first time buyers such as themselves. Many properties in their price range were in such poor condition that they would not meet the strict FHA property condition guidelines, and the repairs needed would have put them beyond the couple's limited budget. I don't know how many offers they wrote but they were not having luck. As my friend detailed the many days and hours she spent with this couple, she said it was seeming increasingly unlikely that they would make it into the market. I paused as I asked her, "Do you think we have hit the bottom here in Sonoma County?". She said yes--good properties are selling extremely fast and sometimes at over asking price. I had to agree. What had seemed a consistently active but still laid back market this winter was falling into high gear as the days got longer. As some of my buyer clients and I surmised in January and February, we felt that things would be much more competitive as spring arrived, and that seems to be true. In fact, the southern part of Sonoma County, in Petaluma was already scorching hot at Christmas and New Year's time. And that same scorch-ability (sp?) seemed to be tracking north along the 101 corridor. The...
Rising Real Estate Sales Trend continues in Sonoma County
Buyers are out in force searching out bargains in Sonoma County real estate with the number of open escrows (ratified sales contracts for home purchases which have not yet closed) reaching the highest level in over two years. This appears to solidify a trend first noted in this blog in early February. The newly ratified purchase contracts will not close till 30 to 45 days after ratification on average and some will no doubt not close, but indications continue to be positive for the state of this spring's market for real estate sales in Sonoma County. Many of these sales have been in the under $500,000 market, where first time buyers and investors are feasting on the large inventory of bank-owned or REO properties where some terrific bargains can be found. For a list of bank-owned properties, please email me. Meanwhile, the following chart shows the sales trends for both new escrows and closed sales for the last two years of real estate sales in Sonoma County....