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That affects me? I’m not the one not paying!

How foreclosure and short sales affected one person in a cul-de-sac of eight homes. It was really was heartbreaking when I had to tell her that her home wasn't worth as much as she thought it would be when she went to sell it so she could buy her dream home.

Recently, I had a client that owned a nice 1979 ranch on a wonderful little cul-de-sac in a great neighborhood with eight other homes. She told me on the phone that recently they had four of the families move out and she wanted to put her home on the market, because she had finally found her dream home.

So, I decided to pull the comparables and what do I find? Only one is still on the market and has been for only 1 day, but is now bank owned. The other three were sold on short sale and went for a lot less than they had bought for in the last couple years. There were two other homes on the next street over that were for sale also and they looked like they were priced lower than they probably wanted to because they had to compete with those bank owned and short sale properties that had gone on the market.

So, when I sat down with her and told her what she could sell for, if she wanted to sell quickly, she couldn't believe her ears. Just last year you told me that I could sell this place for $25,000 more than that. I had to explain to her that last year you weren't under the gun to sell quickly as you hadn't found your dream home yet. This year is a little different. You have a home picked out, and if you don't act quickly, you could lose it. Also, there are 3 properties that are on this cul-de-sac that were sold in a short sale situation and one that is now bank owned, selling for thousands less than I'm even suggesting. The two houses on the next street over are selling for a little more than this, just trying to compete with the bank owned properties and the short sales.

That is when she yelled, "That affects me? I'm not the one not paying!" I said, "I know, but because those homes had to be sold for less to get them sold quickly, that brought down other homes in the neighborhood that needed to sell quickly, and now you need to sell quickly and the spiral downfall of prices in this neighborhood continues. It is true that this fast of a price drop wouldn't have happened had those four families not had been on the verge of losing their homes, but it happened and I'm sorry to say it affected you!"

She thought about it and understood and realized that maybe that is why her dream home is priced the way it was and they maybe in the same situation. Lucky for her she had lived in the house since 1981 and had lots of equity, but if she had only lived there a few years, she would have had to bring money to the table to sell her property.

So, even though your house may not be what it was worth last year because of your neighbor, it could be right back up there in value next year. If you find that dream home, remember their value maybe down just as much as yours, if not more, and you could get your dream home at a dream price!

Respect Realty LLC (Expect More)

 

At Respect Realty, LLC our agents believe in 100% dedication to client satisfaction.  We specialize in property and land acquisition around the Portland Metro and Vancouver, WA area. We delight in working with first time home buyers and sellers to guide them from start to finish. Our doors are always open and we are always happy to assist you with your real estate questions.

 

Reach out today, we look forward to talking with you!

 

Todd Clark and Seraina Aguayo (Owners of Respect Realty)

Respect Realty LLC (Expect More)

(503)564-3130

info@RespectRealtyNW.com

www.RespectRealtyNW.com

 

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Comment balloon 7 commentsRespect Realty LLC • May 22 2008 01:27AM

Comments

Todd, I hope she got a terrific deal on Dream House!  That's the thing about buying and selling in the same market - it's kind of a wash!

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 10 years ago

You're right, for the most part buying and selling in the same market makes all things relative.  She is blessed with having equity in her home, and in being able to upgrade to her 'dream home'......when so many are losing their 'dream homes'.

Posted by Liz Moras Migic, Chilliwack, British Columbia - Realtor over 10 years ago

Fortunately she has been there for awhile and can still price low and sell and not have to take money to close -- she is very fortunate compared to many other families.

Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) over 10 years ago

Todd, she really is fortunate.  I used to love doing the math, it usually showed good news.  I am glad she understood how it affected her and is able to move on.  Having such good Realtor will take her far. :)

Posted by Virginia Hepp - Mesquite NV REALTOR, Mesquite NV Homes and Neighborhoods - Search MLS (ERA - Mesquite NV Homes For Sale) over 10 years ago

And if you do the analysis of her trade-up financials in a down market vs. and up market she may well come out ahead selling at a cheaper price in the down market based on the advantages of buying the dream home cheaper as well.  I have run numbers like this for several sellers trading up recently and in every case the financials worked better doing the trade up in a down market!

Posted by Steve Homer (The HBH Group (Keller Williams affiliate)) over 10 years ago

Todd

Unfortunately, we all will suffer because of what happened. The whole housing market, and the sub-prime practices put a real dent in things.

Sincerely

Tom Braatz

Posted by Tom Braatz Waukesha County Real Estate 262-377-1459, Waukesha County Realtor Real Estate agent. SOLD! (Coldwell Banker) over 10 years ago

Todd, you have already shared the key to this dilemma with your client. The move-up property is a lot more affordable.  The difference should offsets the market price of their current property. Hopefully, your client will view their current property and its equity as the gateway to their dream home. Best wishes.

Posted by Dionne Morgan, Broker REALTOR ,GRI, e-PRO (Realty World Solano Realty) over 10 years ago

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