Based on my experience, the market in the Va Tidewater Area (Norfolk and surrounding cities) has picked up dramatically. Several months ago I decided to retire and downgrade from a 3000 sq ft colonial to a one story SFR due to problems with stairs that will not get better with time. Interviewed a local Agent for input in Feb and recieved an estimate based on recent comps. I found the recommended RE “fair and reasonable” seller concessions interesting.
First, there is the matter of commission. 6% with an additional 1% to the selling agent to expedite the sale. Agent advised that she always rebated the additional 1% the buyer as a matter of ethics. Rebated to the buyer….
Second, according to this Agent, sellers were ALL paying 3% of the sales price to the buyer to cover closing costs. It was expected and the home would likely not sell without this “assistance”. Apparently, the majority of homebuyers do not have any cash for what I considered a normal expense. As far as down payment, 0 to 5% was the norm with the morgages being processed by the known U S Gov agencies. According to the Agent, Banks, Credit Unions and Morgage Companies played a small role.
Third, 1% of the sales price was to be offered for any repairs identified during the inspection. Agent said that the inspectors normally found or recommended repairs up to this value. Apparently the “findings” justified the inspection costs and helped market their services.
The estimated sale price of $350 K would net out $315 after all was said and done. !0% to market and sell the home.
Since Feb the market for new homes is as strong as the 2005 market here in the Great Bridge area of the city. There were 4
small subdivisions within a mile radius that have not had any activity in the last several years. Since January approximately 70 homes have sold in the $360 to $425 range. All the lots are now sold.
The local newspaper identifies recent sales and we have been watching a steady incremental rise in the price of used homes in the surrounding neighborhoods. Based on the increase in prices and the low inventory of homes for sale we contacted three realitors. Basically the story not changed from the info we had recieved in Feb with the exception of an increase in comps.
What I did find interesting is that all 3 Agents downplayed the recent comps as follows:
Agent 1 brought current neighborhood listings and recent sales data from the MLS. Even though many of the homes were obviously listed by a competing company, she referred to them as “her” listings or homes she had sold.
Agent 2 had listed several homes in the area for $389 each and she stated that the homes were under contract for near to the asking price. This turned out to be a fabrication - Agent #3 brought over the sales data.
Agent #3 pressed the fact that she was a top rated Agent in the area and that she held what sounded like supernatural power over appraisers and could get them to hit the number every time.
Agents 1, 2, and 3 all brought comps from 14 months old to current. We thought it was odd that they would bring old comps since recent data is generally used. All 3 also neglected to bring ALL the comps. We peiced this together by combining the data from from all 3 Agents. It appears that they did not want to indicate an upward trend on resales. None of the Agent had ever heard of the Housing Bubble Blog.
We concluded the following:
1. It is no longer a buyers or sellers market. It is an Agents market. RE Agents apparently found out that higher prices make it difficult to sull homes.
2. If buyers generally cannot come up with closing costs and are purchasing homes we are in the third inning of this bubble game.
3. All RE Agents are liars.
4. We will attempt to market our home FSBO using the MLS and reduce the asking price by the 6% commission.
5. We will never again use a capitol A when refering to re agents.
Disclaimer for the hard core “housing prices are going down not up” contributors - My input is based on the Great Bridge section of Chesapeake, Va. GB is desirable due to schools and local amenities. I have not looked outside of this area and have no interest to do so. That being said, based on my observations, prices are going up. New construction now ranges from $150 to $170 a SF in the developments we have looked at and they are selling. The boom is apparently alive and well inmy area of SE Va. It just took a nap for several years.
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