To Buy, or Not to Buy... now that's a Question!

The financial crisis in the US, no matter where the blame falls, has caused an over-abundance of foreclosures on the market, in many areas of the United States. The national buzz is that homes are being bought for 50 cents on the dollar... Unfortunately, or fortunately, depending on your perspective, that simply is not true in San Antonio. So let's talk about it:

Through misfortune or fraud, an owner loses their home to the lender through the foreclosure process. Depending on the bank, they are now trying to sell an asset to offset the loss of the foreclosure itself. The process of foreclosure is expensive. They have to hire an appraiser, a local asset manager, an inspector, pay for some repairs (sometimes), and then maintain the home while it is being sold. So the lender not only lost money through the defaulted loan, they are losing money daily through the process of selling the home. They usually hire an asset manager and a Realtor, and sometimes that is the same company. The process is somewhat burdensome, and costly. So, do you really think they will just price it 30% below market and dump it? Think about it... that really makes no sense.

What the lenders are doing when hiring the Realtors and asset managers is positioning themselves to sell the home for the very most money they can, just like any other seller. The difference is that they are not obligated to disclose anything about the house, and they are not liable for defects after closing. So, the market analysis and appraisals are done, and the home is placed on the market at fair market value, or slightly less. Typically, the lender has standard procedures to market at one price, and reduce the price should they not sell it at that price - usually there is a 30 day analysis, and price adjustment if deemed necessary. This goes on until it is sold. Through the research I have done, there really is no rhyme or reason as to why one home sells for market value or for substantially under market value. Sometimes it is the neighborhood, sometimes its their marketing strategy - or lack thereof. In any case, my point is that you cannot say all foreclosures are a good deal... so you need to be very, very careful.

So, here is the push of this whole commentary: if you are looking to buy a home, include foreclosures in your search. It is every bit equally possible that someone may price their home below market because they need to sell, and that may be the best deal for you... better than any foreclosure. The foreclosure home is completely "as is", while you may have some recourse if you discover a defect when buying from an individual owner. There is no rule in real estate. Everything is numbers until it is you writing the check. Bottom line is that you need an expert to work through all the data and options to be sure that you are making a solid investment.

Therefore - if you are looking in San Antonio, or around San Antonio, you can call me. I have been selling homes and investment properties locally for over 14 years. I will give you my honest opinion. I can give you testimonials from my clients, who have said they are very, very happy they chose to work with me. Give me a call. 210-979-0111

Bush Words

Twelve and 1/2 minutes of intensity. I am a Realtor, and I didn't think it was that bad. Maybe because San Antonio seems to be bucking the trend, or maybe because I am usually a very positive person. It isn't that I missed it.. it has been a rough year. Every deal is taking twice as much work to get closed, but I am closing deals. I guess we're not in Kansas anymore...

The problem is complex, as is the solution. The solution is expensive, but failure to act will be more expensive. While I have my opinions on what needs to happen, smarter and wiser people need to lay down their swords of partisanship, and get real honest about what needs to be done. This isn't about who is smarter, this is about masterminding a real solution that wont bring up more problems later. I think President Bush is wise to bring the Senators in and get a broad perspective. I honestly am not worried about him doing the right thing, I am worried about the politicos... Obama is such a ego-maniac, I just see him trying to one-up everyone. Not that I think McCain has the answer either.. but that is my point.

The solution is a high clash of ideas with a low clash of egos. We need real patriots right now. We need men to be honorable, honest, and candid. We need a vastly varied array of perspectives and input, and then we need a bold answer that will meet this challenge and bring stability back to our country.

I think it is possible, but I fear that the solution will have pork in it, and that afterwards, these men will dance around the stage with their chest s fully out, strutting about with the fact that they saved the country. As I said before, I am usually optimistic, but the current state of our politics has me quite concerned. I see very few people that love the country abouve themselves. And it makes me sad.

We shall soon see what comes about. Let us all pray that humbler hearts will win, and true patriotism rules the day.

End of an Exciting week!

Whew!! I made it through another week of real estate. I have been selling homes for folks for the last 14 years, and there has never been a time like this. The market is flexing more than Arnold Schwarzenegger in front of a mirror! First the A-bombs of Merrill Lynch and Lehman Bros... then AIG, then the bailout... what's next? McDonald's going out of business??? (We are only talking about the last 7 days mind you...) It is difficult to stay on top of all of this.

So, what is the bottom line? First, let me say that my office now has 17% of the residential, single-family sales in the San Antonio MLS, according to the MLS statistics. So, even though the market is down, we are moving up. That's the god news for my buyers and sellers. The San Antonio market is down 21% from last year same month. So, the market is definitely down... no one can claim we aren't feeling it. The odd thing is average sales prices are up, though units are down. I think what is happening is that a lot of the remaining qualified buyers are buying bigger homes to maximize on their profits when the home prices go back up.. which they will ... some day... Also, a lot of higher end homes have hit the market, many of them selling, but selling at a loss. In other words, when the market gets tough, those who own the most expensive real estate feel it first. Let's face it, if you loose your job and your overhead is 8000/month, it takes a lot less time to get in serious trouble than when your monthly nut is $1000. Either way, losing a job draws air rapidly, but that would explain the abundance of homes over $500K in our MLS.

Wow! Too much to analyze. It is just too much. If you go searching the web, you will find plenty of opinions on all sides of the issues. So, my advice? If you want to buy a home more than 30% more expensive than your current home, this is a great market. Sure, you will sell for a little less, but you will more than make it up on the buy. There are a lot of great deal in the market over $400,000. (Before you pull the pin, let me do a CMA on your current home and do an analysis on the potential gains... then you'll go in with your eyes open wide.) If you don't need to sell - stay put. It may take a year, or even two, but it will get better. If you must sell, or if you are in trouble - call me right away. I'll give you all the information you need to make the best decision you can for you and yours...

As always though, Real Estate is still the safest place for your money long term. If you look at the history of home prices, overall, they always go up... I guess it boils down to timing.
Have a Real great day!