Real Estate Information

Chances are by now you’ve heard the term “short sale”. The phrase is thrown about in real estate marketing, on TV shows, and in many conversations about real estate. However, many people don’t know what exactly a short sale is.

A short sale is when the owner of a home owes more on the home than the home can sell for. Most times people in this situation are behind on their mortgage payments due to some financial hardship (job loss, medical issues, etc.). This means that in order to sell the home, the owners must seek approval from their lender to accept less than they owe and release the lien against the property.

A brief synopsis of the short sale process:  Owners enter into an agreement of sale with a potential buyer as they would with a typical home sale – however the agreement is contingent upon final approval from the seller’s lender. The sellers must then submit a large packet of information to their lender – including detailed financial records, a hardship letter detailing why they cannot make payments, an agreement of sale from an acceptable buyer, and any additional information the lender may ask for. After reviewing the information, the lender will either approve or counter-offer the agreement on the property. After an acceptable agreement is reached, settlement will occur. Often the seller’s lender will require settlement within 30 days of their approval.

Some other notes on short sales:  Short sales are a long process. Many times they can range from 3-6 months from the signing of an agreement to lender approval and settlement. Lenders often require a quick settlement once they do approve the short sale. It’s often hard to find a buyer who can wait several months and then rush to settlement within a few weeks. Also, lenders require a lot of paperwork, sometimes duplicate paperwork, from the owners of the property which can be overwhelming and time consuming. Short sales do have a negative effect on a homeowners credit. The way a short sale is reported on a person's credit varies on a case by case basis and is determined by the lender.

Today through Sunday, visit Strasburg Railroad to ride with the Easter Bunny!  Peter Cottontail will conduct your train ride as you tour the beautiful countryside and receive a special treat!  Various train times each day. Ticket window opens at 10:00 am each day and prices vary based on train car and age group. Find the details here!

Spring has sprung in the Lancaster County Real Estate Market! Kim and I have been very busy showing homes, writing offers, and attending settlements. We just received the latest market update from the Lancaster County Association of Realtors and wanted to share the stats with you.

Across Lancaster, 237 homes sold in February, which is a 2.1% decrease from February 2011. The average sale price for February 2012 was $173,355, a slight increase from February 2011 but still below the 5-year average February sale price of $175,676. For February, there were 641 new listings in 2012, a 13.7 percent increase from February 2011; a number even above the 5-year average of new listings for the month of February (which is 627). Beyond new listings, pending home sales also saw an increase in February of 30.8% from 2011 – and 38% of the homes that sold in February were on the market for 60 days or less.

While February saw a slight rise in prices from last year (a good sign for sellers), prices are still below the 5-year average price. The lowered home prices coupled with the increase in new listings means there are a lot of affordable homes for buyers to choose from. Add in that interest rates are remaining low, and it’s easy to see why now is a great time to buy. February’s stats also show us that many of “good values” are still selling fast.

Easter’s on its way! Join the Easter Bunny for breakfast and an egg hunt at The Church of Apostles in Lancaster – happening March 31^st from 8:30 am – 11 am. Located at 1850 Marietta Avenue, Lancaster.

Looking for a theater experience this weekend? The Fulton is running Pinnochio for the family through March 31^st and Sunset Boulevard through April 1^st. See their site for more information.

The Lancaster County Rec is sponsoring an Easter Egg Hunt and Coloring Contest on March 31st, 2012 at 11:00 AM. Open to ages 2-10 years old. Just grab your Easter basket and head over to Lancaster Central Park for some family fun!

Find more information here on the hunt as well as the Coloring Contest page!

Lancaster Chicken Barbecue Coming in May ! Fun time, lots of things to do. Check it out

Here is the latest info. For the first quarter of 2011 there was 731 homes sold in Lancaster County. This is a 3.7 percent decrease from the first quarter of 2010. The five year average of homes sold for the first quarter is 881. The average sales price for the first quarter was $170,772, a decrease of 8.6 percent over the average sale price of 2010's first quarter.  For homes priced under $200,000 we are actually 3.1 percent ahead of 2010 but for homes prices over $200,000 we are 17.9 percent behind 2010.  This pretty much explains the decline in average sales price. It's due to that being a larger part of our market. We are still seeing times where there is more than one offer at the same time on a home. Homes that are well priced and in really nice shape are still selling quickly.

You Pay for the home you live in. Ever hear anyone say that before? I have.

What does it mean? Well sounds pretty straight forward, but it’s worth thinking about.

I had a settlement this morning with a home buyer I was representing that really represented this saying so well and made me think of it again.

This couple was getting ready to rent a town home. They had already viewed it with the owner and put their name on a list of prospective renters he had shown it to. (All of who were ready to help this nice landlord pay for his property)  He was in the process of painting it and getting it ready to rent.  It offered three bedrooms and one and a half baths and was in a prefect location for this couple. The monthly rent was going to be $985.00 a month plus utilities.

A town home entered the market FOR SALE right down the street and we connected. We viewed the home together and they loved it! The home for sale actually offered an additional full bath and was in better shape than the rental.

I assisted them with financing options and we found out they qualified for a 100 percent financing program! We wrote an offer and were able to get the seller to agree to pay most of the buyers closing costs.

This morning these folks, who were days away from being renters, paying $985.00 a month for rent and PAYING for the home they live in for SOMEONE ELSE ( the landlord ) became homeowners! Their total monthly mortgage payment?  $932.00 !  ( Makes me smile )

This is $53.00 less a month they will pay owning their own home, a bigger nicer home, than they would have been paying in rent. Now they are paying for the home they live in   for themselves and not paying for someone else’s home!

( Of course this same principle applies if you are renting an apartment. The factor is where is your monthly payment going, to benefit you or someone else )

They also needed about the same amount of cash to purchase as they would have needed for the security deposit and first months rent for the rental.

This does not even begin to factor in the tax deductions, appreciation, paying the mortgage down and gaining equity aspects of this equation. These items would make the monthly saving over renting well over $200.00 a month!

Yes, we pay for the house we live in. The question is, are we paying for it for someone else, or for ourselves?

Buying an investment property you plan on renting out and wanting a good deal brings different things to consider. For example, what’s the goal of the investment? Is it to bring in monthly cash flow? Or, maybe like some people I have worked with you are more interested in building your long term net worth.  What’s the difference? Suppose your find a modest little town home, maybe in the city. One that, based on what we can tell today, may be limited based on the size, location, etc of having a good chance for going up much in value in the future. However, due the price of the home it could be rented out and have nice positive cash flow on a monthly basis. This could be a good deal for the buyer because that’s what they wanted to accomplish.

The second example for buying Lancaster Real Estate as an investment would be a little nicer home that would cost more in a great location. This home, if bought right may break even on a monthly basis. So, it would pay for itself but it would not be putting cash in the pocket of the owner on a monthly basis. However, let’s say you own that home for ten years. During that time the tenants have greatly paid down your mortgage and because it was a desirable floor plan in a desirable location the home has increased in value and now has a great deal of equity in it. That home was a good deal!

So, it’s important to understand what your goals are when looking for a property. What is a good deal to one person may very well not be anything the next buyer would even consider.

What is a good deal when buying homes in Lancaster?

I am looking for a GOOD DEAL! I have often heard a potential buyer make this statement. And let’s face it, who doesn’t want a good deal? A “good deal” can mean different things depending on the goals and needs of the buyer. Part of my job is finding out what those goals and needs are.  For today let’s talk about a real estate investor.

For example, if you are a real estate investor looking to buy a home in Lancaster County to fix up and resell, your requirements for a good deal will be different. You will need to buy a home at a price that will allow you room to make a profit after putting money into the home for improvements and reselling it rather quickly. Most professional investors are in a position to look at a property and make a VERY quick decision. They can usually make an offer without any contingencies such as needing to sell a home in order to be able to purchase the investment home. They can often make the offers cash, as is, with a very quick settlement. This allows them to offer the sellers the best possible terms and improves the chances of the investor buyer to purchase the property at the best price possible. This type of real estate buyer is not looking at the home thinking about if the master bedroom will be big enough or if the home is in the right location for his or her commute to work or if they like the layout of the kitchen. This buyer is looking at the numbers. Does this make sense and can they make the needed profit. So, the consideration for a true real estate that is looking for a good deal or a well priced Lancaster Home because they are an investor who is buying to resell is very different.

How about someone that wants to buy a home to rent out to help them build long term wealth or have monthly cash flow? Well that buyer will have very different requirements than the fix and flip buyer. Also, the home that's a "good deal" for that buyer-investor may be very different, because that buyers needs is different, than what the first buyer needed in a good deal.  More to come in my future posts!