Real Estate Information Archive

Often in todays economy, Realtors hear the refrain from Sellers:  "But I owe more than my house is worth.  Particularly when you include Realtor fees, and closing cost, I cannot afford to sell".  There is a whole host of reasons sellers find themselves in such a position:

• They paid too much for their house, and bought it at the top of the market
• They have not owned it long enough to build equity, or perhaps they had an Adjustable Rate or Interest only Mortgage.
• Another reason may be they had a zero down mortgage, and financed all the closing cost into the loan, and as such have not built enough equity.
• Some Seller took out a second loan to remodel or pay college tuition for a child
• Others may unfortunately be going through an expensive divorce that is eating away at community assets

The list of reasons are endless.  Many such sellers consider drastic steps, such as turning the keys back over to the Bank, or perhaps filing for bankrupt.  Either of which will trash the credit of the seller for years to come.

A typical Sellers situation may look something like this:  The Seller purchased the property three years ago at the top of the market for $300,000, financing in their loan origination fee, and other closing cost.  Two years ago the eldest child went to college, and they refinanced, pulling out $30,000 equity to pay college tuition.  Now there has been a downturn in the market, and because they had an Adjustiable Rate Mortgage, their loan payment has increased by $500 a month.  They can no longer make ends meet, and have to sell.  Their current mortgage payoff is $330,000, however the Realtor tells them the market value of their home is only $300,000.  Additionally it will cost them about $25,000 to sell their property.  Anyway you slice it, these Sellers are upside down by about $55,000.  They are considering filing bankrupty, or simply turning the keys back into the bank.

Such sellers may qualify for a little know secret banks do not readily advertise, it is refered to in the Real Estate community as the "Short Sale Process".  Basically the bank does not want to become the owner of your house, they are not in the business of owning real estate holdings, they are in the money lending.  Therefore the bank may be willing to forgive the seller of the difference, and allow the property to be sold for current market value.  Often times in is more cost effective for the Bank to cut their losses and move on, rather than go through the foreclosure process.

The "Short Sell Process" requires a Realtor who is familiar with the process, and can help the Seller navigate through this complicate process.  Further the Seller and the Property both need to qualify.  If a seller has a 2nd or 3rd note on the property, it becomes much more difficult to get all the variouse lenders to agree to participate.

If you would like more information on the Short Sale Process, please feel free to contact us.

Many investors and buyers wonder if Real Estate is still a good investment.  Will I continue to get a good appreciation rate.  For about six years, beginning in about 2001, real estate in many areas of the country enjoyed double digit appreciation rates.  New terms entered our vocabulary, like "Fip this House".  People would purchase a house, fix it up a bit, and then sell it a month or two later for a tidy profit.  In places like Las Vegas, out of state buyers would purchase a new house under construction from a Builder.  Six months later, as the house was being completed, they would list it with a Realtor, and sell it for sometimes as much as 15 to 20% more than they paid for it.  If they purchased  a $500,000 house, they usually gave the builder a 10% deposit ($50,000), and in six months, the house was worth 20% more than the purchase price.  When they sold it, it sold for $600,000, profit of $100,000.  This was flipping on steroids, and too much of this activity has resulted in over building, and the decline of the market in such geographic locations.

Alaska investors do not have to worry about the market crashing here as in the above senerio.  One of the reasons was the "Flipping Phenomone" never really took root here.  Sure there were a few investors who purchased and fixed up houses and sold them, this has always been the case.  Yet buyers were not going into new subdivisions, entering into contracts with builders, and then selling the house just as it was being completed.    Market values here in the Anchorage and Mat-Su area are still appreciating at about 3% per year; a good healthy appreciation rate.  A recent national study ranked Alaska as one of the lowest places in the nation where a decline in the housing market was probable.  In fact there was only a 2% chance market values in Alaska would decline.  Said another way, there is a 98% chance market values will continue to appreciate.

 Eighteen percent of FSBO sellers indicated that preparing the home for sale was the most difficult task when selling without the assistance of an agent, followed closely by understanding and performing paperwork (16 percent) and selling within their desired time frame (15 percent).

As for profit — after all is said and done, FSBOs don’t always come out with fatter wallets. Again, the numbers tell the truth.

Homes sold with the help of a real estate professional in 2006 sold on average for 32 percent more than FSBO sales. The median FSBO selling price in 2006 was $187,200, compared with $247,000 for agent-assisted transactions.

If you are considering building a new home in the Anchorage or Mat-Su Valley, it's a good time to start.  Les Bailey and Associates is well versed in the new construction process and will help you get into the home of your dreams within your budget. 

If you currently have a home you need to sell before you can build your new home, don't worry, Les Bailey and Associates has a "Guaranteed Purchase Program" to ensure you get into your new construction home.  If you are interested in this program, you can contact Les Bailey and Associates on the web at www.LesBaileyandAssociates.com or www.RealEstateInAk.com. 

From the time you decide to start a new construction home and enter into a Purchase and Sale Agreement, you can expect approximately 140 to 180 days for completion of your new home.  During this time, you won't make a single mortgage payment on your new home because the Builder assumes all interest in your lot and construction loan during the construction process.  That essentially buys you approximately 6 months to get your current home sold if you need to do so.  Keep in mind, it takes more than only placing a For Sale sign in your yard to get your home sold now.  It is crucial you list your home with a top producing realtor with an agressive marketing system.  Don't just list with any realtor because most realtors can't afford to agressively market your home.  Make sure you do your homework and list with a realtor with a proven marketing system. 

If you need to buy or sell a home, why would you use a realtor without a proven track record or one that is not successful?  It makes no sense to me.  The average realtor sells only between 8 to 12 homes a year, that's not very many.  Choose a realtor, preferably a real estate team, that sells between 80 to 100 homes a year at least. 

You might think a top producing realtors are too busy to deal with you on an individual basis.  That is why a proven realtor implements a team approach to the real estate industry.  If you need attention, there is always someone available to tend to your individual needs. 

Plus, top producing realtors have the income to agressively market your property.  Realtors that do a lot of business year in and year out, breed activity.  The more they can market, the more activity naturally comes.  You don't want to choose a realtor that can't afford to maintain a heavy web presence and other marketing avenues and you certainly don't want a realtor that can only afford to submit a line ad in the local newspaper. 

Please be "wise" when interviewing your next realtor.  If you want success and knowledge, choose a top producer in the industry.

With all the "doom and gloom" portrayed in the media regarding the real estate market in the nation, it is no wonder why people are weary and skeptic about buying or selling a home at the moment. The widespread "doom and gloom" is over exagerrated and certainly does not affect the Alaskan real estate market like other markets in the Lower 48. The doom and gloom is a reality however in some markets that enjoyed super high appreciation rates, forcing first-time homebuyers into "creative" financing such as Adjustable Rate Mortgages, etc.  The reality is there really isn't a "doom and gloom" real estate market.  The market hasn't crashed, it's just corrected itself.  Property values are still appreciating, just not at extreme highs.  In Alaska, we have enjoyed continued, steady appreciation on real estate and our economy remains strong and is projected to grow over the next decade. With such a strong economy and healthy appreciation on real estate, why wouldn't you buy a home in Alaska?

In past times, prospective buyers were loyal to their realtors, but that is not the case so much anymore.  Nowadays, with the advent of the internet, buyers start their home search on the internet and when they want to see a property, they call up the listing realtor and have them show the property.  They do this for each and every property they want to see.  This is not a wise and productive use of your time when searching for a home.  It is better to choose one realtor you feel comfortable with and stick with him or her.  If you are loyal to one realtor, that realtor will get to know your needs and wants more intimately and will work hard to get you into the home you desire at the best price available.

Better decisions are made when they are based on good financial information. Knowing there are alternatives helps to determine the right choices.

Estimated Purchase Costs – It is important to know how much you’ll need to buy a home not only for the down payment but for all of the fees that are charged in connection with getting the loan and conveying title.

Mortgage Qualification –Discover what size mortgage you can qualify for using the same guidelines that a mortgage company uses.

80-10-10 – This report will show you the savings achieved by eliminating Private Mortgage Insurance.  Not only will you save money in the initial purchase costs but also in the monthly payment.

Alternate Financing Plans – Choices will help you to make a better decision as to how to finance your new home.  You deserve to know what options are available and that is exactly what you’ll get.

Mortgage Accelerator – Discover the advantage of adding an additional amount of principal to your fixed rate mortgage on a regular basis to shorten the term and save tens of thousands of dollars in interest.