Contrary to what you have read or heard, the time to buy a new home or condo is now.

First, let’s take a look at the local market for the last 5 years:

West Chester average sale price for single family homes and condos (data obtained from the Greater Cincinnati MLS):

2003 $197,122
2004 $201,796
2005 $211,820
2006 $219,908
2007 $227,982 (1/1/07-12/1/07)

Liberty Township average sale price for single family homes and condos (data obtained from the Greater Cincinnati MLS):

2003 $238,373
2004 $247,624
2005 $265,831
2006 $274,207
2007 $268,266 (1/1/07-12/1/07)

Appreciation on property in West Chester is 15.65% from 2003 to 2007 and 12.54% for the same period in Liberty Township. Utilizing the same data the newspapers or tv blurbs on real estate- the headline would be “Housing Prices Crashing” News has always followed the “If It Bleeds-It Leads” mentality and savvy buyers are ignoring the headlines to grab up great deals.

Currently there are 480 single family homes and condos for sale in West Chester and 385 in Liberty Township so as a savvy buyer you need to find the right house and begin to ask questions.

• How many days on the market?
• Where are the sellers going?
• What are homes actually selling for in this neighborhood or area?
• Mortgage Smarts

How many days on the market-not only the current listing- but total days on market. Your agent is able to print a property history from the greater Cincinnati MLS. A long time on the market may indicate an unwillingness to negotiate or it may reflect overpricing early in the process and the owners are finally in step with the market. Homes that have been on the market for just a few days may not be quite as negotiable as ones on the market for several months.

Where are the sellers going- motivated sellers are more willing to negotiate. A seller who has already closed on their next property, carrying two mortgages should be more motivated than a seller who is waiting to sell before purchasing the next property.

Many buyers make the mistake of grossly under bidding for a home (low low ball) and ultimately pay more or lose the property because the home owner was insulted. Your agent will provide you with a CMA (Competitive Market Analysis) of the neighborhood. The CMA should include current listing, sold pendings (sold not closed), closed and expired listings. A good CMA should contain current data- not sales from more than 6 months. Given the data- is your offer within the range for the neighborhood? For example homes are selling between $225,000 - $260,000 - as the seller how would you respond to an offer of $175,000?

Finally, make sure you are dealing with a reputable lender and you have a handle on mortgage rates, points and closing costs. The best buyer has their loan approved, pending a purchase contract and appraisal. The buyer with “loan in hand” glitters in the eyes of sellers. If you have not secured a loan, the minimum you need is a letter from a lender clarifying your status as a borrower. The more detailed (credit file reviewed, money for the down payment and closing) the lender’s letter the better you look to the sellers.

Do your homework! Select the right home, write a balanced purchase contract and enjoy rising property values in West Chester or Liberty Township. If you need my assistance, I would be honored to assist you just call or send an email.

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Clients and friends are calling and emailing me looking for “insider information” on foreclosed or short sale properties.  In Ohio, the local Sheriff’s department handles the foreclosure auctions.  As a buyer, you must be willing to attend a sheriff’s auction to bid on a foreclosed property then wait 30 days for the owner to either come up with the needed money to repurchase their home or vacate. 

Prior to the foreclosure process, some sellers opt to work with their lender on what is called “Short Sale”.  Short Sales are sales which net the lender(s) less than the full mortgage amount.  As a buyer, you may get a great deal on a property- but you must have patience with the process and the extended time short sales require between contract acceptance and the actual closing. Buyers possessing knowledge of the “Short Sale” process will have greater luck negotiating with distressed sellers.

The “short sale” process begins when the seller is experiencing difficulty making mortgage payments and the potential sale price is less than the mortgage amount. The seller or their agent approaches the lender to determine if they are willing to settle for less -if and when a purchase contract is signed.

The lender’s “loan mitigation” department reviews the seller’s request and paperwork and agrees to review (this is not a guarantee of approval) a written purchase contract from a qualified buyer.  As the lender, imagine $250,000 mortgage due with a probable sale price of $220,000.  After property taxes, $5,000 and sales expenses estimated at $15,400 (total expenses = $20, 400+loss on sale of $30,000) the lender has to be willing to settle for $50,400 less than what is owed on the mortgage- or “short” $50,400.  Not all lenders are willing to go this route.

As the purchaser, you execute a normal purchase contract which will have an addendum stating something to the effect “contingent upon seller’s lending approving short sale payoff.”  You and the seller agree to all the terms and the contract is signed by all.  Unfortunately the lender’s approval does not come in a matter of hours or days- it may be weeks or months.  

Be patient!  The average time for the lender to review and respond to contract may run as long as 12 weeks.  Once the lender has approved the short sale contract, you need to get your inspections completed and be ready to close- usually within a two week time frame.

This scenario is based on the homeowner only having one lender negotiation to handle; the time frames could change when multiple lenders are involved.  There is definitely some well priced properties available in today’s market as long as you are not short sighted about the complexities of the short sale process.

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