?Hey, Miss Realtor . . .

My House Ain't Sellin!? Here's Why . . . And What You Can Do About It If You Need To Sell Your Home

No, it's not your real estate agent's fault that your home hasn't sold yet, at least not because of most agents. There are forces greater than the marketing and sales blunders of inept agents that are causing homes to linger on the market much longer than we have seen in a long, long time. If it makes you feel any better, it's not just your home that hasn't sold. You have a lot of company out there. And that, by the way, is just one reason for this mess you are in if you are a home seller. As homes stay on the market longer, new homes coming up for sale increase the total number of homes already available because not as many homes are selling as buyers are buying.

Can you see where this is going? So, you may ask, why is all this happening? What happened to the rosy predictions of just a few months ago by our revered soothsayers about a come-back of the housing market after last year's precipitous decline in housing values and sales? Great questions. There's one simple answer ? fewer buyers. That's all. There aren't as many buyers as there were in previous years, but the rate of homes coming on the market continues to edge up (although we are seeing a slight scaling back now). Normally a market like this, however, does correct itself over time as it goes through cycles and the real estate gurus figured on increasing numbers of buyers entering the market as summer approached. It hasn't happened yet. There is one other thing that the market prognosticators didn't figure on, something that looms menacingly on the horizon, something that is imminent and approaching, something that has yet to hit us with full force ? the subprime lending fiasco that you have undoubtedly heard about.

This is the fly in the ointment that will spoil a correction in the real estate market in the short term, at least, and exacerbate the home seller's problems. Because of 'creative' lending practices by our nation's mortgage brokers and other lending institutions and, in some cases, down right fraud, millions of Americans are facing the threat of foreclosure on their homes and filings have already surpassed previous levels. This trend can be tracked by the record number of home owners who are behind in their mortgage payments. As they get further behind each month, foreclosure often ensues. The root of the problem is that lenders and borrowers planned on refinancing these fancy loans, which have low monthly payments, before the time came for the mortgage to adjust to higher monthly payments as in the case of adjustable rate mortgages. A large number of these mortgages are due to adjust this year through next and a scramble to refinance is gaining momentum. Normally, this is all well and good. Refinancing allowed people to keep their monthly mortgage payment at a manageable amount and life went happily on. Now is where it gets interesting and a bit scary.

Subprime mortgage lenders, those who lend to people with shaky credit and questionable income, were a bit overly aggressive in the numbers and amount of the mortgage they issued to people whose credit was not always verified and, as it turns out, not qualified to receive the amount offered. As a result, these people purchased homes above their means and began to crumble, after just a few years, from the burden of mortgage payments that they could no longer support and should not have received in the first place. The next thing you know, these people get behind in their mortgage payments, then the bank forecloses on the property and puts it up for sale, and you have another home on the market that would not have been for sale under normal circumstances.

This is happening more and more now as the whole subprime dilemma begins to unfold. This is what you are hearing and reading about. You'd think that was bad enough and we should all be biting our fingernails, but nooo. To make matters worse, several major subprime lenders have sought bankruptcy protection or were taken over, the federal government has gotten involved (boy, is that a monkey wrench in the works), the major housing lenders have tightened lending parameters, and banks are requiring more documentation and financial substantiation. This means that many of the people who had counted on refinancing this year or next cannot now get mortgages because their current credit situation no longer qualifies them with the more stringent guidelines set by the lenders.

These are all potential foreclosures for home owners and it locks out a certain group of home buyers who don't qualify. How all this will pan out is anyone's guess and some parts of the country will be affected less than others and the overall impact may not be catastrophic down here in the neighborhoods. We do see, however, longer days on market, a small buyer pool, and a slight increase in the number of foreclosures and there is reason for concern and we are watching the signs. The tip of the iceberg is in view. We don't know what lies underneath. We'll find out soon. What can you do to sell your house in this capricious market? You won't like it, but take it from me here in the trenches, if you want to sell your house you have to lower your price until you get an offer. It's called 'the market?. It's not called ?It's my house and I can sell it for whatever I want?. Buyers will only pay for what they want and not what you happen to have that you think adds value to your property. You can't charge more for your home because you did something that you thought added value. If it is of no value to the buyer, neither is the price of your home when he or she can buy a similar house for less and they have an almost unlimited supply to choose from. It all depends upon how long you can hang on.

One thing is clear, people are buying on price now. Your tray ceilings and stainless steel appliances can't compete with a house that has a better price, but without these and similar features. The real estate market waters are choppy for home sellers and the brewing dark clouds of the impending subprime storm are beginning to whip up the whitecaps. We will have to wait and see how big this storm will get. I think that I will need to get new rain gear. There is good news ? for home buyers, at least the ones with a good credit score. Not so good for buyers with a mediocre score. They are part of the shrinking buyer pool affected by the more stringent lending rules. Since nothing is certain, however, all this speculation on the effects of the subprime woes may result in just a minor hiccup in the whole scheme of things. Let's hope so. But I?m keeping my rain coat handy.

Ciao for now,
Bernie Rosellen, Your Agent In The Field

Please keep in mind that my statements above are based on my personal experiences and observations around the neighborhoods of central Virginia. Some statements may not reflect fully the situations, regulations and laws of other states nor apply in all areas, so please see what applies in your state (my disclaimer to keep me out of Realtor Jail).

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