A few months ago, I spoke with a seller who wanted to sell their home and who was interested in my guaranteed sale program.  It had been listed two times previously with other agents and the end result was a house that still hadn’t sold.  While the house was in an upscale surrounding town in the greater Nashua NH area, the difference between what it was last listed for and what the market would accept was just too wide.  Perhaps a previous agent just wanted a listing and came up with an overinflated price to make the seller feel good and get a listing, I don’t know, but somehow the seller had a price that was way above market.   

So, when meeting with a seller who has been previously given bad advice, and twice at that, an agent like myself is faced with a choice.  Do you tell them the truth, that the price is just unrealistic and give them an honest assessment of what they could expect from a sale and what can be done to get as high a realistic price as possible?  Or do you think to yourself, “Well, we’ll just list it at what they want and see if they change their mind as we go along”. 

Well, I decided to take the high road and explain a price that was realistic and showed the seller other sold comparable properties that were similar to their home to explain why the expected sales price would be different.  Some of the sold homes were superior in what they offered, others were inferior.  Looking at the superior and inferior sets of homes would give us a range to figure out where their home would most likely be accepted by the market. 

Of course, when you explain to a seller that the market won’t provide the thousands of dollars that the seller wanted, frequently they have to think about the whole situation, especially if they made plans based on the old price expectation. 

Lo and behold, a few days after meeting with them I noticed a brand new listing on the greater Nashua NH real estate market, or so it seemed.  Funny enough, the price was actually higher on the  new listing sheet than when it was last listed and it didn’t sell. 

At last check the house was still languishing on the market, months after we had initially met. 

From a seller’s perspective this scenario can definitely be confusing.  If they are talking to different Nashua NH real estate agents and getting vastly different pricing numbers, who should they believe?  On one hand, they could be dealing with an agent who is just trying to make a quick buck by turning the house quickly and sacrificing equity.  On the other hand, they could be dealing with an agent who just wants to tell the seller what the seller wants to hear in the hopes that the seller will sign on with them. 

When pricing a home the first thing a seller should do is look at what other properties have sold for that are similar to their home.  If a seller has an agent just tell them a price without any supporting information as to WHY the house should be priced a particular way the seller should seriously consider not hiring that agent.  Secondly, a seller should take a good look at the types of marketing that the Nashua NH real estate agent is going to do.  If all they are going to do is throw the listing in MLS and wait for a buyer to come along and have a very passive approach to finding a buyer, that is another big red flag.  Third, do you get a sense of honesty when speaking with them?  Also, does the agent offer any performance guarantees?

While it may feel good for a seller to list a home for what they need, as opposed to what the market will accept, if you are in a descending market you can actually lose more money in the long run than if you just priced the home correctly from the beginning.  When a seller overprices their home they do a couple things, all bad:

1) Help your competition sell their home.  Frequently when buyers are valuing a home, they will look at other properties and what they are listed for. If they see your home and another similar one but yours is tens of thousands higher, that gives the buyer more justification to not buy your house and instead pursue a different one that they feel offers a better value.  This has happened over and over, especially with all the foreclosure properties that have come onto the greater Nashua NH real estate market.

2) If you are in a descending section of a market, you actually chase the market down.  There have been several sellers who fit into this category over the past 1 – 2 years.  While you could get away with pricing your home at the top end of the comparable range when in an ascending market, if your home is in a descending market then the market drifts down, making your home even more overpriced as time goes on as the market falls further.  In order to get homes sold now you need to look at the range and price it in the middle to the bottom end of the range so that when a buyer looks at your home they say “Wow, that is a great deal on that house”. 

3) If your home is vacant, you prolong carrying the mortgage and paying the utilities on an empty house.  After a couple months on the market those bills can really add up.

Bottom line analysis:  If you are a seller, don’t shoot the messenger for bringing you an honest answer.  It may sound counterintuitive, but sometimes the agent quoting you the highest price really will end up costing you in the long run. 

If you want an honest analysis of what your home might sell for, check out our free over the net home evaluation today.

Andy Benjamin
REMAX Properties I
603-674-5864 (cell – best way to reach)

The Pending Home Sales Report for the month of April of 2008 was released by the National Association of Realtors Monday.  Analysts expected the number to drop by .5% compared to the March of 2008 Pending Home Sales Report, but instead the index shot up by 6.3%, which one would think would give hope to those sellers in the greater Nashua NH real estate market. 

The Pending Homes Sales Report is frequently looked at as a leading indicator in the greater Nashua NH real estate market.  There are three major home sale reports that are released monthly:

• New Home Sales:  As the name implies, how many new home sales were sold that month 
• Existing Home Sales: Same report structure, except how many existing homes were sold 
• Pending Home Sales: Tracks how many homes were put under agreement that month.  This particular report is a useful forecasing tool as before homes close they need to go under agreement.  By looking at this report one can have a more educated guess as to how many homes will sell in the next few months.

Breaking it down by region, the Midwest put in an astounding 13% increase, followed by the West at 8.3%, then by the South at 4.6%.  Unfortunately, the Northeast, of which includes the Nashua NH real estate market, declined -1.9%.  The Northeast has been the hardest hit on this report for the past year.  

What does this mean for home buyers looking in the greater Nashua NH real estate market?  From what I can tell, lower prices coupled with the ability to still purchase homes with no down payment are enticing buyers who were sitting on the fence to come back out into the market.  Sellers who are pricing their homes competitively are selling their homes to these buyers.  Also, banks with expanding foreclosure property inventories are finally getting with the program and pricing those homes to sell.

Andy Benjamin
REMAX Properties I
603-674-5864 (cell – best way to reach)

What a difference a few years makes.  The Hudson NH real estate market, much like the Merrimack NH real estate market and the Nashua NH real estate market have gone through some turbulent times.  The odd part is that not all price bands or developments for that matter react differently to the shift in the real estate market.  Some types of properties have taken only a slight correction in price while others have been hit heavily, many times because of all the foreclosure properties entering the market.

For instance, there is a condo complex called Elmwood Village in Hudson, NH.  One of Elmwood Village’s biggest benefits was that it allowed buyers to get into a townhouse for the price they would have to pay for a garden style condo somewhere else. Also, it was convenient for someone who wanted to work in either Massachusetts or commute up to Manchester or over to Nashua.  Back in 2005, there were more than a few that sold in the $160,000s and there were hardly any foreclosure properties to be found in the complex. 

Unit 202 In Elmwood Village just sold for $100,000 in March. 

If we say that fair market value in 2005 for one of the Elmwood Village townhouses was $160,000 and fair market value today is $100,000, then that means that prices have come down in Elmwood Village a whopping 37.5% in the past three years. 

When property values drop that much, new opportunities arise.  There was a certain segment of the population who couldn’t qualify for a $160,000 mortgage back then but could qualify for a $100,000 mortgage now.  When the prices dip that low a new pool of buyers are unlocked that can own instead of rent.  What is helping this situation now is that buyers can still buy these properties with as little as no money down.

Secondly, one of the byproducts of a market that ascended very quickly was that it frequently created a gap between what the monthly payment would be from owning and what rent you could get from the townhouse.  For instance, if you finance a property at zero down and are paying $2000 a month but it only cost you $1500 a month to rent the townhouse, then you would have a $500 gap between what it would cost to rent and to own (well, it would be less because of the tax benefits of owning).  Either way, it was harder to justify owning than renting because of this gap.

Today, rents haven’t moved all that much but the monthly cost of ownership of some  properties have dropped significantly.  From a monthly payment perspective there is an equilibrium that gets created when the market rent number intersects the monthly mortgage payment number.  If you can rent for $1500 a month and own for $1500 a month, then it really doesn’t make sense to rent any longer, especially when the tax advantages come into play along with not having to deal with a landlord. 

Many of these properties that are driving the cost of home ownership down are distress sales that offer some fantastic deals.    Who knows, you might be able to find that perfect place and have it cost you less each month than you are paying in rent!

Andy Benjamin
REMAX Properties I
603-674-5864 (cell – best way to reach)

The National Association Of Realtors released their existing home sales report for April 2008 yesterday.  As one would expect, the numbers tell the tale of a buyer’s market.  Nationally, existing home sales are down 17.5% versus the same time last year. 

Another important metric to look at in the report is the “months supply of homes”.  This is simply calculated by looking at the rate the market is accepting a particular number of homes and then seeing how long it would take for the market to get rid of all its inventory should someone not put another home on the market.  In 2005, nationally we had a 4.5 month supply of homes.  As of this month’s number, that supply has increased to 11.2 months. 

Interestingly enough, when the numbers are broken down regionally, the northeast is actually doing the best (relatively speaking of course) out of the four regions specified in the report. The northeast’s sales have dropped by 14.7%, better than the Midwest, Southern, and Western regions. 

Average home sale prices still declined as well.  The average home sale price in April of 2007 in the Northeast was $309,500.  This April it came in at 295,000, a 4.7% decrease.

What does this mean for greater Nashua NH real estate area home sellers?  This report doesn’t mean that “nothing is selling”. It means that homes are selling but if you price your home too high there is a very good chance that you will end up chasing the market down if the market continues to descend.  One of the best things that you can do is apply for the guaranteed home sale program, a new program that I have introduced for sellers who need to get their home sold quickly but still preserve their equity. 

For buyers in the greater Nashua NH real estate market, there are several properties on the market that are available, particularly foreclosure and motivated seller properties.  From what I have seen in the marketplace, many banks have finally started to figure out that they can’t sit on all their inventory any longer, hence they have been getting much more aggressive on cutting their prices to get the inventory to move.  Amazingly enough, with all the changes in the mortgage industry, it is still possible to buy a home with no money down.

Andy Benjamin
REMAX Properties I
603-674-5864 (cell – best way to reach)
603-886-9380 x2329

After reading all the stories in the press you would think that it would be impossible to buy with zero down any more in the NH real estate market.  In the past 6 to 12 months several banks themselves have gone out of business and some have left residential lending completely.  Risk tolerance has dropped significantly as banks have been hemhorraging money due to the increase in NH real estate foreclosures. 

Compounding this is the fact that many lenders will flag certain areas of the country as “descending markets”.  For instance, many lenders have flagged Rockingham NH, Hillsborough NH, and Merrimack NH counties as descending markets and therefore will not allow zero percent down financing – period.  Essentially you are required to put at least 5% down to enter the game and then figure out a way to pay your closing costs as well. 

Naturally this sent a shockwave through the first time homebuyer community.  Many, many first time NH homebuyers use zero percent down loan programs to purchase their first home – in fact I would say that at least 75% of my first time homebuyer clients use these programs. 

What is interesting to note is that the NH real estate market is very much like a web.  If you disturb one area of the web, then everything else in the web will feel at least some of the effect. 

For example, let’s say we have a first time buyer looking to buy some Nashua NH real estate.  Even if that buyer can cover the payment but not the down payment, that first time buyer can’t purchase the house.  If that buyer doesn’t purchase the house, then the home seller most likely can’t move into their next home.  And so the domino effect continues.  Any time you have an oversupply of homes, which we already have, and then another event happens that limits the amount of eligible buyers it ends up creating a real estate market “double-whammy”.

So what is the solution?  After doing a ton of research, I was finally able to come up with a way for NH real estate home buyers to buy with zero down that doesn’t do anything crazy like you would see on a late night infomercial.  If you are a buyer looking to purchase a NH home with zero down, request the free information today. 

Andy Benjamin
RE/MAX Properties I
603-674-5864 (cell – best way to reach always)
603-886-9380 x2329

I frequently get asked about how to go about finding foreclosure properties in the NH real estate market. With so many foreclosures happening now there are actually three ways to pursue foreclosure properties in the NH real estate market.

1) Pre-foreclosure: These are people who know they are going to lose their home. If they have equity you may be able to purchase their home at a great price and save them from having to go through with a foreclosure sale. 

Pros: The seller is usually motivated, resulting in a good price.

Cons: Can be a bear if it turns out that you are dealing with a short sale.

2) Foreclosure auction: If the seller couldn’t remedy the situation by selling their home or working out an arrangement with the bank, then the bank can elect to foreclose on the property. Many times the foreclosure auctions are held right at the property.  

The big danger in buying a NH foreclosure at an auction is that many times your access to the house is limited and you literally have to buy from the street. So if there is mold in the attic or water damage, etc, you get to find that out AFTER you own the property.

The other big problem is that many foreclosures happen on properties with negative equity. An unfortunate side effect of the credit boom is that many homeowners used their homes as big ATMs and refinanced their homes to the point that the mortgage(s) were higher than what the property was worth. When that happens it is essentially pointless to bid because it doesn’t make sense to bid higher than what the bank is owed against the property, not to mention all the other liens that may be placed against the property like tax liens that would need to be cleared.

Pros: Slight chance you can get a property with equity in it.

Cons: Major risk involved as an inspection of the property is not usually possible as well as other liens that you might not know about would need to be cleared.

3) REO (or real estate owned): This is when the bank “wins” at an auction and now takes possession of the property and it enters their portfolio of what are called “non performing assets”. The nice part about purchasing at this point is that the bank has already taken the loss on the property, you have the ability to do inspections and do other due diligence on the property without the high pressure situation of an auction.

Pros: Since the bank owns the property, they may be more motivated to get it off their books, resulting in a better sale price for you as a buyer. Also, you have the chance to inspect the property and back out should the property have issues that the seller doesn’t want to fix. The seller also will get rid of any liens against the property prior to conveying the property to you.

Cons: You may find yourself in a multiple offer situation if the bank really is trying to unload the property. 

My experience with the foreclosure process has shown that options 1 and 3 to be the best way to purchase a foreclosure. Option 2 is not usually viable as great deals can be had without the associated large risk involved in the auction itself.

There are several foreclosure properties available in the area.  Sign up for the free foreclosure service now and find out about the best priced properties in the NH real estate market. 

Andy Benjamin
RE/MAX Properties I
603-674-5864 (cell - best way to reach)

I always like coming across properties like this.  It’s a move in condition townhouse complete with brand new carpeting.  It’s vacant and a quick close is possible.  The townhouse offers 2 bedrooms and 1.5 baths. A neutral color scheme is perfect for customizing to the new owner’s tastes.  Even better, the washer and dryer are included and located on the first floor – no more trips to the basement to do laundry!

The large back deck overlooks a wooded area behind the townhouse.  Plenty of storage in large unfinished storage room downstairs plus a finished bonus downstairs family room.  The first floor livingroom has a great fireplace for enjoying those winter evenings.

The condo fee includes cable, water sewer, indoor outdoor pools, tennis courts, and club house!    

Even with the changes in the mortgage industry, no money down programs are still available to qualified buyers.  These loans are changing on a daily basis so inquire today as many lenders are scaling back these loan programs or dropping them altogether.  Don’t wait! 

If you don’t feel like this is the right property for you, find out about foreclosures in the area. 

Andy Benjamin

RE MAX Properties

603-674-5864 (cell – best way to reach)

This morning the National Association of Realtors released their monthly existing home sales report. 

October’s existing home sales were down 1.2% to 4.97 million homes compared to September’s 5.03 million home sales.

While the existing home sales number for the nation was down 1.3%, regionally the numbers did deviate.  The west took the brunt of the reduction with that region coming in down 4.4% with the Midwest coming in down 1.7%.  Both the South and the Northeast actually held the line at breakeven, good news for sellers in the greater Nashua NH real estate marketplace implying a potential recovery. 

Comparing October 2007’s numbers to October 2006, we still can see that the market is having some difficulty.  Nationally existing home sales are down 20.7% compared to the same time last year.  When looking at the Northeast only, existing home sales are down 16.9%. 

Part of the correction could be rooted in the amount of distress sales that are being absorbed by the market.

Sellers can view this information as just underscoring the importance of making sure that when you want to sell, to price your home in accordance with what the market will support.  Many sellers who didn’t keep track of the market and stuck to old pricing models found themselves chasing the market as home prices slid.   Also, there are some great tips on what to do to get your home sold for the most amount of money, even in a buyer’s market. 

Andy Benjamin
RE/MAX Properties
603-674-5864 (cell - best way to reach)

You have probably heard the term “short sale”, maybe in relation to NH foreclosure properties.   A short sale is one of the alternatives to foreclosure to which a seller can turn when the seller is unable to continue to pay for their home. 

If a seller finds themselves “upside down” in their loan, i.e. they owe more against the property than it is worth, they can try and sell the property to a buyer and then go back to the bank and see if the bank will forgive the difference between what is owed and what the property will sell for.  Basically the argument to the bank is that they will take less of a financial loss if they sell it to a buyer on the open market as opposed to going through the process of hiring an attorney to foreclose on the home and then trying to dispose of the property at auction. Many times the property ends up back in their possession at which time they have to try and sell the property to recoup their loss.  This doesn’t happen instantaneously; sometimes it takes the bank months to get the property back on the market, all the time the bank has to pay the taxes, to insure it, to winterize it if necessary, etc.

Sellers prefer the short option when faced with an impending foreclosure because they don’t have a foreclosure show up on their credit report when they do a short sale.  Banks vary as to how they report a short sale to the credit bureaus.  Sometimes if they are lucky they may just see it as an account that is closed, other times they may report it as closed with a deficiency.  The net effect is that however they report it, it is usually better than a foreclosure.

Buyers can sometimes negotiate good deals with banks in a short sale so there is a decent chance they can get a good price on a home.   

It’s “win”/ “win”/ “win”, or maybe more like “less loss”/ “less loss”/ “win”.  So if it clearly makes sense to do this, why don’t more banks go this route instead of foreclosing on people?

My theory:  Because some bank decision-makers don’t weigh all the facts.

Some banks will simply refuse to even entertain this idea, electing to go straight to the foreclosure route and not return your calls in trying to come up with an alternative solution. They can assume that they will instead take less of a loss going the foreclosure route than if they accept the short.  Incidentally, every time I have been involved in a transaction where the bank rejected a short they ended up taking a larger loss at the auction. 

Part of this estrangement from market realities is rooted in lack of understanding of what the real estate market can be like in a particular price range and area. Also, banks can have no understanding as to what the real estate experts on the ground are seeing who are working with buyers and sellers each day in a volatile market.  Many times these decision makers are in another state in some office and don’t really know how the greater Nashua NH real estate market is reacting to a particular property. 

The bigger joke here is that banks can take a bad situation (the homeowner not paying) and make it a worse situation (homeowner not paying and then rejecting a short to foreclose instead).   If publicly traded banks have an interest in increasing shareholder value you have to wonder how taking bigger losses is in their shareholders’ best interest. 

The glimmer of light in this is the banks who do understand that the longer their “Non Performing Asset” stays in their portfolio the more money it costs them in the long run.  There are some of them so if you are in a situation where a short is an option, give me a call and I’ll see what I can do to help.  With any luck your lender will be one of the few that understand this.  As foreclosures rise, I wouldn’t be surprised to see more banks be open to the idea of a short sale and recognize it is in everyone’s best interest when that is the only other choice for avoiding a foreclosure.

Andy Benjamin
RE/MAX Properties
Licensed in NH and MA
603-674-5864 (cell – best way to reach)

The Federal Open Market Committee decided to cut the Federal Funds Rate by .25% today.  The announcement was expected, the only real question was whether the cut would be more than .25%. 

While this move is welcomed for buyers and sellers in the greater Nashua NH real estate market, the problem is that it won’t do a lot to change the current credit crunch that is going on in the mortgage industry today and have LITTLE effect on mortgage interest rates.  A lot of consumers make the mistake of thinking that their mortgage rates are directly tied to the Federal Funds Rate.  They aren’t.  What the Fed Funds Rates does do is make the rate at which banks lend money overnight to each other lower.  It will have an indirect effect as some credit cards and equity lines are related to this rate.

The bigger issue that is still out on Wall Street is the lack of liquidity for mortgage backed securities.  If you have ever heard the term “Fannie Mae” or “Freddie Mac”, then you have heard of two entities that buy mortgages on the secondary market.  Without going into too much detail, many times when you get a mortgage the lender doesn’t actually hold the loan themselves.  The lender turns around and then resells that loan on the secondary market.  It’s basically like a stock market, but instead of stocks they trade mortgages and two major buyers on that market are Fannie Mae and Freddie Mac.

The nice thing about Fannie Mae and Freddie Mac is that the lender always knows there will be a buyer for that “paper”, “paper” being lender parlance for “mortgage”.  Incidentially, if you ever heard of the old 20% down rule for mortgages that comes from rules on the secondary market.  The max mortgage that they would buy would be for 80% of the value of the property behind the mortgage.  So, the loan would be for 80% of the value and the buyer would have to foot the other 20%.  There was an exception to this 20% down rule.  This exception being if the buyer put less than 20% down they would have to buy private mortgage insurance to protect against the case of a default.   To make the example easier, let’s just assume that you need 20% down to play on the secondary market with these two buyers of mortgages.

It wasn’t too long that banks figured out that they were leaving money on the table by not allowing people who could afford the monthly payment but could not afford the 20% down requirement. 

Enter Wall Street. 

Banks figured out that they could take this segment of the homebuyer population and lend to them, but instead of reselling those mortgages on the secondary market which had more restrictive qualifications that the homebuyers had to have, they would classify these other less qualified homebuyer loans as “subprime” and package them up into what are called “mortgage backed securities” and resell them instead to investors on Wall Street.  Since the qualifications were more relaxed on these loans they were more risky to the investors.  Because they were more risky, the interest rates were normally higher on these loans, and investors bought them looking for a better return on investment. 

Everything works in this system as long as

1)     the real estate market keeps going up

2)     people keep paying their mortgages

Well, earlier in the year the crack in the dam started to show in the subprime market.  The real estate market started coming back down and subprime homebuyer defaults and foreclosures started to accelerate.  The Wall Street buyers picked up on what was going on and essentially disappeared, refusing to buy anymore en masse.  When that happened a lot of big name lenders got caught holding a bunch of subprime paper that they didn’t want and couldn’t get rid of anymore.  This is one of the major reasons why you hear about some big name banks either dropping their mortgage divisions or posting huge losses because of their exposure to these types of loans. 

So what does this mean for greater Nashua NH real estate buyers?  The good news is if you have good credit and some money to put down, you can capitalize on the better home sale prices currently on the market.  Even if you don’t have money to put down, while many no money down programs have been eliminated, there are still some lenders out there that have access to these programs.   This is where picking the right lender is absolutely crucial.

What does this mean for greater Nashua NH real estate sellers?  Scrutinizing your potential buyer’s financing is very important.  Also, it is critical to understand that because of mortgage changes of late, less buyers can get preapproved now than as little as 1 year ago.  Whenever you have less buyers, that puts more pressure on your price, so it is crucial to understand why a home sells and do whatever you can to pick the right agent and do the easy tips to fix up your home to get top dollar. 

Andy Benjamin

RE/MAX Properties

603-674-5864 (cell – best way to reach)