Chris & Karen Highland

Have you been wondering when the Frederick real estate market would hit bottom, or what we call timing the market? While none of us have a crystal ball, we follow the market statistics closely, and we're seeing a shift here in Frederick.

The end of the summer saw huge jumps in sales numbers for many areas of the country. Southern California saw a 65% increase in sales this September over last Sept., and 51% of those sales were foreclosed properties. This is one time when I hope the saying is true: The trends start in California, then spread to the rest of us.

I'm glad to say that Frederick experienced a boost in sales at the end of the summer in several Frederick Communities, including New Market, Walkersville, Middletown, (sales were up a whopping 172%!) Brunswick, and 2 zip codes of Frederick City. County-wide, sales were up 15%.

The not-so-good news for many homeowners is that prices have fallen, 15% countywide, and as much as 25% in some neighborhoods, since this time last year. Of course, that explains the jump in sales. And it tells me that buyers decided the prices were good enough for them to jump off the fence and purchase one of these great deals.

Now, we're hearing about the lack of consumer confidence, the lack of credit, and lots of other doom and gloom news, but I'm not so sure that buyers are, well, buying it. We have had recent situations concerning foreclosed homes, with multiple offers, one with 3- and one with 5 offers. We had one buyer who took too much time and the home was under contract by the time she'd decided. We're seeing REOs go for 10 to 20% below the present market, thereby insulating these buyers against the possible further 10%fall in price that some are expecting next year. That says something to me. It says there's been a shift.

We're hearing something else too. Banks want to be rid of their REO properties in 90 days. They are taking either one of two main strategies: they list the property at market value, and systematically lower the prices until they're snatched up. Or, they list the property at 20% to 30 % below market and immediately get multiple offers, creating a bidding war that nets them somewhere between 10 to 20% below market. I believe the banks want them gone. They want to cut their losses and move on.

So, buyers, this may be your golden few months; keep your eyes open, get your prequal letters in hand, and be ready to jump when the price is irrisistable. The banks have stated that there are 'optimum' criteria that they like to see, buyers with as much cash as possible (more of a sure thing for them) and buyers with strong financing. They tend to smile on quick settlement dates, too.

Call us to see some very sweet deals: 301-831-9947

The Highland Real Estate Group
Chris & Karen Highland * Frederick County MD Real Estate Agents
Specializing in Frederick County Real Estate
301-831-9947
Real Estate Teams, LLC
isell4u2@msn.com
Pictures of Frederick

There are many foreclosures on the market in Frederick County right now, and every day we see more REO's listed. We're seeing some incredible deals. I've been involved in 6 offers in the last 3 weeks and in all 6 there were competing offers.

Foreclosures in the Frederick real estate market are the trendsetters in two ways:
1. REO properties establish the low point in the market. For the last couple of years the low point has been moving steadily downward, but now we're seeing that change. Having multiple offers establishes a fixed low point. You can't go lower when you have competing offers, ending in either the list price or above list price.

2. REO properties will get sold before most homeowners will be able to sell their homes. Simply because of the price point.

There are two general ways that a bank goes about selling their REO's:
1. The bank starts with a BPO, a brokers price opinion, which is based on the comparative market. They list the property at that price, then systematically lower the price over 90 days until it sells.

2. The bank lists the property about 20%, and we're seeing even 30%, below market, and then they usually get several offers within 1 or 2 weeks, creating a bidding war. Our experience is that the buyer who offers more than list price will get the prize. Unlike a lot of homeowners, who price their home high, leaving room for "negotiation", then watch their home languish on the market, riding the market down, banks are not wasting time.

The key to successfully purchasing an REO property: Banks are leary of buyers who can't make it to settlement, so they are vetting their financing (like only a bank can do), requiring the buyer to be prequalified by their own lender. The buyer is free to get the lender of their choice, they just have to prove their ability through the banks in-house financer. Here is the wording we received from Chase that spells out what they are looking for:

"The higher the price & down payment the more attractive your offer becomes. The bank will accept escalation clauses. The earlier the closing date, the more attractive the offer is. The settlement date must be no later than 45 days from contract ratification date. Do not use the 28, 29, 30, or 31st as your closing day."

If you're looking for one of these deals in the Frederick real estate market, then be ready to act quickly when you find one. This is truly competition. Have as much money as you can for a down-payment, have all you financial documents ready to submit to the in-house lender, and make sure your agent is experienced with the REO market in Frederick.

Call us to see some great deals in the Frederick county Real Estate market: 301-831-9947

The Highland Real Estate Group
Chris & Karen Highland
Frederick County MD Real Estate Agents
Specializing in Frederick County Real Estate
301-831-9947
Real Estate Teams, LLC
isell4u2@msn.com
Pictures of Frederick