Fritz Pfister

Wow, what a week in Springfield. I’m guessing most home sellers are feeling like the guy on the ground in the old Dirty Harry movie, with the market saying to the seller, feel lucky do ya? Well do Ya?

Following a down June with home sales off by 21%, the final numbers are in for July, which you always hear first on Let’s Talk Real Estate, weeks before any where else. July rebounded with closed home sales down by only 21, or by 5.3%, however home listings going under contract fell by 83, or by 17.8% in July heading into August.

Through the first seven months of 2008 compared to last year closed home sales are down by 337 or by 13.7%, Sales pending are down by 430, or by an equal 13.7%. Although the number of new listings is also down 338, or by 8%, the inventory remains the highest on record due to falling demand.

Does this make you feel lucky Mr. and Mrs. Home seller? The 2131 closed home sales represent 39% of homes listed in the CAAR MLS in 2008, and August has stumbled out of the gate with closed sales down 30% and sale pendings down 52% compared to the same period last year. This of course is subject to change. We hope.

To make matters more challenging, due to the credit crisis resulting in record numbers of foreclosures, and short sales, causing major losses at the lending institutions, it is now the most difficult to close a sale in my 21 plus year career as a full time Realtor.

Why? Lending rules for buyers have made it harder for home buyers to qualify, and for your home to qualify as collateral for the loan.

Let’s say you’re a home owner that feels lucky because you have an accepted offer. All is good right? You’re feeling lucky, aren’t you?

Here’s some real life examples of Springfield home sellers experiences in 2008.

Our first example. You listed your home for sale and in a few short weeks you accept an offer to purchase from a preapproved buyer. Feeling lucky, aren’t you? Two weeks before closing, following some heated negotiations for repairs on your home you reluctantly had performed, the buyer calls and tells you the loan they had been preapproved for had changed, and the new requirements disqualified them for the loan. Back on the market you go.

Our second example. Your home listed for $142,000, and you accepted a $138,000 offer to purchase. The appraiser didn’t agree valuing the home at $133,000. You reluctantly agree to sell at the lower appraised value, when all of a sudden the underwriter using a computerized market evaluator rejects the appraisal, and adjusts the value even lower to $128,000. You can’t sell at that price because you will need to bring money to closing to sell your home, money you don’t have. The deal does not close, and now you’re back on the market. Feeling lucky are ya?

Our third example. You list your older home at a low market price to reflect some needed work. You are on the market a couple months and accept a purchase contract from a buyer preapproved for an FHA loan. The home appraises fine, however the FHA appraiser asks for all peeling paint to be corrected, and for a plumbing certification. No problem, the buyer’s love the home and offer to do the painting, and you the home seller have some plumbing repairs made so the home could be certified at FHA standards.

Do ya feel lucky do ya? Forty eight hours before closing the FHA underwriter notifies you that because the appraiser noted some bowing in the foundation walls, which has been there since you bought the home in 1987, that a structural engineers report is mandatory.

The FHA buyer can’t afford the structural engineer, so they hire a foundation contractor who states the bowed walls were common and didn’t believe was a significant defect. The FHA underwriter says they will accept the contractor’s opinion, if the contractor will guarantee the foundation. The deal falls apart and there is no closing. Back on the market you go. Feel lucky do ya?

Just a few real life examples of feeling lucky in the Capitol City! You feel lucky to get an offer, when you should reserve that feeling for when you get closed!

This weeks observation is for you in the housing market. This is no time for amateur hour. Buying or selling a home today is as never before. New stricter rules for financing, weak demand, and a record inventory of homes for sale. My advice; buying or selling a home without professional representation may be hazardous to your financial and emotional well being. Don’t do it! Hire a professional.

Should you choose not to follow this advice, all I can tell you is the market will probably treat you like Dirty Harry treats a criminal!

Make it a great week from Fritz and Kristie Pfister and the Pfister Success Team at RE/MAX Professionals. We’ve helped 78 families get lucky this year, as they have closed on the sale or purchase of a home. It would be an honor to serve you during one of the most challenging housing markets in our history. Call 652-7653.