Dane County home and condo sales higher in January

Dane County home and condo sales recorded via the South Central Wisconsin MLS totaled 182 in January, up 29% from last January's 141 sales. The median home and condo price was lower by 6.4%.

We are seeing very robust buyer activity right now. The extended and enhanced tax credit is certainly spurring sales - even during this cold Wisconsin winter. If you have been planning to sell but have been waiting for warmer weather, you may want to reconsider your plan. The weather may be cold but the market is heating up.

You can view our full report on the January home and condo market here. All of our statistics for the 2009 sales year have been updated, too. You will find them on the real estate trends page at www.DaneCountyMarket.com.

Have a great week,

Dan Miller, Realtor, Keller Williams Realty and DaneCountyMarket.com

The buying season is here

We've noticed a large uptick in buyer activity over the last two weeks. Our real estate search tools are receiving a ton of page hits. Our listings are receiving a lot of showings. Our buyers are out in large numbers, viewing properties and making offers. The market feels much warmer than it did at the same time last year.

If you're planning to buy, don't be surprised if other buyers are getting ready to write an offer on the same home as you. Make sure you have your mortgage pre-approval in order, and be prepared to act quickly.

If you're planning to sell, and you haven't listed your home yet, now is a great time to get your home on the market. From our perspective, the buying season has already begun.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Did the market improve in 2009?

Sales of Dane County single family homes (excluding condos) increased in 2009, but did the market for single family homes really improve? To answer this question we turn to one of our favorite statistics - total days on market experience.

For those who want the details, the total days on market experience approximates the time required to sell a home by taking into account the average days on market for listings that sell, the average days on market for listings that expire, and the overall listing success rate for homes in Dane County. In other words the total days on market experience is a measure of the effort required to sell the average Dane County home.

When we look back at the last two years, we see the total days on market experience for the average Dane County home decreased from 258 days in 2008 to 225 days in 2009.

The time required to sell the average Dane County home improved; however, the real story becomes clear when we look at this statistic by price range. Here's how the total days on market experience changed by price range from 2008 to 2009.

Last year was a tale of two markets. Low interest rates and the home buyer tax credit boosted the market in many of the lower price categories, but the market for homes priced at $500,000 and above took a clear hit.

This year several of our higher priced listings have been receiving good showing activity and good offers - thanks in large part to our clients who have embraced proper pricing, home staging, and aggressive marketing that leverages our clients' efforts to make their homes show their best.

In this market a listing's success depends a lot on how well the seller and the agent are able to work together on an aggressive, well-conceived plan. And in the highest price categories, a strong collaboration between client and agent is a requirement, not an option.

Have a good week,

Dan Miller, Keller Williams Realty and http://www.danecountymarket.com/

How the Dane County home and condo markets vary by price range

The market for sellers is most challenging for the homes and condos that are on the high end of the price ladder. And the data for Dane County listing success rates bears that out.

For example, in 2009 the overall listing success rate for Dane County homes was 56%. Homes under $100,000 had a success rate of 71%. Homes over $800,000 had a success rate of 14%.

In the condo market, the overall success rate was 36%. Condos under $100,000 had a success rate of 53%. Condos over $800,000 had a success rate of 9%.

Another way to view the market by price range is to look at how months of inventory vary across the price spectrum. If you take a peek at this data, the pattern is very clear.

Given the data and the realities of the market, pricing and marketing become ultra-critical as you work your way up the price ladder. The cost of not being able to sell a high-end property in a downward trending market is very real.

Remember all of those golf course homes that were worth a million dollars 3 years ago?

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Kathy Quade from House To Home Interiors has just released her new E-book "Showing Well Selling Well" on Lulu.com. In her book Kathy provides some great advice on how you can prepare your home for today's market in some very simple, practical and AFFORDABLE ways.



Kathy stages all of our listings, and does a tremendous job for our clients. She also has a number of useful articles on DaneCountyMarket.com, including Showing Well and Selling Well, Let Your Home Shine, and Enhance Your Curb Appeal.

Kathy's E-book is available for $19.99 and can be ordered here.

Have a good day,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Interest rates headed higher?

Eric Rosengren, chief of the Federal Reserve Bank of Boston, predicts rates will rise between .5% and.75% over the coming months. You can read more in this article from The Hartford Courant.

Rock-bottom interest rates and tax credit incentives won't last forever. If you need to sell, you have a window of opportunity right now. We recommend you consider listing your home in January rather than waiting until spring.

Food for thought.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

More Madison homes sold for below the assessed value in 2009

Our analysis of data from the South Central Wisconsin MLS shows 58% of the Madison homes that sold in 2009 ended up selling for under the 2009 assessed value. This marks the first year during the new millennium that more than 50% of all Madison homes sold for an amount less than the assessment. (Note: this analysis excludes condos, as well as new construction houses that did not reach their full assessment prior to sale).

Here's how the data has trended over the last 10 years.




The trend toward more homes selling for under the assessment is no big surprise. But these stats from 2009 may surprise you:

• Only 40% of all Madison homes sold in 2009 ended up selling for a price that was within $10,000 (plus or minus) of the assessed value.
• Thirty-seven percent of all Madison homes sold for a price that was more than $10,000 under the assessment.
• Twenty-three percent of all Madison homes sold for a price that was more than $10,000 above the assessment.

In other words the majority of all home sales occurred at a price point that was either well above or well below the assessed value.

The data drives a home a point that we have been making for the last several years: It is the market that determines a home's true value, not the city assessor.

For more information, please see our articles Market Value vs Assessed Value and Pricing Your Home. You'll find both on the selling real estate page at DaneCountyMarket.com.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Thinking of selling? Here's how the latest version of the tax credit affects you.

June is typically the highest volume month for closings in our market. In a "normal" year we would recommend putting your home on the market by March 1st. This date ensures your home gets plenty of exposure to all of the buyers that begin to come out of the woodwork in the late winter and early spring.

However, we have the latest version of the home buyer tax credit in place. This version of the tax credit applies to both first-time home buyers and buyers who sell one home to buy another. The trick is the tax credit can only be claimed by buyers who have an accepted offer by April 30th and close by June 30th.

As we saw in the month of November, the tax credit deadline can have a huge impact on the market. Dane County home and condo sales more than doubled last month - due in large part to first-time home buyers rushing in to beat the previous tax credit deadline of November 30th.

It's impossible to predict the future. But it's very possible all of the recent housing stimulus efforts will end up stealing buyer demand from the future - when interest rates are higher and there are no more stimulus programs in place.

So, if you need to sell, and if you have not already listed your home, we strongly suggest you consider listing during the month of January. And while you're at it make sure your home is aggressively marketed and competitively priced. We don't have a crystal ball, but we do know tax credit deadlines have a tremendous impact on the market. The next four months offer a window of opportunity for buyers and sellers alike.

Have a good Sunday,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Video tours are a great idea for some listings

We're starting to use professional home video tours for our listings because the quality of the product offered by Whirligig Online Marketing is excellent. Video tours are a great fit for homes with quality upgrades and professional staging. They give buyers a closer look at what each listing has to offer. Because of this, we're happy to invest in professional tours as part of our marketing plan.

For example, take a look at the video tours for these 3 new listings (click the "video" tab along the top menu).

• 1714 Bellewood Drive, 5 BR/4.5 BA, Waunakee Parade Home - $995,000
• 1407 Blue Ridge Trail, 4 BR/4.5 BA, Waunakee Parade Home - $765,000
• 3317 Westview Lane, 3 BR/2.75 BA, Madison Arbor Hills - $299,000
  

For a list of over 25 marketing ideas, check out our online marketing plan. You can view it here on the how we help you page at DaneCountyMarket.com.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Five Northern Bay Condos up for auction on Saturday, December 12th

Five of the Northern Bay Condos on Castle Rock Lake will be put up for auction by Micoley & Company on Saturday, December 12th, at 11:00 AM. Registration for the event starts at 10:00 AM. The minimum acceptable bid will be $95,000 or $125,000, depending on the unit. For more information on the auction, you can check out this link from Micoley & Company.

Lately we've seen a number of condo developments getting serious about moving their inventory, either through public auctions or dramatic price reductions. Condo inventory remains very high. Don't be surprised if we see additional fire sales in the coming months.

Have a good weekend,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Do you know someone who is worried about foreclosure?

This web site - DaneCountyShortSales.com - has a list of useful resources. It also includes basic information about the short sale process, as well as information on how we've structured our real estate team to assist our short sale clients.

You won't find any heavy spin on the site. We've done our best to lay out the information in a concise and straight forward matter. Also, we don't force users of our site to give up their contact info in order to view our information.

Have a good day,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Does your listing look great online and in person?

Over ninety percent of home buyers use the internet to find their home. And in many cases it's the online photos that either help a home "make the cut" or "get cut" from a buyer's list.

That's why we hire an interior designer to assist all of our clients with the staging of their home. Then we bring in a professional photographer to take the photos and create the virtual tour that will be posted to the internet.

Take a look at the three homes below. All of these homes look great in person, but just as important they look great online, too.

Fitchburg, Swan Creek, 4 BR/3BA, $299,900+

Verona, Westridge, 3 BR/2.5 BA, $299,900

Middleton Hills, 4 BR/2+ BA, $475,000

For more marketing ideas, you can check out how we help you sell on the selling real estate page at DaneCountyMarket.com.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

How we assist our short sale clients

Our real estate team is assembling a group of short sale experts to assist our clients who need to sell before the lender takes possession. Our goal is to involve the right experts at the right time to ensure our clients get their homes sold.

First, we have a team of three Realtors who have achieved Certified Distressed Property Expert designation. The three of us work together to effectively price and market our listings. We also ensure our clients have the right paperwork in place for the proposal packet that is submitted to the lender.

Second, we have enlisted the services of short sale facilitators who assist in submitting the short sale packet and work with the lender once the packet has been submitted. Our short sale facilitators come from Homestead Title. The Homestead Title team works with the lender to keep the sale moving forward. If issues arise during the approval process, our facilitators work to get them addressed quickly. And, Homestead Title will ensure that there are no 11th hour surprises and that all lien holders are identified early in the process.

Third, we provide our short sale clients with the services of an attorney of their choice. The attorney's job is to protect our client's best interests as we facilitate the sale with the lender.

Soon we'll be launching a web site designed for people who are in danger of losing their home to foreclosure. More on that coming soon.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Short sale failure: some reasons why

Short sales have been in the news a lot lately, and by now we've all read and heard stories about many short sales failing. Here are some reasons why many short sales do not succeed:

Improper pricing. First and foremost, a short sale needs a willing buyer and an accepted offer. A short sale property needs to be priced to sell, without giving away the farm.

An incomplete or improperly submitted proposal package. Once an offer is accepted, the seller needs to submit a proposal package to the lender for its review. The proposal package includes multiple documents and dozens of pages. If the package is incomplete or improperly submitted, it can delay the approval process and cause the sale to run out of time before the sheriff's sale. An experienced Realtor is essential to avoid these mistakes.

Inadequate follow-up. Once the proposal package is submitted effective communication with the lender is critical. If the listing team is not proactively communicating with the lender and helping to move the short sale through the approval process, delays can occur, causing the seller to run out of time or the buyer to walk away from the transaction.

Failure to negotiate all liens. A successful short sale requires that all debts that are liens against the property are satisfied. This requires the agreement of each and every creditor/lien holder and usually requires at least partial payment of the debt. Failure to identify which liens to negotiate can derail a short sale at the 11th hour.

Thanks to Peter Zarov from Homestead Title for his contributions to this post.

In a future post we'll share how our real estate team is addressing the pitfalls listed above.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Why lenders will accept a short sale

Lenders are in the business of finance, not real estate. They're not designed to own a portfolio of properties. There are many good reasons why a bank will accept a short sale over foreclosure. Here are just a few:

Legal fees. Foreclosure requires attorney fees that can be avoided through a short sale.

The declining market. In a declining market, a property loses value for every month it does not sell. A short sale allows a property to be sold more quickly and at a higher market value.

Holding costs. Holding costs for lender-owned properties add up quickly. These costs include taxes, insurance, utilities, maintenance, management, and other costs.

Repairs. In some cases lenders end up owning properties that are in need of significant maintenance and repair. Some owners who are losing their home to foreclosure neglect or intentionally damage their home.

There are many good reasons for lenders to choose a short sale over foreclosure. Despite these reasons, many short sales are not successful and end with the lender owning the property. We'll cover some reasons why in a future post.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

The market feels warm in September

We don't have the data to back it up, but the market feels like it is heating up for higher priced properties. We're experiencing a lot of buyer and seller activity for properties $250,000 and up.

Time will tell, but the market feels warm in September.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

How one Madison condo development is selling its units

Two-and-a-half years ago a very nice west-side condo development put its 42 units on the market. But sales were sluggish. Only half of the units sold after two years of marketing.

Then the development slashed the prices for all of its remaining units.

Take a look at the price history for all of the 1,236 square foot units in this development. Prices were cut by about $20,000 earlier this spring, and now all of the remaining units have either sold or will be closing soon.

We are seeing more and more cases of condo developments cutting their prices, and in some cases, buyers are responding. A good product at a good price can sell very quickly, even in this market.

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Resources for home owners facing foreclosure

Many people who lose their home to foreclosure do so without knowing and reviewing other alternatives. If you are at risk of losing your home, here are some things you can do to learn more about your options:

First and foremost, talk to your lender. You and your lender may be able to work out an alternative to foreclosure.

Educate yourself. The Dane County Housing Authority provides some useful online materials, including:

• How to avoid foreclosure on your home
• The foreclosure timeline in Wisconsin
• Responding to a foreclosure lawsuit

The Wisconsin Realtors Association also provides a useful web site, http://www.wisconsinforeclosurekit.org/, that offers a number of useful articles and resources covering the foreclosure process.

Talk to an attorney. The Lawyer Referral and Information Service (608/257-4666) can put you in touch with an attorney who handles cases like yours.

Consult with a Realtor who specializes in short sales. Your Realtor can help you determine whether or not your home will qualify for a short sale. If it does qualify, he'll outline a plan that will help to get your home sold prior to the sheriff's auction.

Have a good day,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

Reasons for choosing a short sale over foreclosure

For many home owners the short sale is the preferred solution over the foreclosure. Here are some reasons why:

(A quick note before we proceed with the list below: Our real estate team recommends you pursue all of your options, including working proactively with your lender, to discuss solutions other than a short sale or foreclosure. If you do pursue a short sale we highly recommend you work with an attorney who will work to protect your best interests and work to minimize a short sale's impact on your credit score. Our real estate team includes the services of an attorney for our short sale clients.)


Future Fannie Mae loan for a primary residence

Foreclosure: A home owner who loses a home to foreclosure is ineligible for a Fannie Mae-backed loan for a period of 5 years.

Short sale: A seller who successfully negotiates and closes a short sale will be eligible for a Fannie Mae-backed mortgage after only 2 years.


Credit score

Foreclosure: Credit score may be lowered by 250, 300, or more points. Credit will typically be affected for 3 or more years.

Short sale: Late mortgage payments are recorded, which does negatively impact credit score. After the sale the mortgage is reported as "paid in full", "paid as agreed", "paid as negotiated", etc. A short sale typically decreases a credit score by a lesser amount than a foreclosure, and credit can be repaired in as little as 12 to 18 months. As we mention in the note above, we recommend you use the services of an attorney during the short sales process, so you a have a qualified legal expert who is protecting your interests and working to minimize the impact of the short sale on your credit score.

Credit history

Foreclosure: Will remain on a person's credit history for 10 or more years.

Short sale: A short sale is not reported on a person's credit history. There is no explicit recording item for a short sale.

Future employment

Foreclosure: Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have, and in many cases will challenge employment.

Short sale: A short sale is not reported on a credit report and is therefore not a challenge to employment.

Current employment

Foreclosure: Employers have the right and are actively checking the credit of employees who are in sensitive positions. In some cases, foreclosure is reason for reassignment or termination.

Short sale: A short sale is not reported on a credit report and is therefore not a challenge to employment.

Security clearance

Foreclosure: Foreclosure is the most challenging issue against a security clearance outside a serious misdemeanor or felony conviction. If a client has a foreclosure and is a police officer, in the military, in the CIA, or in any other position that requires a security clearance, in many cases clearance will be revoked and the position will be terminated.

Short sale: On its own, a short sale does not challenge most security clearances.

Deficiency judgment

Foreclosure: In 100% of foreclosure cases (except in those states where no deficiency is recorded), the bank has the right to pursue a deficiency judgment.

Short sale: In some successful short sales, it is possible to negotiate with the lender to give up the right to pursue a deficiency judgment against the home owner. We recommend you use the services of an attorney when it comes to negotiate the recording of the deficiency.

Deficiency judgment (amount)

Foreclosure: In a foreclosure, the property will end up being owned by the lender if it does not sell at auction. In most cases this will result in a lower sales price and longer time to sale in a declining market. This will result in a higher possible deficiency judgment.

Short sale: In a well-managed short sale, the home is sold at a price that is close to market value. In almost all cases the short sale price will be higher than an REO price, resulting in a lower deficiency.

This information comes courtesy of the Distressed Property Institute. We'll continue to cover the short sale market in more detail over the next few weeks.

Have a good day,

Dan Miller, Realtor, Certified Distressed Property Expert, Keller Williams Realty and DaneCountyMarket.com

What is a short sale?

An owner "is short" on his property when the amount he owes on his mortgage, combined with commission and closing costs, is higher than the current market value of the property.

A "short sale" occurs when a negotiation is entered into with the property owner's mortgage company (or companies) to accept less than the full balance of the loan(s) at closing.

A short sale is the preferred solution for many home owners facing foreclosure. That's because among other things a foreclosure can have a large and lasting impact on a person's credit score, credit history, and job status. More on this topic will be coming soon.

In order to qualify for a short sale, a home owner must be able to demonstrate one or more of the following:

• financial hardship
• negative cash flow where monthly expenses exceed monthly income, or
• evidence of pending loss and insolvency

The most common justification for a short sale is an increase in monthly mortgage payments. We'll cover this and other acceptable forms of financial hardship in our next post.

Dan Miller, Keller Williams Realty and DaneCountyMarket.com