Tag Archives: home values

Cash Buyers Are Driving Home Prices Downward

 

Cash buyers are sending home values down much lower than they otherwise would be, suggests a new survey by Campbell Inside Mortgage Finance, which polled more than 2,500 real estate agents nationwide.

In its December Housing Pulse Tracking Survey, the company found that investors accounted for one out of three real estate transactions last month, and about 74 percent of those purchases by investors were made using all cash.

Investors have an over-sized command on the market since their ability to pay cash in the majority of transactions puts undue downward pressure on home prices,” an article at Housing Predictor notes about the study.

Cash buyers can be attractive to home sellers, banks, and mortgage companies, since they do not usually come with contingencies, require extra time to secure financing, and tend to move more quickly to closing. As such, cash buyers tend to make purchases at lower prices than those who may need financing or come with contingencies.

Source: “Cash Buyers Pushing Home Prices Lower,” Housing Predictor (Jan. 24, 2012)

 

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Foreclosed Home Owners Take Out Revenge on Properties

httpv://youtu.be/rRWu1rD987k

Some foreclosed home owners are taking out their anger on the homes they are forced to leave behind, smashing holes in the walls, scribbling graffiti everywhere, leaving piles of trash, and ripping out appliances.

More banks — facing a growing problem from trashed foreclosures — are opting to offer homes at big discounts rather than fix the repairs, which can send surrounding home values in the neighborhood spiraling down, experts say.

Real estate pro Nick Davis with RE/MAX Premier Group told the Tampa Tribune that he has seen some home values greatly diminish from foreclosed home owners who have trashed it. For example, he recalls one home that would have fetched $250,000 back in 2006 during the housing boom that would now sell for about $75,000 because it was trashed by the former owners.

“It looks like someone took revenge,” Davis says about the home, which had holes in the wall, appliances ripped out, and piles of trash. “Unfortunately, we’re seeing more of this. We’ve seen cement in the plumbing systems, the air conditioners ripped out from the outside, wiring being removed.”

Some real estate professionals and lenders are even blaming the high number of real estate deals falling apart due to more homes being left in poor condition by the original owners.

Buyers “look at these homes and say, ‘If this is the damage I can see, what else did the home owner do to this place that I can’t see?’ ” Davis says.

Some home owners facing foreclosure place the blame on banks for their woes so they leave behind a mess for the bank. But trashing a home can backfire. Some banks are saying they may even start taking steps to sue home owners for the cost of repairs, and law enforcement officials say home owners can be charged with vandalism as well as theft if they remove items that don’t belong to them from the home.

“Anything that came with the house needs to stay with the house,” says Larry McKinnon, spokesman for the Hillsborough County Sheriff’s Office in Florida. “You may think you’re getting back at the bank. But the bank may have the last laugh.”

Source: “Trashing Foreclosure Homes May be on the Rise,” Tampa Tribune (Aug. 30, 2011)

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More on Zillow.com & Home Values

I recently wrote an article about National Community Reinvestment Coalition filing a complaint with the Federal Trade commission about the accuracy of Zillow.com. In their complaint, a NCRC, a group for advancing appraisers, stated that Zillow.com gave false and mis-leading values of homes.

Zillow.com has prepared a video to address this issue and I found it very informative.

httpv://www.youtube.com/watch?v=uaeAgfay01o

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