Twice in the last two weeks our team has signed listing paperwork to sell condos for clients in Arlington and Alexandria and both times it turned out that our client cannot sell their condos at this time because of the downward pressure on the condo market in Northern Virginia.
In the first case, our client purchased their condo from the developer nearly 2 years ago and the developer is still selling units in the developments. The developer is now selling similar units for nearly 60K LESS than what our client paid. Needless to say, once we confirmed the developer’s prices and shared them with our client he decided it was simply not the right time to sell his condo. We couldn’t agree more, there is no way we could compete with a developer who is slashing prices that dramatically. Since our client is being relocated he has decided to use Long and Foster Property Management to manage the rental of his unit until the market turns around.
In the second case, our client purchased their condo nearly three years ago, in this case however they are competing against short sales and investors. Of the three comparable condos that were for sale in the same development, 2 of them were “short sale” properties that are listed below market value. Selling at these prices wouldn’t make sense for our clients who bought their unit basically for what the short sale units are now being sold.
Remember, a short sale is when a lender allows a property to be sold for less than the amount owed on the mortgage and the lender takes a loss. Lenders usually allow borrowers to use this technique if the borrower is having a hard time making payments and needs to unload the property before it goes into foreclosure. Short sale properties are almost always being sold for less than market value, which drives the prices for other sellers in the same development down as well. There is a lot of talk in the news right now about how short sales and foreclosures hurt the value of everyone else’s property, and this is a classic example of how that happens. For now these clients have also decided to wait to sell and see what the market does in the coming months, and we agree that this is not the time for them to try and sell.
While we love to have listings and sell our client’s property, but we never want to see our clients lose money. Unlike many real estate agents, we are the first people to tell you NOT to sell your home if the market conditions are not right. Being honest with our clients is how we build trust and long-term relationships that will survive the ups and the downs of the real estate market.
As always, if you are thinking of buying or selling please do not hesitate to contact me at 202-369-9821 or Michael@RealAstute.com.
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