Recent economic events have left a lot of people with many questions about the state of the Reno/Sparks real estate market. I hope this brief update on the real estate market is useful to you.
First, however, I thought I should let you know that I have sold Ferrari-Lund Real Estate to my partners, Vince Rossi and David Graham. About three years ago, before the market tanked, Nancy and I (after much thought) began the process of selling the business we started back in 1988. I have been selling real estate for over 30 years and both selling and running the company for the last 20. It was time to simplify my life and go back to the thing I loved enough to never give up—just selling real estate.
I opened Ferrari-Lund hoping to build a company where real estate transactions were handled how I thought they should be. It has surpassed any of my dreams and expectations. I have loved and taken care of it for years. We started with six agents and two brokers. As of today, the company has 150 agents and 4 brokers.
Selling Ferrari-Lund allows me to concentrate full time on selling real estate. I have retained a minority share in the company until the buyout is complete, but Vince and David are now responsible for the day-to-day management of the company. This gives me more time to focus on helping my friends and clients. I have been blessed to find a career at an early age that I loved, and I still love it. I don’t see giving up selling real estate in any foreseeable future.
Despite the tumultuous economy, real estate is still a great investment. The market upheaval has left people with a lot of questions. Here are some great questions I am frequently asked. I hope these answers are helpful to you.
What should I do if I am upside down in my house?
Call me. I can explain your options. Some options include waiting it out, renting rather than selling, approaching lenders for loan modifications, negotiating a short sale, or letting the bank foreclose. There is also bankruptcy. I will refer you to an attorney or accountant if they are needed.
Is it a good time for me to buy?
Yes! There are so many good reasons to buy. Interest rates are low, prices haven’t been this low since October 2001, and there are special tax credits for first time buyers.
What is going to happen to the interest rates?
I wish I had a crystal ball. I recently refinanced one of my properties and did a 15 year loan at 4.375%. My previous loan had a 5.75% rate. I think there is a good chance that rates will rise in the future and that is why I refinanced.
What is the difference between a short sale and a foreclosure?
In a short sale you sell your home for less than you owe, and negotiate with your bank to accept the lesser amount. In a foreclosure, the bank forces the sale of your home at auction to recover what you owe the bank. If your home sells for less than the amount you owe the bank, it can file a court action against you seeking a judgment foe the remaining amount owed, known as a “deficiency judgment.” There is no difference between a short sale and a foreclosure as far as your credit is concerned, at least right now. This could change in the future. If a short sale is handled properly, however, it takes away the banks’ right to seek a deficiency judgment against you.
Are new loans harder to get now?
Yes, if you are looking for the old 100% loans with no down payment. Unless you are a veteran, down payments are required. On the other hand, if you have the 3.5% cash down payment (or a relative who will gift it to you) and a FICO score of 620 or higher loans are still easy to obtain. Further, I have negotiated many offers with the seller’s paying all of the buyer’s closing costs.
Is it better for me to rent for the time being?
It depends on your situation. We are back to the old rules of real estate. With a normal market appreciation of 2-3% annually, you must plan on staying in your property for 3-5 years just to break even. So if you are expecting a job transfer in the near future, then renting may be your best move.
On the other hand, if you have no plans to leave this area any time soon and your housing needs are not going to change much in the coming years, then, of course you should buy and not rent.
Market inventories are shrinking again. The less expensive end of the market will soon see prices going up again. It will start with the sellers no longer agreeing to pay buyer’s fees and then you will see prices begin to edge upwards.
I’m sorry I can’t say this about our exclusive home market. In homes that are $500,000. and up, there may still be some painful times ahead, and unless you can get a great buy, renting might be a better option.
How is the rental market?
At Ferrari-Lund Real Estate we have really expanded our property management services. We are successfully renting the homes, but owners need to be willing to make repairs or be prepared to possibly lower the rent. It is a renter’s market. Tenants have plenty of homes to choose from.
There are so many more things we could talk about, so please contact me. Every situation is different. If you have a good job and good credit – this may be your time.
I can be reached at my office 775-850-7033 or on my cell 775-742-6537;
email is great too: sold@ricklund.com
I would love to speak with you and answer any questions you may have.
Sincerely,
Rick Lund
