More than 12 percent of residential properties on the market in Fairfax County are short-sale listings where a distressed homeowner is willing to sell for less than the value of the mortgage.
Because the mortgage lender must agree to forgive part of the home loan as part of the sale, a key element of closing such a deal is arriving at a price agreeable to all parties. Though short sales are potentially attractive to bargain-seeking buyers, the involvement of the lender in negotiations can make them time consuming and much harder to complete.
Until recently, first-time buyers generally avoided short sales because of the risk of missing the deadline for the federal homebuyers tax credit. That calculation changed after the deadline for the credit passed, for most people, earlier this year.
“If you were looking to get the tax credit, you needed to stay away from a short sale because there was no guarantee you’d get it,” said Kelli Weiner, an associate broker and Realtor with Long & Foster Real Estate in Fairfax. “Now that problem is gone. If [first-time buyers] have the time and stamina, they can give it a shot.”
Jessica Clifton, 31, of Alexandria, is trying to buy a property for the first time. She has put in offers on a town house and a condominium in the Kingstowne area.
“Most of the homes that I’m interested in are short sales, which makes it a lot more difficult,” she said. “I’m finding that banks are not willing to make concessions to close the deal.”
Short-sale homes are easy to find, Weiner said. Listings almost always indicate when a property is a short sale. If they don’t, the listing likely will call the property a potential short sale or may use the term pre-foreclosure.
Weiner does not recommend buyers offer less than list price for a short sale.
“Chances are you’re not going to get it for less,” she said. “It’s not that you can’t, but you just quadrupled the paperwork.”
Prospective buyers should also avoid putting in offers on more than one short-sale property at a time, Weiner added. Once the wheels are set in motion on a transaction, walking away from a deal is more difficult.
Market snapshot — Fairfax
For the three-month period from June through August, home prices in Fairfax were up more than 12 percent with homes selling for about 95 percent of their list price in about 45 days. Short sales take at least twice that long, said Kelli Weiner, an associate broker and Realtor with Long & Foster Real Estate in Fairfax.
Prices were highest in McLean, Weiner said while the most sales were in the Fairfax City ZIP codes of 22031, 22032 and 22033.
Prices are recovering faster in the Virginia sections of the metro area than in Maryland for two reasons, according to the midyear Trends in Housing report from Metropolitan Regional Information Systems and Delta Associates. The Northern Virginia housing market deteriorated first and is now recovering first and job growth in the state has been stronger and faster.
“That’s what helps our market — jobs are here,” said Gary Fitzgibbon, a Realtor with Re/Max Presidential in Fairfax.
Fairfax has a four-month inventory of detached homes and town houses and a six-month inventory of condos. Fitzgibbon said both are healthy inventory levels.
For properties sitting on the market for more than six months, however, “only the great ones are going to sell and prices will get pushed down,” he said.
Single-family homes under $600,000 and town homes under $400,000 are popular, said Fitzgibbon, especially along the Orange Line Metro corridor.
Sammy Lin, 28, of Reston, bought his first home with his girlfriend in Fairfax in April. They received the tax credit, but Lin said he had mixed feelings about it.
“I had a feeling prices would go down after the tax credit,” he said, adding, “I had other influences, such as the lease for my apartment was going to expire soon.”
