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VOL. 40 | NO. 48 | Friday, November 25, 2016

You should be selling while others hibernate

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With Thanksgiving hovering, listings usually go into hibernation this time of year as sellers do not want to be inconvenienced with showings over the holidays.

Once the leaves fall from the trees and the green abandons the grass, the city switches from color to black and white. Some feel that backdrop is not conducive to the home-selling experience.

Based on the Greater Nashville Association of Realtors sales data, the number of transactions will drop substantially to a number that is half the monthly sales that the area amasses in the spring and fall markets.

Many sellers feel that by awaiting the spring market, they will receive more money for their homes than in the dark, cold winter months.

While the market comes alive in the spring – spring now being late February on the real estate calendar – the volume increases and the prices are higher than those of the previous year.

However, sellers should be advised that there are as many people relocating in the area in the winter as there are in the spring.

Additionally, with many of the would-be competitors waiting for the robins to sing before marketing their homes, the competition is significantly reduced. Showings slow as only serious buyers are braving the elements to shop for housing.

Many successful, veteran agents will testify to the fact that they make their hay when the sun is not shining, selling while the competition is taking a break for the holiday.

Houses cannot sell when they are not on the market.

There are several groups of people that start new jobs in the beginning of the year.

Many of those come to town and lease, beginning their searches in January with plans to buy, close, move and bring the family after the end of the school year.

Sellers should not be deterred by dropping mercury.

Sale of the Week

The Glen is on the corner of 18th Avenue South and Blakemore Avenue on the fringes of Music Row and a small textbook toss from Vanderbilt’s ever-expanding campus.

It is relatively small with less than 15 units and non-descript, keeping a low-profile presence during its construction, which was completed in 2008.

During that time when the stock market was tumbling, Nashville condos were rising high into the sky, soaring higher than ever as the nation plunged deeper into the abyss that would later come to be known as the Great Recession.

In December of that year, a person bought unit # 213 at the Glen and paid $299,500 for the two-bedroom, two-bath condominium with 1,014 of living space, much more space for the money than the much-ballyhooed developments such as the Icon, Terrazzo and Adelicia.

It went under contract during construction, when times were good with no warning that the financial tsunami was gaining strength on the horizon.

In 2011, there was some daylight shining through the clouds onto the Nashville real estate market.

This area had not been pummeled as badly as others, with the disastrous wave real estate hitting Nashville later and leaving earlier than it did in other parts of the country.

Seeing the light, the owner of that unit at the Glen decided to unload it for $240,000, losing more than $60,000 after paying his closing costs.

Timing is everything in real estate, and the person who paid $240,000 in 2011 sold the condo last week for $362,000, thereby netting more than $100,000 for his five years of ownership.

This seller invested $48,000 of his own money when purchasing the condo, as lending restrictions had tightened considerably because of the Recession. At closing, he would have recouped the $48,000 plus an additional $100,000 in profit.

Additionally, during that time, he may have been in a financial position to deduct the amount of interest he paid, therefore saving a few hundred dollars per year.

With his 20 percent down payment, he avoided mortgage insurance and – assuming he had an interest rate of 4 percent – his payments, including principal, interest, taxes and insurance, were in the range of $1,200 per month, which is some $700 less than renting a dwelling of that size in that area.

For this seller, he received a better return on his funds than he would have in almost any other type of investment, could have saved some money on taxes, and lived in a desirable area in a new condo for less than rent.

On the other hand, the original buyer secured a 95 percent loan through the now-infamous Countrywide organization and borrowed $284,525.

If he paid his payment each month, when he sold, he lost his $14,975 down payment and had to bring almost $50,000 to closing.

In the recent sale, Amye Harrison listed the home for the happy seller, and Stephanie Coggins Nelson of Fridrich and Clark delivered the buyer.

Let’s hope this buyer fares as well as the last.

Richard Courtney is a real estate broker with Christianson, Patterson, Courtney, and Associates and can be reached at richard@richardcourtney.com.

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