Chris & Stephanie Somers's Q&A

It takes about 3-4 months to sell a condo in Philadelphia if the condo is priced under $400,000 and if the condo is priced right based on a bunch of criteria such as:1) Location and View2) Updated Kitchen, Bath, and Flooring3) Condo Fees being under 300/mo4) Parking 5) Tax Abatement6) If the condo is FHA approved it will sell faster7) How the condo shows will slow down the process a lot (ex. a sloppy tenant/occupant or difficulty getting showings confirmed.)There is a lot of inventory and thus a lot of competition here in the Philly Condo Market. I do not know where your condo is but the same criteria probably applies.

In Philadelphia, there are thousands of great rental properties to buy. Philly is a desired spot because outside of Center City, the prices are affordable and the taxes are extremely low. And those 2 ingredients make for a very profitable investment property as far as cash flow is concerned and in some neighborhoods you can toss in some appreciation to the mix and have an award winner!In the out-skirts of Philadelphia, in the county, finding the winning recipe for a profitable investment is somewhat more challenging. The county has higher taxes to boot and the average price of homes is considerably higher than in the city of Philadelphia. The properties are built differenly. Public water and sewer is not always the standard in some county homes with wells and septic systems as well as land to care for.  Thus, the maintenance of land and so on needs to be quantified as part of your recipe for success.I guess investing in the county vs investing in a Philly row home is like cooking French Cuisine vs  "Shake and Bake" chicken with mashed potatoes and gravy. They both taste good but how sophisticated are your tastes and how much money to you have to spend?The propery that wil make an exellent investment will require some or all of the following criteria:1) The average market rents need to exceede your mortgage. Do not forget to calculate taxes and insurance. Use craigslist to see what the rents are going for in the are where you are buying. 2) If possible choose a property with low maintenance or plan to budget lawn care and septic into your expenses. If your tenant is responsible for the upkeep, make sure the added costs do not excede the market value for rent or you will never procure an occupant. 3) A Home Warranty is an excellent cure for maintenance issues that pop up and can be negotiated during the purchase. Ask the seller of the rental property you are buying to toss in a Home Warranty or buy one for yourself.4) Location is a huge factor. If you want your investment property to appreciate, in addition to maintenance, buy in an area where property values are going to increase such as in commuter friendly neighborhoods, college towns, or in neighborhoods that are in the early stages of development. This is a buyer's market so now is the time to prospect about the future of neighborhoods and towns.5) Multi-family Duplexes and Triplexes offer you 2 and 3 rental incomes all in one location. Mixed Use buildings can get tricky if you are not located in a commercially friendly location with easy parking and foot traffic. If there is an opportunity to procure one and the cash flows, then do it!So, get out of the kitchen and cook up some Real Estate! It is a great time to buy.

prj,We know that consumers like to do their own investigations regarding Real Estate. I have done a few Zestimates to compare my results on the Market Values for homes. I have found the Zestimate to be accurate 30-50% of the time. For me that is a little to inaccurate. Zestimates are a good starting place but they will not replace an estimae provided by a skilled human being who can tailor the market analysis to fit a target home.Please check in with a trusted Realtor in your area to see what they think. A Market Analysis is often complimentary and will likely be very accurate and extremely informative.

Actually Zillow is accurate but only some of the time. And some of the time is just not enough!  When they are not accurate it impacts buyers and seller in a very negative way. I agree they need to be more detail oriented about their Zestimates and regarding details about addresses and location. The 3 most important surface aspects for Buyers and Sellers of Real Estate are:1) Location2) Price3) AppearanceZillow gets it wrong folks. I can say that even though I pay to subscribe to Zillows extra features. That is why consumers need to consult a local Real Estate specialist in their area. A human being not a huge cyber system that does not have the ability to tailor Estimates and review Market Statistics with a knowing eye.[content removed by moderator for being self promotional]

I have been having problems on many levels regarding my postings on Zillow. Zestimates are way off. In Philadelphia we are missing complete neighborhoods. Listimgs ar not properly categorized. Addresses are wrong. Prices are not updated. I can go on. Please contact them and make a formal complaint. I have been told it is a "growing pains" sort of issue and an updated version of Zillow might be launched mid Agugust. "Might" is a very weak word.We'll see.

Jan,Your dilemma is one of the reasons why Realtors do not like it when Buyers and Sellers use Zillow for Zestimates. Zllow sometimes right on and sometimes way off. But, as frustrating as this is, I do not think you should worry too much. A person looking on Zillow who is interested in seeing condos in your building will end up finding a Realtor.  The Realtor will provide them with information directly from the MLS. Your condo will be shown as much as the others in your building. What I am saying is that your property wil most likely not be skipped over because Zillow has it incorrectly valued.But that being said, Sellers are often mislead by Zillow mistakes. The bigest weakness for Zillow is the Zestimates. I pay a hefty yearly price for enhanced Lisings on Zillow and I hope they begin to provide more accurate information, not only on Zestimates but on the names of communities, subdivisions and so on. Please report this inaccurate estimate to Zillow. The more the errors are brought to their attention, the better the site will become. I hope : )

Yes. A Homes needs a stove and a working bathroom, a functioning heater and several other items in order to get approved for an FHA loan.

Taylor,You said a mouth full. Chris and I talk about this 24/7. We live in Northern Liberties right now, I rented in the Art Museum for years, and we moved from Old City where we still own one of our old condos. So, when I speak with our "opinion", I am doing so having much of our own personal retirement invested in these areas of the city. Not to mention we have experience as modestly smart and successful Realtors.The condo market in Center City Philadelphia and the "fringe neighborhoods" such as Northern Liberties, the Art Museum, even Old City, that have an abundance of new construction condos and rehabs meant for flips, are handcuffed by the mortgage industry. It looks like the only developer doing well is Bart Blatstein. He is a genius because he builds posh apartment housing and then builds a village around them that will provide for their every need. Brilliant business model and a generous city planner. Developers and rehabbers can't go any lower on their prices without being upside down on their loans. Developers are defaulting on their loans because the buyer pool for their 1-2 bedroom condo is nonexistent. Well, maybe not completely, but for the most part, the buyer pool is more like an evaporating puddle. Who are the buyers for most of these beautiful condos? They are you. They are typically young, first time buyers, with good credit, and a great job making decent pay but they typically do not have a lot of cash saved up. Their savings are perhaps 10-15% shy of qualifying for a mortgage for a new condo. The buyers that are out there right now do not qualify for condos. Many can only qualify for an FHA loan which rules out most of the condos out there in the city. That is why neighborhoods like Fishtown and the Art Museum, as well as Pennsport and Graduate Hospital have been where many sales transactions are occurring. The condo buyers default to the closest neighborhood Center City and buy row homes. As long as there is a demand the prices will not go down dramatically for those areas.If the loan products do not become more user friendly, then sellers will have to either lower their price and suck up the loss, rent their home until the market ripens, choose a short sale if they have proof of hardship, or throw the towel in and let the bank foreclose on the property. We are seeing all of the above.As for condo pricing, it has come down, but perhaps not as much as it has in New Jersey,  and certainly not as much as it has in other states. The Developers are holding on and renting as an option. The Marine Club is an example of a fabulous, large, Luxury condo conversion that has amped up on rentals rentals because it is unattainable for first time buyers that can only qualify for an FHA loan. That is our opinion. At least that is one of them : )

http://brtweb.phila.gov/The Above site may give you some information.: )

Jphan999,That is a great question ! It is one that every Buyer, Seller, and Realtor ask when dealing with Short Sales. The simple answer is: " Your guess is as good as mine !" The more appropriate answer is:" It depends on the bank."Not that either response is a good answer !  : (Chris and I are self proclaimed Short Sale Specialists in Philadelphia. We do a lot of Short Sales. It is not that Philly has a sinking Real Estate Market. In fact just the opposit is true. We are simply Ready, Willing, and Able to do the work that is needed for a Short Sale. (Low commissions and lots of work are not popular in our industry.) Yesterday I was on the phone with Bank of America. They have a 3 Phase process that can explain what goes on behind closed doors at most banks and explains why it can take a month or 6 months for a short sale to occur. Phase 0 - The 100% complete Short Sale Package is submitted, digitally recorded and awaits assignment.  This tskes 24hrs to 12 days as long as it was received by the right department. Phase 1 - A negotiator is officially assigned to review the package, make sure all documents are there, order the BPO (BPO is like an appraisal). This Phase can take from 25-45 days depending on the bank, their staff, and their work load... and dare I say the quality/integrity of the bank's management. (Ask me about my NIGHTMARE with TD Bank in PHILADELPHIA !!! )Phase 2-  Here a new representative might be assigned. This phase is where changes on the preliminary HUD-1 are made. (HUD-1 is a form that lists all of the money and charges to the seller.) The BPO is reviewed, and they determine if a counter needs to made, then the package is sent to the investor (the ones who own the money) for their review. 25-45 daysPhase 3 - Once the investor is satisfied, it is possible that yet another person will get assigned to the file. But good news is that the closing negotiatins commence. This is when the bank tells you their verdict... Yes, No, Counter Offer, or Yes BUT you need to sign a Note for the deficit.  Phase 3 is when the final settlement procedures are communicated to the Realtor. At this stage a  closing can be schedued within a few days from acceptance.We have had Short Sales accepted in 30 days. We have had Short Sales accepted in 6 months. A typical Short Sale is 3 1/2 months for us.If you are involved with a Short Sale, you have to be patient and flexible. As a Realtor on the Sell Side... there is plenty of paper work and follow up with the bank throughout the process. Very little information is communicated during the entire process but much work is being done behind the scene by the Bank and the Listing Agent.I hope this info helps you and you find it answers some of your questions about the process.