Foreclosures in Downtown Memphis

Luckily, there has hardly been any foreclosure activity on the Island. Why? Well, the fact is that most of the people who buy a home on the Island are people of means. Many of the homes that were built by Lenox Homes that lie to the north of Harbor Town are purchased by fairly wealthy parents who want to furnish their child a nice, safe place to stay while they attend college to become dentists or optometrists or do their residency at one of the local hospitals. These people don't wind up in foreclosure- they have options.

The people of Harbor Town proper are an anomaly in Memphis. They come from all over the globe. They are the people who have been brought in from other parts of the world to be the movers and shakers of our society. The human resource head hunters found them and they, luckily, found Harbor Town. They are not going to stop paying their house notes. They are not going to get foreclosed on. In the past 5 years or so of this "media made economic crisis" there have only been a scant few foreclosures and almost all of them can be attributed to a divorce or some other personal crisis.

There are a few condos in foreclosure on the south end of downtown. I had the opportunity to show three of them today. These, folks, are amazing opportunities for the savvy investor.  There is a 3 story townhouse in State Place, hardwood floors through out, granite and stainless in the kitchen and a one car garage for $134,900. Unbelievable! This unit sold for $225,000 in May of 2007! As far as the second and  third property goes- never mind- they are no longer available- I sold them!

If you want to grab a bargain to live in, flip or add to your portfolio- email me at ksoro@comcast.net and I will send you information. We are living in historic times! Make the most of it!!!

Silly LOW Offers

Silly LOW Offers

By Karen Soro

The Sharp-Soro Team

Henry Turley Realtors

Specializing in Downtown Memphis, Tennessee, USA

901-338-4444

So, here is the scenario - you are going to put your home on the market to sell. You have done everything your realtor has told you to do. You have de-cluttered the entire house, installed granite countertops in the kitchen, put in new carpet, put on  a fresh coat of neutral paint, pressure washed the outside and planted flowers in the flower beds. Heck, you have even had the interior decorator come by and “tweak” the house. You have a nice floor plan, it sits in a nice location and the home has been well maintained. The place is looking awesome.

You live in a sought after neighborhood (oh, yes, there are such things!). It’s a lovely place. The homes around you are selling and you should be no exception.

You have had me come over to your house and we have gone over the comparable sales in the neighborhood. I tell you that, unfortunately, the prices have dipped a bit because everyone has been watching too much “news” on TV and they think they should- so they have- it’s a self fulfilling prophecy. There it is in black and white. We analyze the prices and days on the market. We look at your amenities as compared to your neighbors. We carefully put together a price that reflects the current market conditions. You price it to sell. You have “CONSIDERED THE MARKET.”

After a few weeks an offer comes in. It is 30% off your asking price. REALLY? REALLY? Your knee jerk reaction is to categorically refuse the offer. Your are mad, you can’t help it, it’s insulting. It’s a SILLY LOW OFFER!

What you have to do now- is stay calm. You should counter the offer with one that would be acceptable to you. Pretend like they are bonafide buyers that really DO want your house. You will soon see if they are serious- or if they were just looking well beyond their means. If the second offer stays ridiculously low- shut down the negotiations and hold tight. At this point one of two things will happen, they will either step up to the plate and make a decent offer or they will leave. If they leave, let them go- you may be surprised- they may decide to come back and meet your terms at a later date. 

I am not really sure why people think that they should make a silly LOW offer. Is it because they think everyone is desperate?Is it because they think everything is in foreclosure? Well, the tactic certainly does not work well when people deal with foreclosures. The banks seem to be expecting full price. In fact, almost every foreclosure that I have been involved with DID sell for full price or MORE! And fast! So, what else could it be? Do they think that people have NOT considered the market? Well, generally, they have, and if they haven’t then they are not going to suddenly decide they want to give their house away anyway.

When you make a silly LOW offer the only thing you really accomplish is to set up a contentious relationship between you and the seller. It will cause the seller to raise their hackles and, maybe, decide they don’t want to deal with you, period. And quite frankly they may decide that they don’t want you EVER living in their house. People get emotional about the place they call home! Don’t start out by insulting them! That is really a BAD plan. 

A much better plan is to make a reasonable offer. In our market a reasonable offer would be one that is more like 5-6% off the asking price. That way, the seller will want to deal with you. You will set up “goodwill” and you will probably get the home for a better price than you would have by coming in with a silly LOW offer. 

Why would you EVER consider under pricing your house?

In Memphis, under pricing your home is a hard sell, but in other parts of the world that is exactly what they do- and it works.

Take Victoria, British Columbia on Vancouver Island in Canada for instance. ( I also have my real estate license there). When a home comes on the market, often times the realtor first figures out what price the property is realistically going to sell for, then they price it under that- and wait. Now, things are different there. Property is expensive and certain neighborhoods are greatly in demand. Sometimes the land the home is sitting on is worth as much as the home itself. I heard about one realtor who listed a home that had been built in the 1950’s that sat in a quiet cul-de-sac in Oak Bay- a very nice district. They figured the house and lot were worth about $600,000, so they priced it at $575,000 and waited for 10 days before they opened the bids that were coming in. They sold it for $625,000. Pretty good, huh?

Now I know that this will NOT translate well in most parts of Memphis. Some of the suburbs lack the pent up demand needed to pull this idea off- they are too generic and there is already a lot of competition out there. But in sought after places like Harbor Town or a spectacular condo unit with an amazing view- it probably will work. And it is certainly worth some consideration. 

Case and point- we had a client in Harbor Town who wanted to buy a home directly across the street from the one he was living in. In order to make this happen he was going to have to act fast. I went over and looked at the home he was going to sell- it was REALLY nice with an updated kitchen and baths, a great floor plan and a corner lot. We discussed price and determined that the probable selling price of the home was going to be $375,000. So he could have priced it at $399,900 and waited for an offer, which is what most people would do- but instead he said “lets list it for $374,900”. Good  call! Within 2 weeks we have 2 full price offers- he just had to chose which one he liked more! The deal was done and -voila- he was able to buy the home he wanted !

Another case and point was the condo that my husband, Tim, and I bought earlier this year in the River Tower building. Now, the thing that sets these units apart are the view that you can get from some of them- if they are facing north and are above the 5th floor they have unobstructed views of the Mississippi River and the entire city! Jaw dropping! 

This one was one of those units. There were several units like it that have been on the market for a long time- they were all priced over $200,000. So, after analyzing that fact- we decided that the probable selling price was about $170,000. We priced it at $169,900, got multiple offers and sold it for $ $180,000. 

So, it probably comes down to confidence . If you are sure that people want your home then you may want to play the game.....

This Real Estate Market should make you want to FLIP !

This Real Estate Market should make you want to FLIP

By Karen Soro

The Sharp-Soro Real Estate Team

Henry Turley Realtors

338-4444

Whoa! I have never seen a better time to make some money in the real estate market!

Now, I am not saying that everything is a bargain, nor that everything will reap huge dividends but if you know what you are doing- this is an incredible time for real estate speculation. 

Some places are special. There are some places where people still want to live. There are some places whose prices are going up. And there are occasions when the property is undervalued. By and large, Downtown Memphis is such a place.

Here is what is happening downtown. We all know that the banks, in their infinite wisdom, have lent too much money out to people who can’t afford to pay them back, so they have some properties that are going to be foreclosed. Now, in the Downtown market this is RARE, but it does occasionally happen. They then hire a realtor who is completely unfamiliar with the market to sell the property for them. The realtor comes downtown, (maybe for the first time in their entire life!) takes a look around and because they are used to property values that are much less out in the suburbs they under price it. WhooHooo! Time to pounce!

Now, to my mind, there are two types of foreclosures. There were the mis-steps of the builders who either had really bad timing or, more likely had really bad floor plans. ( you really can’t blame the “economy” for bad planning). Most of these have been sold at auction by now and are no longer on the market- but there are some, and if they are in the “bad floor plan” category - you should probably leave them alone, unless you want to buy them up as rental property. 

What do I mean by a “bad” floor plan? If your front entry door is located in a bedroom- you may have a bad floor plan. If you have to duck your head while walking down the hallway, you may have a bad floor plan, if you have to walk up three flights of stairs to get  to your master suite- you may have a bad floor plan, and hey, if you look out your windows directly into a parking lot or garage-you may just have a really crumby location AND a bad floor plan!!! And as I say, unless you are buying the place to rent out (and there ARE some great cash flow opportunities at the moment) leave these “bad floor plans” alone- No “flipping” on these.

So, what is “Flipping”? Flipping is when you buy something and turn right around and sell it (hopefully for a profit). You may have to invest some money in fixing it up, but more likely, you will just have to “fluff” it up. And yes, you will have to pay capital gains- refer those tax questions to your CPA- but if you do it right it can be VERY lucrative. 

What you are looking for is a nice home in a nice neighborhood , in fair condition that has been under priced. You want to be able to come in with paint and new carpet, perhaps some granite and new appliances but not much more. When you sell it you want to price it slightly below market value and hopefully get a bidding war going on the property- that way you can get in and get out. You don’t want to hold it because holding costs money. 

So where are these opportunities? As I say, they are rare- but they do happen. Occasionally something will come available on Mud Island or in South Bluffs. Sometimes the opportunities lie in the older more settled condo buildings. 

Case and point, Tim and I bought a condo this past January in the River Tower (that’s the old Holiday Inn Rivermont- for you people who remember). It was on the 7th floor looking directly north down the river. It only had about 800 square feet, carpeted floors and formica countertops- but WOW, what a view! Our original intention was to move into it but later we decided it was too small so we “flipped”! It was listed for and we paid $85,000 (hey, thats over $100 per square foot- which to folks who are more accustomed to square footage prices being MUCH lower- must have seemed ridiculously high!). We put in some engineered hardwood floors, granite counter tops, new bathroom tile and a tub- a total cost of about $15,000. And then we “flipped” it for $180,000! How did we get $180,000? We priced it at $169,9000 knowing that was a bargain- and had two people battle over it. I am going to write another blog about the amazing things that happen when you UNDER price your home- rather than getting in a downward spiral pattern after overpricing it- so I will leave it there for the moment.

If you want to get in on this action just let me know. . 

Why Invest in Downtown Memphis?

Why invest in downtown Memphis? Because huge global businesses are! Read on....this was excerpted from "Electric, Light and power International".......
Mitsubishi Electric Power Products, Inc. announced yesterday that it has selected Memphis, Tennessee, as the headquarters for the company’s heavy electrical equipment production in North America.

A new $200 million, 350,000-sq.-ft. facility will initially produce large power transformers, occupying almost 100 acres in the Rivergate Industrial Park. Plans call for the plant to open with 90 employees and reach about 275 at full production.

Mitsubishi Electric Power Products expects to hire most employees locally, with recruiting set to begin this year. This will be followed by extensive employee training throughout 2012 in Memphis and Japan.

In addition to local jobs, the new plant will require numerous local suppliers for machined and fabricated materials and other products and services.