Brentwood Homes Price Value Analysis

I was recently asked by a client to research all available homes in Brentwood priced above $500,000 that were built after 1997 and have at least 4,000 square feet, 4 bedrooms, 3 bathrooms and a 3 car garage. This particular executive client is in search of a primary residence in Brentwood, but would like to ensure that he is buying the best mixture of value, location and quality. Prior to speaking with me, this particular client was very focused on the distressed short sale and foreclosure markets and was led to believe that market would provide the biggest bang for the buck.

As a broker who has a wealth of experience in the short sale and foreclosure markets, I agree that this market segment can provide great value, but not to the exclusion of the traditional for sale marketplace. It would be a rather egregious mistake to ignore either market when seeking the highest and best values.

In order to investigate and ultimately prove the above assertion I gathered the current market data below which ranks the 209 homes that match my client’s specifications by price per foot. I do realize that price per square foot is only one facet of measuring value, but it does provide a quick insight into the point that the traditional marketplace does offer comparable value to the distressed market in Brentwood. Obviously, I dug further into the data creating a metric that ranked other factors that determine value like location, lot size, age of construction, school zone and current condition (I am not going to share that spreadsheet in order to protect my client’s privacy).

According to the price per foot analysis below, indeed 3 of the top 6 deals are distressed homes. However, the two best deals are homes listed on the traditional market. Looking further down the chart, you’ll notice that the distressed sales are not priced any better than the traditional sales and in some cases, the distressed Brentwood homes continue to be listed at premium prices.

While this article was not meant to discuss the Brentwood housing market as a whole, I do find it interesting that more than 200 homes are listed in this rather exclusive price range. Additionally, only 9 of the homes currently for sale (4.3%) are listed on the distressed real estate market. However, 209 homes does represent a 13.2 month supply of homes in this price and size range based upon a current running 6 month average of 15.83 homes closed a month.

Highlighted in yellow denotes distressed sale.

Brentwood home price comparison

West End Condo Auction Details

West End Absolute Auction

The West End condo auction in Nashville is set to take place at 11:00am on Saturday, December 5th onsite in the West End itself. 45 condos will be sold at auction with an unknown reserve price in place. However, in an announcement made just yesterday, the auction will now include a yet undisclosed number of condos selling absolute without reserve. I am told that the developer will identity the specific absolute units this weekend.

Important auction dates and requirements

The West End will be available for previews Monday through Saturday 11am – 6pm, Thursday until 8pm and Sunday 12pm – 5pm. No appointment is necessary. When you arrive at the building, you will be asked to sign in and be given a visitor’s pass that allows you access to all 45 auction units. You will also be asked to identify at this time which real estate broker, if any, will represent you at the auction. Once you have completed this half page sign-in card, you will proceed to the sixth floor to meet an auction representative who will begin your tour of the furnished model condos.

If you intend to bid on a condo at the auction, you must be pre-registered by 3:00pm on Friday December the 4th. In order to be considered pre-registered, you must complete the buyer’s registration form and have emailed, faxed or delivered that document to the West End building. If you choose to email or fax the form, you must bring the original signed copy with you on auction day in order to receive your bidder’s paddle. It is my assumption that should you forget this form, the auction company will allow you to sign the faxed or emailed version at the registration table.

The West End will open at 9:00am on auction day and bidders are encouraged to arrive at least 1 hour prior to the 11:00am auction.

Money requirements

Bidders are required to bring a $5,000 cashier’s check made out to themselves or another type of immediately available funds. In addition, bidders are required to bring a blank personal or business check that will be used to complete the difference between your $5,000 cashier’s check and 5% of the total condo purchase price. You may want to consider obtaining your cashier’s check by Friday to avoid any issues Saturday morning.

The West End’s condo homeowners association fees currently average $0.17/sf. The exact monthly HOA fees for each individual condo are published and available on the day of the sale.

Key auction terms

All of the auction terms are available on the West End condo auction website; however, I would like to point out a few key items that may affect your bidding strategy. The first is that there is a 10% buyer’s premium at the sale. In short, this means if your winning bid is $500,000, the actual purchase price will be $550,000 and your earnest money requirement will be $27,500 ($5,000 cashier’s check + $22,500 personal or business check).

All auction purchases are required to be closed on or before Friday, January 15th, 2010. Should you not consummate your purchase by that date, you are subject to loss of all earnest monies and the West End Partners shall be allowed to sue for damages and specific performance.

This auction is an ‘as is, where is’ sale, which means that no contingencies will be permitted. Your auction purchase will not be allowed to be contingent on financing, an appraisal or an inspection. If you feel inclined to have the property inspected prior to auction day, you should schedule that to occur prior to Thursday, December 3rd.

All one and two bedroom condos are being sold with 1 parking space included and all three bedroom condos are being sold with 2 parking spaces included. An additional 10 parking spaces will be offered to the buyers of the two bedroom condos and sold on a first come first serve basis, limited to 1 space per condo. Pricing for these additional parking spaces has not been announced.

There are 16 condos that have a published flooring allowance for buyers to utilize to complete the unfinished flooring in those units.

Auction terms not present or unclear

I have not found any mention of a builder’s or developer’s warranty for the condos or property. I have also not been able to verify that either Compass Bank or Metlife will be offering guaranteed financing. If this is not the case, any difficulty with obtaining a mortgage could result in the loss of your earnest money and a lawsuit as outlined above. This is a very key point to keep in mind considering the West End condo project is not currently FHA warrantable, which makes obtaining conventional financing more difficult. I strongly recommend that you fully vet your finances with your preferred lender prior to the auction. Typically, an auction company secure a couple of banks to offer guaranteed financing, but this does not appear to be the case with this auction as it was with the successful Terrazzo auction last week.

The auctioneers and/or developer reserve the right to change or amend any or all of the above terms and conditions at any time prior to or during the auction. They have also reserved the right to stop the auction at any point they deem reasonable. The order in which the condos are auctioned and when/if the absolute units will be auctioned during the sale is also unclear at this date. I have also not been able to verify that three bedroom buyers will be prohibited from purchasing additional parking on the day of the sale.

Auction representation and consultation

Should you choose to utilize a broker to represent your interests and consult with you during the auction, no additional fees will be required. In other words, you gain a broker’s experience and guidance at no cost.

I would like for you to consider taking advantage of my knowledge and services during this auction as I am uniquely qualified to advise you during this process. Should you choose to avail yourself of my services, I have made the buyer’s registration form available here for your convenience. Please complete this form and fax or email to the numbers listed on the form. Do not hesitate to call me at anytime with any questions: 615-945-7123

Why Grant Hammond

In addition to being the foremost expert in the Nashville condo market, I own an interest in RealtyTrust Auctioneers, LLC. The experience and knowledge I have gained from working with principle auctioneer E. Dwight O’Neal has uniquely honed my ability to help guide condo buying decisions in an auction atmosphere. There are certain methods and strategies that can be employed during the auction process which can lead to purchasing at a lesser price.

Additionally, I will continue to receive updates from all parties and principles to the auction prior to and during the auction. Invariably, this information usually changes the buying strategy on auction day.

Below is a complete list of West End condos to be auctioned.

West End Auction Units

Thanksgiving Real Estate Humor

Thanksgiving HumorI don’t know about you guys, but I know way too many property owners who are feeling like the turkey on the left. In an effort to show you that your situation could always be worse, here are a three mega tales of real estate loss…I hope these make you feel just a little bit better:

The $200 billion CalPERS real estate investment portfolio has lost 23.5% of its value in the last fiscal year alone cancelling out 6 years worth of gains.

The once glorious Pontiac Silverdome which cost $55.7 million to construct in 1975 sold at auction on November 17th for $583,000.

Celebrity Nicholas Cage lost 2 New Orleans homes located in the French Quarter to foreclosure in early November. These two properties were valued at $5.5 million. In addition, records show that the actor owes another $6 million to the IRS. Whoa.

Have a safe, happy and fun Thanksgiving!

thanksgiving jokes

Terrazzo Re-Prices 30 Condos at Auction Rates

In a move that has both shocked some people and delighted others, the sellers of the Terrazzo condos in Nashville have decided to extended the auction prices. Although these prices do not currently appear on the MLS, they are available on the Terrazzo’s website and were direct emailed to all of the buyers and agents who participated in last Saturday’s auction.

A lot of people have asked if these sales will bring the entire Nashville condo market down to $225-230/ft prices and are worried that their investments in the surrounding buildings are now irrevocably harmed. I do not think that this is the case, just as it was not the case when the Adelicia gave the last 20 buyers in that project a 25% discount to close out the building out 18 months ago.

However, make no mistake about it, this drastic price drop will have a net present effect on all of the surrounding condos. That effect will diminish the further you travel away from the building, but it will still be felt for the short term. I would expect that very few condo developers will lower their listed prices as a result of the Terrazzo auction and subsequent re-pricing, but I do believe that they will become more flexible in negotiating their future deals.

Golden condo buying advice

Now is an excellent time to be a condo buyer in any building. Take your time to look around at all of the options to see which best fits your lifestyle, design aesthetic, preferred area of Nashville and investment goals. Each building offers something a little bit different and the end prices will reflect that fact.

After you have narrowed your choices, research the recent and historic comparables in that particular building in order to formulate a realistic offer, an offer that will insulate you from the eventual condo price floor that should be reached within 12-16 months (my opinion). If you plan on owning this condo for at least that period of time, I cannot see a way to get harmed during the resale process unless you have not followed the above advice.

I have given this condo buying advice before, but it bears repeating: “Be fearful when others are greedy, and be greedy when others are fearful.” Build in the down times and prosper when the rest catch up.

Contact Grant for private condo consultation  √

Terrazzo New Condo Prices

Selling your Nashville condo is not the only way to exit. You could also lease your condo. For those of you who doubt the viability of leasing, I refer you to Summit Property Management, the leader in this rental market.

See all condos for sale in The Terrazzo

30 Year Home Mortgage Rates Update

Mortgage Rates 11-23-09Rates for 30-year home mortgages approached the all-time low of 4.78 percent again last week, falling to 4.83 percent from an average of 4.91 percent a week ago. The 15-year rate did reach a new bottom, dipping from 4.40 percent to 4.32 percent – the lowest level since Freddie Mac began tracking rates in 1991. Wellesley College economist Karl Case says the Federal Reserve’s efforts to purchase mortgage-backed securities from Fannie Mae and Freddie Mac is lowering rates on Nashville home loans.

An obvious tide of home refinance applications came as a result of these lower rates and for the first time in 4 weeks, new home purchase applications increased by more than 5 percent. Nashville mortgage rates appear to have reached an uncommon low point due to the artifical downward pressure resulting from the Fed’s efforts to purchase MBS paper.

If I have said it once, I have said it 100 times, these rates cannot stay at these levels for very much longer. The Fed is doing everything in its power to help stimulate the US housing market, but at some point, we’re going to have to start paying down the national deficit. I am not telling you to go out there and buy a house or condo right this moment, but this is the time to begin a meaningful discussion.

Video of the Terrazzo Condo Auction in Nashville

This is video of Terrazzo condo #1407 during the by Accelerated Marketing Partners on Saturday November 21st, 2009. Condo #1407 was the 18th condo to be auctioned and sold for 62.82% of the original asking price.

Click here for a complete list of the condo auction results.

See all condos for sale in The Terrazzo

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