Log Cabin Blog

As I have reported in other blogs on my website, Short Sales and Foreclosures offer significantly reduced prices but have several major down sides which, after intense investigation, break down to these:

1. Typical response time once an offer is tendered is 90 to 120 days if the property is financed by a large national mortgage lender (which the majority are). On a normal transaction the response time is 72 hours or less. It appears that this is the case because these lenders were totally unprepared for the current economic conditions and to use East Tennessee jargon, “The head of the dog doesn’t know what the tail is doing”. Frequently, an offer on a short sale has to be submitted 5 or 6 times to various departments because there are no established systems for dealing with these situations. Then the offer may have to go before 1 or more committees to be approved.
2. Even if you get an acceptance of your offer, the lender reserves the right to terminate their acceptance until the transaction has closed and the buyer has no recourse for any closing costs they have expended.
3. Since mortgages do not include furnishings (although sales of existent cabins have traditionally come fully furnished at the sales price), short sales and foreclosure sales typically include no furnishings and the buyer has to pay an additional $20,000 to $30,000 (on a 1 to 3 bedroom cabin) before the cabin can be rented.

So where’s the good news? If you look hard enough you can usually find a silver lining to any dark cloud and I’ve found one!  Developer owned short sales that are locally financed and approved are available and in this situation these short comings can be virtually eliminated! This leaves you with a more or less standard transaction only at a significantly reduced price. The same is true for cabins where the developer has allowed foreclosure and the lender has already approved the situation and has assigned an officer to handle the sale. Further, in these situations, the cabin transfers “As Is” (i.e. furnished) and thus saves the buyer the extra expense of refurnishing.

More good news… After weeks of digging I have found several PRIME 1, 2 and 3 bedroom cabins here in the Smokies that fall into this category and are superb investment options.  These cabins are luxurious one to three bedrooms and are now discounted 25% to 47% from their original prices.

Email me at will@willquinn.com for details. 

In the last month, I have been getting significantly more inquiries than I have for the last year. There seems to be a pent up demand for Smoky Mountain Cabins and people are wondering when is the right time to buy?

Historically, when there has been a down turn in the real estate market, Sevier County, Tennessee has been one of the last areas affected and one of the first to recover. The increase in my activity indicates to me that we are seeing the first indications of an impending recovery. 

Another indicator of the underlying strength of this market is the fact that rental incomes for quality cabins in 2008 are holding their own relative to 2007 incomes. Even with higher gas prices, better cabins are booking strongly.  Ultimately, a cabin’s selling price is related to its income. So, what’s happening to prices in light of this?

Through the 2nd quarter of 2006 we maintained a brisk sales market. Then it seemed to drop like a stone. Consequently, over the last two years, over all prices have lowered, but not unrealistically. It’s a fact of human nature that the longer a strong sales period goes, the more sellers push the envelope to see just how much they can get for their cabin. So, while there has been a realistic adjustment in prices, they haven’t crashed and appear to have bottomed.

Another interesting wrinkle in the market is that some sellers of top of the line cabins are not offering wholesale price drops but are offering buyer incentives that are more beneficial to the buyer than lowering the price.

So, the market is now ripe for savvy buyers and it appears unlikely that it will get much better. How long will this go? My hunch is that as long as 51% or more of the people come out of the November elections more optimistic than they are now, the Smokey Mountain cabin market will begin its next cyclical up turn.

For your Free guide to buying a Smoky Mountain cabin go to: www.willquinn.com .