Investors Looking For Short Sale Steals, Move Along!

By admin

Article Courtesy of Stephen Wilde of Wilde Law Firm

Carolina Living Real Estate has sold numerous Short Sales and we are huge advocates of using Wilde Law Firm to represent our sellers and assist them with getting their home sold.  As Stephen has said, Realtors should not be handling these transactions by themselves due to liability.  We know that with regard to banks and short sales in NC, Stephen knows his stuff.   Thus, we have chosen to publish an article he wrote in his newsletter.

Enjoy!

If you are an investor in the real estate market looking for steals then you might want to skip short sales and head to the courthouse steps. Short sales require a “market price” offer and have for several years now. Seriously, I am not kidding. Just so you know, the bank/servicer has heard all of the arguments….”Well if you don’t take this offer it will go to foreclosure”…”That is ridiculous. You will never get that for the property”…”Well look at what it will cost to get this property up to livable standards”…”If you don’t give us a discount, my buyer will walk”…etc. None of these arguments will result in an approval below market price.

Bank/Servicer. Remember that we are usually dealing with a loan servicer who does not own the loan but is merely servicing it. The loan servicer must strictly follow the note holder’s guidelines. The loan servicer will be audited and if they have deviated from the guidelines at all, like approving a short sale below market price, they will suffer the consequences monetarily.

Why? The main reason for this strict guideline is that the note holders do not want to establish a ‘sold comp’ in that neighborhood below market price because it negatively affects all the other property values….many of these properties also have loans secured by the property. Prior to Fannie Mae and Freddie Mac establishing this ‘market price offer’ requirement we had a falling market. After this guideline change we finally saw the market become more solid in most areas.

Market Price. “Market price” is usually defined as what other properties have sold for in that neighborhood or in a one-mile radius of the property in the last 3 months. Pull the ‘sold comps’ and you will come up with the range that the short sale offer needs to be in. That is correct, there is no discount for a short sale. Note: If it is an FHA or VA short sale the appraiser assigned to provide the value of the property is not usually allowed to use distressed sale comps (short sale or foreclosures) in the valuation.

“Let’s just see what the bank/servicer says.” This is a strategy that many take when approaching a short sale. In other words, “let’s base our entire short sale strategy on the bank making a mistake.” This strategy usually ends up shooting the Seller in the foot with a valuation at the top end of the ‘sold comps’ range…or even higher.

Property Condition Issue. If there is a major defect or issue such as a roof, foundation, HVAC, water damage, mold or Radon, then we can usually get an approval that takes into account the amount it will take to fix that specific issue. However, a certified home inspection and several estimates will have to be presented at the BPO/appraisal appointment in order to get the market value established lower than the comps. Note: It is important to establish the condition issue and the repair costs prior to the BPO appointment, not after the short sale approval letter is issued. After the Approval Letter has been issued the bank/servicer generally does not reconsider the valuation or renegotiate price.

General Fix up. Please understand that the bank/servicer does not own the property or even the loan, most of the time. They are not going to put in new carpet, paint, refinish floors, upgrade kitchens, buy appliances, mow the lawn or clean the pool so do not think that you are going to get a reduction in market price for these items. The only thing these issues will do is establish market price at the lower end of the ‘sold comp’ range.

I don’t give you this information to be difficult or to cozy up to the bank/servicers. I am just attempting to inject some reality into the market. Our approach is always to try to understand the bank/servicers as much as possible and give them something they can say yes to at every step of the process so that we can get the parties to closing as quickly as possible. Arguing with the driver of the bus is far less successful. We may have to roll up our sleeves and get into a scrap on occasion but I feel that approach should be used sparingly, not as the first and only strategy.

Pricing Your Home to Sell – Get The Best Value

By admin

Getting ready to get into the real-estate market?

Most sellers today are nervous and unsure. They wonder: is taking a loss on  our house inevitable?

The answer is no! A strategic sales plan, coupled with a smart buy in your  new location will ensure that you recoup the maximum value for your home.

Your Strategic Sales Plan

Consult with an expert, Carolina Living Real Estate real estate agents ensure your house is priced competitively and well-staged. Why? Because while there are always three factors to getting a home sold—location, price, and condition—only two are under your control: price and condition. Of the two, which is more significant? Price. Remember that price will correct bad condition, but condition will never overcome a bad price.

Act fast. Every month that price on your home may decrease, your costs remain the same. For example, I Sell Homes, Inc and Carolina Living’s research shows that sellers who listed their home at the price the agent originally recommended, sold the home 38 days faster. This is over a month of mortgage and tax payments! For a home that cost $200,000 at time of purchase, with 20 percent down and an interest rate of 6.5 percent, selling a month sooner results in a savings of $1101.31 for the mortgage alone, not including the taxes and insurance that the homeowner would be paying during this time.

Don’t worry about where the market has been, keep your focus on where it is going. The price your neighbor down the street got six months ago is not relevant in a market where your house is competing with others from all across town. Again, a local real estate agent will have the kind of long-term, wide-ranging data that will help you decide how to pinpoint your price with precision.

Your Smart Buy

Move up. Whether you are moving to an area where prices are in a downturn, or dreaming of nicer, bigger, home in your own town, selling your house now can get you into the home of your dreams. Falling home prices are a great opportunity for a savvy homeowner looking to move up. Even though your house price may be lower, the smaller loss at sale can be made up by greater savings at purchase. For example, let’s take that same $200,000 home, and imagine that it has decreased in value by 5 percent, reducing the sales price to $190,000. At the same time, let’s imagine that you would like to move up and the $400,000 home you have had your eye on has also decreased by 5 percent. That’s a savings of $20,000, and it is a home that is likely to be better positioned for appreciation when the market rebounds.

To Rent Or Buy In A New City?

By admin

You’re officially making the big move from one city to another. Maybe you’ve landed a new job or have decided you want to travel to a new city to explore and live a little. All your bags are packed, you’ve said goodbye to friends and family and you’re ready to hit the road to the new city you will soon call home. One of the biggest decisions you will come across is whether you should rent or buy. Here are a couple of reasons why renting is better than buying for the first couple of years living in a new city.

It takes time to learn a new city, new neighborhood, and possibly even a new culture. Within the first month, you may be completely in love with your new city. It’s easy to be blinded by the excitement of living in a new place because it’s all brand new to you. After living there a few months, things could change. You could end up hating the area that you are living in. If you were renting, it would be much easier to move to a different neighborhood than if you were tied into making monthly payments on a mortgage for a house.

A lot can change in a year. You could end up hating your new job and your new boss. What if your old boss wanted to hire you back? It would be easier to move back home for your old job if you were only renting a place for a year versus if you had purchased a home. If you had bought a house, you would most likely be coughing up your own money to pay off your mortgage and pay for closings costs because your home had not increased in value in such a short amount of time.

All in all, it’s best to give yourself a few years to really learn a new city, in every aspect, before making a long-term commitment, like purchasing a house. Give yourself time to explore the city and all that it has to offer. Maybe after your first year, you’ll find an even better neighborhood to live in that fit your needs perfectly.

Article by Tom Miller Escape Somewhere

Major Home Builder Has Bullish Opinion On Housing

By admin

According to Business Insider, Homebuilding giant PulteGroup reported Q3 net income of $117 million or $0.30 per share.  This was a big improvement  from last year’s $0.34 net loss.

According to Pulte CEO, Richard Dugas: “In past cycles, the U.S. housing industry proved to be a powerful engine that could help drive the economy forward and accelerate the pace of a recovery.  A similar scenario could again be unfolding, as the industry is responding to increased sales by hiring additional workers and purchasing more building materials.  While we are mindful of any potential impact from global or domestic economic issues, we are optimistic that the combination of ever higher rental rates, record low interest rates and limited housing supply can continue to support the improved housing demand.

Read more: Business Insider Pulte Group Article

In Charlotte, we have seen an increase in closing and a decrease in inventory pointing towards a very minor switch from a buyers market to a sellers market.  However, we are very mindful of the still looming Charlotte Foreclosures and Lake Norman Foreclosures that still impacts the ‘everyday’ Charlotte area seller.

Be A Carolina Living Real Estate Service Provider

By admin

If you share our enthusiasm for honesty, integrity, and quality of service, we’d like to help market your services to homeowners in the Charlotte and Lake Norman areas. We need your business description, including details,website if any and  testimonials. If accepted your contact information will be provided to all customers who search for your business category on our website.

Here are a few tests we require that to be on our list:

  • Pass  reference checks and business license verification
  • Maintain general liability insurance
  • Earn satisfaction rating from our customers when we follow-up

    Your Name (required)

    Your Email (required)

    Subject

    Address

    City

    Your Message

    Charlotte Real Estate – Comeback Time

    By admin

    Even though uncertainty exist throughout the world, real estate is primed for a comeback.  What most people don’t know ui that real estate is emerging as sure thing.

    Only a couple of years ago real estate seemed the biggest gamble in town. We have seen recently, especially for those looking for high end deals, an increase in those looking at real estate in a different light.  Dare I say it,maybe a sure thing.

    A new property management client of Carolina Living Property Management is a General in the Air Force with 3 years until retirement.  He just purchased a beautiful home on Lake Norman that has tax value around 1 million and  he purchased it for approximately 300K less than what these homes traditionally sell for.  He has decided to rent because the rental market is so strong and the deal he was able to get was too good to pass up.

    Quite a few buyers took advantage of this situation as uncertainty grew in the stock market.

    All of the factors affected 2011 in a positive way with regard to real estate and point to an even better 2012.  Already in 2012, Carolina Living has had several closings in what is considered the high end market.  This is a good sign for things to come.

    To support this data, the Institute of Luxury Home Marketing conducted a survey of U.S. agents that work in the luxury market and it is showed a better than 75% increase in activity in 2011 to 2010.

    It is predicted the we will see even more high end properties become distressed sales as owners choose strategic default or lose their home to foreclosure.  Sadly one persons heartache can offer another’s  opportunity.

    We are betting that 2012 becomes even better on 2011.   For this reason we have created two very important websites that give our savvy buyers a place to shop.

    Free Lake Norman Foreclosures

    Free Charlotte Foreclosures

    Charlotte Real Estate Statistics 2012

    By admin

    According to Trulia.com:

    Average price per square foot for Charlotte NC was $119, an increase of 20.2% compared to the same period last year.

    The median sales price for homes in Charlotte NC for Dec 11 to Feb 12 was $157,000 based on 445 home sales.

    Compared to the same period one year ago, the median home sales price increased 4.7%, or $7,000, and the number of home sales decreased 75.4%.

    There are currently 6,464 resale and new homes in Charlotte on Trulia including 3,909 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.

    The average listing price for homes for sale in Charlotte NC was $277,800 for the week ending Mar 14, which represents an increase of 0.2%, or $648, compared to the prior week. Popular neighborhoods in Charlotte include Myers Park and Dilworth, with average listing prices of $827,556 and $413,645.

    Buying Or Selling Your Charlotte Home With Dodd-Frank

    By admin

    There are a lot of articles and summaries of the Dodd-Frank law and most of them seem to be written by academic types that make it difficult to understand by the everyday consumer and agent(like me).  The law is intended to protect consumers from preditory lending that helped kill the housing market.  There also provisions aimed directly at banks, bailouts and the like.  However, much of that language is intended for lawyer types and don’t affect the everyday consumer day to day.

    There are a few things to note if you are buying or selling real estate.  There is much confusion in a lot of this and I am sure there will continue to be tweaks and different interpretations.  One of the first ones to address is the risk factor that lenders are now required to expose themselves to.  This is an area that, to be honest, I do not have a firm grasp.  Having said that, I will try to give a brief explanation.   Basically if a lender is going to make a loan that is risky (supposedly a loan where less than 20% is put down by a buyer), the originating lender has to retain 5% of loan amount  to help mitigate any defaults.  The question becomes (1.  Where is the 5% coming from, 2.  Will the lender even make a loan to someone without 20% down).  Both these by definition affect the buyers pocketbook!  One caveat to this and something that makes it even more confusing, Dodd-Frank also has provisions and/or rules that affect how much a lender can charge.  So….what will they do!   Only time will tell.

    This leads us to the rules about how much a lender can charge.

    Loan originators can still base their fee (called points) on the loan amount. However, under Dodd-Frank loan originators can’t charge the buyer points and collect an origination fee from the lender (called rebate financing). The lending industry is still working on compliance requirements, and the April 1 start date could be delayed.

    Although the intent of the legislation is to protect consumers from being overcharged, there could be complications for buyers trying to get approved for a mortgage in a timely fashion. Most buyers don’t know when they make an offer if they want a loan with points or a no-point loan with a higher interest rate. Dodd-Frank could make it more difficult to move from one loan product to another.

     Here is a buyer tip.  In addition to checking on rates and loan costs, ask about the process and cost of changing loan products mid-stream.

    One more thought about selling your Charlotte area real estate home.  While not directly related to Dodd-Frank, the appraisal process has become one of the biggest deal killers.  Lenders are no longer allowed to choose or even talk to an appraiser.  The process has brought appraisers to appraise homes completely out of their geographic area or comfort level.   However, it is not illegal for the sellers agent to talk to appraisers.  At Carolina Living Real Estate, we recommend to our agents they do two things to mitigate these potential problems.

    1.  We will meet the appraiser at the home and share our comps to assist with how we came up with our selling price.

    2. We recommend but don’t require that our sellers get a pre-listing appraisal.  This has been huge in our ability to get homes sold.

    3.  We refrain from taking overpriced listings.

     

    Squatter Nation – Years Without A Mortgage Payment

    By admin

    According to a recent article at CNN-Money, Some 4.2 million mortgage borrowers are either seriously delinquent or have had their cases referred to lawyers to pursue foreclosure auctions, according to LPS Applied Analytics.

    Nationwide, it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction. In New York, the average is 800 days and in Florida, where the “robo-signing” issue is particularly combative, it’s 807.

    In this article specific examples were given where borrowers have stayed in their homes as long as 5 years without making a mortgage payment.

    An example of what has happened across the nation:

    A borrower purchased a two-bedroom on Tampa Bay in 1998 for $135,000.

    As the waterfront property’s value skyrocketed, eventually reaching $750,000, they refinanced twice (once to expand a business), and took out a second mortgage. They now owe more than $600,000 on the home, which is worth only $235,000.

    Until we get out of this mess, the housing market will continue to drag!  However if you are looking to buy a foreclosure in the Charlotte and Lake Norman areas, the time may be right.

    Check out our FREE list of foreclosures

    Lake Norman Foreclosures

    Charlotte Foreclosures