We”ve Moved!

Thanks for visiting this blog site. If you want to keep reading and commenting on what I have to say about the Lake Norman region real estate market, visit my new blog at http://franparkonline.com. A whole new platform, new features on the way, and the same witty reparte you’ve come to love (or hate).

Home Sales Up In The South

A recent article in today’s Charlotte Observer stated that pending home sales in the South were up 13% in December of last year, outperforming the West and the Northeast markets. Pending sales are properties under contract, which generally will close in about 30-45 days.

At the same time, prices continue to fall in every market. It might be that those falling prices, coupled with low mortgage rates, are driving the increase.

While new construction continues to slump, inventory of resales is strong, providing a lot of choices for a buyer looking for a good deal at a good time. While there aren’t many new homes being started, there are a lot of them in builders’ inventories, and they are dealing as well.

Ready to begin a seach?  It can start with a phone call or email, and you can be viewing your dream home on line. Contact me and let’s get started!

Home Owners Associations-Are They For You?

From time to time I get clients who request I search for a property that has no home owners association, or HOA, governing the neighborhood. Reasons range from having had a bad experience with one in the past, to not wanting the added expense, or in some cases, a desire to do something with the property that would be restricted under normal covenants and restrictions. So how do you decide if an HOA is for you?  Start by asking yourself a few key questions:

1) Do I have plans to use the property for something unusual, such as keeping livestock, or storing cars or trailers?
2) Will I have an issue if a neighbor wants to do something like that?
3) What are my expectations for my neighbors and my neighborhood? How can we keep it looking its best?
4) Do I want community amenities? A pool, a playground?

Generally speaking, if you want to escape an HOA, you need to think about a more rural location. Similarly, if you want a larger lot than currently being offered in new subdivisions, you also need to think rural. However, a larger lot in a rural location with no covenants and restrictions also means that unless there are zoning laws in effect (which seem to be rare in rural NC), you might end up with a singlewide mobile home on the lot next to your new all brick two story transitional home with the horse barn and oversize garage for your motor home.

So in some cases an HOA can be your best friend. Square foot requirements, siding restrictions, architectural review boards, all can keep your community looking nice, and protect your investment. What you have to decide is what do you get for your HOA dues, and do you preceive it as a good value?

If you are considering a neighborhood, and have questions about the HOA, ask your agent to find the covenants and restrictions for your review. Most real estate offices try to keep current CCRs on file for that purpose. If you are going to pay for the service an HOA provides, you should know what you’re getting.

Here’s one last thought; if you do move into a neighborhood and don’t like the way the HOA is run, get involved and change it from the inside. Most associations I know are always looking for people to step up and lead.

Economic Stimulus Package-No Help For Housing Sector

According to a February 3rd article in the Charlotte Business Journal, the Charlotte Home Builders Association is petitioning members of the US Congress, upset over the total disregard for the housing market when developing the so-called “stimulus package” of $800+ billion.

The Homebuilders would like to at least see the $7500 tax credit for first-time buyers raised to $10,000, and extended through the end of 2009. I have also heard some folks argue that it should be doubled, and not required to be paid back. But in any event, I would like to at least see the Congress of the United States acknowledge that the housing market needs help. After all, it was the housing market that first felt the effects of the recession.

The Democrat-controlled house didn’t have any problem seeing the value in $300 million for contraceptives, $75 million for tribal alcohol and substance abuse reduction, and another $75 million for smoking cessation. They are also ready to pay back Hollywood for its extreme left-wing support during the campaign last year, by allocating $246 million in tax breaks for movie producers to buy motion picture film.

Where’s the help for the housing industry in this package? It seems to have been totally ignored. If you are in the business of building or selling homes, or in any of the supporting trades, like furniture, carpet, appliance sales, etc, this stimulus proposal doesn’t do much to help you out. Write or email your representative or your senator, and let them know that you shouldn’t have to be a chain smoking alcoholic Native American independent filmmaker to get help from the stimulus package.

Contingent Sale

I had a question from one of my listing owners the other day about how contingent sales work.  Seems that it might make sense to write a brief post to clear this particular option up for folks. I would imagine there are more of you out there with the same questions.

First, let me say that in a sellers’ market we rarely need to consider such an offer. But in a buyer’s market, with a lot of competition and few offers showing up, sellers might want to consider this approach as a viable one. As with any North Carolina real estate transaction process, the standard forms used have some safeguards built in for both parties. As a seller, here’s some things to understand about a contingent offer:

Once you have accepted a contract that hinges on the buyer selling a home, you may continue to market your property and accept a backup offer. If you do get a backup, you have to notify the contingent buyer and give them a specified time to respond by either waiving their contingency and closing without selling their home, or terminating their contract. If the contingent buyer terminates the contract, they are entitled to their earnest money back. 

One thing to remember is if you get a backup offer for more than the contingent offer, you cannot renegotiate the first agreed-upon price. You can only make them decide to “fish or cut bait,” as it were.

As for the contingent buyer, the important thing to remember is that you will agree in the contract to a date by which you will have your home sold. Miss that date, and the seller may terminate your contract. The operative word here is “may.” The seller does not have to take that action.  Also important for the buyer is to pay close attention to the specified dates in the contract. There are timelines spelled out in this document that you must meet.

In today’s market both parties may want to consider using this option to find or sell a home. It isn’t the best scenario, but it might be better than no scenario at all. We need to be flexible and creative in a tough market such as we now are seeing. If you have other questions about this topic or another real estate subject, contact me and I will be glad to help you get your answers.

Timing The Market

 

Ask anyone in real estate today and they will tell you unequivocally that we are in a “Buyer’s Market.” The indicators that make that so are high inventory, falling prices, and low interest rates. So why aren’t buyers buying?

A lot of potential buyers are operating from a place of fear, afraid that they might pay too much for their home. If a buyer purchases a home for $200,000 today, and sees the news next month and learns that prices fell another 2%, they feel like they have lost $4,000. So in an effort to “time the market,” buyers become waiters, fence-sitters. This can be a costly approach to finding a new home, and I’ll tell you why.

First, let’s understand that while “what goes up must come down,” so too what goes down must come back up. In the case of real estate, we need to remember that home values will appreciate over time. At the very least inflation will see to that. At the same time, paying your mortgage down builds equity, and the tax benefits of homeownership also can improve your net cash flow.

Second, consider this risk as you wait to try and buy at the bottom of the market; you do not know what interest rates will do while you wait. Right now mortgage rates are at historic lows. I can’t see them going much lower, but I can see them going up. From a financial calculation standpoint, any savings to homeownership costs a 10% drop in home prices provides is completely wiped out by a 1% increase in loan rates. Are you savvy enough, or lucky enough to guess right on your timing?

Finally, we are coming out of a hot real estate market where it was conceivable that you could buy and sell a property every three to five years and make money. Today, your home purchase must be considered a longer term investment, much like your IRA or other investments. Remember, a home is more than just an investment. It is the place where you choose to raise your family, send your kids to school, and make friends and form relationships in the community.

The Lake Norman area home inventory contains some very good deals for buyers. If you’ve been considering buying a home, but have been fearful of making a financial blunder, consider the points I’ve made above.They may help you determine your next steps.

For Sale By Owner

Thinking about trying to sell your home yourself, without the aid of a real estate professional? A lot of folks choose this avenue, for differing reasons. In some cases, the difference between the home’s market value and the amount owed is not great enough to be able to pay a listing fee. Others have had experience before selling by themselves, and feel they know how to do it again. Obviously, still others choose FSBO just to try and maximize their net proceeds for future use.

In a seller’s market, where inventory is down and home prices stable or rising, attempting to sell on your own might work. In a buyer’s market, with falling prices and lots of competition, it can be a bit more challenging. Either way, here are a few tips for those of you who want to try this method of selling your home:

1. Make sure you know the laws in your state about disclosure. In North Carolina, as well as other states, owners must complete and make available a Residential Property Disclosure  that informs prospective buyers about the condition of the property. Failure to disclose or misrepresentation is a serious issue.

2. Think about how you will accomodate people that want to view your home.  If someone wants to see the home on a weekday morning, can you be there to let them in? How will you let them tour the home on their own and still feel comfortable about them being in there? Or will you plan to escort them around the property and make a sales pitch?

3. Will you agree to pay a Realtor® fee to an agent that brings you a buyer? If you will, make sure you advertise that on your sign out front. It can mean a lot more showings. If not, expect any offers that might come to be discounted by the prospective buyer that knows you are saving Realtor® commissions.

4. Have you thought about how you qualify an offer from a buyer? How will you know that the prospect is creditworthy? If you know you are getting an offer, request that it is accompanied by a pre-approval letter from a reputable lender. If someone is offering cash, ask for proof of funds. You do not want to spend a lot of time getting to closing, and take your home off the market, only to discover the day before closing that your buyer can’t buy.

5.  How will you attract buyers to your home? Besides the sign in the front yard, consider a flyer box with color flyers detailing the features of your home. Include color photos. Make sure all contact information and the price is on the flyer. Also, get some internet exposure. If you are not going to be on your area’s multiple listing service website, put your home on craigslist. Unless lots of people have a reason to drive past your house you need to let people know you are offering your home for sale.

These are just a few things you should consider when attempting to sell your home alone. You may have more questions about how to get started. As a North Carolina Realtor®, my first suggestion would always be to consider listing with a licensed agent. But if this is something you need to try, and you have other questions, call or email me and I will give you honest answers.

Mortgage Rates Update

Thinking about buying a home? Here are recent mortgage rates on several different loan products, provided by Kim Peschock, our Century 21 Mortgage Advisor*:

Conventional Products:

·        30 year Fixed Rates:    around 4.875%                      

·        15 year Fixed Rates:     around 4.625%

 

VA/FHA Fixed Rates:  around 5.45%

 

 

Jumbo (Loan Amounts of $417,000 and up)

·        30 year Fixed Rates:  around 6.125%

• 15 year Fixed Rates:   around 5.750%  

These are some pretty impressive rates available now on new and pre-owned homes. Century 21′s Approval Process  can get you pre-approved for a loan in twenty to thirty minutes over the telephone. This is your best first step if you are in the market for a home. Before you call a Realtor, talk to a lender about pre-approval.

 

*Rates are always subject to change.

Pricing Your Home Correctly

One of the hardest realities of today’s economy for people to grasp is the effect the recession is having on home prices. In discussion with people in a group, everyone agrees that home prices are falling, albeit much less here in the Lake Norman area than in other parts of the US. But cull one person out of the pack, and start discussing the price of their home, and it’s a different situation. It’s easy to speak without emotion about the housing market, but very difficult to talk about your house.

Some folks like to do their own research to determine their home’s value. Unfortunately this research is usually flawed, inadequate, and not free of emotion. For instance, you cannot determine what your home will sell for by looking at the prices of the other homes for sale in the neighborhood. They may be priced incorrectly, different in size or features than yours, or what is referred to as less than an arm’s length sale, ie; a foreclosure or short sale. Computer savvy people that figure out how to gather up the sold and/or active properties in their neighborhood from an online source are even more prone to making errors in their calculations. An example of this would be simplifying your price calculation by using an average dollars per square foot number. Generally ranch homes will sell for a higher $/sf number than two story homes. This is a poor way to try to determine your home’s value.

Unless you have an understanding of how an appraiser will determine a home’s value, you cannot understand how a Realtor will prepare a Comparative Market Analysis of your property’s value. There are intricate dollar adjustments that need to be made to make comparable properties look as much like the subject as possible. Number of baths, interior features, exterior features, and more play a part in the analysis. So do age of properties, location, condition, etc.

Finally, the one argument I hear a lot from folks considering listing their home is “I’ve been in that house down the street. Mine’s worth more because…” This is the hardest objection to overcome, because it is emotion-based and subjective.

My recommendation to anyone thnking about listing their home for sale in this market is to get a qualified, experienced Realtor to provide you with a thorough market analysis. If you select an agent that says the analysis can be done without seeing your home, select again. If you need help with this important step and don’t know who to call, I would be glad to do the analysis. There is never a charge for this service. Call or email me and I will be glad to help.

Buyers- Do Your Research

Here’s a few tips for buyers looking in today’s real estate market that will help you make better decisions and use your time more efficiently. Since there is still a healthy inventory of homes for sale in the Lake Norman area, it’s not hard to find several properties in the same neighborhood that fit your initial criteria. It’s also not hard to find several neighborhoods that could possibly meet your search criteria.

Step One is to research the neighborhood before actually spending time viewing properties. If you ultimately don’t like the community, it doesn’t matter what the homes are like, does it? Does the community have the amentities you desire? Are the lots suitable for you? What about your commute? Are schools, services and shopping within your acceptable range? Are you comfortable with the age of the homes in the community?

Step Two is after deciding on what neighborhoods you want to search. Are there parts of the community that suit you better than others? Sometimes the lots in a certain area of a neighborhood are level and square, and others in the same ‘hood have no back yard, or a steep slope up or down, or are oddly shaped. Rule out the homes that you can from the outside. Steps One and Two can be accomplished with a Sunday drive.

Step Three: Solidify your “Must Have” list in advance, and use it to help make choices. If you aren’t sure on a feature or number of rooms, then plan to see it. But if you know, then don’t waste your time.

There are a lot of homes listed out there that may fit in your price range and size parameters. But by following the steps above, you can drill down into the inventory and build a list of homes that are most likely to suit your needs . Then it’s just a matter of floor plan, condition, and seller motivation. If you would like help with the search process, call me or email me and I will be glad to help.