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Tuesday, June 26, 2012

Things To Know About the Not-So-Common Knowledge of Short Sales

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When families find themselves staring at the prospect of losing their home to whatever reason, whether job loss, downsizing, relocation or anything else that is unforeseen – many times they feel cornered and unable to see the options.  For years during the current economic state that has resulted in an unstable real estate market, the answer seemed to be foreclosures.  But more and more often, short sales are taking over as the alternate choice. 

Here are three things worth knowing about short sales:

It Doesn’t Hurt to Ask For An Adjustment

Many people do not realize the benefits of simply engaging in dialogue with their banks.  With the large number of distress sales out there these days, banks are far more willing to engage in conversations about alternatives to foreclosure.  Foreclosures end up costing lending institutions thousands of dollars to litigate, plus hours of time and resource put in to handle each case.  By expressing the desire to explore a loan modification, banks are relieved of this stress and are likely to agree with a loan modification.

Through an adjustment of your current interest rate, you may be able to afford the same home and spare you and your family the difficult process and impending negative impact of a foreclosure.  Not only does a loan modification save homeowners money, it also protects their credit from long-term negative affects otherwise experienced with foreclosures.

Know What The Tax Man (Or Woman) Has To Say

Short sales are a great way to spare a family of much pain but there are tax implications.  Like anything else, before embarking on this financial shift with the ownership of your home, it is a good idea to familiarize yourself with everything you need to know about the taxes involved.  In short, the tax liability works like this:  On a mortgage with $200,000 owed that has a short sale of $100,000, there is that remaining $100,000 left that will show up on a 1099 in your name.  This translates to income and should be managed with a tax advisor so you understand all there is to know about that real estate income.

All Players Must Agree to the Terms

A lot of times mortgages involve multiple lenders.  When those homes are being purchased, surely the thought of needing to do a short sale was not a consideration.  Now that you do find yourself looking at a short sale, it is essential to iron out the terms of agreement with all lenders involved. 

When there is more than one lender the secondary bank must agree to give the primary lender a portion of the liability on the difference to you.  This sounds easy enough but since this can be a matter of lender-specific policy, you may come across a lender that is unwilling to agree to this term of a short sale.  By researching in advance the number of banks that are involved and what their respective policies are regarding short sales, you will cover important bases and be far more prepared.
Short sales are a choice that offers many families reason to hope and a path to dream the reality of living in their own home again, without struggling to manage the mortgage.  Armed with the key knowledge necessary to tackle this newest intervention on the real estate woes of many, you can and will hope to succeed in your housing endeavor and look forward to a positive outlook!

Wednesday, June 20, 2012

Toddler Property Laws

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1. If I like it, it’s mine.

2. If it’s in my hand, it’s mine.

3. If I can take it from you, it’s mine.

4. If I had it a little while ago, it’s mine.

5. If it’s mine, it must never appear to be yours in any way.

6. If I’m doing or building something, all the pieces are mine.

7. If it looks just like mine, it is mine.

8. If I saw it first, it’s mine.

9. If you are playing with something and you put it down, it automatically becomes mine.

10. If it’s broken, it’s yours!

Wednesday, June 13, 2012

What First-Time Buyers Need to Know

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If you are considering purchasing a new home, then you probably know now is the best time to buy.  In fact, we haven’t seen such incredible market conditions for buyers in as many as sixty years!  But there are a lot of details that people may not realize.  To help you achieve success during this process and end up with the perfect home, at a great price, in the best location and at a great interest rate – there are some things that we feel you should know before starting. 

Buying for the Right Reasons Is Key
In recent years, we’ve seen an influx of property “flips” where a home is purchased at a low price, numerous updates and upgrades are made through a series of renovations and then the property is resold at a premium price.  If you’re thinking of buying in today’s market for this purpose, think again.  One of the current market conditions that generally holds across the board nationally is declining or low housing values.

If you plan to buy a home for you and your family to live in, it couldn’t be a more perfect time.  Also, if there is imminent relocation in the near future you may not want to invest in a home right now.  Be sure to plan on living in the property for at least several years before reselling again, in order for it to be a sound investment.

Credit Is More Important Than Ever Before
Having a good credit score was always an important factor in buying a home but nowadays with lenders exercising extreme caution and care before doling out loans (seeSubprime Lending Crisis to understand the shift in lending practices) a good credit profile is essential.  Where homeowners might once have been able to secure sizable funding to buy a home in the past, lenders completely scrutinize each detail of a potential borrower’s credit history and standing.  In fact, there are new credit scoring methods being used by many lenders that may lead to even more difficulty for many homeowners with less than desirable financial practices in obtaining mortgages.

Despite the added scrutiny on credit, many first time homebuyers are successfully obtaining FHA loans, as long as they have a minimum FICO score of about 640.  An added benefit of FHA loan programs is that buyers can obtain as much as 6% in seller concessions that goes toward closing costs. 

Grant Money Is Available To Ease Closing and Down Payment Costs
Before beginning your search or deciding on a price range for your property, be sure to research whether there are any grants you may be eligible for toward your home.  An example is the Community Development Administration’s grant designed to assist homebuyers with down payment or closing costs.  Depending on where you live there are other grants available as well.

VA Loans Provide Added Benefits for Military Veterans
Considering the recent changes in Iraq with many veterans returning home and needing to settle down, VA guaranteed home loans are a welcome avenue for countless military first-time homebuyers.  With concessions such as reduced or waived lending fees and no down payment – VA home loans are a great option for veterans or honorably discharged military personnel.

Preparation Now Will Save Headaches Later
As you begin searching for the perfect home, it is important to know exactly what you can afford. The most important step in determining that is to have a consultation with a loan officer.  You should receive a good faith estimate that will outline exactly how much money would be paid by you out-of-pocket, the amount you may need to obtain from sellers as concessions and also the amount of your monthly payment.  Armed with this information you will be in a much better position to bid on homes that are in your price range and those that you know you can afford.  Also, when it comes to multiple offers on a home, sellers like seeing a copy of a preapproval letter and prefer to deal with buyers that have already secured pre-qualification.  It’s something that can make the difference when competing against other buyers and negotiating a sale.

Congratulations on your decision to buy a home for the first time!  We hope that with these tips, the buying process will be fruitful as you get into a home that will provide you and your family long-lasting happiness and security!

Wednesday, June 6, 2012

Mecklenburg, Union Counties – Mid-June Market Status Update

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Welcome back to the mid-month real estate update featuring useful information that you can utilize to make informed real estate decisions. As has become customary, please find below important statistics reported at this point in our market in the middle of June 2012. Using this will provide you with an understanding of where we stand today and where we are headed in the future of buying and selling properties in our region.

Mecklenburg County

With 7,026 homes on the market right now, right now we are reporting 2,458 pending sales and 4,568 active listings. The pending sales ratio is 35.0%, showing an even greater likelihood for a balanced supply and demand market. The higher the ratio, the more that listings are in demand.

The highest number of pending contracts fall within properties in the $100,000-$200,000 price range. The same price range bracket of $100,000-$200,000 has a relatively large inventory of properties for sale at 1,373 listings. Mecklenburg County’s average list price for all price ranges is $366,177.

The previous six months have shown a total of 4,164 closed contracts with an average sold price of $224,743 – the most sold listings coming under the $100,000-$200,000 price range. Conversely, 3,318 listings remain on the market and have remained so for the last six months for a multitude of reasons ranging from overpricing and inadequate marketing to properties shown in less-than-optimal condition. The highest number of off-market listings at 1,100 properties also falls within the $100,000-$200,000 price range.

The higher the number of Days On Market, the stronger a buyers market it is and in Mecklenburg County the current average DOM is 118 days, level with last month’s market update. The average DOM over the last 6 months is 108 days with the fastest selling homes during this time frame in the $1.2M-$1.3M price range. The average sold price for the last 30 days was $256,882 with a DOM average of 101 days.

We currently have 6.6 months of inventory according to the previous 6 months’ sales figures. Assuming that it would take this much time to sell all the current inventory if market conditions remained the same, this indicates a reasonably balanced market leaning toward buyers at the present time.

Union County

The total number of homes on the market in Union County is currently 2,099 with 625 sales pending and 1,474 active listings. The pending ratio is 29.8%, indicating more supply than there is demand. Like last month, homes available in the $100,000-$150,000 price range are still experiencing a relatively large number of contracts pending sale.  The price range of $150,000-$200,000 is reporting a larger inventory of properties for sale at 249 listings. The average list price for all price ranges in Union County is $331,805.

The last six months have had 1,078 closed contracts with an average price of $254,287 – with the highest number of sold listings in the $150,000-$200,000 price range, one bracket up from last month’s update. Conversely, 997 listings remain unsold during the last six months for the same reasons afflicting unsold properties in Mecklenburg County. The highest number of off-market listings at 185 properties are in the $150,000-$200,000 price range, also one price bracket up from the last update.

The average number of Days On Market for property listings in Union County is 136 days, with the DOM during the last six months reported at 114 days. The previous six months reveals an average sold price of $254,287 with the fastest selling properties selling in the $450,000-$500,000 price range.

The Union County average sold price during the last 30 days was $265,099 with an average DOM of 101 days.

Slightly down from last month, we are at 8.2 months of inventory in Union County as per the last 6 month’s sold properties. This would indicate a sellers market given that it would take that much time to sell all existing property listings on the market assuming conditions remain the same.
As always, I invite you to contact me if you would like to explore your options, look further in detail at the market statistics provided above or to assess your real estate outlook – contact me and I will be glad to assist you with all your real estate endeavors!