Short Sales 101

In this unique housing market, many buyers have been enticed by low prices, seemingly too good to be true, and are considering “short sale” properties in their search for a new home. If you are one of these buyers, WAIT! Before you do this, it is important to familiarize yourself with the short sale process, as well as potential issues that may arise. You will then be able to decide if a short sale purchase is really right for you,  while having gained knowledge that will prevent a lot of potential frustration should you proceed.

What is a short sale?

A short sale is an agreement b/w a home owner and a bank to allow the home to be sold for less than the existing outstanding loan amount for the home. This occurs early in the foreclosure process. When you make an offer on a short sale, your offer must be approved by both the home owner, and their lender.

How long does a short sale take?

Short sales generally do not close as quickly as regular sales, due to the negotiations that must occur b/w the bank and the homeowner, as well as any other third parties that may be involved (such as tax or mechanic liens placed on the property that must be negotiated as well). Often, a buyer may wait 90 days or longer for their closing, only to find out in the end that terms were unable to be settled upon, and so the sale has fallen through. Because of this, it is our professional opinion that short sales are best for investors or buyers who don’t have a lot riding on the close of the home and who won’t be disappointed if negotiations fall through. Frustration boils down to the how far apart our expectations are from reality.

Will the bank or sellers make repairs on short sale properties?

This is something that may vary between banks and owners, but the short answer is no. Most often these homes are sold as is. The owners are often under financial duress, and unable to make repairs, while most banks do not want to be held liable for any repairs made under their instruction that might later cause issue. For this reason, it is of the utmost importance that if you choose to pursue a short sale as a buyer, you get a good home inspection, either before or after making an offer. Often, short sales may not be the deal they first seemed to be once structural or other major repairs are found and considered.

Do I still need a realtor?

More than ever! Short sales can be complicated and even frustrating; the more experience you have on your side, the better off you will be. Knowing the risks and warnings ahead of time, if you still wish to pursue a short sale property, make sure you use an experienced realtor—a realtor who has specific experience with short sales. They will know the questions to ask, the concerns to raise, and can give you good advice about the short sale process, expectations, as well as insight on the current/future value of the property.  They can also prepare you further for challenges that you may encounter along the way. Should you want to pursue a short sale, The Jim Mills Team has the experience to make this a smoother process.

 

Park Circle, North Charleston–A Best Old-House Neighborhood!

From the Post and Courier article:

“The editors of This Old House magazine chose Park Circle as one of 61 great spots, based on architectural diversity, craftsmanship of the homes and the area’s preservation momentum– plus walkability, safety and a sense of community.

This Old House praised Park Circle for its ‘hundreds of lovingly crafted — albeit more modest and affordable — old houses surrounding a 30-plus-acre park filled with baseball fields, playgrounds, and a weekly farmer’s market.’

It also praised the shops and restaurants along East Montague Avenue, new area schools and easy commutes. Mayor Keith Summey, a longtime Park Circle resident who built a new home there several years ago, said the city is honored to make the list.

‘We consider it validation that Park Circle and the city of North Charleston are truly a great place to live, work and play.’

John Hohn, one of Gibbs’ friends, said the sense of community is what mostly distinguishes Park Circle. ‘There’s no reason to travel anymore. Anywhere you go you’re going to see someone you know and have a great time.’ “

Buying New Construction: Do I Need an Agent?

Nothing feels nicer to walk into than a brand new home. Clean walls, fresh paint, new everything, nothing broken or out-of-date. “The home is going to be new, gorgeous, and flawless. What could possibly go wrong? I’ll surely get a discount from the builder if I don’t bring an agent . . . I can handle this one on my own.”  So, why should you consider bringing your own agent before meeting with a new construction builder?

 No Extra Cost to You

Typically, realtor fees are included in the price of the home. Builders expect you to come with an agent, and they want to keep a good rapport with that agent! If they take good care of our client and make you happy, the odds are in their favor that we will recommend them to future clients—another incentive to do all they can to take good care of you during your new home construction. They need good agents, which is why they are willing to pay us out of their profits.

When it comes to built-in realtor fees, fees are rarely reduced in such a way that make the home less expensive in the end: selling one home for less would lower the value of all of their homes. And savings that may seem apparent in the beginning for you not having a realtor, is often missed out on later when it comes time to negotiate details or make concessions without an experienced realtor advocating for you. Often, there are many incentives that can be offered to savvy buyers of new construction who have a good agent advocating for them, that amount to significantly more than what can be saved up front by not bringing a realtor. On top of that, we have seen many headaches and sometimes extra fees for the customer avoided due to our ability to step in and negotiate on their behalf. Note: To have an agent represent you, you need to have that agent with you on the initial visit to the builder!

 Who is Working for Who Here?

During the entire new construction buying process, the builders’s on-site sales representative who is selling you a home is working for . . . only the builder. As their employer (and the one who writes their paycheck), that is where their loyalty lies, as it is with most business. While they owe you honesty for questions that you ask, they do not owe you full disclosure, confidentiality, or loyalty.  If there are negotiations or concessions to be made, whose best interest is in the forefront of their mind? The builders! Their goal is to represent their company well, to sell you a home, and to save their company as much money and time as possible in the process. As the customer in this situation, it is solely up to you to look out for your best interest and to ask the important questions.

As your realtor, we only work for you. We are in your corner throughout the entire process. You are not our customer, you are our client! As such, we owe you fiduciary duties: confidentiality, diligence, respect, accounting, etc. We must put your best interest at the forefront! Our loyalty is to you and you alone. Our primary goal is to serve you in such a way that you walk away from your closing knowing that you were well-cared for, well-advised, and wanting to come back again the next time you need help! That means assisting in all areas of negotiations, helping to ask the important questions that you may not know to ask, and protecting you in all things regarding the contract.

 Experience Matters

As full-time real-estate professionals, we have been the rounds and know what to expect and what to watch out for.  We know what questions and concessions to ask for. “Does the refrigerator come with the house? Is this particular cook top or stair-rail standard in your homes? Will the builder install blinds throughout the house? Are towel and toilet paper fixtures included in the bathrooms? What about planting a privacy hedge between this home and the road?” We have been able to prevent closing dates from being moved back at extremely inopportune times. We frequently assist clients by taking photos of the home at different stages and keeping them updated throughout the construction process. We will recommend a reputable home inspector to walk through your future home before closing to make sure everything looks good, rather than the county inspector that works with the builder. We have been able to spot and correct mistakes made during construction: missing windows, wrong paint colors, damages to shingles, concrete, or drywall, holes in the backyard, drainage or privacy issues, etc—making sure things were going as they should before it was too late to correct it. Many of our clients who formerly purchased new homes on their own, have told us that they found it to be much more difficult negotiating repairs on punch-out lists during final walk-throughs on their own.

 In addition to all this, we take the time to get to know our clients and their needs, which in the long run, saves you a lot of time driving all around town looking at homes and neighborhoods that may not suite your needs or your budget.

The bottom line is this: Buying a home is a huge commitment. When you can have an experienced realtor devoted to your best interest, negotiating for you at no cost to you, why not jump at the chance? The Jim Mills Team would love to help make purchasing your new home a more pleasant, less stressful experience!

Charleston Housing Market Overview

 

The proof is in the pudding! In regards to current rumors flying around of a housing market on its way to recovery, recent numbers do indeed reflect a stabilizing market here in Charleston.  The 2011 Annual Report on the Charleston Housing Market as distributed by the Charleston Trident Association of Realtors clearly illustrates some signs of market recovery. While no one has a crystal ball, people may be prone to exaggerate but numbers don’t lie. 

 According to the Annual Report, at the height of the market in 2007, the number of overall closed sales reached nearly 13,000. The next year saw a dramatic decline in that number, with the low point being in 2009, with 8,335 closed sales; fortunately, since then, the numbers are steadily climbing, with 2011 culminating in 9,276 closed sales.

 Inventory, meaning homes currently on the market, is going down, while demand increases, which, according to Economics 101, means improvement in the housing market. Less inventory means less competition for sellers looking to market their home. End of year inventories were down 20% in 2011 compared to the inventory in 2007.

 In 2008 there were 21,946 new listings—2011 saw that number back down to 15,967, which is particularly good news, as much of the new inventory over those years has been “distressed” homes: foreclosures, short sales, etc, all of which drive median prices downward. 30% of all sales last year were distressed property. Overall sales prices is down roughly 12% since 2007. As these distressed homes are taken out of the inventory and as fewer are entering the market, we expect to see less of their downward influence on overall prices.

 With layoffs slowing, hiring accelerating, combined with record-low mortgage rates, demand for housing is definitely improving. Given the above indicators, we hope to hear more of this sort of news for the Charleston housing market in 2012! As another, more personal indicator of improvement, here in the offices of the Jim Mills Team, we are most definitely witnessing positive signs: our office humming is with welcome activity unusual for this time of year, and is keeping us busy. Here’s to recovery!

Image: ddpavumba / FreeDigitalPhotos.net

Tips for Selling Your Home: Make it Shine!

In the Greater Charleston housing market, where your home is facing tough competition for a buyer’s attention, every extra effort you take is worth it, and crucial to the timely selling of your home. There are several things that you can do, at low cost, to give your home the edge that it needs. First things first, whether you love it or hate it–CLEAN it! Make it sparkle, shine, and smell as fresh as springtime! Your home may look decent enough to you day to day, but to a stranger in it who is visualizing themselves as the new owners, every smudge on the wall or cobweb in the windowpanes brings them back to the reality that someone else is not only living there, but using it and dirtying it up. As we all know, our dirt is fine, but someone elses’s dirt is downright offensive!

To make your house competitive, every little bit counts. Wash those baseboards, the walls, the floors, the chair legs. Make sure there is not visible (or smellable) trace of Fido. Have your carpets cleaned! Repaint, where necessary (remember that neutral colors are much more appealing to buyers, in general–it would behoove you greatly to repaint your daughter’s fushia and chartreuse bedroom a calming taupe). Powerwash the exterior, clean the gutters, make the kitchen shine, clean the oven, dust the light fixtures . . .  think of those cleaning checkoff lists your dorm mom used to give you at the end of the semester. That’s a great place to start.

Next on the list: declutter! A little well-placed decore is inviting, but too much is a distraction and a reminder to shoppers that they are in someone else’s house. Keep family photos to an attractive minimum–enough to be cozy, but not so much that people sense you are marking your territory. Hopefully you are moving soon anways, so box up much of the personal items or knick-knacks. Continue to declutter your yards– curb appeal is a very real thing. Trim back those bushes, plant a few perrenials!

While all of this may sounds labor intensive, think about what it’s worth to you. A quicker sell, a higher price, the ability for you to move on to the next phase of your life. It’s hard to put a value on all of  those things together, especially when the primary cost of the improvements are 99% manpower, rather than money. When it comes to money though, a little put into your home can reap dividends in the market. Did you know that good landscaping, according to Money Magazine, can add 5-11% increase in value to your home? And until your home does sell, guess who gets to enjoy a beautiful yard? One more excellent tip that will pay you back: replacing out-of-date lighting fixtures and rusty sink faucets with new, current ones. Again, a purchase that will most likely save you money and time in the end.

Selling your home is a big deal–put a little hard work in up front to make the rest flow smoothly and to save time listing your home. And remember, we’re here to help make your home stand out against competition! We’d be happy to give you some helpful, more specific suggestions for your home, tips that we have seen make a world of difference in getting homes sold. Good Luck!   ~Sara Bunton Powell

For excellent additional tips, please peruse the below articles:

http://money.cnn.com/2007/06/01/real_estate/landscapingtips_juneissue.moneymag/index.htm

http://communitypress.cincinnati.com/article/AB/20120211/LIFE08/302110014/Don-t-cut-corners-when-preparing-your-house-sale?odyssey=nav%7Chead

http://herald-zeitung.com/news/business/article_51f634c8-566d-11e1-a043-001871e3ce6c.html

Hot Tips – Homeowner Education and Loan Protection

HOT Tips!

Carolina One Real Estate and the Jim Mills Team are now offering a new Program to assist Buyers. Ask one of our Team members about this great new Program and how it may benefit you, as a Seller or a Buyer.

HELP (Homeowner Education and Loan Protection), is a Program offered through the Rainy Day Foundation, a 501 ( c ) 3 non profit organization which was established to create and maintain responsible home ownership. HELP’s mission is to educate and financially assist homeowners who experience unexpected short term financial problems, like job loss. The foundation is not an insurance company.

The cost is $500 to the Seller, paid at closing if the Buyer is qualified for the program. A Buyer may not buy it for himself.

There are qualifying guidelines for the Buyer. The Buyer must be between the ages of 18 and 66, employed full time (minimum of 30 hours a week), reside in the US, and cannot be self employed, an independent contractor or active military. The Buyer must remain employed for 60 days after closing to be eligible for coverage.

If the Buyer involuntarily becomes unemployed, coverage begins 30 days after unemployment begins in the amount of $1800 a month or the amount of the mortgage payment (PITI), whichever is less, for up to 6 months within the first 2 years after closing. If there are co-borrowers and one loses his/her job, the amount of the benefit is prorated proportionate to qualifying income.