Spring Market Looks VERY Promising

The Spring market is upon us. Professionals across the country are reporting that buyer activity is very strong. Purchasers are beginning to realize that this is one of the greatest times in American real estate to buy a home. There are basically four reasons for this: 

1.      They realize that it is the COST of the home that matters most not the PRICE.

2.      They realize that it is actually LESS EXPENSIVE to own than to rent in 98% of the country.

3.      They realize that SHORT SALES are a real bargain.

4.      EVERYONE is now saying it is time to buy.

The market is turning for the better. It may be time for you and your family to jump in.  If you are thinking of buying or selling in the New Hanover County area including Carolina/Kure and Wrightsville Beaches, please give me a call at (910) 617-7654 or email me at joyce@intracoastalrealty.com.   

Spring Has Sprung On Pleasure Island!

Here comes Spring, historically the time of year when buyers awake from the winter slumber of the holidays and snowfall, and go on their pilgrimage to look for new housing. Houses look better in Spring with green grass, blooming trees, and flowers.

Plus, buyers who find a home in the next 60 days can close after the school year ends and enjoy the summer months in their new backyards. It’s almost a rite of passage; baseball teams go to spring training, buyers go look at homes, and the birds fly back north.

But this Spring is different than those of recent memory…

§ Because of the warm weather we experienced here on the East Coast for most of this past winter buyers have been out for months – making offers and buying homes.

§ Many sellers have finally come to understand that they need to have a compelling price on their home to attract buyers. The days of listing your home and negotiating down are over because there are homes on the market already priced correctly, and those are the homes that buyers are going to. The overpriced inventory doesn’t even get their chance to negotiate down.

§ Rates have ticked up as economic news (like unemployment numbers) has improved. That, coupled with rising mortgage insurance premiums and guarantee fees, seems to have given some sense of urgency to buyers.

§ The looming shadow inventory, which most certainly will keep downward pressure on home prices (when added to easier short sale approvals), has tended to encourage home sellers to be more realistic in their expectations.

§ The abundance of information available to consumers has further increased their need for sound advice from top-notch real estate and mortgage professionals. The cream is certainly rising to the top in those professions.

Low interest rates, a tremendous selection to choose from, and the seasonality of it all makes for an exciting next 60-90 days. My advice to anyone looking to buy or sell is that waiting to be aggressive could be a fatal mistake if you hope to find the best deal. From my experience, the best deals come when more people are competing for them…and that time is NOW! 

If you or anyone you know is considering buying or selling at this time, please have them contact me a joyce@intracoastalrealty.com to discuss their "wants and needs".

Rents Rising as Rental Availability Shrinks

Because of the challenges in the current economy, many families have either decided to rent or been forced to rent. How has this impacted rental options and the cost of the available options?

HousingWire recently quoted Paul Dales, senior economist with Capital Economics:

“As a consequence of Americans being less willing and less able to buy a home, the number of households in rented accommodation is set to rise by at least 850,000 a year over the next few years.”

The price of anything is determined by supply and demand. As demand increases, the price of an item will increase unless there is an equal increase in supply. The article mentioned above said:

“Dales said in his research that rental vacancy rates will fall again in the future, pushing prices up. The median rent is already up to $712 per month—well above the average monthly mortgage cost of $647, Dales reported.

He estimates vacancies in the home-rental market will push average rental rates up as much as 5% by early 2013.”

How many markets will be impacted? A new rent index offered by Zillow:

“…showed year-over-year gains for 69.2 percent of metropolitan areas covered.”

Bottom Line

Rents are increasing and will continue to do so for the foreseeable future. In many parts of the country, buying a home might make more sense as you can lock in your housing expense for the next thirty years.

Even a 14-Year-Old Knows It’s Time to Buy

Willow Tufano is a 14 year old who lives in Florida. One thing that differentiates her from her friends is that she just bought her first house, a rental property. She bought it with her mother, but anted up her fair share with money she saved for over a year by selling free items she had previously found and fixed up.

The area was hard hit by the housing crisis and Willow and her mother were able to buy the home which was once valued at $100,000 for just $12,000. Why would a 14 year old even consider buying a property?

She is using her half of the rent they charge ($700) to pay back her mom for the second half of the house and the renovations they put into the house. Willow says she’ll have it all paid off in six years. Then she’ll keep the house as a source of income.

“It was definitely a lot of inspiration from my mom and my grandma,” Tufano said. Her mom is a successful real estate agent who owns several investment properties.

If you are interested in buying or selling real estate in the Carolina Beach, Kure Beach, Wrightsville or Wilmington area, please give me a call!  (910) 617-7654.

Short Sale Success: What is an Acceptable Hardship?

Short Sale Success: What is an Acceptable Hardship?

A short sale, in most instances, is a complex transaction. However, there are two very simplistic characteristics that every qualified short sale possesses:

1.      The house must be valued at less than the homeowner owes on their mortgage debt obligation. In other words, the home must be “underwater”. 

2.      The homeowner must have a qualified hardship.

It is the second characteristic that we would like to touch upon in this blog post.

One question that we answer frequently is “My house is underwater. Is this an acceptable hardship?”  Unfortunately, the answer is always “No.”

The simple fact that a homeowners mortgage obligation is in access of their house value is not an acceptable hardship. A Short Selling bank will entertain a short sale when and only when there is a hardship that will, now or in the future, affect the borrower’s ability to pay their mortgage.

The following is a list of acceptable hardships that may be used when submitting a short sale package:

§ Mortgage Rate Adjustments

§ Loss of Employment or Reduction in Wages

§ Business Failure

§ Medical Hardship

§ Death in the Family

§ Divorce/Separation

§ Military Service

§ Overwhelming Debt Obligations

§ Job Relocation

As always, should you have questions as to the acceptability of a hardship scenario, you should seek advice from an expert that has been trained in the short sale field.  Give me a call and we can discuss.  I have listed and sold dozens of short sale properties and have been certified as a Foreclosure and Short-Sale Representative.

Another Refi Boom?

There have been a few developing (and some already existing) programs that are worth mentioning, as the newspaper headlines applaud the opportunity. With interest rates remaining at near historic lows for quite some time, many people have been unable to take advantage of these rates because of problems in securing a high enough appraised value.

To that end, here are a few thoughts to consider:

New FHA Streamline Announcement

HUD announced that they will be rolling back the insurance premiums on this program for loans closed prior to June 2009. The Upfront Premium (the one that is added into the loan amount) will be .01% and the annual premium (the one that is paid in the monthly payment) will be slashed to .55%. These cuts could reduce borrowers’ expenses drastically. This program can be done where the lender pays the closing costs – without an appraisal, income verification, or even a credit check. Most lenders will look for a good mortgage payment history.

The VA IRRL – (Interest Rate Reduction Loan)

For people with existing VA mortgages, this program allows reasonable closing costs to be added into the loan. There is no new appraisal required, nor is there an income calculation. Basically, as long as the veteran is getting a payment at least $50 lower, it is good to go. In some cases, veterans may choose to reduce the term of their loan (instead of a monthly savings). This can be done with some documents delivered to the lender.

HARP 2

This is a program for loans currently owned by Fannie Mae and Freddie Mac wherein the house is underwater. Under this program, lenders may be able to reduce your interest rate despite your loan-to-value. Each mortgage investor is developing their own underwriting and risk criteria, but the good news is that people with good payment histories can take advantage of the great rates – even though their home has declined in value.

I gave you a very general overview of some loan products here today. There are many considerations (ex. closing costs and time you intend to stay in the home) and qualification items that will pertain to your individual circumstance. My intent was to heighten awareness and get you to reach out to your favorite mortgage professional and see if there is an opportunity for you.

Real Estate Commissions: You Get What You Pay For

Does it makes sense to pay a full commission to your real estate agent in today’s market? Sellers, buyers and even agents are debating what should be charged to assist a consumer in completing a real estate transaction. Forget what the actual amount of the commission is. The bigger question is whether you should pay a ‘full fee’ when hiring a real estate expert to guide you through the complexities of today’s rapidly changing housing environment.

If a full fee was the rule in 2006 when completing a deal was so much simpler, why would you now consider cutting the fee of your agent in today’s tumultuous market? You are depending on this person to help you reach your goals in a sale or purchase. In 2006, buyers were willing to pay almost anything to a seller just to get into a home. Banking entities seemed to be willing to mortgage any property for any buyer. The process was rather simple.

Today, a person looking to buy or sell should be willing to pay a full fee for two reasons:

You need an expert guide if you are traveling a dangerous path

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a buyer willing to pay fair market value for your home at a time that there are mass inventories of foreclosures and short sales will take a true real estate professional. Finding reasonable financing can also be tricky in today’s lending environment.

Experts in any profession do not discount their fees; especially when the job is becoming much more difficult.

You need a skilled negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible re-negotiation of that off after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.

When an agent is negotiating their commission with you, they are negotiating their own salary – the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line

We believe that famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.