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Seller Financing – The Real Deal or Risky Business?

by Masha Halpern

The mortgage meltdown has had a far-reaching effect, especially when it comes to mortgage lending. Credit requirements are tougher than ever, and many home buyers may feel that mortgage companies and other lenders are not lending to anyone. Even buyers who have excellent credit are having difficulties getting approved. On the flip side, many people anxious to sell their property can’t get qualified buyers to the closing table. Interested in taking out the middle man and controlling more of the process? You may want to consider seller financing.

If you have never heard of this before, basically the person selling the home lends the potential buyer the money to purchase the house. The seller becomes the mortgage holder and the buyer sends monthly mortgage payments directly to the seller. The transaction is usually completed using a promissory that states the interest rate, length and terms of the loan and default consequences.

In today’s market, sellers may need to get their homes sold quickly, and seller financing is a way to get the property sold faster – it opens up the market to more buyers and the paperwork process moves quickly.

Some advantages to doing this type of financing:

  • Faster closing – Sellers and buyers can avoid long waits for loan committee review, underwriting and legal review.
  • Lower Closing Costs – buyers don’t have to shell out additional money for bank fees and other closing costs associated with a traditional mortgage.
  • Flexible down payment – most sellers are willing to take less money down than lending institutions.

Of course this is not for everyone and many home sellers may not be in a position to where they can offer financing. On the downside, there is risk involved on both sides – the seller is taking a risk on someone who may have some shaky payment history or poor credit, and the buyer is dependent on the seller to have been upfront on the terms of the sale (like making sure that the seller’s lender approves the arrangement). As with any large transaction, especially a property purchase, both parties should consult with a real estate attorney and financial expert to make sure that the transaction is legal and is financially sound. If you are ready to buy and can’t find a lender, seller financing may be worth checking out!

 

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August 2010 Market Statistics

by Masha Halpern

The August market statistics for the Chapel Hill/Carrboro area  have been issued. This report shows the total market overview for the area.

Pending Sales in the region decreased by 17.3 percent from last August to arrive at 1,661. New Listings decreased 1.2 percent since last August, and the overall inventory of 19,602 was up 9.1 percent.

Median Sales Price was up 3.5 percent compared to last August,registering in at $193,500. Average Days on Market, at 110, increased 8.9 percent versus last year. Months Supply of Inventory was also up 3.3 percent compared to 2009 to 10.4 months

 

Below is the breakdown of properties for the Chapel Hill/Carboro area.

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Just when we thought the surprises were over in the FHA market, home buyers who will be closing after October 4 will see increased mortgage insurance premiums. Don’t be lulled into thinking you are realizing savings because the closing costs are lower – it’s just creative accounting 101 from HUD. Here’s what’s actually happening with mandatory mortgage insurance (MMI):

  1. The cost of FHA mandatory insurance is increasing – from 55 to 90 basis points on a 15 year mortgage
  2. The up-front payment at closing is now 1%, down from 1.75%
  3. The higher premium will be spread out over the life of the loan
  4. The statutory cap rate has been raised to 1.55%
  5. Home Equity Conversion Mortgages (HECM) are not affected

The FHA tells us that the new policy will add $300M each month to its insurance fund, but some economists disagree. The changes are part of a sweeping set of policy changes announced by the FHA last January that are supposed to strengthen the status of the insurance program and assist FHA lenders in their struggle with defaults and other losses.

The new policy, which was originally slated to take effect last week, is also causing some confusion among lenders – so buyers beware. Make sure you understand the details of your mortgage insurance and what the actual costs are and don’t be afraid to ask questions.

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Top 10 Family Friendly Cities

by Masha Halpern

Families who are searching for the perfect town to call home typically will have a list of requirements that need to be met before they will make a decision. Families look for good schools, parks and recreation, a overall safe feeling of the area and of course job opportunities.

A recent article highlighted 10 of the top cities that are great for raising growing families. These cities were selected by the availability of job growth as well as state of the economy, as well as local culture and amenities.

Raleigh was on this list, below is a snapshot of the area.

Raleigh, N.C.
 
City population: 367,959 Metro population: 1,084,404
Mean family income: $94,975 Median home value: $200,900
Employment growth: 6.4%
City school rating: 7
Violent crimes per 100,000 residents: 578

Employment is up, and the cost of living is down in North Carolina's capital, a mecca for stable high-tech jobs. The region is also home to more acres of parks per capita than most cities of its size. The Wake County School District is strong, too, with 77 schools of excellence and distinction -- the highest designations in North Carolina. And Tarheel State residents live in a higher-ed sweet spot where academic quality meets high levels of financial aid. The result: The top-notch University of North Carolina at Chapel Hill is perennially No. 1 on Kiplinger's list of Best Values in Public Colleges, N.C. State is #10, and other UNC-system schools dot our top 100.

Some of the best features of the area are affordable family housing, strong employment growth (especially in biotechnology, textiles and medical technology), lauded city schools, mild weather year-round, moderate and falling crime rates.

 Below are the other cities that made the list of best cities for raising a family.

  • Ellicott City, Md.
  • Ann Arbor, Mich
  • College Station, Texas
  • Kennewick, Wash.
  • Huntsville, Ala.
  • Madison, Wis.
  • Pocatello, Idaho
  • Rochester, Minn.
  • West Hartford, Conn.

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Photo of Masha Halpern - Boutique Real Estate Real Estate
Masha Halpern - Boutique Real Estate
Keller Williams Realty
101 Cosgrove Avenue, Suite 200
Chapel Hill NC 27514
Direct 919-951-1780
Toll Free 877-478-4669
Fax: 919-928-9030




Masha Halpern of Keller Williams Realty provides real estate services in the Chapel Hill, Carrboro and Durham, North Carolina area including real estate services for buyer, sellers and those relocating to the surrounding areas of Apex, Bahama,Cary, Efland, Hillsborough, Holly Springs, Mebane, Raleigh, and Wake Forest. Search for homes in Chapel Hill, Carrboro, Durham or the surrounding communities.  Request a market analysis for your North Carolina property.  I list and sell residential real estate, investment property, vacant land, lots for sale in Chapel Hill, Carrboro and Durham, North Carolina area.

Chapel Hill, Carrboro and Durham, North Carolina real estate and homes for sale in North Carolina - Masha Halpern & The Smart Move Team