Real Estate Information

David Letterman's, I mean Masha Halpern's Top Ten Reasons To Buy A Home

I was reading the Wall St. Journal the other day. I read an article I liked and agreed with regarding the housing market.  Here are some of the reasons we agree on buying a home now:

10. You'll get a better home. In different parts of the country, it's hard to find a good rental.

9. The National Association of Realtors puts the current inventory at around 4 million homes. That's enough for a years worth of sales. That means a lot of choices as well as great prices.

8. Sooner of later, the market will improve. There will be more demand than supply. The population is supposed to grow by more than 100 million people over the next 40 years. That means a lot of people will be looking for new homes in the future.

7. Your home isn't the stock market and it shouldn't be viewed as a way to get rich. Real Estate prices will go up again. Equity in your home is another way of investing in your future.

6. If offers some inflation protection, especially if you are young and raising a family.

5. It will be yours. You can have the kitchen and bathrooms you want, you can move walls or build an extension. You can even paint your home bright red. Few landlords will allow you to do that.

4. It's a buyer's market. We all like a good deal, we feel a sense of satisfaction after negotiating.

3. It's forced savings.  If you rent an apartment for $2000/month instead of buying one for $2400/month, renting seems like a good idea but will you save the $400 for the future? Most people won't and since part of that monthly payment as an owner is tax deductible, you do the math.  You are just paying yourself by building equity in your home.

2. You'll save on taxes. You can deduct mortgage interest and real estate taxes from your income taxes.

And the #1 reason is...

1. Mortgages are cheap. Interest rates are low. Two years ago they were around 6.3%. Now they are around 4.3% for a 30 year fixed loan. That's a big difference in your monthly payment.  When inflation goes up, interest rates will go up.

Can you think of any other reasons to buy?

I can. Landlords raise your rent every year. That increase could be used towards a tax deductible mortgage.

What are you waiting for? If you're thinking of buying, now is the time to buy!!

In a real estate market where so much of the news is bad news, the last thing you want is to have your deal fall through at the last minute. Here are some of today’s top deal-killers and what you can do to minimize fall-out.

1. Buyer’s remorse – Everyone gets it; and while you can’t prevent buyer’s remorse, there are a few things you can do to lessen the chances that your buyers will change their mind. First of all, be totally up front with the flaws of the house. Don’t let an inspection reveal problems that you should address with potential buyers and offer to fix.
2. Financing– Everything from stricter credit requirements to increased down payments has thrown the mortgage market into a tizzy and many buyers are finding that they can’t qualify, even if they have been pre-approved for a mortgage. Consider owner financing if you can, or offer to pay for repairs that give the buyers more cash for down payment options.
3. Low appraisals – Make sure that you know the true market value of your home BEFORE you put it on the market and adjust accordingly. You may have to take a hit on the house, but it’s better than spending money on it through the sale process only to lose that money and the deal because you can’t get the appraisal up.
4. Failure to communicate – Negotiations are a key part of a home sale and you have to be flexible if you really want to sell your property. Don’t automatically reject low offers and contract contingencies – be willing to work with the seller and keep communications open. You may be able to agree at the end of the day.

Stay on top of your current market – don’t let national headlines guide your decisions. You should have a good feel for your local economy, neighborhood comps and your home’s current value. Become the expert on your market and you’ll be better equipped to deal with the challenges and deal busters that come your way!

We would love to know of any "deal breakers" that we did not list here, share your experiences and ideas! 

/kh

When it comes to places to retire, for many Florida comes to mind. But for the 1st time ever, the Carolinas have become the #1 retirement choice for Baby Boomers according to newly released “2010 Baby Boomer Survey” conducted by Del Webb. This is a sign of how the Boomer generation is making their lifestyle choices and planning for their retirement.

 
Though Florida and Arizona still remain high on the list of retirement choices, the Carolinas have have moved up on the list as the preferred destination for retirement. Both the younger and older Baby Boomers ranked either South or North Carolina first as their favored location in retirement and indicated the other Carolina ranking as their second choice.

Baby Boomers are not only the current and upcoming generation of retirees but their numbers are huge. This year alone in America there are 3300 people per day turning 65. Next year the Boomer Wave triples this number: 10,000 people per day turning 65! 

This generation has spoken and they have decided on where they want to spend their golden years after many decades of hard work. What better place to be for the best beaches, award wining golf and so many other recreational activites and to call home!

 If you are planning to retire in the Carolina's we would love to know where! Share your comments!

/kh

Do you watch HGTV? Annalisa Burgos of HGTV's FrontDoor.com and Masha Halpern of Keller Williams Realty both suggest these tips to sell your home in the fall:

Be competitive-price your home 5-15% below comparable homes on the market.  In this tough economic climate, you want your home to stand out in some way. 

Fall is a hard time of year to maintain your home but it's also a beautiful time of year. Make sure your yard is clear of leaves, clean out your gutters, and touch up paint.  A few simples maintenance tips can go a long way.

Buyers like a bargain, don't be discouraged by low-ball offers. Look at it as an opportunity to negotiate. I live by the quote: "Don't take anything personally."   If you don't want to come down on price, offer to pay for closing costs or repairs.

Most of all, be patient. Your house will sell, it just will take more time.

Has your home been on the market for a while? What are you doing now to help it sell faster that you didnt do before? Share your tips!  

Lawrence Yun, Chief Economist of the National Association of Realtors, recently wrote an article in a leading Realtor magazine about the lack of jobs & home sales. 

He mentioned that many businesses are seeing profit growth but because of uncertainties in the economy,he noted,companies are still not hiring employees.  With continued high unemployment,he said, buyers are not purchasing homes. 

I think Lawrence is "right on the money" with this! Real estate has been a bit slower to sell in Chapel Hill and Durham than we typically see in a late summer and fall market;and I attribute this to the local lack of hiring here in the "Triangle".

In areas like Houston and Washington, D.C., where businesses have started to create jobs, sales contracts have remained healthy. That's what we want to see in Chapel Hill and Durham, NC!! 

Do you agree with us?  Why do you think the housing market is slow?What's going on in your area?

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Yahoo recently published their list of the top 15 up and coming cities.  Not only did Raleigh make the list but Durham did too!  Below is more information on what positive growth increases that our area offers.

Fastest Growing City-Change in Population, 2000-2008: 36.6%

While many parts of the country are experiencing high unemployment and a sluggish economy, the "research triangle" of Raleigh, Durham and Chapel Hill has helped to boost the economy of North Carolina. A major contributor to the strong employment is Duke and the University of North Carolina in Chapel Hill. Many students to choose to stay in the area after graduation and as a result, the city has risen to first place by increase in population from 2000-2008.

3rd Biggest Increase in Wages:Change in Average Weekly Wage, December 2008 — December 2009: 9.5%

The Durham area also made the list with the 3rd biggest increase in wages. With almost a 10% increase in the average weekly wage from December of 2008 to the same time a year earlier, Durham has seen a population increase occur along with rising wages. With many cities struggling this is great news for residents, especially during a recession.

Yahoo based their findings by looking at unemployment data from the Bureau of Labor Statistics, focusing on the three places with the most significant increases in employed persons, to find that the biggest gainer in the year up to last December improved their employment rate by only half a percentage point.

Other economic factors such as changes in wages and personal income were reviewed based on Census data to see what areas were showing economic growth and stability.

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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!

/kh

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

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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.

 /kh