In most areas right now, real estate is a buyer’s market. Inventory is at an all-time high. There may be 20, 30, or even 40 homes in an area that could be ‘perfect’ for a buyer.

Maybe the buyer has fallen in love with your home . . . except . . .

The master bathroom is too small
A gas fireplace would be better than a wood-burning fireplace
The kitchen needs granite countertops
Hardwood floors would be so much better
The front door must be covered

And on, and on, and on. You just lost a potential buyer – or did you?

Savvy agents will take these comments and work them to the seller’s advantage. How? By taking the feedback/idea, and working it into a potential offer on the home.

For example: the buyer would buy a listing held by Schwebel & Associates of Prudential Carolinas Realty, except all of the bedrooms but one have direct access to a bathroom. We receive this feedback and become proactive. We contact 2DIFOR Builders.

2DIFOR Builders specialize in strategic home alterations. Strategic home alterations is a tool for real estate agents to custom tailor that perfect fit for their client. There is no cost – 2DIFOR Builders simply offer feasibility options and budgets for changes to the home during the buying and selling process.

Schwebel & Associates presents 2DIFOR Builders with the information about overcoming the buyer’s objections. 2DIFOR Builders will assess the situation, determine possible options and budget the alterations. Armed with this knowledge, we can then present options to the buyer’s agent.

From there, the cost of the alteration might be negotiated in the selling price of the home, or it may become a condition of the sale.

Strategic home alteration also works equally well for our buyers. If we show them a home that is perfect except for . . ., we can offer the services of 2DIFOR Builders to help them to realize their perfect home.

Not every buyer has the ability to ‘see’ a home with potential changes, and certainly most won’t have an idea of the costs involved. Our solution is to help them with the process and at the same time, find them the perfect home at a good price.

With the amount of inventory out there, every advantage that we can offer to our buyers and sellers can only help them to achieve their goals; to find the perfect home, or to sell their home in a timely manner.

Irv & I have had many savvy clients (and family members) take advantage of the downturn in Real Estate to lock in a long-term equity gain.

The old adage, “buy low sell high” hasn’t changed, but it now has a new twist. Savvy buyers take advantage of the overall market being down a certain percentage from the high.

For example if the overall market is down 10% then a home that was $500k is now $450k and a home that was $200k is now $180k.  If you sell the second home and buy the first you lose $20k on the selling side, but on the buy you gain $50k in potential equity for a net gain of $30k. Obviously this is a simplified example, but the point is the same.

Let us know if you think this may be an option for you.  As the economy shows signs of warming up the window of opportunity shrinks every day.

This article from Homes: Sell at a loss, buy at a discount

With more and more Americans facing the prospect of declining home values and unemployment levels not seen in quite some time, many homeowners and their lenders are facing the situation where the home is worth less than owed.  This is no problem if the owner doesn’t have to move and can afford their current payment.  If the owner is forced to sell for whatever reason, then the possibility of a short sale becomes a very real option.

What is a short sale? A short sale is an option you have before you reach the point of foreclosure where you are selling your home for less than what is owed. However, the bank has to agree to a short sale as they stand to lose money via either process.  Banks do short sales because of cost.  An average cost to the bank for foreclosure is around $65,000, so they are smart to take the short sale.

You must have an offer in hand for the bank to tell you whether they will do a short sale or not.  They have the say-so whether or not a short sale will be accepted.

The 4 requirements to have a short sale are:

1. The home’s market value has dropped.
2. Mortgage is in or near default status.
3. The seller has fallen on hard times . . . unemployment, divorce, medical emergency, bankruptcy, death
4. The seller has no assets to speak of.

Foreclosure is on your FICO score for 6 years.  Short sales start to repair themselves after 2 years.

Short sales can be a win-win for the lender and the seller.  The lender recovers more of their capital faster than would be possible if they went through foreclosure.  The owner wins by relieving themselves of the financial burdens of the home and taking a smaller hit to their credit than would happen if a foreclosure occurred.

Unfortunately it’s not as simple as it appears.  Every lender and every situation is different.  There are pitfalls to be avoided and terms to be negotiated to reduce or eliminate any further obligations for the borrower after the short sale is concluded.  It is critical to have a team of experts in place to guide you through the process.  A seasoned real estate Broker and a real estate Attorney who specializes in such transactions are the backbone of such a team.

“I wish I would have bought when the market was low.”
 
The article below sums up where the real estate market is today and makes the case for buyers to take advantage while the getting is good.

I am constantly asked what I think the Charlotte real estate market is going to do tomorrow or in the next few months.  I tell everyone if I knew where the market was going we wouldn’t be talking, I would be on my yacht making phone calls all over the world to buy and sell investments because I had the ability to time markets!

All kidding aside, I do know that all markets are cyclical and by the time we know the market is going back up it is too late to get in.  For those who are making the leap now, they may not get in at the absolute bottom, but they’ll be very happy they got in when they did.  Let me know your thoughts whether you agree or disagree.
 
Time To Invest In Real Estate!

Earlier this month, the Charlotte Business Journal reported on The Home Builders Association of Charlotte and their actions objecting to the economic stimulus package being proposed by President Obama:

The Home Builders Association of Charlotte is protesting provisions in the $819 billion economic-stimulus bill passed by the U.S. House of Representatives last week.
The organization will deliver more than 1,000 petitions to members of the U.S. Congress outlining its objections.
The group says the bill doesn’t sufficiently help home buyers and the housing sector because it fails to expand the $7,500 tax credit to all home buyers.
The association says the bill should increase the tax credit to at least $10,000, extend the eligibility period from June 30 to Dec. 31 and allow the credit to be used at the time of closing.”

The article went on to say that:

The building industry is one of the hardest hit in the country,” says Michael Hinshaw, president of the association. “If home building continues to be curtailed, Americans will no longer realize the dream of home ownership and hundreds of thousands of men and women involved in our industry will be unemployed.”

Is this more of the same – going down the road of artificially stimulating the housing market by putting folks into homes that under the traditional model wouldn’t qualify, or is this a stimulus that will work with no negative affects?

Preconceived notions.

One of the most paralyzing conditions that we, as Realtors®, have to deal with every day.  We must be out to make a quick buck.  The lowest of the low.  Scum of the earth.  How can we live with ourselves? How dare we charge a fee for standing around looking pretty while someone chooses a home to buy! I can sign those forms myself without your help, thank you very much.

We understand your feelings and preconceived notions about the real estate industry and those who choose to work as Realtors®. However – our ethics, attitudes, and concern for your investment (a home is a very large investment) may surprise you. Hard as it may be to believe, we value your thoughts, and want nothing but your satisfaction in the end.

• We are not your average real estate agents.

• We did not choose to sell real estate because it was a fun part-time job.

• We don’t spend countless hours with clients hoping they’ll buy a home – any home – just to have a sale.

• We don’t patronize our clients by allowing them to make bad investment decisions.

• We will tell clients things that they may not want to hear, but it will be something that they need to hear.

• We do take the burden of the closing process off of a client’s shoulders, and take full responsibility in seeing that the transaction is a success.

• And we value quite highly the satisfaction that our clients feel when the last document is signed.

Our client’s satisfaction is our greatest reward.  We realize that we can’t please everyone, but we do our best to make that happen.  We love our job.  Meeting people, showing them around our favorite city, allowing them into our lives for however long it takes for them to see that we aren’t smoke and mirrors – what you see is what you get.  And what you get is nothing short of amazing service, dedication, and unparalleled loyalty.

We are –

Top Charlotte Agent . . . for a reason!

We have a special guest blogger today – Bill Saint, CFO and Director, Simonini Builders, Inc.  Bill recently spoke at several Realtor® seminars.  This is a followup to the Charlotte, North Carolina real estate market.

At our Realtor® seminars this fall, I promised to share the updated Case Shiller numbers which came out last week, for data through August.

Way to go Charlotte! We are 2nd from the lowest in price decline, reporting an overall 2.8% decline during the past 12 months. Dallas, at 2.7%, was the lowest; with Phoenix the highest at a 30.7% decline.

Here is the updated Case Shiller report.

We’ve been delighted to meet with many firms this fall to provide an update on home design trends we’ve found across the country and what is asked for by our buyers. Additionally, we have an update on the overall Charlotte real estate market and tools to assist your resale buyers and new home buyers. I’m delighted with the feedback from many Realtors that these tools are being used to help make sales! Great news!

In today’s market the value of a good Real Estate Agent is even more apparent as we struggle with the demands of finding that right buyer in order to sell your home for top dollar – let alone sell it at all.  A recent article in The Charlotte Observer “Real Estate Today” talks about why the owner of a home hasn’t been able to sell his home. This is an exceptional article that deals with the very frustration we, as REALTORS, deal with day in and day out! This particular seller has had his home on the market since 2005.  Sure the market was better then than now.  However real estate is and always will be localized in how it performs.  With in a week or two after placing his home on the market an offer came in.  It was for 5.7% less than asking price.  The owner turned down the offer convinced that they could do better.  Of course they did because SELLERS KNOW IT ALL! 

The seller, a house painter, knows more about selling their home than that of an experienced professional. OF COURSE HE DOES BECAUSE SELLERS KNOW IT ALL! Lets assume that their carrying cost for their mortgage is a mere $1500 per month. That equates to $54,000 of payments for this period vs. taking the offer that was $30,000 less than the asking price.

Here are some things to remember:

1.  Real Estate is no longer recession proof.

2.  Greed, not intelligence, is often the factor for loosing a qualified buyer.

3.  Good realtors® fire their sellers when they don’t listen to them.

4.  The seller may set the asking price but the MARKET SETS THE VALUE.  This one bears repeating – the seller may set the asking price, but the market sets the value!

I’d like to hear your opinion on this or any related topic.

Why are Newspapers Dying?

A recent front page article in The Charlotte Observer Real Estate section on September 14th entitled “Key to Closing” was loaded with inaccuracies for the state it was printed in.  The article was a authored by Susan Diesenhouse at the Chicago Tribune.

As a Real Estate professional I was shocked to see how many statements were incorrect with regards to the common practices in the state of North Carolina.  Is the Charlotte market starving for worthy articles that The Observer has to go outside of it’s local area to find content?  Who checks for the accuracy or do they just slap it in?

Let me give you some examples as written:

About A Month Before closing - “The buyers lawyer can review the available documents such as title insurance policy and final survey.”  I have never in my 18+ years in real estate seen a final survey 1month prior to closing.

Two Weeks in Advance – “Advisable to set up a tax reproration escrow account where the buyer and the seller deposit their share of the currents year’s taxes.” That doesn’t exist in North Carolina!

Two Days Before Closing – “Do a final walk through with a licensed home inspector, the seller or their agent so they can agree to fix any problems found.”  In the Charlotte area, the time to do an inspection is not two days before closing.  Usually the inspection is done 3-4 weeks before closing to identify any deficiencies, submit those items requested for repair and then conduct a final walk through the day before or the day of closing to insure that the items which have been agreed upon to be fixed have in fact been fixed.

A Day Before closing – “Usually the lenders appraiser will walk through to assure that the unit is substantially complete”.  Who would close on a home that is “substantially complete”?  My clients will be told to not close on the home and then it will be up to my clients to accept the home in it’s present condition or not.

Closing - “. . . with the process complete . . . Take the house keys.”  According to what I have been educated to by the closing attorneys, keys are in almost all cases not given until the deed is recorded.  Funds don’t disburse to the parties, including commissions to the agents, until the deed is recorded.

Picture yourself a first time buyer or an experienced buyer moving to North Carolina.  When in doubt contact your Realtor and your attorney to give you proper/accurate advice.

We also have a home closing checklist pertinent to the closing process as it happens in Charlotte North Carolina on our website.

When the real estate market slows down, and there are more sellers than buyers, homeowners can no longer dictate to the market what price their home will command.

It doesn’t matter how much you paid for your home, or how much money you have in it after improvemennts, or how much you need to net after the sale.  The market determines the price, period!

If the figure that a homeowner is asking is way above market price then there will be little if any showings and no offers.  As the asking price approaches market value, showings will increase as will the probability of an offer.  However, the offers will be less than full price and show a trend.

If your home is priced close to market value you will have even more showings and an offer sooner.  You can even price the property lower than the market and it will still show it’s influence with more than one offer and the sales price will be bid up to where the market is.

It drives me crazy that people seem to forget simple econ 101 when it comes to selling their home – and insist on making irrational decisions when setting an asking price.

What do you think?  Am I full of it or am I just saying what needs to be said to an unrealistic public?