Real Estate Information

Alas, another shady real estate agent making us look bad...at least he's getting busted! 

This guy has been making a mint off of rent-to-own deals, but the payments he's been receiving from the buyers?  Been going into his pocket instead of to the banks-so these houses are now very deep in debt and the buyers are reporting ruined credit and money down the drain.

This individual has now started a new venture to help 'student athletes get into college' by hooking them up with scouts.  Isn't returning phone calls or emails to anyone.  And when a colleague asked about the bounced checks, ruined credit, missing mortgage payments, unpaid taxes, unhappy clients...his response?  "F___ them."

I have never been a proponent of rent-to-own deals, because I personally think the setup preys on the uneducated buyer.  Buyers who need a little time to build their credit scores back up are better off renting until the credit is corrected, so they can then shop the full available inventory and get a reasonable mortgage rate.  Only a small portion of our current inventory is available as a lease-purchase or rent-to-own situation, and a lot of times it's the portion of our inventory that isn't going to sell any other way. Or-it's owned by an investor who is banking on the fact that you might not ever get that credit cleaned up and will leave behind that fat 3-5% nonrefundable deposit.  A lot of money is made on buyers who never go through with a rent-to-own.

Proper advice and counsel is essential in purchasing a home, whether you're buying right now or if you're going to need a year to clean up credit to be ready.  We're ready when you are.  And we'll protect your best interests now and in the future!

You know, when you run your mouth as much as I do, it's hard to think of 5 things that may not be public knowledge....

But to humor Jay Thompson per his blog earlier today, here goes (more in depth than my comment, Jay). =)

1.  I'm a classically trained pianist and vocalist.  I was forced to take piano starting at age 6, fell in love with it by age 9 and have played ever since.  I teach a few students on the side just for fun!  My beloved middle and high school chorus teacher, Ken Young, showed me that I had vocal talent as well. At the time, I was the accompanist for the school choruses, and didn't think I was any good.  I wound up in a lot of competitions, sang in college, more weddings and funerals than I can list here, and spent 10 years singing with the Charlotte Symphony (currently on a break because of the kiddos and bedtime conflicts).

2.  I was a woman sales rep for Husqvarna.  yep, it WAS as much fun as you might think!  It was eye-opening to be a woman in a man's world, to say the least.  The corporate honchos trotted me out at a lot of trade shows to show how progressive they were...and I drove 5000 miles per month on average, flew out of town at least two weekends a month, was moved into new territories every 11 months to trouble-shoot.  Long story short, that got old!  Did enjoy the annual sales meeting in Stockholm though.

3.  I'm a certified OSHA logging safety instructor.  Of course, that ties in with my Husqvarna days!  i can tell LOTS of stories about logging.  It's somewhat like you imagine, and then again nothing like you imagine.  I won't share the photos I used in safety class, they will turn your stomach!

4.  I paid for college by bartending.  I had a full ride at Florida State University as a National Merit Scholar, but then made some changes-decided I didn't want to be a music major after all and was homesick, so I transferred to the University of North Carolina at Chapel Hill.  I lost the scholarship $$ when I moved, but kept all my credits.  Got a job waitressing and bartending and finished my bachelor's degree in 3 years total.

5.  I'm a certified USSSA softball umpire.  Another job I picked up in college for cash (and yes, to pick up guys!).

How's that?  More than you ever wanted to know I'll wager!

For homes sold from November 1-November 30 2006 (data courtesy of Carolina Multiple Listing Service):

Charlotte NC:

986 single family homes sold (a decrease of 9% vs same period 2005)

Average of 71 days on market (vs average of 73 in same period 2005)

Average sale price of $226,083 (an increase of 1.7% vs same period 2005)

Average list price of $226,574 (ratio of list price/sales price at 97.6%)

You'll note that our prices are up and our sales are pretty steady...so if you're looking for a safe haven investment or are ready to purchase that dream home, Charlotte and surrounding areas are doing great! 

For the period of November 1-November 30, 2006 for Cabarrus County (including Kannapolis, Concord, Harrisburg, Mount Pleasant, and Midland).  Data collected from Carolina Multiple Listing Service.

237 single family homes sold (a decrease of 2% vs same period 2005)

Average 82 days on market (vs 95 same period 2005)

Average sale price of $188,460 (an increase of 10.4%)

Average list price of $191,188 (ratio of list price to sales price tighter at 98.5% (97.5% in Nov 2005))

This is a great time to buy in Cabarrus County-we're growing at a fast rate being so close to Charlotte-but just over the county line for lower property taxes and a strong public school system!  The North Carolina Research Campus in Kannapolis is booming right along in its construction phase and is scheduled to be open for the first few companies in 2007. 

In today's Charlotte Observer, there was an article about a new proposed land transfer tax.

The city and county leaders are proposing a 1% levy on all property sales in Mecklenburg County, to fund improvements to roads.  This is BAD public policy, people!  Word on the street is that this tax will bring in $119mm annually for roads and schools (which is what politicians say the money is for when they want more money...but does the money ever go there?).

However, the usual shortsightedness is in play. The politicians seem to overlook that transfer taxes slow growth and sales because:

• It's a non-deductible expense.  Under the Tax Reform Act of 1986, real estate transfer taxes are non tax-deductible.  Interesting to note that in 1967, the federal government repealed the Federal Transfer Tax because it was unreliable and discriminatory...
• Transfer taxes are not included in appraised values.  All government agencies (FNMA, VA, FHA, FHMC) have moved to a cash equivalency appraisal.  Due to the large (and growing) number of defaults, appraisers may not include costs (such as transfer taxes) that do not add value to a home.  Where does this really hurt?  A loan with a minimum down payment of 5% would see an increase of 20% in what's required (5% down plus 1% tax=6% down payment).
• Entry-level and all other homes become less affordable.  Low to moderate income homebuyers could pay a fee greater than their down payment-especially in programs like Habitat for Humanity.  In essence, you're keeping these people out of homes altogether.  As affordability is a growing problem anyway, this fee makes that problem worse.  Recent experience in York County, SC, showed a decrease of 50% in affordable housing starts after the county imposed a transfer tax.
• Taxes are grossly unfair to current residents.  Besides the fact that these taxes are inequitable to newcomers, they would grossly penalize the many buyers of new or existing homes who currently live in Charlotte. 
• Charlotte will become less competitive.  Higher costs of new and existing houses will make our area less attractive for industrial recruitment because the availability of affordable housingg is a very important factor in site selection decisions.

Now, if you're not familiar with Charlotte, you should know that our real estate market spans a sprawling 7 county area.  Many people choose to live in the outlying counties already because of strong public school systems and lower property taxes.  This kind of a tax will force even more people out of Mecklenburg County and into the outlying areas...which will put a further strain on the roads, but kill the tax that's been proposed to improve them!

Please contact the Charlotte city council and the Mecklenburg County commissioners

Now in order to understand this analogy, you have to think back to a time and place long, long ago...before Playstation and Nintendo and Atari...

Remember the old pinball machines?  You pulled back the plunger to shoot the balls into the game, hoping it would hit the bumpers for points and the classic 'ding ding's of success!'

Sellers, you DON'T want to be the bumpers!  When you overprice your home, you become an example.  Not a contender, but an example. 

"But Leigh", you say, "I've had showings!"  Which means that agents are using you to sell other listings.  When you are overpriced in your neighborhood and in your market, buyers look at you and bounce right off to the next house-which is properly priced. 

"But Leigh", you say, "I've got the best condition going!"  Might be true-but even the best condition will hit the ceiling of what a buyer will pay given a particular location and neighborhood.  Buyer look at you and bounce right off to the next house-which is properly priced.

Don't allow your home to sell others...remember that when your home is shown, it's being compared to (on average) 10 other homes in that showing schedule.  And if they're looking at you and bringing no offers, they are bouncing off and hitting another house.  SCORE! (don't you wish it were you who scored instead of them?)

So today I was getting my hair fixed (for you non-Southerners, that means 'styled' or 'done').  =)

And while I was covered in foils (YES I COVER MY GRAYING HAIR), I overheard my stylist say 'boy, you should have called Leigh!' I perked up and asked what they were talking about (I was reading a gossip magazine and not really paying attention).  One of the ladies who works there was complaining about her agent.  Of course, I said 'so tell me about it'. 

She proceeded to explain that her buyer agent is trying to convince her to make a full price offer on a condo that she wants.  In a slow neighborhood.  In a market where we have competing offers occasionally but not often.  On a condo that has been on the market for over a year (I told you it was a slow neighborhood).  I asked if he had run comps to justify that recommendation.  Nope.  And she's a first time buyer, so really needs the hand-holding.

Turns out, her 'agent' is the husband of her lender-who is apparently doing a fantastic job informing her of the process and advising her on the mortgage side.  She hasn't signed anything with her agent, but is afraid to rock the boat with a lender that she likes. 

So what did I tell her?  Not a lot I can say.  NC recognizes oral buyer agency until time of contract...so since he's been showing her stuff, i can't step on any toes ethically.  I did advise her to be strong and request a CMA on the condo in writing, have him go over it with her, and not be pushed into making too high an offer if that's not what she wants to do.

It's frustrating.  She now knows she should have called me (and so does everyone who was standing around listening to the conversation)-and I'll get the future business of her and probably the others.  But I can't help her now and can't help but feel that she's in danger of paying too much.

Alas...the difference between Great Clips and a full service salon also applies to real estate!

I am representing buyers who are in the process of relocating to North Carolina from sunny Florida.  They're purchasing new construction, and it's finally complete!  woo hoo!

They were pre-approved by the builder's lender for 100% financing, not contingent upon the house in Florida selling (you know how the market is in parts of Florida, a little on the slow side). 

A buyer surfaced on the house in Florida-hooray!  So at the first part of November, the buyers (without talking to me, oh please, buyers-rely upon us-we love to advise and help but can't help if you go off on your own!) changed loans.  To do a conventional 20% down loan, which is only feasible when the equity is taken off the house in Florida-which is under contract, right?

So what happens in Florida on the house they're selling?  THEIR BUYER decides to shop his loan a week before closing...discovers he was getting a great deal all along so changes his mind again and stays put, but it delays closing since the underwriter had iced the package.  Closing was supposed to happen last Friday, but was put off til today.

Today we were supposed to close on the new one, but that's been delayed by the delay in Florida.  Because since the loan was changed, they have to sell the old one to buy the new.

Still with me?

You might be thinking, 'so what? what's a few days here and there?'  Well, it matters to this builder.  In their contract is a provision that any delay on the scheduled closing will result in a penalty of 1% of the purchase price.  You heard me, any delay costs 1%!  I call that usury.  But it's a builder contract written by builder attorneys and if you want to buy their product, you use it. I've seen a lot of contracts with a per diem on delays, but this is a large national builder who wants closing to happen when they want it to happen!

The house in Florida closed today, but the wire hasn't yet arrived.  Since wires have to go through the Federal Reserve System, they can appear after 5 minutes or 8 hours-no way to know, and it's not instantaneous like email (which is a surprise to a lot of people).  And this builder will NOT do a dry closing (paperwork without funds).

So the closing attorney is checking the account every few minutes, hoping the wire shows up.  Because if it doesn't appear in the next two hours, they close tomorrow and pay a whopping $2100 in penalty.  Over a few hours' delay-and no skin off the builder's back since they wouldn't have the money til tomorrow ANYWAY (since in NC funds can't be disbursed until recordation has taken place).

Why do I suggest that you not change your loan at the last minute?  Because if this buyer had stuck with the original 100% loan, they wouldn't be faced with a $2100 penalty-they would have been able to close on time.  The rate difference?  1/8%.  And they could have gone back and refinanced a little while after closing and gone to the conventional 80% product.  Think through the process and all the things that can crop up.  Any experienced real estate broker can tell you that no contract is secure until it's closed, recorded, and money is in the bank.  Things just happen, outside of your control.  So rely on us-talk through these decisions and ideas, even if you think you're wasting our time-you're NOT wasting it at all, most of us WANT to help and want to be that trusted advisor.

All of the Realtors in our market have been talking about it, and finally even the media is saying it's true statistically!

In today's Charlotte Observer (locally known affectionately as The Charlotte Disturber), our local real estate columnist Allen Norwood talks about the steady climb in real estate prices in our resale market.  4.5% increase in third quarter 2006 and North Carolina overall is leading the nation with an increase of 9.7% over the same period in 2005!  Wow!

We've always been a contrary market and now is definitely a great time to invest in homes in the Charlotte NC market-with prices falling elsewhere, and knowing that real estate is always part of a smart investment portfolio, come to Charlotte and our surrounding areas and let us show you why the sunny South is a safe haven!

And FYI-if you didn't follow the link above...our median home price state-wide is $198,300.  Great values abound for first time buyers, empty nesters, investors,...everyone!