Archive for the 'Home Financing' Category

Apples, Oranges? Appraisals Are Becoming Rotten Fruit

September 28th, 2009 categories: Charlotte Real Estate Trends, Home Financing, Selling Your Home

I share my friend, Miami Realtor Ines Hegedus-Garcia’s appraisal that whether you’re in Miami or Charlotte nobody is happy with the current state of residential real estate appraisals.

Home appraisals used to be, more or less a check off (not a good thing), a part of the process to ensure that someone did not buy a home that was wildly over or under priced (as Martha would say that’s a good thing). Nevertheless the exact and only true value of a house is the price that a buyer is willing to pay and a seller is willing to accept, today – kinda like a share of stock – yes the free market is funny (and works great) that way! Sarcasm aside appraisals are important and (when done right**) they do provide an invaluable measure for homeowners and lenders alike. Here’s the rub there is no right way to do an appraisal and the most professional appraisers will tell you even the best appraisals are subjective and as much art as science.

The problem started about 15 years ago when Americans stumbled on a treasure chest literally under their feet - the home equity line – the mother lode first for home improvements (good), then boats (worse) and ultimately even bottles of three buck chuck (bad) at Trader Joes (now in Charlotte). We went crazy using our newfound “home-wealth” to bankroll (most of) our American dreams. There was only one pesky hitch to get into the chest (your own chest) you had to have a key which was held by the bank – and to get to the key you had to go through a gatekeeper, the appraiser! Long story short – equity lines flowed like mountain springs as many appraisers checked off on treasure chests bigger than the house – not a problem since American home values would increase forever and ever (we’ve always been an optimistic lot). Well in 2007/2008 the party ended – the treasure chests slammed shut, fingers and dreams were crushed.

Past is always prologue and all that treasure hunting inflated home values beyond belief. As we know banks (and regular Joes) got their heads and foreclosure notices handed to them as home values and loans unraveled.

What now? Well the lenders have predictably overdosed on reality and the appraisal process is feeling the brunt of this fervent – albeit understandable fiscal conservatism. The home valuation pendulum has now swung as far right as it was left and we are left with the scarily governmental HVCC Home Valuation Code of Conduct which in part “…attempts to curb inflated appraisals by refusing reports from people selected, retained or compensated by mortgage brokers and real estate agents.” Appraisers are selected by “round robin” – many are not familiar with the neighborhoods they appraise and the unintended consequence of this abject objectivity is the process has become a black hole where …

A new code of conduct, that sounds great, right?  Well as @Ines so deftly describes in her MIAMISM blog post Appraisals Kill Deals ~ in practice that code of conduct seems more like a cloak of Teflon – no over-values are gonna stick to me says Mr. or Ms. Appraiser – undervalue is de rigueur. Result? Inconsistent, uniformed appraisals are killing reasonable real estate transactions (indiscriminately and unnecessarily). What should you do — now more than ever make sure you’ve got the right agent – look for the most smart, the most informed, the most candid agent you can find and for now anyway, pray for a return to common sense!

Spoken by Mike Gibbons | Discussion: No Comments »

First Time HomeBuyers: Why the Real Deadline is October 5!

August 3rd, 2009 categories: Charlotte Real Estate Trends, First Time Home Buyers, Home Financing

Can you hear it….. it’s like a freight train in the distance the First Time Home – Buyer Tax Credit December 1, 2009 deadline is closer than you think and here’s why.

As you probably know the US government has a great program to help first time home-buyers** with up to a $8,000 tax credit if you purchase a home before December 1, 2009. **if you haven’t owned a home in three years you too may qualify as a first time home-buyer!

OK Mike it’s August 3rd so what’s the rush? Three dates you need to know:

September 14: START LOOKING AT HOMES - Charlotte’s under $250,000 housing market is hot and it will get hotter closer to the deadline. See the Charlotte Observer article “Bargain houses selling as others keep sitting“

October 5: SUBMIT OFFER - Let’s talk about about closing dates with the rush to beat the deadline and new truth in lending restrictions you MUST give yourself six weeks to close! To make matters worse the deadline (November 30) is a Monday, and the week prior to the First Time Home – Buyer Tax Credit deadline is Thanksgiving! Yes to meet the December 1st deadline you better be submitting your offer to purchase no later than October 5 – time is of the essence!

November 30 - You need to be cuddled up with some hot cocoa next to fireplace in your new den!

Everybody has questions about the First Time Home-Buyers Tax Credit program, it’s a government program after all! We can help you with answers email us here or we can put you in touch with a professional, knowledgeable lender who can help you out — don’t let this opportunity pass you by!

Spoken by Mike Gibbons | Discussion: No Comments »

Short Sales and why they can be anything but short!

April 20th, 2009 categories: Charlotte Real Estate Trends, Home Financing

A real estate short sale is not to be confused with a short salesperson! >

I’ll say up front this post about real estate short sales is not going to be the most exciting or particularly uplifting Talk Charlotte topic! Nonetheless if you are in this situation as (a Charlotte home seller) or you’re looking to purchase a short sale property hopefully this short (haha good one) explanation will help.

So just what the heck is a short sale and why is it different than a foreclosure ~ well Wikipedia gives a very straightforward explanation ~ the transaction itself can be much more complicated (do not attempt this on your own)… from Wikipedia on Short Sales

“In real estate, a short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank’s loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower’s financial situation.

A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. read more

There is nothing wrong with buying a short sale property – in fact a short sale is usually a little less foreboding than a full on Foreclosure sale and in both cases you can get a pretty good deal. Please consider this though just because its says short sale, auction, foreclosure ~ the three oldest rules still apply

1. You get what you pay for
2. Buyer beware
3. Remember and repeat to yourself often rule #1 & #2

The other thing about short sales is they are most often anything but short — when you have distressed homeowners, mortgage companies and banks involved…well lets just say these thing take time and remember too your offer is a binding contract until it is accepted or rejected which means you may be in “buyer limbo” possibly waiting for months yes with an “s”! My friend and Tuscon Realtor Kelley Koehler (aka @housechick for you Twitterers) does a nice job discussing foreclosures and short sales on her blog post Buying Short Sales and Foreclosed Homes in Tucson

So bottom we are seeing a lot of short sale activity – Right now Rhonda has a beautiful short sale property in Foxcroft listed. The entire TalkCharlotte team went through rigorous Certified Distressed Property Expert (CDPE) training and Donna has earned her CDPE designation (more on that in a subsequent post). So we are ready and trained to help you in this new area of Charlotte real estate.

I will leave with this thought though…remember that the real estate market is very efficient and there are just as many fairly-priced “normal” properties for sale in Charlotte , ready to move into without all the hassles of foreclosure or short sale uncertainties ~ ask us and whether it’s a short sale or plain old home for sale (Betsy has a beauty in The Palisades) the TalkCharlotte team can help find the best home for you!

Spoken by Mike Gibbons | Discussion: No Comments »

So you think we have it tough…

March 13th, 2009 categories: Charlotte Real Estate & More, Home Financing, Jackie Stutts

 

So you think we have it tough now, take a look at this. This was lifted off the front page of the Charlotte Observer on March 30, 1980. My wife Jackie Stutts and I bought our first house in closing months in 1980. Considering where the interest rates had been earlier in the year, we were more than thrilled when rates dropped below 12% and we got our first mortgage at the bargain basement rate of 11.75% for a 30 year fixed rate with a 10% down payment. We thought we had made the coup of the century and we felt good about what we had done. Rates would never be that low again.

Today’s interest rates are at the lowest level that they have been in years. If you are waiting for rates to drop another 0.125% before locking your loan, take a quick look back at 1980 for a reality check and think of just how lucky we are to have rates consistently below the 6.5% level.

Requirements to get approved for a home mortgage have tightened up some over the past year but these adjustments get us back to the 1980’s. The article talks about loans requiring 10% and 20% down payment. A down payment. What a novel idea. There is absolutely no mention in the Observer article of 100% financing. Can you believe it? Actually having a true investment in your home in order to buy it.

Yes requirements have tightened up some but with a good credit score, a little money for a down payment (only 3% for FHA loans) and a job in hand there is plenty of financing out there for a home mortgage for you.

Don’t get too bogged down focusing on waiting for rates to drop another 0.125%. If you are happy with your interest rate and comfortable with your monthly mortgage payment, you might want to consider locking in your rate while you can. You just never know (as this article shows us) when rates will move in the wrong direction for you.

By Terry Stutts-Myers Park Mortgage

Spoken by Donna Johnston | Discussion: No Comments »

Well Excuuuse me, no way my Charlotte home is worth THAT much!

January 21st, 2009 categories: Charlotte Lifestyle, Charlotte Real Estate Trends, Home Financing

Yes it’s THAT time of year again….TAX TIME! That time of year when we all look back over the last year and try desperately to remember anything, anything we did or spent that might reduce our tax hit! Here’s Kiplinger’s take on the 10 most overlooked dedutions if you’re into that kind of thing.

But today I wanted to talk about something near and dear not to every Charlotte homeowoner’s heart…Charlotte Mecklenburg property taxes, or in the latin Ad valorem taxes – (don’t you they use latin or french when they want something to sound more noble and magnanimous.) By the way for 2008 it’s $1.2973 per $100 assessed value.

In today’s Charlote ObserverApril Bethea has as really great article Can I Appeaal Tax Value?. In part she reports

“The start of the new year kicks off the period when property owners can appeal the tax values on buildings and land, and officials from across the Charlotte region said they’ve been peppered with requests similar to Stanberry’s. But N.C. law doesn’t allow current economic conditions to be used as a reason to change a property’s tax value… The law catches many homeowners by surprise. “A lot of people assume quite naturally that current sales information would be a valid reason for an appeal,” said Chuck Hicks, real property appraiser manager for Mecklenburg County. read the full article here”

Things that can be considered in appeals:

• Correction of clerical or mathematical error, or error in applying schedule of values used in most-recent property reassessment.

• Physical changes to property, such as addition or removal of a structure.

• A rezoning change, or adoption of a conservation or preservation agreement.

Things that cannot be used in appeals:

• Normal, physical depreciation of buildings.

• Economic changes affecting the county.

• Improvements to property such as repainting of buildings or other structures, and landscaping.

Spoken by Mike Gibbons | Discussion: No Comments »

Any First Time Home Buyers in Charlotte “Swinging” on the Fence?

October 17th, 2008 categories: Charlotte Real Estate & More, Home Financing

If you are on the fence and are financing FHA with down payment assistance, you need to purchase a home prior to January 1st. There is an important FHA change coming January st that you need to be aware of. At present FHA borrower must put a minimum investment of 3% of the sales price into a transaction. This can be a down payment of 2.25% plus .75% in closing costs/prepaids. Effective January 1st, the minimum downpayment on an FHA loan will to to 3.5%…(closing costs/prepaids can not be a part of this.) This basically means that as of January 1st, you will need to come up with an additional 1.25% of the sales price.

This really bothers me but it is what we have to look forward to. This may not sound so horrible but to put a number on it if you were to purchase a home for $250,000 your down payment after January 1st will have to be $3,125 higher than it does today. That is significant especially for the first time home buyer that is saving every penny to purchase their first home. 

With prices being down and interest rates favorable, you only have a couple of months left,  so what are you waiting for? Give us a call to find your dream home.

Spoken by Donna Johnston | Discussion: No Comments »

What’s up with this First Time Homebuyer Tax Credit?

September 14th, 2008 categories: Charlotte Real Estate & More, Home Financing

There may be is a sliver lining to everything even the current “housing crisis” (more to say about that here). It happens to be a very good to time to buy a home in Charlotte especially if you are a first time homebuyer. While prices and transactions may be down the Charlotte home real estate market continues to be reassuringly stable.

So what about this First Time Homebuyer Tax Credit? Is it for me? How does it work?

Here’s what the National Association of Homebuilders says about the homebuyer tax credit program…

“Opportunity of a Lifetime for First-Time Buyers

For aspiring home owners who find their goal stubbornly elusive, newly enacted legislation providing a tax credit of as much as $7,500 for first-time home buyers might just be the opportunity of a lifetime. But like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible.”

Check out some great information on the  National Association of Homebuilders website or if you prefer a question & answer format check out Charlotte’s own residential real estate guru Bill Gallagher’s excellent and informative blog post about the first time homebuyer tax credit. (Bill owns Superior School of Real Estate here in Charlotte) Thanks Bill for this concise explanation! We know the ropes too so please don’t hesitate to call us — we’ll be more than happy and ready to help you find you first Charlotte home or your tenth!

Spoken by Mike Gibbons | Discussion: No Comments »

Myers Park Mortgage a Friend of Talk Charlotte!

August 8th, 2008 categories: Home Financing

We are pretty good at helping you find the perfect home in Charlotte but that is only part of the story. Once you decide on a home we rely on a team of experts to help us close the deal. Inspectors, attorneys and of course mortgage bankers. We are very lucky to have teamed up with Myers Park Mortgage to offer our clients one option for sound financing advice & products with a local feel. Getting the best mortgage interest rate is of course important but it is only part of a successful financing program ~ customer service & communication or (lack thereof) too often make or break the deal! That’s why choosing a solid lender like Myers Park Mortgage is so important!

We have invited one of Myers Park Mortgage’s best (and a really good guy!) bankers, Terry Stutts to write for us about some of the more interesting and misunderstood aspects of financing your new Charlotte home. Welcome Terry what do you have for us this week?

“Today I’d like to share with you some thoughts about an often vexing problem for homebuyers (especially first time buyers) Down Payment Assistance. Down Payment Assistance (DPA) for home mortgages, seems to be going the way that 100% financing has recently gone. Basically, GONE as in gone goodbye! President Bush last week signed a bill that forbids the FHA from insuring mortgages in which the down payment comes directly or indirectly from an interested third party (usually the seller). This bill takes effect October 1, 2008 (also effective 10/1 the minimum down payment for an FHA loan will increase from 3.0% to 3.5%.) DPA is a process that allows the seller to charge more for his home and return that money to the buyer to be used as a down payment. This allows the buyer to purchase a home effectively with little or no down payment.

Of course this is Washington so while this law takes effect, there is a new “counter bill” being introduced that if passed and signed into law will allow DPA to continue indefinitely. Another fine example of your tax dollars at work! This mortgage business is going through a lot of changes ~ at Myers Park Mortgage we feel it is our job to do the homework so our clients can make the best  and most educated decision. I am happy to answer any question you might have ~ please do not hesitate to call Terry at 704-887-9405 or by email“ 

Thanks Terry, we get a lot of questions about down payments so this will certainly help our clients ~ we look forward to your next guest post!

Spoken by Mike Gibbons | Discussion: 1 Comment »

You paid what for that house?

August 6th, 2008 categories: Charlotte Real Estate & More, Home Financing

Inflated home values are a big part of the recent mortgage meltdown. The good new is that vast majority of home appraisers are professional and very good at what they do. In a recent AP article in the Charlotte Observer talks about the growing problems in the residential home appraisal area. Here is another recent article from the Charlotte Obsever’s Kenneth Harney about home appraisals  “Appraisers still feel pressure to inflate value of homes“

Bottom line #1 Use common sense “if it looks to good to be true it probably is” and #2 use a good Realtor, Realtors are trained and operate under a strict code of ethics to serve the customers need first! 

Spoken by Mike Gibbons | Discussion: No Comments »