So, you want to Buy New Construction? MYTH BUSTERS!

After a long, exhausting search of resale homes, I had a buyer client call me on Saturday and ask if they were to buy new construction if I would be paid. The answer to that is YES. It is extremely important that you disclose to the builder that you are working with a real estate agent.

This particular client has a great understanding of the fundamentals of buying real estate. We have researched tax records, MLS histories, property disclosures, and neighborhood values on more homes than you can shake a stick at. They know how important it is to have their own representation. On a personal note, I am thankful they chose me.

I could probably write a book on the reasons why you should have your own representation when purchasing new construction, but I promise to keep this short and sweet.

The onsite agent’s job is to get the best deal for the builder. If things go sour during a build job, you need someone who will fight for YOU. Remember, your agent is paid by the builder, but works for YOU. I cannot tell you enough how important it is to have someone on your side during such a large financial investment.

There is a common myth about NOT using a real estate agent in your deal that I would like to BUST!

Myth: “I’ll get a better deal/cut if I buy directly from the builder and not use an agent”.   

Reality: An unrepresented buyer can be at a real disadvantage not to using an experienced real estate professional. The fact that there is no commission paid on a particular home does not mean there is more room for negotiation on a home. Any reputable builder would never offer such a deal because of the ramifications it would have within the broker community. This means you cannot negotiate down the percentage that would have been paid to your agent. If a builder were to cut agents out of the loop they would have “that reputation” and it would spread like wildfire among the real estate broker community. With the high volumes of sales made by real estate agents on new home sites, that is not a lead source that any builder would risk.  Myth busted! You will not get a better deal by not using a realtor.

My job is to represent my clients’ best interest and assist them through the entire transaction with as little frustration and hassle as possible. My goal is to get my client the most value for the least money. I have heard buyers say they do not need an agent for a transaction, but I have NEVER had a client say to me at the end of the transaction that they were sorry they had me at their side during the process. The least important part of my job is showing houses (although it is important); my real value comes later in negotiating and working through the process on behalf of my client.

So, if you’re looking to buy a new construction home, hire a professional! I can be reached at: (803).944-9544 or by email at: hope.dorn@era.com.

Is Your Real Estate Agent a Realtor?

The words REALTOR® and Real Estate Agent are often used interchangeably, but are not the same!

Both are licensed to sell real estate, but the difference between a Realtor and a Real Estate Agent is that a Realtor must subscribe to the REALTOR® Code of Ethics.

The Code of Ethics is strictly enforced. It contains 17 Articles and various underlying Standards of Practice. Here are 17 things that a REALTOR® promises to do that non-affiliates do not:

#1) Pledge to put the interests of buyers and sellers ahead of their own and to treat all parties honestly.  

#2) Shall refrain from exaggerating, misrepresenting or concealing material facts; and is obligated to investigate and disclose when situations reasonably warrant. 

#3) Shall cooperate with other brokers / agents when it is in the best interests of the client to do so. 

#4) Have a duty to disclose if they represent family members who own or are about to buy real estate, or if they themselves are a principal in a real estate transaction, that they are licensed to sell real estate. 

#5) Shall not provide professional services in a transaction where the agent has a present or contemplated interest without disclosing that interest.  

#6) Shall not collect any commissions without the seller's knowledge nor accept fees from a third-party without the seller's express consent. 

#7) Shall refuse fees from more than one party without all parties' informed consent. 

#8) Shall not co-mingle client funds with their own.  

#9) Shall attempt to ensure that all written documents are easy to understand and will give everybody a copy of what they sign.  

#10) Shall not discriminate in any fashion for any reason on the basis of race, color, religion, sex, handicap, familial status, or national origin.

#11) Expects agents to be competent, to conform to standards of practice and to refuse to provide services for which they are unqualified.

#12) Must engage in truth in advertising.

#13) Shall not practice law unless they are a lawyer.

#14) Shall cooperate if charges are brought against them and present all evidence requested.

#15) Agree not to bad mouth competition and agree not to file unfounded ethics complaints.

#16) Shall not solicit another REALTOR'S client nor interfere in a contractual relationship.

#17) Shall submit to arbitration to settle matters and not seek legal remedies in the judicial system.

The National Association of REALTORS® was founded in 1908 and has more than one million members.

Member lookup here: Realtor Lookup

CALL TODAY FOR YOUR FREE BUYERS OR SELLERS CONSULTATION! Hope Dorn, Realtor (803) 944-9544 hope.dorn@era.com.

Goodbye, Landlord!

STOP THROWING YOUR MONEY AWAY!  

Is buying a home a wiser choice than renting? I get this question ALL THE TIME, especially from twenty-somethings. At this moment in time, buying is the smartest decision.  Please consider the following before your throw one more cent away on that home that you will NEVER own:

While comparing monthly mortgage payments to rent is a good starting point, you need to consider this, part of your mortgage payment is being applied to principal. This is forced savings! For example, if you purchase a $200k home with a 30 year mortgage at 4.25%, your monthly payment will be $993 with $285 of that amount going to the principal.

Low mortgage rates have kept homeownership from becoming more expensive than renting. If you are considering purchasing now, be mindful that real estate forecasters are predicting a significant increase in 2015.

As a renter, you have ZERO control over your housing destiny. The landlord is in total control. If S/he decides to sell or are foreclosed on , you will be out of a home. They can also raise your rent at the end of your lease or choose not to rent to you at all. Owning a home will give you a sense of security that you cannot find in renting.

You also have the option of doing whatever it is you want to do with your own home. Paint the walls garnet or orange? Go right ahead! It’s yours! Perhaps you want to add a deck or hardwoods? More often than not, these types of improvements add to the value of your home.

Owning a home will reduce your federal and state tax obligations because of the deductibility of interest payments on your mortgage. When you rent, you end up with 12 cancelled rent checks at the end of the year. However, as a homeowner, you end up with 12 cancelled mortgage checks that are nearly fully tax deductible in most cases.

Yes, owning a home comes with repair expenses down the road, but anyone who thinks that you do not need to worry about a leaking roof or shotty heating & air in a rental home has not met my new buyer client’s former landlord.

In short, the answer to the question of whether you should buy or rent is so obvious that it is hardly worth stating. Property prices and interest rates are going up. Owning a house is a wise move.

If you are considering investing in your future and telling the landlord, "goodbye", call me today! (803).944.9544. Serving Lexington, Richland, & Newberry Counties.

9 Real Estate Agents to Avoid

1. The agent who needs more training.

There are too many agents who are simply undertrained, and it shows during the transaction.

As with all  professions, it takes a long time to learn the ropes.  Many people get into selling real estate because it looks easy to make a lot of money. Experience is the only true teacher!

2. The agent who misses contract deadlines.

Nightmare! Plain & simple!

3. The agent who always over promises and under delivers.

Making a promise that can’t be kept is a deal breaker! Clients and other agents remember those who talk a big game without bringing home the win.

4. The agent who ignores calls and emails.

 When you’re trying to close a deal, there is nothing more frustrating than working with someone who doesn't return calls, listen to voice mails, or return emails.

5. The agent who quotes crazy high prices to win a listing.

Winning a listing is great — unless in the process you’ve ruined your client’s chance of closing in a timely fashion by bringing them unreasonable numbers of what the property is worth. Property will not move based on any wishful thinking and delusions.

6. The agent who doesn’t focus on the details.

Real estate agents have to be able to see the bigger picture and focus in on the details. Whether it’s dealing with deals, presenting an offer or reading emails, thoroughness is a valuable skill in this industry.

7. The agent who tries to be a big bully.

Agents whose methods of moving a transaction along always involve voice-raising and choice words score high on the drives-me-nuts scale. These guys do more harm than good for their clients- always.

8. The agent who doesn’t anticipate potential problems.

Real estate deals are about getting clients to closing the best way possible. That’s impossible if an agent is always getting tripped up by transaction surprises. Experience is key!

9. The agent who’s dangerously walking the ethical line.

The last and least liked of all the agents are those who are actively unethical. Those who get the deal done by treading in the gray area of the law.

Remodeling Improvements That Entice Buyers

Over the last few years, some homeowners have opted to stay put for the time being and that's caused them to consider remodeling instead of moving. But most homeowners know that one day they might need or want to sell their home so which remodels help to add value and entice buyers?

There are a few areas that are better than others to improve. It's pretty easy to understand why these home remodels are enticing buyers when you consider the way the housing market has been for the past several years.
Here are a few of the renovations that are adding value to homes and creating appeal from home buyers.
Aging in Place
With the tough economic times, more short sales and foreclosures, extended families are combining homes and reducing their cost of living by residing together in one larger house. The National Association of Home Builders found that 62 percent of builders in a survey were working on home projects that were helping families "age in place". Included in these types of remodels are placing a bedroom on the entry-level of a home, wider doorways that would accommodate a wheelchair, and overall modifications for the elderly including reducing steps outside and inside.
At one time, these designs might have been unattractive but with many Americans wanting to "age in place" and extended families living together, remodels like these are becoming common, necessary, and valued.
Savvy Kitchen
The great rooms that bring the kitchen and the eating areas together are still popular. More space is preferred so families can have room to sit and spend time together over a meal even if that means having less space to actually prepare the food. Cabinets and shelving are being customized to suit the homeowners' needs and many are favoring pantries or utility rooms. Kitchens are taking on the look of a chef's cooking space with open shelving and islands to help homeowners be able to quickly prepare meals and still mingle with guests and family.
Totally Wired
Fast-placed, busy buyers who often work from home will find smart homes that are wired and built to handle all the high-technology needs a huge plus when it comes time to market and sell their homes. Another plus is having space-saving workstations in the home. Remodeled homes that feature floor-to-ceiling bookcases and wiring for home offices are increasingly becoming the norm in many homes.
Outdoor Living
This continues to be a popular trend to bring the outside in. Making the most of living spaces, even those in the garage and outside, is a huge benefit. Homeowners are capitalizing on all possible livable space by creating outdoor living rooms complete with wiring for entertainment, cooking, and relaxing. Outdoor furniture is also being featured inside as well as outside the home, blending the line between the two.
According to the Census Bureau, 2011 home starts were bigger and featured more amenities than in the previous year. It seems houses are growing again. The average new-home's square footage is was 2,522 in 2011, up from 2,381 square feet.
Not all remodels add value to the home. The balance of achieving what you like in a home and which improvements can potentially increase the sale of your home, can allow you to make smart home improvement choices.

http://realtytimes.com/rtpages/20120224_remodel.htm

Homeownership Possible Within Three Years After Foreclosure

Losing your home can be devastating to your credit, not to mention your psyche, but you can buy again within as few as three years after a foreclosure or short sale.

It's not surprising when you lose your home you also lose some self-esteem, especially if your were raised in a culture that sees homeownership as a status symbol, as a sign that you've finally arrived.
Some lost self-esteem also comes from the belief you've lost your shot at the American Dream. Others will tell you seven to ten years must pass before you can buy again. At that time, uninformed people say, you'll have to buy at high interest rates.
That's not always true.
If you file for bankruptcy, and make the right credit and financial moves, you can buy a home again as soon as two years after your bankruptcy is discharged.
What's more, if you rebuild your credit and maintain a healthy, on-time credit profile, you can take advantage of low down payment and low interest rate loans. The Federal Housing Administration (FHA) allows you to buy a home with as little as 3.5 percent down and take advantage of some of the best interest rates on the market.
FHA loans literally replaced the subprime brand, but came with federal backing.
Also see: "U.S. to lower size of guaranteed mortgages"
You also may be eligible for first-time homebuyer programs that assist you with your down payment and closing costs. First-time homebuyer programs are not just for those who have never owned a home, but allow you to qualify if you have not owned a home in the past three years.
Some private lenders, home owners and investors also may allow you to buy a home even sooner than the two- to three-year period, but it will cost you a higher interest rate and require a large down payment.
With the housing market flat and many local markets still expected to see prices fall more, it is not a bad idea to spend the next several years cleaning up and re-establishing your credit. Good credit will allow you to buy a home with a minimal down payment and the lowest interest rates.
If you lost your home to foreclosure or a short sale, don't lose hope. Don't hesitate. Begin today putting yourself in a good position to buy.
Fix your credit
• Rebuild your credit by making your monthly debt payments on time. Don't ignore your remaining credit obligations during foreclosure or after losing your home. Your credit score gets a boost, in part, based on the number of positive accounts in your credit report. The more you have, within reason, the faster your credit score rises, even after losing a home.
• Pay down your credit cards but not to a zero balance. Your credit score gets a boost if you maintain a balance that is about 30 percent or lower than your credit limit. Keeping a balance reveals you can borrow money and pay it back on time. Don't close out your credit cards because the longer your positive credit history, the more your credit score and your ability to buy a home will improve.
Save money
• Most of today's homebuyer programs require a down payment. FHA loans require 3.5 percent down -- $3,500 for every $100,000 you borrow. You likely will have to pay closing costs, another 2 percent to 3 percent of the sales price. This is another $2,000 to $3,000 per $100,000. Do the math to determine how much you need to save each month, over the next two or three years, to have enough to cover your down payment and closing costs.
Don't be pressured
• Buy only when you are ready. You didn't lose your credit overnight. Likewise, it will take time to rebuild your credit and save for a down payment. Home buying deals will be available for years to come.
• Avoid adjustable rate mortgages (ARMs) and consider a 15- or 30-year fixed rate mortgage (FRM) that is a fully amortized loan so your payment and interest rate are fixed for the duration of the loan. Full amortization means each payment helps pay down the principal. When your loan term ends, so does the loan balance.
• Buy based on what you can afford, rather than a higher amount approved by the lender. You already know the risk of biting off more than you can chew. Lenders will pre-approve you based on your gross monthly income, but that does not consider taxes subtracted from your paycheck, food, clothing, utilities and other monthly obligations.
Know your comfort zone. Don't over-extend yourself.

http://realtytimes.com/rtpages/20120208_foreclosure.htm

Clean up Your Credit

More than ever having a healthy credit score is important. It may mean the difference between securing a home loan or not. Don't let old habits or debts stand in your way of taking advantage of historically low interest rates and great deals on housing.

The first order of business is to arm yourself with the cold, hard facts. What is the state of your credit report and score? You can visit annualcreditreport.com three times a year for free to view your credit report. You will have to pay a nominal fee in order to view your score.
Once you have accessed your report be sure to check it over carefully for errors. This is not a time to let identity thieves abscond with your good name. Besides identity theft there may also be errors and omissions that should be corrected. Contact each of the three major credit reporting bureaus to have your report updated.
There are also many programs available today to protect against identity theft. Many banks now offer convenient ways to monitor account and card activity. If unusual spending shows up on your account they will halt any purchases and contact you immediately to confirm you are in fact the person making them.
Now that your existing report is in good working order and safeguarded from theft, it's time to start making repairs. First reduce the amount of hard inquiries. The home buying process is not a time to start opening new accounts and lines of credits.
Resist the urge to buy the new car, call DirecTV, and buy new furniture on credit. Wait to make those purchases after you've closed on your home. Your future interest rates will reflect your patience.
Start paying down balances on credit cards. While some revolving accounts like car payment and home mortgages show you are a responsible borrower, having high balances on your cards dramatically reduces your score.
Don't pay off cards just to close them, however, if you're looking to raise your score. The way this works is simple. If you have a total of $10,000 in credit available and you carry a balance of $5,000, you are using 50% of your available credit. That is too high.
If you close a card and are using $5,000 of now $7,000 available credit, you are using 71 percent of your available credit and are worse off than you were!
The key is to start paying down balances and keep that percentage low. Once you're positive that your mortgage and loans are in place you can then consider closing card accounts.
Next, never pay late. If you need to set up payment reminders or automatic withdrawals for certain bills in order to pay on time then by all means do it.
If you fear that you will miss a payment or will be late be sure to contact lenders or creditors before this happens. Many lenders will work with you without reporting the missed month to the credit bureaus. Every reported late payment docks your score and stays on your report for years.
Finally, pay off debt instead of moving it from one card to another. It might be tempting to put this debt on that card and so on, but that doesn't remove the history from your credit report. In fact, if you have now opened a new card, you might have just dinged your score.
Responsible spending and payments are how you build a credit report. There is no overnight fix to a score (don't buy into those scams)! Do your work to pay down debt and over the next months and years your credit score will soar sky-high.

http://realtytimes.com/rtpages/20120201_credit.htm

Are Homeowners Glad They Own?

It might come as a surprise but a whopping 72 percent of surveyed homeowners nationwide are satisfied with owning a home. The other 28 percent, not so. They say they're dissatisfied and that's likely due to the devaluation of their homes.

But surprisingly, of those who were satisfied with owning a home, only 24 percent said it was because of home appreciation. The majority, 76 percent, had many other reasons they were happy to own their own home including the one that proves the American Dream is alive and well: pride of homeownership. Following closely behind were the freedom to control their home improvements and upgrades. All this according to HomeGain's 2012 National Home Ownership Satisfaction Survey.
Of those who were unsatisfied with owning their home, 63 percent blamed depreciation as the root of their dissatisfaction. However, the cost of owning a home, such as paying for property taxes, homeowner's association fees, upkeep, and routine repairs, also sucked the joy out of homeownership and led this group of 37 percent to be unhappy about homeownership.
On the bright side, most - three out of four - are very happy with homeownership even in spite of such rocky real estate times where declines in home values have crippled some homeowners severely.
The survey polled homeowners all across the country. So you might be wondering is there a connection between where you live and how satisfied you are with owning a home?
The highest percentage of satisfied homeowners comes from the Northeast where there is 77-percent satisfaction, according to HomeGain. Pulling in at a close second is the Southeast at 73 percent satisfaction. The West and Midwest were at 71 percent and 68 percent, respectively.
Those who purchased their homes within a timeframe of the past three to eight years were the least satisfied. If they bought more than eight years ago, they tended to be more satisfied.
The higher-end market was the least satisfied with owning a home, especially if they paid more than $800,000 for it. This group's dissatisfaction rate was 69 percent. But those who purchased homes for under $75,000 are cheering. This group's satisfaction rate was 77 percent.
Of course, a lot of homes are sold through foreclosure and short sale, which, depending on the side of the sale you're on, can leave you satisfied or very dissatisfied. Those purchasing a foreclosed or short sale had the highest satisfaction ratings; 79 percent and 83 percent, respectively.
New and existing homes didn't fare so well with homeowners. They were fairly dissatisfied and showed it in a 73 percent and 71 percent rating, respectively. Most seemed to have expected an increase in the value of their home and when depreciation hit, this highly disappointed them, making this the primary reason for their dissatisfaction.
An interesting statistic may reflect the need for freedom from being tied down to a home and its maintenance as well as other costs. Homeowners ranging from 18 to 25 were the least satisfied (45 percent) with owning.
On the other end of the spectrum, those homeowners between 55 to 65, were the most satisfied with their homeownership. This group's satisfaction rating was 76 percent.
HomeGain collected some comments from some of the surveyed homeowners. Here's how one satisfied homeowner summarizes homeownership, "Just knowing I own it. I rented a house two times after owning a home for 16 years, and I do NOT like relying on, and dealing with, a landlord! I also feel pride in owning my home. I just bought a house 8 months ago and am very happy!"

http://realtytimes.com/rtpages/20120127_ownership.htm

Winter Home Maintenance

It may be cold outside, but it's no time hibernate when it comes to home maintenance. Have you ever wondered how some friends or neighbors live in older homes that are still in good working order? This isn't just a lucky coincidence.
Houses require careful attention, especially in the Winter, in order to keep in good working order. If you take the extra time each season to check your home over and perform the necessary maintenance, then you'll be sure to have a sturdy home for years to come.
First, it's important to keep your family safe and warm when it's chilly outside. Do a twice yearly check on your windows and doors for air leaks. Under most circumstances you can easily fix these with caulking.
Are your windows in need of a more energy efficient upgrade? Have you thought about installing storm windows and doors? These are important questions to ask yourself. If you have older, non-insulated windows it may be time to replace them. You can even deduct some of these upgrades from your incomes taxes!
If you find leaks, then take the necessary action to fix them pronto. You may find that some doors continue to leak air even after you've made them "air-tight." This means it is time for Plan B. Storm doors work wonders for keeping out the elements. Many stores also sell draft blockers that sit at the bottom of you doors.
Next, schedule a time to service your heating system. Central heat and air units need to be checked over. When a unit is well-serviced it will save you fuel and thus money.
If your home is older, then you might consider a trip to the attic to check ductwork. You never know what critter has chewed through ducts or what parts have become disconnected.
While you're in the attic take a hard look at the state of your insulation. Is it adequate for your region? Is ductwork well-insulated? Older homes can sometimes be completely devoid of attic insulation. If so then it's time to bring in some reinforcements. Insulation is relatively inexpensive and can save you big in the long run.
Do you heat using a wood burning fireplace? Is it imperative for your safety to have your chimney cleaned and checked multiple times during the Winter season if you use your fireplace regularly. Chimney fires happen all the time.
There are smaller issues to attend to as well. Did you know that your ceiling fans have two settings for the blades? You want to be sure to reverse your fan in the Winter so that it pushes the hot air (which naturally rises) back down into your living spaces.
Gutters become full of leaves and other debris. If you fail to clean your gutters they can begin to hold water which can eventually rot away the siding and roof of your home.
When the weather drops below freezing you need to keep your pipes from freezing. Let faucets drip and unhook all outdoor hoses.
Finally, every responsible homeowner is stocked with the proper tools. Keep sand or salt on hand to de-ice slipper steps and sidewalks. Invest in a heavy duty snow shovel or snow blower.
Your home is your biggest asset and literally keeps a roof over your head. Be kind and take care even during the chilly Winter months.

http://realtytimes.com/rtpages/20120119_maintenance.htm

Relying On An Agent

The latest NAR Profile of Home Buyers and Sellers showed a growing trend among recent buyers.

The latest figures show that 89 percent of buyers purchased their home with the help of a real estate or broker. This is a sharp increase from a decade ago in 2001, when only 69 percent of buyers enlisted the help of an agent or broker.
Why do today's buyers buyers choose to work with an agent? Let's look at just a few of the many reasons an agent can be your biggest ally.
First, agents are licensed professionals, which means they had to complete coursework and pass an exam in order to become and agent. They have the education and experience to help you navigate what will be one of the biggest purchases of your life.
They also have access to a wide range of properties and can guide you to those that are the best fit for you, which can save you time and energy. If you are unsure what type of property you're interest in, an agent can help explain the pros and cons of things such as condo life versus single-family detached living.
Where are the up and coming neighborhoods? Which areas are more walkable or have access to better schools? These are all issues an agent deals with daily.
They can also ease the burden of buying by simplifying the process. They set up showings, drive you to appointments if needed, and help you handle the intricacies of negotiations.
Today's market also presents challenges that simply weren't present or didn't dominate the market a decade ago. Buyers are faced with some great deals, but through some complicated channels, such as short sale or foreclosure. How does one handle these sort of contracts? Your agent or broker will know.
According to the NAR, "More than ever home buyers are relying on real estate agents and brokers to help them with their home purchase regardless of whether the home they are buying is a foreclosure, short sale, or even a FSBO sale because they need a real estate agent to help them through the process."
Finally, buyers are unsure if now is really a good time to buy. They need to rely on someone with local market knowledge. Is this a good neighbor to invest in? Are prices still dropping in this community? How long do homes take to sell? What is the median selling price? Buyers want the best deal out there.
The 2011 Profile found that more buyers are opting against dual agency, where the agent represents both the buyer and seller. This could signal that today's buyers are very cautious about getting into the market. While a dual agent isn't supposed to harbor any bias, buyers now want to be extra sure they are getting the best deal possible. In fact, "60 percent of recent buyers had an oral or written arrangement with the real estate agent or broker so that the buyer's agent only represented the buyer and not the seller."
If you are considering entering buying a home this year, be sure to strongly consider using a real estate agent. They could be your biggest ally.

http://realtytimes.com/rtpages/20120117_youragent.htm

August 2011 - Monthly Indicators & Housing Supply

Despite some choppy waters in August, there have been noteworthy shifts on both sides of the closing table. Buyer activity is moving back in line with historical trends while sellers are making fewer concessions in order to sell their homes. Falling supply and improving absorption rates in many regions also suggest that market balance is realigning towards neutral. Locally, a few indicators posted positive movement over August 2010, but do the rest of the numbers provide reason for optimism?

New Listings in the CMLS region decreased 7.5 percent to 1,281. Pending Sales were up 19.1 percent to 667. Inventory levels shrank 5.8 percent to 7,855 units, a positive supply-side improvement.

Prices dipped lower. The Median Sales Price decreased 10.0 percent to $137,000. Days on Market increased 11.1 percent to 110 days. Absorption rates slowed as Months Supply of Inventory was up 17.5 percent to 14.6 months.

The economy bobbed along just this side of positive in August. Consumer confidence, which often affects housing demand, showed some slack even as personal income and spending both increased modestly. Low interest rates, declining supply and stabilizing prices are beacons of hope in the harbor, but the recovery still needs wind in its sails.

-Article Courtsey of CLMS

July 2011 - Monthly Indicators & Housing Supply

At the height of summer, we're finally beginning to move beyond comparisons to the 2010 incentive market. Even so, sudden changes in sales volumes are likely due to factors occurring at this time last year. Qualified buyers may find more attractive opportunities now than during either of the recent tax credits. Interest rates should hold their ground around five percent, though the shift in the federal credit rating could change that. Some indicators suggest improving conditions, but let’s see just how we’re faring locally.

New Listings in the CMLS region decreased 20.5 percent to 1,164. Pending Sales were up 3.6 percent to 625. Inventory levels shrank 4.9 percent to 8,015 units, but consumers are still finding terrific opportunities. Strong affordability is partly driving purchase demand.

Prices softened a bit. The Median Sales Price declined 4.5 percent to $143,340. Days on Market increased 9.0 percent to 117 days. Absorption rates slowed as Months Supply of Inventory was up 21.6 percent to 14.8 months.

Second quarter GDP growth was just 1.3 percent after a meager 0.4 percent gain in the first quarter. We added 117,000 new jobs in July, a stronger gain than expected after an embarrassing June. Even though a budget deal has been reached, several challenges persist. Changes to Fannie, Freddie and the mortgage interest deduction are still in play. As consumers absorb distressed inventory and labor market conditions improve, the wheels of recovery grind on.

-Article Courtesy of CMLS

June 2011 - Monthly Indicators & Housing Supply

You may have noticed some "noise" lately about where the market is heading. Some accounts are optimistic while others, well, aren't. The good news is that local data provides a more reliable tone than national sound bites can offer. When it comes to hearing the market's true message, it may not necessarily be from the expected indicators, it may not be heard evenly across all segments and it may arrive in disjointed bursts. Let's listen.

The rate of inventory absorption in the CMLS region slowed as Months Supply of Inventory was up 28.2 percent to 15.3 months. New Listings decreased 0.8 percent to 1,539. Pending Sales were up 19.7 percent to 688. Inventory levels shrank 3.3 percent to 8,209 units, but even choosy buyers can still find top-notch homes.

Prices were more or less stable. The Median Sales Price increased 0.8 percent to $146,130. Days on Market increased 19.9 percent to 117 days. Affordability also improved.

On the national front, the interest rate dropped to 4.79 percent on a 30-year fixed conventional and 4.44 percent for FHA. The unemployment rate has been stable around 9.0 percent and initial unemployment claims have continued to fall. Wages and payroll jobs are also improving slowly. Debt ceiling negotiations and other background noises persist, while prolonged job growth is still the missing verse in the recovery song.

Article courtesy of CMLS.

Should I Buy a Home Now or Wait?

Everybody wants to know how to best time the market when buying a home. It's just natural. Especially if you're thinking about buying in a down market where homes prices are declining. You wonder how low they will go and whether you should wait, right?

Some Home Buyers Should Buy Immediately

You're probably thinking: "Of course, she would say that. She's a Realtor, and agents always say 'Now is the best time to buy'." Well, here is why:

If you are a seller who wants to move up to a more expensive home in a down market, now could be the best time. The longer you wait to sell, the lower the price of your home could fall.

If you can arrange for alternate housing, a smart strategy is sell now, wait a few months, then buy your new home.

If you sell and buy simultaneously, you'll still be ahead of the game because the price reduction on the purchase is greater than the loss on the sale.

Consider the "Loss" on Selling Your Present Home

For example, say your present house is worth $300,000, but because of high inventory and few buyers, you must reduce your price by 10%. So, instead of receiving $300,000, you would get $270,000 and "lose" $30,000.

Consider Your Real Profit

Now, consider this. Say you bought this home 10 years ago and paid $100,000. You're still ahead $170,000, less costs of sale, aren't you? (This ignores monthly payments, but you would make those if you were renting, too.)

Consider the "Savings" on Buying Your New Home

If you are planning to move up to a $500,000 house, which is located in the same distressed market, you could probably buy that house at that same 10% discount or $450,000. This would mean you had saved $50,000.

Review of Selling and Buying Numbers

1. So you "lost" $30,000 on the sale of your home
2. But you "made" $50,000 on the purchase of your new home
3. Doesn't that put you $20,000 ahead?

Don't Forget the Impact of Interest Rates

Which way are interest rates moving? Are they moving up or moving down? If interest rates are near an all-time low and beginning to inch upwards, waiting could cost you more than you would think. You might not be able to afford to buy a home at any price. Following is what happens if you're looking for a loan around $400,000.

FACT: Each 1/2 point increase in your interest rate gives you $25,000 less in purchasing power.

FACT: Each 1 point increase in your interest rate gives you $50,000 less in purchasing power.

FACT: Each 2 point increase in your interest rate gives you $100,000 less in purchasing power.

Look at the Differences Among Purchase Prices versus Interest Rates

If you put down 20% and qualify for an 80% loan, here are your principal and interest payments on the following purchase prices:

• $425,000 sales price, at 8.25% interest, your payment is $2,554.
• $450,000 sales price, at 7.75% interest, your payment is $2,579.
• $475,000 sales price, at 7.25% interest, your payment is $2,592.
• $500,000 sales price, at 6.75% interest, your payment is $2,594.
• $525,000 sales price, at 6.25% interest, your payment is $2,586.

The payments are almost identical. However, the home you can afford to buy a 8.25% is $100,000 less than the home you can afford to buy at 6.25%. If you wait for prices to further decline, the perceived value could be lost due to higher rates.
A good strategy is to weigh all the pros and cons of real estate ownership before making the decision to buy or sell. Don't panic over newspaper headlines. Make an informed decision. Run your own numbers.

Sources: Ask.com

South Carolina Fourth of July Schedule of Events

Friday, July 1

• Festival of Stars Independence Day Celebration - Ninety Six - 2-day event includes street dance, parade, games, fireworks

Saturday, July 2

• Festival of Stars Independence Day Celebration - Ninety Six - 2-day event includes street dance, parade, games, fireworks
• Freedom Fest - Pendleton - live music, children's games, bingo, fireworks, 'Salute To Our Heroes', bake sale, cake walk
• July 4th Celebration on Lake Murray - Boat parade, fireworks to choreographed music airing on local radio

Monday, July 4

• 4th of July Festival - North Charleston - local entertainers, kids' play area, vendors, fireworks at dark - bring lawn chairs and blankets
• Fabulous Fourth in the Creek - Goose Creek - live entertainment, jump castle, food vendors, fireworks at 9:30 PM
• Firecracker 5000 Road Race and Fun Walk - Hilton Head - 5K run or walk with post-race celebration - proceeds for local charities
  Independence Day - Happy 235th Birthday United States of America! - state and federal holiday
• Lexington County Peach Festival - Gilbert - parade, food, entertainment, 'peachy' recipe contest, antique car show, fireworks
• Red, White and Blue Festival - Greenville - showcasing one of the states largest fireworks displays
• Town of Surfside Beach 4th of July Celebration -  inflatables, water pool slide, entertainment, watermelon and ice cream, fireworks

TOP 10 REASONS TO BUY A HOME NOW

1.)                Investors are buying up houses and condos, in some instances paying entirely in cash. This is a good indicator that the market is ROCK bottom.

2.)                What goes down, must go up. Homes prices are expected to rise.

3.)                Good deals. Nationally, the cost of a house is the equivalent of about 19 months of total pay, the lowest level in 35 years.

4.)                Interest rates are historically low.

5.)                You own a real asset. If you own a home, vs a Stock you have a real asset that you can live in, rent out, or sell if you choose.

6.)                Home mortgage could be less than rent. With all of the recent foreclosures, there are a lot of renters. Therefore, it is a landlord’s market.

7.)                It’s forced savings.

8.)                There are many homes to choose from that are priced competitively. All ready for you to call home!

9.)                64% of Americans agree. Nearly two-thirds (64%) of all respondents polled in a study by Fannie Mae think it is a good time to buy a home, and nearly one in three (31%) think now is a very good time to buy a home.

10.)            Buying a home positively impacts our local economy. The National Assocation of Realtors® estimates that each home sale at the median national sales price of $173,000 generates $30,792 of economic impact, and $58,529 of economic impact when new housing is taken into account. Because of the significant economic impact a single home sale generates, the National Association of Realtors® also estimates that one job is generated for every two home sales.

For more information on buying a home in 2011, please contact Hope Dorn with ERA Wilder Realty at (803) 944-9544 or by email: hope.dorn@era.com.

FHA Mortgage Insurance Premium Increases

If you’re currently looking to purchase your home (house, condo, townhome) with an FHA Loan, the cost of that loan will be increasing soon. Effective April 18, 2011, the FHA monthly mortgage insurance premium will be increasing 0.25% for all loans with case numbers issued on or after April 18th.

The net effect of the change is two-fold. First, the monthly mortgage payments will increase. That means more money out of pocket every month. Second, as the cost of the mortgage rises, purchasing power decreases. In this case, not by much; it’s likely less than $10,000. Though, if you’re close to your limit, that could have an effect on how much home you can afford. To avoid the fee increase, buyers should act quickly.

Most FHA buyers will finance a 30-year term with the minimum 3.5% down, resulting in a 96.5% loan to value, and therefore will be subject to the 1.15% mortgage insurance premium.

If you're approved, get your offer in now!

No Fannie, no Freddie

Editorial Courtesy of the Los Angeles Times

The Obama administration has offered three options for reducing the government's role in home loans.

February 23, 2011

The Obama administration took its first, tentative step this month toward a future without Fannie Mae and Freddie Mac, the troubled mortgage finance giants. The Treasury Department laid out three options for reducing the government's role in home loans, each of which would phase out Fannie and Freddie and shrink or eliminate federal support for run-of-the-mill mortgages. Such an approach is likely to raise mortgage interest rates, especially for 30-year fixed loans, and could make it harder to get a mortgage during a financial crisis. But it would also greatly reduce the likelihood of taxpayers being stuck covering the cost if a downturn causes foreclosures to mount.
Congress created Fannie Mae and Freddie Mac to help lower the cost and increase the availability of home loans. Before the Depression, banks typically required mortgages to be paid off in one lump sum after five years. That's because banks' reliance on short-term sources of money, such as customers' deposits, left them ill prepared for the long-term risks posed by loans that wouldn't be paid back for years.
Launched in 1938, Fannie Mae's original mission was to purchase and hold loans guaranteed by the Federal Housing Administration. By offering banks the chance to sell the loans they issued, Fannie Mae made it possible for them to offer more mortgages and to allow longer payback periods. The eventual result was the wide availability of consumer-friendly 30-year fixed-rate loans. Freddie Mac, which Congress created in 1970, made even more capital available for mortgages by buying, bundling and selling loans to investors.
But Fannie Mae, which became a shareholder-owned company in 1968, and Freddie Mac, which has always been shareholder owned, combine public missions and private ownership in a dangerous way. Because Congress created the two companies and relied on them to promote affordable housing, investors and lenders assumed (correctly) that they wouldn't be allowed to fail. That made it cheaper for Fannie and Freddie to borrow money, giving them an unfair advantage over competitors in the secondary market for home loans.
More important, the implicit federal guarantee encouraged the companies to take excessive risks, which they did by jumping into the market for subprime and other exotic loans late in the housing bubble. After racking up billions in profits for their shareholders and employees, they foundered in 2008, sticking taxpayers with more than $150 billion in losses.

Let's Go Shopping!

LEXINGTON:

Average listing price in Lexington went down 0.78% to $218,869 from prior week.

Median sales price in Lexington  went down 8.14% to $140,000 from prior quarter.

Average price per sqft in Lexington  went up 3.45% to $90/sqft from prior quarter.

There have been 399 price reductions in Lexington.

There are 122 foreclosures in Lexington.

NEWBERRY:
Median sales price in Newberry went down 61.11% to $35,000 from prior quarter.

There have been 39 price reductions in Newberry.

Average listing price in Newberry went up 2.21% to $145,817 from prior week.

There are 16 foreclosures in Newberry.

COLUMBIA:

Average listing price in  Columbia went down 0.03% to $188,026 from prior week.

Average price per sqft in Columbia went down 3.95% to $73/sqft from prior quarter.

There have been 1,195 price reductions in Columbia.

There are 691 foreclosures in Columbia.

IRMO:

Average listing price in Irmo went up 1.40% to $207,154 from prior week.

Median sales price in Irmo went down 9.76% to $143,000 from prior quarter.

Average price per sqft in Irmo  went up 5.88% to $90/sqft from prior quarter.

There have been 170 price reductions in Irmo.

The are 87 foreclosures in Irmo.

Call Hope Dorn with ERA Wilder Realty at (803) 944-9544 to begin your dream home search!

Free Money to Buy a Home!

If you have been procrastinating about buying a home, get off of the fence! Rates are starting to climb and home prices are at an unbelievable low. If downpayment is an issue, consider this:

Many lenders are offering the 5-to-1 down payment match. If you bring $500 to the table, they turn it into $2,500. If you bring $1000, they turn it into $5,000.

SC State Housing Authority  - The Authority offers $5000 down payment assistance based on availability, which may be used toward down payment and closing.

USDA Rural Development  - Rural Housing Direct Loans are loans that are directly funded by the Government.   These loans are available for low- and very low-income households to obtain home ownership.  Applicants may obtain 100% financing to purchase an existing dwelling, purchase a site and construct a dwelling, or purchase newly constructed dwellings located in rural areas. Some of the neighborhoods are closer into town than you think.  

For more information on finding the perfect home and making it happen, contact Hope Dorn with ERA Wilder Realty at (803) 944-9544 or by email at hope.dorn@era.com.