Adventures in Showing Homes -

From time to time it’s fun to share parts of real estate that just aren’t covered in the normal training classes – over the years I’ve experienced lots of interesting situations – many of which occur while out showing property.

Take this weekend for example – I was out showing an older ranch home on 16 acres – (side note – this was not in Cary city limits! – it was a drive out to a more rural section of the area) back to the story – so I was showing this home on acreage to a set of buyers looking for a home with enough land to have horses. 

If you’ve never looked at a home on 16 acres of land complete with barns etc it takes a while – someone in the group (protecting identities here) needed to use the bathroom and slipped back into the house – which was vacant  . . . and without water, any water, and no signs warning that the water was off . .  completely – including an empty toilet refill tank – well you just cant flush without water – which we didn’t have and we just couldn’t just leave the new colored water in the toilet – so – experieced agent into action – found a bucket on the property – walked down to the stream that runs through the 16 acres – filled the bucket with stream water – back to the house – filled the toilet tank with the stream water – problem solved – one toilet flush complete!

And you thought being a real estate agent was all glitz and glamor

Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams

David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com

]]> http://caryrealestate.com/2010/01/11/not-your-typical-cary-backyard-adventures-in-showings/feed/ 0 http://caryrealestate.com/2009/12/09/ask-cary-real-estate-what-is-a-short-sale/ http://caryrealestate.com/2009/12/09/ask-cary-real-estate-what-is-a-short-sale/#comments Thu, 10 Dec 2009 04:33:48 +0000 davidadmin http://caryrealestate.realestatetomato.com/?p=613

What is a Short Sale?  A Short Sale occurs when a home seller is allowed by their lender to sell the home for less than what’s owed on the mortgage.

If you are a home seller you may be thinking – I like that idea – not having to payback as much as I owe – well of course it’s not that simple.  Typically several things need to occur before your mortgage holder will consider a short sale:

1)  You are delinquent on your house payments

2)  You have no other assets or ability to cover what you owe

3) Short Sale is the only option to avoid Foreclosure

4) Lender considers short sale necessary and possible

Why would a lender accept less than what you owe? Foreclosures are expensive for the lender – as much as $50,000 or more when all is said and done.  If foreclosure is eminent then accepting a short sale loss may be less of a loss than foreclosure.

Lender’s are not required to allow a short sale – they are 100% in control – and if you have a 2nd loan, like a home equity loan – then both lenders have to approve the short sale.

Impact of a Short Sale to a Home Seller:

1)  Can not receive any money from the sale of the home at closing.

2) Credit will be damaged (typically less than a foreclosure)

3) Lender may file a deficiency judgment against seller for balance of their loss (difference between what they received at closing versus what the seller actually owed)

4) Short Sale may have IRS implications where forgiven debt is considered income – currently there is a moratorium against this – it’s called the Debt Forgiveness Act.

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Impact of Short Sale to a Home Buyer:

1) Offer to Purchase agreement is between buyer and seller, with a contingency that lender must approve

2) Purchase price will probably be less than market value

3) Can take weeks or even months for lender to approve

Bottom Line – Short Sales are anything but ‘Short’- They are complex real estate transactions - if you have any questions about short sales let me know!

Thanks for Reading our Cary Real Estate Blog. Post Authored By: David Williams

David’s a Licensed North Carolina Realtor & The Voice of CaryRealEstate.com

I boarded a SouthWest Jet this morning at Raleigh-Durham, headed to sunny San Diego for the annual Realtor convention.  The inevitable happened – the conversation with a stranger – it was the gentleman on the adjoining aisle seat – after learning more than I really needed to know about him etc etc he asks what I do and where I’m headed – once the subject of real estate surfaced an interesting yet typical conversation unfolded – I thought to myself – I’m gonna blog about this!

I would do the cool dialogue format back and forth on what he said and what I said, but, ohm, just assume I was nodding and smiling

The gentleman is trying to sell his home – he has it listed with an ‘experienced’ agent but he is not willing to accept that his house is not worth what it was 2-3 years ago – granted it’s a high end subdivision and we are talking about a price swing over $100,000, I feel his pain – but his strategy is to just keep it priced at the old higher value “cause somebody will come along”

REALLY?   Somebody’s going to come along . . .

So even though a stock is trading at $50 a share you think somebody will offer you $75 a share cause that’s what it traded at 2 ½ years ago?   Who is this ‘someone’ and where do ‘they’ come from?  And what about the ‘experienced’ agent that has their sign in the front yard with a non realistic price?  Who is that helping?

As I nodded and smiled I played through the conversation in my head that I would be having with this gentleman if I was at his dining room table instead of an airplane – I know one thing for sure – my sign would not be in the yard of a grossly overpriced listing.

Lot’s of thoughts are dancing through my head on information I could share about fair market value, absorption rates etc – but you probably don’t want to hear about that right now and I’m off to bed – need a good nights sleep for a full day of Convention tomorrow!

Posted via email from David Williams

Most buyers really don’t know what to expect during the home inspection. Should they attend?  How long will it take?  Here’s a few tips to help you be prepared and know what to expect.

Should you attend the home inspection?     Yes.

If at all possible plan on attending the home inspection.  While it is not required for the buyer to be present during the inspection I’ve found that it helps.  You get to see the inspector working and can learn great tips about preventative maintenance items. How long will the inspection last?  Typically in the 2 to 3.5 hour range.

When do I pay? How much will it cost?  Be prepared to write the inspector a check at the time of the inspection.  The cost varies between inspectors and the size of the home – a good estimate is $350 – $500

Expect to sign a home inspection agreement with the inspector.  The agreement spells out the inspectors responsibilities etc.

The Home Inspector will be visually inspecting many components of the home, you will see them run the dishwasher, test doors, windows, electrical outlets etc.  They will move through the home systematically, making notes of their findings along the way.  The inspector will wait to go under the home last (if it’s a crawl space) – having already ran water in the sinks, flushed toilets etc it will be easier to notice a leak.

Remember the home inspector is working directly for you and is not tied to the sales contract in any way.  Here’s why that’s important, you may hear the inspector say something like, “The sellers will have to fix that”, not necessarily – while it may very well be a legitimate item that needs repairing, the seller is not obligated to make the repair – how you handle the findings from the home inspection report will depend significantly on terms in the offer to purchase.  The best way to handle this is to wait for the written home inspection report and then determine which items are of concern and how to address them with the seller.

Here’s a great way to mentally categorize things the home inspector finds or points out.  This is not an official method,  if you say to the inspector “Is that a category II finding?” it’s not going to mean anything, it’s simply intended to be a help as you process things the inspector finds.

Category I items:  think of these as recommendations – things the home inspector may point out that could be done to improve or extend the life of an item.  This is not really something you would typically ask the seller for, just good info to have.

Category II items:  minor items, again good to know but not really a substantial reason to be alarmed.  For example, a closet door latch needs to be adjusted.

Category III items:  in my opinion this is really why you are having the inspection,  items you want to be aware of before you decide to close on a home, for example, plumbing leaks,  broken heating or air conditioning system, foundation problems etc

With any home (even new ones) the  inspector will likely find a number of items to report.   It’s important to wait until the end of the inspection and look at the complete findings.

After the inspector is finished they will go over their findings with you verbally, followed by a written report, typically the next day.  The written report will show their exact findings along with photos.

Once you have received the written report you can evaluate and determine which items to request the seller to repair.  Please remember, usually there will be a date within the offer to purchase contract by which any repair request must be submitted to the seller.

The home inspector is reporting if a particular item or system is working or not – they will typically not get into what would be required to repair the item or the cost to do so.

Remember no home inspector is perfect and they don’t have x-ray vision.  A clean inspection is not the same as a guarantee.  Something can be working today yet break tomorrow.  Depending on the age/condition of the home you may want to consider a home warranty.

There are many factors that go into properly pricing a home, this is a simple yet powerful tip!  We all know the age old marketing ploy, price something at $9.99 instead of $10, it just sounds better right? No doubt this approach works it’s magic on our minds when we stroll the aisle of Target but don’t make the mistake of using this strategy with your home.

It can be a HUGE MISTAKE to price your home at $299,999 instead of $300,000!!

Curious Why?  I hope so.  It’s one of those simple things that’s so easy to miss.

Where do buyers start their home search?       Online.

How do the online search parameters work?       By Price.

Figured it out yet?  Online home searches have you select your price range in even increments.

By pricing your home just above or just below a major price point you unknowingly eliminate tons of potential buyers!

If you price your home at $299,000 you have just eliminated the buyers that are looking in the  $300,000 – $350,000 range.

or

If you price your home at $303,000 you have just eliminated the buyers looking in the $250,000 – $300,000 range.

If you have a home that is close to a $25,000 price point consider pricing it exactly at that price point.

What is Earnest Money?

Who Holds the Earnest Money?

How Much Does the Earnest Money Deposit Need to be?

What happens to the Earnest Money if I Don’t Close on the Home?

These are all great questions that home buyers ask  before purchasing a home in North Carolina.  Here’s a typical scenario for a buyer purchasing a resale home in the Cary-Wake County-North Carolina area  You’ve found a home you’re interested in and ready to make an offer.  That first offer needs to be in writing – for a re-sale home here in the Cary area we’ll use the standard NC Offer to Purchase Contract.  Along with the written offer, you will write an earnest money check.

What is Earnest Money?

Think of earnest money as a deposit on the home, a show of good faith.  If/when your offer becomes a contract your money will be held in trust and subject to NC Trust account regulations.   At the time of closing the earnest money deposit will be credited towards your purchase of the home.

Who is the Earnest Money  Check Made Payable to?

Typically the Listing Company.  Most listing firms in the Cary area maintain a trust account for purpose of holding earnest money deposits, however some small firms choose not to maintain a trust account, in this case we can use the CaryRealEstate.com trust account or use the trust account of a local real estate attorney.

How much should the Earnest Money Deposit be?

Technical Answer, the amount of earnest money is negotiable between buyer and seller.  Real life answer, usually around 1% of the offer amount.  Think of your offer as a gift to the seller – the terms and condition of your offer are like the wrapping paper and bow.  The larger the earnest money amount the ‘prettier’ the bow.

What Happens to the Earnest Money if I Don’t Close on the Home?

Notice I saved this one for last?  The best answer here is, IT DEPENDS!  You, the buyer, may or may not be entitled to a refund of your earnest money – depending on why the closing did not occur – the offer to purchase is the guideline.  Here’s the catch – even though it may appear obvious that you are entitled to a refund, both parties (buyer & seller) must sign off on how the earnest money is  disbursed before the firm holding the earnest money can release the money.  If the parties can not agree then it can become a legal matter.

Could I write more about the intricacies & nuances of earnest money?  Absolutely.  Would you still be reading, probably not!  Please let me know if you have any specific earnest money questions that I did not address.

Please Note:  The North Carolina Real Estate Commission has a Question and Answer Brochure available here.