KD's Real Estate Blog

The Real Estate Book 10 i 10

2012-03-01T10:39:00.001-08:00

Open publication - Free publishing - More bathrooms

New Property Evaluation

2012-02-25T07:58:00.000-08:00

Hi Mike,

Glad to hear from you this morning. Listen, I’ve put up a real estate facebook page and a real estate blog – I’m trying to post semi-regularly – which means, when I have time and when I have a topic that needs to be addressed. And this is a topic that begs addressing. Check it out http://kdsfarm.blogspot.com or you may just visit KDMcCall.com and click on the blog link. For Golden Valley I’m still posting, you can visit the GoldenValleyNC.com and click the blog link there as well.

Sitting at my desk with my morning coffee, I've been looking at short-sale information. A whole lot of us are upside down on our properties and I think as these tax valuations come out this is going to be the case. I just got our evaluation yesterday and it's about what we owe on our note. If we had to sell, had to add a real estate commission to the tax value, we'd be underwater. It's unusual for tax value to be greater than market value, but in Bostic, from October 2010 to October 2011 that was the case for 90% of the properties sold.

But let me get on to your question. Why did the county evaluate your two properties so differently? My guess is that there are two different appraisers. That’s very much a guess, as I do not have access to their criteria, and a certain amount is subjective. Like the client who asked this morning, could I maybe get a long term rental? How long is long term?

Same with large rooms, quiet neighborhoods, and expanding waistlines – I would submit that all are subjective.

So, my response is conjecture. But I have a report that shows a certain amount of criteria the appraisers are using for their evaluation, it is much the same a real estate agent uses for a comparable market analysis (CMA). Much of what we do is subjective, like grading lumber, yes there are some hard and fast rules, but there’s a lot of leeway, too. One of the huge problems I have doing CMA's is I am not a person who sees an acre in an acre. I see the view, I see the hardwoods, I see the view-shed, I see the contours, I see the building site, I see the HOA, I see the roads and drives, can you get highspeed Internet, cable TV, cell phone service? I see an acre very differently than, say, an investor, or a builder or the developer's salesman.

A couple of weeks ago, I heard from a homeowner who had purchased a foreclosure and the county was valuing the house at more than the sales price, way more. The homeowner was upset and intended to appeal. I explained: the county is taking into account surrounding property values, replacement costs, just because you bought your house at $29.50 on the square foot doesn’t mean it’s actual value is $29.50 per square foot. You got a deal – right? It’s like this – let's say you bought a car from your brother-in-law in SC for $565.00, it’s worth $4,000 according to Kelly Blue Book. When you bring that car into the state of NC, is it now worth $565.00? Of course not, and we all understand that. Well, it’s the same for real estate. And why would your brother-in-law sell you a car for $565.00? Maybe because you conceded the dining room suite in the estate sale, the one your wife’s sister was so keen on. Maybe, maybe not…You got a deal. That doesn't change the value.

Why did the county evaluate your two properties so differently? The honest answer is I don't know. Will it hurt to appeal? Hmmm. Let me remind you that 90% of the property in Bostic in 2011 sold for less than tax value. If that continues through 2012, how will that affect your market value, and is that important to you?

I've been answering questions in blog posts when the topics are like this one, timely, relevant, and like the insurance issue, are about something you and I need to know about. (See: GoldenValleyNC's Blog - mapping service some of the insurance companies have subscribed to - are you more than 5 miles from the fire department). See February 10th at http://goldenvalleync.blogspot.com/.

It's nice to have something to write about this morning. Thank you for your timely, relevant, newsworthy question. It's questions like this that make the real estate blog worthwhile. Enjoy your weekend!

Let a REALTOR Guide You

2012-02-09T16:13:00.001-08:00

Please visit the NC Association of REALTORS, serving you since 1921

CrackerJack Agent - Article Profile - How to Calculate Capital Gain

2012-02-08T11:46:00.000-08:00

CrackerJack Agent - Article Profile - How to Calculate Capital Gain

In this straitforward piece, Jennifer Pendzick shows you how ro calculate capital gains. You may be much better off with a 1031 Tax Exchange, but be advised this has to be done BEFORE you sell your property. If you've already closed, you're too late.

Strategic Default Help - Foreclosure Protection - Strategic Default Assistance

2012-01-29T10:08:00.000-08:00

YouWalkAway.com Featured On 60 Minutes You Walk Away - Strategic Default Help - Foreclosure Protection - Strategic Default Assistance

How Much Does It Cost To Buy A House?

2012-01-27T10:57:00.000-08:00

"Exactly how much money would that be with closing and other cost?"

This is a question from an actual email I received this week, and it's not the first time I've addressed the question. The answer is not as simple as you might think, because it depends, it depends on a lot of things. But here goes, here's my answer, if I've been vague or left you with questions, call me. I'll answer your questions and edit this post for clarity. I have always said these things should be taught in High School, but until they are, let's work together.

How much exactly will depend on several things, and it will largely depend on what kinds of loan you qualify for. The loan I told you about is an FHA Loan. I put a mortgage calculator on my blog, just for you, so you can play with different scenarios. http://kdsfarm.blogspot.com/ .

Now, remember when you’re looking at this PITI. The acronym, p-i-t-i, stands for principal, which is the principal amount of the loan, the first i stands for interest, that’s what you’re going to see with a fully amortized loan, that’s the figure the calculator on my blog will give you, the principal and interest. But there’s more… the t stands for taxes, which in this case (on $114,000) is $551.00, and the second i is for insurance.

The lender will escrow – in other words collect and hold – money to pay interest, taxes, and insurance. They don’t want you to get behind, they want to start you out ahead so when you buy the house and go to closing they will hold 3 months. They'll break it down into a monthly amount… let's take the taxes: $551 divided by 12 = $46.00 which will be added to your payment. And so will your homeowner’s insurance (required on a mortgaged home). I don’t know how much that will be without calling your insurance provider or calling one for you. That's another thing that depends. I have a nice deal with Allstate because I have my cars and my homeowner’s with them. My lender, Bank of America collects the taxes and insurance from my payment and pays those bills on my behalf. You’ve heard people talk about their house payments changing? This can be because insurance and taxes fluctuate. There’s another reason a loan amount may fluctuate it's called an ARM, which stands for an adjustable rate mortgage. That’s when you get a super-duper interest rate, but the rate adjusts with prime. And right now prime is low so ARM’s are not a good option. There’s also an interest only loan, again, that’s not a good option for an average home buyer either.

Another thing how much will depend on is how much are you going to put down on the home? If you put down the minimum to qualify assuming you paid full price for this house (and we’ll talk more about that when you hire me as your Buyer's Agent) at $114,000 the down payment would be $3,990. There’s may also be a fee, called a loan origination fee, aka points, on a bank loan.

I found this really super link to the Federal Reserve Site: http://www.federalreserve.gov/pubs/settlement/ with a Settlement Costs Worksheet! Have a look at that.

Here’s the thing, buying a home seems like an awful lot, but in an effort to cover every little thing, well, you have to cover every little thing. A real estate agent should be well versed in these things and should be able to help you make a good decision.

Have you ever heard of Truth in Lending? Each and every real estate transaction will have a HUD Statement. This breaks down the exact costs. The closing attorney, the attorney you pay to handle the transaction, he’s YOUR attorney by-the-way, he or she will prepare a closing statement, and cover it line by line to make sure you understand exactly what each cost is. Your real estate agent should cover these items, too, so there are no surprises at closing.

If your grandmother is going to give you some money for closing, that’s OK as long as it’s a gift and does not have to be repaid. Mortgage companies do not allow you to borrow your down payment. You have to have some cash on hand, to buy a house. $5 or $6,000 on a house in this price range ($100,000) will take you a long way.

Now, it's time for you to go to your bank. That's the best place to start. Call your bank and find out if they loan money for mortgages. If they don't I can send you somewhere else. Even if they do you might want to check around and see if you can get a better interest rate or a lower loan origination fee.

So, how much does it cost to buy a house? It depends, it depends, it depends.

Realtor.org - Research Commentary

2012-01-24T05:50:00.000-08:00

Wrapping up 2011, NAR chief economist, Lawrence Yun, reports the rise of existing-home sales. Record low mortgage interest rates and lower sales prices have continued to entice buyers. Are we on our way to a sustained recovery? See Lawrence Yun in this 2011made for REALTOR TV video.

And in this YouTube video, a commentary by Yun following the unpresidented housing boom and bust "700 billion here, 800 billion there..." Now, the mortgage interest deduction has become an issue.

Reasons People are Buying Homes Today

2012-01-12T07:07:00.000-08:00

The second most common reason people cite for buying a home now is affordability. What's the first reason? Find out here:

Primary Reason for the Recent Home Purchase

On January 11, 2012, in Did You Know, by T.J. Doyle, Marketing & Communications Manager a blog post was added to the Economists' Outlook Blog, which follows housing stats from the National Association of Realtor's esperts.

Wind Power Talks at JLF Event

2011-12-28T07:40:00.000-08:00

Wind Power Does Not Help Economy or Environment, Experts Say

While state law requires North Carolina utility companies to generate 7.5% of their energy using renewable resources by 2018, they don't tell you: "Electricity generated from the wind is inefficient, extremely expensive, and bad for the environment, argued scientists and economists at a forum sponsored by the John Locke Foundation Dec. 5, at the University of North Carolina-Wilmington."

Like many of the green movement's supposedly great ideas to save the planet, this one is no panacea. Wind run plants, according to the article, "cover more tnan 1,000 times the surface area of a conventional facility."

So, I'm thinking if you've got a hundred acres of pasture or so, you're not using, and you don't mind the sight and sounds of several hundred windmills, and you have deep enough pockets to build the grid, knowing it'll be several generations down the line before you get a return on your investment, one you'll never see... why you're probably a good candidate for this technology. Now, if they can figure out how to store electricity generated by wind power plants, well then, that would be another story.

Sell Low - Buy Low, Should I Make a Move Now?

2011-12-13T15:33:00.000-08:00

My best articles come from letters to clients. This is one from "Eric" who said, "We are exploring our options and aren't sure what we should do." Here's my response:

Hi Eric,

Thanks for following up with me. It sounds like you've got some decisions to make, but nothing that can't wait a while. This market has made a lot of people unsure of what they should do. Do you live in Western Carolina?

My thought is that while it might be OK to make a lateral move right now - sell low, and buy low - moving into an altogether new situation requires a different sort of investigation. And with this market in flux... every week a different expert pops up to say: We're at the bottom! Invest your money today; we'll strike it rich. And at the same time another expert on another channel chews thoughtfully on the end of a pencil and says "Bottom? Really? Not with all of the shadow inventory. Until that clears, we're still going down. And here's our National Real-Estate-Expert, Miss Smarty Pants, to weigh in on the REAL real estate news this week." And the cameras roll.

We don't know what to believe.

My thought is that this is the time when you follow your heart. Play the theme song from Annie: The Sun will come out tomorrow, betcha' bottom dollar that tomorrow, there'll be sun...

Do what you feel is in your families best interest, for today, and for the long haul. If you can stay in your home, STAY! Make it more comfortable and stick this out. Laura Allen, a local business woman, has been selling some of her household goods online. She said she can't afford a bigger house so she's going to declutter, rearrange, redecorate and make the one she has feel bigger. Smart girl!

A lot of people have to relocate - and it comes down to this - do you HAVE to sell or can you STAY. Whatever you decide you've got some work in store, whether it's the work of putting your house on the market, or redecorating for the long haul, now is the perfect time to get started. 2012 is just around the corner.

Whether you sell or stay here are some links you might want to explore.

See: Video from the National Association of REALTORS: Inside An Energy Audit
http://link.brightcove.com/services/player/bcpid1785312249?bclid=1747275818&bctid=1726708597

See Video from the National Association of REALTORS: The Staging Pro
http://link.brightcove.com/services/player/bcpid1785312249?bclid=1747275818&bctid=63269637001

Merry Christmas and Happy New Year!

By the way, Eric, in writing this note I realized I've stumbled onto a good topic for my New Year's real estate column! If you see this in print....

Real Estate Syndication

2011-11-21T05:31:00.000-08:00

Real Estate Syndication, "Distribution Trumps Destination" so says Saul Klien in this fantastic video that explains real estate syndication in a way that absolutely makes sense.

This morning as we approach the Thanksgiving Holiday I've just got to say, Thank you to Saul Klien, who has been a leader in real estate and real estate technology. I took my e-Pro certification under Saul's Internet Crusade before the National Association of REALTORS took over the class and that was one of the smartest/bravest/best things I've ever done.

Syndication Overview

View more webinars from yveszx

I specialize in a second home and land market that requires a good understanding of technology. Most of my real estate transactions are with out of area buyers and sellers. I utilize and enhance marketing and syndication of listings with tools like visual tours. I've talked with a lot of you about syndication and explained how important it is, but Saul Klein nails it.

Our MLS Board offers syndication through List Hub. United Country offers syndication through their online partners as does The Real Estate Book and since I rarely work with clients who won't participate in syndication, you can safely assume your listing is syndicated.

Now in our rural area, we occasionally get some errors, particularly mapping errors, some I can fix and some I can not. Sometimes we find off the wall examples of data feed errors, like $17,000 appearing at $1700, but, the technology is improving everyday and while I can't make changes to your listing on every little site, like "typepad" and "hothomes", I want you to understand that I am covering the bases and have accounts with the big guys.

Real Estate Syndication - made easy - watch and learn from one of the big guys, Saul Klein whom I am grateful to "follow" in RealTown.

Get Preapproved? Prequalified?

2011-11-19T04:27:00.000-08:00

Get pre-approved, pre-qualified, who me? Why should I? Do you think I would misrepresent my buying power? You're the third REALTOR who's asked me that.

Well those other two didn't explain pre-approval. Pre-approval, and I'm using this interchangeably with pre-qualification, is a good thing. It enables you the client and me the REALTOR. Right this minute I've got three potential buyers on the fence. I'm writing this for them because they evaporated when I asked them about finances. I'm the REALTOR so finances are none of my business, right?

Wrong.

As your Buyer's Agent I am your hired professional. I'm getting paid to represent you and if you don't have any money, and you don't have any credit, then you can't buy a house, period. I can't help you; I can only hurt you.

Here's why I am telling you to get pre-approved:

1. I need to know what our price range is so I can find and show you homes you could buy, not more home, or less home (unless that's what you want), but just the right home.

2. I need to know if there are any smudges on your credit report we could be working on now to get you a better rate on interest later.

3. I need to know when we present an offer that we're presenting a strong offer, and you need to know pre-approval could help you win the house in a multiple offer situation.

4. I need to know who we'll be working with. We need a mortgage officer who can tell you exactly what interest rate you qualify for, can give you numbers, explain PITI (Principle, Interest, Taxes, Insurance) and tell you what your payments will be at your price point.

5. I need to know what mortgage options are available to you. Looking for a home that qualifies under FHA is different than a home that's going to qualify for VA, and the FHA and the VA change their requirements, not as often as Adobe upgrades their reader, but often enough.

6. I need to know you're qualified to buy a house BEFORE I put you in my car and drive you all over the 566 square mile Rutherford County to look for the perfect place and THEN find out you have a little credit problem. I am a self-employed business person. It's my money going in the gas tank. If you're honest and tell me Maybe Someday you'll buy a house, then Maybe Someday I'll take you out to look at houses. Sometimes I preview homes, and I like to have company when I'm going to look at vacant properties.

I want to help you buy the most house for the least money. I want to help you get into a home that can be a tax shelter as well as a family shelter for years to come, so get pre-approved, will ya?

Here's the harsh reality.

Champagne taste on a beer budget - ever heard that? You want to see houses you can't afford - maybe you'll make an offer and get a $200,000 house for $75,000 - really? It does happen, but you should know one of the stipulations on making an offer on a deal like this is "Proof of Funds" that has to go in with the offer.

You just need a cheap fixer-upper because you're handy and so are your friends/family members, but you don't have any money. And about this, I am sorry, but banks only loan money to investors on fixer-uppers. They loan money to people who have money. Banks aren't going to take a chance on you. I hate it - but unless you've got a wealthy friend of family member who'll front you the money you're out of options. Banks aren't going to loan money on anything but a move-in ready house, because if you miss a payment they want a house that's move-out and re-sale ready.

You've got credit problems? I can't solve them for you, but I can help.

Owning a home has long been called The American Dream. Helping you find a home, putting you in a home, well that's my dream. When you walk into a house and say: This is it - I get goosebumps. And after you move in I nod my head when I drive by and feel good. This is a real feel-good business.

But when you fall in love with a house, and I can't help you get it, then I feel bad, and you feel bad, and the seller feels bad, and their agent feels bad and it's bad.

What's worse? When I drive by your house and know you're losing it. Boy do I feel bad. Even after you move out, when I drive by that house, I feel bad. If you get in trouble, I will help you any way I can. I can not make your payments, but I'll list your house, and help you make a plan, and give you boxes if have to move out. And that's really bad....

Listen, the last thing I want to do is to help you get more house than you can afford. So do yourself and me a favor. Get pre-approval/pre-qualified.

Get preapproved. It's a good thing.

Unbranded Virtual Tours

2011-11-18T06:29:00.000-08:00

One of the things people don't know about real estate practitioners is that many of the Multiple Listing Services do not usually allow agents to post "branded" visual tours. Branding is material with your name, signage, logo, verbage, anything that would promote your work as in advertising. This is not permitted in visual tours. This is because Multiple Listing Services are purveyors of a system called IDX (Internet Data Exchange). IDX is part of an agreement agents, joining the MLS, make to work with one another, to cooperate, by sharing listings. This means if, for instance, Carol McCall at Re/Max Retro posts a listing into the MLS, I, Karen McCall, over here at United Country, Country Lanes Real Estate am free to share Carol's listing with my clients. Now, I don't want to send Carol's branded visual tours to my buyers and sellers and promote Carol's business. I have agreed to share pictures, to share listing details, to share information, but I have not agreed to advertise for Carol.
Pursuant to keeping a good working relationship with my fellow REALTORS, I have set up an unbranded virtual tour channel on YouTube. This is so that all of the members of the Rutherford Board of REALTORS can send my/your listing to their clients, without sending an advertisment for yours truly.
I understand that in business to put a lot of work into setting up a program you aren't going to get credit for doesn't seem to make a lot of sense - and it wouldn't - except that I know any of my fellow MLS members can share my/our visual tour with their clients and that any of them can bring a ready, willing and able buyer, and sell your property. If my visual tour of your property helps another agent to bring a buyer I'm all for it. I would sooner have 120 agents shareing your listing with thier clients than to have a branded showcase tour trumpeting my achievements online.
Please, feel free to visit my unbranded YouTube Channel anytime. Below you may watch a short tour. I try to keep tours under 2 minutes long. The point is, not to show everything about the property, the point is to pique a potential buyer's interest so that they'll want to see the home in person.