Charleston, SC Posts

A new bill was passed by Congress today which will affect Buyers and Seller. 

•1.    DOWNPAYMENT ASSISTANCE BAN: The bill will remove downpayment assistance (DPA) programs for FHA loans effective September 30, 2008.  However, it's not too late!  Now is the time to buy! It's time to get under contract before the deadline.  Sellers, this means, the only way for a non-veteran borroweRS to get 100% financing is going to be gone in less than 60 days. 

•2.    INCREASE FHA DOWNPAYMENT: Additionally, the minimum downpayment has increased from 3% to 3.5%.

•3.    INCREASE LOAN LIMITS: There was a permanent increase in "CONFORMING LOAN" limits also.  The cap use to be $417,000.  Mortgage will now be guaranteed up to $625,500 by Fannie Mae and Freddie Mac. This also applies to FHA loan limit caps making it easier to for borrowers in upper price ranges to get mortgages.

•4.     NEW HOME BUYER CREDIT: The good news about the bill is that first time homebuyers will now be able to receive a $7500 tax credit up to 10% of a homes purchase (but no more than $7500). The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments.

So what does this mean?

In the Charleston market, one of the biggest obstacles in the current market is financing options for qualified buyers without a downpayment.  Quite frankly, there are none unless the buyer qualifies for a VA loan.  This mean that time is running out for buyers that might qualify under this program.  With the removal of this program, this financing incentive is no longer available reducing options to sellers to attract buyers. It's not too late!

The real estate has serious problems.

You need a realtor with serious solutions.

Call or email the Charleston Relocation Expert if you are ready to purchase a home or need marketing solutions to get your home sold.

michele@CharlestonRelocationExperts.com

843-814-6680

We have passed the halfway mark for 2008. 

2007 closed out the year with just under 13,000 closed transactions.  We are behind the mark as of June 30, 2008.  During the same time frame in 2007, January through June, There were 16,223 new listings that came on the market. 7634 went under contract or pending and 7015 sold with an average list price of $300,975 with an average days on market of 78 days.  The median price was $209,142 and sellers received 96% of list price.

From January to June, 2008, there were 12,706 new listings.  As of June 30, 2008, 4,677 properties were contingent or pending.  And 4,777 sold with an average sold price of $305,795 with an average days on market of 107 days.  Seller received 95% of list price and the median price was $205,000.

What does this mean?  Here's how I interpret the numbers.

The good news is that the number of new listings has decreased by over 3500 homes. That's a 22% reduction. This is an important piece of the local market dynamics.  The reason for the seller's market in 2003-2005 was due to the lack of supply. Currently we have about 11,000 homes to choose from whereas at any given time in 2003, there were only about 3,500 available. So they started flying off the shelves like hotcakes. Builders couldn't build them fast enough to meet demand.  Part of normalization in the Charleston SC real estate market will require a reduction in inventory where supply and demand is more balanced.  We need to be closer to 7,000-8,000 in active inventory for days on market to get back down to 4-5 months.  This means that sellers that don't have to sell and builders not being spec homes will help significantly in this area.

As far as pending properties, we are down by 39% closely followed by 32% down on sold. The good news is that earlier in the year, we were close to 40%.  The lack of pending and sold properties can be related to many factors.  Lack of financing alternatives and low consumer confidence are the 2 greatest factors.  Interestingly when I pulled stats back to 1991 from the Charleston MLS, we have never had one single year where there was an across the board depreciation.  There were years of slower appreciation as low as .46% but then there were double digit years also.  The most interesting part was that for every 2-3 years of slower growth, it was followed by 2 years of faster or greater growth.  Charleston is an exceptional market and the numbers are fascinating. 

The further good news is that the average sales price has inched up and has continued too which also delineates to strong appreciation.  The most noticeable difference is the extension of days on market which jumped 29 days up to 107 days for sold properties.  That doesn't even include the average days on market for active listings which is current 161 days.  Sellers are noticing this the most! However, given the average is selling in 107 days, there are way to shorten the timeframe!  Price, condition, staging and incentives are just a few!  Not to mention...marketing. It's a tough market out there and it's important to be proactive and armed with the facts!  For a FREE NO OBLIGATION consultation, contact the Charleston Relocation Expert!

Michele Reneau

michele@CharlestonRelocationExperts.com

I was showing property downtown last week in Hampton Park.  We got to a house close to Burke High and the stadium.  My notes said the property was vacant so I was surprised to see the front door open.  As I knocked, yelled and then peeked in, it was clearly vacant, however, I was concerned about the door being left open.  My client and I waited on the front porch as my mind raced. First I called the listing agent. No answer, he's on vacation. So I called the back up number.  The agent had no idea and didn't have the slightest idea of what to do.  My client really wants to see the house not to mention her schedule is crazy so it may have been now or never.  Then I remembered! I have mace in the car. So I rush to the car and grab the canister. I asked me client to follow behind me.  I knocked and announced our entrance into each room.  We cleared the first floor and we relaxed.  As we went upstairs, it felt eery again to which I held my arms straight out prepared to punch the red button.  All was well.  As I tried to lock up, I noticed the problem.  The catch for the door was stuck in the door so it wasn't grabbing the frame.  I called the back up agent to let him know we were alive but they needed to get someone to the property to secure the building.  As we walked out, I noticed the Charleston Detention Center van carrying community service candidates.  I'm not so sure about the area. In hindsight, I should have called the police. Funny how one block can make a difference.  The property would make a great investment however the proximity to the stadium could be a turn off on resale, even though the price is right for now.  When it comes to vacant properties, there are risks and sometimes surprises.  Did I take too big a risk by taking my client in?  She was adamant about seeing it. What's your worst story?

Our office had a vendor come to our sales meeting last week and I signed up for a free evaluation of my house to see how inefficient it was and what fixes could be done.  The company, Eco Unit offers several different "green services" to include Green Fiber insulation, Radiant Barriers, Proper Sealing, Window Films, and Rain Barrels.  My home is fairly new, but he still had some recommendations based on my roof line, where the sun spends most of the time and after a short trip through my attic crawl space.  Interestingly, he pegged every warm area in my house without me saying a word!  So he's going to seal a few gaps around pipes, put up some low-E window film on the windows where the most sun comes in which will reduce incoming UV rays to protect my hardwood floors, and block unwanted heat.  He said that my electric bill will see a nice reduction by doing these things.  I'm also interested in the rain barrels as a way to capture rain water to water the lawn and wash the cars.   I can see how this will save us money on the electric and water bill and pay for itself in a short time. It's fairly inexpensive from what I would have thought.  I think this would be an extreme value for an older house that may have drafty attics or crawl spaces.  As inflation takes its toll, the cost of energy is definitely not getting lower.  By making a small investment now, I can lower my future monthly bills!  What a great listing tool for listings...This home is energy efficient!  With "green" becoming a bigger issue, this is a great tool. Buyers and homeowners are going to be looking for ways to live for less and this is one way to do it.  For my clients, I'm teaming up with Eco Unit to offer a discount for an evaluation and discount for services.  So stay tuned for a coupon!  Eco Unit can be found in SC and NC.

I had an Open House on Sunday in White Gables located in Summerville, SC. It was a great turnout for a steamy Sunday afternoon.  This community is patterned after downtown Charleston, but without the price tag and with cheaper taxes!  It's less than 5 miles from historic downtown Summerville and included in the awesome Dorchester District II schools! Anyone will love driving home every day and enjoy the well landscaped neighborhood, amenities, and friendly neighbors!  When you enter the neighborhood, you are greeted by ponds, fountains and arbors.  It's quite picturesque.  It feels like Rainbow Row as you troll down the main drag and enjoy unique architecture, piazzas, and double front porches.  The community has courtyards, green spaces, parks and sidewalks. I have yet to be in the neighborhood and not see families and children outside walking, playing, riding bikes or strolling with pets.  The community is very well kept and they have a gorgeous clubhouse for owner's use.  The amenity center includes a catch and release fish pond, Olympic pool, kiddie pool and playground.

The house I hosted an open house for is by far the best deal in the neighborhood. One of the folks that came through lives in the neighborhood and doesn't want to leave, but needs something larger.  His mouth dropped when I share the price and incentives!  It's only $10K more than what he paid for his much smaller house without the incentives. The Seller is participating in Nehemiah program and offering to pay Buyer's 3% downpayment and 3% towards Buyer's closing costs or the money can be used to buy down the interest rate! With a price tag of $248,900 at 2250 sqft, this is a great value! If a buyer doesn't need the incentives, that bring the purchase price to $234,000! 

This house has a wonderful open floor plan including a formal living room (which could be easily converted or used as a study), formal dining room, spacious foyer, breakfast area and Family Room!  There are gorgeous hardwoods throughout downstairs and soaring 10 foot smooth ceiling on the first floor. The kitchen boasts lots of countertop space and plenty of cabinet storage with Corian countertops on light maple cabinets. A Bright breakfast area next to kitchen and gas fireplace in the Family room makes a great focal piece. Master bedroom features a tray ceiling, large walk-in closet and ceiling fan and walks out to 2nd floor "piazza" porch. Imagine coffee in the mornings, sweet tea in the afternoons and a refreshing glass of wine in the evenings here. Master bath offers ceramic tile floors, dual vanity sinks, garden tub, separate shower, linen closet & water closet. Secondary bedrooms are a good size and have ceiling fans and plentiful closet space. Fenced backyard with rear entry door to 2 car garage. The garage is insulated with window A/C, cable outlet & automatic garage door opener. This is a handyman's dream workspace! Extra parking in front of house too unlike most of the homes in the neighborhood makes this a premium home site!    

As interest rates remain unsteady and lenders tighten guidelines, there is a general sentiment among buyers that still believe renting is a waste of money; however, they don't have enough of a downpayment to make a purchase. Lease options or "rent to own" homes can provide cash poor buyers a route to homeownership. There is no "standard" lease option so whatever the buyer and seller can agree to is a legitimate agreement but it should be in writing and I recommend it be reviewed by an attorney. Buyer should be cautious as there are many vague areas that you need to make sure you are covered.

The primary benefit of a lease option is that you can build up cash on a monthly basis with the seller. Generally, you can live in the home and make improvements as if it were your own. However, there are many questions that need to be clearly covered in the contract.

- How much of the rent will go towards the down payment?
- How long will it take for you to accumulate the down payment needed to qualify for a mortgage?
- What happen if you don't exercise the option to purchase within the deadline? Can you extend the contract?
- Who will be responsible for routine maintenance and who will pay for repairs?

As a buyer, it's still important to consult a  real estate professional about other items that need to be clearly stated in a contract. I have been advised by an attorney that lease option to purchase agreements should be recorded at the RMC office to protect the buyer.

Best advice is for all parties to hire lawyer to draft an agreement.

For sellers, some important questions include:

1. How do you get paid?
2. What happens if buyers default?
3. What property tax ratio will be used? 4% or 6%?
4. How do you get defaulting buyers out of the home?
5. Is it a landlord tenant relationship or a seller financing arrangement?
6. Do you evict them in magistrate court or will the magistrate refuse to hear it?
7. Will magistrate require the case to go to Master in Equity for foreclosure? (Time and cost way may be increased.)
8. Why do they want to do a lease option?
9. Can the seller afford a defaulting buyer?

Lease options can be a very risky transaction, but it's great if parties both go into it with eyes wide open. Anyone had a good or bad experience? 

In reflection of yesterday's celebration of Independence Day, I'd like to share just a slice of my story.

My dad served 26 years in the US Army.  My mom met my dad during his tour in South Korea in 1975. She immigrated to the United States from South Korea.  It was always her dream to come to America.  She was finally naturalized in 1984. I was born on American soil in South Korea.  I moved to Charleston in 1980 when my father was stationed at Charleston AFB.  Charleston has become home, one that I adore and love.

I can't tell you how blessed I feel to be an American.  The freedoms we have as Americans make us the envy of many nations. Like the ability for anyone to achieve their dreams and goals no matter where you come from, who you are, or who your parents are. You see, I grew up in a very blue collar family.  My mom knew the only way I could "get out" would be to go to college.  They didn't have the ability to pay for my college education.  I started my first job at 15 years old.  I went to a technical college to get my basics.  I applied for scholarships, carried 2 jobs, and paid for the rest of tuition in cash. I transferred to a 4 year college and continued to work 2 sometimes 3 jobs to pay for school.  I graduated at the top of my class in 4.5 years with $zero dollars in student loans.  After a short stint in the blue collar world, I went back to graduate school to finish my Masters which took another 3 years.  During my first year of graduate school, I saved up enough money to buy a house with an FHA loan at $79,900.  At the age of 24, I was a homeowner.  Though much sweat equity, I removed the old blue carpet off the original hardwood floors, ripped out the dated wood cabinets, and removed the wallpaper.  With the help of some friends, I refinished the hardwood floors, painted the entire house, and over time remodeled the kitchen. After about 2 years, I thought, wow, that wasn't so bad.  So with some more money saved up, I was ready for an investment.  I bought another house with 10% down just around the corner.  It didn't need as much work as my first home so it was a perfect start.  I found a renter right away and the property has been rented since. 

Right after graduate school, I entered real estate school. I'm an avid learner and since I knew I was interested in owning more property, it made since at the time to learn more about the process. In no time, it became a full time career.  I was passionate in helping others to teach and achieve what I considered a big part of the American Dream. Owning a home! After the 3^rd year of living in my house, I met my husband who was in the US Navy.  We wanted a new start in "our" house; we decided to purchase a new house together.  It was a dream come true to live 5 miles from the beach and downtown.  Due to timing of moving into our new home, we decided to rent out my house.  I've been blessed with great tenants who have lived there now for 4 years!  In 2006, we purchase our first multi family project, a triplex. 

It's been 7 years since I bought my first house and I'm thankful for that experience that propelled me into my chosen field. While many folks don't have a high opinion of sales people, or real estate agents in particular, I'm proud of my job, my work ethic, and my experiences which have molded me into the person I am today.  I truly work to discover new ways to better assist my clients and consider it to be an honorable profession to help families achieve their homeownership dreams.

To date, I've help over 135 families achieve their dreams.  Some have been first time homebuyers, homesellers relocating out of the area, investors looking to build their portfolio, people making their first investment, sellers moving up to their dream home, or sellers moving out of their last home.  I'm honored to be part of their lives and part of the process.  We are so fortunate to have the luxury of being homeowners, but we are even more blessed to be American.  Coming from a family of military service members, it's important to remember that our Independence and freedoms came at a price, even today. There are men and women who are away from their families and their family members who long for their presence while they serve their country.  I'm proud of my father and husband who gave their time and service and for those in the past who fought and paid a great price for us to be able to celebrate this holiday.  And I'm thankful for those who choose to serve today and for those who will continue the American tradition of service in the future.  What does being an American mean to you?

It's time to add yet another strong recommendation to new listings, for houses young and old alike.  Pre listing inspections.  I do a pre-CL100 (or termite report) for older homes where the likelihood of termite issues increase when a termite bond is not present. I also suggest a pre listing inspection for older homes too.  I have a vendor that does pre listing termite reports for FREE as it's a great way for him to earn business when termites are present. A pre listing inspection lets a seller know what might become an issue when the real deal happens and if a seller can afford to fix the items, it helps them know in advance where they need to be in the negotiations.

I recently closed a listing where the seller insisted the home had NOTHING wrong with it. The roof, water heater, HVAC, were all new and he was quite handy and felt confident the inspection would reveal only minor items if any.  He owned a vinyl home on a slab so I have to agree there was no reason to expect otherwise given the replacements of the big ticket items. Well, lo and behold, we get a ratified contract.  The home inspection revealed roof, water heater, plumbing and electrical issues.  That's not the worst though.  The house has termites in the garage!  Seller didn't have a termite bond.  So in order to get to the table, the seller bought a termite bond for $1050 and paid about $2000 in repairs to get the deal done.  Had the seller invested $350 in advance for both the inspection and CL100, could we have remedied the problems and known where his bottom line would be with the cost of repairs in mind? Would have been nice to know!

The idea of a Pre-home Inspection is to allow a seller to remedy any problems or defects and to relieve potential buyers about any house repair issues that might otherwise turn a buyer away.  A termite report is a good idea too as it can prevent a contract from falling through.  Luckily for my seller, the termites didn't scare the buyers away.  A pre-listing inspection left out for a buyer during showings should not deter the buyer from getting their own inspection, but as a seller, it could be a well invested $350. 

I read an article about a normal market and I started wondering...what exactly is a normal market?  Hmmm...a leveling of house prices, buyers no longer buying on speculation and sellers only selling when it's necessary??   Ok, well, that seems to be happening, but it doesn't feel normal with more than 3 times the inventory from when I started 4 years ago. 

We are in a recorrection period in hopes of getting back to some level or normalization might be a better way to put it.  So then I started to think....what does normal mean to me?  I've only been in the business for 4 years but I must say that I still work hard every day and put in 60+ hours a week, with an assistant and a buyer's agent. So I still work the same amount of hours and I'm spending more marketing dollars than ever---this doesn't seem normal.  I still act like a "pop tart" when something comes up, and I can't help it. It's my personality to want to get things done immediately when possible. I sort of envisioned a normal market meaning my life would also normalize also but it seems to be just as hectic as it was 3 years ago.  So normal market doesn't mean normal Realtor, eh?   What's "normal"?