Charleston Real Estate Blog

March madness starts now

We have the conference tournaments wrapping up and today is Selection Sunday with the announcement of the brackets to get March madness started. But here are two unrelated notes of interest that might be even more maddening.

Why did the Cleveland Browns sign Jake Delhomme to a $7 Million contract that will now pay him more than $19 Million this year including the $12.7 Million that he is still owed by the Carolina Panthers who cut him after his worst season as a pro including throwing 18 interceptions.

And I just noticed a home still sitting unsold three months after the seller originally called me about listing the property. He told me how badly he needed to sell it but totally disregarded my suggestion of a realistic price range to offer it for sale. Now other than the seller, who really thinks that home went up in value since it was bought at the peak of the market in spring 2007. Even if some buyer thinks so and makes an offer close to the listing price, does anyone else really believe that it will appraise for that amount.

Photo courtesy of flickr by Sail Whitestone (a great shot of North Carolina facing Davidson featuring Stephen Curry back in 2007). With UNC out of contention this year, let's cheer for another of my favorite blue teams, how about the Kentucky Wildcats.

Finding that elusive deal when buying Charleston real estate

There are lots of opinions on how to get a great deal these days buying Charleston real estate. Some people focus on lender owned homes figuring that the lenders are anxious to get foreclosures off their books and will sell for less than market value. Others think that short sales offer the best deal because the home owner is in trouble and wants to avoid foreclosure and in many cases, the list price is well below market value.

And in both situations, it is very possible to find a great deal.

But sometimes, that isn't enough and buyers want an even better deal so they will make offers that are well below listing prices and then wonder why they haven't gotten a response let alone a ratified contract.

But what they forget is that someone else might think the property is worth more than they do. It might be another buyer who is willing to offer more. It might be the asset manager at the bank who has a serious amount of information on current home values that clearly show the property is worth much more than that low offer. Or it could be the loss mitigation department at the lender who might agree to a short sale if a buyer offers a price that they can live with.

Anything less just doesn't cut it. No sale. 

There are some rules of thumb that you can use to craft an offer. If a home was just listed, the seller is fairly confident that the listing price is reasonable (and if it is priced realistically), offers well below list price will not be considered especially with lender owned homes initially being offered for sale in the first 5 days to a month.

If you analyze statistics in the Charleston MLS, you'll see that homes sell on average for between 89% to 95% of list price depending on the price range. (Homes at higher price points sell for a larger discount than lower priced homes.) Those are averages and some homes sell for much less than list while others sell for prices pretty close to list.

But if you happen to buy a home for pretty close to list price, that doesn't necessarily make it a bad deal and similarly, it isn't necessarily a great deal when you get a big discount; a great deal is when you are able to buy a home for below market price.

And let's not forget traditional sellers who simply want to sell their home for any number of reasons. First of all, if they happen to be selling it for less than they paid, it does not automatically make it a short sale and you may be able to buy at "short sale pricing" without the usual uncertainties and delays associated with buying a short sale.

Bottom line, first of all, find a home that you really love, that is always the best deal. Then ask me to check the comparable sales prices of similar homes that have sold in the neighborhood and find out what current home values are and make a realistic offer based on fact, not fiction. 

Photo courtesy of flickr by Curt Deatherage.  

Second Annual Summerville Easter Egg Hunt

FREE and fun for the family and for a good cause, The AgentOwned Realty Co., Main Street Summerville will be sponsoring the Second Annual Summerville Easter Egg Hunt in partnership with the Junior Service League of Summerville on Saturday April 3, 2010 in Azalea Park in Summerville from 10AM to 2PM. All proceeds will go to the Dorchester Children Center "Children in Crisis".  

Activities include:

Egg Hunt (age divided)

Face Painting

Pictures with the Easter Bunny

Jump Castle

Sack Race

Food, Beverages and Door Prizes

Bake Sale for the "Children in Crisis"

** Don't forget to bring your Easter Basket **

FREE.

Will the future of real estate include more unrepresented buyers

There are a lot of commission models in real estate today besides the traditional co - broker commission offered in the MLS. There are flat fees for menu services provided, commission rebates, retainers, service fees and others.

But since some people might not know, here is a brief explanation of how real estate commissions work and who pays. The seller of a home negotiates with the listing agent who agrees to share the agreed upon commission between the listing broker and the selling broker.

And you might think that the buyer doesn't pay to use a real estate agent except that the seller pays the commission from the proceeds of the sale brought to closing by the buyer and the mortgage.

Now to the story.

Ardell wrote about a savvy home buyer who saved 83% of the buyer agent fee by using Trulia Voices.

I plan on making a $1M offer on a home in Queen Anne. I found the property myself. Was shown the home by the listing agent. She does not have a claim for procuring cause, as I told her I was working with an agent when she showed me the property. I am looking for an agent to write up my offer and take the transaction through closing. The offer will be cash, with only the standard inspection contingency. At closing, you will refund the entire 3% co-broker fee to me minus a flat fee of $5K. We will be asking for closing within 2 weeks. Who wants to make an easy $5k?

Ardell's bottom line

For anyone wondering what “The Future of Real Estate” is going to look like, this just might be a peek into the future. The possibilities are endless. It’s a great time to be a participant in the changes afoot for consumers in the real estate arena. 

And a final comment from "Patrick", the buyer 

And for those of you who continue to tell us buyers that “you don’t pay the commission” and “commissions are not negotiable,” this thread alone has proven otherwise. Most agents get it, some still do not, and may never. 

Read all the comments on Trulia Voices.

OK, I get it.

Some people seem to think that real estate agents are an overpaid breed who do nothing to earn a commission and want to eliminate them from the real estate equation. Some want to do it themselves. Some want to deal directly with the listing agent and not bother using a buyers agent. Some people don't care if they get involved in single agent dual agency (don't get me started on that one) where neither party is effectively represented.

But in the end, it's all about the home and the job of a real estate professional is to help their client either buy or sell successfully and earn an agreed upon amount of compensation for the effort that they put forward.

I've been asked to perform limited service for a fee and I've been asked to rebate commissions and I'm agreeable to either depending on the scope of time and services required.

But I would suggest that if this is the future of real estate, it's not for everyone and in some cases, it will result in some unhappy DIY consumers.

Wall Street Anniversary week [highs and lows]

Barry Ritholtz at the Big Picture reminds us this week marks not one but two major Wall Street anniversaries. One year ago this week, the market made a 12 year low and back in 2000, the tech bubble popped. Barry called the March bottom last year. Here's more. 

[Think again] Is Charleston real estate dead as an asset class

The short answer. No.

Some people might think that people don't want to be home owners any longer after the devastation that rocked the real estate market following the collapse of the lending bubble that enabled many people to buy homes that they may not have been qualified to buy. Owning a home went from being a great investment to a lousy investment in just a few years.

But that isn't the best reason to buy a home anyway and there are certainly times and circumstances in most everyone's life when it makes more sense to rent than own.

But take a look at the graph above and think again if you think interest in Charleston real estate is declining. Page views for real estate search topped 100,000 for the month of February and for the first time ever since I installed the new Charleston MLS search portal on my website in mid June.

And remember, February only has 28 days.

Are you interested in searching the Charleston MLS; choose either basic, advanced or map search and best of all, registration is not required. When you're ready, please contact me to help you buy a home in Charleston.  

[3 questions] If you're thinking of selling your home in Charleston

Maybe you want or need to sell your home in today's Charleston real estate market. It could be that you want or need a larger home or to downsize to something smaller or maybe your financial circumstances have changed. Ardell asks home sellers three important questions:

Why are you selling it

When did you buy it

Did you do a cash out refinance after you bought it. 

If you are selling, is it a want or a need. The purchase date is important because of home price declines since 2007 and finally, if you have taken money out of your home already, you may also be "upside down" and need to bring money to closing.

But being "upside down" alone is not a qualified hardship to qualify for a short sale and Ardell makes an excellent point about sellers who are "upside down" on their home.

"Everyone assumes "upside down" homes are "short sales", when in fact many sellers simply walk into closing with a check the same way that buyers do. Even people who are qualified to do a "short sale", often have to bring money to closing. Just because the home sold for less than was owed, does not automatically mean that the difference was waived permanently or temporarily. Sometimes the owner pays it in full, and sometimes the owner pays it in part."

Great advice!

Upside down house "shamelessly stolen" from Ardell's post at Rain City Guide

Charleston real estate market report, sales, inventory and home prices, March 4, 2010

This year, the Charleston real estate market report features a little different format by combining some of the charts and graphs as well as including Charleston home sales and inventory with home price statistics into one bigger and (hopefully) better market report.

Statistics compiled by Howard Arnoff using the Charleston MLS as the source of data, information deemed reliable but not guaranteed.

Home Prices

Looking at a year over year comparison should give you the best idea of housing trends in the Charleston real estate market and I would suggest taking note of the decline in prices paid per square foot more than the median or average sales price. First time home buyers made up a significant portion of sales in the past year and that distorted the decline in median and average sales price.

You can see that the market stabilized due to the home buyer tax credit for homes selling for less than $300,000 and that year over year, home sales stayed steady instead of declining as they had for the previous few years. And also take note of the list price to sales price, at higher price points, the sellers appear far more flexible to negotiate when getting an offer.

Sales and Inventory

The blue line represents 2008, the red line represents 2009 and the yellow dot (it will become a line when future months are included) represents 2010.

Inventory is represented by the red line and corresponds to the left axis and the absorption rate is represented by the blue line and corresponds to the right axis. Look for the absorption rate to go down again once sales pick up as expected during the spring selling season.

Sales, inventory and absorption rate for all homes and by price point.

The current inventory (inv) column reflects the number of active listings on the market on the 16th day of each month. The months of inventory (mo) column is equal to the current inventory divided by the monthly sales. This reflects how many months it would take to sell out of inventory at the current month’s rate of sale. It can also be referred to as the absorption rate.

Charleston Wine + Food Festival 2010

Always a favorite during the spring season in Charleston, the 5th annual BB&T Charleston Wine + Food festival starts tomorrow, March 4th and continues through this weekend.

The festival brings national and regional attention to the Charleston food scene and enhances Charleston's culinary reputation.

Most importantly, the festival raises significant funds for charities and scholarships.

Read the Charleston real estate blog

There are now lots of different ways for you to read the Charleston real estate blog. Of course, you can just stop by here almost every day and read today's post or you can subscribe via RSS feed and use your favorite feed reader.

For several years, I've kept a database of everyone who has contacted me with interest of some sort about the Charleston real estate market whether it was buying or selling a home in Charleston or just asking a question. And every month, sometime right around the first of the month, I've sent a monthly real estate update via email. It was my version of a monthly newsletter and included a few comments and links to blog posts that I thought would be interesting to you.

But after April, I will no longer be sending the monthly update by email unless you request it because I don't want to unnecessarily send it to anyone who doesn't really want to get it. So if you want to continue to receive the monthly real estate update via email, you can subscribe here.

But, you can also find the blog posts and other articles of interest that impact the National and Charleston real estate markets on the new CharlestonOnlineHomes page on Facebook. It's easy, just become a fan!

Or follow me on Twitter. 

You can count on getting real estate news, sales statistics and housing market trends and analysis, Charleston community and neighborhood information, living in Charleston and local events and happenings and posts that are just for fun.

Thanks for reading and please let me know how I can help you.

NAR Short Sales and Foreclosure Resource Certification [SFR]

The National Association of REALTORS® (NAR) offers the SFR certification to REALTORS® who want to help both buyers and sellers navigate these complicated transactions as demand for professional experience with distressed sales grows. I am pleased to announce that I have taken the required course and webinars and have added the SFR designation.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. For many Charleston real estate professionals, short sales and foreclosures are the new "traditional" transaction. REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk, and provides resources to help REALTORS® stay current on national and state-specific information as the market for these distressed properties evolves.

While the Charleston real estate market does not have the large number of lender owned properties that many other real estate markets have, there are foreclosures coming on the market just about every day at all price points. The number of short sales available has been high and the good news is that the banks are finally realizing that working with the borrower is a better idea than foreclosing so rather than waiting three to six months only to find out that the sale has not been approved is being replaced by a more timely and more often positive response from the loss mitigation department of the bank.

Southern Living loves Charleston [again]

... and I love Southern Living.

Charleston graces the cover of another Southern Living this month.

Charleston is highlighted in a majority of Southern Living issues every year and usually captures one or two covers each year. This year is no exception as Charleston's Romantic Charm is featured in articles throughout the March issue.

If you would like to live the premier Southern lifestyle in Charleston instead of reading or dreaming about it, contact me and I'll be happy to show you how you can find the home of your dreams in Charleston.

All it takes is one visit and I guarantee you'll fall in love with Charleston.

Charleston real estate blog reader buys a home

Longtime Charleston real estate blog reader Jimmy (not his real name but his screen alias) closed on the sale of a home yesterday. I've had several clients who told me that they decided to hire me as their Charleston Realtor because they enjoyed meeting me through my blog but Jimmy was the rare exception who frequently commented on the blog.

Jimmy was very concerned about current Charleston housing market conditions and was very cautious about buying a home. He wanted to take his time and get a good deal. I would suggest that he did even better than that and that he got a great deal, 24% less than the sales price when the home previously sold at the top of the market in spring 2007 and 10% less than the current list price.

Best of all, it is a very nice home. Congratulations Jimmy, thanks very much and keep in touch, your thoughtful comments have always been appreciated. 

UPDATE: A reader inquired in an email if this was a foreclosure or a short sale, actually, it was neither, simply a motivated seller who wanted to sell.

Deceptive mortgage ads: what they say, what they leave out

We've all seen ads from mortgage companies offering below market rates or low payments. Sometimes they seem too good to be true and you know the old saying, if it seems to good to be true, it probably is.

I'm not suggesting any of the ads to the left are deceptive but mortgage rates of 3.875%, a low payment and no SS number required from the first ad should be reason for caution.

Some of the home owners who borrowed during the housing boom didn't understand what kind of loan they were getting and some of today's foreclosure problems are a direct result of shady lending. The new good faith estimate is supposed to help minimize bait and switch lending and provide home buyers with an easy to understand mortgage terms summary.

But don't count on that to stop predators and scams.

Someone visited my website the other day and asked me for a list of reliable local lenders serving the Charleston real estate market. I sent it along with a note saying that if you are looking for a great Charleston Realtor, I would be happy to help with the purchase of a home and if you wanted a list of OK Charleston real estate agents, I could send that as well.

Well, it turned out they had already selected a Realtor so my next question was why are you asking me for names of good lenders and isn't your real estate agent helping you with that. It turned out they were but he just wanted to be sure so all in all, there isn't anything wrong with double checking and that's really the point of this post anyway.

The FTC offers you tips on deceptive mortgage ads: what they say, what they leave out.

And for a list of reliable and professional Charleston mortgage lenders, contact me.

But choose me to be your Charleston Realtor also.

Spring Charleston real estate listings jump

Conventional wisdom has it that lots of home sellers in Charleston tend to take their homes off the market during the holidays and once again offer them for sale during the busy spring selling season.

This year is no exception.

During December, 1134 homes came off the market due to the listing either expiring or being withdrawn from sale. Many of the expired or withdrawn listings are likely included in the 1782 homes listed for sale in January and the 1357 homes listed for sale in February (with a few days still remaining in the month).

Charleston homes for sale tend to come and go on the market every month. Of course, it's better when they go under contract to go off the market rather than simply getting re-listed so if you are interested in getting your home sold instead of just dusting the cobwebs off the for sale sign, a price adjustment should be part of your plan. And making your home easier to show and showing better by improving the condition and appearance goes a long way toward getting that elusive contract.

Activity by buyers thus far this year is busy. I'm working with lots of Charleston home buyers actively looking for homes to buy. But if you are selling, there is still lots of competition. And it's important to remember that everyone wants a great deal.

If you are thinking of selling your home in Charleston, contact me for a FREE, no obligation comparative market analysis (CMA) to determine how much your home can sell for in today's Charleston real estate market.

This is not a solicitation if your home is currently listed by another Charleston real estate broker.