Durham, Chapel Hill and Raleigh Real Estate
So here you are...you get a glimpse at my passions; real estate- helping buyers, sellers, renters and landlords connect. Photography, finding joy in the world around us. The written word and its importance in illustrating our culture and God at the center of my all. So, welcome.
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Buying HUD homes a lamentation
Foreclosure by H.U.D.
Purchasing a H.U.D. foreclosure can be a challenging experience. True some of the deals they offer are amazing but interacting with H.U.D. asset managers can be frustrating. When one brings bank financing into the picture the experience can be downright maddening.
H.U.D. requires a two-step process to contract on one of their homes. First is the electronic bid, the buyer and their duly registered broker fill in an electronic bid on the desired H.U.D. home. Buyers will need to provide their social security numbers. If one is not comfortable sending one’s data into the nethersphere of the internet, then purchasing a H.U.D. home is not for you.
Once a bid is accepted then agent and buyer have 48 hours to get an official, one page H.U.D. contract with earnest money, proof of funds to close, pre-approval letter to the asset manager. Asset manager= some random firm in some random city which has pleased the H.U.D. gods and is allowed to review paperwork. Here’s where it can gets dicey.
If the asset manager is reasonable your contract might glide right through. If the asset manager understands the H.U.D. system; that bouncing paperwork back for the tiniest of reasons; ie: missing hyphens, un-dotted “I’s”, un-crossed “t’s” means job security then there is a challenge. Job security= paperwork bounces around= home is not sold= 48 hours expires= bids must be resubmitted= 48 hours to submit contract= house not sold and on and on. This is typical, this is their norm, remember the asset manager is a contractor so there is security in un-sold homes. There are dollars too…BIG dollars.
So, let’s suppose you get through this maize. You have a contract…good for you. Now you must set up financing. Be prepared to solicit from yet another vendor, in another random city permission to turn the power to your new home on. The cost $150 non-refundable, certified bank dollars, this fee is to re-winterize your new home and…drum roll…the power can only be on for 72 hours. In that timeline the bank appraisal must occur, banks require power on to appraise a home and the home inspection must occur in that 72 hours too. Pray…that there are no issues requiring an engineer. Re-winterization is required between October and April, even if you’re in sunny warm climates. The rules are the rules are the rules.
The home stretch hurdle…H.U.D. must have a closing settlement statement FIVE days, FIVE business days prior to closing in order to approve that statement. This is insane and in the private sector, well it never, ever happens. Here are some other H.U.D. peccadillos; H.U.D. does not allow any scratch outs or white outs on their contract, make an error, start over. H.U.D. does not accept faxed contracts or emailed contracts. H.U.D. does not accept electronic signatures. Some H.U.D. asset managers allow agents to sign certain parts of the various addenda to the contract others require the agent’s broker in charge to sign everything. Be aware of evenings, holidays, vacations and other time off because your agent’s broker might need to be intimately involved.
And then, as happened with me; a H.U.D. asset manager emailed me the wrong contract, complete with some stranger’s social security number and they thought nothing of it. Concerned? See paragraph two. The take away, pray and be patient before entering into a H.U.D. transaction.
Want to buy a HUD home…call or email me…919-608-2372 or MSullivan@fmrealty.com
2012 Real Estate Predictions
2012 predictions
There is no doubt about it in the last several weeks my telephone has been ringing. If the nature of those telephone calls is any indication, then real estate should start a rather robust turnaround in the first quarter of 2012. In a word, my sales pipeline is looking rather full. That said home sellers should not expect to see any sort of rebound in the value of their homes.
I justify this point of view by looking at several recent sales that I’ve had. In my own neighborhood in which I work very routinely values are down dramatically. I am seeing and offer acceptance differential in sales of anywhere between 5% and 35%.
In contemplating the value of my own home which I purchased for $149,000; now most likely would sell in the neighborhood of $125,000. I’m not moving! Conversely, Ridgefield a neighborhood in which I have several rental homes, sold new in 2003, 2004, and 2005 at roughly $200,000-$229,000 for a 2700 ft.² home with four bedrooms and a two-car garage. Today in multiple listing there were two homes that were both listed one at $126,000 and the other $139,000. Both of these homes are in the Ridgefield neighborhood. That is a tremendous decline in value and many people in that neighborhood simply will not be able to sell.
Overall foreclosed homes, distressed homes and short sale homes are still driving values down in the Raleigh-Durham real estate market. What many folks fail to understand is that a foreclosed home is a comparable property and bank appraisers do use foreclosed homes when establishing value. With an eye to that in 2012, 2013 and most likely well beyond REALTORS and homeowners are going to have to price homes very close to an expected sales price based on most recent comparable sales.
The picture is looking better in real estate but it isn’t rosy and rosy as a long time away.
November what’s what in RTP NC
Ok so real estate isn’t all that rosey, just look at these statistics from the TARR report for the 3rd quarter of 2011;
• There are currently 1,854 active listings listed within TMLS. This is a 20% decrease from inventory levels seen in 3Q/10.
o I actually think this is good news in view of the law of supply and demand.
• New home inventory decreased by 26% and re-sale inventory decreased by 19%.
• There were 1,136 houses entered in to the system as new listings during the quarter, a 23% decrease compared to 3Q/10.
• The average list price is $216,000, adecrease of 1% compared to 3Q/10.
o Given employment statistics I think that this figure is high and we’ll continue to see some depreciation into 2012 and 2013.
• The number of expired and withdrawn listings accounted for 71% of properties listed during the quarter, up from 41% a year ago.
o Wow, nearly 3/4 of all listed homes don’t sell the first time out. That is startling. I imagine that this is pretty much in line with national stats.
So what’s my advice? If you have a home and if you don’t have to move…don’t. Wow, I bet many REALTORS don’t say that!
If you have to move and if you live in Raleigh/Durham then renting your home may be a viable solution.
Additionally, if you have some spare cash tucked away and if you’d like a greater return on your investment; better than banks that is…there are some amazing investment opportunities in the area. Call me, I’m happy to discuss these options with you.
