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Posts Tagged ‘Selling Homes’

After twenty two years of selling homes you’d think that I’d seen it all.  Maybe? Close?  I don’t know. I am still amazed at what happens.

In spite of the fact that as both a buyer’s agent and listing agent I endeavor to impart clear expectations to buyers, buyer’s agents and home owners; sometimes I’m just plain surprised by what happens or doesn’t happen when a property is shown.  So, I’ll attempt to impart some wisdom here in this forum.

To home buyers here are some common sense do’s when viewing another person’s home. Keep your children under control if they’re looking at homes with you. It is not acceptable for young children to flop on furniture, this includes beds. Please prevent your children from opening cupboards, refrigerators, playing with toys, hiding in closets and under beds or turning on electronic devises.  This would also include “disco lighting” he house by rapidly turning off and on lights.  It is also very bad form to allow anyone in your party to bring food, drinks and snacks into a property being viewed.  This would include you. Please leave pets alone too, many pets bite or scratch when faced with strangers.   Finally, don’t use the bathroom; I know that this is a tough one given the excitement of viewing homes but it is just bad manners to use the loo without permission.

Agents working with buyers and showing them homes should be in tune to what their clients are doing and should know their stuff. Get your chin up out of the MLS data or off your tablet and use memory and top of mind techniques to tell the buyer about the property. Start your showings by removing your shoes, if you model this behavior your buyers will follow suit. Make sure all doors are locked when you’re finished showing and LEAVE THE HOME EXACTLY AS YOU FOUND IT. If lights were on, leave them on, if off then turn them back off. Educate your clients about acceptable behaviors and be aware that many owners use recording devices to review what’s happening in their home whilst they’re away.  Finally a good buyer’s agent should provide brief and impersonal feedback after showings. I find that a simple statement telling whether the buyer is interested or not will suffice. Good listing agents really don’t want to read nitpicky personally motivated mess about what you think and especially what you can’t qualify with data.

Home sellers should ensure that valuables are tucked away and out of site. Horizontal surfaces, closets and cupboards should be clutter free and the home in general should be well organized.  Even the brightest of homes should burn lights like a commercial for Duke Energy. Heating and air conditioning should be set at comfortable levels and the water should be on, just in case someone uses the loo, even though they shouldn’t.  Owners should also freely share any transgressions as outlined previously in this post along with anything else that’s amiss with their listing agent.

Yes, I’ve seen a lot; buyers attempting to change a diaper on a dining room table, children hiding under beds, home owners hiding under beds and in closets, folks showing up to view a home with an open cup of coffee and lots of muddy shoes. I’ve been bitten by a cat, chased by a Doberman pincer, terrified by a snake inside a home on a stair step and walked in on folks behaving intimately even though I had a confirmed appointment. Some good common sense can make the home buying and selling experience a happy one.  Interested in buying or selling a home?  Call or email me.

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3413 Freeman Road

This home was built in 1987 but an unbelievable rehabilitation makes it look brand new. The living space essentially is one large room, so well suited to today’s active lifestyles.

The living space is adorned with lovely laminate flooring and a gas fireplace is the focal point of the room. The ceilings are cathedral.

At the back of the living space is a large dining space and a completely updated kitchen complete with new flooring, new cabinets, new counter tops and new appliances.

The bedroom wing is updated too with new smooth ceilings, new wall to wall carpet, new bathrooms and new lighting fixtures.

Call Michael Sullivan today at 919-608-2372 or email me at MSullivan@fmrealty.com to take a look at this amazing home.

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302 Pekoe Street Durham NC 27707

302 Pekoe Street

The Short Story of a Financial Mess

In 2005 302 Pekoe Street was listed for sale for $93,000 and it sold for $105,000 and the seller the Historic Preservation Society of Durham paid $5000 to connect the property to services and $2000 in buyer closing costs.

I was called in 2009, in the fall to look at the property and prepare a market survey for the purpose of listing and selling the property.  At that time the owner related to me that he had to sell the house in the neighborhood of $149,900 to pay it off.  He had been given all sorts of home equity money in the house by Bank of America.

The property had not been completely renovated.  The kitchen was incomplete as were the baths, the second floor drywall and the landscaping.  The home is in a nice area within close proximity to NCCU but the neighborhood has never been financially stable since most of the population is hourly workers subject to the whims of a changing economy.

At that time the house had been listed; the agent and owner started the price at $177,000 and had incrementally dropped the price down to $166,000.  My market survey at that time fall of 2009 indicated that the owner would be LUCKY to get $80,000 for the property and I indeed thought that tax value would be a more appropriate listing price, that being $69,986.  It was my opinion that this property at 302 Pekoe Street, Durham NC 27707 was NEVER worth what the owner had paid for it, let alone what Bank of America had lent out on it. 

Furthermore it was my opinion that both Bank of America and the now previous owner had speculated as to the value of this property.  302 Pekoe Street is now in foreclosure at a list price of $59,900. 

The fellow who has lost this home to foreclosure purchased the home through its listing agent.  Unfortunately, the listing agent did this buy a disservice by not really looking out for his best interests.  Of course the previous seller should never have over financed this home and Bank of America should never have lent so much money out on it.  It is a financial mess and perfect illustration of what has destroyed the real estate market in the country.   Interested in learning more, and there is so much more to learn about foreclosed and short sale properties.  Phone me, Michael Sullivan at 919-608-2372 or 1-888-574-6400 and ask for Michael Sullivan at Croasdaile.  You may text me at 919-608-2372 or email me at MSullivan@fmrealty.com  

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Don’t get caught

I recently read a home inspection report which was the most evasive report that I’d ever seen. The report itself was very nice, full of photos and general observations but when it came to some the meat and potatoes, I was very disappointed. Thankfully I didn’t encourage the buyers to use this inspector.

The inspector noted that the home has aluminum wiring, not in and of itself a problem, especially since the house has copper pigtails. What was disturbing is the inspector refused to comment as to whether the terminal connections to the breakers and bus bar are secure and functioning properly. All of this done with the panel box open and with enough time to snap multiple photos.

I guess he couldn’t put his fingers on the wires; no danger here if one touches just the insulation and jiggle them a little to see if they are loose. The same true with the breakers. The home inspectors recommendation; hire an electrician to evaluate. The inspector did a political dance to the left. He took the fifth and passed a very expensive buck.

The same was true of some water stains in the house. He wouldn’t say yah or nah to whether or not there were active water leaks in this home. He said, get a plumber and investigate further. I imagine that a moisture meter placed on the spots and running the water at full force during the inspection didn’t cross this guys mind. That’s what other inspectors do; so that they can then say, ah ha here’s a water leak. To be fair to this fellow, he did find a lot.

However this side stepping at over $300 for a townhouse home inspection is unfair to the buyer, the seller and the agents involved. This is exacerbated too by his sarcasm and hostility when I asked him about the homes grounding, breaker box, wiring and “plumbing leaks.” I was told in no uncertain terms to read the whole report and reference all of the links he’d placed in it. Reading the report and following the links are all admirable and well spent time tasks but those tasks still don’t answer the questions left begging, are the bathrooms leaking? Is the electricity working properly?

 I guess that I’ll have to go elsewhere to determine those answers. Care to know more about finding the best home inspector to evaluate your future home? There is more but a blog is not the venue to go into all of that. Call me, Michael Sullivan at 919-608-2372 for a free no obligation consultation where we will discuss finding the very best inspectors for you. I have 17 years market experience in the Raleigh, Durham, Cary and Chapel Hill real estate market where I have helped thousands of families find their spot to call home. You may text to 919-608-2372 or email me at MSullivan@fmrealty.com. Learn more about Team Michael Sullivan at TeamMichaelSullivan.com

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Buying a foreclosed home? What you should know going into the process?

For the next two to three years those who are able are going to have their pick of the litter when it comes to foreclosed homes. The trend in the last six month of 2010 is that there are some pretty good foreclosed homes coming on the market in Durham, Chapel Hill, Raleigh, Apex, Cary and Morrisville, North Carolina. Gone are the days, for the most part of the stripped down, abused and beat up foreclosed home. Gone also are the days of really holding the banks hands to the fire and driving a hard nuts bargain.

Lesson one; foreclosed homes are by their very nature at bargain basement prices. This is where most consumers miss the boat. Many real estate consumers of foreclosed homes believe that they can rake the banks over the coals and score a really terrific deal. Banks work off a system where by an actuary puts numbers into a formula and those numbers determine, list price, sales price, concessions if any and commissions. The consumers with whom I’ve worked; who have been successful in purchasing a foreclosed home have “hit their initial offer into the ballpark.” This initial offer is typically within three to five percent of asking price and this includes all concessions. Concessions being closing costs, warranties and any other out of pocket expense the bank would be asked to pay.

Lesson two; unless the property is a portfolio property, the bank has little if any investment or money into the property. Almost all mortgage loans, including those defaulted upon are bought and sold on secondary markets as commodity therefore the bank selling the foreclosed home is a loan servicer and their exposure is in holding the home in inventory. The servicing bank is exposed if the house burns down, develops mold, is vandalized and that’s about it.

 Lesson three; what is as is where is? Simply put, what you see is what you get and what you don’t see is what you get. Here is where you need an experienced savvy buyer’s agent to help you through the process, you also need an agent who knows your market and generally this will not be the listing agent. Most REO/Foreclosed home listing agents don’t work with buyers; they represent the best interests of the bank. This is where I can help you. My 17+ year’s market experience allows me to guide you through the process. I have also sold numerous bank owned properties. Here are my responsibilities to you the buyer:

 1. Make you aware of all hidden and latent fees associated with your purchase of a foreclosed home.

a. Did you know that you might be responsible for de-winterizing and re-winterizing the property even if you don’t get to the closing table?

b. Did you know that there might be significant issues of title including un-cancelled deeds of trust (mortgages).

 c. There indeed might be hidden document fees paid to the bank holding ownership of the foreclosed homes.

d. The bank contract or purchase addendum for the property being pursued may require that the buyer pay fees normally associated with the seller side. Having these documents in hand is critical before purchasing a foreclosed home.

Lesson four; in this down economy there may be unwelcomed residents and conditions associated with the foreclosed home that you are pursuing. I have seen squatters move in during the contract period and the sheriff has had to evict them prior to settlement. I have seen foreclosed homes vandalized or stripped of copper during the escrow period. What the buyer needs to understand is that the bank is under no obligation to bring the house back to the condition that it was in when first discovered by the potential buyer. That is indeed a painful reality.

Lesson five; the listing agent will get me a better deal on this foreclosed home. Nope, isn’t true at all. Most listing agents of foreclosed homes are playing a numbers game. If you don’t buy it someone else will and they are so swamped with paperwork and reporting to their masters at the bank that they don’t have the time or inclination to work with buyers.

Interested in learning more, and there is so much more to learn about foreclosed and short sale properties. Phone me, Michael Sullivan at 919-608-2372 or 1-888-574-6400 and ask for Michael Sullivan at Croasdaile. You may text me at 919-608-2372 or email me at MSullivan@fmrealty.com

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2010 Second Quarter Real Estate Wrap Up

Where is the target? Based on the data in the 2nd quarter Triangle Area Residential Realty Report or (TARR) real estate is still trending down in terms of price and up in terms of days on market. Correctly pricing homes is still an issue; traditionally REALTORS and appraisers have relied on sold data to assist home sellers in determining prices for property. With foreclosure filings up 12% in Durham County, and foreclosed homes accounting for 8% of the active inventory these properties aren’t dominating the market but they are indeed driving values down, as are too many short sale properties.

In the Q-2 of 2010 there were 24,450 showings logged into Centralized Showing Service, (CSS) this is a decrease of 10% from Q-1. Additionally there were 970 listings with a status change from either Active or Contingent to Pending in Q-2 2010, this is a 12% decrease compared to Q-2 of 2009. These lower showing numbers and lower pending numbers will also produce lower closing numbers in Q-3 of 2010 and this will place additional downward pressure on home prices.

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Real estate investments and rent to own community service that makes sense
Do you have $10,000 give or take?
Do you want to invest in a sound vehicle that has some risk but won’t scare you?
Then think about this.
In my practice I run across potential buyers who are fairly good risks but have some dinks and dings in their credit or may lack down payment. One such individual that I’m working with now, is currently renting at a high dollar amount. She has a good job, which is steady and stable, she has good income. She is lacking down payment and her credit needs a little clean up. Here is what she is willing to do; she is willing to meet in an on-going fashion with my in house mortgage lender as an ad hoc financial counselor so that she stays on track. The (buyer) has a credit score of 648 (fair), she makes 61,000 per year; she works for the city of Durham. She is looking at a condominium priced at $199,900.
She and I are looking for backers who are willing to buy the property that she’s identified, own said property for three years and then sell said property to her. Here’s how it could all lay out…
In very broad strokes:
We would buy this property, we would then lease this property to her on a rent to own basis and in three years when her credit is completely repaired she would buy this property from us. I say we because I am willing to put in my money too. We would collect incremental profit monthly on the lease and at the end of the term in three years when the property is sold to her.
If we purchase for $199,900, and our mortgage is at a 5% interest rate, we put down 20% which is 39,980, and our final loan amount is $159,920 financed for 30 years; then our payment would be $858.49 principal and interest + taxes $186 + HOA dues $213= which is a grand total of $1257.48
We enter into a rent to own agreement with our future buyer. Her monthly rent could be $1800, less $1257.48 our monthly expenses which leaves us with $543
We apply $200 from that $543 toward her down payment, at the end of three years she has $7200 saved up.
We could apply the additional $343 to our principal or we could divide it up on a monthly basis.
At the end of three years with no additional principal paid our outstanding loan balance would be: $152,000
We then sell her the property at 199,900, less payoff and the return is $47,900 less $39,980 (our down payment) is $7,920 + 12,348 ($343×36 months)= $20,268 return on investment which is not bad and much more lucrative than any bank or the stock market.
The reality going in the door, know that capital is going to be tied up for three years. Once in, then in for the three year period, secondly, know the risks, she defaults, we keep her down payment money and the property, but then we’re stuck with the property.
Additionally, we buy the property a tad discounted at the front end, say for $190,000 or $188,000 with seller paid closing costs and the revenue stream looks even healthier.
Interested in learning more, call me and let’s talk about it.

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