Don’t Forget Your Bathrooms!

When it comes to preparing to stage your home, don’t forget the bathrooms!  This includes getting rid of ugly surface molds, stains, or discolorations.  If you need it, consider adding a fresh coat of paint to make it look new and inviting.  Also, remember to check your shower curtains and shower doors.  Give them a thorough cleaning, and if it doesn’t work, then replace them!  You only have one chance at a great first impression.

Avoid Anything that Dates Your House

Unless your home can pull off a genuine antique or historic feel, then you probably want to avoid dating your property with old decor.  Remember to consider painting or new fixtures to help modernize rooms in your house.

Make it Appeal to Both Sexes

You never know who you are going to sell to, or who has the purchasing power.  With that said, you should try make rooms like your  master bedroom  appeal to both sexes.  This will mean different things for different home owners.  However, it might mean updating the colors and elements to either darken or lighten the space.

Make Your Home Shine!

You should approach the staging process as you would opening your home to important family members.  This means cleaning every part of your house so it shines!  Pay attention to dust and odors as well, as you may want to replace air filters and add certain scents to various rooms of your home.

Pretend that your mother or mother-in-law is coming for a visit. Think hotel clean. Mop, dust, vacuum, wash windows, baseboards — even the cat. Remember that people will look in your cupboards, under your sinks and in your closets. Also, pay particular attention to odors. You might even consider consulting a neutral nose by having a friend come by for a smell test.

Try to Depersonalize

When you stage, it is a good idea to depersonalize where possible so that those walking through can envision themselves in your house.  This also means depersonalizing the overall style so they can see better how they might decorate the space.

Try New Artwork

If you are struggling to update or add color to a room, consider new forms of artwork.  This can be a great way to add some contemporary styles, color and lighting.

Don’t Neglect Needed Repairs

If you have small repairs you have been putting off, don’t put it off any longer.  Now is a great time to finish those needed repairs to ensure your house is in the best shape possible for potential buyers.

The favorable rates available and rising rent make buying more attractive everyday. However, some still debate on whether it is truly an opportune time. Here is an article from the Wall Street Journal, on the debate of whether or not buying now is a good decision:

It’s been a scary few years for the housing market. But at some point, the nightmare has to end (please?). Is now the time? Should first-time home buyers consider jumping into the market?

The WSJ Debate

Yes: It’s a rare opportunity, says Eric Lascelles.

No: The fall isn’t over, says A. Gary Shilling.

Read the complete Big Issues: Personal Finance report .

After all, home prices have fallen 34% from their 2006 peak and mortgage rates are hovering at or near record lows.

On one side are those who argue that homes are more affordable than they have been in decades, based on how much monthly income a mortgage consumes and whether owning is less costly than renting.

An uptick in home buying by investors already is under way, they say—an indication that those who wait may miss out on a good buying opportunity.

On the other side, pessimists insist that the housing slump is far from over, and that prices will continue falling—perhaps as much as 20% or more.

Excess inventories, they say, are the problem, and some estimate it could be four years before the market absorbs all of that extra supply.

Eric Lascelles, the chief economist at money-management firm RBC Global Asset Management Inc., says this is a remarkable time to be a first-time home buyer. A. Gary Shilling, president of A. Gary Shilling & Co., an economic consulting firm in Springfield, N.J., says buying now is a terrible idea.

Yes: It’s a Rare Opportunity

By Eric Lascelles

This could be the best time in a generation to be a first-time home buyer.

RBC Global Asset Management

ERIC LASCELLES: Investors ‘understand that this is the mother of all buyer’s markets, and won’t last forever.

Cheery views such as this are out of vogue and easy enough to dismiss as the ravings of a serial optimist. And yet this opinion isn’t based on any heroic economic assumptions. To the contrary, it is constructed upon a more curmudgeonly foundation: In my estimation, the stock market probably underestimates Europe’s woes, U.S. economic growth may fall short of expectations, and—of greatest relevance—the overall housing market is likely still several years from normality.

Nevertheless, this is still a remarkable time to be a first-time home buyer. Affordability is the best it has been in 30 years, thanks to the combination of a 34% decline in prices since the 2006 peak and a historically low 4% average rate for a 30-year, fixed-rate mortgage.

The two affordability metrics that truly matter are how much monthly income a mortgage consumes, and whether this is less costly than renting. On the first count, I calculate that home prices are now an astonishing one-third cheaper than the historical norm. On the second, real-estate website Trulia figures that buying is cheaper than renting in 98 out of America’s 100 major markets. That is practically a clean sweep.

Rock-Bottom Rates

Investors get this. While households dither, investors ramped up their home buying by 64% across 2011. They understand that this is the mother of all buyer’s markets, and won’t last forever. The prospect of making a profit by flipping these properties is still rather distant, so they lay in wait for an eventual rebound and in the meantime make money by renting out their properties for more than the monthly mortgage payment.

Yet most people are sitting on their hands, frozen not by the fundamentals but by psychology. For those able to overcome their phobias, a blazing contrarian opportunity exists.

Here’s a dirty little secret about recessions: They aren’t bad for everyone. They can even be downright beneficial if played right. Roughly one in 30 Americans is unemployed as a result of the financial crisis. The rest have sidestepped this blow, and what’s more have been given the gift of extraordinarily low interest rates.

The long arc of history reveals no other sustained period of real interest rates this low. It is mind-bending that American home buyers can now borrow for 30 years at a cheaper rate than either General Electric Co. or the Australian government. And unlike their counterparts in most other countries, Americans can lock in today’s borrowing costs for the full life of their mortgage, enjoying perfect certainty about future payments.

The finances of most households have had a rough go over the past several years. Many were ravaged by financial markets. Others are trapped beneath an illiquid and possibly underwater home.

However, the situation for first-time home buyers is different. They largely skated through the past few years. They weren’t yet in the housing market, and so escaped that devastating hit. And with an average age of 30, they hadn’t yet accumulated sufficient assets to truly suffer when markets fell.

A significant part of this cohort’s savings has been generated in just the past five years, and while markets have been enormously volatile over that period, a monthly savings plan would have generated a 26% return in equities and 22% in bonds. First-time home buyers may not be so hard up for their down payment after all.

Heck of a Deal

But is it wise to take the plunge in this era of economic uncertainty? While the economy remains very fragile, it has become less so since the fall. Still, say the worst happens—you buy a home and then immediately lose your job: The foreclosure backlog provides breathing room, and there is ample evidence that the newly unemployed are regarded preferentially by employers over the poor souls in long-term unemployment purgatory.

Do home prices still have room to fall? Or is now the time to buy?

Could home prices fall further? Yes they could. The home-inventory overhang is still quite large and credit availability remains poor. Home prices are unlikely to bloom in earnest for quite some time. But inventories are finally shrinking and mortgage availability has at least stabilized, and if you wind up buying a house on sale for one-third off its fair value instead of discounted by 40%, you still got one heck of a deal.

Arguably, the bigger risk is rising interest rates, which could erode affordability and snuff out this buying opportunity.

What if you are presently unemployed, or a grim-faced banker has rejected your mortgage application? Alas, your decision has been made for you. But for viable first-time home buyers—those with a stable job and a preapproved mortgage—this opportunity is ripe for the picking. Investors are already eating your lunch.

Mr. Lascelles is the chief economist at money-management firm RBC Global Asset Management Inc. He can be reached at reports@wsj.com.

]]> http://bobchambers.me/when-is-the-best-time-to-buy-a-house/feed/ 0 http://bobchambers.me/living-in-charleston-sc/ http://bobchambers.me/living-in-charleston-sc/#comments Mon, 07 May 2012 15:33:52 +0000 bobc http://bobchambers.me/?p=842

Living in Charleston, SC

What makes living in Charleston, SC unique? Have you been wondering about making a move to Charleston, but wanted to learn more about the area and surround communities.  Here is a brief guide to living in Charleston south carolina, and what you can expect to enjoy if and when you move here:

Charleston, South Carolina is located in a region referred to as the Lowcountry, which is simply a geographic and cultural region along South Carolina’s coastline.  The city itself is located on a beautiful peninsula that is carved out between two rivers:  the Ashley and the Cooper Rivers.  The Charleston region now spans to a tri-county area:  Charleston, Berkely, and Dorchester counties.  Charleston has a rich history along with many cultural influences that have resulted in a very unique experience for residents and locals.

Gorgeous Landscape

The local topography is extremely attractive, and is one of the big reasons people choose to live in Charleston South Carolina.   The landscape is filled with tidal marshes, brackish and saltwater lakes, freshwater lakes, bays, and coves.  In addition to gorgeous beaches spanning the coastline, you will have may bodies of water to choose from if you desire an aquatic lifestyle.

Beautiful Wildlife

The Charleston area is home to many unique forms of wildlife and plant life.   The region is known for the many species of birds that inhabit the Lowcountry:  egrets, herons, ibises, pelicans, gulls and common loons.  In addition to birds and bird watching, you will have an opportunity to witness various unique forms of aquatic life whether it be alligators or sea turtles.

Great Lifestyle

If you have paid a visit or considering living in Charleston, SC, then you have probably heard people refer to the remarkable lifestyle and environment that is available.  Simply put, there is a reason that Charleston  was announced as the No. 1 tourist destination in America as voted upon by readers of Condé Nast Traveler. Living in Charleston, SC means that you will have an opportunity to experience rich cultural history, wonderful eateries, and plenty of outdoor activities, which all amounts to a great lifestyle and balance.

Diverse Economy

With a growing knowledge economy and relocated companies like Boeing, there is growing opportunity for the residents of Charleston, South Carolina.  In addition to tourism, the community touts many big name companies and corporations in the following industries and sectors:  medicine, technology and software development, manufacturing, military, and shipping.  The Charleston Digital Corridor is an example of the diversifying economic base for the region.

When it comes to living in Charleston SC, you will have an opportunity to enjoy a great lifestyle and environment.  If you are considering moving to Charleston, SC or want to learn more about living in Charleston, then don’t hesitate to contact me.

Quality of Life

If you have lived here any length of time, you’ve probably experienced more than one conversation about the quality of life in Charleston, SC.  However, what defines the great quality of life for the low country?  In addition to Charleston’s acclaimed culture, cuisine, entertainment and waterways, residents have a wide range of housing options and relatively low cost of living in comparison to the national average.  Also, the year round climate is remarkably mild, and Charleston has truly become a medical hub for the Southeast.

It’s Growing…Fast

Based on data extracted from both the 2000 and 2010 Census, an approximate average of 32 new people are added to Charleston’s population each day.  Much of the growth come from the relocation of companies like Boeing to the region which bring jobs, and thus people.  The economy of Charleston has expanded and diversified, and so have the residents!  It is truly a growing and thriving area.

Expanding Opportunity

In conjunction with the expanding population, the favorable business climate has fostered expanding opportunity for those residing in the Charleston region.  Here is a list of the largest private employers in the community to give you an idea of opportunity:

I hope this information has been helpful in understanding Charleston.  If you have any questions. don’t hesitate to contact me.  You can reach me via email, bob-chambers@infinityrealty.com, or by phone, 843-849-3005.  The Charleston real estate market has some fabulous homes available right now that I’d love to walk you through. Get in touch with me today so we can take advantage of the favorable buying market!  Talk to you soon!

When it comes to selling your home, upgrades and renovations can truly make a big difference in terms of motivating a perspective buyer who has already been perusing the marketplace.  Here is a look at some various home improvement projects and the return on investment you might be able to expect:

Top 5 midrange renovations by return on investment

Source: Remodeling magazine’s Cost vs. Value Report 2008-09

Make sure you think of remodeling efforts as not only adding to the resale value of your home, but a tool you can use to motivate perspective buyers.  Considering the favorable buying conditions and amount of homes on the market, it is a good idea to differentiate your property by wisely renovating or remodeling.  Remember that remodeling efforts will provide additional incentives to buyers to move forward with a purchase.

Consider renovations that not only add value or motivate purchase but deliver energy savings and possible tax credits.  This could mean investing in new windows, doors, insulation, lighting etc.

No matter the investment you are considering, make sure you consult an expert when moving forward with a project.  Also, ask around to learn where to start.

I hope this brief discussion on home remodeling and upgrades has been helpful.  If you want to discuss this blog further, or if you are considering a real estate investment in  in the Charleston, SC area, then don’t hesitate to reach out for advice and information on available properties.

You can reach me via email, bob-chambers@infinityrealty.com, or by phone, 843-849-3005.  The Charleston real estate market has some fabulous homes available right now that I’d love to walk you through. Get in touch with me today so we can take advantage of the favorable buying market!  Talk to you soon!

Foreclosures are down and short sales are up, but what does this mean for the real estate market as a whole?

The answer depends on who you ask.

But first, some background: Short sales occur when a lender agrees to sell a home for less than what is owed on the mortgage. The lender forgives the difference, and the borrower unloads a home they can’t afford.

In an effort to avoid adding to their already large portfolios of bank-owned homes (REOs), lenders are beginning to seriously consider short sales as an alternative to foreclosure. According to a Bloomberg report released Tuesday, banks including Wells Fargo and JPMorgan Chase last year started giving away cash to select homeowners who agreed to do a short sale instead of allowing the house to fall into foreclosure.

Experts at the National Association of Realtors (NAR) hear the short sale process is becoming more streamlined, which is good news for buyers and lenders. This more organized process means short sales can be unloaded quickly — relative to foreclosures — instead of sitting on the market for a long period of time.

(Typically homes spend more than a year from the date of the first missed payment until the gavel falls on the foreclosure sale, but in places like New York, a bank can take nearly 3 years before foreclosing on a property.)

Like foreclosures, short sales can hurt home prices in the neighborhood. According to NAR, short sales typically sold for 17 percent below market value in February. That’s a steep price cut, but less than the average 22 percent discount for foreclosure sales.

Is help on the way for underwater homeowners?

Given that short sales typically recover more money for lenders, you’d think that short sales would be the preferred way of unloading distressed property. They don’t add to banks’ REO inventory, they don’t sit on the market as long as foreclosures and the impact on home prices is not as substantial as that of a foreclosure.

If foreclosures don’t sell at auction they become bank-owned property, or REOs (Credit: Shutterstock.com)

But you’d be wrong. Since the housing bubble burst, the sale of foreclosed homes has far outpaced short sales. But that is beginning to change. On Tuesday, Bloomberg reported data from Lender Processing Services (LPS) which indicated short sales had surpassed foreclosure sales for the first time, by 4.2 percent in January — the most recent data available.

Jonathon Weiner, a vice president in the applied analytics division of LPS, told Bloomberg “It’s a fairly recent phenomenon that short sales have been increasing.” Short sales should be the dominant way of disposing of distressed property, Weiner said, because they can be processed quicker than foreclosures.

What does this mean for the real estate market?

An increase in short sales could mean that home values will fall further, faster. Weiner tells Bloomberg LPS’ “baseline scenario is home prices will hit bottom by the end of this year,” based on the fact that short sales now outpace foreclosures.

But not all analysts agree we’ve hit that threshold.

Walter Molony, a spokesman for NAR, said in an email that although NAR data does show an uptick in short sales for February, foreclosure sales still dominate the distressed market. Short sales rose to 14 percent market share month-over-month in February, but foreclosure/REO sales still lead at 20 percent. Moreover, the recently approved $26 billion foreclosure settlement means more than a million additional foreclosures are about to be pushed through the pipeline.

Q&A: What you need to know about real estate now

Loan scam red flags for homeowners

Why the disparity of data? Molony attributes the difference in findings to methodology and the measurement period. Home price, foreclosure and short sale data for March is set to be released this week. These data sets may shed more light on whether short sales are indeed picking up and if they are surpassing the number of foreclosures sold, even if it turns out to be temporary.

Foreclosure sales have outpaced short sales since the burst of the housing bubble (Credit: Shutterstock.com)

Regardless of whether or not they’re outpacing the sale of foreclosures, the uptick in short sales could signal a positive turn in housing crisis.

Short term, more short sales mean home values will remain low, or fall further. But over time, plowing through short sales could mean we’ll see fewer homes wind up in foreclosure or as REOs, which would push down home prices even more dramatically. At best, we avoid another big wave of foreclosures that would send home prices spiraling down even further, something no one wants to see, least of all homeowners who pay their mortgage on time each month.

Mortgage Rates Have Potential to Rise

Many potential buyers and would-be homeowners have watched mortgage rates extremely closely over the past year, to make sure they make the best decision.  Rates are still historically low, but you may have already missed your chance to catch rock-bottom.  Mortgage rates have risen slightly, but are not expected to increase dramatically anytime soon.  If you have been considering whether or not you should take advantage of the borrowing climate, then you may want to start looking more intently.  According to the Mortgage Bankers Association, rates on 30-year fixed mortgages are expected to average about 4.3% in the second quarter, as opposed to the 4.16% seen in the first quarter.

The Mortgage Bankers Association’s latest forecast indicates that the rate on the 30-year fixed mortgage will average about 4.3 percent in the second quarter. That’s up from the first quarter’s average of 4.16 percent in Bankrate’s weekly survey.  Remember that 4.3% is still remarkably low when compared to the 6-8% rates seen during the housing boom.  It is still a favorable buying market, but you may want to look more closely at trends if you are still evaluating.  Another indicator to keep in mind is the labor market.  It is no doubt, that the labor market, and employment are critical to the condition of the housing market.  People need to be employed and be getting paid to get or keep a mortgage.

It’s Tough Out There…Thoughts on Investor Competition

Even with some slight increases in overall mortgage rates, the rates are still dramatically low and attractive to many investment parties.  Low home prices and the rising rent price across the nation create a unique opportunity for investors to continue to capitalize on the real estate market.

Investors can make it competitive, when it comes to purchasing your property because many of them will pay in cash.  Sellers usually prefer cash because it helps in closing time etc.  In short, this makes it harder on those of you out there seeking home ownership.   Your best bet is to make sure you have everything you need to facilitate a quick closing and smooth transaction.  This will help when you are competing for a property.

First, Check and Fix Your Credit

You will not be able to qualify for a mortgage or loan in general unless your credit is in order.  The first step towards purchasing your first home should take place well before you apply for your mortgage.  You should have your credit checked 6 months prior to application, and you can request a copy of your credit score and report from the following credit bureaus:  Experian, TransUnion, and Equifax.

Even if your score is not at a FICO level of 720 or above, you should undesrstand first what your credit score means, and what you do can to help or damage it, so then you can build best practices into your finances.

Be Prepared For All Costs

You should be prepared for the down payment, closing costs, and all other costs associated with purchasing and owning a home.  Make sure you do your research to understand how your costs will increase when you own and maintain a home.   Traditionally, you would have a down payment of 20%, but with Federal Housing Act (FHA) loans you can pay just 3 to 5% of the total cost upfront.

Depending on your down payment you may have to pay Private Mortgage Insurance.  PMI is insurance for your lender to offset the risk assumed for a lower down payment.  PMI can be paid upfront or installments on a monthly basis.  You should know how much you will have to pay in HOA fees, insurance, energy costs, and all other costs associated with ownership on a monthly basis to determine affordability.

Understand How Much Home You Can Afford

When you are looking to purchase or evaluate your ability to qualify, one of the most important factors to consider is your debt-to-income ratio. Debt-to-income ratios are the percentage of an individual’s monthly gross income that is available or goes towards paying certain debts or obligations.  Your “Front End Ratio” indicates the ratio of income to debt that is associated with housing costs (mortgage principal, interest, mortgage insurance premiums, other insurance premiums, property taxes and HOA fees).  As a general guideline, your monthly mortgage payment inclusive of the elements listed above, should not exceed 28% of your gross monthly income.   To get a better grasp on what you can afford using this rule of thumb:  take your gross annual income by .28 and then divide by 12.  This will give you an idea of your threshold of affordability.

Your debt-to-income ratio (DTI) is the percentage of your gross monthly income set aside for paying debts. While some loans may qualify you for up to 50 percent of your monthly gross income, it’s advisable that you use no more than 30 percent, says Joe Adamaitis, a mortgage banker in Sarasota, Fla. Be realistic about how much you can pay, because an unexpected event could tear a hole in a tight budget.

U.S. home builders’ confidence in the housing market held steady in March after five consecutive monthly gains, keeping sentiment at the highest level in nearly five years as the industry slowly regains its footing after a devastating bust.

The National Association of Home Builders said Monday its housing market index was 28 this month. It was the same level as February, which was revised down from a previously reported 29. The reading, while historically low, is holding at its highest level since June 2007.

The results, however, came in below expectations. Economists polled by Dow Jones Newswires had forecast a reading of 30. A reading above 50 in the NAHB index would mean more builders view conditions as good rather than poor. The gauge hasn’t been in positive territory since April 2006.

“Builder confidence is now twice as strong as it was six months ago,” said David Crowe, the association’s chief economist. “That said, many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets.”

The three components of the index were mixed in March. Builders’ assessment current sales conditions declined one point from the prior month, while expectations for sales over the next six months grew by two points, reaching the highest level since June 2007. The reading of traffic from potential buyers held steady.

The March index was based on a survey of 403 builders. Regionally, the index improved in the Northeast, Midwest and South, but declined in the West.

I hope this information has been helpful.  If you are considering purchasing a home in the Charleston, SC area, then don’t hesitate to reach out for advice and information on available properties.  You can reach me via email, bob-chambers@infinityrealty.com, or by phone, 843-849-3005.  The Charleston Real Estate market has some fabulous homes available right now that I’d love to walk you through.  Get in touch with me today so we can take advantage of the favorable buying market!  Talk to you soon!

Take the Time to Price it Right

Remember that putting your home on the market is a big decision, and you should take the time up front to make sure you price it where it needs to be.  This means using your real estate agent or contact to get a thorough list of nearby homes on the market and their respective asking prices.  You can use these comparables to make a more informed decision.   Also, remember to consider unique qualities your home possesses and how that might influence value.

Make Sure You are Ready to Sell from the Start!

When you put your house on the market, make sure you are completely ready to sell.  It is not worth entering the process if you are truly undecided or have mixed feelings.  It is best to enter the process with a confident, decisive mindset to sell.  You should consider all of your options from the start and make sure you understand what you are getting into before you commit.  Consult an expert real estate agent to help you better understand what you need to know beforehand.

Think About How You Will Promote Your Home

Make sure you think through how you will promote your home in order to sell.  Great photos can truly help your ability to attract interested parties, but there are many other elements in promoting your home the right way from the start to save you time, and get your house sold sooner.  Ask your agent about promoting standards and trends in the current market and develop a strategy that your confident in.

Consider Extra Items

Don’t forget to consider “extra items” when selling your home, which might include certain pieces of furniture, washer and dryer, and other appliances.  This may or may not make or break your ability to sell, but it can certainly help and it is always a great idea to enter with a game plan.

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