Buying a Foreclosure? What every buyer should know

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FORECLOSURE:
What Every Buyer Must Know

 In today’s market, you’ll hear lots of terms used to describe “bargain” properties – distressed, short sale, pre-foreclosure, auction, REO, bank owned, foreclosure, foreclosed, and more. Confused? That’s understandable. Some of these terms are interchangeable, some are not, and some cover a whole range of bargain property types.

To understand the terms, it’s important to understand the three stages of foreclosure:

  1. Pre-foreclosure stage. This stage begins when the homeowner falls behind on home-loan payments (or sometimes other terms of the loan). Lenders may wait for a second, third or even fourth missed payment before sending the homeowner a Notice of Default — which becomes public record. The homeowner then has a given period of time to respond to the notice and/or come up with the outstanding payments and fees — sometimes by selling the home in a pre-foreclosure sale, also known as a distress sale. (If a judicial procedure is required, it occurs after the notice of default is given.)One type of pre-foreclosure or distress sale is a short sale — when proceeds from the sale of a home are less than the amount of mortgage still owed to the homeowner’s lender. A lender-approved short sale (or short payoff) occurs when the homeowner’s lender agrees to accept the proceeds of the home sale as satisfaction of the mortgage owed, even though proceeds are less than the outstanding debt.
  2. Foreclosure stage. At this stage, the former homeowner may or may not have been evicted — depending on state law — when the lender puts the home up for public auction (after a judgment of foreclosure in those states requiring judicial procedure).If the home sells at the foreclosure auction, (sometimes called a sheriff’s sale, trustee’s sale or step sale) money from the sale is used to pay off the costs of the foreclosure, taxes and other prior liens, service charges and advances, interest and principal on the mortgage, late charges or fees, and liens recorded after the first mortgage. Any amount left over is paid to the borrower (former homeowner). When proceeds from the sale are less than the various amounts owed, the lender may be able to hold the borrower responsible for the difference (deficiency judgment).
  3. Post-foreclosure stage. When a property that does not sell at auction — either because no one bid on it or because bids did not meet the lender’s or agency’s minimum price — the property becomes real estate owned (REO) by the lender or government agency that guaranteed the loan (such as FHA/HUD, VA, etc.). You’ll also hear the term bank-owned applied to these properties, whether they are owned by an actual bank or some other type of lender. (Be aware: The term REO also applies to properties purchased by companies from employees who didn’t sell their home on the market before relocating, which is to say that not all REOs are foreclosed properties.)Once the lender or agency has repossessed a property following a failed auction attempt, the home is put back on the market. Most REO properties are listed for sale through real estate brokers and placed on the Multiple Listing Service.

At this stage, the foreclosure process is complete, and the property may be accurately described as a foreclosed property, while in the first two stages the home is in foreclosure and should be referred to as a foreclosure property. (You’ll find, however, that real estate writers and others sometimes misuse this terminology; be sure to ask if you are unsure what stage of foreclosure a particular property is in.)

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PROPERTY RIGHTS :: Buyers Must Know How Easements Can Impact A Property’s Value

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If you are thinking about buying a property that comes with an easement, be sure you understand how it could affect your life and the property’s value. An easement means a third party has been granted the right to use a defined area of an owner’s property for a general or specific purpose (see box). Easement restrictions could, for example, prevent you from building on the easement area or from installing fencing that would prevent access to or through it.

There are many different types of easements. A common one—a right-of-way easement—allows a specific person or persons to travel across a piece of land owned by someone else. This type of easement is sometimes used in rural areas so farmers or ranchers can get to a piece of property they own that does not have road frontage.

Easements may be granted as permanent arrangements that continue indefinitely or until a release is given by the person receiving the easement. In this case, the easement would normally become part of the property deed.

An easement can also be granted as a limited-time agreement—expiring at a stated time, when a specified event occurs or when the benefiting person dies. Limited-time easements are normally not recorded as part of a deed description.

Other easements you may encounter could grant the right for a utility company to run lines or poles—even high-tension power lines—over, on or under the property, or for a local government or housing development to install sewers or water mains or allow access to a park, for example.

Beware: Just because an easement is not being used does not mean it will never be used.Should the benefiting party decide to exercise their right, can you live with whatever impact their use might have on your property and lifestyle? Be sure to consult a qualified real estate attorney for advice. In addition, carefully consider whether future buyers will shy away from the property because an easement exists.

Beware: Just because an easement is not being used does not mean it will never be used.Should the benefiting party decide to exercise their right, can you live with whatever impact their use might have on your property and lifestyle? Be sure to consult a qualified real estate attorney for advice. In addition, carefully consider whether future buyers will shy away from the property because an easement exists.

Other Common Easements

  • Provide pathways across two or more pieces of property.
  • Forbid neighbor from blocking view with a wall of trees.
  • Allow neighbor to use owner’s driveway to reach neighbor’s home.
  • Permit public access to beach or park through private land.
  • Grant historic preservation organization rights to enforce alteration restrictions.
  • Allow an individual to fish in a privately owned pond.
  • Permit land owner to drive cattle over another’s land.
  • Restrict development, commercial and industrial uses on a property to preserve views, habitat or other amenities of the land.

 

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BIDDING WARS 8 Hot Tips To Win The Dream Home You Want When Other Homebuyers Want It Too

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Wilmington NC and many markets and neighborhoods around the country are experiencing a shortage of homes for sale right now. When that happens, prospective buyers can find themselves losing out to other buyers who have their ducks lined up and a good real estate pro working with them.

If you want to purchase a home and you’re in a tight market—or you know someone who is—here are some pointers on how to win a bidding war.

1. Get pre-approved for a mortgage. Pick your lender (we’re standing by!) and loan type, and then submit all the paperwork requested. When you find the home you want, you’ll be able to make an offer quickly with a pre-approval letter from your lender tailored to the specific property.

2. Have cash at the ready—and prove it. You’ll need cash for earnest money (a check with the offer; make it a big one), your down payment and closing costs, along with bank statements that show the sellers you have more than enough cash to close the deal.

3. Find a great real estate agent. Look for an experienced, knowledgeable and committed pro who has the time to pay close attention to your house hunt. Overly busy agents may not be able to meet your needs in a timely way.

4. Jump on new listings. Being the first buyer to see a home and make an offer puts you at the head of the line—and at an advantage. Work with your agent to learn about homes that are about to come on the market and keep an eye out for new for-sale signs in the neighborhood(s) where you want to live. Sometimes signs go up a few hours or days before homes show up on the multiple-listing service.

5. Offer and counter-offer quickly. Work with your agent to have offer paperwork ready to go so you need only fill in the blanks for the particular property. If your offer is not accepted but countered, respond to the sellers as quickly as possible to “stay in the game”—hopefully keeping other buyers at bay.

6. Find out about the sellers. This is where your agent can be especially helpful, asking the sellers’ agent what the sellers are looking for in an offer, such as a particular settlement date. In addition, a personal “Dear Seller” letter from you, describing specifically why you like (love!) the home and want to live there, makes a great first impression for your offer. Flatter away!

7. Make a “clean” offer. Typically, offers include contingencies for financing, appraisal, inspections and more to protect buyers from surprises. Ask your agent for advice on skipping these contingencies or making other arrangements to protect your interests. If you decide on inspections, get them done quickly and resist the urge to nickel and dime the sellers on every little deficiency found. Offer your best price without requests for seller financing, help with closing costs, conveyances or a home warranty.

8. Consider an escalation clause. Your agent can help you decide whether an escalation clause should be a part of your offer. An escalation clause offers to pay a certain amount more than the highest offer in hand, up to a specified price. Before you set that price, however, make sure you understand how much the home is worth so that you don’t end up overpaying. If the lender’s appraisal comes in under your contract price, you would either: 1) have to pay the difference in cash; 2) lose the home (and your deposit, if you don’t have an appraisal contingency); or 3) try to renegotiate a lower price with the seller.

 

Categories: Bidding Wars, wilmington nc real estate, wilmington nc relocation, wilmington real estate stats, Wrightsville Beach NC

HAPPY DANCE More Local Sellers Are Making Fast Moves To Closing

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Our local housing market is busy. You’ve probably seen a good number of “for sale” signs around town that were swiftly topped with “sold” signs. It’s not a mirage. And those sellers weren’t just lucky either.

The key to getting your home sold today is being an involved, educated seller. Sellers who actively participate and partner with their real estate professionals get their homes sold faster and for top dollar.

Sellers today know that getting their home ready for sale takes some effort. It’s worth it when buyers view their polished home online and then flock to the property—and like what they see. In this market, offers come easily when home sellers have done some fancy footwork ahead of time!

We can give you all the real estate advice you could ever need or want. The secret is to put the advice into action. If you’re serious about selling your home, call us now for a pre-listing evaluation.

We’ll work with you to set the right price and right strategy to meet your real estate needs and get your house sold. Stepping forward to closing can be easy…if you know the right moves. We’d love to do the home seller’s happy dance with you!

Choreographed Pricing
Your best foot forward is looking at recent solds in your area that tell us what homes like yours are selling for. We call them ‘comps,’ or comparable properties. Then we mix in the unique features of your home in relation to the larger market trends to price ahead of a rising or declining market.

As we choreograph your individual selling scenario, we’ll also use expired listings as an indicator of overpriced listings. Some homes may call for a paid pre-listing appraisal, if setting a slightly under-market price will attract more buyers. Finally, we’ll review competing listings—not that they will sell for those prices, but to position your home to advantage versus long-on-market wallflowers.

Ultimately, local market conditions and current homebuyers will determine what is a fair price for your home.

Clutter Shuffle
Before you list your home for sale, you’ve got to deal with your stuff. Sure, your clutter might be neat, it might be hidden under things and behind doors, but buyers will see it eventually, and it will distract them. Start on a clutter-busting plan before you put your home on the market. You’ll have less to move later, and your home’s true character will shine for buyers.

The Remodeling Twist
If your home doesn’t show like a model home, all is not lost. Don’t hurry into a major remodel, though. Many large-scale home improvements won’t pay you back at sale time, and some buyers may not like your choice of upgrades. Instead, consider giving buyers an upfront credit for new flooring, updating a half bath or whatever deficiencies your home has. One very worthwhile upgrade would be a fresh coat of neutral-color paint throughout the home.

Do The Stage-And-Slide
Once you get your home de-cluttered and all your small home projects are complete, take the best pieces of furniture from each room and arrange them to invite buyers in. If you need help, we can refer you to professional stagers who can make your home look stellar. For some long-time owners, moving out early and staging with select furniture can transform a ho-hum listing into an instant hit.

Waltzing Away
If you carefully heed professional advice to get your home cleared out, staged, prepped, priced right and open for inspections and appraisals, you’ll be ready to waltz to closing/settlement, and then do the happy dance to your next home.

Categories: wilmington nc real estate, wilmington nc relocation

Are there any inside tips on down payments for first-time buyers?

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Folks who are new to the home-shopping world need more than just good luck. You should, of course, save all you can for closing costs and a down payment. For further help:

  • Revisit your “wish list”

Reconsider what you’re looking for in a first home. Find out what you can afford now, and consider buying a starter home that requires a small down payment with the idea of moving up in a few years.

  • Take advantage of special programs

Look into special low- and no-down payment programs like loans guaranteed by the Department of Veterans Affairs (VA) and Federal Housing Administration (FHA). Some areas also have local programs for low- and moderate-income families or first-time buyers, offering lower interest rates or down payments.

  • Gather gifts

Check with parents and relatives for monetary gifts that can go toward a down payment or closing costs. A 20% down payment can dramatically cut monthly costs and eliminate monthly mortgage insurance premiums.

  • Consider “sweat equity”

If you can fix up a home that’s in poor condition, you increase the value of your investment faster. Ask us about special combination loans that provide fix-up funds as well as purchase money.

  • Scour market for bargains

Call on us to research foreclosure properties, housing auctions and other homes available at below-market costs.

Want to know more? Click on “Ask Your Own Questions” or call or e-mail us today with questions of your own. We can tell you how much house you can afford, and we can help you get into your first home.

Categories: first time home buyers, Waterfront Wilmington NC, waterfront wrightsville beach, wilmington real estate stats

SELLING A HOME HAS CHANGED Retiring Soon? Avoid These Common (And Costly) Home Selling Myths

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Myth: A neighborhood pretty much like the old one we have is just fine.
Truth: If you have your heart set on certain activities such as swimming, golf, volunteering, etc. choose a location where these activities are readily available. Are you a gardener who thrives getting your hands in the dirt or are you trying to escape yard work?

If you are thinking of continuing to work—part time or more—are there job opportunities available? Consider: Even if you don’t want to work now, down the road, your finances may require you resume working and you’ll want to avoid relocating for a job.

Myth: Every place has the same healthcare resources.
Truth: Good healthcare access is a necessity as we age. Make sure suitable hospitals and doctors in your health insurance network are within easy proximity to your retirement location. If you already have preferred healthcare professionals, consider whether your new home gives easy access or if you will need to find new providers. TIP: Ask your existing medical team for referrals and recommendations for professionals in your new location.

Myth: Driving is always the best way to get around.
Truth: As visions of golf carts, public transportation options, bicycles, taxis and your own car, or two, dance in your head, prioritize what your main method of commuting will be in your new location. Will these options still be viable later on in life? Don’t forget safety considerations. If you have plans to attend evening events in a big city, will you feel safe on public transportation as your only transportation choice? TIP: Reliance on friends or relatives for occasional commitments may work in a pinch, but over time, these arrangements may be fraught with problems.

Myth: When it’s time to move, I’ll just hire a packer/mover.
Truth: Long before you decide to move, start to pare down and clear out furniture and household items you no longer need or want. It’s not just for showing your home for sale; in the process you can decide what is moving with you on the next stage in your life. Be ruthless. Go through everything you own—even those unknown boxes of “stuff” tucked away, enjoying and savoring the trip down memory lane. Determine what moves with you, what gets tossed or sold and what is give-away worthy or can be recycled. Don’t be surprised how long this takes. Remember: The stuff you shed now means an easier and cheaper move later.

Myth: Better to home shop before you sell to ensure you don’t miss your dream home.
Truth: Well ahead of home shopping, determine if your finances will allow you to purchase a new home before you sell your old one. Remember: You’ll have less negotiating power as a homebuyer if your home purchase must be contingent upon your current home’s sale. To avoid having to wait for your home to sell before you buy your next one, research whether you can tap the equity in your home (say through a bridge loan) or borrow against investment or retirement accounts as a temporary loan to purchase your new home.

Myth: Paying all cash is the best strategy for retiree homebuyers.
Truth: Previous homeowners and excellent savers may have the ability to pay cash for their retirement home. It’s comforting to many retirees—especially those on a fixed income—not to have the pressure of making a large mortgage payment every month. Before you make this decision though, sit down with your financial advisor and tax professional to determine whether it might make sense to take a mortgage on your new home. Doing so may free up cash that can be invested for a higher return than the mortgage interest rate. Plus, mortgage holders can take a tax deduction for their annual interest payments. TIP: Discuss the pros and cons of reverse mortgages during the same meeting to determine if this equity-drawdown is something you may eventually need or want to take advantage of

We’re experts in local real estate. Contact us today to help you separate market myths from local reality for your specific situation.

Categories: Buying Retirement Home, Retirement, Selling Home

What are some typical closing costs? | Wilmington NC real estate

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Cash In HandWhen you apply for a mortgage, the lender must respond with a Good Faith Estimate of Closing Costs, which explains the costs you will likely have to pay at settlement. But the numbers on the form are estimates, and the final tally could be higher or lower.

Some of the more common charges are:

  • Loan Origination Fee: usually 1% of the loan;
  • Loan Discount Points: a form of accelerated interest; each point is 1% of the loan amount (who pays points is negotiable between buyer and seller);
  • Appraisal Fee: the charge to have a professional appraiser certify the value of the property being purchased;
  • Credit Report: the cost of getting a credit history from a credit service;
  • Tax Service Fee, Document Preparation Fee: charges to set up a tax escrow account and prepare mortgage documents;
  • Attorney Fees: the settlement agent’s charges for processing the sale closing;
  • Title Insurance: charges for insurance to guarantee the validity of the property’s title for the lender; buyers can also purchase title insurance at settlement to protect their interests;
  • Recording Fees, Tax Stamps: local charges to officially record the deed and mortgage, and transfer taxes;
  • Survey: the charge to verify the boundaries of the property being purchased.
  • Call us, we can help do a net sheet on your costs.
Categories: Mortage options, Mortgage options, Mortgage points, Mortgages, Wilmington NC Neighborhoods, wilmington real estate stats

TRENDING | What’s New and In Demand

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29 cu. ft. Whirlpool® French Door Refrigerator with Flexible Capacity ...If you’re buying a home, you probably already know what looks dated and what’s desired in today’s homes. If you’re selling your home, you may need a little help determining if your home is move-in ready and if buyers will sigh—relief or despair—when they get inside. Check with us before you start remodeling—as local trends move fast in our ever-changing real estate marketplace.

In: Top load, high-efficiency washing machines
Out: Front load, high-efficiency washing machines

In: White washers and dryers
Out: Colorful washers and dryers

In: Induction electric cooktop (stays cool to touch)
Out: Utilitarian cooktops without style

In: French door refrigerators with freezers on the bottom
Out: Side-by-side fridges with narrow shelves

In: “Smart” appliances that connect to phone apps
Out: Appliances that aren’t able to connect to the Internet

In: Quartz countertops that look like granite
Out: Laminate that looks like granite

In: Integrated sinks
Out: Stainless sinks

In: Backsplash tiles that extend all the way to the countertop
Out: 3–4″ back piece of counter that goes up the wall

In: Open shelves or glass-front cabinet doors in the kitchen
Out: All solid cabinet door

In: Larger showers with seats and body sprays
Out: Closed off, tiny showers

In: Grab bars that look like towel rods
Out: Grab bars that look like they came from the hospital

In: Framed mirrors
Out: Expansive, frameless wall mirrors

Categories: coldwell banker sea coast advantage, Whats Trending, wilmington nc real estate, wilmington nc weekly events

New Loan Rules | 2014 Wilmington NC Real Estate

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Back on January 1 of this year, new lending regulations came into effect capping what lenders can charge in points and fees to no more than 3% of the loan amount.

On the one hand, know that origination fees average only 0.87% and typically are not more than 1%, according to Bankrate.com. What’s more, the new fee rules do not include non-lender (third-party) charges for escrowed taxes and insurance, notary fees, appraisal fees, flood hazard reports, pest inspections, document preparation, title insurance or credit reports—as long as these fees all come from independent companies not affiliated with the lender. Also, loans of less than $100,000 are exempt and can have lender fees of more than 3%.

Some experts thought the new rules would impact mortgage brokers more than banks. Yet so far, homebuyers have not been dramatically impacted, even though the cost to comply with the new rules can be more burdensome to smaller lenders.

Bottom line: Lender fees are limited to 3% of the loan amount (over $100,000), which means borrowers won’t be overpaying for their loans. However, the cap on fees tends to make some lenders less likely to offer loans in the $100,000 to $200,000 range.

Call us 910-202-3607 for more information.

Categories: wilmington nc real estate, wilmington real estate stats, Wrightsville Beach NC

Home Improvements | Investing In Accessibility Pays Back

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With an increase in multi-generational households, frequent out-of-town guests and various special needs that arise, a home that allows everyone to live and visit comfortably is a bonus for you, the homeowner, as well as a positive selling point for future buyers.

More and more families are finding themselves caring for family members with physical limitations. And many homeowners today express a preference for “aging in place”—not having to move to another home when they get older.

No matter if a physical impairment is temporary or permanent, or if elderly family members come to live with you or simply visit, updating your home to accommodate everyone is a wise investment.

  • Threshold. Consider modifying your home by creating a zero-threshold entry. No stairs, no steps, no barrier to getting through the front door. Be sure the width of the door also allows easy access.
  • Bedrooms. First-floor master bedrooms and baths can allow independence to any age, resident and visitor alike. Guests who have difficulty with stairs appreciate roomy first-floor half baths.
  • Bathrooms. Making bathrooms accessible to all includes doorways at least 32″ wide (36″ is even better), grab bars/handrails, easy-to-grasp lever faucets and sinks with lower cabinets/countertops or room to maneuver a wheelchair under.
  • Showers. If budget and space allow, consider creating a multi-function shower space that is accessible and safe for users who are in wheelchairs or need a seated shower.
  • Hardware. Consider lever-style door knobs and drawer pulls, which are easier to operate than knobs.
  • Kitchen. When redesigning a kitchen, make sure space between islands and counters is wide enough to accommodate a wheelchair.
  • Stairs. To allow easy access to upper or lower floors, investigate the installation of a stair or wheelchair lift, or elevator, including space and cost requirements of each option.

Let us know if you would like to investigate how you could use your home’s equity to finance accessibility modifications to make your home more accessible for you, your loved ones and anyone who comes for a visit.

Contact us to help you decide whether paying points makes sense for your particular financial situation.

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Kay Baker | 1001 Military Cutoff Rd. | Ste 101 Wilmington, NC 28405 | kaybaker@seacoastrealty.com | 910-232-0363 | Fax: 910-256-0473

Copyright © 2014 Wilmington NC Real Estate Guide. All rights reserved. Disclaimer: All content on this blog is my own opinion and should not be treated as fact or relied upon when purchasing or selling real estate.