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Today's KCM Blog Post "Home Sales: Investors Are About to Return"

Tuesday, September 20, 2011
by Kevin Holt

Home Sales: Investors Are About to Return

Reposted From The KCM Blog on September 20, 2011

Sales in the housing industry have remained stagnant over the last several months. Though certain categories of purchasers have remained stable and even increased, the number of cash buyers and investors has dramatically decreased. Researchers from Capital Economics recently reported:

“The firm has found that since January, the number of homes purchased by cash buyers and investors has fallen by 26 percent.”

However, we believe these purchasers have not left the market entirely but instead have been waiting on the sidelines.

Both cash buyers and investors are normally looking for a deal/steal on the real estate they purchase. It is our opinion they are waiting for the release of the glut of distressed properties which has been kept off the market while paperwork issues were being cleared. Proof of this can be seen in the decreasing percentage of overall sales the distressed market has represented over the last six months (40% to 29%).

As we posted yesterday, this distressed inventory is about to come to market. These foreclosures will have very enticing prices on them. We believe sales will jump.

Bottom Line

The supply of houses will increase; so will demand for this inventory. The impact on prices will be determined by which increases more. Our bet is that supply will still be greater than demand causing further downward pressure on overall prices.

 

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NEW LISTING ALERT! 4047 Amicus Rd. in Stanardsville

Friday, September 16, 2011
by Kevin Holt

4047 Amicus Road, Stanardsville, VA

Featuring an Expansive Deck with a Bold Mountain View

Offered at the Compelling Price of $285,000

MLS #:492371  For Property Details Click Here

This beautiful contemporary home, on 4.5 private acres, boasts a gorgeous rural setting with no HOA yet the convenience of living near the commercial offerings of Ruckersville and close proximity to the county schools, NGIC, DIA, GE and the UVA Research Park.  Setting this home apart from much of the competition is the strong view of the mountains enjoyed from the expansive rear deck as well as from the   interior of the home via the many large windows and glass, sliding doors. 

Mature landscaping compliments the front of the property including various trees and landscape beds.  The open, grassy area to the left side and rear of the property offers many  possibilities for more flower beds, a garden spot, the addition of an improvement such as a workshop, etc.  There is plenty of room to build on whatever your hobbies and passions include.       

Entering the home you are greeted by such a warm and welcoming area generated from the natural light coming through the many windows and the vaulted ceiling of the living room.  Look forward to relaxing by the gas-log fireplace while taking in the mountain view.  With the living room opening into the dining area that adjoins the spacious kitchen with its built-in buffet entertaining is quite enjoyable—all while taking in the natural backdrop of those mountains.  Adding further natural beauty, the solarium which is off of the kitchen provides those with a green thumb an ideal place to grow and showcase their plants or instead a warm and light filled sunroom.

The very livable one-level floor plan has rich, laminate flooring throughout with ceramic tile in the foyer, kitchen and bathrooms.  Other interior features include a master bedroom with a vaulted ceiling and a fantastic view of the mountains as does the jetted tub in the attached master bath.  The attached two-car garage as well as the full, unfinished basement offer a very large amount of storage and unfinished space.

With its bold mountain view, privacy, no homeowners association and close proximity to commercial conveniences 4047 Amicus Road is a very attractive offering.        

 

 

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Today's KCM Blog Post "5 Great Reasons to Sell Your House Today"

Tuesday, September 06, 2011
by Kevin Holt

5 Great Reasons to Sell Your House Today

Reposted from The KCM Blog on September 6, 2011 

We are often asked “Is it time to sell my home?” The answer to that question is based on what your families’ goals are. If you don’t need or want to move for a few years it might make sense to wait for the housing industry to recover and prices to appreciate. However, if you wish to move within the next six to eighteen months, it is probably better to sell sooner rather than later. Here are five reasons why:

Your House Will Get More Exposure Now Than the Winter

Housing sales usually level off in the summer and then regain momentum in September and October. The spring buyers’ market has passed. Don’t miss the early fall market. It has consistently outperformed the winter season.

Distressed Properties Will Impact Prices

Distressed properties (foreclosures and short sales) on the market will increase this fall and winter. This will put tremendous downward pressure on prices for at least the next 12-18 months. Get your home sold before they become your competition.

Mortgages Will Become More Difficult to Attain

Lending standards are continuing to tighten. There is legislation currently being considered that will make it even harder for buyers to qualify. Less demand will equate to lower prices.

It is the Perfect Time to Move-Up

With prices where they are and interest rates at all time lows, there may have never been a better time to move-up into your dream home. If you move into a more desirable home now, you will be in position to gain larger equity as prices eventually appreciate.

You Get to Move On with Your Life

Probably the most important reason to sell is so you can get on with your life. You are considering selling for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you are thinking about moving. Are these reasons really important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question.

 

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9/1/2011 KCM Blog Post: "Money to Purchase AND Renovate Your Home"

Thursday, September 01, 2011
by Kevin Holt

Money to Purchase AND Renovate Your Home

Re-posted from The KCM Blog
Written by Dean Hartman on September 1, 2011

Whether you’re looking at a foreclosed home, bank REO, a Short Sale or really any home, you need to be aware of the FHA 203K Program. The general condition of real estate has taken a dip over the past few years, as homeowners are not sprucing up their home as they have in the past.

(Pssst…there’s a recession going on…people are afraid of losing jobs…and they believe they won’t “get back” the money they spend by renovating upon sale).

The 203K loan can be used for small repairs (with a minimum of $5000 of work) such as a new roof or replacing the boiler. It can go all the way up to practically rebuilding the home and anything in between. Maybe you love a home, the neighborhood, etc., but you hate the kitchen cabinets. The 203K may be for you. As long as the existing foundation stays intact, we can talk about any type of repair, upgrade, modernization or expansion.

With one closing, we will give borrowers money to satisfy their contract with the seller AND establish a Rehab Escrow Account to fund the agreed renovations. The Rehab Escrow Account is managed like a Construction Loan. Money is released after work is completed, the property is inspected by the lender and the title is updated.

Like all FHA loans, the property must be owner occupied and loan approval requires full documentation of income, assets and credit worthiness. At the same time, underwriting guidelines have some flexibility built in. (In theory, we can lend up to 110% of the After-Improved Value of the home for example.)

Loans are processed in the same fashion as any other loan (in terms of income, asset and credit) with the exception of the appraisal. Appraisers work in conjunction with the home improvement contractor and a HUD Approved Pre-Planner to determine: “As-Is” Value, “After-Improved” Value, costs of construction and the draw schedule of the renovation portion of the loan. This work typically adds about a week to the approval process, largely because it should be done BEFORE contracts are signed.

SOME UNIQUE FEATURES OF THE 203K

  • Mixed-Use Properties may be eligible! As long as the commercial space is no more than the allowable square footage based on the number of floors in the building and none of the renovation monies are used for a commercial renovation, the 203K gives tremendous interest rates for Mixed-Use Properties.
  • The loan can be used to change property usage (when appropriate municipality approval)…..converting a 1 Family Home to a 2 Family or a 4 Family to a 3 Family or any variation that stays within the 1-4 Family boundaries works.
  • On major renovations we will finance up to six months payments into the loan. In these cases,the house will not be habitable until after the work is completed.
  • There is a Streamline 203K for projects that require less than $35,000 of repairs. Typically, we like to see only one or two items of work that can be done quickly (with one inspection).

It is recommended that you work with an experienced loan officer when exploring the 203K Program, as there are many details that need to be considered (from selecting a qualified contractor to the inner workings of the draw schedule and preparing for different contingencies). While the program is more intricate, with the right education ahead of time, it is extremely manageable.

 

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8/31/2011 KCM Blog Post, "Short Sales: A Dignified Solution for Many Families"

Wednesday, August 31, 2011
by Kevin Holt

Short Sales: A Dignified Solution for Many Families

Re-posted from The KCM Blog
Written by Steve Harney on August 31, 2011

Occasionally, Steve Harney, our founder and lead content creator, asks us permission to share his personal feelings on a current real estate issue. Today, is one of those times. – The KCM Crew

I am truly excited that the banks are beginning to see that a short sale in many cases is a good alternative to foreclosing on a property. It makes more sense to sell the property at a higher price. At the same time, the banks are creating less vacant REOs (foreclosures owned by banks) which have blighted neighborhoods and negatively impacted surrounding house values for the last several years

It is also satisfying that so many of my fellow real estate professionals are taking the time to get properly trained to facilitate these transactions to a successful closing. It is a good revenue stream for some agents at a time that has proven to be very difficult for many industry professionals to make ends meet.

However, today I don’t want to speak to the financial aspects of the surge in short sales. Instead, I want to address the impact it has on the families living in these homes. They have found themselves in over their heads. In many cases, they can’t afford the mortgage and are trapped – unable to sell because the mortgage exceeds the home’s value. They may believe that they are left with only one alternative – allow the home to proceed to foreclosure.

Let’s realize the consequences of this decision for the family. The day will come that someone in an official capacity knocks on the door and notifies the family it is being evicted immediately. No matter how well they have prepared, at that moment, spouses look to each other in embarrassment. There is a big difference between imagining how this moment might feel and actually experiencing it.

And, in so many cases, there are children involved. The official stands there as a mother or father gets on a knee and explains to their son or daughter that they must go pack up some of their toys and belongings in a hurry because the family must leave – now!

The short sale process avoids these situations. The family plans around a set closing date. The children are made aware of the move months in advance and the parents have time to lessen the pain of that move.

Short sales make good financial sense for all involved. They also allow families to exit an extremely difficult situation – WITH DIGNITY.

 

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Today's KCM Blog Post: "Short Sale Success: Key is to Change Our Mindset!"

Tuesday, August 30, 2011
by Kevin Holt

Short Sale Success: Key is to Change Our Mindset!

Reposted from The KCM Blog on August 30, 2011
Written by Christopher Reale

We are honored to have Christopher Reale, Director of Short Sale Operations at Lepizzera and Laprocina Title and Escrow Services, as today’s guest blogger. He is an expert on the short sale process and will share his knowledge with us on a regular basis. – The KCM Crew

In any business discipline, having the proper mindset is the key to a successful business venture. This holds true in the Real Estate industry. Now more than ever, having the proper “Short Sale Mindset” is a key ingredient to a successful short sale transaction. In order to have the proper” Short Sale Mindset” we need to ask ourselves:

What are the parties involved thinking?

During our nationwide educational seminars regarding the short sale process, we have found the following mindsets to permeate the industry:

  • Listing Agents - The short sale process is too lengthy. It is impossible to deal with the short selling banks.
  • Buyers – The short sale process takes too long. We want an answer from the short selling bank ASAP. Why should I wait to purchase a short sale when I can purchase a non- distressed asset?
  • Sellers - What is the point? I am just going to let the bank foreclose.
  • Banks – Their mindset changes all the time!

The Key to Success

The following comments, though general in nature, are the keys to changing these mindsets.

1.) Listing Agents – Though the short sale process does take longer than the traditional non distressed property sale, the short sale process on average is taking 72 days from start to finish. If the agents are properly positioned to negotiate with the bank, preferably through a law firm who has experience in the short sale process, their mindset will change. Taking the negotiation burden off the agent will allow them to properly market the property and help the distressed seller.

2.) Buyers - Understandably the short sale process is lengthy and not every buyer is a “short sale buyer” depending on their individual circumstances. However, according to the Realty Trac Foreclosure Report dated 8/23/2011, a buyer who engages in the purchase of a short sale will typically purchase the property at a 21% reduction to the current market value. That means INSTANT EQUITY for the potential buyer. In most cases this will change the mindset of the buyer.

3.) Sellers – In nearly every instance, a short sale is more advantageous to the seller than a foreclosure. We will cover this in detail in a later post.

4.) Banks – It is apparent the bank’s mindset changes on a day to day basis. However, through successfully negotiating over 1000 short sale transactions, we have found one common thread to be true. Banks are becoming more and more open to a discussion regarding short selling a property. We will again reference the RealtyTrac Foreclosure Report to explain our point. If a bank approves a short sale, on average, they will be approving a sales price that is at 79% of current market value. The other most common loss mitigation option is for the bank to foreclose on the property. When sold, the bank will sell the REO asset for 60% of current market value. Their mindsets are changing!

We certainly understand that a short sale transaction is not one without its complexities. That being said, if we change our mindset when dealing with them, we will be truly doing a service to our communities and the entire Real Estate market.

 

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Today's KCM Blog Post, "Short Sales: Has Their Time Finally Arrived?"

Monday, August 29, 2011
by Kevin Holt

Last week, RealtyTrac released its Q2 2011 U.S. Foreclosure Sales Report. The report confirmed what we are hearing in the marketplace – banks are beginning to look more favorably on short sales as option to foreclosure.

The report dissected the sales of distressed properties in the second quarter of 2011. Here are several of their findings:

  • Sales of homes that were in some stage of foreclosure or bank owned accounted for 31 percent of all U.S. residential sales in the second quarter of 2011, down from nearly 36 percent of all sales in the first quarter.
  • A total of 102,407 pre-foreclosure homes (short sales) sold in the second quarter, an increase of 19 percent from the previous quarter.
  • A total of 162,680 REO homes (foreclosures) sold in the second quarter, virtually unchanged from the first quarter.
  • Short sales on average sold for a discount of 21 percent below the average sales price of non-foreclosure homes.
  • REOs on average sold at a discount of nearly 40 percent below the average sales price of non-foreclosure homes.

This could be a great sign that banks are finally realizing the advantages of short sales over foreclosures.

Bloomberg.com quoted Rick Sharga, senior vice president of RealtyTrac, in an article covering the report:

“This is a glimmer of hope that lenders are getting more realistic. It’s a win for borrowers who avoid foreclosure, buyers who get a house in better condition and banks that lose less money, which is also a win for taxpayers.”

Bottom Line

Banks are beginning to do more short sales. It is time for everyone involved to help in this endeavor. Tomorrow, we will have a short sale expert, Christopher Reale, blog on gaining the right mindset to do just that.

Reposted from The KCM Blog on 8/29/2011

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1220 Agnese Street--The Newest ERA Gold Star Property Program Listing

Tuesday, June 14, 2011
by Kevin Holt

1220 AGNESE STREET, CHARLOTTESVILLE, VA

The Newest ERA Bill May Realty Co. 
Gold Star Listing

  • Pre-Listing Home Inspection!
  • One Year Home Warranty Included in Sale
  • Home is Staged and Shows Beautifully!

With charming curb appeal, a beautiful, large backyard and an interior with many great features and updates you can genuinely look forward to coming home to 1220 Agnese Street.

Located in the well established Woodhaven community this home is very convenient to all things Charlottesville.  Enjoy being within walking distance of the popular Rivana trail, minutes from the Downtown Mall, and a quick commute to the commercial conveniences offered along Route 29.  Yet, still enjoy the pleasures of relaxing outside in your own green-space offered in the expansive backyard.  Whether watching children play, pets run, gardening, or entertaining friends and family on the back patio the backyard is a great getaway. 

Inside, rich hardwood floors great you along with a glassed-in wood-burning fireplace with a mantle above.  The large master bedroom has an attached bath as well as  access to the rear patio.  Further, there is potential for a master suite here as you could easily use the adjoining room as a quaint sitting area or as a dressing room or office.  Multiple rooms have been recently painted and the hall bathroom has been impressively updated including ceramic tile flooring and shower.  The finished basement offers a good amount of additional living space including two sizeable rooms (one currently used as a home office and the other as a bedroom), a full bathroom, a den, a small workshop area and a large laundry room.

With convenience, a beautiful backyard to enjoy the outdoors and many great interior features 1220 Agnese Street is a great place to call home.

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Today's KCM Blog Post: "Should You Rent or Buy in this Market?"

Wednesday, June 01, 2011
by Kevin Holt

Should You Rent or Buy in this Market?

Reposted from the KCM BLOG June 1, 2011

Families are trying to determine whether or not now is the time to buy a home. Some are advising these families to sit out the current real estate market and instead rent for the next year or two. We do not agree with this advice. Homeownership means a lot to a family. We also realize that the financial aspects of purchasing a home today can be a concern. The challenge is any advice given by someone in the real estate community is immediately dismissed as self-serving.

For this reason, we want to give you the advice of three entities not involved in real estate sales:

Citigroup

“When we examine the relationships between mortgage payments and income and mortgage payments and rent, we see that these relationships have also reverted back to or below equilibrium points. In some cases, particularly when mortgage payments are compared to the cost of renting, home prices actually appear cheap.”

JP Morgan

“JPMorgan analysts said ‘the continuation of falling rental vacancies and rising rental demand will make home buying increasingly attractive’, especially as rental prices increase.”

Business School professors Eli Beracha and Ken H. Johnson

“Fundamental drivers now appear to be in place that favor homeownership over renting in the near term future…

The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting…

Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

Bottom Line 

Is it better to rent or buy? According to those quoted above, it seems it may be becoming a no-brainer.

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Today's KCM Blog Post: "Renting: Truly a Better Option?"

Friday, April 29, 2011
by Kevin Holt

Renting: Truly a Better Option?

Reposted From the KCM Blog on April 29, 2011

After the last five years, more and more people are hesitant about purchasing a home. We definitely understand their concern. However, is the alternative option actually a better choice? Renting in the current housing market might not make good financial sense. Just this week the Harvard University Joint Center for Housing Studies released a report analyzing conditions in the rental market. The study found:

Rental markets are now tightening, with vacancy rates falling and rents climbing. With little new supply of multifamily units in the pipeline, rents could rise sharply as demand increases. 

This increase in rental costs is already taking place. In their Spring 2011 Housing Report released earlier this week, hotpads.com stated:

…that rental listing prices across the US climbed 7.4 percent while for sale listing prices retreated 8.8 percent since this time last year (April 2010 – April 2011).

Just yesterday, Trulia released its second quarter 2011 Rent vs. Buy Index. In the report, they stated that buying a home has become more affordable than renting in nearly four out of five (78%) major cities.

 ”With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying,” says Ken Shuman, Head of Communications at Trulia. “As we head into the summer buying season, those looking to buy a home should be encouraged by improvements in the market and feel optimistic about their chances of finding an affordable home, much more so than in previous years.”

 “Aspiring homeowners should focus their energies on locking down a low mortgage rate sooner than later. While home prices are unlikely to return to pre-crash levels, today’s low interest rates will likely rise thanks to inflation and spikes in the Fed rates,” notes Shuman. “As the government wind downs its role in the mortgage markets higher mortgage interest rates will be inevitable.”

Bottom Line

Though purchasing a home is not an easy decision after what has taken place in the market over the last five years, realize rental prices are about to soar. You should probably take this into consideration when determining your best housing choice.

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Displaying blog entries 1-10 of 176

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