Alan's Blog

Charleston (SC) Real Estate Market Experiences Change in Momentum

Alan Donald (Keller Williams Realty) — Thu, 19 Nov 2009 16:43:44 -0600

The Charleston, SC Area real estate market has experienced an important change in sales momentum. Fueled by low mortgage interest rates, improved housing affordability (lower home prices), the $8,000 Tax Credit for first-time home buyers and the prospect of increased employment with the future Boeing plant being built near the Charleston International Airport, year-over-year monthly sales (i.e. October 2009/October 2008) have shown increases for the past four months, for the first time since October of 2006!

As this chart shows, this "turn" in the market trend signals positive things to come for our real estate market. Higher monthly sales = accelerated inventory reduction = shorter time to market supply/demand stabilization.

What does this mean for any potential buyer or homeowner? While in the short term (Fall/Winter 09) the market may still look it is declining, this change of momentum means that next year there will be increased demand for homes in the area. As a buyer this means increased competition, which will prevent them from negotiating "incredible deals". As a seller, this is good news in the long term. The market will return to a "balanced" market once we hit 5-7 months' inventory, which will place sellers in a more balanced negotiating position (right now buyers have a notable advantage).

Of course, market momentum may shift again if any of the underlying variables shift. For example, the market may slow down again if interest rates shift upwards dramatically. However, at this point this seems unlikely, given that inflation is not yet on the Fed's radar screen. But you never know...

My advice for buyers: Don't wait! Take advantage of this window of opportunity now!

My advice for sellers: Can you hang in there for another 9-16 months? You may be able to get a better price for your home if you can wait...

The Worst Picture of the Month Award

Alan Donald (Keller Williams Realty) — Fri, 13 Nov 2009 08:13:52 -0600

One of my pet peeves while viewing properties on the MLS is to find listings with NO picture or pictures that frankly are SO POOR in quality, that even a teenager with a cell phone would take a better shot.

So I am going to establish the "WORST PICTURE OF THE MONTH AWARD" - I invite your contributions! (please make sure no names or addresses are included in the file name or description).

Here is my pick for this month's award candidates:

It's only 116 x 76 pixels in size *you need a magnifyng glass to see it*, AND it's blurry!

I'm sure you will find other contenders in your MLS...

The A-Z of Buying a Home (Part 5)

Alan Donald (Keller Williams Realty) — Fri, 13 Nov 2009 07:52:41 -0600

The A-Z of Buying a Home (Part 5)

By Alan Donald, BuyHomesInCharleston.com

This is the last part of our brief guide for first-time home buyers in South Carolina. Once you have closed on the purchase of your home, you will still need to take care of some very important details (in addition to your move):

1.Change all the utilities in your name. Usually sellers stop their accounts as of the closing date, sometimes they give you 1-2 days grace. The last thing you want is to get to your newly purchased home and find the power is off, and the temperature outside is 98F...

2.Re-key all exterior doors. Although the sellers may have seemed very nice, you never know who else has keys for the home. Don't forget to re-program the garage door openers!

3.If there was a transferable termite bond, make sure you transfer it in your name so you can actually file a claim, if necessary.

4.Once a property changes hands, two things change with respect to property taxes: The first, is that the home "assessed value" will change to reflect the purchase price. And the second, it that the home will be taxed at a 6% assessment ratio. This could bring a nasty surprise in the shape of a letter from your bank, announcing you that your monthly payment needs to be substantially higher to be able to cover the anticipated costs of taxes and insurance in their escrow account. If you intend to liv e in this home as your primary residence, South Carolina residents are entitled to a PRIMARY RESIDENCE EXEMPTION that decreases the assessment ratio from 6% to 4% (which will bring the tax more in line to what your lender initially estimated in their Good Faith Estimate, since the lender probably assumed that this was going to be your primary residence and estimated the property tax at the 4% assessment ratio)...to claim the primary residence exemption, you will most probably need to change your home address on your driver's license, and bring the new license, copy of your closing documents (the HUD-1 statement and/or deed, if you already received it back from the attorney) and a utility bill in your name to the new address to request the change at the County Tax Assessor's Office.

5.Remember to change your address at the post office (better yet, pay for their 6-month forwarding service) and notify all your creditors (credit cards, stores, etc.), friends and family. The last thing you want is to damage your credit because you did not get the bills.

6.Get involved in the HOA as a property owner. This is a right you did not have when you were renting. Now you can actively participate in the democratic process of your homeowners' association.

7.Send a copy of all closing documents and expense receipts associated with the purchase to your accountant. Some closing costs and expenses may be tax-deductible.

8.If you are a first time home buyer and purchased your home in late 2008 or in 2009, you may be eligible for the Tax Credit offered by the Federal Government. You don't have to wait to file taxes to claim this credit. All you need to do is to ask your accountant to submit the required form and, if you are eligible, you will get a check in the mail from Uncle Sam!

WE HOPE THAT YOU HAVE ENJOYED THIS SERIES. If you are thinking about buying a home ANYWHERE IN NORTH AMERICA, we can gladly help you find a local, experienced REALTOR who can assist you in your quest. If you are planning to move to the Charleston area, or live here already, WE WOULD WELCOME THE OPPORTUNITY TO EARN YOUR BUSINESS. Contact us today to start the process - we will help you every step of the way - from A to Z!

Alan Donald, Team Leader
BuyHomesInCharleston.com

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Alan Donald (Keller Williams Realty) — Tue, 01 Sep 2009 11:07:25 -0500

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text messaging

Alan Donald (Keller Williams Realty) — Fri, 28 Aug 2009 10:37:08 -0500

Does anyone know of an INEXPENSIVE way to provide information about a listing via a text message from the prospect? (i.e. to replace the Archtelecom call capture)

i.e. "TEXT 33452 with "MLS" in body to receive information about this listing" - and then triggering a text website or WAPwebsite to deliver the information?

Alan Donald
Keller Williams Realty
www.BuyHomesInCharleston.com
Charleston, SC

The A-Z of Buying a Home (Part 4 of 5)

Alan Donald (Keller Williams Realty) — Fri, 28 Aug 2009 10:30:22 -0500

By Alan Donald
www.BuyHomesInCharleston.com

You have finished performing your Buyer's Due Diligence and everything's lined up for a closing on a specific date and time (usually at the attorney's office). What happens at this "closing"?

A "real estate closing" is the name given to a completion of the real estate transaction, including legal (title) and financial (loans & mortgages) aspects. It is an event that normally takes about an hour, in which normally all the parties are present (the sellers and their listing agent, the buyers and their buyer's agent, the closing attorney, and in some instances the loan originator). The parties each sit facing each other, and the attorney will explain the process and start sending papers their way to have them signed.

Be warned! By the time you finish, your signature hand will be tired! Buyers may sign 50-100 times (depending on the complexity of the financing and the lender). By contract, the Sellers only need to sign very few documents - so the Buyers have the most work...

The attorney will first start by reviewing the HUD-1 Statement to make sure that all the financials are correct. These include: Purchase price, earnest money, down payment, seller concessions, lender origination costs, agents' commissions, homeowners/wind & hail/flood/title insurance premiums, attorney's fees, taxes (i.e. deed stamps), prepaid items to create the escrow account, and any service providers' bills related to the real estate transaction (for example, the CL-100 - termite letter - is normally paid out of closing).

When everyone is in agreement, the attorney will normally ask everyone to sign several copies, and will also ask the Buyers for the balance owing for their downpayment (note that the Buyers' agent or closing attorney should have told the Buyers in advance how much they needed to bring to closing, since these funds need to be either wired in advance into the attorney's escrow account, of paid by Cashier's Check at the closing).

Next, Buyers and Sellers will normally sign all kinds of disclaimers and certifications (to make sure their identities, Social Security Numbers and information is right). The Buyers will also be asked to provide picture IDs (normally driver's licenses or passports), and the attorney's paralegal will make copies of those documents to comply with the Patriot Act. The Buyers will also sign a copy of the CL100 Termite Letter.

Following this, the attorney will usually ask the Sellers to sign the transfer of the deed and their mortgage discharge documents.

Now the fun part starts for the Buyers: Signing the loan(s) notes and their corresponding mortgage documents. The amount of paperwork varies depending on the lender, but this can take some time and effort, since the lenders will want the Buyers to sign and initial every document and affidavit in their closing package. Some lenders are very bureaucratic, others are not.

After all the paperwork has been signed, the attorney normally checks to verify if the funds from the new mortgage loans have arrived in his escrow account. If they have (the transaction is "funded"), the attorney will proceeed to disburse checks to all the parties, and the Sellers will hand over the keys of the home (and the garage door openers, pool keys, etc.) to the Buyers.

If the funds did not arrive on time, the parties can agree to do a "Dry Closing", in which case it is a good idea that the attorney holds all the paperwork and the house keys until the funds arrive (it may take just a few hours, or up to a couple of days!)

Now it's done! The home is officially the Buyers' (although the deed may take a few weeks to be registered in their name).

Next: Post-Closing - What Needs to Be Done?

The A-Z of Buying a Home (Part 3 of 5)

Alan Donald (Keller Williams Realty) — Sat, 22 Aug 2009 12:30:28 -0500

By Alan Donald, BuyHomesInCharleston.com

You found a home, negotiated a favorable contract ("ratified" = signed & delivered). You are supposed to close in 30 days. What now?

This period from contract to closing (also known as "escrow period" in some states) is critical for the buyers to do their due diligence. This means investigating everything they want about the home including the bricks and mortar, the title, the neighborhood, etc. to their satisfaction. It is also the time to formally apply for the loan (you may have shopped around with different lenders before you got pre-approved by one of them. You do not necessarily have to use the same lender, but cannot hesitate to submit a formal application because most contracts include a deadline to apply for the loan, and a deadline to get formal approval.

Due diligence is not rocket science, but there are a lot of small details that need to be taken care of in a certain order. The due diligence is a TEAM EFFORT between you, your REALTOR (who can play a pivotal role), the attorney and other service providers. Here is a partial list of steps that need to be taken care of during this period:

1. Inspections - buyers need to make sure that the home has no major, unforeseen problems with its structure, plumbing, electrical or mechanical systems, and that it is safe for human habitation. These inspections may include:

Home Inspection - looks at structure, exterior siding, roof, windows, foundation, plumbing, air conditionin, electrical and basic appliances.
Termite, Pest and Moisture - Makes sure that the home is not infested/damaged by termites, fungi, woodrot or vermin
Structural - necessary only if there is an issue that the home inspector recommends to be looked at in more detail
Survey - determines the boundaries of the lot, and the location of the buildings on the lot. In the Lowcountry it is common practice to order an Elevation Certificate, stating the elevation of the main floor above sea level for insurance purposes
Pool - if desired by buyers
Radon and other Potential Contaminants - while Radon and other contaminants are not common in the Charleston area, buyers who are coming from areas (where these issues may be more common) feel better if they order these inspections for their peace of mind.

2. Legal Due Diligence

You will need to hire a closing attorney (SC is an attorney state) to do the closing. I recommend you choose one who is specialized in real estate (other attorneys can do it but they may not be up to speed with legislation or the closing process and may delay or even derail a transaction). This is YOUR closing attorney (the buyers normally choose the closing attorney) and he/she is supposed to represent your interests in the transaction However, he/she will normally also represent the other parties parties (sellers, lenders). The closing attorney's functions include:

Perform a title search to discover liens and potential problems with title marketability.
Get a title insurance binder (most attorneys are also agents of title insurance companies and will sell you the title insurance policy - you don't have to buy it from them, but most people do)
Order a survey (only if you request it)
Contact current lienholders to request payoffs of existing liens as of the proposed closing date
Prepare all closing documentation related to title, deed and new loan notes/mortgages
Prepare a preliminary closing statement (HUD-1) for your review

3. Loan Processing

The contract normally stipulates a deadline for buyers to sumbit a formal application and to receive full loan approval. You will need to submit a formal application to the lender you choose to go with, and normally pre-pay $300-400 for the appraisal to be ordered. These days appraisals take more time due to recent new federal regulations. Please note that as of July 1, 2009, if you have even a slight variation on your estimates for nominal interest rate, insurance and closing costs that affect your APR on the loan, you will need an additional 3-day "disclosure" period before you can close.

4. Insurance Policies

During this period you will have to determine which insurance policies you will need/want and shop around to choose a carrier/agent. The types of insurance policies that you may need are:

Homeowner's (Hazard) Insurance
Wind & Hail Insurance
Flood + Excess Flood Insurance
Contents (Renters) Insurance to Supplement Insurance carried by your regime (in the case of a condominium)

Once you choose the agent/carrier(s), you will need your agent to send the "binders" and invoices to your closing attorney, to be paid out of closing. Check that your insurance is being paid for by the attorney by reviewing your HUD-1 statement. I have heard of instances where the binder was sent to the closing attorney but the invoice was not, so the premium did not get paid out of closing and the buyer was uninsured unknowingly!

5. Repairs

Unless the property is being offered "as-is", normally a seller has to provide a home that is broom-clean, free of leaks, structurally sound, and with safe and healthy plumbing and electrical systems.

After all the inspections are done, you and your REALTOR will sit down and produce a "Repair Adendum" listing the items that you want corrected or fixed before the closing (your "wish list"). Normally this lists exceeds the basic expectations and will lead to a second round of negotiations between sellers and buyers. Sellers sometimes offer the buyer compensation en lieu of actually doing the repairs. Once the repairs (or compensation) are agreed to, the seller will fix the agreed items prior to the closing...

Next: The Closing...

The A-Z of Buying a Home (Part 2 of 5)

Alan Donald (Keller Williams Realty) — Fri, 21 Aug 2009 09:45:47 -0500

The A-Z of Buying a Home (Part 2)

by Alan Donald, BuyHomesInCharleston.com

OK - so you've hired a REALTOR, discussed your needs and buying criteria and got preapproved by a lender. Now it's time to go see homes! Although it is a relatively small city, the Charleston Metro Area is very large, with hundreds of neighborhoods, areas and subdivisions each with a different style, construction, lot size and price point.

Step 4 - The Home Search

The home search is a collaborative effort between you and your REALTOR. If you are comfortable "sharing the news", make sure that you mention to everyone in your sphere of influence that you are looking to buy a home. It is impossible to know where your best option is going to come from - there are many sources of information at your disposal - including:

The Internet (Your REALTOR's website, the MLS, REALTOR.com, Craigslist, Facebook, etc.)
Your REALTOR
Driving Around Neighborhoods (Yard Signs on Listings, For Sale By Owner)
Friends/Colleagues/Family hearsay
Newspaper/Real Estate Magazines

In a "Buyer's Market" such as the one we experienced in 2008, there are so many "suitable choices" out there that your home search may become overwhelming UNLESS you have a system in place. I recommend that my clients use the "helicopter approach", starting from up above in the sky to the landing zone (from general to specific).

You should first try to narrow down your search (using your "Needs" and "Wants" criteria) to 2-3 general areas (for example "within JB Edwards Elementary or Mount Pleasant Academy school catchment areas") , then down to 2-4 neighborhoods within those areas (i.e. Old Village, I'On, Molasses Creek Plantation) and then down to specific sub-sections and maybe even streets you prefer. If you are able to do this, the process to choosing a specific home will be fairly simple.

Step 5 - Negotiating a Contract

You found a home you love! Now your REALTOR will help you structure an offer, looking at the listing history, the sales comparables in the area, and general market conditions. You will have to write a check for the EARNEST MONEY (normally 1% of the purchase price), and determine the TERMS of the contract (including but not limited to purchase price, closing date, conditions, contingencies and concessions). Your REALTOR will send the offer to the LISTING AGENT (who represents the Seller) and you will have to wait for a reply from the Seller. The offer can result in:

ACCEPTANCE: The Sellers accept your terms and conditions - once the contract is signed and delivered back to you, it becomes RATIFIED. Now it is ENFORCEABLE - both for the Seller's and for YOUR protection.
REJECTION: The Sellers reject your offer and accepts someone else's (typical in multiple contract situations).
COUNTER-OFFER: The Sellers acknowledge your offer but changes terms according to what they want. At this point you can either walk away (no expense, no responsibility), accept the Seller's counteroffer, or submit your own (second) counteroffer. This process can go on indefinitely until the "meeting of the minds" is attained. Sometimes it is just impossible and you may have to move on.

To negotiate a contract smartly, it is best to have the most information you can. Your REALTOR can many times get you:

Market comparables ("comps") showing how much similar homes in the area have sold for
How much did the Sellers pay for the home, when they purchased it, and what mortgages they have registered on it.
Other choices in the area of similar size, age, characteristics.
The Sellers' reason for selling, motivation and perceived urgency

Next - Part 3: The Buyer's Due Diligence Process

The A-Z Guide for Home Buyers (Part 1 of 5)

Alan Donald (Keller Williams Realty) — Sun, 02 Aug 2009 18:49:58 -0500

This guide for first-time home buyers is intended to provide general information to help buyers be aware of the buying process, and to dispel any myths about buying a home. Please discuss your particular situation with the appropriate professionals before making any decisions.

So, You want to Buy a Home?

Since buying a home is a BIG financial commitment, many first-home buyers (and some repeat buyers) feel very intimidated by the whole process, which, in itself is rather uncomplicated, but it involves a lot of small steps, that, if not done right, can produce expensive mistakes.

In my 12 years in Real Estate I have dealt with many types of buyers and different scenarios, so I have developed a "method" to reduce stress and ensure success. Here's a brief synopsis of my recommended "Buying Process".

STEP 1 - Hire a REALTOR to Represent You
In SC, buyers can hire their own Buyer's Agent, normally at no cost to them. Once you hire a REALTOR as your Buyer's Agent, this person has a FIDUCIARY responsibility to represent you and protect your best interests. Buying a home is a "joint project" between you and your REALTOR. Make sure you establish a mutually agreeable communication pattern and that you have clear expectations of each other's responsibilities.

STEP 2 - Show Me the Money
Whether you are single and about to buy a home on your own, or (even more so) a couple with kids, money is always one of the crucial factors to explore upfront. Ask yourself these questions:

What's the total monthly payment that you would feel comfortable with, without stretching your finances or cramping your style?
Do you have an "emergency fund" in case there's a hiccup (loss of income, emergency, etc.)?
How much money do you have to put down toward the purchase?

Now, it's time to get PRE-APPROVED. Contact a local lender and they will be able to walk you through an application. The lending officer will review your INCOME, EXPENSES, ASSETS and LIABILITIES, plus your CREDIT SCORE. Based on a formula that takes into consideration several factors, the lender will tell you HOW MUCH is the maximum purchase price and loan amount you can have, the amount you must have ready for your down payment and your estimated MONTHLY PAYMENT.

Ask for a written PRE-APPROVAL letter and how long it is valid for. Keep in mind that (especially in this market) such a letter is often required by Sellers, and will give more weight to any offer you make.

STEP 3 - Define Your Needs and Wants
Some buyers do not have a clear picture of what they want, and in a "buyer's market", where there are literally thousands of available homes, they can get confused and frustrated quite easily. I recommend that you write down your needs and wants, and rank them in priority, for example:

MY/OUR BUYING CRITERIA

NEED (must have): Min. 3-bedrooms, "excellent" rated schools, 2,000 sq. ft., under $200,000, within a 45-minute drive to/from work.
WANT (would like to have): Community pool, bonus (FROG) room, 2-car garage.

NOTE: If there is more than one decision maker, make sure you all agree on at least the NEEDS column. It is important that you share these criteria and priorities with your REALTOR, to help him/her give you better selection of properties and provide better advice.

Next: Part 2-Searching for a home and negotiating a contract....

Read more articles like this one at: BuyHomesInCharleston.com

Are Banks Socially Responsible?

Alan Donald (Keller Williams Realty) — Wed, 08 Jul 2009 16:47:55 -0500

On May 1st, Wells Fargo, one of the nation's largest mortgage lenders, decided to tighten its underwriting standards for 200 markets they considered as distressed or soft, requiring higher down payments and making state-income loans off limits in most of these markets. I believe this will cause other banks to follow suit (the bandwagon effect).

This is one more action that shows that the stimulus money provided by the Federal Government and intended to loosen up credit and provide funding to stabilize the real estate market is not working as intended. The government should have required the banks to lend this money out, instead of playing conservative and padding their balance sheets with it.

Regardless of what the government does, banks need to provide access to money to get the economy going. While tightening underwriting rules is a good long-term, safe strategy (which they should have done ten years ago - look at Canada!) their timing stinks and their strategy is not aligned with the consensus view that a real estate market recovery is the key to a swift economic recovery.

Fortunately, FHA-backed loans are providing some relief for lower-priced properties by guaranteeing mortgage loans of up to 97.5% of the purchase price. FHA loans went from "pariahs" to "superstars" in the last three years. Today, a big chunk of all the loans (that are actually closing) are FHA. Once again, it is the government who is taking the risk...

I hope that lenders understand that they also have a responsibility to loosen up their requirements in times of distress. I believe it is a measure of their corporate social responsibility commitment - the communities they operate in are also stakeholders, not only their shareholders. After all, it was their irresponsible behavior during the good times that got us in this mess.

Read more articles at www.BuyHomesInCharleston.com/blog.html

Tips for First-Time Home Buyers

Alan Donald (Keller Williams Realty) — Sun, 14 Jun 2009 12:50:08 -0500

As a first time home buyer, you need to maintain a balance between money and lifestyle in a way that makes sense for you and your family.

Buying a home comes with great benefits, but also with added responsibilities, one of the reasons many would-be first home buyers are very apprehensive and fearful of the process. They need not be. Although the process is not complex, it includes a myriad of steps that have to be done in the right order to avoid problems.

Hiring a REALTOR who can recommend the right team of inspectors, attorneys, lenders, surveyors, insurance agents, painters, handymen, etc. will save them lots of time and headaches.

I recommend to all my first-time home buyer clients that they follow a plan - like this one, for example:

Sit down (together with anyone involved in the decision-making process) and figure out your short, medium and long term objectives. What are your main reasons for buying? How long do you plan to stay there? How does buying a home fit in with the rest of your "life puzzle"?
Apply for a loan (make sure the loan officer checks all your documents) and get a pre-approval letter from a lender so that you know how much house you can comfortably afford. Make sure you can afford the estimated payment (i.e. no big payment shock!)
HIRE A REALTOR as your BUYER'S AGENT! It amazes me that someone who has never bought a home would feel OK about buying their biggest investment without getting professional help! In SC, hiring a REALTOR to represent you as a buyer is normally FREE OF CHARGE (the commission is paid for by the seller)
Establish your home search parameters (and share them with your Realtor!). Include: Location (the narrower the area, the better), price point, number of bedrooms/bathrooms/square feet, type of home, required condition, other features (like schools, fenced yard, pool, style, etc.)
Find the perfect home and (together with your Realtor) negotiate a favorable contract. Make sure the home, the neighborhood and the conditions contained in the contract fit your desires and objectives.
Stay actively involved during the due diligence (contract-to-closing) period, ask any questions you can think of (there are no silly questions!)
Make sure you provide any information/documents that your lender/insurance company/ attorney/Realtor asks for - without delay
Plan your move in advance. Connect utilities in your name as of the closing date
Ask the closing attorney how much you need to bring to the closing. Get a cashier's check or wire the money to the attorney. Review the closing statement (HUD-1) with your Realtor.
Attend the closing. Make sure all the terms of the sale and the loan(s) are what ou expected.
Change the address on your driver's licenses
Don't forget to apply for the Primary Residence Exemption - which will lower your property tax substantially!
Enjoy your home!

Read more articles like this one at www.BuyHomesInCharleston.com

REVERSE MORTGAGES - Now You Can Use Them to Purchase a Second Home

Alan Donald (Keller Williams Realty) — Thu, 05 Feb 2009 13:44:22 -0600

A REVERSE MORTGAGE (RM) is a type of home equity loan that allows you to borrow against your home while still keeping title to it. It may be an ideal tool if you are a "house-rich, cash-poor" retired person.

Similarly to a "normal" (or forward) mortgage, your home is used as the collateral for the lender, except that in an RM the lender pays you (and adds the payment or draw, plus interest) to your balance.

There are three types of reverse mortgages:

FHA-insured
Lender-insured and
Uninsured

Borrowers can elect to receive a combination of monthly payments, lump sum or a line of equity against which they can draw whenever they need the money.

The benefit of a reverse mortgage is that it allows homeowners (62 and over) to keep living in their homes while using their equity for whatever purpose they choose. Borrowers may need the money to cover health care costs, pay off an existing debt, or support children or grandchildren.

Recently, the government allowed reverse mortgages to be used to purchase second homes (as downpayment).

When the homeowner moves out or passes away, their loan becomes due and their estate must pay it in full (the estate can either refinance to a forward mortgage to keep the home, pay with cash, or sell the home to pay the loan).

To qualify for a reverse mortgage, borrowers must have substantial equity in their home. The eligible amount is generally based on age, the owners' equity in their home, and the prevailing interest rate for the program. Because homeowners keep the title to their home, they are responsible for taxes, repairs, and maintenance. A real benefit of reverse mortgages is that borrowers can live in their homes as long as they like, even after they have completely exhausted their equity. Borrowers must also keep the home insured, and in good repair.

Reverse mortgage payments are non-taxable, nor they affect Social Security payments. However, interest is not tax deductible until borrowers pay off the debt.

Using a reverse mortgage reduces the amount of the borrowers' estate for their heirs (they are using up their net worth)

Read more online at www.BuyHomesInCharleston.com

BEHIND IN MORTGAGE PAYMENTS? WHAT ARE YOUR OPTIONS?

Alan Donald (Keller Williams Realty) — Thu, 18 Dec 2008 10:25:49 -0600

ARE YOU BEHIND IN YOUR MORTGAGE PAYMENTS?
DO YOU NEED TO SELL YOUR HOME?
DO YOU OWE THE BANK MORE THAN YOU CAN GET FOR YOUR HOME?

What are your OPTIONS?

Many people are not aware that they have a few options to explore when they are facing these situations. Some people just give up and abandon the house for the bank to take it over. Before you do this, it is important to explore other options that may affect your credit and personal finances less than foreclosure.

The first thing you have to find out is who owns your loan note (it may be different from the lender who sold you the loan and/or different from the company who services the loan). Once you find out who is holding your loan, you may want to call their LOSS MITIGATION DEPARTMENT, which specializes in dealing with these matters.

Notes: I am assuming that when you took the loan you were properly informed of the conditions, and that your lender performed all required disclosures as required by the Truth In Lending Act (if you feel you were not informed properly, or believe there was fraud involved in your loan, you have legal recourses you can pursue). Also, some of these options may have tax implications for you. If the lender accepts a short sale, the amount of principal they "forgive" may be counted as income for your tax return. It is essential to consult with your CPA and attorney before taking final action.

Option 1: LOAN FORBEARANCE Depending on your circumstances, a "temporary fix" option you might wish to consider as a way to prevent foreclosure is mortgage forbearance. This option is commonly used for temporary financial hardship situations such as short periods of unemployment or poor health. Mortgage forbearance enables you to temporarily stop making your mortgage payments. However, interest on your loan continues to accumulate and is added to the remaining principal balance of the loan. You are generally also asked to sign a forbearance agreement that states when the lender will require you to pay the amount you owe. Once the forbearance period comes to an end, you are once again obliged to make full payments on your home loan.

Option 2: LOAN MODIFICATION If your mortgage interest has readjusted upward (as in an ARM) and you cannot afford the new payment, or you are having trouble paying your mortgage and you are in a high-interest loan and cannot refinance, your lender may consider changing the terms of your loan to help you. Some of the factors that your lender will consider are: Nature of the hardship that is causing your mortgage payment problems; the amount of equity you have in the property; your ability to pay the mortgage; the amount owed on the mortgage; and mainly, what is financially better for them - whether to foreclose or pursue a loan workout with you or modify your loan.

Option 3: DEED EN LIEU OF FORECLOSURE This option basically provides a "free out of jail card" for the homeowner, who agrees to give the property back to the lender if the lender agrees to forgive the debt that was secured with the real estate. Deed-en-lieu-of-foreclosure is only approved by lenders in certain hardship circumstances (conditions vary according to each lender). Both sides have to enter the transaction voluntarily and in good faith. The property needs to be transferred at a fair market value.

Option 4: SHORT SALE In a declining real estate market, it is quite common for homeowners to owe more on their home than what they can net from sale at a "fair market price", especially if they haven't lived long in their home. In many cases you can still sell your home, provided that the lender(s) and other lienholders approve a short sale, where they are paid less than they are owed. Any other liens affecting the property (including mechanics' liens, tax liens and any judgments against you, the owner) will have to be cleared to be able to "short-sell" the property.

Option 5: RE-FINANCE If you are in a situation where your loan is at a high interest rate, you may wish to consider re-financing (with the same or with a different lender) to lower your monthly payments. However, in the last two years the guidelines for re-financing have changed, making it impossible for some homeowners to re-finance their mortgage. The main recent changes affecting your ability to re-finance are: Declining home values; reduced loan-to-value and debt-to-income ratios; your payment capability and your credit score.

Option 6: FORECLOSURE Foreclosure is a legal process whereby the lender(s) exercise their right to take possession of your home and kick you out for not honoring your commitment to pay the loan(s). This is a slow process (in SC it can take from 6+ months) and it is expensive for the lender. It also affects the homeowner's credit substantially and for a long period of time. If you fail to pay your loan on time, you will first receive written notices that you are in default and warning you to pay or face foreclosure. After a few months (depending on the lender), they will issue a notice of their intention to foreclose. The case will be handed over to an attorney, who will file suit to foreclose and will file a lis pendens notice at the County Courthouse. Once the court rules the property will be sold to the highest bidder at public auction on the courthouse steps. If you are still living in the house, the new owner will file a motion to evict you.

Option 7: BANKRUPTCY In some particular cases, the only option that may make sense to you will be to file bankruptcy. The latest changes to the bankruptcy law make it a bit harder for some to file bankruptcy. Some filers with higher incomes won't be allowed to use Chapter 7, but will instead have to repay some of their debt under Chapter 13. You will have to get credit counseling before you can file a bankruptcy case. And, because the law imposes new requirements on lawyers, it may be tougher to find a bankruptcy attorney.

Alan Donald is a bilingual REALTOR^® with Keller Williams Realty in Charleston, SC.You can ask him questions by sending him an email to adonald@kwcharleston.com or by visiting his website at www.BuyHomesInCharleston.com .

Top Producer 8i Stinks!

Alan Donald (Keller Williams Realty) — Wed, 03 Dec 2008 13:24:04 -0600

I don't know if I'm alone, but about a year ago I decided to adopt Top Producer as my CRM solution. It is indeed a very comprehensive solution, with MANY great features (too many??).

Although I am not technologically challenged, it took me about six months to learn it (it's not that intuitive!). Finally, I was able to USE IT to develop my business and WHAM! they came up with 8i, the next version.

Normally, a new software release shares most of the navigation and user interface with the previous one. Top Producer decided to do a complete OVERHAUL, including changing EVERYTHING AROUND! Why didn't they keep the interface intact and change the back engine? (Likely Answer: Because it was probably re-designed by programmers, not by users...)

I have been struggling with 8i for a few months now. I do not like it! Although it is true that it is much faster than 7i (yeah!) , and IT DOESN'T NEED JAVA (double yeah!), it is confusing and not as user-friendly as 7i.

The contact notes are hard to read, the boolean searches are much more difficult... etc...etc. Do these people expect us to spend an enormous amount of time re-learning their software? I don't know about you guys/gals out there, but I barely have time to use it to generate leads, let alone re-learn their interface...

They say that Top Producer is trying to "phase out" 7i. I say they are going to find out that if they do, they will lose a substantial chunk of their existing clients (myself included). Anyone else shares my feelings?

Alan Donald, MBA, REALTOR, e-PRO
Keller Williams Realty
Charleston, SC
www.BuyHomesInCharleston.com

To Lock or to Float?

Alan Donald (Keller Williams Realty) — Thu, 27 Nov 2008 11:03:06 -0600

To Lock or To Float...?

It is very important for home buyers or for those who want to re-finance to be aware that in these volatile financial markets we are living in, interest rates on mortgages can fluctuate substantially in a matter of hours! I have heard many stories from mortgage lenders about how they were able to lock a fantastic interest rate for a loan using a 2-3 hour "window of opportunity" that disappeared afterward, or others that missed out because they floated the loan (to "float" means to let the interest rate fluctuate with the market). Understanding how "locking-in" a rate works may help you evaluate your options and could result in thousands of dollars in savings!

So, what is a "lock"? A lock is a GUARANTEE from a lender that if you close your loan within a stipulated time (usually 30 days), the note on your loan (i.e. the nominal interest rate) will be set at a specific interest rate.

When you ask a lender for a quote (also called a "Good Faith Estimate" or GFE), you can ask how long the rate is good for. Bear in mind that until you lock the interest rate, it can (and probably will) change. If you think you need more time to close the transaction, ask the lender for an adjusted rate quote. If you are afraid that interest rates may rise, lock your rate now (rate locks are recommended when interest rates are on the rise, to avoid ending up with higher monthly payment than anticipated). Floating the loan in a volatile market is a gamble - you may win if rates drop, but you may also lose if they go up.

What many people don't know is that long-term mortgage rates don't depend on the inter-bank rates set by the Federal Reserve Bank. This rate normally affects only short-term lending (such as credit cards, car loans, home equity lines, etc.). Long-term rates depend on the behavior of the financial (stock & bond) markets. Thus, if bonds are in high demand, mortgage rates drop.

Professional mortgage representatives are constantly checking the financial markets and related news releases to be able to predict future movements in interest rates. Ask your lender to keep an eye out for a favorable rate to lock in your loan! This is one of the reasons why it is very important to pick a very sharp and experienced mortgage representative (if you ever have the need for one, I can recommend several...)

Commercial Real Estate Also Going South?

Alan Donald (Keller Williams Realty) — Sat, 22 Nov 2008 17:12:25 -0600

Today I was reading an NAR update on Commercial Real Estate (CRE) - it seems that CRE is following the path that Residential Real Estate took two years ago!

Donald Trump just asked for more time to pay his $770 million in construction loans on his Chicago Tower. Many commercial builders may not be able to make their mortgage payments if absorption slows down vis-a-vis their business plans.

When the economy slows down = fewer jobs = less need for space. To add insult to injury, we'll see many banks suffering from defaults in their commercial loan portfolio next year...

Unfortunately I don't think this is going to help residential real estate either. Banks are going to feel weaker and lending is going to be very restrictive in 2009.

What's Happening With Mortgages?

Alan Donald (Keller Williams Realty) — Fri, 19 Sep 2008 15:15:50 -0500

WHAT'S HAPPENING TO THE MORTGAGE MARKETS? (Sept. 18, 2008)

On the positive side, Freddie Mac reported that 30-year fixed rate mortgages fell this week for the 5^th consecutive week. According to the Mortgage Bankers Association (MBA), lenders saw a 58 % surge in mortgage applications since August 15^th, led by a 122 % surge in re-financing applications. Fixed-rate mortgages are currently the predominant choice (95 % of all new applications) among home buyers. Applications for adjustable rate mortgages (ARMs) have fallen by almost 50 % since the end of last year.

After the government takeover of Freddie and Fannie last week, rates came down substantially (by almost 1%). We are now experiencing very low 30-yr rates (similar to 4 years ago). Definitely a great relief for potential buyers, and a great opportunity for refinancing higher interest loans.

On the other hand, there are a multitude of negative factors affecting the eligibility of buyers to get a loan. The Downpayment Assistance Programs (DAPs), that allowed 100% financing, are disappearing as of October 1^st. Mortgage insurance rates are going to be drive (upward, I imagine) by credit scores. And lender underwriters went from one extreme (you just had to fog a mirror to get 100% financing three years ago), to the other (demanding an overwhelming amount of information and questioning issues that verge on the ridiculous for event low LTV loans).

So, on one hand we have great interest rates that should drive demand for housing up. On the other hand, it is difficult to qualify for those loans.

Where are we going? This is my crystal ball: I believe lenders will finally realize that they are in the business of lending money, not just in the business of avoiding losses. If they make it very difficult for buyers, their lending business will die. So they will probably start to relax their guidelines and requirements a little next year. I also believe that inflationary pressures are evident, and when inflation goes up, it affects negatively the stock and the bond markets, so I believe we'll see mortgage rates creeping back up after the presidential election.

The next six months will be a great window of opportunity for buyers and investors who wish to buy inexpensive properties and get low interest rates. Beyond six months, it is hard to say... In the long term (4+ years), I believe real estate will prove that it is still one of the best and most stable investments around (look at the S&P 500 roller-coaster this week!)

Housing and Economic Act of 2008 - Mixed Blessings!

Alan Donald (Keller Williams Realty) — Tue, 16 Sep 2008 13:47:46 -0500

Although it has been heralded as a piece of "life-saving" legislation for the housing market, The Housing and Economic Recovery Act of 2008 that will kick in on October 1st contains some important provisions that will affect our industry adversely:

It eliminates DAP (downpayment assistance programs) that allowed buyers to borrow 100% of the purchase price. While this makes sense from a risk-based analysis point of view (these types of loans defaulted at a much higher rate than loans where the buyer actually puts in a downpayment out of their own money) it does not stimulate the housing industry, restricting first-home buyers, who are the ones supportuing the whole housing "food chain". No one disputes that homeowners have more to lose if they have a downpayment, so maybe they will "try harder" to make ends meet when the going gets tough. But a responsible, stable income buyer will be a better credit risk than an irresponsible buyer with a downpayment.

Comment: I believe that this provision will affect the demand from first-home buyers substantially. In this economic climate it is very difficult for a person with moderate to low income to save any substantial amount for a downpayment. A more equitable and fair way of determining default risk and access to use these types of programs would be by looking at the buyer's ability to pay (income & employment history) and financial responsibility track record (i.e. credit scores).
It amends Section 121 of the Internal Revenue Code (which is the exclusion that allows homeowners to sell their qualifying primary residence and exclude up to $250,000 ($500,000 for a couple) of capital gain from capital gains tax. Many savvy investors were combining this exclusion with the 1031 exchange provisions to build up equity via several 1031 exchange transactions, and then convert this investment property to a primary residence to take advantage of the capital gain break. With this amendment, Section 121 no longer permits homeowners to take advantage of the full tax-free exclusion on the sale of a home that was their primary residence if there was a non-qualified use of the property (i.e. investment) prior to being held as primary residence.

Comment: I believe this amendment is just closing a loophole that only savvy investors with high net worth were using, so I am OK with it. However, it will restrict the demand for investment property transacted with investors looking to maximize their tax-free equity, and the sale of homes via 1031 exchanges.
It provides up to $7,500 in tax credits for first home buyers (or individuals who have not owned a home in the last 3 years). While this is being publicized as a "great thing" for our industry, this amount is only an interest-free loan for a 15-year period.

My opinion: People with irresponsible credit behavior will be lured into home ownership by the shine of this tax credit (we are already seeing many volume builders advertising this credit) , will spend the $7,500 on consumer goods when they receive it, and increase their indebtness to the point of default. I believe it is our duty as REALTORS to point out to our clients that they will have to pay this amount back, and strongly suggest that they use the $7,500 instead to pay off high interest credit lines, or principal off their mortgage to shorten the life of the loan, build equity and have some forced savings.

Natural Disasters - Emergency Preparedness

Alan Donald (Keller Williams Realty) — Thu, 04 Sep 2008 16:05:01 -0500

NATURAL DISASTERS

Every now and then nature reminds us that we are small and cannot control everything about our planet.

We used to live in San Francisco, CA, where everyone is very aware of earthquake and forest fires. Although here in Charleston we are also located on top of a fault line, no one seems to worry about earthquakes, maybe because the last major quake happened in 1886 (although in 1995 there was a minor one). Here, hurricanes are THE big deal.

Every year, from May to November, the "Hurricane Season Soap" keeps us glued to the TV set and frazzled! Here it comes! It's going to be a direct hit! It turned toward Florida! It's turning again toward us! Now it IS coming! It's a Category 1, 2, 3...Will we have to evacuate? Do we have to cover the windows with plywood?

I find that native Charlestonians don't worry too much about a hurricane until they are sure the danger is imminent. However, for those of us who are not used to living on this area of the country, Hurricane Season is a stressful time...

Mind you, I think hurricanes are better than earthquakes: At least you can anticipate them and prepare for them. And it is always better to be prepared than taken by surprise. Here are some preparation guidelines that may be useful to you:

Clean debris and leaves from your roof, gutters, yard and street drainages. Nail and seal loose shingles and caulk all windows, doors and siding to prevent flooding and water penetration. Remember that your homeowners insurance policy does not cover flood damages (did you remember to buy flood insurance?)
Trim all bushes and trees that are close to your house to prevent damage from abrasion. Look carefully at all your trees, cut dry-loose limbs. If a tree doesn't look healthy it is best to cut it down (remember you may need a permit from the city/county to cut a tree of a certain size)
Bring inside all objects that could move with strong winds: Planters, bicycles, chairs, tables, BBQ, trampolines, etc. Park your car in the garage.
Prepare for the possibility of a heavy tropical storm or a mandatory evacuation. Prepare all your important documents and store them in a waterproof container, including your insurance policies for your home. Take some cash out of the bank in case ATMs are out of service. Buy enough non-perishable food and water to last 3 or 4 days. Have enough flashlights, batteries gas stoves and a radio to be able to survive without electricity.
Have an emergency plan in case of a mandatory evacuation. Where are you going? Which way are you taking? Try to avoid leaving at the last minute, together with 90% of the city.

Let's hope that no hurricane heads our way, but in case it does, it is better to be prepared! Here are some online resources that can help you get prepared:

Hurricane/Weather Information:

http://www.wunderground.com/ or http://www.noaawatch.gov/themes/tropical.php

The Red Cross:

http://www.redcross.org/services/prepare/0,1082,0_253_,00.html

Charleston County Emergency Preparedness:

http://www.redcross.org/services/prepare/0,1082,0_253_,00.html

Preparing Your Boat for a Hurricane:

http://www.boatus.com/hurricanes/

Kids Hurricane Information:

http://www.fema.gov/kids/

Alan Donald is a bilingual Realtor^® with Keller Williams Realty. You can visit his website BuyHomesInCharleston.com or ask him questions by email at adonald@kwcharleston.com or by leaving a voice mail at (843) 416-1434.

New Fed rules miss one key lending abuse

Alan Donald (Keller Williams Realty) — Sun, 27 Jul 2008 06:07:57 -0500

This is amazing!

The FEDs require full disclosure and fiduciary responsibility for any money-related transaction with clients EXCEPT in the case of mortgage brokers.

They are not required to disclose UPFRONT how much they are making on the YIELD SPREAD PREMIUM, a payment made to the loan originator which normally just gets buried as a footnote in the HUD statement. And loan officers employed by lending institutions are not required to disclose it at all!

This has allowed unscrupulous mortgage brokers and lenders to steer unsuspecting borrowers into more expensive loans, to earn a larger commission on the loan, beyond what a 'reasonable" commission should be.

According to CNNMoney.com. the new Federal Reserve's lending rules released last week do nothing to stop this practice! They dropped their proposed ruling on yield spread because they feared "people would be confused by it" and disclosing broker fees upfront would cause borrowers to think it would be cheaper to go directly to the lenders (which is not the case usually). It seems to me like a case of heavy lobbying on behalf of the associations of mortgage brokers.

As REALTORS, we owe a fiduciary responsibility to our clients to act in their best interest. We should be involved in the loan application process to make sure our clients are not abused.

The problem is that not every client wants our help in this regard. I recently had a client who was charged outrageous fees in yield spread, from a mortgage broker "friend" (what a friend!) and when I questioned the charges, my client got upset with ME for questioning the integrity of his friend! Talk about absurdity!

Why don't they require the same fiduciary responsibility from lenders and mortgage originators that they require from REALTORS?

HOW DO YOU DEFINE QUALITY SERVICE?

Alan Donald (Keller Williams Realty) — Sat, 19 Jul 2008 16:43:48 -0500

HOW DO YOU DEFINE QUALITY SERVICE?

For every business (especially for those of us in professional services) client satisfaction guarantees future success. Happy clients bring more clients, and a great reputation in the marketplace (especially in a small market like Charleston’s) is a very desirable asset.

It is essential to have business strategies and practices that result in repeat business and word-of-mouth referrals from our client base.

So, how does one make sure that clients are happy? Obviously, we need to provide them with “outstanding service”. The problem is that not everyone is on the same page when it comes to defining “outstanding service”.

In order to avoid disappointing clients, I recommend following these guidelines:

Clarify mutual expectations from the beginning. Ask your clients what they expect from your service, as well as letting them know what you expect from them. This way everyone will know what to expect, and you can EXCEED your clients’ expectations.
Educate your clients. Explain the whole process from A to Z and identify the most common potential problems, so that they don’t get surprised if they happen.
Keep in constant communication. The worst you can do when there is a problem is to avoid communicating with your clients, thinking the problem may just go away, or that you may be able to solve it without their involvement. It is much better to let them know what the problem is, why it is happening, and how you are working to resolve it. ALWAYS return calls and emails promptly.
Assume responsibility. If there is an unforeseen event that affects the process, assume responsibility (even if it is someone else’s fault) and try to provide proactive solutions.
Be honest. Your clients will appreciate your honesty, even if the news that you bring are not favorable to them.
Show genuine interest in your clients. Give them personalized attention and be sensitive to their personal situations.

This will set you apart from other service providers and will provide the “personal touch” that will remain in your clients’ minds looking forward. You want to be their "top-of-mind" provider for your field, and having a great reputation only enhances your chances for repeat business and referrals!

MAKING "LOWBALL" OFFERS WITHOUT OFFENDING SELLERS

Alan Donald (Keller Williams Realty) — Wed, 16 Jul 2008 12:39:51 -0500

In the last two years, the housing market in the Charleston area has changed from being a “seller’s market” where sellers had the upper hand and buyers had to dance to their tune, to a “buyer’s market” where roles are reversed and buyers now have the advantage.

The housing market is affected both by the real numbers (supply and demand), and by the PERCEPTION of the market created by the media.

It is true that we have much higher inventory today that we had in mid-2006. But on the other hand, demand has not collapsed like it has in California, Nevada and Florida, we are still selling homes at a pace comparable to 2003, which was not a bad year!

So, why are we complaining about our housing market? I believe that the media has chosen to publish only sensational headlines (in this case bad news). Here’s an example: A colleague of mine was recently interviewed for a newspaper article about the housing market. But, because his outlook for the market was positive, he was not even mentioned in the article!

So we have a real disconnect in this market: On the one hand we have the sellers, with their inflated idea of what their home was worth in 2005 - when the media articles were all bullish and full of adrenaline and greed; and on the other hand we have the buyers, who are permanently reading negative “doom & gloom” articles and believe that they can buy any property for half the price!

In Charleston it is true that in some areas priced have dropped, but prices have kept constant in other areas. Some areas have more than 2 years’ inventory, while others only have three or four months. In my opinion, it is not wise to apply a “national average” situation to all submarkets without doing a proper analysis.

When a buyer tries to make a “lowball” offer to purchase a property, he/she runs the risk of offending the seller and breaking the negotiation (I am basing this analysis on the assumption that both the seller and the buyer want to make this happen!).

To increase the odds of ending in a successful transaction, I recommend to look at:

Sellers’ Motivation: How motivated are the sellers? Are they in a financial crisis? Are they selling because of a catastrophic event (divorce, death, layoff)? Did they purchase another house and already closed on it? Or do they need to sell this one to close on the new one? Is this a short sale? Or a bank-owned (REO) property? (Note: Banks don't tend to get offended when they receive lowball offers!)
History of the Listing: How long has it been on the market? Have they lowered their price? Has it been under contract before and failed? Have the Sellers changed their listing agent?
Debt: How much does the seller owe the banks? (many sellers refinanced their debt on the home and spent their gains “in advance” of a sale, so they have no room to negotiate on price).
Willingness: Are both parties showing patience and good will to work together to arrive to a mutually satisfactory solution? (in this market it is very common to have several counteroffers and extended negotiations before an agreement is reached)

Conclusion:

Buyers: You can get great deals, but to increase your likelihood of success you must try to learn about the sellers’ circumstances and try to justify your offer with facts and figures to avoid offending the sellers and to increase the likelihood of getting a positive reaction to your offer (or at least a counter-offer). This implies you must do your homework first!

Sellers: In a static or declining market you must pay attention to ANY offer you get. Do not get offended by an aggressive lowball offer – make them a counter-offer! Keep negotiating and communicating with the buyer. Make a few initial concessions to show your good will. Remember: “A bird in the hand is worth more than two in the bush!”

INSURANCE 101

Alan Donald (Keller Williams Realty) — Wed, 16 Jul 2008 12:15:36 -0500

INSURANCE AND ITS ROLE IN HOME OWNERSHIP

Buying insurance makes gives you mixed feelings – one hopes to never have to use it, but will be very glad when you have to! Insurance policies protect the user against different kinds of risk inherent to home ownership. Here are some types of insurance and their differences:

Homeoners (or Hazard) Insurance. This is the most common type of insurance, which protects homeowners against partial or total loss in case of events such as fire, earthquake, hurricane, theft, liability and loss of personal property. This policy generally covers only the replacement value for the structure of the home (given that land is not insurable), plus the cost of replacing the lost contents. It is important to update the replacement cost for the structure from time to time, especially if construction costs rise. This policy is purchased annually – generally the bank pays for it at the beginning of the year and charges the owner 1/12 of its estimated cost as part of the escrow funds charged with the mortgage payment.
Wind & Hail Insurance: Supplements the homeowners policy in case that it does not cover wind and hail. This coverage must be purchased separately (the bank will require it) if the home is in the designated “wind pool” areas. It is purchased annually and it does not cover damages by flooding.
Flood Insurance: Covers damage by floods, tidal waves, etc. It is supplied by the federal government through FEMA and covers the first $250,000 of value of the home. Supplemental flood insurance can be purchased separately. It is purchased annually and it is required by lenders if the home is in a “flood zone”.
Title Insurance: It is purchased once (at closing) and covers the homeowners against claims against the title of the property or boundary defects, liens or judgments that were not discovered by the title search or were not properly recorded at the time of closing.
Home Warranty: This is an optional policy that protects the homeowners against failure of the mechanical systems of the home: Heating and air conditioning, stove, oven, microwave, washer, dryer, dishwasher, ceiling fans, etc. It is purchased annually.

HOW DO YOU DEFINE QUALITY SERVICE?

Alan Donald (Keller Williams Realty) — Mon, 23 Jun 2008 10:26:30 -0500

HOW DO YOU DEFINE QUALITY SERVICE?

For every business (especially for those of us in professional services) client satisfaction guarantees future success.

Happy clients bring more clients, and a great reputation in the marketplace (especially in a small market like Charleston's) is a very desirable asset. It is essential to have business strategies and practices that result in repeat business and word-of-mouth referrals from our client base.

So, how does one make sure that clients are happy? Obviously, we need to provide them with "outstanding service". The problem is that not everyone is on the same page when it comes to defining "outstanding service". In order to avoid disappointing clients, I recommend following these guidelines:

Clarify mutual expectations from the beginning. Ask your clients what they expect from your service, as well as letting them know what you expect from them. This way everyone will know what to expect, and you can EXCEED your clients' expectations.
Educate your clients. Explain the whole process from A to Z and identify the most common potential problems, so that they don't get surprised if they happen.
Keep in constant communication. The worst you can do when there is a problem is to avoid communicating with your clients, thinking the problem may just go away, or that you may be able to solve it without their involvement. It is much better to let them know what the problem is, why it is happening, and how you are working to resolve it.
Assume responsibility. If there is an unforeseen event that affects the process, assume responsibility (even if it is someone else's fault) and try to provide proactive solutions.
Be honest. Your clients will appreciate your honesty, even if the news that you bring are not favorable to them.
Show genuine interest for your clients. Give them personalized attention and be sensitive to their personal situation. This will set you apart from other service providers and will provide the "personal touch" that will remain in your clients' memories looking forward.

Are the Mt Pleasant/Daniel Is. markets the "California" for the Charleston Metro Area?

Alan Donald (Keller Williams Realty) — Fri, 28 Sep 2007 17:30:55 -0500

While analyzing different (residential single family) sub-markets, vis-a-vis the whole Charleston Metro market, it appears that the Daniel Island and Mt Pleasant markets act as "trend precursors" to the rest of the market area: They boomed earlier and faster, they slowed down before the rest of the market, and it appears like they are poised to recover while the rest of the market is still slowing down.

Maybe these high appreciation markets act as the leading indicators of the trends in the rest of the market, much like California starts most trends in the U.S.? If so, watching these markets could give savvy investors a leg up over the competition to judge future shifts in the real estate market for other areas of Charleston...

Alan Donald
Keller Williams Realty