Jim's Real Estate Blog

Is That A Month?

2007-11-19T15:35:08Z

The robust and growing job market in the Charleston, South Carolina area continues to draw people from across the nation. A "skilled" worker who recently relocated to the area from northern New Hampshire more than doubled his salary along with a corresponding improvement in their standard of living. Another family, who moved from Northern Virginia, remarked that their combined property taxes, homeowners insurance including hazard, flood and wind, are less than just the cost for property taxes in Virginia! I can go on with other specific examples such as these but will share instead the general question that I get from many clients when I first speak with them about what to expect regarding the dreaded property taxes. When I answer their question as to what they should expect to pay in property taxes on their new home, they then ask me, "is that a month?"Anyone who is relocating to this area from the Northeast, as well as other parts of the country, is paying outrageous amounts in taxes. And I always chuckle when I get that question, and do get it often.

But the theme of this Blog is not taxes in its entirety, but another slant on the "terrible" real estate market that the local and national news media fling at us almost daily. Yes, there are problems in the real estate market and decidedly so in some areas. But here in the Tri-County area of Charleston, South Carolina, which is a definite "Buyers Market", we are still selling homes and buyers are still buying.

Those who read this point of view and know how drastically the taxes on an owner occupied home have been reduced as of this year know first hand the point I am making. Our already low property taxes on owner occupied homes, especially compared to other regions, have been reduced by as much as 48% to some, albeit not as much in some Counties. The State of South Carolina has shifted the burdensome public school portion of property taxes away from homeowners and have added one cent to the state sales tax.

Mortgage rates are still the lowest that they have been in years. Mortgages are still readily available for those with good credit and, the new homebuilders, intent on reducing inventory are offering great incentives for homebuyers. Homes that are priced right, are in the right condition, are accessible for showings and, are getting the proper exposure are selling. So if you ask me how the Real Estate business is, my answer is "absolutely wonderful!"

Like Politics, All Real Estate is Local

2007-11-13T08:41:17Z

Day after day, night after night, the local papers, local TV news and national news herald the death knell of the real estate market. And unfortunately, most folks believe that real estate has gone to hell in a hand basket. The only good that I see in the media's trumping of the doomsday stories is that part time real estate agents and those that shouldn't be in the business to begin with, believe it and are starting to drop out, one by one.
As Tip O'Neil, the often quoted Politician from Massachusetts once quipped, "all politics is local", and so true is the real estate market.
While there absolutely are areas with price erosion, stagnant markets and such, I have long felt I was a strident voice in the wilderness preaching that "business is great, homes are selling, and mortgages are readily available." Sure it is a buyers market with many choices from which to pick. And that's great for buyers! But homes that are priced right, are easily accessible for showings, are in the right condition and, get the proper exposure will sell handily. My business, and that of colleagues in my office can attest to that fact.
In the Charleston, SC Tri-County areas we are experiencing robust job growth, which not only enhances the earning power of those who currently live here, but also is drawing people here from other regions. Retirees continue to flow to the area due to the "livability" of the region as well. Most of them will be buying and selling homes. Damning statistics from the news media hammer doom and gloom on a daily basis, enough so that people believe it. Unless of course, you are like the Pharmacist at Walgreen's who told me that her home sold in 34 days, or two clients of mine whose homes sold in 10 days and 4 days respectively.
And finally, a 218 word article, (yes I counted), tucked into Monday's local paper Business Review section on page 6E, sported a headline that read, "Charleston homes market faring OK". I won't give a word by word description but here are some notable quotes; " . . .Charleston as a new-home market that has fared better than other cities." And, "It's definitely one of our top-performing divisions. Even in a down market, we're not that far off of our peak time in Charleston."
Then again, in today's edition of the same newspaper the lead story in the business section was "Local Home Sales Drop Again". Within that article was in interesting point that I feel buoys my optimistic outlook. It reads, "Even so, the median sales price for the region has not fallen to reflect the discounts or other breaks that buyers are getting. For October, it rose slightly, less than 1 percent, to $208,705."
So there you have it. Real Estate stinks, or it doesn't! In my world, business is great.

Sequel to The Fallacy of a Signed Lender Verification Form

2007-09-21T10:53:15Z

You may have read my previous rant about what Bank of America did to a Buyer Client. Here is an update, which casts more aspersions on BOA. I learned through a colleague who has a solid contact at the Bank of America who advised me that on Friday 9/14/07, BOA discontinued all first time homebuyer programs. My client, scheduled to close the afternoon of 9/14/07 had in hand a fully completed Lender Verification Form confirming there were no issues. The underwriter signed this form.

The day before closing, Bank of America asked my Buyer to provide them with a copy of the $1,000.00 earnest money deposit check to show that it had cleared. I have never heard of any lender asking for such a thing. Have any of you? Then on the day of closing, the Bank of American began to ask for a multitude of documents, statements and so on which went on throughout the day and subsequently made it impossible for us to close that day. We then, with the blessing and knowledge of Bank of America, moved the closing to the following Monday. Monday came and the same delaying tactics by the Bank of America followed. It was on or about 3 PM, with us facing a 4 PM closing time, that Bank of America informed this buyer that they were declining them for this mortgage. They gave as the reason for declining the mortgage that after grossing up a $1,200.00 per month Social Security stipend, that this buyer now exceeded the limit for the first time home buyer program and was not eligible for any other program that the Bank of America had to offer.

Looking back on this debacle, in my opinion, Bank of America began a deliberate process of finding a way to decline this client regardless of the fact that they had approved the funding for the mortgage several weeks prior. Way to go Bank of America!

The Fallacy of a Signed Lender Verification Form

2007-09-18T09:13:34Z

When is a fully completed and signed lender verification form, stating that a buyers credit, income and employment has been verified and that there are no contingencies other that those addressed in a contract totally worthless? The short answer is when the lender verification is from a large bank or mortgage broker.

Forgive me if I come across jaded but here is the background on why I make this statement. My very first closing, which now seems to be eons ago, was with a buyer who had been "pre-approved" by a mortgage broker. The pre-approval letter had more holes in it than Swiss cheese and I discussed this with the broker who then completed my form, which closed those gaps. Nonetheless, the day of closing came and went and we spent the next week jumping through hoops. A week late we closed. That set me up to be very leery of anything that is not signed by an underwriter.

Fast forward to the current dilemma. A buyer client had a pre-approval from Bank of America with a stated dollar amount for a mortgage. The Assistant Vice President who signed this letter also completed for me a Lender Verification Form which again, specifically stated that this borrowers credit has been checked, income and employment confirmed, all with no issues. On the day of closing, this past Friday, suddenly there were unexplained issues. The closing of course did not happen and was rescheduled for the following Monday, yesterday. All through the day something else popped up but during the entire debacle, said Assistant Vice President continued to stall with no clear answer. Finally, late in the day the call came that this client was being declined. The reason? Part of her income was $1,200.00 per month from Social Security because the buyer cared for her disabled brother. Said amount was net. The good folks at Bank of America ultimately determined that this amount has to be grossed up, (somewhere around $300) and therefore put the buyer over the limit for income for this "first time home buyer" program. Bottom line, the buyer was declined, went through a weekend of frustration and anguish.

So when is a fully completed and signed lender verification form valid? Perhaps when it is completed by an underwriter who is local and not in some regional office cloaked in anonymity, or perhaps more importantly, when the deal actually closes.

I also subsequently learned about three additional deals involving Bank of America that failed to close. So maybe there is a pattern here.
Does anyone have any thoughts on this subject?