Charlotte North Carolina Real Estate Blog

Is it time to put an end or limit the Section 8 housing voucher program?

2008-08-16T04:54:51Z

Today, I received an email that one of my listings in north Charlotte had been further vandalized. This property has seen better days for sure. Before I took over, it had been a section 8 rental property and unfortunately, not cared for in the least bit. When I initially took on the listing, I researched what the county had on file for the home and at that point, I knew I was in for a few more headaches and hassles than normal. Upon arriving at the property for the first time, what I discovered caused my heart to sink to the floor.

To say that there wasn't a pride of ownership would be an understatement. The tenants had a dog they left tied up outside however it was in the house at some point, left locked in the garage and laundry room to relieve itself. The carpets were beyond filthy, the vinyl flooring had been damaged. A small fire had been started on the stove. The home was painted top to bottom...and I mean they painted everything (trim, walls, ceilings) without drop cloths or a second coat. The upstairs bedroom doors were dead bolted shut and a few doors had their frames kicked in. In one of the rooms, they did have a stack of cable boxes.

Now, I would certainly not want to paint all of the section 8 recipients as being like the tenants that lived here by a long shot so please do not misunderstand this article. I think that most at least intend to do well, better themselves, and demonstrate pride in ones home. However, some others simply do not.

The section 8 voucher program was developed during the Great Depression to help provide housing for low income households. Many receive other forms of government assistance as well. No one wants to see a family living on the streets or in a shelter so in that respect it is a very noble program. The aid money can be used to live in government housing or can take their voucher and rent from a private landlord. Some private landlords like it because the government is never late on paying rent and they'll rarely have a vacancy.

So in essence, you have a tenant paying reduced or nothing to live in a private home and a landlord paid by the government - what could go wrong?

Unfortunately, the culture has gone wrong. I grew up in a single family household. My parents divorced when I was in elementary school and like many in a divorce situation, my father thought divorce from my mother meant a release from his other responsibilities too. My mother worked extremely hard to provide for our family and some months, the Lord kicked in. She made too much money for any government assistance but that doesn't mean we were living high on the hog. Instead, my mom worked the night shift at times to earn extra income, took over time, cashed in vacation days - whatever necessary to keep us a float. Now, being a parent myself, I now fully appreciate her sacrifice. We certainly didn't live in a 4 bedroom single family home but at times a 2 bedroom townhome where she shared a room with my older sister. Then another older townhome in need of serious repair. Finally, she saved and purchased a little townhouse that we called home for many years to follow.

If my mother wanted to, she could have given up and let the government and state provide for our family but she didn't. Instead, we had cars paid for with cash, clothes that were outdated and didn't fit, and certainly didn't have cable tv. Yet, while we struggled, we never once bashed holes in walls, left car parts in the yard or lived the way in which the former tenants in my listing did.

So when I arrived today at my listing, I discovered that some neighborhood children had broken every window out of the house. The home in situated in such a way that at least 10 other homes must have seen what was happening and yet did nothing. This is also a neighborhood with a large number of rental homes and because of the price point, are popular with section 8. Additionally, the homeowners in the community have witnessed a few of their neighbors foreclosed upon for non-payment of their mortgage. Pride of ownership and pride in the community is pretty low.

So maybe it's time the section 8 program is dialed back to those who truly need it. To me, you're not truly in need if you have multiple color tv's with cable. Maybe the approach should be, as it was originally intended, to act as a helping hand and not a permanent crutch? I would think more people would take ownership of their lifestyles and pride in what they were paying for.

It just seems to me that if my mother could do it against all odds and health obstacles (in dialysis at one point), almost anyone can. Moreover, if more people took pride in their home the way my mother taught me, I wouldn't have a house of shattered windows without any witnesses.

July 2008 Housing Market Update for East Charlotte North Carolina (Area 2)

2008-08-13T15:01:54Z

Charlotte North Carolina Market Update for:

Single Family Homes in Mecklenburg County North Carolina Area 2 including:

Charlotte Neighborhoods East of N. Tryon Street and North of Albermarle Road (24/27) including the neighborhoods of Plaza Midwood, NoDa (The Arts District), Belmont, McCarron, Old Stone Crossing, Buckleigh.

Data gathered for July 1, 2008 - July 31, 2008

In July, 321 new single family listings were added to the market, which is down from the 386 home added the year prior. As of the date of this blog, the total number of single family homes in area 2 is 1,139.

July saw a 27% decrease year over year in the number of homes placed under contract. In July 2006, 233 homes were placed under contract and in July 2007, the number of pendings dropped slightly to 231. In 2008, only 168 homes were placed under contract.

In July 2008, 123 homes were sold, down 37% from the year prior.

In July, sellers received 97.8% of their asking price. The July prior, sellers received only slightly more: 97.89%. In July 2006, sellers received 98.04%.

The average days on market increased from 65 in July 2007 to 89 in July 2008.

The average sold price for homes in area 2 decreased .022% in July 2008 to $163,665.

Holding Steady

A year after the first round of mortgage bank collapses and inspite of a large number of foreclosures in some east Charlotte neighborhoods, average prices are holding close to their 2007 highs. In addition to prices holding steady, sellers are receiving close to what they were the year prior, which is another bright spot. The concerns in area 2 are much the same as they are throughout the Charlotte area. Higher inventories have placed pressure on prices, holding them steady year-over-year.

A suprisingly good report for area 2 - not great but good. In the coming months, I would expect the new inventory levels seasonally adjust, leaving fewer homes for buyers. Unlike last fall where the mortgage markets were in a total mess, this fall should fare considerably better than last, inspite of the elimination of 3rd party down payment assistance programs.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Keller Williams Realty is sending my son to college

2008-08-12T09:42:40Z

I have to admit that paying for my son's college is a bit scary. Sure, I may have some time before he's ready to start the college tours but thinking that the day will never come is a sure fire way to strattle him with student loans. Being on that road ourselves with a Corvette's worth of loans still outstanding, there's no way that we're going to repeat this with him. So our plan is to let Keller Williams Realty pay for our son's college.

A few month's back, my wife and I were driving along and she tossed out the idea of re-directing our company's profit share money into our son's savings account. For the past five years, our profit share funds have been funnelled into our normal checking account for use in our day-to-day lives. It never was purposed for anything and we never tracked it until tax time. Now, our profit share money has a purpose.

In September, I'm back to paying company dollar and like always, my goal is to cap as quickly as possible. Since my wife is my sponsor, she is the direct benefit of any profit share generated by me. As for me, I've never been one to go out and actively bring people into the company but I have a feeling that's going to change. After all, Harvard is pretty expensive.

Another cool thing about the Keller Williams Realty profit share program is that should we leave for any reason, Micah's college fund will not stop growing. In fact, we have an agent who made $3,000 last year and he works at a competitor company. I'm sure he's laughing his way to the bank every month that we're profitable and the people he brought into the company remain and are productive.

So I'll let you know how it goes and we continue to grow towards Micah's college fund. I may have 17 years to go before he's heading out the door but when that time comes, we hope to be sending him without incurring any additional debt.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

July 2008 Housing Market Update for North Charlotte, Cornelius, Davidson, and Hunterville North Carolina (Area 1)

2008-08-11T15:25:44Z

Charlotte North Carolina Market Update for:

Single Family Homes in Mecklenburg County North Carolina Area 1 including:

Charlotte, Cornelius, Davidson, and Huntersville Neighborhoods East of I-77, North of N. Tryon Street, West of Cabarrus County, and South of Iredell County including the neighborhoods of Highland Creek, Vermillion, Heritage Green, River Run, Skybrook, Northstone, Cambridge Grove, and others.

Data gathered for July 1, 2008 - July 31, 2008

In July, 417 new single family detached homes were added to the available for-sale inventory in North Mecklenburg Area 1. This is a 11% decrease in new single family listings when compared to the same period a year ago. Not July 2005 saw fewer new listings with 400.

Only 203 single family detached listings were placed under contract in North Mecklenburg Area 1 during July. This was a 31% decrease in the number of homes placed under contract in July 2007 and 13% fewer than in June 2008.

In July, only 168 homes sold through the MLS in North Mecklenburg area 1. This was a 40% decrease from the number of sales the year prior (282) and almost half the number sales from the high in 2008.

Seller received 96.46% of the asking price in July. This was down from 97.75% from the year prior and 97.41% the month prior.

The average days on market increased to 97 in July, up 70% from the year prior when the average days on market were just 57.

The average sold price for a home in North Mecklenburg area 1 decreased to $205,061, down from 10% from the year prior but up from the month prior where the average sold price was $203,465.

If you were hoping for large declines, sorry to disappoint you.

I've been expecting the numbers for July for quite some time because July 2007 is when everything started to fall apart. Mortgage banks started failing, investors stopped funding, and essentially it was the earthquake. Since then, we've had tremmors but overall, things have improved. A year later and the markets have opened back to traditional buyers and with the FHA's guarantee of higher dollar mortgages has prevented a total disaster. Still, this wasnt your typical July.

Last month, we saw a fewer number of homes on the market than in prior years and far fewer contracts and sales. The result is that sellers who are highly motivated were taking less than ever before to move on. Some of the decline in the Percentage of List Price Received number maybe as a result of the pre-foreclosures, short-sales, HUD's and REO's which are prevalent in some parts of that area.

The price range with the most activity in North Mecklenburg area 1 remains the homes below $200,000. Of the homes which closed last month, 121 were priced below $200,000 and only 4 were above $500,000. Of the active listings on the market, there are 137 homes for sale above $500,000. Last June (BC - Before Collapse), 20 homes sold above $500,000.

Overall, the numbers are better than expected. The number 1 issue in Charlotte remains buyer's confidence in the housing market above all else. As a result, sellers should settle in for a considerably longer average days on market, show their home in the best possible light, and hope their home is the one buyers are looking for. The second issue is the lack of affordable financing for self employed buyers. Finally, buyers with homes to sell themselves are out of the market until their home sells.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Sellers: Having your house pre-inspected is a great way to head off post-inspection headaches

2008-08-11T10:13:20Z

The idea of having a listing pre-inspected had been completely lost on me. Often times, after a home inspection, buyers and sellers would compromise on a list of needed repair items that would be addressed by closing. There were no reason to think that anyone would walk away after closing however times are changing. Blame a tighening economy, fears of sinking home values, or just buyer's remorse but buyers are becoming a whole lot more pickey. Where before an inspection would reveal 20 items, 3 major 17 minor and 10 would be repaired - now its 20 items and all 20 must be repaired or $10,000 off the price of the house or no sale.

Until God get's back in the construction business, houses will be built by man and deteriote over time. Therefore, it's a great idea to have a home inspector come out and pre-inspect your home just as you put it on the market. For a few hundred dollars, you can have the same level of inspection that a buyer will perform to eliminate any unforseen issues down the road. At the end, you'll receive a list of issues that should be addressed and that would pop up any other inspector's list. You can choose to have them taken care of ahead of time or escrow the appriopriate amount at closing to be handled later on.

A secondary benefit is that you can market the home as being pre-inspected and provide a copy of the report to prospective buyers. If you choose not to do the work ahead of time, at least you'll know the issues that exist and already have a plan of action as soon as a buyer puts pen to paper. So often, buyers walk up to a brick house, see a crack in the fascade, and assume that the foundation is bad (because all buyers and agents are structural engineers). That could be the case or it just to could be settling over time. That buyer may have decided not to buy your home because of a personal misdiagnosis.

Here's the downside that you should be aware of. Property Disclosure laws in states like North and South Carolina and Maryland (where I practiced real estate for 3 years) place all the burden on the seller with regards to the discovery / disclosure of Material Facts. A Material Fact, in general, is anything that could prevent a buyer from making a purchase. A highway planned through the front door of the home would be a material fact. Another would be that the roof is bad, the foundation has shifted, the home has an EFIS exterior, asbestos roof/siding, etc. Once that inspector reveals to you the issues, they should be disclosed to the buyer if they aren't remedied.

Check with your REALTOR to find a good home inspector in your area who can pre-inspect your home. The lack of headaches, hassles, and sleepless nights makes it so worth while.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Growing Number of Fake Real Estate Agents in the Carolinas

2008-08-04T13:40:37Z

In the last few months, I have received a bunch of phone calls, emails, and letters from folks I would describe as fake real estate agents. They are unlicensed and unregulated people who are in the business of helping others buy, sell, and rent real estate. Many builders sales reps are unlicensed but this isn't the group that most concerns me. Take for example this call I received the other day.

I received a call from a guy who was looking to find out if a home I had for sale was available for a lease purchase. I asked if it was for him and he told me that his side business was helping folks find other lease purchase homes and they were paying him 1% of the purchase price for the priviledge.

Another sends letters to all of my clients saying that they will purchase their house for cash, no REALTOR fees whatsoever. One of my clients turned the letter over to me and I contacted this individual who was taken back by my call. I wasn't impolite but curious as to their operation. When I offered to help them legitimately find property for sale, he hung up.

You name it and they're out there. Of course, they don't come out and say "we're practicing real estate without a license" but a quick trip over to the North or South Carolina Real Estate Commission website will tell you if they're legitimate or not.

So buyers and sellers, here are some tips to find out if the person you're working with is for real or not.

Ask to see their real estate license pocket card or check them out on the real estate commission's website before your meeting
Check with the Better Business Bureau to see if these people are registered or have complaints against them
Work only through a REALTOR, a member of the National Association of REALTORS
If you're selling privately (For Sale By Owner), hire an attorney for you and DO NOT SIGN ANYTHING without them first reviewing everything.

Unfortunately, the toughest of times have brought out the worst in some people. However, taking these steps should ensure that you don't end up with a horror story situation.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Custom Built Providence Country Club Home for less than $500,000

2008-07-17T22:47:29Z

Jonathan Osman | Keller Williams Realty | 704-998-1900

12522 Long Cove Drive, Charlotte, NC

Providence Country Club for less than $500,000

4BR/3.5BA Single Family House

offered at $475,000

Year Built	1994
Sq Footage	3,447
Bedrooms	4
Bathrooms	3 full, 1 partial
Floors	2
Parking	2 Car garage
Lot Size	.645 acres
HOA/Maint	$0 per month

DESCRIPTION

Over $75,000 below recent appraisal, this stunning home must sell featuring a chef's kitchen w/ granite counters, gas cooktop, a pantry the size of most bedrooms, all hardwood flrs on main level, Master Wing, fenced yard w/playset, crown molding throughout, irrigation & landscape lights, walk-in attic. Don't delay as this home won't last long.

see additional photos below

PROPERTY FEATURES

Central A/C	Central heat	Fireplace
Walk-in closet	Hardwood floor	Tile floor
Living room	Bonus/Rec room	Office/Den
Dining room	Breakfast nook	Dishwasher
Refrigerator	Stove/Oven	Microwave
Granite countertop	Stainless steel appliances	Attic
Balcony, Deck, or Patio	Yard	Jacuzzi/Whirlpool

COMMUNITY FEATURES

Clubhouse

Tennis court(s)

ADDITIONAL PHOTOS

Seller contact info:

Jonathan Osman

Keller Williams Realty

704-998-1900

For sale by agent/broker

Equal Opportunity Housing

Posted: Jul 17, 2008, 6:31pm PDT

Just Listed: 3 BR, 3BA Townhome w/Garage...Below $170,000!

2008-07-14T19:04:13Z

Jonathan Osman | Keller Williams Realty | 704-998-1900

2037 Gable Way Lane, Matthews, NC

Best Priced Townhome in Neighborhood on Meck/Union Co. Line

3BR/3BA Townhouse

offered at $169,900

Year Built	2001
Sq Footage	Unspecified
Bedrooms	3
Bathrooms	3 full, 0 partial
Floors	2
Parking	2 Car garage
Lot Size	1,742 sqft
HOA/Maint	$140 per month

DESCRIPTION

Best priced townhome in neighborhood features 3 Bedrooms, 3 full baths (1 each on main), detached garage off alley, large covered front porch and rear patio, a unique open floor plan with 9' ceilings on the main level that you'll love. Hardwood floors on the main level. Only 39 townhomes in this mostly single family neighborhood. Weddington Middle & High Schools.

see additional photos below

PROPERTY FEATURES

Central A/C	Central heat	High/Vaulted ceiling
Walk-in closet	Hardwood floor	Living room
Dining room	Dishwasher	Stove/Oven
Microwave	Attic	Laundry area - inside

COMMUNITY FEATURES

Clubhouse

Swimming pool(s)

Playground

OTHER SPECIAL FEATURES

1 Car Detached Garage

9' Ceiling on the main level

2 Master Suites on the upper floor

ADDITIONAL PHOTOS

Seller contact info:

Jonathan Osman

Keller Williams Realty

704-998-1900

For sale by agent/broker

Equal Opportunity Housing

Posted: Jul 13, 2008, 11:53am PDT

CAUTION! The home you could be showing might be bugged!

2008-07-05T14:44:29Z

I'm back! After a bit of an absence to an abundance of business, I am back and more busy than ever. If this is a bad market, I hate to see it good again.

This morning, I showed a house to my neighbor. The house was incredible but it had A LOT of stuff everywhere. It wasn't tacky in the least bit but there was decorations on the walls, lots of pictures, and collectibles everywhere. Naturally, I am suspicious of EVERYTHING and I started thinking...If I were the seller, I could hide cameras and microphones everywhere to record the showings and no one would know.

Surveillance technology has come a long way from the oversized black and white camera found in your local 7-Eleven. Today, wireless camera systems with DVR's to accompany can be had for less than $500 from your local Costco. Lots of homeowners are utilizing them to keep tabs on their property, spy on their neighbors, or out of paranoia. In addition, most cameras and microphone systems can be wireless, have the ability for internet access, and can be hidden in just about anything from stuffed animals to smoke detectors.

Ever wanted to be a fly on the wall during the showing? You very well could learn much more than how much the buyers hate the drapes. Often times, when showing a property, agents will talk specifics about an offer (price, terms, conditions, etc) or the buyer's intent inside the home. A seller with a mild surveillance system could be monitoring the entire conversation from their laptop or have it stored on their DVR for later viewing. This would give them a distinct advantage when it came time to negotiate.

Don't believe me? When my wife and I sold our real estate business in Maryland before moving here to Charlotte, a client called and asked me to sell their house. Not knowing what the circumstances of how long we'd be in the state, I referred it to a colleague. I went on the showing appointment with my colleague so that he knew I wasn't just handing him off. While walking around his property, I noticed a number of bird houses around the property but didn't think anything of it...until we got back to his living room. The seller then preceded to share with us about his system and replayed the visit around the property. In each bird house was a camera and there were cameras hidden in many other places as well.

The internet has a wealth of resources on buying these type of camera systems. A good resource is www.smarthome.com, where you can purchase each one of the cameras shown here. They even sell a 4 camera wireless camera with audio for less than $300.

So just be forewarned that next house you're looking at could be bugged.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Case Shiller Survey Shows Charlotte Home Values Dropped in April...but you knew that

2008-06-25T14:57:02Z

Out this week, the Case-Shiller Survey from Standard and Poors shows in that in April Charlotte finally hit the negative column with prices falling 0.1% from the April before. If you had been reading my blog, you would have known that when I reported the numbers from April in May. While this is the first time prices have dropped since 1991, there's more to this story...A LOT MORE.

While this was the first drop since 1991, Charlotte's market has been incredible resilient when other markets had taken steep declines. I would argue that 0.1% is essentally flat, especially since the months leading up to April were all positive gains. So is this beginning of Charlotte's down fall? No and I'll give you a few reasons why.

First, consider what was happening when Charlotte's market was growing at a modest pace. According to the Case Shiller survey dated April 26, 2006 for sales from February 2005/2006

Miami MSA +30.2%
Los Angeles +20.4%
Las Vegas MSA: +10.8%
Washington DC Metro Area: +17.1%
Chicago +9.1%
Denver +3.4%

Charlotte was not added to the index until December of 2006 when the results looked like this for October 2005/6:

Miami +8.55%
Los Angeles +5.2%
Los Vegas: +2.6%
Washington DC Metro: -0.8%
Chicago: +5.1%
Denver: +.7
Charlotte: +6.8%

So what happened in Miami, L.A., DC? Just after 9/11 when interest rates were reduced to record levels, money was cheap and real estate in the markets of L.A., Vegas, Miami, and DC were booming. In can speak from experience in the DC metro area, most of the new construction that was being built at that time was for homeowners 55+ because of a lack of available schools. Buyers had nowhere else to turn but to existing construction, which saw record appreciation from 2002 to mid 2006. For every one home, you had on average 10-15 people who were making offers.

In other parts of the country, buyers were doing similar with many purchasing available new construction and condos with the goal of selling for a profit when the project was completed. Sounds like a good idea until there's more available on the market than there's buyers for which started to tumble prices.

Here in Charlotte, our market was under the radar for the most part since we were growing at steady 2-6% pace over the last decade. What kept our market from getting overheated was the available new construction was enough to meet the demand of buyers relocating here from the west coast and the north east. In 2006, the Charlotte Chamber was estimating that 50,000 people a year were relocating to the Charlotte area.

Along with the influx of new residents was an influx in the job market with many health care, financial services, and manufacturing businesses relocating to the Queen City or expanding their employment roles. Call it what you will but it we had just enough demand to meeting the growth we experienced.

So where did our -0.1% result? All anyone has to do to find -0.1% is to look at the current market numbers posted on my website and blog. In April, 100% financing went away for borrowers who were getting a mortgage without a down payment. Smart real estate agents and lenders found work arounds like utilizing down payment assistance programs however not every seller is willing to participate. The next is the foreclosure market here in Charlotte.

While not as robust as in other cities, we do have our fair share of bank-owned and HUD-owned homes. However, many buyers and investors are snatching up these homes as they represent an incredible value when compared to the traditional sale. Additionally, our foreclosure market is really limited to the lower end new construction starter homes and the extreme high end luxury properties. Don't misunderstand me...the two are hardly equal but in both groups, you had borrowers that had should not have been qualified but were and purchased a home they couldn't afford.

Get away from the idea that sub-prime mortgage products were designed to just to scam poor people because they weren't. Many sub-prime products were designed for investors to purchase flip and second homes. In other parts of the country, sub-prime loans were utilized because the home values had far exceeded FHA, VA, conventional and Jumbo pricing. Most ALT-A programs were designed for investors and commission-based sales people like myself. That lenders were qualifying someone who worked an hourly job in the mail room with one of these products is fraud since that was not the intention. Here in Charlotte, since our prices didn't have a huge spike and homes remained relatively affordable, we have not had this mass of foreclosed properties because lenders relied on these products as their sole source of lending.

Charlotte's savior is the continued influx of buyers relocating to the area. Yes, people are still moving here in a considerable amount however these buyers are not all purchasing right away. Some are renting until their home in their former town sells while others are just feeling out the city. These guys are buying and many are buying even before their leases are up due to rising interest rates and the deals afforded by the REO's on the market.

Is Charlotte the next Miami, Las Vegas, or Washington DC? I certainly do not think so but who can tell the future. All I ask is that you use a little perspective. If you look at the factors that sunk those cities with double digit loses, it was as a result of sustained double digit increases, high development, high investor activity, and high buyer demand. Have we seen that here? That's for you to decide.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

So What Will This Housing Rescue Bill in the Senate Mean for Buyers and Sellers?

2008-06-25T12:30:50Z

You've got to love election year politics as it is the ONLY time when politicians open pander to their constituents over special interest groups. Set to make it through the Senate is the AMERICAN HOUSING RESCUE AND FORECLOSURE PREVENTION ACT OF 2008 (they should have added "for our children") that has a few benefits and quite a few negatives. So who benefits most?

The Benefits For Buyers seems to be the increase FHA loan limits. The House wanted to increase the FHA loan limits to $730,000 while the Senate pushing for a more conservative $625,000. This is great news, not just for states like Maryland, Florida, and California which as fairly expensive real estate but the effect will trickle to relocating sellers who have had trouble selling their higher priced homes. Remember, FHA doesn't lend money, just insures it through MI. However, buyers who have been taking advantage of the decreasing home prices due to foreclosures may find themselves out of luck when looking for a deal. Many of the riskier, high dollar loans were impossible to come by or required more of a downpayment than buyers were willing to pay. FHA's conservative LTV and MI would likely mean fewer foreclosures upon passage.

The bill also features a provision that allows a federal downpayment assistance of up to a $7,500 tax credit. The catch is that the credit will be paid back by the homeowner over a period of 15 years and is only eligible for homeowners making less than $75,000 a year. The average homeowner lives in their house for less than 7 years so those who participated in this program and sells will have an additional suprise at closing - the balance of this credit.

For sellers, their benefit is two fold. First, those facing foreclosure could refi into one of these FHA insured loans however there is a catch that I'm not so sure many would be keen on. Part of the provision states that if you refi into one of these loans and would have been in foreclosure, any profits made upon the sale would be shared with the government. At one time, I was reading as high as 50% of all profits. The bank would have to agree to refinance the homeowners at a payment suitable for the borrower. What has not been said is if this is just interest that is being reduced or principal too.

For borrowers who are actually facing foreclosure due to predatory lending practices, this may provide some relief however it will have no effect on those borrowers who are just walking away from their homes due to falling values and speculators.

The secondary benefit for sellers goes back to the point for the buyers. If borrowers are able to obtain FHA insured mortgages with higher limits, it should help sell more real estate.

It's not perfect. Some members of the House and Senate are lobbying for increased lending for lower-income borrowers which contributed to some of this mess in the first place. The President may veto the bill however the Bush Administration has been working with the Senate Banking Committee to prevent such a veto. I like the increased FHA limits and that's about it. While banks are taking huge loses through the foreclosure process, refinancing the existing mortgages at the same amount as they would receive on a foreclosure sale doesn't seem viable but I guess time will tell.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Hopefully Not The Next Big Thing: Intentional Foreclosures

2008-06-23T21:56:31Z

The newspapers and the internet are filled with news stories of families facing foreclosure as a result of being taken advantage of by a lender and/or real estate broker. While I think we all are sadden when we hear them, there's a large group that deserve no ones sympathy. Apparently, a new trend is emerging nationwide of homeowners letting their homes go into foreclosure intentionally and its absolutely astounding.

The idea has evolved that since values in some areas around the country have dropped, homeowners who wish to sell are just letting their home go into foreclosure after they're stripped out the remaining equity and purchased another place. The penalty for a foreclosure is a pretty heavy hit on your credit but they seem not to care. Some are even going as so far as to open multiple credit cards and purchase new cars before they ruin their credit for the next few years. About six months ago, the Charlotte observer reported on a woman locally who did such a thing and the sad part about it is that she could have sold her house but she chose not to. This isn't a Charlotte issue as I've heard the same type of stories from Las Vegas, Washington DC, Florida, Detroit and more.

So I guess the lesson here is that if values drop in your area, take all your money out and just walk away. Can you imagine what it would be like if we applied the same irrational thinking to the purchase of a new car? Just off the dealer lot would remain parked a bunch of brand new cars, keys inside, some vandalized but all left all because its not worth the same as what was paid for it just minutes ago.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

What's Next For Self Employed Home Buyers?

2008-06-23T13:18:33Z

One group that has been completely ignored in the last year with all the mortgage restructuring are those self employed borrowers, of which I am one. Many of the programs that are being demonized today were developed with the purpose other than to create massive foreclosures. Stated-income and no documentation loans were great for buyers who were either had a commission-based income or were self-employed and made more than their tax returns reflected. Unfortunately, the flexible guidelines afforded by these programs meant that some irresponsible lenders were placing unqualified borrowers in homes they very well could not afford. But for the rest of us, what's next?

I can only see two outcomes. First is that self-employed buyers will remain out of the market for the next year or more until their businesses are profitable. Many will actually show the profit they are making while others may choose to just deduct less. The only winner here is the federal and state governments. The only other solution that I can think of is that the banks will slowly reintroduce programs for small business owners but will it be too late?

Who knows what's next for self employed buyers but I sure hope something is done soon.

Charlotte Real Estate Market Update: May 2008 for Union County (Area 10), Market Stats

2008-06-23T12:38:12Z

Real Estate Market Update for

Single Family Homes in Union County North Carolina including:

Matthews, Stallings, Indian Trail, Weddington, Monroe, Marvin, Wesley Chapel, Mineral Springs, Waxhaw, Marshville, Wingate, and Peachland

Data gathered for May 1 2008 - May 31, 2008 from the CMLS

In May, 610 single family detached homes were added to the market, which was 15.97% fewer homes than were added in May 2007. This is the first time since November of 2007 when the number of homes added to the market in a single month was lower than the same month a year prior.

In May, only 295 homes were placed under contract, 36% fewer than in May 2007 but the highest number of contracts written since August 2007.

In May, 223 single family deteched homes were sold, a decline of 36.83%. However, this was the best month for home sales in Union County since September 2007.

The Average Days on Market for Union County increased 18.75% to 95 days from the year prior but dropped from the month prior and is at the lowest point since November 2007.

The average sold price for Union County in May was $282,920, an increase of 1.83% over the year prior.

I hesitate to comment on the list price to sold price percentage because of the glaring 101.74% for May. When I saw this number, I began to do some research as to what may have led to this average and what I found is quite interesting. First, many of the homes that sold over list price were new construction sales. Many builders will advertise the base price without options, lot premiums, or elevation changes in the MLS. However when a sale occurs, many will go in and reflect that in their sold prices, skewing this figure. 67 of 218 homes sold were new construction.

Next were the foreclosure sales. Many are under market value and tend to draw multiple offers. Some were not necessarily a multiple offer situations but rather the buyer increasing the sales price to increase their buyer concession. However, leaving in the foreclosures but removing the new construction sales revealed that on average sellers were receiving 97.44% of their asking price.

Recovery?

What's significant about what happened in May in Union County is that many of the numbers in May were on par with those from August, September, and November of last year. In August and September, many large banks like HomeBanc, American Home Morgage, and 154 others either went belly up or closed their wholesale or specialty lending divisions. This forced many potental buyes into rentals or to simply delay their purchases. Some lending opportunities have opened up, allowing for some to buyers to come back in the market but others remain unavailable such as the no-documentation and stated income loans. So in spite of those buyers still unable to get financing, these numbers are pretty strong.

However, as of the date of this blog, there remains 2600 active single family homes on the market in Union County (630 are New Construction) or a 9 month supply.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Your Guide to Buying HUD Homes

2008-06-21T16:33:07Z

I recently had the priviledge of attending a half day seminar from the local HUD representative company to explain the system and processes of buying a HUD owned home. Here is an overview from that seminar as well as some helpful tips so that you will be successful.

What is a HUD Home?

A HUD home is a home or vacant land that was purchased with an FHA loan (government insured). When the homeowner defaulted on their mortgage, the FHA paid off the mortgage lender and took possession of the home and is relisting it for sale.

Where can I find HUD Homes for sale?

While there are lots of sites popping up to try to sell you this information, there are only two places you need to go:

For homes in North and South Carolina, visit http://www.hmbireo.com which is a free site to search for HUD homes. It is the offical listing of HUD homes and is updated every Friday with new listings
For homes in other states, visit http://www.hud.gov.

Your REALTOR may also have access to the HUD listings (I know I do) and I make them available on my website as well for free.

Advantages of purchasing a HUD home?

There are many advantages to purchasing a HUD home but here are a few. First, HUD will allow the buyer to receive up to 3% in closing costs and your broker a commission of up to 5%. Here in Charlotte, 3% is just about what a typical closing will run with lenders fees, attorneys fees, etc and so there's very little money required out of pocket. Also, all HUD homes are offered to owner occupants first before investors so you stand a better chance to win the bidding process. Finally, if you get an FHA loan, you can borrow up to 100% of the loan minus $100.

How to View & Purchase HUD Homes

Unlike a traditional owner sale, you will need to enlist the services of a HUD registered real estate broker such as myself. HUD homes can only be accessed by HUD brokers and HUD brokers are the only ones who can submit your offer to HUD. The offer starts out on paperwork but is submitted electronically to the HUD system.

Tips for Purchasing HUD Homes

Remember that all HUD homes are available for bids during a 10 day period starting on Friday and ending the Sunday of the following week at 11:59pm.
The offer price is based on an as-is appraisal. HUD will not accept offers less than 50% of their as-is appraisal. Offers that exceed the appraisal price will require that the buyer bring the difference to the closing table. It cannot be financed.
You do not need another appraisal. HUD will supply your lender with a copy of the appraisal upon request. If they perform another appraisal, the values HUD will rely on are those found in their report.
Owner occupants get first priority. If an offer is not accepted or received by the end of the offer period, the property is available for All Bidders. All Bidders offers are reviewed every evening and posted the following day
All offers are reviewed at the same time with the highest net to HUD being the winner. Net includes your closing costs and commissions.
A property condition report is available for viewing on the HMBI website for every HUD listing. This is not a home inspection and you should hire an inspector after your offer is accepted.
If the sales price is less than $50,000, HUD requires an Earnest Money Deposit of $500. For prices greater than $50,000, $1000 is required. For vacant land, HUD requires that 50% of the listing price is held in escrow. The Earnest Money is held in your real estate broker's trust account
Remember that all offers are reviewed on the Monday after the 10 day period has lapsed. One local real estate agent thought their offer had not been accepted so he submitted his clients offer 5 times during the first 10 days with a $2,000 increase every time. To his excitement, he learned that he had won the home...the first time. His lack of understanding resulted in his client paying $10,000 more than necessary for the home. Way to Go!
Get approved for a mortgage through a FHA Direct Lender BEFORE submitting an offer. Any changes to the offer after acceptance will result in your offer getting tossed out. The most common scenario is a married couple buying their first home discover that one of them has bad credit and can't go on the loan. Don't let this happen to you.
Always offer to close within 45 days even if you can close earlier. It is much easier to close earlier than ask for an extension later. You can ask for one free and after that, it will start costing you.
Due to numerous cases of mortgage fraud, HUD is now investigating owner-occupants. I am told that one or more persons must be a permanent resident of that address for at least 1 year. The penalties for lying about your status is a $250,000 fine and/or a prision sentence of not more than 2 years.
DO NOT MAKE ANY REPAIRS OR IMPROVEMENTS TO THE HOME BEFORE CLOSING!!! Yes, this happens far too often and if discovered, they will be removed and discarded.

Insured, Insured with Escrow, and Uninsured

When you are looking at HUD homes, look for these three terms to determine the condition of the home. It has nothing to do with insurance but rather the home's eligility for FHA financing. Insured properties are eligible for FHA 203(b) financing. Insured with Escrow means that there is an amount less than $5,500 that is required to bring the house up to minimum FHA 203(b) standards. The amount will be added to any offer that you make.

For example, a listing will say $2300 insured with escrow (stained carpet, holes in drywall). If you made an offer of $150,000 and it was accepted, your loan amount would be $152,300. At closing, the closing attorney will hold back the $2,300 to pay a contractor for the repairs required to meet minimum standards. The buyer has 90 days to have the repairs made and is not available to buyers without an FHA loan.

Uninsured means that the property requires repairs that exceed $5,500. For that type of property, a FHA 203(k) loan will allow buyers to borrow up to an additional $30,000 for repairs. This is for minimum standards so don't think that you'll get granite counters in the kitchen and travertine tile floors with your money.

Buying a HUD home can be a great way to get started in homeownership. The government does make it easy to get into these properties with very little money down. Mind you, these places aren't for everyone but if you are handy and have some extra cash coming in every month, a HUD home may be right for you.

Your Trusted Real Estate Adviser;

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Waiting to make that home purchase until the market hits rock bottom?

2008-06-17T11:10:59Z

When I think back on all the missed opportunities that I have had in my life, I always think why I didn't act and how things might have been different if I had. If I has purchased Google as an IPO, I'd be incredibly wealthy. At $100, I'd still be very content. $200, you get the idea with Google trading at $575 today. We all do it because hindsight is always 20/20 and not all of us are huge risk takers. Those that gamble large usually win large but some also lose large, enough so that it keeps those who are cautious from ever playing the game. The same holds true to real estate especially now.

Just so that you are aware, I am all for you purchasing a home now and that's why I blog. I don't like to rely on unfounded conjecture but I present rational arguements as to the benefits of doing so. Tremendous opportunities abound like we haven't seen in a very long time and probably will not see again. I had clients who are absolutely scared to make a move fearing what they've read and heard on the nightly news may be true. Now, they're rethinking their actions in the face of rising interest rates. Have you ever stopped to think what motivation the folks have who are discouraging to from purchasing real estate in Charlotte today?

When I sold real estate in the HOT sellers market around Washington DC, I can recall financial magazines writing as early as 2002 of the housing bubble that was sure to burst imminently. I guess if they kept printing the same story, eventually they would have got the timing right. Their motivation is to get you to buy their magazines and newspapers, watch their newscasts and visit their websites. Dog bites man isn't as much a story as man bites dog and the same holds true for MORTGAGE MELTDOWN...CREDIT CRISIS instead of Banks who Lent Money to Risky Borrowers Face Loses.

So here's the indisputable facts:

If you try to time the market for the absolute bottom or the absolute peak, you'll miss both.
Interest rates will go up. Pressure from inflation and the weak dollar will cause the fed to raise rates and it will cost you more to borrow the money for a house that costs less. Here's an example of how waiting will cost you.

Finally is the realizaton that every town, city, and state are different. Every community is different just like how you and I are different. Yes, what happens to the market in California does have an impact on real estate here in Charlotte but the impact is minimal. If a buyer for your home has to sell a home from where they are moving from, they are only but a few choices: wait until the other home sells and rent locally until then, pay 2 or more mortgages, or pay their way out of their old property.

So the idea that things are absolutely bad and that the best thing to do is to wait, it's a costly one and I guess it speaks to how altrustic you are. If you like paying more interest to the bank, then by all means wait. In fact, you may not have to wait because I'm sure that any lender would charge you tomorrow's higher rates today if ask. But that's insane, right?

Your Trusted Real Estate Adviser;

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

You Have Either a Buyers Market or Sellers Market, Not a Bad Market

2008-06-16T15:06:32Z

[Slow Clap] Thank you national and local media. You have done your fair share to convice buyers that there is this idea of a bad market.

I'm sorry but markets can be good or bad since every market favors someone. While the general concensus was that the high flying days of just a few short years ago were "good," I know of lots of buyers who would have begged to differ. You had 10 to 15 buyers for every one listing so buyers had to compromise a great deal to make a purchase. Those who owned real estate during that time made a considerable amount of money on their investment but then were at the mercy of the market when it came time for them to make a purchase. Inevitably, there were lots of hard feelings from those who wrote offer after offer after offer, only to lose out to an investor or someone with more money.

Many buyers resorted to living much further away from work, family, church, etc just to have a place to call home. Sellers were selling as-is and giving nothing. Buyers had only but to hope that the demand would continue in the hopes they too could make a few dollars. This market wasn't good for sellers, IT WAS GREAT!

Then we have the buyers market that we have today. How quickly things have changed from a buyer having no options to having too many options. Sellers are reducing their prices, offering incentives, and doing what is necessary to get their home sold. There are still multiple offer deals but instead of being on every home, they are reserved to only the best of deals. Even builders are negotiating, something I have never seen until recently. Bad market? If you're a buyer, it certainly isn't.

So what market is better? I suppose it is whatever market benefits you the most. If you've lived in your home for a few years and now are looking to upgrade or downgrade, then you may be pretty excited at the opportunities that currently abound. However, if you sold after a year and paid top dollar when you purchased, bad probably isn't strong enough for how you feel about things.

Your Trusted Real Estate Adviser;

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

DISCLOSE DISCLOSE DISCLOSE and DISCLOSE SOME MORE

2008-06-15T23:10:46Z

Have you ever had a situation where your jaw just hit the floor by someone or something so dumb it's unbelievable? If you haven't, get a pillow and stand over it because this will astonish you and it has me. Unfortunately, I cannot share all the intimate details with you because of where this may go but I'll give you enough broad strokes because there is a very important lesson here.

A couple of weeks ago, I received a call from a buyer looking to purchase a home. I showed them a few homes and by the time we got around to putting together an offer, the home they wanted was under contract. So I spend the next couple of days combing through the MLS for listings and found another home that worked. I immediately went over to preview the house and the buyer was in the area at the time and came over to have a look. He liked it and so we decided to put together an offer based on the price and condition of the home as we saw it.

Turns out the listing agent was also the seller of the property and proceeded to tell us that everything was fine with the house but it needed some work. The listing agent accepted the offer and my assistant began the process of setting up our inspection for later in the week. The inspection day arrived and the agent had the power turned on to the property and even showed up to drop the NC Property Disclosure Statement. The timing was a little slack but not unusual based on the date. The listing agent also gave us a home inspection report dated the month prior which detailed there were quite a few material facts she omitted in the property disclosure.

It was no suprise that the buyer's inspector found the same issues as were in the report and so the buyer and I were both left confused. We've taken the report back to the seller and asked them to make the necessary corrections and the listing agent / seller refused citing nothing wrong with the home. Where things go from here is anyone's guess.

In general, a Material Fact is anything relating to a property or a real estate sales transaction that might affect the prospective purchaser's decision to buy the property. That something doesn't work as intended, the property is in a flood plain, is near an expanding highway etc that should be disclosed. If you're a For Sale By Owner, these rules apply to you as well.

For my take, I prefer over-disclosure since no one has ever gone to real estate jail for that. For example, the Monroe Bypass in Union County has been a cause of concern for some residents. About a year ago, residents in about a few dozen subdivisions learned that a new major toll road was to pass through their communities. At one time, there were a dozen possible routes which the bypass could have taken. Therefore, it wasn't a bad idea to have the client initial a copy of the plans showing the proposed routes as a form of disclosure. Today, the plans can be viewed online and when I have a client buying in that area, I still have them initial a copy of the route map.

Remember that no one has ever been sued over disclosing accurate information so why would you do anything otherwise.

Your Trusted Real Estate Adviser;

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Google StreetView comes to Charlotte and surrounding area

2008-06-15T09:25:52Z

Google has just added the SteetView feature its Google Maps site for the Charlotte area. While coverage is not 100%, it's pretty good. For years, savvy agents like myself have been using the local GIS services to look up images on a particular property. The images were blurry and the property lines weren't close but at least you knew which lot you were looking at.

Recently, Microsoft launched its BirdsEye View on its Live Search Maps site. With it, you were looking at more of a 75% angle than straight on like a typical overhead. This improved things further and is still useful since you can see all 4 sides of a particular home on the day that picture was taken.

With StreetView, you can take a digital drive past that house with relative ease. You can even move up and down the street like you were driving. This program has added benefit because if you take pictures around any major cities these days, you may end up in police custody on suspicion of being a terrorist...which will ruin your day.

Here is a Street View of one of my favorite condo complexes in Uptown Charlotte: Fifth and Poplar. I absolutely love this development because in the basement is a Harris Teeter grocery store and in the center a large open park (shown below).

This is a great tool for buyers to use, especially relocators to learn more about the area and neighborhoods in Charlotte.

Your Trusted Real Estate Adviser;

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Benefits of a Buyers Market: Homes at 50% off

2008-06-13T17:02:33Z

Here in Charlotte, we are most assuredly in a Buyer's market and the deals are absolutely astounding. Take just one example of a home that I found listed for 50% off. Last year the owner paid 1.7 million dollars to build quite a spectacular home in Marvin. The other homes in the neighborhood vary from $700 to $2 million dollars. One very smart buyer has already purchased one of the foreclosures that was listed at an astonishingly low $700,000. Now, this home that once sold for $1,7 million can be had for $920,000 or less.

I took some pics of this incredible home below for a client that I have looking for an exceptional home like this.

View Album

Get your own

Far too often, the media has been mislabeling this buyer's market as a bad market. Well, if I am a buyer, I wouldn't things are so bad. After all, I am able to buy my dream house at a price than will allow me to purchase the beach house. I guess its all in perspective.

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate

Buyers: The Best Deals in the Charlotte Area Are....

2008-06-11T20:37:04Z

Ok, so the spring market has shown up a little late but still its a market none the less. My personal business is doing splendidly - others not so much. The key is that my clients are looking for best buys on the market and I am uncovering new ones each day. Finding a great deal isn't as easy as looking up an MLS listing. In a buyers market, every home will have the description "great deal" but is it really? In Union County, agents love posting "below tax value" and this comes immediately after the real estate in that county was reassessed. Buyers who purchased based on that alone will be disappointed to learn that much of the county is being re-reassessed since so many people complained of the value increase.

So for my clients, where are the absolute best buys right now in the Charlotte area?

Builder Spec and Inventory Homes

I have not been too keen on purchasing new construction homes lately because for most, builders have been lowering prices to the point where the last guy to get in may have paid 1/3 less than you did six months earlier. That's not good for home values and in many other parts of the country, buyers have just walked away from their homes as a result. However, many builders were caught with buyers that had to sell their home to purchase their new one. They proceeded with the construction and when it came time to close, they couldn't handle two mortgages. The result are inventory homes which are deeply discounted.

The beauty of an inventory home is that they are move-in ready, usually are tastefully decorated, and carry the builders warranty. If you're a resale home shopper looking for a new place before spring starts, finding a builder inventory home would be a great start. As of today, I will start placing a link on my website with builder spec / inventory homes that need to be sold. Most of the times, a competent REALTOR like myself can negotiate a price 10-20% lower than a comparable build.

Foreclosures, Pre-Foreclosures, and Short-Sales

Yes, I sell a lot of foreclosures but that's because some represent a great deal. Let's get one thing straight: these homes will not be around forever. As lending standards are tightening putting aside riskier clients, the future going forward will be without these opportunities. Therefore, smart buyers are taking advantage and buying foreclosures. Now, not all foreclosures are a good deal and that's why you need to work with someone who is specifically competent in foreclosures. Often times, the home went into foreclosure because of financial reasons and the buyers were otherwise very responsible. The homes are not damaged whatsoever and it is just like buying a typical resale home but with a lower price and 1 catch. Others were purchased as an investment and may be badly damaged. For the right person, these can be a great homes to add to their real estate portfolio.

After all, you are most likely going to paint, may change the carpet on your next home too, personalize the kitchen so why not start with a blank slate. Now, the twist to getting a good deal on your foreclosure is understanding the current condition. Some may choose to bring an inspector out before they are ready to make an offer. This can be expensive and there's no guarantees your offer will win it. I would take along a trusted friend in the construction trade to go through and look for things which may be an issue. Another alternative is to make up a list of items you want to look for on the house before making an offer. If you discover something that is a problem (and ugliness isn't a problem), deduct it from your asking price. After your offer is accepted, you will be allowed to perform a home inspection which should reveal the other issues. The bank will not typically make any repairs so do your homework up front.

The Market Above $500,000

The market above $500,000 has a glut of homes on the market in most areas around Charlotte. With more homes than qualified buyers, sellers are doing what it takes make an offer stick. Granted, this isn't everyone but I would say that for the most part, buyers have greater negotiating power. Understand that a seller with 1 home to sell will be less flexible than a builder with 10 inventory homes to sell or a bank with 40,000 foreclosures. However, do not just overlook a home because it is not an inventory home or foreclosure. It could just be a screaming deal but you wouldn't know if your search was too limited.

Today, some clients decided to pop into new construction neighborhood while they were waiting for me to arrive for a showing. The builder has 10 spec and inventory homes for sale at a remarkable price. However, there is a seller who has moved to another community and has a home just sitting there and it is an even better deal! It is a great neighborhood, a good builder, and a great Weddington location. Until now, buyers have been passing this home buy for absolutely zero reason however 11 very smart buyers will take advantage of the opportunity to live in a upscale home 10-20% less than their neighbors.

Remember that some deals are donkeys and some deals are horses. You won't know which one you have until your agent investigates and uncovers the value.

Your Trusted Real Estate Adviser;

Jonathan Osman
Charlotte NC Homes, Charlotte Real Estate