Wilmington and Burgaw Area Real Estate News

There are three ways that an appraiser analyzes the data he or she collects for a property. These approaches produce different end values, so an appraiser will use more than one approach to determine the best fitting value. Here is a short description of these approaches:

1.       The Sales Comparison Approach

In this approach, the appraiser matches up the property with recently sold homes. These are called comparables or comps and the best fitting ones are chosen according to style, square footage, lot size, age of home, number of bedrooms, number of bathrooms, heated space, unheated space, garages, and additional features like fireplaces, decks, patios, and swimming pools. The overall condition and quality of materials are considered. Each comparable is assigned a price, which is determined by the features that are inferior or superior to the primary property and the home with the most similar features is given the most weight. This approach is considered the most reliable of the three approaches.

2.       The Cost Approach

This approach beaks down the property into three parts. First, the appraiser determines the value of the land as if it were vacant. Then, that is added to what the appraiser determines it would cost to completely replace the current home. Finally, he or she factors in depreciation (physical deterioration, undesirable design features, and location near unchangeable, undesirable features like industrial zones). Because The Cost Approach takes into account the current cost of materials and current techniques, this approach is most used with new construction or special purpose properties.

3.       The Income Capitalization Approach

As the name implies, this approach is used for properties that will be producing some sort of income, like rentals, apartment buildings, etc. The appraiser looks at other income creating properties and factors in the rate of return, a vacancy allowance, lost rent, and net operating expenses (taxes, insurance, maintenance, repairs, appliance replacement, etc.). The income produced divided by the rate of return (or capitalization rate) equals the value of the home.

The appraiser will use more than one approach to come up with the value of the home. He or she will reconcile those numbers – determine what factors are not as important as the rest. An average is not used, because doing so would be saying that each approach has equal weight when, in fact, one approach is more suitable than the others depending on the type of property. So, the appraiser must give the most fitting approach more weight.

One of the most important parts of financing and purchasing a home is the appraisal. The appraisal is conducted by an unbiased third-party, a state licensed individual, and tells the lender if the offer on the home is too low, too high, or just right. The appraiser does not determine the value of the home. Instead, the appraiser collects all the appropriate data and creates a report that shows the value of the home. In other words, the market determines the value of the home. The appraisal process can be pretty vague, so here is a short description of the steps an appraiser takes to come to the conclusion of what a home is worth.

Step 1. The appraiser identifies the home, the type of property, and what sources they will need to utilize to gather all the data they need.

Step 2. They gather and verify all the data about the home that they need, including visiting the home to visually review the condition of the home. The type of data collected is determined by the approach the appraiser chooses to take, but often includes property features, home improvements, comparable sales, construction costs, etc.

Step 3. The appraiser determines the property’s highest and best use by taking into account the current use of the property, the current use of comparable properties, and future potential use.

Step 4. They determine the value of the land alone. Location, neighborhood, construction projects, and comparable sales affect this price.

Step 5. The appraiser analyzes all the data using different approaches, including The Sales Comparison Approach, The Cost Approach, and The Income Capitalization Approach. This provides multiple estimates that are then reconciled to give the appraiser a solid number to go by.

Step 6. As the last step, the appraiser puts the findings into a report. This report should identify the property, the value being estimated, its highest and best use, an overview of the steps taken to gather the data, a description of the data used, an explanation for the appraiser’s opinion, and a signed certificate per the Uniform Standards of Professional Appraisal Practice (USPAP) guidelines.

Depending on the lender, the appraisal is good for up to 60 days and is usually paid for at closing by the buyer.

Two of the top-selling Coldwell Banker franchises in North Carolina have joined forces, creating the state’s third-largest residential real estate brokerage company.

The merger of Coldwell Banker Sea Coast Realty of Wilmington and Coldwell Banker Advantage of Raleigh and Fayetteville creates a regional powerhouse with a sales team of more than 600 agents and 26 sales offices in Raleigh, Wilmington, Fayetteville, Jacksonville and other Eastern North Carolina markets.

The two companies combined to generate more than $1.3 billion in sales volume from 6,500 real estate transactions in 2010, which would have ranked the merged company as the state’s third-largest brokerage, according to REAL Trends, a real estate industry trade magazine.

Those totals would also have ranked among the top 55 brokerages in the country in sales volume and among the top 75 in transactions, according to the magazine.

The two companies are on track to surpass last year’s sales and transactions totals in 2011, having already exceeded $1 billion in sales and 6,000 transactions through October, according to statistics provided by local offices of the Multiple Listing Service (MLS).

The merger was announced by Coldwell Banker Real Estate Corporation CEO Jim Gillespie on Thursday, November 17^th in separate news conferences in Raleigh and Wilmington.

“Today’s merger creates the fifth largest Coldwell Banker affiliated company in North America,” Gillespie said.

“Coldwell Banker Advantage and Coldwell Banker Sea Coast Realty have been long-time members of the Coldwell Banker Chairman’s Circle, representing the best-of-the-best of our great brand,” he said.

The new company – to be called Coldwell Banker Sea Coast Advantage – will be led by co-CEOs Tim Milam of Sea Coast Realty and Gary Rabon of Advantage.

“This is a true merger of equals,” Milam said. “It is not an acquisition. I want to emphasize that in the strongest possible terms. All owners of both companies will remain owners with the new company. Neither company is buying the other. Instead we’re joining forces to compete more effectively in today’s challenging marketplace.

“Gary and I have been friends for years,” he added. “Our companies have been built on similar values and culture. We’ve talked about merging for at least the last five years, and finally decided this summer the time was right to get it done.”

Rabon added:  “This is a merger where both companies are strengthened. It builds our regional footprint and enables us to do an even better job of supporting our team of brokers and agents in the field. It also creates a lot of synergies in terms of marketing, training and technology.”

The merger brings together two companies that have dominated their respective markets. SeaCoast Realty is currently the number one brokerage in Wilmington, Brunswick County, Topsail and Jacksonville with over 23 percent of the market.

Advantage, meanwhile, ranks number four in Raleigh and number one in Fayetteville, according to MLS statistics.

Both have emerged as leaders in North Carolina’s fast-growing military market, with strong positions among military families in Fayetteville and Jacksonville – home of Fort Bragg and Camp LeJeune, respectively.

The merged companies will also have an advantage in serving the two-way traffic between the Raleigh/Research Triangle and the Wilmington/Wrightsville Beach markets, Rabon said.

“There’s a lot of cross-pollination on I-40 in both directions,” he said. “Triangle families are looking in Wilmington area for second-home opportunities, while a lot of Wilmington area families are looking to move to the Triangle for job opportunities.

“The merger gives us an even better connection to this growing segment of the market, one that we are both going to capitalize on.”

CONTACT:

Tim Milam                            

Coldwell Banker Sea Coast Advantage

(910) 202 2501

Gary Rabon

Coldwell Banker Sea Coast Advantage

(919) 846 3305

If you’re on the fence about buying, consider this – Yesterday, the typical 30 year rate for a fixed mortgage fell to below 4% for the second time in history. According to Freddie Mac, the average is now 3.99%. Last week, the typical 15 year rate for a fixed mortgage fell to 3.3%. This is increadibly low compared to five years ago when rates were above 6%. Even more, eight years ago, they were above 8%. Now is the time to finance!

I have a number of loan officers that I work with regularly. If you would like a recommendation, please feel free to give me a call. It doesn’t cost anything to find out what financing you may qualify for. Don’t just dream about one day owning a home. Buying is becoming more and more affordable. Let me help you take the first steps toward purchasing.

Tammy Barnes - (910)471-5579
Realtor - Burgaw, NC Real Estate - Wilmington, NC Area

Search for homes and land in the Wilmington, NC, metro area, including Leland, Hampstead, Burgaw, Ogden, Castle Hayne, Carolina Beach, Kure Beach, and Wrightsville Beach. You will also find information on the buying and selling real estate process, including preparing your home for sale and qualifying for home loans.

When shopping for a home loan, buyers will encounter numerous sources for lending. It’s important they are educated on the different types of lenders, so they choose to work with an originator that will provide them with the most choices and best programs. It’s also good to understand how these lenders work. Many lenders will sell loans. Who you start out working with may not be who controls your loan in the long-run. Here is a quick rundown on some of the entities a buyer will see and their role.

Mortgage Banker

A mortgage banker is a lender that originates loans and resells them to the Secondary Mortgage Market, which consists of investors like Freddie Mac, Fannie Mae, Ginnie Mae, and other private companies. The loan could be sold multiple times during its lifetime. Examples of a Mortgage Banker: Countrywide Home Loans, Wells Fargo, Alpha Mortgage

Mortgage Broker

A mortgage broker is an intermediary between the lender and borrower. They do not fund the loan. The wholesale lender funds the loan. Rather, they help the borrower pull their credit report (some will even advise how to improve the credit scores), locate a loan program, fill out the loan application, order an appraisal, and find a lender to fund the loan. Their flexible position allows them access to good rates and the most programs to choose from. They are paid by either the borrower or lender at closing. Examples of a Mortgage Broker: Coastline Mortgage, 1^st Trust, Walker Jackson, etc.

Wholesale Lender

The wholesale lender underwrites and funds the loan. Some may service the loan payments. Examples of a Wholesale Lender: CitiBank, Farmers Bank, First Bank, 1^st National, First Citizens

Banks, Credit Unions, Savings and Loans

A major portion of the primary mortgage market, banks, credit unions, and savings and loans create mortgages from the money their customers provide by means of savings accounts, checking accounts, and certified deposits. Because they self-fund their loans, they are often referred to as “direct lenders”.

Banks, credit unions, and savings and loans usually manage loan payments; however, have been known to sell their loans to the secondary mortgage market. Larger banks and Savings and Loans may be referred to as “portfolio lenders”, because they can fund their own loans and don’t need to sell them to the secondary market. This frees them from the lending guidelines created by Freddie Mac and Fannie Mae, which isn’t always good for the homeowner.

Keep in mind that the roles of some of these entities overlap. A whole sale lender may share the same name as bank and a credit union may act like a broker. It all depends on their size and the department involved. Buyers should do their research and ask as many questions as they can before signing loan paperwork. It could affect their ability to refinance later on.

You've prepared your home. You've chosen your Realtor. You've priced your home competitively. But you aren't getting any offers. Many homeowners don't want to hear this, but the lack of offers may be due to a lack of flexibility on their part. When a homeowner decides to sell, they work very hard to make their home show-worthy, but they don't take into consideration there is one more element - themselves! Preparing to put your home on the real estate market doesn't just mean fixing up the home, it also means preparing yourself for the showing process.

A well-priced home will get a steady stream of lookers and, consequently, showings, but in the current market, where there is a surplus of inventory, owners need to be flexible with their schedules to snag lookers. They need to make their homes easily accessible, because there are plenty of other homes for buyers to look at. This is especially true for out-of-town buyers, who may only have a day or two to view homes. As someone who works in a real estate office, I see a myriad of reasons why appointments are denied. Here are some common ones I see and how homeowners can alleviate these problems:

1. The real estate office or showing call center is unable to contact you to confirm the appointment. Maintain at least one open line of communication - phone, text, or email. If you're at work during the day, explain to your boss that you have a home for sale and will be receiving some sort of communication from a person scheduling showings. To confirm an appointment should take less than a minute and shouldn't take away from your work schedule. Reassure them you be choosing the most non-disruptive form of communication.

2. It interrupts your dinner time, nap time, scheduled walk, etc. Be ready to break daily routines if showings are requested. Approach the showing as a chance to run errands or get a bite to eat outside of the house. If you work all night and sleep all day, and they request an 8 a.m. appointment, ask if they can come at a later time. If not, try to decide what matters most - sleep or the house selling. If you say sleep, then you may not have a strong desire to sell and that is fine, but you may be turning away a potential buyer for your home.

3. You have pets. When determining if a pet can handle strangers entering the home, better safe than sorry. Some animals have extreme reactions when the owner isn't present. If they're large, they may even scare buyers and prevent them from entering the home. If your pets aren't friendly with strangers, put them in a crate, the guest bedroom, or the garage and make sure that the Realtor showing the home knows not to open the door. Your other option is to ask a neighbor or friend that the animal is familiar with if they would be willing to stop by the home and put the animal away. Planning in advance really helps when it comes to pets.

4. The home is messy. This one is easy - actively maintain the home's appearance. Believe me, buyers understand that an occupied home is being lived in (keywords "lived in"), but they need to be able to walk through the home and see the counters, floors, walls, etc. So, do the dishes, put clothes away, and make your beds. If you have children, buy a large basket or trunk for their toys, so you can quickly pick up the floor. When the real estate office or showing center call to schedule an appointment, there won't be any major messes to avoid.

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Most people understand that they can fund a home purchase with a mortgage that often requires a down payment. What isn’t clear is exactly how much money is required upfront when purchasing a home. If you are thinking of making a real estate purchase in the future, it’s a good idea to have an idea of what amount you will be required to bring to the table and start saving for that fund as soon as possible. Here are some points you will want to keep in mind when determining the amount you should save.

The down payment is the largest portion of the money you will be required to provide before purchasing a home. This amount depends on the type of mortgage you are able to secure. A mortgage calculator can give you an idea of what that amount will, but a lender can tell you exactly how much when they prequalify you for a mortgage. Traditional mortgages can be 10-20% of the purchase price of the home, but there are special programs that may require none or an amount as low as 3% (FHA mortgages).

Once your down payment is saved and you find a home you want to submit an offer on, you will be required to provide earnest money, which is a gesture to show you are serious about buying. Traditionally, that’s between $500 and $2000. The earnest money is held in a trust account by the seller’s real estate agent brokerage. If your offer is accepted, that deposit goes toward the down payment or closing costs. If your offer is rejected, that earnest money is returned to you. The only time you may lose your earnest money is if a dispute arises during the transaction process.

After your offer is accepted, inspections are made, and you decide to go through with the purchase of the home, you will need to provide money that covers your closing costs. The costs include the title exam, title binder, recording, paperwork processing, survey (if requested), and mailing fees. These fees vary, but an estimate can be provided by the lender. They average 3-4% of the purchase price of the home; however, many sellers in today’s market are either offering to pay closing costs or can be negotiated to pay closing costs. This is an option you can discuss with your real estate agent.

Much of the headache of saving can be reduced by first meeting with a lender to discuss your options. Even if you aren’t sure that now is the right time for you to buy, they can give you a good idea of what you’ll be able to afford, how much you should save, and how you can improve your finances to qualify for mortgages that will save you money in the long run. Also, check with the U.S. Department of Urban Development and local governments. There may be programs that fit your specific circumstances that will help you to purchase a home with no down payment or provide other financial assistance.

When people write about short sales, they often speak about the homeowner’s options and the requirements to qualify. They don’t usually address the buyer’s side of the transaction and what they should expect. As a result, buyers are often confused and frustrated when they enter the short sale process. Here are five tips for buyers on what to expect when they make an offer on a short sale:

1. A seller-signed offer is not a finalized contract. In a normal offer process, the listing agent presents the sellers an offer from the buyer’s agent. Negotiating takes place and the sellers sign the contract accepting the offer. Then, inspections take place, followed by the closing. However, in a short sale the sellers sign the contract initially, but the bank does the negotiating and closing doesn’t take place until the bank releases an official acceptance letter.

2. More than one offer will be accepted. Until the seller’s bank formally accepts the offer and approves the short sale, offers will be accepted and submitted. How those offers are approached depends on the bank. Some will only look at one offer at a time. Others require that all offers be submitted at once, so they may accept the highest in order to minimize their loss. When placing an offer on a short sale, it’s good practice to offer the highest and best price. This will increase the likelihood of it being accepted.

3. Short sales are not “deals”. They occur when a homeowner owes more than what the home can be sold for. The appearance of short sales has greatly increased over the past two years, because the housing market has taken a huge hit with homes falling in value. A home bought in the $600s in 2005, could very well be sold in the $400s today. So, in reality, short sales are being sold at fair market price.

4. The sale may be short, but the wait is long. When agents say that a short sale takes 3-6 months, they aren’t exaggerating. If a buyer needs to move within 3 months, it is not recommended that they make an offer on a short sale. It’s a lengthy process, because there are multiple parties and departments in and outside of the bank (mortgage insurance companies, investors, negotiators, etc) who need to communicate with each other and come to an agreement on terms. How many there are depends on how the mortgage is structured. This all funnels down to one negotiator, who speaks with the listing agent or attorney handling the short sale for the seller. It isn’t uncommon for halfway through the process to get a request for additional documents or information from the seller or buyer. This will delay the process too, so it’s important for a homeowner to use a listing agent and/or attorney who is well experienced in short sales and can foresee what information will be needed. The only exception to the long process is when the short sale has already been preapproved by the bank.

5. A buyer can back out anytime. While there could be repercussions if a buyer backs out at the last minute, if they find a home while waiting for short sale approval from the bank, they can rescind their offer. A signed termination form is required, but earnest money will be refunded.

Buyers who make an offer on a short sale should realize that communication with the bank is very limited, especially before the property is assigned a negotiator. The selling agent or attorney can go for many weeks without hearing anything from the bank. Patience is key. While that is easier said than done when making such a large purchase, buyers should prepare themselves for the approval process.

When a property owner puts their home or land on the market with a Wilmington, North Carolina, real estate agent, they will sign a listing agreement with their company. This listing agreement covers a number of points, services, and conditions, and is intended to protect the general well-being of both the owner and agent. The specifics covered in listing agreements differ according to state laws, company policies, and local governing organizations; however, property details, price, commission, termination date, special assessments, and Dual Agency seem to be pretty standard. The most confusing of these is usually Dual Agency.

In a traditional real estate transaction, a property owner is represented by a listing real estate agent. When a buyer is interested in the property, a selling agent will present the offer to the listing agent, who will in turn present the offer to the property owner. While real estate agents cannot give legal advice, they are educated to know the laws of real estate and how they affect the sale of a property. It is the job of both agents to protect their client’s best interests by making them aware of all their options and the consequences of those options. This includes advising them on the fair market value of the property and their jobs as sellers or buyers according to state and national laws.

“Dual Agency” is a term for when a real estate agent represents both the buyer and seller. This can happen if the agent is acting as a selling agent with a buyer and that buyer decides they want to purchase the agent’s listing or if an unrepresented buyer decides they want to buy the home listed by the agent. When Dual Agency is initiated, the agent’s role as negotiator changes. He/she must work for both sides of the transaction in a fair and equal manner. Some buyers and sellers do not feel comfortable having an agent working for both sides. In that case, the real estate company can appoint another agent to represent that party.

The term “Dual Agency” also refers to two real estate agents from the same company sharing a transaction. If a property owner chooses not to allow Dual Agency, it could quite possibly bar other agents from the listing agent’s company from showing the property. That can have a significant impact on the number of buyers who see a home. If Dual Agency is initiated and a selling agent from the listing agent’s company brings an offer from a buyer, there will be no change in negotiation. Each agent will work diligently for their side of the transaction.

It’s very important for property owners to discuss with their listing agent how Dual Agency will affect them. Sellers should know the facts so they can properly determine if Dual Agency fits their needs. While it may downgrade the agent’s negotiation power, that’s often outweighed by the benefits of making the property available to all potential buyers.