Market trends report for April

In April, the number of pending sales (homes that have gone under contract) are broken down into their price ranges:

Total of 281 homes in April went under contract! March's number of pendings was only 126!

$0-$100k- 107 homes
$100,001-$200k- 106 homes
$200,001-$300k- 36 homes
$300,001-$400k- 19 homes
$400,001-$500k- 6 homes
$500,001 and above: 5 homes

May's numbers so far are encouraging! Current number of pendings for homes under $200k will surpass April's numbers if they continue on their current pace!
**So far, there are 5 pending homes in the $300k-$400k price range and 2 May pendings in the over $500k price range! Sales of the higher priced homes are starting to increase, which is a key indicator of the security of buyers!

Greenville lake house

For sale in Greenville, SC. Check out the double ovens!
Asking $998,000 this 4 bedroom, 3 bathroom home boasts an in-ground pool and lake views! Beautiful landscaping makes this home feel like a blooming oasis!

Real Estate and Financing

Real Estate and Financing Are PERSONAL

by Dean Hartman on April 7, 2011 · 2 comments

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Every day we are bombarded with statistics and data.  Housing starts are up, housing starts are down; more job losses, unemployment is improving; foreclosures, short sales, housing inventory, interest rate movements and much more.  It’s enough to make your head spin.
There’s an old saying that claims: “All real estate is local”. It infers that national numbers are good reference points, but that individual communities (or even pockets within communities) can have strikingly different realities.  When prices are falling nationally, there are some places where prices are holding steady or rising as an example.
I believe that even that old saying is too broad.  Buying a home or structuring the financing of a home isn’t a local phenomenon….it is a personal one.  It’s the same as the economy.  Even though we have been suffering through a national downturn, many are having their best years ever.  Unemployment, foreclosure, even homelessness are tragic statistics and things to be aware of. But, for those not in those situations, you need to make decisions that will best serve your PERSONAL goals.
To that end, it is a great time to buy a home, for the reasons touted in this space regularly:

• Low interest rates make more house more affordable
• Tremendous available inventory
• Home prices are in line with income levels once again

It is also a terrific time to sell.  I heard an agent say just last week that there is NO INVENTORY available.  He further explained that properly priced homes are selling almost immediately and the only homes on the market more than 30 days are ones that won’t sell because of unreasonable seller expectations (and agents who aren’t strong enough to deliver the truth to those sellers).  A strong statement, yes- but one worth taking into consideration as you ponder your PERSONAL situation.  And remember, sellers become buyers. They get the advantages buyers are enjoying as well.
My advice is don’t be a sheep following media hype which analyzes data that reflects the past (and not the present or future) or looks at national numbers or assumes that your job, credit standing or savings are in jeopardy.  YOU need to look at your individual life and decide for yourself.

Great information on price vs. cost of home ownership compared to renting

Rental Costs Are About to Takeoff

by The KCM Crew on April 8, 2011 · 0 comments

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We are often asked whether it is better to rent or buy in the current housing market. The answer to that question is: “It all depends”. There are certain situations where renting short term probably makes sense. It may make sense if you are retiring to a different region of the country and are not yet sure where you want to set down roots for the next 25 years. It may make sense if you have a one year employment contract which will probably require a move to another place upon termination.
However, in most other cases, renting right now makes little sense for several reasons.

• Even though prices may still soften, waiting to buy makes no sense as the cost of owning a home may still increase.
• Mortgages may soon become much more expensive than they are right now.
• Owning a home is less expensive than renting a home in 72% of major U.S. cities.
• Rental costs are about to explode.

Let’s take a closer look at the last reason. We have often said that the cost of anything is based on supply and demand. The number of widgets for sale and the number of widget buyers together create the price for widgets. That will also apply to rents. There is a much larger demand for rentals right now. The economy has forced many to leave their foreclosed homes and other buyers are afraid to plunge into homeownership.
At the same time, the supply of rentals is rapidly decreasing. Here is a graph from Calculated Risk showing the apartment vacancy rate in the United States:

When supply is rapidly decreasing and demand is quickly increasing, prices have only one place to go – and that is UP! That is exactly where rental prices are headed.

Bottom Line

Is now a good time to rent? We think not. You can buy a home today at a discounted price and get a 30 year mortgage at a historically low interest rate. You can set your housing expense for the next thirty years. On the other hand, rental costs are poised to increase for years to come.

Foreclosure Friday for 04/08

In the Spring Haven subdivision in Taylors, this 3 bedroom, 2 bath home built in 2008 is one of the newer foreclosures in Taylors. The square footage is 1800-1999, and asking price is $119,900.

Prince (the artist formerly known as), donates $250k to Columbia nonprofits

Prince donates $250K to Columbia nonprofit group

By: The Associated Press 04/05/11 9:04 AM
The Associated Press

Recording artist Prince is making a $250,000 donation to a nonprofit group that aims to make sure all children in a Columbia neighborhood graduate from college.
Prince's drummer and Columbia native John Blackwell Jr. made the presentation Tuesday to Eau Claire Promise Zone officials.
The 501c3 Eau Claire Promise Zone is a 12-neighborhood area that is part of the nationwide "Promise Neighborhoods" movement, modeled after the work of Geoffrey Canada and his Harlem Children's Zone.
Prince and the New Power Generation performed shows in Columbia, Charleston and Greenville last month.

Want a home with a lake view?

The greater Greenville region of the Upstate of South Carolina alone has 183 homes with lake views currently on the market! These homes range anywhere from $2,900,000 to $115,000. There is sure to be a home with a fabulous lake view in your price range!

Looking for a lake home in the Upstate?

This beautiful lake home sits on 31 acres, and boasts over 7,000 square feet!

Owner's Title Insurance: What does it do for me?

From the WSJ:

Why Buy an Owner's Title Insurance Policy?

By JUNE FLETCHER

Q. I'm buying a home and the lender insists that I buy a title insurance policy before it will give me the loan. Now my real estate agent tells me that I should buy a policy for myself, too. This seems like overkill. The house I'm buying is only five years old, and the sellers are original owners. Is the agent right, and if so, why do I need this insurance?
--Hillsborough, Calif.
 
A. Imagine that you've bought and settled in to this house. One day, a woman knocks on your door and says that she and her husband had split up shortly before he put the house on the market, and that he forged her name on the deed. She says the sale was invalid and that she's still the owner—and she wants you out. You and the woman go to court where she proves that her story is true. She gets the house back, and you are evicted. Meanwhile, the husband has vanished with the money from the sale.
Or imagine that you discover after closing that there are "clouds" against the title, like liens for unpaid contractor bills (called "mechanic's liens"), legal judgments or taxes. Or perhaps you learn that a former owner has a life estate in the property.
Any of these situations could happen to the buyers of any house, even relatively new ones purchased from original owners. That's why most lenders won't fund a mortgage unless the buyer purchases a title insurance policy to protect it (but not you) from losses due to such claims. And that's why I believe that you should have a separate policy, too.
During a title search, a professional examiner searches through public records, either in person or online, looking not just at the chain of ownership but also at other issues that might affect whether title can be cleanly delivered to a future owner, such as undisclosed leases or restrictive covenants that affect how a property can be used. In many cases, should a problem be found, the title company will quietly fix it. Once the title is clean or "marketable," the underwriters will issue a policy that essentially says that it will defend the policyholder's title in court should anyone challenge it.
The lender's policy is attached to the mortgage, so should you refinance, you will have to purchase them another one. The owner's policy is attached to the property, however, so you won't have to buy another one as long as you own the home. Whether the seller or buyer pays for an owner's policy is typically a matter of local custom, but it can be negotiated as part of the purchase. Since costs vary widely, it pays to shop around for the best rate.
To be sure, some people argue that because public records can be searched so easily by computer these days, title insurance is a rip-off. They maintain that because the incidence of claims is so low, the cost, which can top $1,000 in some areas (paid in a one-time premium at closing), is unconscionable. Indeed, citing high costs, Iowa has created its own title guarantee program. Other states have launched investigations into title insurance companies that give kickbacks or other inducements to agents who recommend them.
Despite these problems, I think an owner's title insurance policy is a necessary evil. Sure, it's not very likely that a wronged spouse or a long-lost heir is going to turn up at your doorstep, but if you are unlucky enough to find yourself in that situation, you will be very glad that you have that policy.

Golf's Ultimate lottery prize: Master's Tickets!

 *For the first time in Masters History, single day passes are available....but are limited!

AUGUSTA, Ga. -- Feelin' lucky?

For the first time in 47 years, Augusta National next spring will make available a select number of daily tournament tickets through a new program wherein fans can apply online for a shot at what traditionally has ranked as the toughest ducats in sports.

Here's the catch -- it's literally a one-off deal, though it won't likely affect the application appetite much. Unlike annual Masters badge holders, who have weekly tickets that are passed along in the family for generations, the new policy will allow selected applicants to purchase single-day passes only. It's similar to the protocol the club uses for distribution of practice-round tickets for Monday, Tuesday and Wednesday.

Of course, the odds of getting the congratulatory email from the club might not be terrific. The new policy is sure to draw millions of applicants and only a lucky few will be selected via what the club described as a random draw.

The club is moving all of its ticket sales online at Masters.com. Those hoping to win the lottery for a live tournament round must apply by June 30 for next spring's event. Practice round passes have been circulated through a random draw since 1995. The deadline ro register for a chance at securing practice-round tickets is July 30.

"Moving the entire application process to our official tournament website is a safe and convenient way for those wishing to apply for daily practice round tickets," Augusta National chairman Billy Payne said in a statement. "We are also pleased to provide a limited number of tickets for the individual tournament round days, which, up until now, have only been allocated to our series badge holders."

In the lottery draw, the maximum allocation for daily tournament tickets is two for any one day and four for any single day for practice round tickets. Tournament week begins April 2 next year. If picked, tickets for practice rounds are $50 and daily rounds are $75.

When asked for more detail, Payne would not divulge the number of tickets that will be made available for Thursday-Sunday tournament play. The club does not announce attendance figures and did not specifically state how many live-round tickets would be made available. Thus, it's hard to speculate on an applicant's odds of being selected for a live round.

"We have actually cut down on the number of people here over the past few years," Payne said of the attendance. "You could say the practice rounds are a needle in a haystack, because we have always had far more applications [than tickets available]. But still, it's the first time in 47 years [for a chance]."

Half-teasingly asked whether the process would be truly random, Payne said, "Yes, sir."

WSJ: Mortgage Rates Tick Up

Mortgage Rates Edge Higher
By DREW FITZGERALD

Mortgage rates ticked up again in the latest week as inflation concerns eased somewhat, according to Freddie Mac's weekly survey of mortgage rates.
The 30-year fixed-rate mortgage averaged 4.86% in the week ended Thursday, up from 4.81% the previous week but down from 5.08% a year earlier.
Mortgage rates generally track U.S. bond yields, which move inversely to prices. Rates have climbed recently, in March hitting the highest point since last April after slumping most of last year when Treasurys rallied amid economic uncertainty.
Freddie Chief Economist Frank Nothaft said low rates "have benefited from relatively benign inflation reports" of late, while distressed property sales continue to pressure house prices.
Rates on 15-year fixed-rate mortgages were 4.09%, up from 4.04% in the previous week but down from 4.39% a year earlier.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.70%, up from the prior week's 3.62% but down from 4.10% a year earlier. One-year Treasury-indexed ARMs were 3.26%, up from 3.21% but down from 4.05%, respectively.
To obtain the rates, the mortgages required an average payment of 0.7 point, except for the 1-year Treasury-indexed ARMs, which averaged 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.

Upstate SC golf courses

Spring is in full "swing," get yours on at your local golf course!!

City	Course	Phone	Photos	$Coupons	Site	Course  Specialse
Campobello	Links O'Tryon	(864)52LINKS	All 18	$105/4WD $135/4WE
Ninety Six	Star Fort	(864)543-2757	All 18	$WebSpecial	Y
Greenville	Bonnie Brae GC	(864)277-9838
Greenville	Verdae Greens	(864)676-1500	All 18
Williamston	Brookstone Meadows	(864)964-9966
Fountain Inn	Carolina Springs GC	(864)862-3551
Tigerville	Cherokee Valley GC	(864)895-6758
Spartanburg	Cotton Creek GC	(864)583-7084
Greenville	Cross Winds G Ctr.	(864)233-6336
Greenville	Donaldson GC	(864)277-8414
Greenville	Hillandale GC	(864)250-1700
Greenwood	Lakeview Golf Club	(864)277-2680
Campobello	Links O'Tryon	(864)52LINKS	All 18	$WebSpecial
Spartanburg	Oak Ridge CC	(864)582-7579
Seneca	Oconee CC	(864)882-8037
Spartanburg	Peach Valley GC	(864)583-2244
Pickens	Pickens CC	(864)878-6083
Anderson	Pine Lake GC	(864)296-9960
Duncan	River Falls	(864)433-9192			Y
Williamston	Saluda Valley CC	(864)847-7102
Easley	Southern Oaks	(864)859-6698
Ninety Six	Star Fort	(864)543-2757	All 18	$WebSpecial	Y
Greenville	Summerset GC	(864)834-4781
Pickens	Table Rock GC	(864)878-2030
Pickens	The Rock at Jocassee	(864)878-2030
Gramling	Village Greens	(864)472-2411
Clemson	Walker GC	(864)656-0236
Greer	Willow Creek GC	(864)848-4999	2,5,8,12,16		Y
Pendleton	Woodhaven GC	(864)646-9511

Foreclosure Friday x2 for 04/01

Absolutely gorgeous home over 4600 square feet! Foreclosure asking $529,000.....let's get a deal!!!! This home is in The Columns at Roper Mountain subdivision. High class!

Greater Greenville

Number of homes currently available: 5670
Number of homes currently under contract "pending": 600
Number of homes that sold (closed) during the month of March: 520!

*The 80 home increase between the number of homes sold last month, and the number of current pending homes is encouraging! Home sales are picking up into the spring months!

Interest rates continue to oscillate around the 5.00% range.

Foreclosure Friday 04/01

No April Fool's Day pranks here....this home is in the highly sought Rockbrooke North subdivision in Greer!

4BR/2BA hardboard and stone ranch on fenced, cul-de-sac, 0.48 acre lot. Home features Architectural roof, attic storage, two car attached garage with bonus

room above garage, screened porch, fireplace and some hardwood floors.

4BR/2BA hardboard and stone ranch on fenced, cul-de-sac, 0.48 acre lot. Home features Architectural roof, attic storage, two car attached garage with bonus

room above garage, screened porch, fireplace and some hardwood floors.

4BR/2BA hardboard and stone ranch on fenced, cul-de-sac, 0.48 acre lot. Home features Architectural roof, attic storage, two car attached garage with bonus

room above garage, screened porch, fireplace and some hardwood floors.

4 bedroom and 2 bathroom, hardboard and stone ranch on a fenced cul-de-sac, 0.48 acre lot. Home features Architectural roof, attic storage, two car attached garage with bonus room above garage, screened porch, fireplace and some hardwood floors!

Any questions can be directed to Jacqueline at 843-437-6917, or jmims@kw.com

Home pricing predictions showing an expected increase as soon as next year!

Double Dip or Double Your Money? … or Both?

by The KCM Crew on March 28, 2011 · 3 comments

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Last week, MacroMarkets LLC announced the results of the March 2011 Home Price Expectations Survey, compiled from 111 responses of a diverse group of economists, real estate experts and investment and market strategists. Many media sources reported on the survey’s comment about a projected ‘double dip’ in prices. What the media didn’t aggressively cover was the other projection in this same report. Today we want to shed light on both portions.

Double Dip

There is no doubt the survey looked negatively on house prices through the rest of 2011. Robert Shiller, MacroMarkets co-founder and chief economist said:

“Overall, the sentiment among our expert panel regarding the U.S. housing market outlook continues to deteriorate. Now they are expecting only a weak recovery, and even that is not until 2013. This uninspiring view must be influenced by the persistently weak market fundamentals – high unemployment, supply overhang, an unabated foreclosure crisis, and constrained mortgage credit.”

Terry Loebs, MacroMarkets managing director commented on the dreaded ‘double dip’.

“Many more experts are now projecting a double-dip after witnessing the double-dead cat bounce that came in the wake of expired government stimulus programs. In December, only 15% of our panelists were projecting that a new post-crash low would materialize for national home prices. Now, just three months later, almost 50% foresee a double-dip happening this year, and not a single panelist expects national home prices to recover to the pre-bubble trend in the coming 5 years.”

However, the longer term view of home prices was much more optimistic.

Double Your Money

The experts projected that by the end of 2015 home prices would attain a cumulative level of appreciation of almost 10% (see chart below from the report).

This means, if you purchased a house today with a 10% cash down payment, you could double your cash in five years; even taking the projected double dip into consideration.
Shiller also noted that there continues to be significant dispersion among the panelists regarding their individual home price forecasts:

“A few respondents do see a real recovery, predicting prices up 20% or so by 2015.”

If that happens, you would have TRIPLED your cash.

Bottom Line

If you are thinking of selling in the next 12 months, you should do it before the projected ‘double dip’. If you are thinking of buying and you plan to live in the home for at least five years, your financial investment will be fine.

Are we carving out the bottom of the real estate market in Upstate, SC?

Real Estate: GOLDen Opportunity of This Decade

by Steve Harney on March 30, 2011 · 3 comments

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Everyone wants to comment on the current real estate market. They want to talk about how now is not the time to buy a home. Some even argue owning a house has never been a great investment. Most say it will be a long time before real estate again begins to appreciate. It all sounds so familiar to me. It was just a decade ago that many made the same arguments about gold as an investment.
Gold had dropped from over $400 an ounce to $250 an ounce (a 40% decline) from February 1996 to August 1999. People ran from gold as though it was a plague.
Lord William Rees-Mogg, the current Chairman of The Zurich Club, in 1997 said:

“No investment has been so thoroughly exploded as gold; most people think that there will no more be another gold boom than there will be another boom in tulip futures in The Netherlands.”

Two years later in 1999, Don Wolanchuk author of the Wolanchuk Report explained:

“Everybody hates gold. You can’t have a bottom until everybody is out. And everybody is out of the gold sector.”

Everyone knows what happened next. The proclamation of gold’s death was rather premature. Gold rose from $250 an ounce to over $1,400 an ounce in the next twelve years. I see the same situation with real estate today. I am not predicting that real estate will see the same levels of appreciation. I do believe however that the market will rebound strongly.
Those who continued to believe in gold as an investment were rewarded. Those who continue to believe in real estate as a sound investment will also be rewarded.
Here is what Adam Hamilton wrote in October 2000 in an essay titled Is Gold Dead?

The road for gold investors has been long and parched in the last five years.  They have wandered through a seemingly endless desert, occasionally tempted by what proves to be an illusory mirage.  Many have fallen beside the sun-cracked path, their white bones picked clean by buzzards and gleaming in the sun.  Nevertheless, a brave contrarian core continues to march forward.  They have studied history, currency, gold, investments, economics, and finance.  They understand the timeless value of gold, the cyclical nature of the markets, and the vagaries of human psychology.  They realize it is darkest before the dawn, and the journey most difficult right before the homestretch is reached.  Gold is in an INCREDIBLE position, and it will have its day.  Nothing goes up in price forever, and nothing goes down in price forever.  Investments are cyclical.  Gold is NOT dead, it is simply biding its time, waiting for its next earth-shattering mega-rally.  The spoils that go to the few remaining gold investors when that day inevitably arrives will be fantastic.  The stunning victory will quickly blot out the painful memories of the long struggle…

You could replace the word ‘gold’ with the words ‘real estate’ throughout this essay and it would apply today.

THANK YOU, all Vets....but especially today, Thank You to Vietnam Veterans.

On this day in 1975, South Vietnam surrendered to the North, reuniting Vietnam. If you know a Veteran of the Vietnam War, honor them today by thanking them for their service.

Learn About the Vietnam War

Between 1945 and 1954, the Vietnamese waged an anti-colonial war against France and received $2.6 billion in financial support from the United States. The French defeat at the Dien Bien Phu was followed by a peace conference in Geneva, in which Laos, Cambodia, and Vietnam received their independence and Vietnam was temporarily divided between an anti-Communist South and a Communist North. In 1956, South Vietnam, with American backing, refused to hold the unification elections. By 1958, Communist-led guerrillas known as the Viet Cong had begun to battle the South Vietnamese government.
To support the South’s government, the United States sent in 2,000 military advisors, a number that grew to 16,300 in 1963. The military condition deteriorated, and by 1963 South Vietnam had lost the fertile Mekong Delta to the Vietcong.  In 1965, Johnson escalated the war, commencing air strikes on North Vietnam and committing ground forces, which numbered 536,000 in 1968. The 1968 Tet Offensive by the North Vietnamese turned many Americans against the war. The next president, Richard Nixon, advocated Vietnamization, withdrawing American troops and giving South Vietnam greater responsibility for fighting the war. His attempt to slow the flow of North Vietnamese soldiers and supplies into South Vietnam by sending American forces to destroy Communist supply bases in Cambodia in 1970 in violation of Cambodian neutrality provoked antiwar protests on the nation’s college campuses.
From 1968 to 1973 efforts were made to end the conflict through diplomacy. In January 1973, an agreement reached and U.S. forces were withdrawn from Vietnam and U.S. prisoners of war were released.  In April 1975, South Vietnam surrendered to the North and Vietnam was reunited.
CONSEQUENCES:
1.  The Vietnam War cost the United States 58,000 lives and 350,000 casualties. It also resulted in between one and two million Vietnamese deaths.
2.  Congress enacted the War Powers Act in 1973, requiring the president to receive explicit Congressional approval before committing American forces overseas.

It was the longest war in American history and the most unpopular American war of the twentieth century. It resulted in nearly 60,000 American deaths and an estimated 2 million Vietnamese deaths. Even today, many Americans still ask whether the American effort in Vietnam was a sin, a blunder, a necessary war, or a noble cause, or an idealistic, if failed, effort to protect the South Vietnamese from totalitarian government.
A succinct history of the Vietnam War
http://www.digitalhistory.uh.edu/database/subtitles.cfm?titleID=71

Declaration of Independence, Democratic Republic of Vietnam. September 2, 1945
http://www.vwip.org/articles/declar01.htm

Documents relating to the Vietnam War
http://www.mtholyoke.edu/acad/intrel/vietnam.htm

$445,000 in 2008 to $160,000 in 2011!!!

This beautiful, never lived in home in the Griffin Park subdivision of Simpsonville was originally listed at $445,000 when it first came onto the market on 09/25/2008. As of just 10 days ago, the price had been reduced from there to $160,000!!!

Two other foreclosures in Griffin Park: Neither of these homes have been lived in.
235 Austin Brook: Appraised for $323,000 in 2009! Now asking $199,900!

This home on Hatcher Creek is asking $199,000 and has several "green" features, including bamboo floors!

Contact me if you'd like more information, or would like to see any of these foreclosures!

Foreclosure 03/28

This home hit the market as a foreclosure this morning. It's a 3 bedroom, 2.5 bathroom home with 2000-2199 square feet, and sits on a quarter of an acre! Asking $189,900 this home is brand new and has never been lived in! It is in the wonderful Copper Creek subdivision in Simpsonville.

Contact me if you would like to see it!
843-437-6917

Distressed Properties: A state by state glance

Distressed Sales: State by State

by The KCM Crew on March 23, 2011 · 1 comment

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We have often written on the impact foreclosures and short sales have on the value of the house next door. The Center for Responsible Lending has done great reporting on the subject. It seems distressed properties will be a challenge we will need to deal with for some time. The National Association of Realtors (NAR) released their Existing Sales Report. The report said:

Distressed homes – sold at discount – accounted for a 39 percent market share in February, up from 37 percent in January and 35 percent in February 2010.

This week, NAR released an Economic Outlook. In the report, they covered the percentage of overall sales that distressed properties represented in each state. Here is a map that accompanied the report:

Bottom Line

Distressed properties have a major impact on house values in a marketplace. Where there is a large percentage of distressed properties, home prices will continue to soften until we work our way through this inventory.

Compound Interest: The Rule of 72

The Rule of 72 basics:
To determine how long it will take your money to double, divide 72 by your interest rate percentage earned. For example, say you have a CD paying 8% (hey, it could happen!). 72 divided by 8 is 9....it will take 9 years for your money to double.
Check out this interest rate calculator to see how much money you will have at a given interest rate, how long it will take that money to double, and even how long it will take you to reach a given financial goal! Very useful!

http://www.moneychimp.com/features/rule72.htm

Building Wealth: 101

The 4 Stages Of Wealth Building As A Homeowner

by Dean Hartman on March 24, 2011 · 5 comments

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One of the primary objectives of owning a home is to let the home appreciate over time and become a pillar of a family’s financial strength.
But before we can discuss “wealth”, we need to identify the stages to get there.

Stage 1

Having “Emergency Cash” is the first stage. It’s having $5-7,000 liquid for life’s inconveniences (the boiler breaking down, the car needing work, etc). When faced with the inevitable challenges that arise, many people are forced to run to their credit cards to make it through. They become stuck with high interest rate, non-tax deductible borrowing.

Stage 2

The second stage is the elimination of “Bad Debt”. We define “Bad Debt” as any debt whose interest is not tax deductible. Obviously, those high interest rate credit cards must be the first to go. But we also want to divest ourselves of the borrowing associated with car loans, boat loans, student loans, and personal loans because it typically can be done cheaper.

Stage 3

Shockingly, when you arrive at stage three, you will be considered in the Top 5% of Americans in terms of financial security. Stage three is accomplished when you have 3-6 months of your total expenses in reserves. The average homeowner (who is logically financially better off than the non-homeowner) has less than one month’s expenses in reserve! When life shows them more than a minor inconvenience (like a job loss, an illness/disability, or worse), most people are in a panic situation. With 3-6 month’s reserves, you will have time to weigh options and make better choices.

Stage 4

True financial security is attained when you become “Debt Free”. But not without debt. We consider our clients “Debt Free” when they have enough liquid assets to pay off whatever mortgage they have outstanding. Wealth building almost requires utilizing the tax benefits of having a mortgage in combination with strategies that utilize The 3 Miracles of Money…

The 3 Miracles of Money

1. Compound Interest – The impact of money left to grow upon itself can be dramatic. If you had $1 on Monday and you could double it every day ($2 on Tuesday, $4 on Wednesday, etc.), by the end of 20 days, you would have $1,048,576.00!!! Now, you can’t double your cash every day, not even every year, but the concept holds true…..compounding interest is a good thing!
2. Tax Free Growth – The ability to accumulate assets without giving Uncle Sam a third of it (in the form of Federal and State Income Taxes) is how the $1 became $1 million. If the growth was taxed at 33% ($1 on Monday gave you $1.67 on Tuesday – instead of $2- and so on), your $1 would only grow to $28,466.20 after 20 days!!! THAT IS NOT A TYPO! You would have “lost” over $1 million.
3. Leverage and Arbitrage – If you can put up minimum cash and take title to a significant asset (like a down payment on a home….the smaller the down payment the better), you can leverage that cash investment to large returns. At the same time, if you can take the cash that you don’t bury in home equity and effectuate a spread between your “after tax cost of money” (mortgage payment) and your investment options (hopefully, in a tax free environment), you can gain the exponential growth that creates wealth.

Bottom Line

Please take the time to investigate all that is possible, by harnessing the POWER of a mortgage to help you move your family towards wealth. Work with a loan officer who can educate you on the power behind properly leveraged real estate via tax savings and reallocation of equity.

Distressed Properties: Short Sales and Foreclosures; the "time" factor

Distressed Properties: Discounts and Difficulties

by The KCM Crew on March 25, 2011 · 2 comments

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Most buyers want to make sure they get a ‘good deal’ when they purchase something. Purchasers of real estate are no different. That is why many decide to buy a distressed property (a foreclosure or a short sale). The National Association of Realtors (NAR) last week reported foreclosures, on average, sell at a 22% discount and short sales at a 17% discount. It sounds like a pretty good decision to buy a property at those levels of discount.
However, the purchaser must realize that there are added obstacles in these type of transactions. Many foreclosures are left in less than pristine condition by the previous owner and some have title issues that must be corrected before they can change hands. Many short sales have multiple loans that must be negotiated before an offer is accepted by all parties to the transaction. This can take months in many cases. Purchasing a non-distressed property will probably have a lot fewer pitfalls.

“Patience Equity”

Does that mean that you shouldn’t consider a distressed property? Not necessarily. Just understand that there is an additional cost to purchasing a foreclosure or a short sale: the cost of time. For some, the 17 or 22 percent discount is well worth the extra time they must spend on the transaction. We like to call that savings your ‘patience equity’. Patience equity will require you to be patient however. Realize going into the deal that there will be obstacles to overcome and make sure you give your real estate professional time to overcome these challenges. Again, patience equity will require your patience.

Bottom Line

Buying a distressed property could make sense for you as long as you realize you will need to be VERY patient with your real estate agent throughout the process. If you are, you will own a home that has considerable equity the day you move in.

Home Inspection before you sell: Is it a good idea?

    There is a trend subtly making its way to the forefront for those trying to sell their home: the idea of paying for a home inspection as a seller is becoming a debated topic. For a majority of real estate transactions, the home inspection is ordered (and paid for) by the potential buyer after a purchase and sales agreement has been accepted and signed by both buyer and seller.
    After the home inspection, the buyer has 3 options:
1. Request that the seller make some, all, or none of the repairs recommended by the home inspector.
2. Further negotiate a lesser purchase price to cover the cost of repairs, should the seller refuse to make the repairs.
3. Walk away from the deal only owing the home inspector his fee.

   As a seller, it might be worth your time and resources to get the home inspection out of the way, minimizing the leverage that the buyer could gain in the home inspection. You will identify up front any areas of concern and can then repair them before the buyer has to ask.

From the National Association of Realtors: What to do to get your house ready to sell.

Get the House Ready
A house that "sparkles" on the surface will sell faster than its shabby neighbor, even though both are structurally well-maintained.
From experience, REALTORS® also know that a "well-polished" house appeals to more buyers and will sell faster and for a higher price. Additionally, buyers feel more comfortable purchasing a well-cared for home because if what they can see is maintained, what they can't see has probably also been maintained. In readying your house for sale, consider:

• how much should you spend
• exterior and curb appeal
• preparing the interior

How much should you spend
In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new roof, but they aren't likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen. Your REALTOR®, who is familiar with buyers' expectations in your neighborhood, can advise you specifically on what improvements need to be made. Don't hesitate to ask for advice.

For Your Home Our home improvement section features how-to tips and important information about repairing and remodeling your home.

Maximizing exterior and curb appeal
Before putting your house on the market, take as much time as necessary (and as little money as possible) to maximize its exterior and interior appeal. Tips to enhance your home’s exterior and curb appeal:

• Keep the lawn edged, cut and watered regularly.
• Trim hedges, weed lawns and flowerbeds, and prune trees regularly.
• Check the foundation, steps, walkways, walls and patios for cracks and crumbling.
• Inspect doors and windows for peeling paint.
• Clean and align gutters.
• Inspect and clean the chimney.
• Repair and replace loose or damaged roof shingles.
• Repair and repaint loose siding and caulking.
• In Northern winters, keep walks neatly cleared of snow and ice.
• During spring and summer months consider adding a few showy annuals, perhaps in pots, near your front entrance.
• Re-seal an asphalt driveway.
• Keep your garage door closed.
• Store RVs or old and beaten up cars elsewhere while the house is on the market.
• Apply a fresh coat of paint to the front door.

Maximizing interior appeal
Enhance your home’s interior by:

• Giving every room in the house a thorough cleaning, as well as removing all clutter. This alone will make your house appear bigger and brighter. Some homeowners with crowded rooms have actually rented storage garages and moved half their furniture out, creating a sleeker, more spacious look.

• For Your Home Want to give your home a new look? Find advice and inspiration in our decorating section.

  Hiring a professional cleaning service, once every few weeks while the house is on the market. This may be a good investment for owners who are busy elsewhere.
• Removing the less frequently used, even daily used items from kitchen counters, closets, and attics, making these areas much more inviting. Since you're anticipating a move anyhow, holding a garage sale at this point is a great idea.
• If necessary, repainting dingy, soiled or strongly colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum.
• Checking for cracks, leaks and signs of dampness in the attic and basement.
• Repairing cracks, holes or damage to plaster, wallboard, wallpaper, paint, and tiles.
• Replacing broken or cracked windowpanes, moldings, and other woodwork. Inspecting and repairing the plumbing, heating , cooling, and alarm systems.
• Repairing dripping faucets and showerheads. Buying showy new towels for the bathroom, to be brought out only when prospective buyers are on the way.
• Sprucing up a kitchen in need of more major remodeling by investing in new cabinet knobs, new curtains, or a coat of neutral paint.

How does the relationship between you, your Realtor, and your lender work?

   Communication is key, especially when buying a house! So, how exactly does the relationship between your Realtor and your lender work, and how is that in your best interest?
  What you tell your lender stays between you and the lender. The only information passed to your Realtor from your lender is:
-How much you can spend
-What type of loan you may be looking for
-If you want or need the seller to contribute money towards your closing costs.

*Knowing these things ahead of time may very well save you precious time, resources, and could save some frustration! These things must be known so that you are put in the best possible position to actually purchase the house you want!
 

Foreclosure Friday 03/25/11

For those of you who like having land....This beauty of a home sits on 11.78 acres!! Asking $549,900 it boasts 5 bedrooms and 5 1/2 bathrooms! Plenty of space with 4200-4399 square feet, and is in Easley but is not in a subdivision---no HOA's!!

Want to see it? Call/text me: 843-437-6917
...or email if you prefer: jmims@kw.com

WSJ survey says more people are moving to SC than any other state!

A recent Wall Street Journal news article reported findings on its survey of "Baby Boomers" (those who are preparing for retirement, or have recently entered retirement--people born between the years of 1946-1964). WSJ asked these people where they are planning on living in retirement. Of those people surveyed, most said they were planning on moving to South Carolina!
*So if you have a family member, friend, or previous neighbor that you know is moving to South Carolina, pass the web address of this blog along. They can ask any questions that they may have!
--If they're not comfortable with computers, feel free to pass along my contact information. I would be happy to speak with them.

Image from the WSJ article:

Foreclosure Friday (new foreclosure of the week)

This 4 bedroom, 2.5 bathroom brick home offers much space at 2400-2599 square feet. It has a two car garage, and sits on over 1/2 an acre. Asking $189,000 in the Roper Mountain Plantation subdivsion. This one is worth a look!

Contact me for a personal showing!

Don't let the bedbugs bite.....or the termites!!

I have learned more about termites in the last 3 1/2 years than I had ever wanted to know. Just in case you're curious, here is some information!!

What Can You Do to Help Protect Your Home?
Small steps make a big difference in termite prevention and sustaining an effective termite treatment plan. Start by eliminating moisture conditions and food around your home. These simple steps make your home a less attractive target, helping deter termites.

Eliminate Moisture Problems Repair leaking faucets, water pipes, and a/c units Divert water from foundation Keep gutters and down-spouts clean Remove excessive plant cover and wood mulch Get rid of standing water on roof Keep all vents clear and open Seal entry points around water and utility lines or pipes Remove Food Sources Keep firewood, lumber, or paper away from foundation or crawl space Get rid of stumps and debris near house Place screens on outside vents Check decks and wooden fences for damage Wood on your home shouldn’t contact the soil Termite Warning Signs & Identification Some indications you may have a termite infestation: A temporary swarm of winged insects in your home or from the soil around your home. Any cracked or bubbling paint or frass (termite droppings). Wood that sounds hollow when tapped. Mud tubes on exterior walls, wooden beams, or in crawl spaces. Discarded wings from swarmers.

CNN Money's "Top 10 Things to Know When Buying a House"

1. Don't buy if you can't stay put.
If you can't commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner - even in a rising market. When prices are falling, it's an even worse proposition.
2. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
3. Aim for a home you can really afford.
The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
4. If you can't put down the usual 20 percent, you may still qualify for a loan.
There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price.
5. Buy in a district with good schools.
In most areas, this advice applies even if you don't have school-age children. Reason: When it comes time to sell, you'll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.
6. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.
7. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points -- a portion of the interest that you pay at closing -- in exchange for a lower interest rate. If you stay in the house for a long time -- say three to five years or more -- it's usually a better deal to take the points. The lower interest rate will save you more in the long run.
8. Before house hunting, get pre-approved.
Getting pre-approved will you save yourself the grief of looking at houses you can't afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.
10. Hire a home inspector.
Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.

Are you ready to buy a home?

You've decided that you would like to buy a home....where do you go from there?!
*You'll need a source of funds for a down payment (which will run anywhere from 0%-10% of the purchase price), and closing costs (which will run anywhere from 2%-4% of the purchase price). Many loans will allow these funds to come from any "interested party" (meaning...from a relative, friend, or even the seller)
*You will need an income. Your lender will require your most recent 2-3 W2's. (Lenders used to be able to lend on "stated income" meaning that a buyer could say, "I make $100,000 per year" and that's what the lender would base the loan amount on. That's a big reason why banks got into trouble....they don't lend on stated income anymore!
*You will need a decent credit score. The lower limits of lending now are 620 for FHA.

Once those ducks are in a row, you know you are in a good financial position to buy!!!

Happy house hunting :)

Trying to save money on the purchase of your next home?

In today's market, everyone is looking for a "good deal." Why shouldn't you be? There are plenty of deals out there. It's common for people to think of the money paid to real estate agents as a way to possibly save money on the price of the home. The thinking is: "Well, if I don't use an agent and just go through the listing company, I'll save that 3% on the price!" That would be the logical thing to do. May I offer that not using a buyer's agent could possibly put you in a position where you will actually pay more for your next home, and do a whole lot more leg work than you would have if you had an agent!  (But you expected me to say that...so let me justify)

**Also, I do need to preface this by saying that there are bad apples in every profession. Are there some dishonest agents? Yes. There are 13,274 real estate companies in South Carolina...and many, many more agents. (So interview a couple agents before making your decision).

A good buyer's agent will
*Streamline the process in finding your next home, which could save you hours of time, not to mention saving that gas money!
*Have access to all properties by all agents on the MLS, as well as FSBO's
*Be able to search exclusively for distressed properties (short sales and foreclosures)
*Provide resources to help secure the financing that you need (ie: little to no money down, 100% financing, the best interest rates available)
*The mentality of coaching you through the home buying process, and heart to "fight for you." To be an outspoken advocate on your behalf.
*NEVER will divulge personal information about you, or your motivation for buying
*Will have the ability to get you the best possible deal through aggressive (fair, but assertive and confident) negotiation techniques.

If you have any questions, please call/text/email, or comment about this post!
843-437-6917
jmims@kw.com