Charlotte Real Estate, Foreclosures, Short Sales

According to the National Association of Home Builders, housing starts decreased 11 percent in July 2008 to a seasonally adjusted annual rate of 965,000, the lowest level for this series since March 1991.  Construction of  single-family homes fell 2.9 percent to 641,000 rate, the lowest since January 1991 while work on multifamily units contracted by 24 percent from the prior month to an annual rate of 324,000.  Authorizations for building permits fell 18 percent between June and July to 937,000. 

This is an excellent time to buy a new construction home.  Add the recent $7500.00 tax credit from the Government, and you have a win-win situation.  We are currently have 4 fantastic auctions scheduled for September.  These new construction homes have been reduced hundreds of thousands below appraisal.  The property websites are:

http://www.1401Avery.com

http://www.8020WilsonRidgeAuction.com

http://www.9226ArlingtonAuction.com

http://www.8612Annaleis.com

THESE HOMES ARE UNBELIEVABLE!  THESE ARE NOT FORECLOSURES!!

Some other builder promotions to note are:

Lennar Homes
Zero down and zero closing cost for Lennar Homes.  This Saturday and Sunday get a new home with great financing through Universal American Mortgage Company.  With certain restrictions, Buyers can own a new home at $199,990 for $992.00 per month for the first year.

Oakmont Builders
Only $100 Down.  Oakmont Builders has homes available from the low 100's to the low 200's. Downpayment assistance is available plus Oakmont Builders will pay closing costs.  Visit floor plans online at http://www.oakmonthomebuilders.com

If you would like information on the many new home builder alerts that we receive daily, please register as an online guest and receive weekly information as it becomes available.

The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009.   Congress has set no limits on how many people can take the tax credit.  It is expected to benefit hundreds of thousands of home buyers.  There are no price limits, limits on location or condition of the home.  What are the facts about the tax credit?

1.  Who is eligible for the tax credit?
The tax credit is only for first-time homebuyers purchasing new construction or existing homes.  To qualify for the tax     credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009

2.  Can I purchase an investment home as a first-time homebuyer?  No, the home must be purchased as a owner-occupied principal residence home.

3.  Do I have to pay back the tax credit?  Unfortunately yes.  Starting in the second tax year after purchase and continuing for up to 15 years, taxpayers are expected to make pro-rata repayments to the government on their federal filings. Over a 15-year payback period for the full $7,500 credit, the cost would be $500 a year.

4.  Are there any income restrictions?  Yes, there are income restrictions.  Single or head of household status on a form 1040 are eligible for the credit if their income is less than $75,000.00.  Joint return filers may not have a higher income than $150,000.

To find out how you can take advantage of the credit prior to filing your taxes and increase your monthly cash flow, download the following document provided by the National Association of Realtors 

Myth, Short Sales Don't Work

It depends who you ask.  Short sales can work or bomb for both the buyer trying to purchase a home as a short sale or the homeowner trying to sell their home with a short sale prior to foreclosure.  We've been facilitating short sales for years and here are the most common mistakes we see on both the Realtor representing the homeowner and the buyer who submits an offer:

1. The home is not really in default and is listed as a short sale. 
When I look through our local MLS, I see homes listed as "short sale", but the home has not received a notice of default.  A notice of default is basically a notice given to the borrower that they are in default; have not made their regularly scheduled mortgage payments to the lender.  It states that if the money owed is not paid by a certain time, the lender may chose to foreclose the borrower's property.  Some homes have not reached this point yet.  If they have not, a contract submitted to the bank will most likely NOT get assigned a negotiator to short sale the balance on the loan. 

Buyers, make sure the home is actually in foreclosure.

Sellers, do not allow a short sale comment to be posted on your home just to get an offer.  The property needs to be in foreclosure.

2. The homeowner does not approve the submitted contract and holds out for a higher offer.

If a property is truly in foreclosure, the seller has actually lost the right to negotiate.  Not literally, because they still own the property, but in all actuality you need the lender's approval to discount the loan.  It makes no sense.  Final approval is going to come from the lender. A negotiator will be assigned to speak to the agent representing the homeowner. 

3. The agent does not submit a full short sale package.

If you are facing foreclosure, please make sure you are working with an agent who has facilitated short sales and has experience.  When you are weeks away from eviction, now is not the time for an agent to "practice".  Once the homeowner signs the letter of authorization authorizing the agent to speak to the default department/loss mitigation department about the loan in default, the agent should request the list of documents required to be sent as a short sale package.  Many banks such as HSBC, Countrywide and Option One have a dedicated page listing the documents needed to submit for a short sale.  Submitting an offer without the supporting documents will lead to the offer being denied or a huge delay in processing the short sale.

4. The price listed in the MLS for sale is based on fair market value.

We see too many homes listed at fair market value or even above FMV.  There is not anything "fair" about a short sale, that is why it is called a short sale.  Agents, please short the sale and list the homes at the percentage either obtained from the lender or at a 30% or higher discount.

5. The buyer submits an offer FULL of contingencies.

We see many offers full of loan and inspection contingencies.  There are also a number of contracts submitted with the seller paying closing costs or a portion of closing costs.  Buyer agents please know that the sellers are totally insolvent at this point and can not pay closing cost.  A net sheet along with other supporting documents will be sent to the lender.  Discount the property based on the pre-inspection and closing cost desired.  Chalk it up to the cost of doing business and spring for an inspection by a general contractor.  Know that the homes will have cosmetic repairs to be made, but be more concerned about the structural soundness and mechanicals of the property.  Yes, we have negotiated closings costs to be paid by the lender and they are recently being approved at a higher rate, but it still doesn't make for a clean offer.  The negotiators are working with a historically high amount of short sales.  The cleaner the offer, the faster the approval.

6. The buyer does not have a team.

If you are interested in buying a foreclosure, short sale or home at auction, you need a team.  The team will consist of a mortgage broker with hard money lending experience, contractor, title/escrow agent and general contractor to name a few.  Make sure each member of the team is reliable, has experience in this arena and works weekends.  Know the cost of doing business up front and you will lose less in the end.

If you are facing foreclosure or if you are a buyer interested in purchasing a short sale or foreclosure, please contact us today at (704) 559-5988 X 5.

After employers have shed 51,000 job, the unemployment rate has climbed to a four-year high of 5.7 percent.  According to data released by the U.S. labor department, lack of credit affected employers the greatest by decreasing their willingness to hire and plans to expand.  That brings the total of lost jobs to 463,000 for 2008.

Summer has usually been a time when teenagers were able to enter the job market for summer employment.  Not so this year.  The unemployment rate for teenagers has climbed to 20.3 percent.  This is the highest since 1992. 

Company Cuts

General Motors filed a report on Friday showing the third-worst quarterly loss in its history.  General Motors posted losses of of $15.5 billion on Friday. General Motors will reduce production by another 300,000 vehicles and lose thousands of hourly and salaried workers.

Other cuts include:

• More than 700 Bennigan's restaurants, owned by privately hel Metromedia Restaurant Group are closing.

• Some cuts at Chrysler

• Some cuts at Wachovia

• Some cuts at Pfizer
  
  

What does this mean for the Housing Industry?

There is no doubt that we will see a relationship start to exist between these new job losses and foreclosures.  This will mean that homeowners affected by job losses and other hardships will need to seek out information and assistance earlier.  Forums and information to help include:

Neighborhood Works - Free foreclosure counseling at HUD approved agencies

HUD Foreclosure Information - A free resource to give tips to homeowners facing foreclosure.

Hotline for N.C. Homeowners Facing Foreclosure - Help for North Carolinians who are at risk of losing their homes to foreclosure is now just a telephone call away

If you need additional assistance and numbers for avoiding foreclosure, give us a call at (704) 559-5988 x 5.