Real Estate Information

In this series, we will discuss the questions you need to know the answers to before you hire that Realtor.  Too often, sellers simply pick the agent that suggests the highest recommended price for their property as they seem to be on the sellers "side" and sellers, naturally want the most for the property.  Buyers will often simply choose to work with the first agent they meet-once they are ready to make the purchase.

For sellers that choose the agent that "bought" the listing by recommending a high list price, this could ultimately cost the sellers tens of thousands of dollars as they chase down a declining market.  I have seen this happen many times.

Buyers and sellers need trustworthy, knowledgable, and experienced agents that know the market, know how to market, and most importantly, know how to negotiate. They will help you avoid pitfalls and will provide you with upfront and direct advice.

Here are some questions you want ask when you interview your agent:

1) How much experience do you have?  Being a Realtor for 20 years does not mean they are more qualified than an agent that has been in business for 5 years so you will want to dig a little deeper on this subject.  Find out how many transactions the agent does in a year.  What type of properties do they typically sell?  Do you have a partner or team to help with different aspects of the process?

2) How much referral business makes up their annual sales?  The higher the better.  A good agent should have at least 30% or more of their annual business from referrals.  This shows they value their clients enough to stay in touch with them after the sale.  An agent that does a lackluster job for their clients will not be getting many referrals from dissatisfied clients.

3) Can they provide referrals from past clients?  This will give you an opportunity to speak with someone who has been through the process with this agent and will provide great insight for you.

4) Ask the agent about market knowledge (statistics).  How many homes on on the market in your area?  What is the average days on the market?  What is the list price to sales price ratio for the agents listings? What is the absorption rate for homes in your area (the period of time it should take all active listings to sell if no more were put on the market). 

5) Do they have a list of proven service providers (attorneys, lenders, contractors, etc.)

6) Most importantly, is the agent "telling" or asking questions and "listening?"  Your agent cannot possibly help you if they do not ask you questions so they can determine how best to help you accomplish your goals. 

7) Do you provide any type of guarantee (for sellers)?  Of course, agents cannot guarantee the sale of your property unless you price it well below market value but they can guarantee their work and efforts.

Next week we will have more questions for you to ask before you hire that agent.  We will dig into the type of marketing each agent may offer.  Once you have all the information, you will be able to make a great decision on the right agent for you!.

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

Here is how things look from December 2010 to January 2011 as well as January 2010 to January 2011 (Information provided by Wilmington Association of Realtors):

The average sales price dropped roughly 9% over the past month, however units sold stayed steady at a 1% drop.  There were 1/3 fewer listings on the market in January 2011 as ther were in 2010.

The one month decline from December 2010 to January 2011 is largely the result of seasonal changes.  It is more important to watch the month to month trends that develope over time as markets can sneak changes in without creating a lot of a dramatic reports.

2010 vs 2009

The number of homes sold in 2010 vs. 2009 was an increase of almost 200 properties.  Average sales prices dropped only 1.1% last year.  Days on the market went from 135 in 2009 to 133 in 2010-not much difference.  What does all this mean?

Take a look at the Wilmington NC Real Estate area market statistics.

This market has been full of surprises but it is clear that prices are settling and it is safe to say we are very close to the bottom.  Can they adjust more-maybe.  There is a shadow inventory of foreclosures that will be released at some point.  This could cause a slight dip in values but we won't know until it gets here.

Is it a good time to buy?  You bet.  Housing affordability is a function of prices and interest rates.  Affordability is the highest it has ever been.  Once interest rates go up, affordability will go down.  The money saved by securing a great interest rate now, will offset any minor price dips we may see this year.

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

No matter what business you are in, the value of referrals and repeat clients cannot be overstated.  Many years ago while managing restaurants, I learned quickly that if you take excellent care of your clients and customers they may tell someone that you did a great job and refer them to you.  If you do a lackluster or downright poor job, they will definitely tell quite a few people and your reputation and business will suffer!

Staying in touch with our clients has always been important to us but sometimes we go for longer stretches than we like.  Life is certainly busy and it is easy to let relationships slip away.  I think we can all attest to that.  Whether it is business, personal, or family-staying in contact is often a challenge. 

We are developing a "Client Appreciation Program" and it will serve two functions.  First, we will have a system in place to stay in touch with our clients on a more regular basis.  Secondly, we provide an item of VALUE to our clients and friends each month. Providing useful and valuable information is what we typically do when we are helping to sell real estate in Wilmington, NC or when we assist someone with a purchase.  It only stands to reason that we will extend this service to keep everyone updated with current and relevant information throughout the year.

If you would like to be added to our list of clients and customers, send us an email or call and we would be happy include you!

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

"Should we wait for the market to improve before we list our home for sale?"  That is an often asked question these days.  The answer is, "that depends." 

Some important questions to consider are:

• Do you have a realistic idea of what your property is worth? 
• Can you afford to sell your home?
• Do you have a mortgage or home equity line of credit on the property?
• Are you moving out of the area? If so, what is the real estate market like in that area?
• Are you going to buy another home after the sale?
• Are you up-sizing or downsizing?
• Will you be financing your next home?
• When will the market improve?

First, let's see what your property is worth.  An appraisal is a great way to determine values but they can be $350-$500 or more.  If you are in the Wilmington NC area or the surrounding counties, you can use our Market Valuation tools at www.WilmingtonMarketValues.com .  This provides you with a report of real estate listings and sales in your area every two weeks.  An on-site visit is needed to narrow down the value but this tool will provide a pricing range. 

Knowing your current home value will help you determine how much money you will net in the sale or if you may be in a negative equity situation.  If you are upside down, there are other options available and that warrants an article on its own. We help with these situations so let us know if you need guidance here.

If you are selling your home and buying another, the important consideration is the real estate market in which you will be making your purchase. If it is similar or the same market, that makes your decision easier.  Since price is relative, it is somewhat of a wash.  If you sell your house for a lower price, you will be able to purchase for a lower price.  The reverse is also true.  A twist to this is if you are up-sizing or downsizing.  The greatest impact, to you, will be seen on the larger or more expensive home.  This is a great time to move up to a larger or better home since the greatest benefit will be on the purchase. You may need to downsize and you will see more of an impact on the larger home you are selling. If you are buying your first home or investment property, there are many wonderful opprotunities out there.

Another important consideration here is whether or not you will be getting financing.  Interest rates are very low.  The cost benefit of a 1% increase in interest rates can reduce your purchasing power by 10%.  For example, if you are shopping for a $200,000 home and can secure a 4% mortgage, that purchase price will drop to $180,000 if interest rates go to 5%.  This is overlooked often as many people are focused on prices. 

How long will you need to wait until the market improves?  No one really knows.  The statistics are showing a trend towards leveling out.  Could prices drop some more? Sure.  But most regional real estate prices have approached a point of break even for new homes and cheap land.  Basically, this means that even with very low lot prices, builders with stripped down homes cannot create a replacement house with zero profit if home values drop much more.  Remove the supply and demand will rise-and so will values.

We do expect additional foreclosures, REO's, and short sales in the Wilmington NC Real Estate market and this will keep low prices stable for at least this year.  Once big banks flush out this inventory, it reasonable to assume values will begin to inch up.

Money is not the only factor to consider when selling.  Perhaps you want to move to be closer to family.  maybe there is a better job in another area.  Convenience to loved ones, school, or work can also be a reason to move.  Life is short and the values we place on some things can be worth a lot more than money.

Have a question?  Feel free to email or call and we will do our best to provide you with information that will help you make the best decision!

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

December 2010 homes sales numbers are out with positive numbers in all categories with the exception of sales price.  Here is how things look from November 2010 to December 2010 as well as December 2009 to December 2010 (Information provided by Wilmington Association of Realtors):

Comparing 2009 Wilmington NC Real Estate data to 2010, we see that 179 more homes sold last year than the previous year of 2009 and that yielded approximatley 21.4 million dollars more in sales.  The average sales price in 2009 was $234,383 and dropped slightly to $231,667.  That is much better than the drop from $256,167 that we saw from 2008 to 2009.

Compared to previous years, this trend reinforces that the market is showing improvements.  Price decline rates are low and the number of homes selling are increasing.  Interest rates continue to ve very good and if the credit squeeze will relax further, we should continue to see improving Wilmington NC Real Estate market conditions. The population of the country continues to rise and pent up demand is becoming more apparent each day.

The flip side to all this is the foreclosure and default rate.  As banks resume foreclosures and homeowners continue to default, the negative effects of this will have some influence in values.  You can view Wilmington NC Foreclosures and short sales on our website. 

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

As we move into January, 2011, we want to pay attentions to a few key issues with regards to Wilmington NC Real Estate.  This includes trends and sales information.

December 2010 data is not yet out but here is what we saw in November for the Wilmington NC Real estate area:

• From October 2010 to November 2010: # Units sold increased 2%, Average sales price increased 6% and Median sales price increased 5%

• From November 2009 to November 2010: # Units sold decreased 22%, Average sales price increased 10% and Median sales price increased 6%

Another issue we want to be aware of is that foreclosures still represent a huge danger to the recovering economy and housing.  While many large companies have stalled foreclosures, the number of borrowers defaulting continues to rise.  Eventually, the foreclosures will begin to stream back into the market along with the backlog. 

A third issue is interest rates.  While we do expect these to rise over time so inflation does not get out of hand, we expect it to be a gradual increase. 

Lastly, new home starts are on the rise.  Builders have been on the sidelines and they will be coming out with new products in 2011 at great prices.

What does this mean to the buyer?  These are all good reasons to purchase now or in the near future.  I am not talking about flipping properties.  I am talking about buying and holding for your personal home or investments for renting. With the extension of tax cuts, people still desiring to own their own home, low rates, and and improving economy, real estate is slowly but surely going to come back-like it always has.

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

In our previous two blog entries we discussed the basics of the new NC Offer to Purchase and Contract form set to go live (mandatory) on January 1, 2011.  Today we are going to touch briefly on the Due Diligence period and financing that the buyer may need to purchase a property.

As Realtors, we are continuously advising our clients to obtain pre-approval prior to shopping for a home.  The benefits are numerous and include the following:

• Pre-approvals gives the buyer a shopping price range.  The worse thing a buyer can do is look at homes outside the price range they feel is affordable given the lifestyle they wish to maintain.
• Pre-approvals show the monthly expenses (principle, interest, taxes, and insurance costs) and that allows the buyers to budget accordingly.
• Pre-approvals in hand allow a Buyer to move quickly when they find a home they want to purchase.  (Foreclosures and short sales require pre-approval letters or the bank/ owner will not even consider the offer.)
• Pre-approvals strengthen an offer as it shows any seller that the buyer is serious (ready, willing, and ABLE)!
• Pre-approvals reduce the risk of loss of the Buyers' earnest money

Since the Due Diligence period is a critical date, the buyers need to be sure they can get financing and the pre-approval letter means they have supplied the lender with critical documents needed.  Do not confuse "pre-approval" with "pre-qualified".  Pre-qualified means very little as it is usually based on statements made to a lender, by the buyer, and has provided no credit report or critical documents.

The last but not least important consideration is the choice of lender.  We ALWAYS recommend a solid local lender that has a proven track record and understands the Due Diligence date and the potential and substantial losses the buyer could incur if the lender does not approve the loan.  Many "on-line" lenders are notorious for quoting cheap rates and sending pre-approvals letters only to decline the loan prior to closing.  These firms are responsible for substantial delays or losses to buyers and sellers.  We prefer local lenders who have in-house underwriting to speed up the process and give us a "go" or "no-go" on the buyer before monies are placed at risk.

Ask your Realtor for a couple of good local (to your purchase area) lenders and save yourself a lot of trouble!

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

Last week we covered the basics on the new NC Offer To Purchase and contract form.  We are going to discuss two sections of the contract that deal with money, paid out by the Buyer, at the time an Offer To Purchase is made.  These are the "Earnest Money" deposit and the new "Due Diligence Fee."

The Earnest Money, typically submitted with an offer to a seller, is intended to show "earnestness" or seriousness of intent by the buyer to the seller.  The more earnest money, the better an offer looks.  The buyer is saying, "Hey Mr. or Ms. Seller, I want to buy your house and here is some cash to show I am serious!"  Now that money does not usually go to the seller, it is held in a trust account until closing when it is credited towards the purchase price.  It may also be returned to the buyer under several circumstances. 

In the old Offer to Purchase (OTP), the earnest money could only be returned to the buyer if the buyer could not get the financing approved, the seller could not convey clear and proper title, or if the buyer and seller could not agree on repairs to the property (and a few other potential issues).  Repairs have been a huge obstacle to closing real estate deals.  The old OTP addressed fairly specific repair items.  This led to many stalemates and deals falling apart because of the huge potential for interpreting if there was a problem.  For example, an old roof with missing shingles; though it may not leak, it could be in need of replacement.  Buyers and sellers may not agree on appropriate action and the deal dies.  At this point, the buyer chooses to terminate the contract and get earnest money back.  The seller may refuse.  In this case, the earnest money must stay in the trust account until both parties agree to how it will be disbursed.   Sometimes it may go to arbitration or court.  In any event, the earnest money is tied up.  In this case, it is easy to see that a buyer is making a bold statement of earnestness when they submit money with an offer as they risk it being tied up for a potentially long time.  With the new OTP, this will be different.

Although earnest money is still important, the new "Due Diligence Fee" is an amount of money a buyer pays directly to the seller to "purchase" a look at the property for a period of time (Due Diligence Period).  The buyer will need to do everything during this period to satisfy the fact they can make the purchase confidently.  After the Due Diligence Period, the buyer WILL lose their earnest money to the seller if the buyer fails to close on the property.  Some things a buyer will want to do: make sure they can secure the loan including appraisal of the property, investigate HOA and regulatory documents, inspect all aspects of the property (hire professional inspectors), investigate insurance costs, and anything else a buyer may need to be concerned with. This also included negotiating with sellers for repairs.  If, during the course of this period of time, the buyer feels like they cannot be satisfied with moving forward, the will terminate the contract and be entitled to receive the earnest money back-but they do not get back the Due Diligence Fee.

So how much to offer in a Due Diligence Fee?  That will vary for each situation.  The seller will be most at risk since the buyer can walk for any reason or no reason during this period.  It will be in the sellers' best interest to get as high a Due Diligence Fee as possible.  The status of the sellers property will be changed in the MLS database and this will result in an immediate decrease in buyers looking at the property.  The buyer wants to put as little as possible since it is non-recoverable (in most cases) if the deal does not close. 

Buyers and sellers need to put themselves in each others shoes and work together to be fair and thorough through the process.  Buyers want to buy, sellers want to sell, and none wants to get hurt. 

More next week!

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

Begining January 1, 2011, North Carolina will be using a new NC Offer To Purchase and Contract form.  This residential form replaces the traditional Offer to Purchase and is radically different in several sections.  In fact, a great deal of standard forms will be updated. It is important to understand these changes as they will affect buyers, sellers, and real estate agents.

For years, the Offer to Purchase Contract (OTP) has gone through minor changes as lawsuits, agency issues, municipal codes, building styles, and general expectations have dictated a need to address issues in a clearer and more thorough manner.  The new contract eliminates detailed sections of the old contract that address inspections, repair issues, and financing.  In this blog entry we will will give an overview of the changes.  We will follow up with some additional information in this series.

The contract now looks more like the commercial form in that it provides for a "Due Diligence Fee" and a "Due Diligence" time period.  Let's look at the basics of these.

The "Due Diligence Fee" is a negotiated amount of money paid by the buyer to the seller to conduct Due Diligence.  This money will be credited to the purchase price at closing or forfeited to seller in the event the buyer does not close.  The fee may only be returned to the buyer in rare cases where the sellers breaches the contract, cannot provide clear title, or the house is damaged by fire or other causes. This fee is not to be confused with "Earnest Money."

The "Due Diligence Period" is a period of time from the execution of the contract to a specific future date in which the buyer must complete all inspections, document review, ordinance review, insurance costs as well as satisfy all lender obligations (including appraisal).  This is also the period of time that the buyer must complete negotiations with the seller regarding repairs.  The Due Diligence period is a "time is of the essence" date.  Once the Due Diligence period has passed, the buyer must purchase the property or forfeit their earnest money. 

What does this mean for the buyer?  Essentially, during the Due Diligence period, the buyer can terminate this contract for any reason or no reason and still be entitled to a return of earnest monies.  The buyer needs to move quickly and efficiently during this period of time so they do not risk a potential loss of money or opportunity.

What does it mean for the seller?  The "status" of your property listing will be changed and will not be shown by as many agents since it is under a conditional contract.  Your risk is loss of time on the market. 

In the next series we will explore some more details and strategies with regards to the new forms and how Wilmington NC real estate and other markets will be affected.

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408

Thinking of buying a new home?  Here is why you need a Buyers Agent to represent you.

There are few better marketing tools for builders than to set up a gorgeously staged model home in a new community.  Potential buyers walk in and see a showcased home complete with decor and furnishings and imagine how great their home can be-and indeed it may be that way.  However, there are some things you as a potential buyer should know.

• Loyalties: A Buyers Agent represents you and is looking after your best interests. On site agents typically represent the seller.
• Potential location problems:  What are the future plans for the area?  Could a major project be planned nearby that could affect future values?
• Negotiation:  A buyers agent will be able to negotiate for you.  We are often able to negotiate lower sales prices or upgrades at no or reduced charges.
• Contracts To Purchase:  Standard Offer to Purchase forms are complicated enough.  Many builders have their own contracts and you need someone to explain the terms and potential extra costs, fees, and potential penalties.
• Eyes and ears:  Many of our clients are out of town and cannot monitor the progress or lack thereof.  It provides substantial peace of mind to know you have someone watching the project for you.
• Problems can happen.  We stick with our clients before, during, and after the sale to help remedy any problems that can show up with the house.  Most builders are great to work with and want to make sure the clients are happy.  We have also had some instances where the builder was difficult to reach and not cooperative with correcting issues.  With the strength of our presence, we can help remedy these issues.
• You do not save money by buying directly from the builder.  Many think they can get a better deal buying direct and this is simply not the case.  You will want a professional negotiator working for you.
• There is typically no charge to the buyers to have a buyers agent represent them.

We have wonderful New Communities in the Wilmington NC area and the builders are top-notch.  We will match our clients needs with communities offering the types of homes and amenities they are looking for-not try to sell you on one area. 

So, what do you do?  First, locate an Wilmington NC Real Estate agent you trust and hire them to help you find a home.  It is important to be very careful when you are exploring on your own.  If you go in to a New Home Community and encounter an on-site agent, tell them RIGHT AWAY that you have a Buyers Agent that will be representing you.  Keep a few of your agent's cards handy and give one to the site agent. Once you are able, let your Buyers Agent know if you have visited a new community and that you would like to arrange another visit to find out more. Most importantly, have fun!

Wilmington NC Real Estate Sales - Chris Baynes REALTOR Chris Baynes and Associates is one of the areas most successful Realtor Teams.  We specialize in helping buyers and sellers with real estate services in the greater Wilmington NC area including Wrightsville Beach, Carolina Beach, Kure Beach, Castle Hayne, Hampstead, Leland, Belville, New Hanover County, Brunswick County and Pender County, and all Wilmington NC Real Estate.  (910) 470-4408