There's Gold in Them Hills!

But does it belong to you?

There’s been some buzz in the news regarding homeowners and mineral rights, especially here in North Carolina.  So, what’s all the hubbub? 

Well, it turns out that this is something that is very important for home buyers and sellers to know.

Most real estate transactions here in NC and around the US transfer real property in its entirety.  This includes the air above, the surface area, and everything below to the center of the earth (called, “mineral rights”).

For several years, however, some new builders have been including statements in contracts with their buyers that sever their mineral rights.  The builder then sells these mineral rights – along with the right to drill, mine, store and explore for them -- to another company.  This does not permit them access to the surface of the property, but it does give them rights to anything 500 feet below. 

500 feet is not that deep.

If you purchased a home with this type of contract, it means that if there happens to be a treasure of emeralds, diamonds, or other gems 500 feet or more below your house or land, they don’t belong to you.  And others can tunnel in to get it, sell it, and profit from it. 

Now the odds of this happening are rather slim, but what if natural gas and oil happen to be there? In today’s world, some folks may argue that these are even more valuable than jewels.  Have you heard of fracking?  Fracking refers to hydraulic fracturing, a process of pumping millions of gallons of water and toxic chemicals under high pressure to break up underground shale rock deep within the earth to release trapped natural gas. Environmentalists are very concerned over this practice because of the widespread and long lasting water pollution and potential for earthquakes (yes, that is not a typo!).

Currently, fracking is not legal in NC, but the North Carolina General Assembly recently passed legislation to study the feasibility of fracking right here in the Triangle.  It has been banned in many other states.

So, to make a long (and potentially scary) story short you need to know your rights as a homeowner and have an advocate on your side for any real estate transaction – especially new construction. 

I’ve just completed a 30-hour refresher course on real estate contracts to assure that I’m up-to-speed with the best information on the biggest purchase you probably will ever make.  If you need legal advice, I have some great attorneys you can speak with.  Questions?  I’m your Real Estate Resource, give me a call!

PS – If you’re thinking of selling your mineral rights, it is a very involved and lengthy process and there will most likely be problems with your mortgage holder.  You definitely will need at least one experienced attorney involved.

More information: 

http://geology.com/articles/mineral-rights.shtml

WHAT'S GOING ON IN HOME SALES FOR MARCH, 2012?

The numbers are in for the month of March, 2012 for our area.  Generally, trends are positive and I have been feeling and seeing the energy in increased showings and activity.  Here’s the scoop (as compared to March 2011)*:

New listings decreased 12.2%

Pending sales increased 17.1%

Closed sales increased 11.2%

Days on market increased 2.9% from 131 days to 135 days to close

Median Sales Price increased 1.6% from $182,000 to $185,000

Average Sales Price increased 2.6% from 212,515 to 218,079

So, in a nutshell, what does this say?  Well, prices are going up (for those of you who are waiting for the bottom – it may well have passed by).  The decrease in new listings is a good thing for homes that are already for sale as it means supply will be lower.  It does appear to be taking a little longer to sell; however, it is clear that buyers are out and not just looking, but actually buying.  Homes are selling!!  Absorption rates improved as the supply of inventory was down 27.4% to 8.1 months (don’t know what this is – call me and I’ll explain.  It is crucial if you are selling your home)

Still on the fence about buying?  Tired of filling your landlord's pockets with nothing to show for it?  Let’s talk – mortgage rates are still really low and great opportunities are out there. 

In the meantime, enjoy our beautiful Triangle Spring weather!  Take some time to smell those lovely flowers.

*Source:  Triangle Multiple Listing Service

Update on my previous FHA blog:  The powers that be have decided to delay a decision on limits to those who qualify for FHA loans until July 12, 2012.  They may remove medical debt from the list of debts to be included, but at this point I cannot predict what they will do.  Stay tuned & I’ll keep you posted.

FHA Changes - What You Need to Do

Think you qualify for an FHA loan?  You may have to think again!  Effective April 1, 2012, all potential borrowers with ongoing credit disputes totaling more than $1,000 will not be able to get a mortgage insured by the Federal Housing Administration (FHA) (excluding accounts from more than two years ago and those related to theft).  Prior to this date, there was no requirement that disputed credit accounts need to be resolved – that decision was left to the discretion of the underwriter.   

A quick primer on the FHA:  The program originated during the Great Depression in the 1930s, when the rates of foreclosures and defaults rose sharply.  The program was intended to provide lenders with sufficient insurance to cover default.  Some FHA programs were subsidized by the government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers. Over time, private mortgage insurance (PMI) companies came to be, and now FHA primarily serves people who may not be able to  afford a conventional down payment or otherwise do not qualify for PMI. 

An FHA insured loan is a mortgage loan that is backed by the Federal Housing Administration and is provided by an FHA-approved lender. FHA insured loans are helpful because they allow lower income Americans to borrow money for the purchase of a home that they might not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, a mortgage insurance premium (MIP) equal to 1 percent of the loan amount at closing is required, and is normally financed by the lender and paid to FHA on the borrower's behalf. Depending on the loan-to-value ratio, there may be a monthly premium as well.

So, what does this change mean for today's homebuyer?  Well, if you’ve already gotten your FHA loan before Apri1 1, you’re OK.  If you’ve been approved for an FHA loan previously, but have not finalized it yet, this change will affect you.  The first thing you need to do immediately is check your credit & FICO scores.  There are a number of different agencies, online sites & ways to do this.  However, the easiest, cheapest, and most reliable way is to talk to a mortgage professional.  For example, your first reaction might be to run out and sign an agreement to pay off any outstanding debt, but that might not be the best action because the debt itself may still remain on your record (crazy, huh?)  I’ve been told that, just because a debt has been paid may not mean that it has been expunged from the record. 

You really need to know where you stand now and what action you must take to get to where you want to be.  I can recommend several great mortgage experts who have helped my clients.  They would be happy to meet with you – confidentially and at no cost.  They will have some action steps you can do to improve your situation, if needed.  You need to do this now because it may take several months.  You will be happy you did when you find that perfect home. 

Things are still changing and evolving -- more than ever you now need the help and advice of experts, so give me a call.  I'm your Real Estate Resource.

Here’s the link to the notice from the FHA:

http://portal.hud.gov/hudportal/documents/huddoc?id=12-03ml.pdf