Don't get stuck with a bill for $20K when it's time to sell

If you build it, they will come…

and that’s not always a good thing!

The weather is beautiful and you’re contemplating that screened porch or other project you’ve been wanting.  Stop; do not pass go or collect $200!  Lately I’ve been surprised to hear of several home owners who made renovations to their home – lovely renovations – but did not get permits.   Uh-oh!

If this happens, you can be stuck with a bill for many thousands of dollars when trying to sell or, worse, a home you can’t sell!  If you perform work that is not permitted, ultimately you will pay for it, so you might as well do it correctly from the get-go.  All the hard work that you thought would add value to your home could become a giant money pit.

What should you do?  First, sellers and buyers -- make sure you or your Realtor® check the status of permits on the home.  There may have been permits issued, the work done, but it was never inspected, so the permits are now expired and invalid.

Second:  do not assume your contractor knows what to do and will get the necessary permits.  Ask.  If they don’t know what to do, where to go, who to speak with, move on. 

Third:  Be sure to arrange for a final inspection after the work is completed.  This is a must in order to validate the permit.  Renewing a permit after it has expired is more costly.

Fourth:  Unpermitted work done that adds living space to a home cannot be counted as ‘livable’ square feet by lender appraisers, even if it is being used as such.  This means you will not be able to include that beautiful finished attic or basement.  Today, underwriters may require copies of permits for all work that adds square feet, in addition to what shows in the public record – that means Grandpa may have a heap o’ trouble on that sunroom he built in 1970! 

Fifth:  If you’ve followed all the rules, keep those permits in a safe place where you can find them.

Sixth:  Public records are not always accurate (shocking!).  For example, an addition that was done with permits may not show up on the public records.  This error needs to be corrected immediately.  Your real estate agent can help you with this.

Things the inspector is checking:  structural soundness, electrical systems, reliability of fire prevention and suppression systems, plumbing and mechanical systems, and energy efficiency and sustainability.

Takeaway: 

• Before you swing that hammer, swing on over to your phone & call your town hall.  Who to speak with may vary from town to town, but the information is very easy to get by calling the main number. 
• You can be sued for misrepresenting square footage – always err on the side of caution
• If you are thinking of selling or making an offer on a home, make sure your agent discusses this with you.

Rent vs. Buy: Survey Says.....

Thirty-three percent of Americans say they expect home prices to rise in the next 12 months, the highest level in more than a year, according to Fannie Mae’s March 2012 National Housing Survey of consumer attitudes about the housing market.

The number of people who say now is a good time to buy is also on the rise, increasing to 73 percent—also the highest level in more than a year. The percentage who said it's a good time to sell a home also increased one point to 14 percent in March.

Meanwhile, more Americans expect rental prices to rise and are projecting an increase by 4.1 percent over the next year, the highest number recorded to date.

The term “expect” is very important because consumer expectations tend to become reality.  In the meantime, I can attest that the buyers are out & buying.  Several of my listings have gone under contract in just the past week. 

Let’s look at some actual numbers:  Here in our area you can still find USDA properties in Apex, Holly Springs & Fuquay-Varina.  This type of loan requires NO down payment.  Zippo!  So, if you purchase a 3-bedroom home on land for $180,000 (totally doable) utilizing a USDA loan at 4 percent interest, with no money down; your payments would be approximately $1087/month.  Please understand that this is an approximation and several factors come into play such as your credit score, eligibility, plus I also added in mortgage insurance & taxes.  But – how does that compare to a 3-bedroom apartment or rental home in that same area? I know what rentals are charging and it is considerably higher.

Wishing & hoping & dreaming won’t get you into that home – action will.  How is your credit score?  What is your eligibility to buy a home?  Many of my clients have been delighted to learn that with just a few tweaks & actions they were able to get their credit into shape & are now home buyers.

I have several great mortgage folks who will be happy to speak with you – confidentially and at no cost.  It is painless and takes no more than a half hour.

This is your call to action!  Let me know if I can answer any questions for you. 

Triangle Real Estate Sales Numbers are in for April

I have learned that good real estate advice comes from a combination of analyzing past and present data and then using these facts to predict the future.

Some days I wish it was as easy as putting on a cool babushka, sparkly earrings and a long, fringed shawl and staring into a crystal ball that would give me accurate information with a wave of my long-nailed hands.  Oh, and don’t forget to cue the soulful gypsy music in the background! 

OK, enough daydreaming!  The numbers are in for our area for the month of April and my job is to get this info to you in a way you can use.  The point of my fabulous story is that folks tend to use home prices as the only indicator of what is going on in the market.  And sales are up – by 4.6 percent!  But that only tells us what happened in the past – which is called a lagging indicator by those who like to use fancy terms. 

What we need to look at is actual sale to list price, how many days the home was on the market, and what the months’ supply of inventory is -- also called supply and demand by those fancy-term users. 

And the news seems to indicate that we may be in the early stages of trending away from the amazing buyer’s market that we have been in (source www.TriangleMLS.com) 

• New listings in the Triangle increased 1.3 percent to 3,774.
• Pending Sales were up 20.4 percent to 2,272
• Inventory levels shrank 27.3 percent to 14,111 units
• Median sales price increased 3.9 percent to $190,000
• Days on market was down 2.1 percent to 125 days.
• Sale to List Price remained about the same at 96.4 percent
• Months’ supply of inventory decreased 29 percent to 8.3 months (the supply vs demand) 

Real estate does not exist in a bubble so we must also look at the overall economy and job growth.  Preliminary Q1-2012 GDP (gross domestic product) was at 2.2 percent which was slower than Q4-2011, but still continues to show economic expansion.  Banks are processing loans and are actually beginning to ease lending standards.  What a concept -- the banks are finally getting ready to lend the money that we, the taxpayers, gave them! 

My personal experience is that buyers are coming out & more are now ready to take the plunge.  This is still the best time in our nation’s history to buy a home.  Got questions? Let’s talk!

3 Things That Sell Your House Now!

Location, Location…Not!  You’ve heard it so many times:  the 3 most important things that sell a home are Location x 3.  Well, guess what?  This is no longer true.  The three most influential things you need to sell your home now:

                              Price…. Price…. Price

OK, so that’s really only one thing – but I needed a little drama there!

According to a recent NAR study, homes that were not priced correctly (priced too high) stayed on the market longer and sold for less money than if it had been priced accurately in the beginning.

For example, homes that were priced correctly sold within 2 weeks (yes, that quickly and sometimes with multiple offers!) for a price near or above asking price.  For homes that were on the market 17 weeks or longer, most had reduced their price more than once and they sold for only 91% of asking price.  Factor the inconvenience of having to keep the home immaculate for showings all that time and place a dollar value on that.  It adds up.

Of course, all us home owners believe our home is the best on the block.  Unfortunately, buyers may not have the same opinion.  One of my most difficult tasks is convincing sellers to view their house as a product that is competing for the same, small pool of buyers.  The cold, hard fact is that it is a business transaction with decisions based mostly on financial and investment concerns.  Home sellers who allow emotions and sentimental attachments to rule during the process run the risk of making poor decisions.  It’s not that we don’t recognize the feelings, because they are real -- we just can’t let it override logic.

Today is a very different market from just a few years ago.  More than ever you need a knowledgeable agent to help you make the decisions and formulate strategies that are best for your needs. 

I’ve just completed a detailed course and have received the designation of Strategic Pricing Specialist.  I can help you understand the factors that are in play in our real estate market so you can get your home sold quickly, for least inconvenience, and best price.  If your home is lingering on the market with little activity, now you know why. 

The truth may not be what you want to hear, but it will set you free!