Good Faith Estimate: It's Part of the Deal

When you plan on getting a mortgage in Savannah anytime this winter, you’re fairly certain to run into something known as the GFE. It’s the acronym for ‘Good Faith Estimate’-- and despite the reassuring name, the federal government decided they had better make it mandatory. 

The GFE has a new format dictated by the federal Real Estate Settlement Procedures Act which requires lenders to provide an estimate of the charges and fees due at closing. Lenders have three days to make it available.

The GFE looks like a bill. It features a list of fees and charges denoted by three-digit codes. It is grouped into sections to make it more readable, and although at first glance the resulting grid looks overly complicated, after you scan through it once or twice, it actually makes sense. The reason it is a good idea is because of the number of charges that may or may not be on there. It prevents sudden last-minute cash flow surprises at closing. 

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Once you receive your GFE, you'll also receive a Truth in Lending (TIL) disclosure form. This gives you the annual percentage rate for your mortgage, taking into account mortgage insurance, discount points and other assorted fees.

The GFE is exactly what it says - an estimate. This isn’t so that the lender can suddenly raise the prices: there is a built-in variability to the various processes that truly cannot be guaranteed until the last ‘i’ is dotted and the last ‘t’ crossed. The figures quoted in a GFE can rise as much as 10 to 15 percent or more by closing…they can also fall. The GFE comes in quite handy when you’re getting a mortgage because you can compare it with the final, see where any differences appear, and be assured that it all makes sense.

Getting a mortgage is an integral part of becoming a Savannah homeowner. Understanding the costs at every step of the way is a big part of the decision-making process – it is just one of the services every one of our clients can be sure we will provide.

Landscaping Now for Future Value

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It’s a guiding principal among Realtors that superior landscaping adds value to any housing for sale. In Georgia, different studies arrive at differing answers for how great that incremental increase actually is, but most agree that it lies somewhere in a range between 5% and 14%.


Needless to say, that is huge! Since there isn’t anything like a universal way to define ‘good,’ ‘bad,’ or even ‘average’ landscaping, you can’t pin down its precise value. Nevertheless, what is certain is that in offering any housing for sale, the result will be greatly influenced by the first impression the property makes – its ‘curb appeal’. Landscaping is a great part of that.

The landscaping term covers a wide swath of meanings including just about every part of a property that isn’t physically part of the house itself. Improving it can be simple and inexpensive – or not!

·         A well-maintained lawn is commonly the first ‘must’ for improving the value of any housing for sale. A messy yard will put off most potential buyers immediately: that can make an otherwise sparkling property seem old and run-down. Think of landscaping as a frame or prelude to what a home's interior has to offer.

 

·          Adding and improving ornamental detail is one of the least expensive and most impactful ways to upgrade housing for sale. Professional landscapers know how splashes of color placed in appealing places can please the eye and distract from features that would otherwise detract from an overall impression. Long story short: be willing to freshen up over-the-hill plantings and planters before they become visual liabilities.

·         Taking the long view, the time/budget tradeoffs are fundamental realities when it comes to more major plant landscaping. A tree planted now can mean a great improvement to any housing for sale five or ten years from now. Just ask a nurseryman what is involved in transplanting a mature tree!

Attractive landscaping adds a welcoming factor to any Savannah housing for sale. Moreover, there is another real benefit we don’t often think about: the increased pride of ownership that enriches the homeowning experience beyond its dollars-and-cents value.

This winter, with inventories trending lower, some homeowners may suspect that now could be the right time to list their Savannah home. If you are one of them, give us a call to talk strategy and the best way to take seasonal advantage of your own property. You can also receive a FREE no-obligation evalutation to get an even better idea of what your home is worth.

Pets Can Benefit from Relocation Planning

Success! You have listed and sold your home -- or are making the final preparations to move to Savannah. By now, the kids are either grumbling or eager, friends and relatives are waiting by their phone or computer screens to catch the first snapshots of the new neighborhood…everyone is clued in, on the same wavelength, ready to go!

 Right?

 Uh-oh -- we may have left somebody out. In fact, all those ‘somebodies’ who happen to have four paws. When all is said and done, it’s a sure bet that they will be happy in their new home (after all, they’re always happy as long as you are paying attention to them). But in the interim, what steps can you take to simplify their move to the new home?

The first order of business should be a simple safety measure. Create tags with your new address details (and a phone number that won’t change). It’s not likely, but possible, that a recently-uprooted pet may try to find the old house – especially the first few times he or she is left unattended. You need to be doubly sure pets are properly identified so they can be returned promptly. Even housecats who are usually collarless should be given some identification during the beginning weeks in a new home. Those first few days and weeks are the most likely time for doors and windows to be accidentally left open… and it’s much better to be safe than tearful!

Depending on time and distance factors, a sanity-conserving idea is to find a safe and quiet place for pets to stay during the actual move.  Whether you ask friends or relatives or use a kennel or cattery, it will minimize the sense of disruption your small friends experience. Put yourself in their paws: big, burly strangers moving sofas and beds in and out of giant trucks? Better the kennel!

Last tip: give them extra attention. Distraction is one carnival trick that never fails. Your pets may miss their previous environment, but when you shower them with special attention before, during, and after the move, they’ll be convinced that your love made the move, too.

If you’ve already found your new home and are planning the move – congrats!  If you’re just getting started in the search, we’d be delighted to put our Savannah experience to work for all the members of your household. 

Do New Homes Simplify Lending?

Newly built homes may make up a relatively small part of our overall housing market, yet I think Savannah homeowners have to be encouraged by the trends we are seeing. This month, the National Association of Homebuilders reported that construction spending has turned up (“A Housing Recovery is Gathering Steam”) after its long slide. In August, the Commerce Department reported that overall sales have jumped 25% over the past twelve months. So far, so good.

Yet it’s still true that many observers (I’m one) think that these encouraging numbers would be a lot better if it were easier to finance home purchases…particularly for previously occupied homes. New homes have an advantage right now in this department. At a time when obtaining financing can be a stumbling block, there are several reasons why lenders may gravitate toward financing new homes.

Part of the momentum has to do with recent history. One of the main reasons for the rise in newly built home sales since 2010 has been the number of foreclosures on new homes. Many of these were built on spec, never lived in, then turned over to lenders when the original investors could no longer afford to support them. Since foreclosed homes are usually cheaper than normal sales, that lower price made it easier to gain financing approval.  Added to these is the number of non-distressed new homes whose financing is available directly through the builder.

 

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Other factors make new homes simply easier to finance. From the lender’s point of view, new homes look like a slam dunk when it comes to safety and compliance issues: if they are on the market, they’ve passed the test. New homes in Savannah are usually more energy-efficient -- plus, they have been constructed with today’s buyers’ preferences in mind.  No home should ever be purchased without standard inspections, but new homes can often avoid some additional inspections that might be ordered for older homes.  New homes bypass heirloom health concerns like lead and asbestos – trimming loan-processing complexity.

Lenders as well as buyers of new homes can plan on less capital being required downstream, after the purchase, to keep properties in top shape. That smaller maintenance load makes it easier for the new owners to meet their mortgage requirements, which translates into lowered risk for lenders. More immediately, if a previously owned home is in need of major repairs – that cost can postpone or derail a loan closing. 

It’s all part of why buying new homes in the Savannah area can be an attractive option – whether you are a first timer or home-buying veteran.  But it’s only one of the many elements that go into purchasing a home.  Whenever you would like to discuss the tradeoffs available as the market picks up steam, we’re here anytime to go over all of your options.

Home Sales: The New Normal is…Normal!

September is a transition time for almost everybody. Here in Savannah, the kids have shifted into school gear, adults have moved out of vacation mode, and businesses are already sprucing up for the (believe it or not) Holiday Season.

In real estate, we are looking with more than casual interest at what’s going on nationally. Especially those measures that tend to affect Savannah area home sales. The largest professional association in the country is our own National Association of Realtors^®.  At the beginning of September, they broke another piece of welcome news. This one looks like the difference between ‘indicators’ of a strengthening home sales market -- and signs that it’s already fact.

The NAR release was about TOM. No, as you have probably guessed, TOM isn’t some real estate broker’s name -- it’s the Time On Market measure. For Savannah homeowners who are selling (or planning to sell) their properties, it’s a vital measurement of one of the two most important characteristics of how things are going – a tip to what they may expect when they list. Along with median price trends, it tells the story of whether the market is hot, cool, or somewhere in between.

For some years now, TOM has been an uncooperative sort of fellow. Following the financial crisis came skyrocketing foreclosures…then the fallout from that -- painfully long TOMs marking the lengthening time it took to move homes through the market. TOM had stretched out to a painfully long median of 98 days – close to the longest ever.

 

The good news: TOM is just about back to normal. From the cyclical peak hit in 2009, by mid-summer, he was back “in the range of historic norms for a balanced market.”  Traditional sellers were reporting the median TOM had returned to the balanced range of six to seven weeks. IOW, TOM is finally behaving himself.

 

And what about that other half of the picture that helps guide home sales expectations? 

 

I think it’s too soon to tell for sure, but the head economist at NAR knows what history tells us to expect when this kind of balanced market returns. According to him (Lawrence Yun), “Our current forecast is for the median existing home price to rise 4.5% to 5% this year.”  Plus another 5% in 2013!

 

So the transition that September means for everyone else seems to be underway in the real estate world: and it’s a transition back to home sales normalcy. In light of what we were looking at a just couple of years ago, I think it’s fair to say we are delighted that ‘normal’ is the ‘new normal!’

Home Sales Tick Up Another Notch

As regular readers know, we keep track of the national media spin on real estate matters because our Savannah home sales often reflects the tone we all pick up from the feel of the wider market. So let’s not beat around the bush: again in July, the residential real estate picture continued its rise. It has been sensible to remain cautiously optimistic about the direction of things for a good long while, but at this juncture, it’s finally beginning to look like a trend has taken shape.

“For the fifth consecutive month,” the Wall Street Journal reported in its news pages, “sales of previously owned homes notched another rise.” Savannah homeowners who have gone through literally years of sinking prices and moribund home sales must be worried as they read this –worried that someone will snap them out of this pleasant daydream. But it’s real: despite most of the other national economic news that remains considerably less encouraging, the real estate picture is heartening.   

The National Association of REALTORS^® agrees. They report that single family homes, condominiums and townhomes increased sales. Single family home sales rose 9.9% over last year, with condo sales jumping a full 14%.

A low inventory of homes for sale is believed to be at least partially responsible for strong new homes sales numbers. The nation’s biggest builder of luxury homes, Toll Brothers, reported a sales leap of 57% from last year. Meanwhile, the price picture showed the kind of growth you would expect: median prices were up over 9% from a year ago.

 

The median sale price in July for single family homes in 31405 was $187,200.
The sales prices increased by 1.18% from the previous month.
More Market Reports

 

Supporting trends were also interesting. Distressed sales (foreclosures and short sales) were down markedly, reflecting a tightening supply. This is probably an indication that the glut of such properties has finally worked its way through the market; certainly an encouraging sign for homeowners who have been waiting to list until the home sales market strengthens. The WSJ news story would likely provide some encouragement: they feature one would-be buyer who bid on a home, but lost it to a higher bidder. He and his wife had been viewing homes all summer before finally making their offer. “Maybe I stepped in a month too late,” he’s quoted as saying.

For Savannah homeowners who have been biding their time, that kind of quote will surely be music to their ears. If you have been watching and waiting for your own entry into the Savannah real estate market, I hope you will give us a call to investigate the latest comparables in your own neighborhood.  

MLS Listings Tell Shift in Area Homebuyer Values

The latest indications that we have seen the end of the sagging real estate market have started some Savannah homeowners thinking it may be time to sell. For those who are wondering if the long recession has altered how people look for homes – and if so, in what ways  – we’ve noticed a couple of new trends.

As before, the first stop for most potential buyers is the Savannah MLS listings. When you compare the language and features most prominent there, huge changes do not leap out. But a comparison with former language does reveal something of a shift in emphasis: many details that highlight opulence (to some, excess) are being replaced by features much more in tune with practicality and efficiency (to some, frugality). You would expect that, since consumer confidence is still less than robust.

The trend to open floor plans is nothing new: fewer walls; more living is an idea many buyers embrace. The more casual “great room” is almost always more desirable to today’s buyer than the formal living and dining rooms of 30 years ago. 

As the baby-boomer generation grows older, issues of accessibility and mobility become more important.  Savannah MLS listings that boast easy-access showers, baths, bedrooms and kitchens are highly desired and sought after by buyers in that populous group. Such listings signal a home already equipped for easy access -- meaning no extra dollars will be needed for retrofitting the property. Even for those who have no immediate need for those features, eliminating a future expense (even if it seems a distant concern) can be attractive.

Prominence is growing for features that relate to extra living space. The demographic reasons are clear: in-law apartments or bachelor studios have added value for families whose children may have to move back in with them (the “boomerang” effect).  Since such units may be rented for extra income in tough times, they bring an added element of financial security.  Large garages fall into this category as well (but no longer for that brand-new Hummer!)  Today’s MLS listings featuring an extra large garage are viewed as desirable by Savannah buyers looking to convert it into extra useable space: man-cave, gym, extra storage, or, increasingly, home office space.

Today’s homebuyer seems considerably more environmentally conscious than heretofore. Homes that feature solar panels, green toilets or other water-efficient plumbing, and radiant light windows are increasingly desirable. This may be due to growing social responsibility -- but I’d bet that reduced utility bills can’t be far behind. As a result, green technology features are working their way up in Savannah MLS listings. 

If you are looking to buy or sell a home in the Savannah area and would like to review where the latest trends point, give us a call!  As always, we’re here for all your real estate needs!

Boomer Generation Continues to Smash Expectations

We all know that many Savannah property searchers are looking for homes with more modern, high tech-compatible features. But something that is also interesting is evidence that the trend has broadened to include retirees who are in a downsizing, property-searching frame of mind.

From wireless availability to health monitoring systems, technology is one of the key hot buttons in the senior housing industry. "Many people are trading older houses for new [properties] that offer energy efficiency, great rooms, open floor plans,” according to Jane O'Connor, a specialist who studies trends in the 55-plus population. 

Although earlier studies found that most baby boomers preferred to stay in their current home as long as possible, those times are a-changin’. That attitude may have been typical for most of the last 50 or 60 years, but perhaps due to skyrocketing energy prices over the past few years, willingness to downsize and move is growing among retirement aged advocates.

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As the publisher of Mature Living Choices magazine, O’Connor suggests other contributing reasons. “Boomers…were the first generation to question authority.  They changed everything they touched, from the creation of suburbs to mini-mansions.” Today’s retirees are also strong entrants into the virtual communities that the social networking explosion has created. They are using e-book readers, tablets, and other digital technology -- including online services like Skype and other video chat enablers. A decade ago, members of the senior sector were generally considered to be interested in (but in need of instruction regarding) the latest electronic communication devices. No longer. Especially given how particularly useful the new gizmos are for keeping in touch with children and relatives in other states, more tech-savvy seniors consider strong cable and internet access absolute necessities.

It seems like just yesterday when it was principally the 20-somethings who were wired. The senior population today can be nearly as high-tech as their offspring, and – when the time arrives to begin a Savannah area property search at the start of retirement - they expect to continue. It’s no wonder that assisted living facilities, retirement communities and nursing homes are also being required to have all the amenities of today’s connected world.

Whether you are one of the retiree generation setting out on your own property search, or a homeowner preparing to sell into this changing market, we’re here to assist in your plans. Give us a call anytime or begin your search at www.SavannahHomeSales.com

Psychology Helps Savannah Home Sales

When you choose the local real estate agent who will be your home-marketing partner, you are choosing someone who will need to fill many roles: marketer, stager, tour guide, negotiator.  And don’t leave out another role -- psychology major!   

 

To build our kind of successful track record, a real estate agent needs to study and understand the way prospective buyers think about their search for a future home, how they are likely to react to different forms of presentation, and what builds or detracts from the value they assign to your property. It’s psychology, all right -- and it’s usually an integral part of any sales or marketing success.

A good example of how psychology can affect a real estate transaction comes from a study done at the University of Texas. There they have a Real Estate Finance and Development Program. A couple of years back, they began conducting some psychological studies, and one of them used sophisticated statistical tools and a huge sample of real estate transactions.

What’s fascinating is what they discovered about using the word “new.” Real estate agents who marketed homes with phrases like “new paint,” “new carpets,” and “new roof” wound up selling them for slightly less than those who did not!  

The study’s explanation is that, for homes that are not brand new, touting “all new” features seems to call attention to the fact that the items mentioned needed to be replaced. It unnecessarily opened the door to suspicions about what went wrong that made replacement necessary.

A more effective strategy: under-promise and over-deliver. Rather than trying to convince buyers how “new” an older home is, do the renewal work, but don’t brag about it.  Then when potential buyers walk into the home, they will be impressed by the new carpets and fresh paint.  It’s the approach that uber-successful Zappos company founder Tony Hsieh calls “surprise and delight.” What is effective for leading a company and retaining customers can also be psychologically effective for selling a local home.

As a leading real estate company in our community,  we are constantly reminded of how important it is to never stop learning. If you are considering selling your home and are looking for cutting-edge marketing and advice, we hope you’ll contact us for a complimentary consultation.

The Right Contractor Gets Your Job Done

We have all heard horror stories about what can happen when people hire the wrong contractor. “It took three times as long as it should have!” “They wound up charging me half again what they said it would cost!” “They never even called me back!”

Those kinds of tales can be enough to keep you from even considering starting any of the home improvement projects you may have been thinking about for this summer. But that doesn’t need to happen – and it shouldn’t happen: protecting and improving your real estate investment is too important to your financial future. Sometimes the difference between a successful outcome and a disappointment is as simple as getting started the right way. Just three simple steps (combined with your own good common sense) will get your own Savannah real estate improvement project off on the right foot:

1. Get Recommendations

Most important is the first step: get recommendations. Trusted real estate agents usually know some of the most reliable local contractors (We always have a few recommendations or know where to point you to get them.)  Take enough time to collect as many names as possible. Friends, family, neighbors, co-workers – even the local hardware store proprietor -- can offer names and first-hand experiences. Then check reputations: use the Better Business Bureau for their accreditation, and see what people on the Internet have to offer (though you should always take Web gossip with a grain of salt!). Usually the best recommendations come from people you know who relay their own experiences, good or bad.

2. Meet Each Contractor

You are looking for a licensed professional who does excellent work on time and on budget.  After creating a short list of contractors, take the time to meet each of them at your house. The contractor can then give you a written estimate of how much the work will cost you and how long it will take.

3. Double-Check

After you have settled on a final candidate or two, don’t be shy about asking to speak to a couple of recent clients about their experiences. It’s not unreasonable to ask; after all, if your job gets done on time and on budget, won’t you be willing to answer a phone call or two? 

If you want a stress-reducing way to protect and improve your real estate investment, hiring a great contractor is the vital first step.  As your Savannah area real estate professionals, we will be happy to steer you in the right direction when it comes time to work on your home – don’t hesitate to call!

Why Experts Urge The “5-Year Rule”

Even some veteran renters are looking at today’s housing market and wondering whether it’s time to start a home search. With prices and mortgage rates as low as they are while rents continue to move higher, the numbers point to home ownership as an ever more obvious choice.

But that’s just the quick, back-of the envelope budget equation: monthly rent vs. mortgage payment less tax savings. If this June finds you at the start of your own Savannah home search, many financial advisors recommend that you also consider another rule of thumb – you should plan to stay in your new home for at least five years.

Transaction costs are only one consideration that makes this a good idea. Here are some of the others why it’s prudent to think about the 5-year planning horizon as you conduct your home search:

Financial Safety - Homeowners need to have at least some extra liquidity: funds set aside as an emergency resource in the event of unforeseen loss of income. Affording a home and its maintenance costs should never jeopardize the financial health of your household.  Liz Weston of MSN.com recently asked several experts for their calculations regarding home repairs. Their answer? Plan to spend at least an additional 1% of a homes’ value on maintenance each year.

Resale Value - The significant overhang in distressed homes will likely continue to exert at least some pressure on home values for the near future. If you need to sell your home two or three years down the road, you may come up short when all the moving, transaction, and other expenses are considered. It may be at least that long before the familiar growth in residential real estate value resumes. 

Sanity – Studies have shown that moving is one of the top stresses in life (up there with death, divorce and illness). Personally, I think a well-planned move is a little less dire, but it is true that a happy homeowner is a settled homeowner.  When you’re starting your home search, consider the changes coming to your family in the coming years: New baby?  Child to college?  If you know a move is eminent in the near future, consider finding a home with long-term rental value.  Buy a home that can grow with you and you’ll find yourself much more financially secure…and sane!

The current low prices and 30-year fixed mortgage interest rates aren’t likely to last forever, and that old adage remains true: buy low, sell high.  If you’re looking for a reason to start your home search in Savannah now, call for a serious look at this June’s market.  

Survey Nails Outdoor Living Trends

Those of us who focus professionally on our Savannah real estate trends can vouch for it: outdoor living sells! And depending on what life phase their family is in, homebuyers’ choices tend to follow similar lines.

The 2012 Residential Landscape Architecture Trends Survey confirms again how important those backyard grills and dining areas are when it comes to what most people have at the top of their minds when they think about buying homes.

When potential homebuyers come to us, some of the features highest on their “must have” list virtually always have something to do with outdoor space.   Young families buying homes, for example, are usually pleased to find a grassy area off the kitchen where their toddlers can toddle.  High-profile clients often seek out impressive spaces with great foot-traffic flow for indoor/outdoor entertaining.  Empty-nesters buying homes often come to us seeking the opposite -- less yard with easy- or no-maintenance landscaping.   The point is, no matter what the age or demographic of the buyer, in today’s market, outdoor space sells.

So -- what is hot for those buying homes in 2012? The survey cited earlier is one conducted every year by the American Society of Landscape Architects. This year they came up with some clear winners. According to the survey, top popularity goes to BBQ grill space (97.4%), followed by low-maintenance landscapes (96.6 percent), fireplaces/fire pits (95.8 percent), and dining areas (95.7 percent). 

Not so obvious winners were decorative water elements such as ornamental pools, splash pools, waterfalls, grottos, water runnels or bubblers, and pergolas. Not as popular as they once were? Turf lawns at 50.9%, gazebos at 49.1%, and hammocks at 27.4%.  Go figure!

If you are considering an outdoor remodel before selling your own home, be sure to design with Savannah buyers in mind. Contact us any time for a stop-in -- we’ll be happy to go over the features most clients look for when buying homes today.

Short Sales Rising, Foreclosures Falling

For quite a while now, bargain hunters have been able to take their time combing through Savannah foreclosure listings.  They’ve been looking for the kind of terrific real estate bargains that the last few years have provided -- and there have been plenty. But recent signs show that it may be time for them to step up their efforts.

According to ReatyTrac, the outfit that reports on current real estate activity of all kinds, banks are increasingly leaning toward short sales as a way to handle defaulted properties. There are good reasons why they would prefer short sales over the foreclosure track. You would expect that if that trend is for real, we should see a decline in the number of foreclosure-related notices being issued. In April, that is exactly what happened.

In April, fewer than 190,000 of the notices were reported. That makes it the lowest monthly total in 5 years (and a decline of 5% from March). In other words, although it takes some time for a foreclosure to occur, the writing seems to be on the wall: the high water mark in foreclosures may well have been passed.

Another sign: the average price of completed foreclosures rose from the year’s average of $226,953 to $256,027. Lower supply, higher prices -- if the early trend continues, Savannah foreclosure bargain hunters may soon find themselves having to hunt a bit harder.

There are many online resources that provide foreclosure lists: properties that are in good shape as well as distressed foreclosure properties, pre-foreclosure properties, REO foreclosures and foreclosure auctions. Anyone thinking about taking advantage of the bargains that are still out there (and they ARE still out there) should consider consulting an experienced Savannah agent to help with the process.

First and foremost, we can provide you with a current and accurate foreclosure list. There are many web sites out there that claim to list foreclosed properties, but most of them charge fees for their listings, and sometimes contain little or no contact information for accessing a property (or worse, are inaccurate).  Licensed real estate agents have the resources to obtain an accurate, timely list, as well as the experience in targeting the correct contact people.

Your agent can also be a guide through the sometimes tricky process of purchasing a foreclosed house. Many properties on the foreclosure list have not been well maintained; the lender may try to get more for the house than it is actually worth. If you intend to improve a property through your own sweat equity, our first-hand knowledge of Savannah market values can help you project a property’s future value, too…either as an income-producing rental or to sell for profit.

To get the most bang for your buck, make sure to put your search in the hands of a professional.  

Staging When Stagers Aren’t Around

Deciding to put your house on the market? Recruiting an experienced Savannah listing agent will give you a leg up on the competition.  He or she will know where you need to spend money, and where you don’t. 

A good example is dealing with staging – the ‘show biz’ of the real estate world.  Complete staging is expensive and sometimes just is not practical.  A great listing agent will help you decide whether staging is imperative for your home – and if it is not, will offer some basic fixes to help you work with what you have. 

1. The first stage to set? The front yard. If the street view is untidy or the yard overgrown, you can lose your audience before the performance even begins. Of course, you will keep the lawn cut and fix the fences and gates – but also think creatively. People’s eyes are drawn to color, so adding a few cheerful annuals in pots and hanging baskets and placing them strategically can do wonders. If the front or garage doors are even a little bit chipped or flaking, sand and paint them. If trees or bushes are blocking sunlight from the front windows, take the trimming shears to them. All of this should take no longer than a weekend (and cost less than $150).

2. Buyers are not really just an audience: you want them to be participants. You want them to be able to visualize their furnishings in your space. Professional stagers have a simple arithmetic rule:

Subtracting Furniture = Adding Space

 You add space by removing bulky, old or mismatched furniture. Our listing agents can help you walk through the house and decide what should stay and what should go into storage. Moving them can take about a weekend; cost will be the price of storage (or half of your garage – the next best option).

3. Have you ever walked into an expertly staged home and seen dirty socks hanging out in the bedroom?  Didn’t think so.  Nothing is quite as off-putting as evidence of personal hygiene.  Kitchens, bedrooms and bathrooms need special hospital-clean sparkle. Do laundry frequently, and why not use a stagers’ extra? Light candles, set air fresheners -- and open windows wherever you can.

The market has begun to show signs of new activity, but even so, similar homes are still competing for the same group of buyers. That’s why it is vital that you present your home as favorably as possible.  Staging decisions are a good example of how we, as listing agents with comprehensive knowledge of our Savannah market, help you maximize your home's potential. It is one of the ways we work hard for you - - just part of the complete service we are proud to offer. If you are considering listing a home in the Savannah area, call anytime for a consultation!

Savannah Owner Financing: Good Deal or Not?

 

Bear with me on these numbers: they are meaningful to Savannah home buyers and sellers alike. One of the most meaningful calculations The National Association of Realtors® makes is the Housing Affordability Index. An Index value of 100 means that the average (actually, ‘median’) family’s income is exactly the right amount to qualify for a typical 20% down mortgage on a median-priced home. It would be tight, but doable.

That’s what a “100” means. In the latest report this spring, the Index across the whole country was higher than 200! … 204.3, to be precise. Up there in “never-before” territory. And it’s been there since January!

Yet banks are still not lining up to approve mortgages – for the number of reasons we’ve talked about before. It’s why some buyers and sellers have started to look for alternative ways to sell and buy a home; and begun to look in the “for sale by owner” (“FSBO”) realm.

Savannah homes for sale by owner aren't being sold through a licensed agent, forcing a potential buyer or his agent to deal with the seller directly. If the home has sat on the market for an extended period and the homeowner does not have a mortgage to pay off, a buyer can sometimes interest the seller in owner self-financing. In such a deal, the buyer gives his or her down payment and installment payments directly to the seller. As anyone would guess, this approach has its own special Pros and Cons.

The biggest Pro for the buyer is, obviously, easier financing. The biggest Pro for a seller is the potential to make a sale where none was possible before. As can be inferred from the Affordability Index, many people can afford a mortgage, but cannot find a traditional lender. 

But speaking of problems, there are some ‘Cons’ to consider. If the buyer stops making payments, the seller must evict and foreclose on the property -- both time-consuming and costly procedures. A For Sale by Owner financing deal gone sour is especially problematic if the seller is dependent on the income from the home. And buyers need to pay attention, too. When dealing with a For Sale by Owner transaction, there are a variety of potential legal loopholes and title issues that traditional sale and mortgage disclosures and contracts are specifically set up to avoid. In all cases, it is wise to consult a trusted financial professional and attorney before signing anything.  

While a home listed For Sale by Owner with attractive terms (like owner financing) can be attractive, having a licensed real estate professional on your side can make all the difference. If you are considering buying or selling in Savannah, we are always here to be your real estate resource!

It’s 9 O’Clock: Do You Know Where Your Listing Is?

In an age where technology is king, the concept of free and widespread listing syndication at first sounded promising to agents and consumers alike. “Listing Syndication” is the term used when third parties – including big Internet outfits like Zillow and Trulia -- take real estate agents’ listings and put them up on their humongous national websites.

Most Savannah real estate agents thought to themselves ‘Great! – now everyone in the country can see my clients’ home listing; we will get the word out nationally.’ And they were right about that, up to a point. But now some serious scrapping has broken out, and the details are something I think readers will find useful to think about. They affect what happens whenever you look for a real estate property, or put your own up for sale.

For Savannah house-hunters, the biggest issue with syndicators is information that is either out of date or inaccurate. To any would-be homebuyer, sites like Zillow or Trulia hit them first: they’re always smack dab at the top of the Google or Bing pages when you look on the web. What isn’t apparent is that such websites don’t always offer all of the homes or data that might be available through a local real estate agent.

Rather than using feeds that offer each viewer the freshest information possible, syndicators lead those searching for a new home through a dizzy trail of listings. Moreover, if you have ever used them, you probably know that some of those have usually expired. In addition, syndicators are real search engine hogs; real estate agents have to battle against their Google-engineered pages to get a top spot. As a result, house-hunters may be unable to find what the very local housing market and its most active agents have to offer.

As well as failing to deliver accuracy to consumers, syndicators may lead consumers in the wrong direction when they do find a house that interests them. If a listing agent is not willing to pay Zillow a monthly fee for the privilege of having listings accurately placed at the top of the search results, a consumer may find a different agent's contact information displayed. It’s easy to see why some agents are fuming about this, but more importantly, it may do damage to the client’s experience. Just because an agent is at the top of a search result does not mean that he or she can answer important questions a buyer may have about that listing. 

Finally, it is not uncommon for consumers to experience confusion when it comes to listing prices. Syndication has in the past led to inaccurate information about prices to be published online, even duplicates with different prices. Yikes. 

However, those slowly evolving issues don’t totally cancel the early promise of wide syndication. Personally, I love the wealth of information syndication provides consumers.  Technology and free access to information are boons to us all.  However, when it comes to buying a house in the Savannah area, sometimes there’s no replacement for the human touch.  Call us anytime for the personal service only a local real estate agent can give you!

Buying a House in Today’s Mortgage Market

Anyone interested in buying a house in the Savannah area today has heard that they should expect to find tougher mortgage lending requirements. Sometimes that can seem arbitrary -- or just plain unfair. But unfair or not, the new lending reality is probably here to stay for a while, and the causes are understandable.

The mortgage industry learned a powerful lesson from the past, when it pretty much gave anyone who applied a generous loan – sometimes with practically no questions asked. But this “generosity” created financial problems for both the banking industry and the country as a whole. It's not hard to understand why lending guidelines are stricter.

Reducing Loan Defaults

The overriding reason for tougher lending policies is to reduce the number of loan defaults. In order to qualify for a mortgage, borrowers are finding that lenders now look more closely, may require a higher annual income, better credit score, or a larger down payment. Their high-priority goal is preventing any foreclosure situation where the bank owns a property it has to sell or rent itself.

Questioning Future Value 

For many years, homebuyers never questioned the investment value that seemed to automatically accompany any piece of real estate. Buying a house was like investing in a blue chip stock: certain to rise. The advent of a shrinking Dow Jones Average preceded the phenomenon of ‘upside down’ homeowner equity. But in both cases, long gone is the idea that everyone should expect to find no-brainer investment opportunities. When buying a house can mean exposing the lender to a future where more is owed than a house is worth, they naturally seek a safer place for their money.  Since a smaller loan or larger down payment achieves that goal, that’s what lenders tend to offer.

Lowering Consumer Debt

During 2010, the nation’s ten largest mortgage lenders turned down about 26% of all applications (according to the Wall Street Journal).  In many cases, that could be attributed to lowered credit scores – due in turn to increased debts from credit cards or unpaid student loans. In fact, those heavy debt loads are part of what got homeowners into financial trouble and helped to fuel the housing market crisis.

In the short term, homebuyers denied a loan can’t help but be keenly disappointed. But it can ultimately provide time to let them raise their credit scores, increase their savings, and get their financial affairs onto firm ground. The ultimate effect should be to put the whole housing market there, too.

If you’re considering buying a house in Savannah, we’d like to help you get pre-qualified under the current mortgage guidelines. Once you see what real values are out there and available to you, we think you’ll be glad you called!

Five-Year High for Pending Home Sales

With more than 1,000,000 members, the National Association of Realtors^® is the nation’s largest trade association. It’s no wonder that what it says carries a lot of weight. When a gargantuan outfit like NAR makes a prediction, its words may not always make headlines, but they do influence everyone whose job it is to forecast the future of the nation’s economic activity.

That’s why their most recent report dealing with pending home sales put smiles on many of those one million members’ faces.

“The spring home buying season looks bright,” according to Chief Economist Lawrence Yun. “If activity is sustained near present levels, existing-home sales will see their best performance in five years.”

Like all statistics, those he was describing can be looked at in more than one way. We know that some numbers are more reliable than others. This particular index is based on an unusually large sample: about 20% of all transactions for existing home sales. It’s a forward-looking indicator: in the past, it has signaled coming trends before they materialize. This index seldom produces a straight line of activity because of seasonal and monthly ups and downs, but this time a trend is evident that is “notably above the pattern from a year ago.”

Our Savannah home sales patterns are not invariably tied to national trends -- but they aren’t impervious to them, either.  So we are pleased when our own impression that the spring market is looking up is borne out by the experts who deal in the broader picture. “Based on all of the factors in the current market,” Yun went on, he expects to see “sales rising 7 to 10 percent in 2012.” 

Real estate is a famously local phenomenon, and although we keep an eye on the national and state markets, our real attention is always centered right here in Savannah. If you have questions about your own real estate outlook, call us anytime for a consultation focused on your neighborhood. 

Savannah Investors: New Rental Homes Index

Zillow.com is a website that is often cited for its index of home values across the nation – but its surveys and data are interesting to Savannah real estate observers, too.  Recently it launched a new rental homes index that seeks to measure rental rates throughout the country. The index weighs rental listing prices as well as tax data and homes' sale histories.

The index has some value to prospective Savannah area tenants and landlords as well. Ultimately it might help identify local market trends (but their data only extends back to November 2010, so more time will be needed for its usefulness to be proven). It might, though, serve as a tool for comparing markets. For example, the index showed year-over-year median rent increases in nearly 70 percent of metro markets from January 2010 to January 2011, and it reports that rents have appreciated 3% during the same period.

Of course we all know that decisions based on data are only as good as the data itself. Unfortunately, Zillow's track record for accuracy in its market value numbers (it calls them "Zestimates"!) is less than stellar. Although these estimates of value are thought to come within 15% of true market values more than three-quarters of the time in some metropolitan markets, if you are interested in rental homes in that other quarter, you might be misled. And in many small markets, it misses the mark entirely. In some markets, the estimates are so far off base that Zillow doesn't even attempt to quantify their accuracy.

The other disadvantage to relying on an algorithmic index like Zillow's is that algorithms can't replace the local market knowledge that is any real estate professional’s stock in trade. The data we collect and analyze on Savannah investment homes comes from our own knowledge…and what is more important, is put it into a context that allows local tenants and landlords alike to use the information to make sound decisions.

If you are considering buying an income property, you need to know the most recent and accurate information for the local rental homes market – so I hope you won’t hesitate to call us for a consultation.

Banks with a Heart? - Homeowners Become Tenants

A few weeks ago, Bank of America initiated a pilot program allowing homeowners facing foreclosure to remain in their homes as renters.   There are important reasons why Savannah homeowners should be interested in the success or failure of BoA’s approach.

First, a note about the term “bank owned homes”. It’s not technically correct to say that there has been some huge rise in the number of them, because “bank owned homes” actually describes every home with a mortgage. The mortgage holder always technically "owns" the property, even when the homeowner retains title. However, what is true is that over the last four years, many homeowners learned the hard way just what it means to face the reality of your home being owned by someone else.  

Enter Bank of America. Their press release quotes Ron Sturzenegger, a Legacy Asset Servicing executive with the Bank: "Our priority is designing a solution that helps our customer." Although we might be justifiably skeptical of this as BoA’s sole motive, allowing homeowners to remain as renters in bank owned homes is hardly just a PR move.

The program certainly makes bottom-line financial sense for a whole host of parties, including Savannah area homeowners who have no difficulty meeting their own mortgage payments.



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Under the program, a former homeowner who qualified would be able to continue working and contributing to the economy without the costs, loss of time, and anxiety involved in moving. For all property owners, the ultimate effect is to keep the market from being flooded with distress sales. Every neighborhood would benefit if home values stabilize.

Under the pilot model, bank owned homes convert to investor ownership in a much smoother transition than the foreclosure/short sale model. Instead of the lender being left with an empty property generating zero revenue in the interim, former homeowners simply become renters, making it easier for them to get back on their feet financially.

In our opinion, any move or policy that helps more people stay in homes is a policy worth discussing.  BoA’s program is only in a limited test stage, but here in Savannah we can hope that it will prove to have multiple beneficiaries: banks, investors, agents, homeowners and neighbors. Everyone benefits when his or her neighborhood’s real estate market is healthy!

Have a question about real estate in the Savannah area?  Feel free to contact us anytime with questions. We represent Low Country buyers and sellers, and are always available to chat about your own plans.