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!