lake norman real estate, The Real Estate Process, Home Buying and Selling Tips

2 Marketing Tools that will set your Lake Norman home apart

Pool and rear view of the listing in The Point

I recently listed this beautiful home in The Point and had the good fortune of getting a full-price offer within 24 hours of it hitting the market.  At a price point that’s average days on the market is 212 days and the average listing- to-selling price is 95% for recent comparable sales I would say we did very well!  So was this pure luck? Perhaps, but I do believe that my seller’s and my efforts getting the property ready, staging and then going all out on the marketing didn’t hurt!

In this specific case we decided the gorgeous pool and outdoor fireplace/grill and bar were huge attributes given that these amenities didn’t exist in our competition. So, besides having the house and garden groomed to perfection I hired a wonderful stager to make everything inside “popped” while I focused on the pool area and the front door.  My inspiration was a recent Frontgate catalog and other photos on such online sites as Houzz.com. But all of this effort might have ended up under the radar of buyers if we hadn’t used two key marketing tools that are rather new to the Lake Norman area:

  • Aerial/Drone Photography and Professional Video
  • Matterport 3-D and 360 Virtual Tour

Of course, both of these required the expertise of a very talented photographer I was able to hire for the project.  He did all of the still photos, the drone aerial photos, created the video and took the Matterport 3-D photos.  The end result was pretty darn awesome!

Here is the video:

Below is the Matterport 3-D tour.  If you are not experienced viewing this type of marketing, I find it easiest to click on one of the photos and then use your up, down, right and left arrows to either take a good look of a room by doing a 360 degree scan or literally walk through the house from room to room and stop and turn whenever you want:

Lake Norman 3-D home tour

What is the take away? I can’t emphasize enough the importance of staging a home and then using the best marketing tools available that are appropriate for your property.  It is worth every penny!

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lake norman real estate, The Real Estate Process, Home Buying and Selling Tips

What Lake Norman Buyers & Sellers Should Know About Mineral, Oil & Gas Rights

North Carolina's new Mineral Rights Disclosure image

 

Effective January 1st of this year, The State of North Carolina added a new disclosure form that must be signed by both parties of a residential property transaction as part of the initial purchase contract. The State of North Carolina Mineral and Oil and Gas Rights Mandatory Disclosure Statement   requires all sellers of  new or existing homes in North Carolina to disclose whether the mineral, oil and gas rights for the property are owned by someone other than the seller.

“The purpose of this new law is to protect the buyer. Property owners sometimes lease or sell the subsurface mineral rights on their property to a third party or company. This means that if sellers have “severed” their mineral rights, the third party or company could potentially have the perpetual right to drill, mine, explore and remove any of the subsurface mineral resources on or from the property. These mineral or materials could be extracted directly from the surface of the property or from a nearby location – even if the property is sold to a new owner.”

Okay, so why here and why now?  Continue reading

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Lake Norman Home Inspections: Why the Challenges Never Change

Home inspections in Lake Norman

Home Buyer: “But when I sold my house I did ALL of the repairs.”

Buyer’s Agent: “My buyers want ALL of the items on the inspection report repaired because that is how I have always handled home inspections and I want to get the most for my client whether this is reasonable or not.”

Professional Home Inspector:“As a home inspector I have more and more liability so not only must I note every little thing I see, I also have to spell out the worst case scenario.  What if that tiny speck of fungus is mold?  Guilty until proven otherwise by the expert in each field. I can only point things out but I can’t tell you what’s really wrong because I am not an expert…call a licensed contractor.”

Listing Agent: “My sellers have taken good care of their home and this is an “as is” sale per the contract but I do need to urge my sellers to make the repairs because otherwise we may loose the buyer”.

 

I have been a full time Realtor since 1991 and for the most part these 4 perspectives really haven’t changed.  The result is a perpetuation of sometimes grueling negotiations, added stress for all parties and a solution that will require a complete and simultaneous mindset change by all 4 roles in the real estate sales process throughout the entire country. Yikes! Continue reading

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The Due Diligence Fee: Non-Refundable and Very Unpopular with Lake Norman Home Buyers

Due Diligence Fee and Period for buying a home

 

In January of 2011 the North Carolina Association of Realtor’s completely redesigned the Offer to Purchase forms to be used when buying and selling single family homes in our state.  One of the hardest things to explain or justify to out-of-state buyers particularly is the non-refundable “Due Diligence Fee”.

So what is the Due Diligence Fee?  In short, it is a non-refundable fee that is given to the seller at the “effective” date of the purchase contract which is the day the agreement is signed and delivered back to the buyers or buyers’ agent.  If paying by check, the buyer makes the check payable directly to the seller.  It does not pass go nor go to an escrow account. The seller keeps it no matter what.  The good news is that this fee is negotiable and does get applied to the total purchase price. Continue reading

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The Real Estate Process, Home Buying and Selling Tips

Why a “Dated” Home in Lake Norman?

Home in Lake Norman's Luxury Community The Peninsula

One of the adjustments I had to make when I moved to Lake Norman in 2005 from Pasadena CA was the transition from selling historic, Pre-World War II homes to mostly new or newer construction.  We didn’t even have Great Rooms and the Master Bedrooms were always upstairs!  Synthetic stucco, what was that? Continue reading

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lake norman real estate, The Real Estate Process, Home Buying and Selling Tips

The Reality of Lowball Offers in Lake Norman Real Estate

I got a call yesterday from a potential buyer for one of my listings.  He told me he would like me to present an all cash offer of $350,000 for a property I just listed at $429,000.  With a little prodding I was able to find out that he hadn’t seen the home and didn’t know the neighborhood.  I tried to explain a bit about the price and comps and his response was “it is a terrible real estate market and that’s all I need to know”.  REALLY?

Needless to say, my client’s counter to this buyer was not accepted.

This is just one example of how not to be successful in our current Lake Norman housing market. While it is quite common for investors and low-ballers to make these kind of offers when a new listing comes on the market, I have to wonder what these buyers are thinking?  Or, are they thinking at all?  Even banks get disgusted with these types of buyers.  Here is a great example: Continue reading

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The Real Estate Process, Home Buying and Selling Tips

Lake Norman Homeowners, Do you need a permit to replace your water heater?

 

As the new year approaches, Lake Norman homeowners  will most likely be creating lists of things to do in 2012 that will include repairs or upgrades of our homes and gardens.  Many times we don’t stop to consider if a permit is needed, especially for minor repairs.

So, if you live in the Lake Norman area, or the entire state of North Carolina, you might be interested to know that the North Carolina General Assembly passed house bill HP-1409  which exempts from building permitting the replacement of a water heater. Here are a few of the stipulations:

  • Electrical, Plumbing or Mechanical work must be performed by a person licensed under G.S 87-43 or G.S. 87-21
  • The replacement of a water heater is the same capacity, location and energy source

Continue reading

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Lake Norman Real Estate: What is the new “Due Dilligence” clause mean?

Lake Norman real estate kitten

So here I am about to write about an extremely significant change to our North Carolina real estate contract wondering how in the world I would get you all to read about  this important, albeit boring, subject.  Enter the photo of a cute little kitten.  Did she catch your attention?  Mission accomplished!  Here we go:

Major revisions to the standard Offer to Purchase and Contract form designated for use in residential real estate contracts by the North Carolina Association of Realtors and the North Carolina Bar association became effective January 1, 2011.  So, if you are buying or selling Lake Norman real estate, here are the key elements:

  • Removal of the entire section and deadlines related to physical inspections and repairs
  • Removal of  the separate deadline and conditions for the buyer’s loan, survey, insurance appraisals etc.
  • New Due Diligence Period and Due Diligence Fee/Buyers right to terminate for ANY reason
  • Distinction made between the “Settlement Date and the Closing Date

Per the new contract:  “Buyer shall have the right to terminate this Contract for any reason or no reason, by delivering to Seller written notice of termination during the Due Diligence Period (or any agreed-upon written extension of the Due Diligence Period), TIME BEING OF THE ESSENCE.  If buyer timely delivers the Termination Notice, this Contract shall be terminated and the Earnest Money Deposit shall be refunded to Buyer.

The bottom line is that the buyer no longer has separate deadlines for their inspections and loan approval AND the seller is no longer obligated to make any repairs.  In an effort to lessen or remove the contentious repair negotiations, the buyer now has one “Due Diligence” deadline, time being of the essence, in which to make all property investigations,surveys, insurance AND obtain their financing.  The appraisal should also be included during the Due Diligence period.  (The contract goes in to more detail as to what the buyer could and should investigate and accomplish during this period.)  Any time during or by the deadline date of this period, the buyer can either terminate the contract or go forward.  After the Due Diligence date, if the buyer defaults (can’t get their loan etc.) in most cases the seller now has the right to retain the Earnest Money Deposit.

The length of the Due Diligence period is completely negotiable between buyer and seller.  In most cases, the current market climate will help dictate how long this period will be. During today’s buyer’s market, the Due Diligence period seems to average about 30 days.  When I was selling real estate in California in the hot seller’s market of the early 2000’s (we had a similar contract clause then) the inspection/loan deadlines were extremely short or removed entirely.

The greatest challenge with this new Due Diligence Period is to make it long enough to allow the buyer to get formal loan approval yet not so long that the seller won’t agree to the date because they will be too vulnerable for too long.  It is hard for a seller to know that the buyer can walk at any time for any reason.  It is also hard for the buyer to set a shorter deadline knowing that their loan may fall through at the last moment and they will then loose their earnest money deposit.

The authors of this new contract feel that this balances the risks equally between buyer and seller.  While I don’t have a problem with the concept since this is how our California contracts worked, I don’t like the fact that they combined the inspections and the loan into one deadline unlike in California where we had one deadline for the inspections and one for the loans.  That enabled us to make much shorter deadlines for the inspection period and longer for the loans.  Here, we really need 30 days for most loans yet really only need a week or so for inspections but will now have one deadline for both.

It is very important to undertand that this is a Time is of the Essence deadline so there is no wiggle room  After the end of the Due Dilgence Period, the buyer should  expect to loose  their earnest money if they default on the contract and fail to close.  If the seller defaults, the buyer does get their earnest money back.

There are many additional revisions to the Offer to Purchase and Contract but these are the most significant. Please feel free to email me with questions.

RELATED ARTICLES 

 60 Things You Should Know About Life in Lake Norman, Part 1

Lake Norman Real Estate: What Does the Closing Attorney Do?

The Silent Majority of  Lake Norman Real Estate

What You Should Know Before Buying Lake Norman Residential Real Estate

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Lake Norman Real Estate: A Real Life Glimpse into Some Lake Norman Foreclosure Transactions

 

  There are myriad sites online dedicated to detailed explanations about foreclosures. This is not going to be another “how to” guide.  Instead, I am going to try to provide you with some insight and examples of  real hurdles encountered during my recent experiences representing Lake Norman buyers through the process of purchasing foreclosures or bank-owned properties (REOs).  In my next post I will do the same for shortsales. If you take only one thing away from reading this post, it should be that no two sales transactions are alike.  Be prepared for the unexpected.  That said, 

REOs (Real Estate Owned) or Bank Owned properties are MUCH easier to purchase than ShortSales 

When a bank owns a property, you can usually count on the fact that as a seller they are going to care about one thing and one thing only:  their bottom line.  They have been through the long foreclosure process, they own this property along with many others and they want it off of their books.  It’s about as unemotional a transaction from their perspective as is possible.

Most of the time the listing agents of REO properties do nothing but REOs.  They have been hired by a bank because they are good at processing paperwork and working with the bank’s systems and staff.  They want a quick, easy sale.  It is all about numbers to them as well.  This is a business transaction, it is not about relationships or empathy.  In the case of several of my buyer’s REO purchases the listing agents had never even seen the property and their offices were located far from the listing.  In most cases I have found that these agents really don’t want to be contacted unless it is really important.  They want the buyer to fill out the paperwork to the satisfaction of their sellers including each banks’ own addenda protecting them from just about everything.  They don’t want to hear about repairs or problems related to the inspections or even having utilities turned on or the property de-winterized for inspections. (But they will when prodded).  Take it or leave it and the sooner the better. The only thing they worry about, and rightfully so these days, is the buyer’s loan. Always be pre-approved and have your loan pretty much in place before writing an offer.

REO’s come in many different states of condition.  In some cases, especially if they are new construction, they will be in excellent condition.  There are some beautiful new construction foreclosures that I have shown in communities like The Point, The Farms, Bay Crossing and Northington Woods.  Our Lake Norman home builders have been hit particularly hard these past two years; many have gone under leaving an inventory of spec homes some of which are still active listings.

However, many homes, especially those that were lived in and abandoned by the homeowners, can be in various states of disrepair.  I have seen houses that have been stripped of everything including cabinets, toilets, appliances and light fixtures. Some have been trashed by their angry owners before leaving.  I’ve seen holes in walls, shattered doors and the like.  Others are truly “fixers” in every sense of the word.  Some new construction homes, especially close to the lake, were abandoned by the builders before completion so the buyer will have to finish the work and get the permits signed off before moving in. It is especially important to look for signs of moisture problems. (From broken pipes to drainage issues.  When homes sit vacant many things can happen and go unaddressed.) It is important to be diligent about inspections of bank-owned properties!

One of the homes I sold several months ago had had mold as a result of some moisture issues which had been such a detriment that the bank actually had the mold remediated.  My buyer was willing to take on the moisture issues (after numerous inspections and estimates by mold and moisture experts) and the other repairs related in most part to the house having been vacant for 2 years.  The result?  My buyers purchased a 7000 sq. ft. $1 Million+ waterfront home with a dock in the$600,000’s.

Banks do negotiate.  They get really tired of low-ball offers by investors.  In my experiences, the banks came down in price more than the listing agents expected.  (About 8% in one case).  Banks tend to use pricing systems that dictate price reductions on a schedule.  But, they also want these properties off of their books.  I had one offer accepted on a Friday afternoon after the listing agent had told me there was no way it would be accepted.  Perhaps on that Friday afternoon the bank looked at their numbers and decided they needed to get more properties off of their books.  Don’t give up!

Know the recent comparable sales and determine ahead of time what price you are willing to pay based upon those comps and the amount of out-of pocket expenses for repairs.  As long as your inspections and loan goes smoothly, you should be able to close the sale within a short period of time with little drama.  (Of course, your own loan and the inspections could add a bit of hard work).

If you are willing to take on a house that has issues and no disclosures or warranties then an REO may be for you.  Inspect the property thoroughly with experts in their fields so you know what you are buying.

Stay tuned for Part 2 of this series which will share some of my experiences with short sales.

RELATED ARTICLES

Lake Norman Real Estate:  How YOU can search for distressed homes for sale

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Lake Norman Real Estate: What Home Buyers Should Know Right Now!

Lake Norman future home buyers

Every time I go out with my buyers in our Lake Norman area I gain some knowledge about the dynamics of our market that can’t be acquired merely by looking at our Lake Norman housing statistics and reading the myriad real estate articles in the news.  Now more than ever real estate is very very local.  My insights about the Lake Norman real estate market may not even apply to Charlotte!

If you are serious about buying a home in Lake Norman this spring here are my recommendations:

Get pre-approved for a loan AND then keep in touch with your lender on a weekly basis.  Right now the lending market is so erratic that you can not count on last month’s pre-approval.  I had buyers completely pre-approved but when they finally were ready to write up their offer the lender told them they could no longer get a loan, period.  The rules changed, not their excellent credit or down payment.

Know your priorities and goals and stick to them.  There are so many homes for sale in the Lake Norman area that buyers have almost too many to choose from.  It is easy to get side tracked which leads to more confusion and frustration.  Stay focused!

Look at homes that are priced 10% or more above your intended purchase price.  I can’t tell you how many sellers, including my own, are afraid to lower their prices but keep asking why they haven’t gotten any offers and insisting that if they had an offer they would work with the buyers.  They might ultimately reduce their price lower than you might expect.  You may miss your perfect home that is simply overpriced if you don’t stretch your price-range.

Don’t be afraid to make a low offer!  This goes along with the idea of looking at higher-priced homes.  As a buyer you probably know the market better than the sellers since you are out there looking at active listings.  While there are times the seller will simply not respond, if they have a good agent they will counter with something just to keep the dialog going.

Before making your final decision/offer, ask your agent to provide you with:

  • An MLS archive search of your favorite homes:  This will tell you exactly how long the property has actually been on the market as well as how many times it has been reduced and/or expired and re-listed.  The most recent MLS data might say 100 days on the market when in fact it has listed for well over a year.
  • Tax records:  When did the sellers purchase their home and for how much.  Right now in many Lake Norman neighborhoods prices are back down to 2004/2005 prices so if the home was purchased more recently chances are the sellers are going to have to take a loss.
  • A comparative market analysis:  Learn everything you can about the recent sales and current active listings that an appraiser will use to help you decide your purchase price.  If there are one or two low sales or active listings these will greatly impact the value of the other homes in the neighborhood.  Lenders are so conservative right now that they are even doing second appraisals just before closing.  Our prices are trending downward.  Lenders are very difficult to work with under the best of circumstances but if your purchase price is a bit high it is most likely that you won’t be able to get the loan.

Finally, keep up with the financial news.  The newly passed Stimulis Bill includes an $8,000 tax credit (that does NOT have to be repaid) for first-time home buyers.  There are discussions about further efforts to bring mortgage interest rates down and other tools to revive our lagging national housing market.

Be smart and you will be successful!

RELATED ARTICLES

Lake Norman Real Estate:  How to Learn About Our Area Schools

10 Things Lake Norman Waterfront Home Buyers Should Know BEFORE buying

Lake Norman Relocation Resources

Relocating to Lake Norman

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lake norman real estate, The Real Estate Process, Home Buying and Selling Tips

Lake Norman Real Estate: What are “Seasonal Views”?

One of the first things you will discover as you begin your search for a home on or near Lake Norman is that there are myriad variations of “waterfront” and “waterview” homes.

Our Charlotte Regional Multiple Listing Service provides Lake Norman real estate professionals and home buyers and sellers with specific search catagories entitled “waterfront” and “waterview” but it is truly up to the listing agents to properly describe the type of waterfront (wide, main channel or cove) and the type of waterviews the property actually has.

The most common term you will find when looking for Lake Norman waterveiw homes is “seasonal”. So, what are seasonal waterviews?

Here are pictures of the view from my own waterview home taken in Spring, Summer, Fall and Winter: Continue reading

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The Real Estate Process, Home Buying and Selling Tips

How to sell your Lake Norman home in 18 days!

Real Estate Success

On May 5th, 2008 I listed a lovely two-story Colonial in a waterfront community on Lake Norman NC. The house next door as well as many others in the same subdivision had been on the market for well over a year.

Lake Norman home sold in 18 Days!

The ultimate buyer of my listing saw it on May 6th (thanks to the photos on the Internet) and intended to write an offer that day but they wanted to write a contingency in for a pool which my clients and I would not accept. On May 23, just a day after getting confirmation from the county that they could build a pool, they presented an offer. On May 25, the final details of the offer were accepted by all. We closed the sale successfully on June 30th.

So how did we do it during such a tough real estate market here in Lake Norman? There was no magic involved but rather a lot of hard work, a savvy seller and just a little bit of luck:

Planning and Preparation is critical!

  • I first met with my sellers in May of 2007 and walked the property giving them feedback on how to prepare for their sale and move.
  • Over the course of the next 11 months my sellers focused on the huge task of downsizing their belongings as well as having their home painted inside and out and other repairs and improvements.
  • About a month before they wanted to actually list the property they interviewed me and several other agents. Once I had the listing we concentrated on the final staging for the property including New granite counter-tops, re-arranging of furniture, adding staging touches to the interior and sprucing up the garden and porches with lots of flowers.
  • At the same time I hired a professional to do a floorplan and hired a photographer to do the photos and virtual tour.
  • I then designed the two-sided full-color flyers for the street (printed on glossy paper), and the Buyers Book which included about 20 pages of photos, the floorplan, survey, disclosures, information about schools and anything else I felt every buyer that came to view the property should have to take home with them.
  • Late in the day on May 5th, I uploaded the listing on to our MLS including multiple photos, virtual tour and interactive floorplan.
  • As soon as I had the MLS number I designed and created their own website: www.137Mussellane.com, and uploaded their Internet flyer to myriad websites including CraigsList, Trulia, Yahoo and Zillow. I also upgraded their Realtor.com listing with multiple photos, virtual tours, and all the bells and whistles included in being a “Showcase House”.
  • On May 6th the sign went up along with the brochure box with our full-color brochures including multiple interior photos. We had our first showings!

On the very first day this listing appeared on the MLS every single detail was complete. The property was staged and ready to show, all of the marketing was in place. When the potential buyers were notified of this new listing through the MLS systems they got to see multiple photos, virtual tours, floorplans not a blank box. When the first buyers arrived to view the home it looked great and they had Buyer’s Books waiting for them.

Approach the sales process with an aggressive attitude (both myself and my wonderful sellers!)

  • We priced the property where the market dictated NOT based upon hopes and what ifs.
  • My sellers did everything they could to prepare their home for sale while never insisting on rushing the process.
  • I staged the property with my own props and flowers.
  • I prepared the marketing blitz for the first day of the listing knowing that the best chance we had at a quick sale was in the first two weeks of the listing.
  • The quality of the marketing was excellent: I hired a team of professionals who provided me great photos, floorplans and virtual tours to work with.
  • My sellers helped me to define the special features of their home that I could focus on in the marketing.

Negotiate with realistic expectations and open-mindedness

  • While the first offer was low and had some unrealistic terms, my seller was committed from the outset to make a sale. (See a great article: Home Sellers Who Understand Market Prosper by Diane Hymer). Their willingness to be realistic and compromise was critical to the process and resulted in a very successful sale.

On June 30th, we successfully closed. It took a total of 52 days from the day it was listed to the day it closed in a market where their price range is very very slow. The house next door has just been re-listed with their 4th Realtor. It has been reduce almost 20% in price and is now vacant.

I just got the greatest gift a Realtor can get; a thank you card from my sellers. It said simply: “You Are Awesome…And by awesome, I mean totally awesome”. How cool was that?

But, you know what, my sellers were awesome too. Without their willingness to work so hard, to be open-minded and to be smart negotiators all of my guidance, preparation and marketing wouldn’t have made any difference. It truly was a team effort!

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Lake Norman Real Estate: What Does the Closing Attorney Do?

Scales of Law, Closing Attorneys in Lake Norman

When my husband and I bought our Lake Norman home in 2005 we knew nothing about the closing process in North Carolina let alone what the attorney’s role was in the process.

Yesterday I received an email from someone moving here who had read this blog but couldn’t find anything specifically explaining the role of the closing attorney. She too is moving here from CA where we used escrow and title companies for closings so I can understand her confusion.

Here is an outline of the most common closing practices and the role of our closing attorneys here in Lake Norman and throughout North Carolina:

Once the buyer and seller have finalized the Offer to Purchase and Contract, the buyer’s agent, on behalf of the buyer(s),contacts a real estate attorney to schedule and handle the closing. The closing attorney is hired and paid for by the buyer however they do assist in the closing paperwork for the seller as well. “The most common practice is for the closing attorney to represent the purchaser and lender while performing limited functions for the seller (such as the preparation of the deed).”

The Closing Attorney in North Carolina real estate sales acts much as an escrow company does in other states:

  • They receive a copy of the sales contract soon after the day of acceptance usually from the buyer’s real estate agent
  • They do the title search and arrange for title insurance for both the buyer and the buyer’s lender
  • They work with the lender to get the loan documents in time for the closing
  • They will process the Property Insurance Policy, the Wood Destroying Insect Inspection Report and the Property Survey if required
  • They get the information from the seller about the payoff of their loans, their deed and proof of repairs
  • They prepare the new Grant Deed
  • They will notify the buyers the day or so before closing as to the exact amount of money they need to bring to the closing. This now must be wired funds to the attorney
  • They preside over a meeting on the day of closing attended by the buyers, the sellers and their real estate agents.
  • They process the closing documents and file all with the county
  • They handle the disbursement of funds

On the actual day of the closing agreed upon in the sales contract, the buyers, sellers, and their real estate agents meet with the closing attorney at an appointed time together to sign all of the necessary documents:

  • First, the attorney will explain the U.S. Department of Housing and Urban Development (HUD) Settlement Statement which is a statement of the actual settlement costs. All parties, including the real estate agents, go through the HUD Settlement Statement line by line to make sure all of the costs/credits are correct and paid by the appropriate party. It is not uncommon for mistakes to be found. The attorney merely has a corrected Settlement Statement printed for all parties to sign during this meeting.
  • Once the HUD Settlement Statement is approved, all parties sign multiple copies so that everyone has original signatures on their own copy to take with them.
  • At this point usually the sellers are excused
  • The attorney then goes through and explains all of the loan documents to the buyers and has them sign all including the Grant Deed
  • As soon as possible, preferably the same day as the closing meeting, the attorney will “update” their earlier title search, record the deed and the deed of trust and disburse funds as indicated in the closing statement

Attorney’s fees vary but to give you an example, at my last closing of a $410,000 home the costs related directly to the attorney were:

Buyer:

  • Title Search: $100
  • Attorney’s Fees $425
  • Title Insurance: $519
  • Recording of Deed: $112
  • Misc Fees: $130 (couriers, wiring fees)

Seller:

  • Document Preparation Fee: $175
  • Release Fee: $60
  • Courier Fee: $50

“In 2003, the North Carolina State Bar ruled in an ethics opinion that attorneys do not have to be physically present at closing meetings in residential real estate closings. A non-lawyer assistant who is under the direct supervision of an active member of the North Carolina Bar may attend the closing without the attorney being present.”

If you have any further questions regarding attorney closings don’t hesitate to email me or leave a comment!

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What you need to know about buying real estate in North Carolina

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Lake Norman Real Estate: What is a “Perc” test?

Digging a hole to do a Perc Test for Lake Norman homeOne of THE most confusing terms I heard when I first moved to Lake Norman and re-established my real estate business was the term “perc” . I would hear agents ask such questions as: Did the land perc? How many bedrooms did it perc for? When I visited a new housing subdivision in Mooresville the agent on duty told me they were delaying construction because only 20 lots ˜perced.

So what in the world does perc mean? Technically, it is short for the term: Percolation. And, very simply, a perk test measures the ability of the soil to absorb water.

“The percolation tests are designed to simulate conditions in a septic system. The percolation test consists of a hole 6-12 inches in diameter dug in the area of the proposed septic system. The depth of this hole varies depending on the soils encountered but it is generally not greater than 24 inches. The hole is initially filled with water (presoak) in an attempt to saturate the soil, allowed to drain away and than refilled with approximately 12 inches of water. The rate at which the water drops in the hole is measured at intervals over a period of time ranging from 30-60 minutes. The uniform slowest rate of drop of the water level over a measured time interval is converted to minutes per inch and used as a basis of design in determining the septic system size”.

Any unimproved lot will require a perk test to determine if it can qualify for a septic tank and if so, how big a house will the septic system handle. The size of the house is actually the number of bedrooms so, if a lot perks for three bedrooms, the maximum number of bedrooms that a house on that lot can have is three.

When buying raw land that is not in the town limits and thus does not have sewers, it is critical to know whether it will perk as this will determine not just how large a home you can build but IF you can build a home at all. Sometimes in subdivisions you will find oddly shaped lots which many times are bigger than the average. This is probably due to the septic system requirements.

Each county around Lake Norman has their own requirements for septic systems. The process usually goes like this:

  • You/your builder string off where the home and driveway will be placed on the lot itself
  • Apply for a septic permit from the county health department
  • Draw an initial site sketch
  • The county will come out to the site and perform a perk test
  • If the soil does not perk, then you will not get a permit
  • If it does perk, you will be given the limitations by number of bedrooms

Another important step in any plans for expansion of an existing home is to pull the septic permit to find out how many bedrooms it allows. You would not be allowed to add a fifth bedroom to a home that perked for four!

To learn more about this process go to the website: Percolation Test or contact your county health department.

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Relocating to Mooresville Lake Norman: What you should know before buying real estate Part 2

Relocating to Mooresville Lake Norman: What you should know before buying real estate: Part 3

Relocating to Mooresville Lake Norman: What you should know before buying real estate: Part 4

What you should know before buying real estate in Lake Norman Part 5

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The Real Estate Process, Home Buying and Selling Tips

Relocating to Lake Norman; What You Should Know Before Buying Real Estate: Part 5

Every state and region of our country has its own areas of focus when doing a home inspection and the Mooresville Lake Norman area is no different.

In Parts 1-4 I discussed the real estate contracts, siding, moisture issues, pest reports and radon. There are three additional inspections and reports you should also consider ordering  AT THE SAME TIME AS THE PHYSICAL INSPECTIONS:

  1. Water test if your Lake Norman home has it’s own well (And most either have their own well or a community well)
  2. Septic Tank Inspection and Pumping
  3. Survey of lot lines

Well Water: If the home you are purchasing is close to Lake Norman or beyond the city limits of Mooresville or any of the surrounding towns it most likely will have its own well. It is recommended that you have the well water tested during the physical inspection period. New Construction is required to pass a water test before it will get occupancy clearance. You can do further research about North Carolina Drinking Water at the U.S. Environmental Protection Agency website. They also provide a list of State Certified Laboratories that test drinking water and contact information for our NC drinking water offices. While the EPA is not responsible for private well water they do recommend that well owners have their water tested annually.

A Septic System ”consists of an underground tank and a leach or drainage field that work to purify household waste water. Sewage sits in an anaerobic bacteria which breaks down the solids. The fluid that leaves the tank is called effluent. It flows into the pump tank and after the effluent level reaches a certain level then the effluent is pumped to a leach field and ito the surrounding soil. The soil filters the fluids, aerobic bacteria breaks down the effluent into chemicals that support vegetation.”

A septic inspector will mark the septic fields and inspect the tank and the system for proper seals and filtration. They may recommend having the septic tank pumped, repaired or even replaced.

Lot Survey: North Carolina Real Estate Attorneys, lenders and title companies all recommend that home buyers get a professional survey of their property before purchasing. While this is not mandatory, it will make sure you know exactly where your property lines are so that you can make sure there are on encroachments or other problems that could surface after closing, most commonly when putting up a fence. The cost of a survey depends on the surveyor and the size and difficulty of the lot.

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Relocating to Mooresville Lake Norman: What you should know before buying real estate Part 2

Relocating to Mooresville Lake Norman: What you should know before buying real estate: Part 3

Relocating to Mooresville Lake Norman: What you should know before buying real estate: Part 4

Relocating to Lake Norman: Subdivision or No Subdivision?

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lake norman real estate, The Real Estate Process, Home Buying and Selling Tips

Lake Norman Real Estate: What are the Ten Deadly Sins?

Lake Norman Real Estate ethics and laws

My guess is that most home buyers or sellers, whether in Mooresville, the greater Lake Norman area or throughout North Carolina, know very little if anything about:

Yet it is these three sets of rules that define in great detail how real estate professionals (REALTORS) are to do their jobs properly, legally and ethically. And most importantly, they are in place to insure that all home buyers and sellers are protected by outlining the consequences if a real estate agent violates their legal and ethical duties.

THE TEN DEADLY SINS OF REALTORS*

  • Thou shall not lie the consumer
  • Thou shall not badly represent your client
  • Thou shall not consider yourself more important than the consumer
  • Thou shall not be incompetent
  • Thou shall not give or accept bribes for leads
  • Thou shall not commit loan fraud
  • Thou shall not treat people unequally
  • Thou shall not practice law
  • Thou shall not fool around with other people’s money
  • Thou shall not allow agents to do dumb things

*From Priscilla G Senecal, instructor for the Mingle School of Real

Each one of these “sins” is backed up by extensive legal and ethical codes which, if violated by a real estate agent, could result in suspension, loss of license, fines and even jail time.

The easiest way to summarize all of these laws and codes for me is to picture the person I love most in my life and imagine that I am representing him or her every time I am working with a buyer or seller.

Every time you work with a Realtor you should expect nothing less!

This is part one of a series in which I will discuss and give real life examples of each of the “Deadly Sins” to help you better understand them and in turn empower you to be a smarter home buyer or seller.

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STOP: Proceed with Caution, Dual Agency!

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Relocating to Mooresville Lake Norman: What you should know before buying real estate Part 2

Relocating to Mooresville Lake Norman: What you should know before buying real estate: Part 3

Relocating to Mooresville Lake Norman: What you should know before buying real estate: Part 4

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lake norman real estate, The Real Estate Process, Home Buying and Selling Tips

How is buying or selling real estate in Lake Norman like rock climbing?

Lake Norman real estate is like rock climbing

 

When I look at this picture I feel this huge rush of fear go through me; an avid rock climber would probably feel excitement and proud father might see a strong young man. My point being that every single person that sees this picture will have a unique perspective. The same is exactly true about our national economy AND the Lake Norman real estate market.

The news this morningof the dramatic drop in jobs last month is one more argument for the “R” word…recession. The truth is, we will probably hear pundits reactions for the rest of the day and each will have a slightly different perspective on this news.

Franklin Roosevelt’s first inaugural address was given during the depth of the 1933 depression at which time he said:

“This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honesty facing conditions in our country today. This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself–nameless, unreasoning, unjustified terror which paralyzes needed effort to convert retreat into advance….”

Is this not equally true today?

But how can a home buyer or seller determine the truth about what is best for them personally?

On the one side they read and hear constant news about the housing crisis, the sub-prime mortgage meltdown, record foreclosures and even locally about our “severe” drought. At the same time, almost every real estate ad you see has neon flashing lights screaming Buy NOW!

Let’s go back to the picture of the rock climber. Every single potential home buyer or seller needs to understand that their circumstances are unique and therefore their interpretation of the real estate market needs to be made based upon their own specific needs, timing and desires.

Step one for home buyers and sellers:

  • Determine first and foremost, is this an investment or a home for your family?
  • Make your own list of pros and cons of buying, selling or relocating including your timing and your motivation (Why you are going to buy or sell: a dream home on Lake Norman, job relocation, downsizing, trading up, retiring, divorce?)
  • Ask yourself and your family how long you intend to live in your new home.
  • Write down the financial facts to be considered: income, monthly payments, current interest rates, $ loss or gain if selling

Step two:

  • Find a Realtor who will “speak the truth, the whole truth, frankly and boldly.”
  • If you are selling, study the recent sales with your Realtor and face the reality of the value of your home at this point in time and plan accordingly. If you are going to take a loss, plan for that upfront. While it is never easy to loose money, you are far better off planning for this possibility in advance.
  • If you are a buyer, remove the fear, “the unreasoning, unjustified” fear that paralyzes so many and look at your own personal goals. If you are making an exciting move to a waterfront home and plan to live there for many years, forget about the short-term drought and the ups and downs of the economy and look at this Lake Norman housing market as an opportunity to buy when there is an unprecedented selection of homes from which to choose at reasonable prices.
  • However, if you are planning a short-term stay perhaps it is best to rent since it may take several years for the market to get its momentum back. Or, if you do buy knowing it will be for brief period, buy in a price-range and neighborhood that have historically strong sales and try not to buy brand new construction unless the subdivision is nearly completed.

The bottom line is that the current real estate market in Lake Norman should be seen differently by every single buyer or seller depending on their own perspective. It is not all good or all bad. Buyers and sellers need to seek out the best real estate counseling possible in order to make their own determinations of what is best for their specific wants and needs.

As FDR went on to say in the same speech:

“Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; with them it can not live.”

Is this not what every Realtor should strive to provide?

Learn More About Life in Lake Norman:

10 Things Lake Norman Waterfront Home Buyers Should Know BEFORE buying

Lake Norman Relocation Resources

Relocating to Lake Norman

60 Things You Should Know About Life in Lake Norman, Part 1

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lake norman real estate, The Real Estate Process, Home Buying and Selling Tips

Relocating to Mooresville Lake Norman: What you should know BEFORE buying real estate: Part 4

 

When buying real estate in the Lake Norman area for the first time it is very important that you are educated about not just the sales process but what to look for during the inspection process. Coming from California, despite 15 years in real estate, my husband and I knew nothing about moisture issues, siding, radon gas, well water, septic tanks and other physical aspects of homes here in Lake Norman and unfortunately, our Realtor who was a native of Lake Norman, had no idea what we didn’t know and therefore did not explain anything at all to us. Hence this series of articles!

A radon screening test is done with an electronic detector which does a continuous monitoring of radon levels for a period of not less than 48 hours. They usually put the device in the lowest livable level of the home and doors and windows must remain closed.

The North Carolina Department of Environment and Natural Resources has a great section on the NC Radon Program with a Q and A, copies of the Radon Information Brochure for NC Citizens, and a list of certified testers and mitigators you can use when buying or selling real estate in our Lake Norman area.

The US Environmental Protection Agency also provide detailed information about Radon and also offers “A Citizens Guide to Radon” and links to their North Carolina resources.

Radon levels in Lake Norman homes vary greatly but it in almost all of my real estate sales the levels were very low and presented no problems. That said, I have had high Radon levels in basement homes, especially on the lake. If you are considering buying real estate in the greater Mooresville, Lake Norman and Charlotte area I would highly recommend that you include a radon test in your home inspection process.

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About Diane Aurit, The Real Estate Process, Home Buying and Selling Tips

How my sick cat reminded me of why I am a Realtor

Cat I came so close to loosing my dear “Mr. Kitty” this week. Not because he was so sick, but because of a Vet who lacked confidence, experience, and the understanding of just how important it is to empower her clients with the knowledge necessary to make the best decisions during tough times.Woman scratching head

I took 19-year-old Mr Kitty to my regular vet in Mooresville on Thursday because he had virtually stopped eating. I knew he had lost a lot of weight over the past 6 months and that his quality of life was likely to diminish at any time. I had already made the decision that I would not put him through extensive medical treatment since he was so old.

The vet that saw him was not my regular doctor, but rather a young woman who looked to be fresh out of school. She checked over Mr. Kitty and when I suggested his mouth might be bothering him she tried but was unable to get a good look at it.

Sensing my reluctance to do any medical procedures she sent us on our way with some antibiotics and the expectation that Mr. Kitty was in his last days and just to keep him as comfortable as possible.

Cat

This morning my husband noticed that Mr. Kitty had a very loose tooth and decided we should take him to the emergency animal hospital in Huntersville to at least have them look at the tooth (his last:) if not remove it.

The doctor who treated him, also a young woman, exuded confidence and professionalism and immediately took control. She told us that it was her professional responsibility to recommend that he have tests for kidney failure, thyroid, and also carefully examined his tooth and said she could extract it while we waited using a very low dose of gas to put him under just long enough to get the tooth out.

Within an hour, all of the tests were completed, the tooth extracted and we were on our way home with some medication and a cat that could live for quite a while and who was even purring and eating by the time we got home.

Two different doctors and two entirely different outcomes.

But is this not also the case with Realtors? A good agent will provide their expertise, knowledge and direction while instilling trust; enabling their clients to be empowered to make the best decisions for them based upon the best information available to them. We should never be afraid to tell our clients the truth or give our honest opinions and guidance based upon our expertise. Whether it is choosing the best listing price (NOT the highest) or making sure a buyer doesn’t overpay, it is our professional responsibility to tell our clients the truth, not what they want to hear.

No, we aren’t doctors and no one’s life is depending upon us. However, buying a home is a huge decision and one that should be made with the help and guidance of a Realtor who is strong enough and knowledgeable enough to be honest and straightforward, especially during these tough times.

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The Real Estate Process, Home Buying and Selling Tips

Relocating to Mooresville Lake Norman: What you should know before buying real estate: P art 3

Last month I wrote: Thanks to having several years of experience selling real estate in the greater Lake Norman area after 15 years selling in California, I can not only tell you exactly what to look for regarding earthquake safety (okay, not terribly useful here) but now I can also explain the benefits and shortcomings of different types of siding, how to mediate moisture in your crawlspace, what levels of radon are considered acceptable, how to test septic systems, private well-water and what to do if your double paned window seals break. Here is Part 3:

Moisture: What to look for when buying a home in the Lake Norman area

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Moisture related issues are probably the most common problems found during the home inspection process here in the greater Lake Norman area. If you are not from the south, then this may seem surprising. Humidity, our amount of average rainfall and our wonderful red clay soil all contribute to the tendency to have moisture issues, especially if the previous home owner did not keep up with regular but rather simple maintenance of their home.

The most common moisture related items called out in a home inspection in the Lake Norman area are:

Excessive moisture readings in the crawlspace of the home

  • Excessive moisture could be caused by any or all of the following: improper ventilation, inadequate moisture barriers, leaks, condensation, or rain or sprinker water flowing into the crawlspace due to poor grading. According to one of my inspectors, one square foot of vent area should be provided for every 500 square feet of crawl space and a moisture reading of 20% or higher would require some sort of remediation. You might check with several inspectors to get feedback regarding these numbers.

Missing or inadequate moisture barrier in the crawlspace

  • A moisture barrier is simply a sheet of 6 mil or thicker plastic installed over the entire crawlspace floor. This sheet traps the moisture in the soil, stopping it from seeping into the house. Very inexpensive but very important!

Old/failing and or inadequate caulking and sealing around windows and any cracks or openings that would allow moisture to get into the walls

  • Inspectors recommend that homeowners check the caulking around all windows and vents several times a years. Again, this is an inexpensive yet very important.

Inadequate or clogged gutters and downspouts

  • Gutters and downspouts should be designed to divert water away from a house. It is important to make sure that downspouts take the water away from the house either through piping or by grading the soil so that water flows away from the house itself and doesn’t puddle around the foundation.

Moisture damage to wood soffits, fascias and anywhere wood exists on the exterior of the home

  • Any time you have wood on the exterior of your home, make sure that you maintain the paint or protective covering so that moisture can’t get in to the wood. It is important that there is no earth-to-wood contact as well. (Decking wood should not touch dirt but rather cement or footing of some sort).

Plumbing leaks

  • Plumbing leaks are common inspection issues everywhere, not just here in Lake Norman. It is always important to check for leaks on a regular basis and repair them before any damage can be done to any nearby wood.

Condensation in double paned windows indicating a broken seal

  • Double paned windows are found in most homes around Lake Norman. The two sheets of glass need to be completely sealed to their frame in order to keep out moisture. When you viewing potential homes look for a foggy look to any windows as this probably means that a seal is broken. There are companies that claim to be able to fix the seal and at the same time remove the trapped moisture but most people elect to replace the entire window.

Of course, I am not a contractor nor a physical inspector so please use this information as general guidelines and consult a licenced contractor or inspector with specific questions regarding moisture issues in the greater Mooresville Lake Norman area homes. And, when buying real estate in the Lake Norman Area, even new construction, I highly recommend that you have a professional inspect your property!

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The Real Estate Process, Home Buying and Selling Tips

Lake Norman Real Estate: How to research the Sex Offender and Public Protection Registry

This is one of those subjects that can be uncomfortable to discuss but is very important to many Lake Norman area home buyers. As a Realtor, I want to provide as many resources as possible so that you can find any information you may need to feel comfortable about your family’s safety. Whether you are moving to Lake Norman or already own a home here, I hope you will familiarize yourself with The North Carolina Sex Offender Registry

On the North Carolina Sex Offender and Public Protection Registry website you can type in an address and search by 1, 3 or a 5 mile-radius to see not just how many registered sex offenders live in the area but also their home addresses and photos.

On this same website you can also sign up to be notified by email if a sex offender reports moving in or out of the radius of the address you requested.

Buyers many times ask me if a neighborhood is “safe”. The very best way for anyone buying real estate in Lake Norman or anywhere to learn about crime rates and data is to contact the local town police department. And, thanks to legislation like Megan’s Law, we now have this sex offender registry available as well.

Here are a number of other online resources:

If you have any questions regarding Lake Norman or Mooresville real estate or ideas for subjects for me to write about drop me an email!

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Relocating to Mooresville and Lake Norman: What you should know before buying real estate Part 2

Part 2: Types of Siding

Thanks to having several years of experience selling real estate in the greater Lake Norman area after 15 years selling in California, I can not only tell you exactly what to look for regarding earthquake safety (okay, not terribly useful here) but now I can also explain the benefits and shortcomings of different types of siding, how to mediate moisture in your crawlspace, what levels of radon are considered acceptable, how to test septic systems, private well-water and what to do if your double-pane window seals break.

Part 2 of this series will focus on the types of siding commonly found on homes in the Lake Norman area.

I must admit, we didn’t even use the term “siding” in California and I was really shocked to find out they used vinyl rather than real wood for not just siding but shutters and even deck railings. But, that was before I fully grasped the importance of controlling moisture in and around our Lake Norman homes.

Siding: Siding is simply the material that covers the exterior of a home. In the Lake Norman area, you will find

  1. All Brick (veneer or full)
  2. Stone (veneer of full)
  3. Vinyl
  4. Stucco (hard coat or synthetic)
  5. Fiber Cement
  6. Wood/Shingles
  7. Any combination of the above 

Briefly, brick is durable, never needs painting and is quite popular here. It is one of the most expensive siding options so if you are buying new construction or building a new home plan on paying an additional amount for all brick or even partial brick exteriors. When we first moved here in 2005 brick was extremely popular however there is a move now towards a more Craftsman look using a combination of shingles, planks and even stucco.

Vinyl was completely new to me but is extremely common here in Lake Norman homes. I was shocked when I discovered that this siding, which I thought was wood from far away, actually feels like plastic as do their companion shutters. Vinyl is very low maintenance, cost effective (affordable!) and common in the lower to middle price ranges of homes in Lake Norman. There are many different grades of vinyl siding. See The Pros and Cons of Vinyl Siding

 

Stucco is both good and bad and inspires lots of controversy. This is because of a product called “synthetic stucco” or EIFS (Exterior Insulation and Finish Systems). In 1996, 90% of homes tested in Wilmington NC that were clad with synthetic stucco were found to have high moisture levels in the wood components of the walls. As you learn quickly living in Lake Norman, high moisture levels can lead to the damage of wood and mold. Since this discovery, the use of synthetic stucco plumetted and now builders use primarily “hard-coat” stucco.  You can usually tell if a stucco is hard-coat by the existence of seams.

There are companies that do elaborate testing of stucco homes to determine if there are any high readings of moisture behind the walls. The key is to keep all areas around windows, chimneys etc. sealed properly so that moisture can not seep in. For more information go to the North Carolina Department of Insurance and select Engineering and Codes, then NC Building Code Council and finally Exterior Insulation Finish System. Or, the EIFS Industry Members Association , or The EIFS Alliance. By North Carolina law, Sellers may disclose the existence of synthetic stucco and listing agents must disclose it. I have a great stucco expert who can inspect and provide a very comprehensive report about existing synthetic and hard-coat stucco.

 There are also some very popular cement fiber sidings that look similar to vinyl but are more durable and more expensive. Hardieplank is highly recommended by contractors. It is a fibrous concrete that termites can’t eat, is impervious to moisture, comes in different colors but can be painted.

Wood is most common in older homes and higher-end custom homes but is not used extensively in new construction because of the regular maintenance and painting required. I still love real wood and hope someday to replace our current siding with wood. But, that’s probably because I am used to maintaining wood and love the look and feel.

If you do a Google Search on the pros and cons of siding you will get myriad results that will help you do further research if desired.

Part 3 of this series on Lake Norman real estate will discuss moisture issues.

MORE ARTICLES ABOUT BUYING A HOME IN LAKE NORMAN

Relocating to Lake Norman: What you should consider before buying a home Part 1

What you need to know about buying real estate in North Carolina

Lake Norman Relocation Resource

10 Things Lake Norman Waterfront Home Buyers Should Know BEFORE buyingR

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Relocating to Lake Norman: What should you consider before buying? Part 1

I recently read an article by Bernice Ross in Inman News entitled: Avoiding a relocation nightmare. It brought a smile to my face because I could tell that she, like me, was also used to housing issues common in California and seemed truly alarmed by all of the unexpected things she encountered while building a new home in what I’m guessing was the Southeastern part of the country.

It’s amazing to me how truly different the home-buying experience is throughout our country. When my husband and I moved to Mooresville our Realtor didn’t even begin to educate us on all of the differences and things we needed to consider; probably because he was a native of Lake Norman and didn’t have a clue what we didn’t know.

Thanks to having several years of experience selling real estate in the greater Lake Norman area after 15 years selling in California, I can not only tell you exactly what to look for regarding earthquake safety (okay, not terribly useful here) but now I can also explain the benefits and shortcomings of different types of siding, how to mediate moisture in your crawlspace, what levels of radon are considered acceptable, how to test septic systems, private well-water and what to do if your double paned window seals break. Below is a list of things to consider and learn about before or during the house-hunting process.

Does your new community have issues with floods, fires, mold, water shortages or even hurricanes? (No earthquakes that I know of here.)

  • Here in Lake Norman and the greater part of the Southeast we are experiencing an extreme drought. While this is not common, it is certainly not something my husband and I even thought was possible! Those who have city services are under water restrictions however those of us with private wells need to watch the underground water tables (see my article on the Lake Norman drought).
  • Because of our topography and red clay soil, many lots have low areas that are prone to flooding so it is important to learn as much as possible about the lot you are buying
  • Mold comes with living in a humid climate. The homes here are built specifically to address moisture issues. From moisture barriers in crawl spaces to building materials like Tyvek, to different types of siding, there are many ways to protect your home from potential moisture problems. It is important to know what products your builder uses or used or didn’t use.
  • Here in Lake Norman we rarely are affected by hurricane although Hugo in 1989 did topple some trees and cut power to many homes

Do you have city services including sewer, natural gas and water or does the property have a septic system, private well water, propane and private trash pick up?

  • As a general rule, if you live in the town limits of any town around Lake Norman you will have sewers, natural gas, trash pick-up and city water. However, many of the areas on the lake itself are in the counties not the town limits so, like my home, have private wells, septic systems, underground propane gas and private trash pick-up. I have absolutely no complaints about this but it is important that you educate yourself about the differences and decide which better suits your needs.

What are the average insurance and property tax rates?

  • Property taxes vary by county and also if you are in the town limits or county. Compared to states like Florida, New Jersey and New York our taxes are extremely low. The 2007-2008 tax rates range from a high in Charlotte of $1.2973 per $1000 to a low of .4650 in Iredell County outside the town limits of Mooresville, Statesvillle and Troutman which just happens to include the Brawley School peninsula where I live!
  • We have found our own insurance rates to be about half of what they were in California

In Part 2 of this series “What you should consider before buying” when relocating to the greater Lake Norman Area, I will start to talk about the types of sidings, and other issues that may or may not come up during physical inspections. Since the North Carolina does not require the seller to disclose problems related to the structure of the homes, it is very important to know what to look for and where to go for the best information regarding these issues.

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Relocating to Lake Norman: What you should know before buying real estate Part 2

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Relocating to Lake Norman: What you should know before buying real estate: Part 5

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The Real Estate Process, Home Buying and Selling Tips

An Open Letter to Lake Norman Area Home Sellers

 

Dear Potential Sellers in Lake Norman,

If you are considering listing your home in the next 6 months, it is extremely important that you not only know the current status of our local Lake Norman real estate market, but what to consider before listing your property and finally what you and your Realtor should do to prepare and market your property in this challenging real estate market.

General Overview of the Current Lake Norman Real Estate Market

There is simply no doubt that we are now, and have been since late spring 2007, in a buyers market. The number of active listings around the Lake Norman Area (#13 in our MLS) is double what we should have in a healthy, balanced real estate market. Add to that the fact that we are entering the holiday market which is traditionally slow, and it becomes a tough decision whether to list now, take your property off the market and/or wait until spring. Interest rates have dropped slightly and may drop further but the home mortgage market is still recovering from the sub-prime market collapse. The negative news is prompting many buyers to wait and see if the market continues downward in the spring or whether it will pick back up as it does traditionally. For a detailed real estate sales analysis see: Third Quarter Lake Norman Sales Analysis. (Link below)

Whether or not you should sell now depends on what you have to sell (price range, location, size, amenities), what kind of condition its in, how well it is priced for this market and how motivated you are to sell. The holidays are usually a time when only serious buyers and sellers are active. If you don’t have to sell you should seriously consider postponing until there is a sign that the market is improving.

What to consider before listing your home

  • What is your motivation to sell?
  • Your direct competition…the amount of inventory of homes for sale and the number of days they have been on the market.
  • Are you willing to list at a truly realistic price? This is not a market in which to “test” a higher price on a home sale. If a property is not priced properly it is likely to sit for months and ultimately sell for less.
  • Are you ready to manage your expectations? Be grateful for any offer at a reasonable price from a well-qualified home buyer.
  • Buyers are not overpaying in today’s real estate.
  • You are not only in competition with other homeowners but you may also be in competition with builders. Builders right now are offering myriad incentives and financial inducements with which home sellers may not be able to compete.
  • Be open to offering to pay buyers closing costs and/or pay points to reduce the buyers mortgage rates if the lender allows it.

How to list and sell a property in today’s market

  • Price your home to sell! Never “test” a higher price because you are not in a hurry to sell.
  • Be prepared to make your property perfect before it is placed in the MLS. With so much to choose from, home buyers want a property that is like-new or in move-in condition. Make all necessary repairs before it is listed.
  • Your real estate agent should help you “stage” your property, both inside and outside. It should be your goal to make your property a buyer’s dream home. If your agent can’t help you themselves then at the very least they should get you in touch with a professional staging company.
  • With so many homes to choose from, buyers are pre-screening online before they even physically visit the property so it is also imperative that your real estate agent capture and present the absolute best images and comprehensive visual experience of your home and garden for home buyers online. This means professional photos, videos and floor plans.
  • When you interview potential listing agents it is no longer enough to ask them how many homes they have sold. Make sure that they have a very clear marketing plan that is designed specifically to target your niche of potential home buyers. Print is not necessarily the best use of your real estate agents time and money. There are myriad sites on the Internet where your property can be displayed. Take advantage of all of today’s technology and social networking on the Internet!
  • Make your property easy to show.
  • Hire an agent that will provide you the very best comparable sales to help you price it properly and who offers all of the above marketing and staging services.

Having moved here from California where I have experienced the lows and highs of real estate markets, one of the first things that I noticed about sellers and listing agents here is that because the greater Lake Norman and Charlotte real estate markets have been consistently growing and have not experienced a slow down:

  • Both sellers and agents can be almost complacent about how they price and market a listing.
  • Sellers assume that if they are in no hurry the real estate market will eventually catch up to their price.
  • Many real estate agents are willing to take over-priced listings because it will get their name and signs out in the community.
  • Sellers tend to hire the agent that provides them with the highest price rather than the best services and most realistic price.
  • It takes a strong agent to be honest with a seller about a realistic listing price and be willing to walk away if the seller insists on a higher price. That is the kind of real estate agent you want!
  • Many sellers end up overpricing their properties for months, ultimately reducing them to where they should have started.
  • The first two weeks a listing is on the market are the most important. All marketing and staging must be complete and ready to go when the listing hits the MLS. This is when most properties will sell at the highest prices and when the most serious buyers will first see your property.

I hope this list has been helpful!

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Lake Norman Buyers: What you should know about Agent Bonuses

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The Real Estate Process, Home Buying and Selling Tips

Lake Norman buyers: What you should know about agent bonuses!

Several months ago I wrote a post about why I don’t ever take bonuses or any agent incentives because of my personal feeling that they are unethical:  Agent Bonuses and Incentives: Buyers Beware!

Today, on the front page of The Charlotte Observer, there was an article: Homebuyers in the dark? NC rules may leave customers unaware of bonuses received by their agents’.

The most chilling statement was the first paragraph: ” N.C. regulations leave potential homebuyers vulnerable to having their search guided by their real estate agent’s financial interests.” The article then goes on to discuss a specific real estate firm’s relationships with builders and the million’s of dollars in bonuses they received in exchange for finding the buyers their homes. The focus of this article was that the buyers were not told about the bonuses and whether the NC Real Estate Commission should require written disclosure of all real estate agent incentives and bonuses to every buyer rather than the current verbal requirement.

As I did in my previous post, I would like to explain that I passionately disapprove of any kind of financial incentives for buyer’s agents. As a Realtor, I think that we should show buyers any and all properties that meet their search parameters without regard for compensation. It would simply be wrong not to show a buyer a property because the commission was too low or to choose to show a buyer a property because there is an agent bonus. When I have come across these kinds of situations my buyers have always offered to pay me a reasonable amount for my services. Or, if I am offered a bonus, I give all bonuses offered to me directly to the buyer at the closing table. This can be done legally as long it is on the HUD closing statement and the lender is aware of and approves it. Usually, this can be done by putting the bonus towards a buyer’s closing costs or upgrades.

Important Update!  Real Estate Agents are now required to disclose any bonuses IN WRITING before you make an offer.

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News Flash! You Can Still Get a Mortgage!


Guest Post: I decided with all of the confusion and discussion about the mortgage market that it would be helpful to have a mortgage broker provide you with his perspective on that market:

I know, I know. You wouldn’t believe it by watching the news that there are any more lenders in America. Everybody is going out of business. It’s all gloom and doom! The sky is falling! The sky is falling! (to quote Chicken Little) Well, guess what? It just ain’t so!

Keep in mind; bad news sells. The news media would never write a story about a boy scout helping a little old lady across the street, but have him hit her over the head and steal her purse and they’ll be interviewing his kindergarten teacher, his neighbors, check with the state to see if he’s ever received mental health treatment and bring in an endless parade of psychologists, legal experts, expert witnesses, law enforcement officials and Nancy Grace to provide unending coverage until your eyes glaze over and brain activity ceases.

First off, remember that sub-prime loans weren’t all about having bad credit. It was no-documentation loans, stated income loans and jumbo loans (over $417,000). If you can provide full documentation (can prove income), put at least 5% down and are under a $417,000 loan amount; NOTHING HAS CHANGED. Even if you have to do a stated income or no-documentation loan; they still exist. They just may require a higher credit score.

Secondly, and I had this conversation with my partner, Dave, last week. We aren’t turning down many more loans than we would have six months or a year ago. Sure, there are those who are “on the bubble” around the 580-620 credit score that are more difficult to do now, but we have a tool we use in conjunction with our credit bureau that allows us to show a customer how to raise their score by 30-50 points within 30 days. The couple or individual needs to have a little cash to pay down some debt, but in many cases that tool allows us to act as if the “credit crunch” never happened.

Now, we did lose approximately 100 lenders nationally, (ouch!) but the big secret is that there are still several hundred national and regional lenders out there. Guess what? You only need one! They are still selling their products to Fannie Mae and the good news is that the rates are still low.

Here’s some more good news. Fannie Mae (a government sponsored agency that establishes standards and buys 1st mortgages on the secondary market) and FHA (Fair Housing Administration that establishes guidelines and insures loans for people with limited credit) are being pressured by consumer groups (and Congress) to pick up some of the slack in the non-conforming market. FHA is especially sensitive to the non-conforming market fallout and has even begun a program called FHASecure Initiative. This program allows homeowners with adjustable-rate mortgages (ARMs) to refinance with FHA after the loan has become adjustable. If there is sufficient equity in the home, FHA will allow the homeowner to refinance WITH LATE MORTGAGE PAYMENTS. FHA is also raising maximum loan amounts allowed and dropping the minimum score requirement. (It used to be 580) All good news for those clients, “on the bubble”.

The long and short of it is this….now is a great time to buy in North Carolina and probably in many other markets as well. We have the best of everything. Nice stable market, good, but not overblown appreciation, plenty of selection and the rates are low. What changed? NOTHING! So relax and know that selling bad news is the news media’s job.
J .R. Finger
Branch Manager
1st Metropolitan Mortgage
 
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How a Short Sale Can Enable Sellers to Avoid Foreclosure

Lake Norman Real Estate Short Sales

 

Hardly a day goes by without at least one article in the newspaper about the increasing foreclosure rates, even in the greater Charlotte and Lake Norman area. What many sellers facing a possible foreclosure don’t know is that there is another option. They, with the help of their attorney and Realtor, may be able to negotiate what is called a Short Sale which will enable the seller to sell their home for less than the debt owed against the property. The reality for the lenders is that foreclosures require a lot of work; not just processing the foreclosure but also listing and selling the foreclosed property. So, they may be willing to take less than the full amount of the loan balance due in order to avoid foreclosing on the property.

I did my first short sale transactions back during the recession in the early 1990’s. They require a lot of work and patience on the part of the buyers and the sellers but they do work. So how do you begin? Here are the first steps:

  1. Research the title records of your property and make a list of ALL liens including all mortgages, judgments, property taxes and IRS tax liens.
  2. Talk with a bankruptcy attorney to get legal advice
  3. Rank the debts by who has the right to be paid before whom. For instance, in a foreclosure the first mortgage will be paid before the second, third etc.
  4. Once you have a comprehensive list, start talking with the last debtor first to negotiate either a partial payment or even total forgiveness of the loan. The reality is that if the property goes to foreclosure they wouldn’t have gotten anything anyway.
  5. The goal is to negotiate with each of the lien holders a reduced/complete forgiveness of the debt based upon the actual purchase price of the buyer’s offer so that the sale can proceed with all liens removed by closing.

During the negotiations of a short sale the homeowner will most likely be asked to provide the following:

  1. Letter of authorization for Realtor to contact your lender(s)
  2. A “hardship” letter explaining why you are requesting a short sale and are unable to pay off the entire debt.
  3. Financial statements to verify your inability to pay
  4. A Comparative Market Analysis substantiating the agreed upon purchase price of your home
  5. A Copy of the Offer to Purchase and Contract Agreement
  6. A Settlement Statement outlining the net proceeds to the lien holders

This is a very brief explanation of a short sale written with the goal of providing a general definition and overview of the short sale process. It is important for the seller to understand that a short sale may affect their credit score and that the amount of the debt that is forgiven will be taxed by the IRS as income. I urge anyone facing a foreclosure to consult a bankruptcy attorney to discuss their specific details.

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Why Do YOU Need to Know About C.L.U.E Reports?

 

Almost everyone has heard of the term FICO scoresand how they impact one’s ability to get a home loan. But, did you know that there is an almost equally important scoring/rating system called a C.L.U.E. (Comprehensive Loss Underwriting Exchange) report that can dramatically impact your ability to buy and sell a home, get homeowners insurance as well as such things as automobile insurance rates?

I learned about them years ago, the hard way, when my homeowners insurance renewal was denied because of one small claim which I didn’t even need to file! I couldn’t believe that my insurance broker didn’t warn me not to make such a small claim! I ended up having to use Lloyd’s of London coverage for several years.

So, here are a few facts I gathered from Privacy Rights Clearinghouse which should motivate you to learn more about your C.L.U.E report:

  • Insurance scores are also based largely on credit history, but the characteristics fed into the insurance scores are supposed to predict how likely you are to file an insurance claim.
  • After you file a claim, your homeowner’s policy may not be renewed and you may not find another company to insure you. (And, as in my case, you may not be told this by your insurance company when you make the claim!)
  • Your automobile insurance premium may be raised because you file for bankruptcy.
  • Information stays on your C.L.U.E report for 5 years!
  • Your credit history can play an important part in an insurance company’s judgement about your risk potential.
  • Inaccurate information can be included in the report including information about someone else or another property.
  • A report may use information other than claims data to rate you as a risk.
  • Your phone calls to inquire about a possible claim may be reported and lower your score.
  • Even when repairs are made and the property is restored to the original condition, the C.L.U.E. report can include information about the claim.
  • The report can affect the premium you pay as well as whether you are insured at all.
  • Your history as a long-time customer with your prior company is NOT a factor of the C.L.U.E. report.
  • Annual privacy notices from financial institutions and insurance companies do not have to explain that the company shares your information with the C.L.U.E. database.
  • The insurer assigns you a score based largely upon your credit history.
  • You are entitled to get a copy of your C.L.U.E. report and your insurance score and may dispute errors in the C.L.U.E report

I recommend to all of my sellers that they get a C.L.U.E. report when we list their property. If they have had any claims in the past 5 years, this may impact the future buyer’s ability to get insurance so it is best to know this up front. Prior water/moisture related claims as simple as a broken pipe that led to flooding and has since been repaired may make obtaining insurance on that property either very expensive or impossible! In California, getting a C.L.U.E. report was a mandatory part of our listing process.

It is also very important that buyers apply for homeowners insurance as soon as possible after the purchase contract is signed. Think of it as a part of your loan process like getting a credit report.

To get a C.L.U.E report, go to ChoiceTrust. Choice Trust will provide a C.L.U.E Personal Property Report with a 5-year history of losses associated with an individual and his/her personal property as well as a Home Seller’s Disclosure Report which provides loss information about a given address which can be given to potential buyers.

If you have any questions please email or “comment” and I will either provide the answers or refer you to someone who can do so!

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Lake Norman: Why and How to Stage a Vacant Home!

How to stage a kitchen before listing a home

I remember the very first new-construction listing I previewed after moving to Lake Norman and getting my North Carolina real estate license. I was shocked. It had been on the market for quite a while by several different real estate firms. While the construction was 99% completed, the home itself was dusty, the plants the builder put in the front yard were dying; it was very bleak looking even though it was brand new.

Why didn’t either of the listing agents stage this $689,000 house? I quickly found out that most vacant listings in Lake Norman are not staged at all and many aren’t even cleaned. Perhaps this is why many new-construction homes around the lake take almost a year to sell! Well, for fun and since I didn’t have a lot of business yet, I asked the listing agent if I could add a few touches to this home which she graciously allowed me to do and even paid for part of the props.

Staging a vacant home does not require as much money or effort as you may think unless you want it completely furnished like a model home. I learned from a builder years ago that a few well placed “props” can convert a construction site into an inviting home, You should focus primarily on the:

  1. Curb appeal,
  2. Kitchen
  3. Master bath
  4. Other bathrooms
  5. Deck or patios
  6. Fireplace
  7. Ambiance
  • Curb Appeal: Everyone knows how important curb appeal is but they may not know how relatively easy it is to improve: Create an inviting front door and walkway. A nice welcome mat, healthy potted plants and annuals along the walkway make a huge impact. It is also critical that the landscaping be well maintained as it gives a strong indication of the care the owner has taken keeping the property in top condition.
  • Kitchen: If appropriate to the house, I usually go for a Tuscany feel: baskets, wine bottles, cookbooks, William Sonoma soaps and towels and Gourmet Magazines strategically placed can transform a bare kitchen.
  • Bathrooms: Have some fun! Create a spa theme and include brand new towels, candles, plants, soaps, TP.
  • Fireplace: Try a large mirror over the mantle and a few candles, a potted plant, a large pot…just warming up the mantle can make a big difference!
  • Decks and Patios: Place a few pieces of patio furniture, perhaps two chairs and a small table in-between, and some colorful potted plants and flowers where you can see them from inside. The goal is to catch the buyer’s eye and help them to imagine the patio as an additional living space.
  • Overall Ambiance: Don’t forget how important it is to appeal to all the senses: scented candles , soft music can change the entire mood of a buyer! Keep the air fresh and the porches, windows and garden clean. Vacant houses don’t have to smell musty or stale.

In the end I spent only $800 for the props you see above plus a few more that aren’t pictured and spent about one full day cleaning and setting up the props.

Staging is not only fun, but you get immediate gratification. All you have to do is take a few “Before” and “After” pictures to remind you what a difference your efforts made overall!

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Stop! Real Estate DUAL AGENCY! Proceed with Caution!

Lake Norman Real Estate Educational perspective

It happened again, and still, I simply couldn’t do it! I was showing some really wonderful buyers property in Lake Norman several weeks ago and we happened to run in to a builder. He invited us to look as his newest home currently under construction across the street. My buyers fell in love; it was perfect for them. As it turned out, the builder’s listing agreement just expired so when my buyers proposed making an offer the builder suggested that I represent both sides and cut the commission. I told the builder no. Not because I had to cut the commission, but because I absolutely will not personally represent both sides of a sale. The builder as astonished, exclaiming that every agent he knew would have jumped at the chance. I told him I would gladly do all of the work for just the buyers’ agent’s half of the commission but he would have to act as a For Sale By Owner and my representation would be exclusively of the buyers. He agreed and we are successfully moving forward with the sale.

Okay, here is my problem: By law, we, as licensed real estate agents, owe a fiduciary responsibility to our clients. The definition of fiduciary according to my Webster’s Dictionary is: “the relation existing when one person justifiably reposes confidence, faith, and reliance in another whose aid, advice or protection is sought in some matter: the relation existing when good conscience requires one to act at all times for the sole benefit and interests of another with loyalty to those interests“. Where in this definition does anyone see room for a single Realtor to represent both sides of a transaction and still fulfill their legal responsibilities as a fiduciary?

In reality, an individual Realtor (as opposed to a firm) representing both sides in a transaction becomes a facilitator. But, don’t I owe my buyers more than that? When the builder brought up this idea of dual agency I immediately envisioned a few weeks down the line when there was a disagreement about the roofing or the hardwood floors. How in the world could I “protect” my buyers and act for their “sole benefit” and remain “loyal” to their interests if I am now simply a facilitator and owe equal representation to both buyers and seller?

Well, the reality is that I can’t and I never have in the 23+ years I’ve been a Realtor (Licensed in 1991).

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The Real Estate Process, Home Buying and Selling Tips

Why is Listing a Property for Sale Like Giving a Dinner Party?

 Lake Norman Wine Tasting

If you were having a very special dinner party, would you wait until all the guests have arrived to start cooking and cleaning? Of course not! Yet every morning when I check my clients’ new listing notifications from our MLS it never ceases to amaze me how many brand new listings have absolutely NO photo(s) of the property. And, if I show an anxious buyer a new listing on the first day I can almost guarantee there will be no property handouts/brochures at the showing and that we may even run in to cleaning crews or worse yet, clutter. We’re lucky if there is even a lockbox in place!

Here are some key practices I consider extremely important to the overall success of a home sale:

  • Interviewing a potential REALTOR should be a two-visit process and should take place ideally at least a month before the seller intends to list their property. The first visit allows the REALTOR to get a thorough tour of the property and see all of the upgrades, issues and warts that will help them prepare a more accurate market analysis. The second visit should focus on the Comparative Market Evaluation, the Marketing Plan, and if all goes well, the listing paperwork.
  • When you sit down to do the listing paperwork, your agent should also prepare a pre-listing to post-listing calendar with you including dates for photography, measuring for floorplans, marketing deadlines, cleaning, painting, and final staging leading up to the first day of showings. The post-listing calendar would outline broker caravans, luncheons, special events, dates of advertising if applicable and time frames for showing feedback summaries.
  • Almost every property I have ever listed needed some kind of staging. Whether it is a long or short list, all staging should be complete the day before any showings begin and ideally in time for the photographer. Don’t fall in to the trap of letting your agent put their own “temporary” photos up until they can get the professional ones and never allow showings before the property is staged and ready to be seen.
  • The day the listing hits the MLS all photography and marketing should be in place and the house and garden should be sparkling so that you start out with a BANG for your very first showings!

If this isn’t happening, or you feel pressure to put your property on the market ASAP, then you need to see real estate expert David Knox’s dvd that talks about the importance of the first two weeks of a listing. He clearly and simply explains that it is during the first two weeks that a new listing will have the most serious buyers and that it is critical to take advantage of every marketing opportunity during that time. (It also helps sellers to understand why it is not a wise financial decision to test the market with a high sales price). The MLS instant notification system that send emails to our buyers every time a new listing hits the MLS is an incredible tool. Show thesebuyers multiple, professional photos! (I know Realtor.com may take a few days, but make sure to have multiple photos there too!)

If this doesn’t make complete sense, then pretend that you are about to have a spectacular dinner party and that you need to have everything perfect when you open your front door for your first guests.

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The Real Estate Process, Home Buying and Selling Tips

What you need to know about buying real estate in North Carolina

When my husband and I moved to Lake Norman I think our REALTOR assumed we knew everything we needed to know about the process because I had been in real estate for so long in California. It wasn’t until I started taking my North Carolina real estate licensing courses that I realized just how different the sales process is here and how much I DIDN’T know! These are the key elements of North Carolina real estate law, NC Real Estate Commission rules and regulations and common practices here in the Lake Norman area that may be different than other states:

  • Buyer’s Agency: Until the buyer has given oral or written authority to their agent to represent them as a buyer, the agent legally acts as a sub-agent of the seller. This is critical because it means that the if the buyer(s) share private information with any real estate agent before they discuss agency choices, the agent will have the duty to share the buyers’ information with the seller. Buyers should not share personal information with any real estate agent (including at open houses) until they have all agreed he/she will be their buyer’s agent because information shared by the buyer with the agent WILL NOT BE CONFIDENTIAL until a buyer agency relationship has been established. Buyers should receive a brochure entitled WORKING WITH REAL ESTATE AGENTS at first “significant contact” with their agent. If you don’t receive one…ask for one! At the time of writing up an offer, buyers will have to fill out and sign the EXCLUSIVE RIGHT TO REPRESENT BUYER Buyer Agency Agreement.

 

  • Caveat Emptor: Let the Buyer Beware! This is HUGE coming from a state like California where the sellers responsibility to disclose anything and everything about their property is pounded into their heads during the listing process. In essence, in a buyer beware state like North Carolina, the responsibility to inspect and investigate a property falls directly on the shoulders of the buyers. So buyers: be vigilent!  The seller can elect “No representation” on the sellers disclosure form so essentially they don’t have to tell the buyers anything about the property. However, the listing agent must disclose any material facts that they know or should have known that might affect the value of the property and they usually provide HOA information and that sort of thing. The 4-page STATE OF NORTH CAROLINA RESIDENTIAL PROPERTY DISCLOSURE STATEMENT should be provided to the buyer before or during the purchase contract negotiation process.

 

  • What to look for during a physical inspection: Moisture is the number one issue here. Crawlspaces should have “moisture barriers” and readings will be taken to determine if there is too much moisture. Radon is a pretty common test although I have only had a couple of properties test over the allowable 4.0 pico curies per liter of air. This is most common in homes with walk-out basements. Pest Inspections are required. If you are buying outside a city limit, you will have your own well, septic tank and propane tank for gas. Many buyers elect to test some or all of these. Synthetic Stucco is a bit of an issue as is poly-butelene plumbing but these are workable in most cases. A good inspector who provides a comprehensive report with photographs is extremely important!

 

  • Time is NOT of the essence: This is another biggie (is there such a word?). The residential OFFER TO PURCHASE AND CONTRACT does not have the legal term “Time is of the Essence” attached to the closing date and most of the deadlines with the exception of the Due Diligience Period. What this means is that closing dates can be delayed a reasonable amount of time if the party delaying the closing is showing good faith efforts to close.  “Reasonable” is the term thrown around but honestly no agent or even attorney seems to be able to give a concrete definition of “reasonable” although 2 weeks seem to be a number that comes up more than most. This doesn’t mean that contracts don’t close on time because they usually do but it does mean that there is a possibility that there could be “reasonable” delays. If you plan concurrent closings just make sure everyone is on the same page, especially the attorney.

 

  • Role of Attorneys before and at closings: Unlike some states where escrow companies or title companies handle the closing paperwork, in North Carolina real estate attorneys handle the title searches and all of the closing paperwork including handling all funds and loan payoffs. Buyers wire their funds to the closing attorney by the day of the closing. We have a formal closing meeting on the day of closing where the buyers, sellers and their agents sit around a table with the closing attorney and approve and sign the HUD statements, deeds etc. Then the sellers leave and the buyers sign their loan documents with the attorney. After all the paperwork is finished and the lender has funded the loan the attorney will take the appropriate paperwork to the county recorder to have the formal recording of the deed. This usually happens the same day. Sellers usually get their funds within 24 hours depending on time of day of the closing meeting and how busy the attorney is. By the way, in North Carolina the BUYER chooses the closing attorney and pays the attorney’s fees as well as for title insurance, the title search etc. and fees to vary by attorney.

 

  • Good Faith/Earnest Money: While it can vary, the buyer will commonly put down about 1% of the purchase price as their earnest money at the time the purchase agreement is signed here in the Lake Norman area.

 

  • Due Diligence Fee:  This is a NON-refundable fee that is paid directly from the buyer to the seller as soon as the offer has been fully signed/executed by all parties.  The amount/fee is optional and is negotiated during the offer process between the buyer and seller.

 

  • Due Diligence Period:  This is the time period during which the buyer will investigate the property, do inspections and get their loan approved.  This time period is negotiated on the Offer to Purchase and Contract  form and this time period is Time Being Of the Essence. During this time period the buyer can walk away for any or no reason at all and the seller must return the earnest money deposit.  However, after 5:00pm on the deadline of this time period if the buyer hasn’t canceled the contract in writing then the seller may keep the earnest money if for any reason the buyer can not close the purchase.  Please ask for a copy of the Offer to Purchase and Contract to learn more before entering a purchase agreement!

 

  • Modification of language and all amendments must be approved by attorney: As licensed brokers/agents in the state of North Carolina, we are taught that we can only “fill in the blanks” of all of the forms provided to us by the North Carolina Bar Association and the North Carolina Association of REALTORS. There are no blank lines in the contracts for us to use to add verbiage and there is no addendum with blank lines for us to use. On occasion we may draw up an addendum but we must get it approved by an attorney.

 

  • Counter Offers: We have no counter offer forms, which is probably my biggest complaint. If a seller wants to modify the terms of the original offer, they either cross out the terms to be changed and write in their own and initial, or, the agents verbally communicate the counter offers until there is agreement and then a new contract is written up incorporating all of the agreed upon changes. During this time the original contract is void. My greatest concern is that any time before the seller and buyer sign the final contract, if the seller gets another offer they are not bound to sign the one already negotiated so there is a window of time when we are working in good faith. In the meantime, I keep lobbying for a counter offer form!

The above is only meant to be a general summary and an overview of how the sales process is customarily handled here. I am by no means an attorney so while I will try to address any questions or comments, if you have legal questions I can also provide you with the names of several very good real estate attorneys.

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lake norman real estate, The Real Estate Process, Home Buying and Selling Tips

Agent Bonuses and Incentives: Buyers Beware!

Lake Norman real estate tipsThe other day I heard something terribly unsettling. An agent was explaining to another agent why they should choose a certain home warranty company because the company “gives back” more money than the others. First of all, any kind of “kickbacks” from any service providers is simply illegal. Secondly, the fact that an agent would choose a service for their clients based upon their own interests is a violation of our code of ethics. This small incident led me to think again about agent bonuses and/or incentives; why I think they are all inherently wrong and the challenges I have faced while trying to give back my bonuses to my buyers.

I recently sold two new-construction homes to buyers. In both cases there were substantial bonuses for me as the buyers’ agent. In the first sale I simply told the builder to put my bonus towards the sales price. The purchase price was reduced by $5,000. That was easy. In the second case, I wanted to give the $5,000 cash back to my buyers at closing so that they would have some cash to build a fence right away for their small children and dog. The builder and the closing attorney fought me every step of the way claiming this was illegal, loan fraud and that they would only credit the purchase price. I called the North Carolina Real Estate Commission whose attorney told me as long as the $5,000 was on the HUD statement and the lender agrees to it that it was definitely acceptable to gift a bonus to the buyer. The key is it MUST be on the HUD statement and the lender must agree to it. If the lender doesn’t agree to an outright gift then there are other options like paying closing costs or buying down an interest rate.

What shocked me was not only how difficult it was to give back my bonus, but the fact that clearly no other agent had tried to do this as the sellers (a very large builder in Charlotte) and a very active closing attorney didn’t even know how to handle it. It felt so wrong to me to take that bonus money, yet I guess it is rather common for agents here to do so. (By the way, these bonuses must be disclosed to the clients.)

As I see it, the bottom line is that I, as a REALTOR, have a “fiduciary responsibility” to my clients which means I am to represent them and ALL of their interests as if I were them…guiding them through their real estate transaction with the mission of representing their interests, and their interests only. Any agent who would determine what properties to show their buyers based upon the commission offered or a bonus their might receive is violating their responsibility to their buyers. If this is true, then any “incentive” is just that, something that is trying to convince a buyer’s agent to show that property. Since it is our job to show every property that the buyer wants to see or that meets their wants and needs, then why in the world would an incentive be appropriate since it should never be a consideration?

I have heard countless agents celebrating the fact that they received a bonus so they are certainly an accepted incentive for sellers to offer. To be honest, I have had some of my seller’s offer bonuses as incentives.  But, I will never accept one!  FYI, bonuses must be disclosed to all parties in the transaction.

As always I welcome your comments!

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