5 Things to do right after your closing

If you just bought a new property, you’re probably still celebrating and feeling the sense of pride and accomplishment that comes with home owners p. You’re shopping for furniture, drawing up plans for renovations … but wait! There are some important tasks to cross off your list before you
get to the fun stuff.    
 1. Change the locks: A lot of people came in possession of your keys during the home sale process, whether it was on the market for a year or a day. Protect yourself by changing all the locks, just in case a set of keys fell into the wrong hands.
 2. Make copies: It’s good to have copies of all your closing documents, if only for reference. But in the worst case, you’ll be thankful you have your own copies if something goes wrong.
 3. Make sure you get your mail: The post office won’t deliver your mail if the mailbox doesn’t have a name, and it’ll be difficult to sign for packages if UPS can’t get to your front door. If you’re in a multi-unit building, make sure to put your name on your mailbox and verify that the buzzer or call box is working.
 4. Meet your neighbors: It’s not just about being cordial. It’s good to exchange contact info with your neighbors in case there’s a problem in the building or someone is being noisy.
 5. Prepare for emergencies: Store the contact info for insurance agents and services like plumbers and locksmiths in your phone. You don’t want to waste time searching the internet when you’re locked out on a winter night or your home suffers fire damage.

Whether you've just closed on a first home, an investment property or a second home these tips should guide you well.  For more information please contact us anytime at ben@benguyton.com or visit www.benguyton.com

What is the seasonality of Real Estate on the Grand Strand?

New Closing Process delayed until October from August

Update to a previous post - the new closing process planned to go into effect today has been postponed until October by the Consumer Financial Protection Bureau.  The new document replacing the HUD statement for financed real estate purchasdes will be known as 
TILA RESPA Integrated Disclosure.  The transition is expected to caused delays in closings of up to 30 days.  Stay tuned for more information.

New Closing Process coming in August - Be prepared!

New MORTGAGE Information - Important

On August 1st, there will be a new roadblock to closing on a house

New integrated disclosure forms will wreak havoc in the home closing process.

On Aug. 1, 2015, the new TRID (TILA-RESPA Integrated Disclosure) forms replace the HUD-1 Settlement and Good Faith Estimate. The Consumer Financial Protection Bureau’s mission is to rebuild the mortgage banking landscape so that the industry will avoid the type of conditions that led to the Great Recession. The CFPB replaces the Department of Housing and Urban Development for oversight because HUD did not provide specific consumer protection.

Everyone agrees that increasing consumer protection is a desirable goal. Nevertheless, the unforeseen ripple effects from these changes could seriously disrupt how the closing process is conducted.

The new rules will require a new three-day waiting period when there are any changes in the TRID forms. The recommendation is to allow an extra 15 days to close your transactions. In other words, 30-day contracts will now require 45 days, and 60-day contracts will require 75 days.

Who will be hit the hardest?

The states that will be hardest-hit are those where the agents or principals must be physically present for the closing. “Escrow” states, like South Carolina,  where the documents and signatures are normally submitted a few days prior to closing, will be less likely to have issues.

In “closing table” states, clients, agents and attorneys are accustomed to routinely making changes at the closing table and still closing the sale on same day. The new three-day waiting period will severely limit this practice for items covered in the TRID documents.

The biggest headache: the moving van

When transactions don’t close on time, it’s common for one or more of the principals to be stuck with furniture on a moving van and nowhere to go. Any agent who has experienced an irate client in this situation knows how nasty this situation can be.

In most cases, these issues are resolved and the transaction closes the next day. Nevertheless, more than one agent has footed a hotel bill for their clients (especially those who are relocating). Moreover, if there are multiple properties involved, any delay on one home’s closing could delay others from closing, too.

Now imagine how much more complicated this could become if there is an error that retriggers the three-day TRID waiting period. Everyone will be scrambling to handle late closings — not just for one day, but for at least three days or more.

If this happens, can you allow the buyers to move in early? If so, you must enter into a separate lease agreement or Right-to-occupy prior to closing, then collect the first month’s rent plus a security deposit to protect both the buyer and the seller. Given how tight some buyers are on cash at closing time, this may not be an option.

Other potentially costly issues include situations where one of the principals must close by a certain date to take advantage of the tax breaks on the sale of their primary residence — or situations where one of the principals is involved in a 1031 tax-deferred exchange. The lost tax-benefit costs of a late closing could run into hundreds of thousands of dollars.

Interest rate games

If you have been in business for more than 10 years, you have probably experienced the shenanigans that some lenders pull when the interest rates increase. In fact, I have personally witnessed the scenario described below since the early 1980s. Here’s what happens:

Your buyer locks in an interest rate for 60 days. There is an increase in the interest rates. This means that the lender can no longer sell the buyer’s loan on the secondary market. As a result, the lender demands additional documentation. You submit the documents in a timely matter, but the underwriting department takes days to get to your changes. In the meantime, the buyers’ interest rate lock expires, and the property doesn’t close on time. At this point, the lender requires a higher interest rate in order to close the transaction.

It doesn’t take much imagination to see how easily this could play out with the new TRID three-day waiting period.

A tough transition

What will be particularly thorny are transactions closing in late July. If they fail to close by Aug. 1, 2015, how will they be handled? Does entirely new documentation have to be drawn? How long will the delays be?  Even lenders can’t answer these questions yet.

As we move closer to the Aug. 1 change date, clients need to know that there will be unexpected delays in obtaining loan approval, potential changes in the documentation during the transaction, and a host of problems I probably can’t even begin to imagine. When closing on a property with a mortgage you should always expect the unexpected, however these changes will impact all closings and will cause delays.  Set your mind to accept these changes, communicate often with your Realtor and Lender and you should still be able to enjoy the experience.  Better Start preparing now.

Is it aggressive or UNethical?

In my line of work I have the opportunity to speak with a lot of property owners each day.  During the conversations I will typically hear about how many real estate agents have called and it seems a little overwhelming to them.  If a property has been on the market and it failed to sell the information is sent out to a multitude of agents in the market that have an interest in helping get it sold, hence the calls.

The problem I keep coming up against is the difference between being aggressive, as an agent must be in the market, or being unethical.  What is the difference you ask?  There is a huge difference -

As a Realtor in the real estate field we are under a code of ethics sworn by our membership into the National Association of Realtors.  There is very specific language in the code the prohibits any Realtor from contacting you while you are a CLIENT of another real estate agent.  This means that if your home is listed, under a listing agreement, with one real estate agent any other real estate agent cannot contact you to discuss listing your property.  As the owner of the property you obviously have the right to speak with whomever you want as ling as you make the call to the agent.  The reason Sellers receive so many calls in the days after a property goes off the market is because the agreement is over and the Seller is no longer a CLIENT of the agent.  Other agents now know that the Seller has an interest in selling and therefore makes the call.

The issue is the calls you receive BEFORE your listing expires.  These are the real estate agents that choose not to abide by the code of ethics and try to circumvent a relationship you have established with your current Realtor.

Beware of confusing aggression with an unethical behavior.  The agent that calls to talk with you about your listing when it is still listing should be the last person you would want to trust your property with to get it sold.

I would encourage you to reach out to the Coastal Carolina Association of Realtors to file a complaint if you receive a direct call from any agent when your property is listed and they continue to talk about your listing with you after you inform them that it is currently listed.

For the best process in identifying the best agents out there shoot me an email and I will gladly share a proven strategy you should use to eliminate the rest and pick from the best.

SOLD in 30 days or less!

Looking over the market information today one interesting number jumped out at me, especially given the fact that we are in the Holiday Season.  234.  That is the number of homes and condos that came on the market to sell on or after November 1st that are already under contract!  Of the 234 properties only 31 of them were distressed properties.  If you remove the Distressed properties that means that almost 7 properties of the 30 that sell everyday sell within 30 days of hitting the market.

203 property sellers that are not desperate to sell, but are motivated to price their properties correclty for the market will be celebrating the end of the year without another mortgage payment, or HOA payment or taxes for 2015!

It proves that when a property comes to market and is priced correctly it doesn't matter what month it is or what the temperature is outside - it will sell.

If you have been on the market for a long time take a god look at the ONLY three reasons properties don't sell and evaluate yours -  Price, Condition or exposure.  Something isn't working and needs to be changed.

Our market doesn't stop in November and December, so don't allow this to be an excuse for you or the agent you are working with.

If you would enjoy seeing any of the market information please let me know and I'll drop it in your inbox without question.

Thanks for reading!

Is Waiting For Spring Your Best Strategy To Sell?

This is an age-old question that continues to be asked even in the 21st Century.  I believe this question must have started back in the 1950's (or before) when potential buyer's had to drive around to see every property and they didn't want to do so when the weather was cold.  I have heard the question enough that it finally caused me to do the research to see if it is still better to wait until spring like it was a few decades ago.  The market facts for the Grand Strand show two very interesting things; First the spring quarter (1st quarter) is the slowest period for sales in our market.  Second, the difference between the worst quarter and the best quarter is almost insignificant.  When you look at the total number of properties sold broken down over the four quarters we see that our area is very consistent.  Probably most areas are now, unless you have to contend with 4-5 feet of snow on the ground.  I beolieve there are a couple good reasons for this and the best one is that the Grand Strand has a large enough population now that it isn't so seasonal anymore (have you been on Hwy 17 lately since September?).  We have a large enough buyer pool to support year-round real estate sales.  Sure, the market is still seasonal for bathing suits, restaurants and gold courses, but not real estate.  The second reason is due to the advancement in technology.  Shopping for real estate starts on a couch somewhere and grows into a visit to the property.  If a potential Buyer is sitting in Toms River, NJ thinking of buying in Myrtle Beach and sees a property of interest they won't wait until beach weather to come see it.  

So, is it better to wait?  Waiting or moving forward to sell a property should be decided by your desire to sell, financial information and the other properties you'll compete against - but not the weather.

If you would like to see the quarterly report for selling volume email us at info@benguyton.com with Quarterly Report in your subject line.

What you should demand from any real estate agent you consider

Are you thinking of selling your house? Are you dreading having to deal with strangers walking through the house? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant.

You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one.

Here are the top 5 demands to make of your Real Estate Agent when selling your house:

1. Tell the truth about the price

Too many agents just take the listing at any price and then try to the ‘work the seller’ for a price correction later. Demand that the agent prove to you that they have a belief in the price they are suggesting. Make them show you their plan to sell the house at that price – TWICE! Every house in today’s market must be sold two times – first to a buyer and then to the bank.

Every house in today’s market must be sold twice: 1st to the buyer, then to the bank.

The second sale may be more difficult than the first. The residential appraisal process has gotten tougher. A recent survey showed that there was a challenge with the appraisal on 24% of all residential real estate transactions. It has become more difficult to get the banks to agree on the contract price. A red flag should be raised if your agent is not discussing this with you at the time of the listing.

2. Understand the timetable with which your family is dealing

You will be moving your family to a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan.

This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. You agent cannot pick the exact date of your move, but they should exert any influence they can, to make it work.

3. Remove as many of the challenges as possible

It is imperative that your agent knows how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.

Remember: If you have an agent who was weak negotiating with you on the parts of the listing contract that were most important to them and their family  (commission, length, etc.), don’t expect them to turn into Super hero when they are negotiating for you and your family with your buyer.

4. Help with the relocation

If you haven’t yet picked your new home, make sure the agent is capable and willing to help you. The coordination of the move is crucial. You don’t want to be without a roof over your head the night of the closing. Likewise, you don’t want to end up paying two housing expenses (whether it is rent or mortgage). You should, in most cases, be able to close on your current home and immediately move into your new residence.

5. Get the house SOLD!

There is a reason you are putting yourself and your family through the process of moving.

You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with selling. Do not allow your agent to forget these motivations. Constantly remind them that selling the house is why you hired them. Make sure that they don’t worry about your feelings more than they worry about your family. If they discover something needs to be done to attain your goal (i.e. price correction, repair, removing clutter), insist they have the courage to inform you.

Single Family Home Sales up 30% in 2014. Is it really? Read on to truly understand what is happening in the market.

We all yearn for good news and the real estate market is no different.  After a 5 years slide to the bottom of pricing we all started getting really excited in 2012 when the reports stated that prices had "bottomed out".  As we look back a couple years now to 2012 we see that those reports were true; prices did bottom in 2012, then they got stuck there!  Sure, there has been a few bright sub-markets that have seen anywhere from 2% - 4% appreciation over the last couple years, but most areas along the Grand Strand are the same prices as the spring of 2012.  Another absolute bright spot for the single family market here has been demand.  Demand jumped up last year from a pretty slow 2011 & 2012, Then 2014 came in like a lion! Looking at the comparison of number quarter to quarter the selling pace has increased a whopping 30% this year in single family homes.  That alone is great news, whether you are a Buyer or Seller, and usually enough information for us to start posting the news on every social site available...but let's dig a little deeper.  You see, with the increase in demand last year and the slight increase in prices it was enough to send the builders in our market into a frenzy.  You can see the trusses flying in a lot of neighborhoods around the beach.  This observation was enough to cause a more in depth look at the demand side of our market.  What I found, after eliminating the sold homes that are new, or never lived in, is that for existing homes along the Grand Strand the market has improved exactly 3%.  Not 30%.  There has been a 27% increase in New Home Sales in 2014 over 2013.  What does this mean to you if you are a Buyer or Seller of real estate right now?  As a Buyer it means you better get your act in gear and find your motivation to buy the house you want.  The New Home market is just now heating up and the builders are willing to do things to get you to buy that they won't do next year.  It also means that when you look at the market median pricing that we should see small increases as the next 12 months goes on.  While this can be an unimportant number, the Builders will use it to justify their pricing and reduced incentives.  These figures will also drive the existing home market causing many sellers to ask too much for their homes and remain fixed on that price, thereby reducing the selection of correctly priced homes available.  

If you are a home seller right now - beware.  There is a new competitor in town.  The last 5 years your competition has been distressed homes for sale.  Today, as I write this there are 3203 homes on the market and 216 of them are distressed.  They don't effect your pricing anymore.  In the past a Buyer may be willing to pay more for your home because of condition over a foreclosure.  Today, your competition is NEW.  Shiny, bright, pick-what-I-want, NEW.  Your competition is more fierce now.  As an existing home seller you need to know the truth about the market and understand what you are competing against.  Sure, not all Buyers want New and not all New Homes are in desirable areas.  Many builders are having to build under "value engineering" strategy in order to make a profit, so you lose some of the bells and whistles.  I encourage you to dig deeper than the surface of information you typically receive about the market to be fully informed on how to price your home.  Don;t be misled to believe the housing market is up 30%, because it is not.  The market for your type of house is up 3%.  Three percent higher demand against an 8.5 month supply of homes doesn't typically make headlines.  

Let's be clear.  Factoring in all areas and all categories of the market along the Grand Strand we have seen improved demand and that is great news.  Single family homes sales are outpacing condo sales by a wide margin and mainly due to the New stuff.  There is less than 3% New Condo sales volume here right now, so condo owners aren't competing with New...yet.  

I hope you've found this information helpful and if it raised a few questions let me hear about it.  If I'm not meeting with you about your property, or showing your property to a Buyer my head is usually buried in the figures.

Living in a terrible real estate market

Most days I have the pleasure of talking about real estate to dozens and dozens of people which gives me the opportunity to ask a lot of questions.  When you talk with enough people and ask enough questions you start to see patterns form with the answers you receive.  One of the Mysteries of the Real Estate industry is the answer to the question; Why hasn't your property sold?  The consistent answer we hear is "The Market".

First, you must understand that the market has never been responsible for any real estate owner to sell or not sell a property.  The market with real estate, like anything else offered for sale, is dependent upon the demand for the product and the amount of the product available to meet that demand.  I do get the excuse that the reason a property won't sell is "The Market", but let's look truthfully at the real reason before moving on to the numbers -  It is a Seller's willingness or unwillingness to accept a price for a property that will cause  it to sell or keep it from selling, not the market.  As a seller, you always want to evaluate the hold & see approach against the costs associated with doing so and what likelihood there is that prices will improve.  You can do it in the back room, so no one sees you do it and make the decision yourself without telling anyone, so don't be afraid.  You actually should be afraid to NOT do it, but make sure you're using facts and not HOPE as your driver.

Let's pretend for a moment that "The Market" is the cause of a property not selling.  This exercise got me thinking about the past and reflecting on the "Great" market we were in back in 2006.  You'll remember 2006 because it is the year every property owner thinks is returning next year...well next year...or next year.  I went back in time (via MLS system) to see what was going on back in the single best year of real estate sales in the history of our nation and it is interesting what I saw.

Since we are a seasonal area, many people also believe July is the best sales month of the year, so I pulled the selling numbers for July in both 2006 and 2014.  I also pulled the year-to-date numbers from January to August 21st for both of the same years.  You think we are in a bad real estate market?  Read the numbers below -

July 2006 had 512 homes sale.  July 2014 had 593 home sale.  That's right - Better in 2014 than 2006!

2006 Jan - Aug had 3958 total homes sale.  2014 Jan - Aug had 3893 homes sale - 8 less homes per month sell in 2014 to date as there were in the best market ever!   A Bad market??

But let's look at Condo & Townhome sales -

July 2006 had 396 condos sale.  July 2014 had 382 condos sale.

2006 Jan - Aug had 4488 condos sale.  2014 Jan - Aug had 2613 condos sale.

You can see that where July wasn't far apart in the different years the annualized number is WAY off.  Over 550 fewer condos are selling per month in 2014 than in 2006, but there are still an average of 326 condos selling every single month right now.

Land sales are roughly half right now than what they were in 2006, except in 2006 there were large tracts selling to developers where the current sales are driven by individual lot sales.  Land is a super challenged segment of our local market and will remain that way for many more years.

So, when you truly examine the numbers of properties selling you cannot deny that the market today is not drastically different than the best market ever.  Of course this relates only to selling volume and not pricing...which is kind of the point.  It is always about the price and no matter how much we, as homeowners, don't want to hear it that doesn't change the fact. 

"The Market" is never the culprit for you not selling your property.  It is all about you making the decision to sell or not sell as it relates to today's market. As an example, if the true market pricing is on a property is $250,000, but you won't sell for less than $290,000 why would you put it on the market? (see previous post about the dumb buyer).  If you don't put it on the market because you feel it will get better down the road, then look at the potential and probable appreciation that needs to happen.  Let's assume that the market returns to 3% appreciation year over year for the next 5 years.  You would arrive at your target $290,000 price at the end of the 5th year and again assuming an average cost of $2,000 per month to carry the property, you only invested $120,000 to get your $40,000!  The only thing more wrong than investing $120,000 to get a $40,000 return is expecting the real estate market to guarantee a 3% annualized return for the next 5 years.  Do you really want to put your life on hold for this hope?

If selling is you goal, then make the decision on the facts and if you just can't do it then stop thinking about selling all together.

Get out of 2006 and understand that today's market is 2014 - 8 years removed from what you may still be waiting to return.

Let's talk about it -