Closing Costs – How Expensive are They?

Calculator

It depends upon where you live, of course.

Bankrate did a survey in 2009 and 2010 of 49 states, 2 areas in California and the District of Columbia.

The 5 most expensive states for closing costs are:

  1. New York – origination fees, title and closing costs = $5623
  2. Texas – origination fees, title and closing costs = $4708
  3. Utah – origination fees, title and closing costs = $4605
  4. California – origination fees, title and closing costs = $4566
  5. Alaska – origination fees, title and closing costs = $4327

North Carolina ranked 51 out of the 52 areas surveyed with total closing costs averaging $3255.  Hooray North Carolina!  Everyone should live here!

Arkansas was the least expensive coming in number 53 with costs averaging only $3007.

These numbers were based on a $200,000 purchase with 20% down.

For a breakdown of costs in your state, check out Bankrate.com.

Why is it important that you understand your closing costs?

How to sell your home.. Discount!

for Sale

The economy is down and the market is flooded with properties, both retail and Bank owned.  This is not a good time to list a property unless you can sell at a discount.

I’ve been reading lots of news articles lately all encouraging low pricing to get your property sold. Trulia, PMI, Moodys, the Wall Street Journal, even the National Association of Realtors all say that retail pricing will not get your property looked at in this market.

This morning on Facebook, a Realtor posted that only 25% of the listed properties will actually sell! That stat is end of 2nd Quarter 2010 based on GRRA- Greensboro area of Guilford County – Realtor Association.  Yikes!

Trulia announced that 24 percent of listings currently on the market as of July 1, 2010 experienced at least one price reduction, up 9 percent from the previous month.  They go onto say that 22 of the top 50 cities across the U.S. experienced price reduction levels at 30 percent or more compared to just 10 cities the previous month.

It appears that the expiration of the tax credit has hit the market hard and there are far fewer “left over” buyers now that the credit is gone than expected. Some are predicting that, due to the slow summer sales, we will experience a double dip in the housing crises during the second half of 2010.

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Lenders Repossessing Homes at Record Levels

House

Lenders have been repossessing homes at record levels in the first half of 2010 according to RealtyTrac.  Let’s hope banks are focused on  regulating these properties to protect market values from deteriorating even further!

Here in North Carolina, REO sales accounted for almost 15% of all sales so far this year with an average discount of about 25% off market value.

Nationally, REO sales represent 31% of all home sales!  Short sales accounted for about another 12%. Those two categories together account for almost half of all homes sold nationally!

What does this mean to the average homeowner trying to sell their property today?  Well, there are a lot of cheap properties for sale and you’ll probably have to take less than you feel your home is worth to get it sold.  If you have to move now, you may want to consider renting out your property until the market changes so you won’t have to take a significant loss with today’s competitive pricing market. I know people worry about renters messing up the property, but if you’re looking at a potential increase of $30,000 to $40,000 in the next few years, that additional income to you would buy a lot of paint and carpet!

Nationally, the average REO discount is reported to be about 34% while the average work out or short sale discount is about 15%. According to these numbers, as a seller you may want to get a discount to be able to sell your property but, as a buyer you may get a better price if you can buy the property after it has foreclosed.

RealtyTrac also announced that foreclosures were up 2500% from 2005 to 2009! Nevada, California and Arizona continue to post the highest percentage of foreclosure sales. Interestingly, Ohio, Kentucky and  Illinois post the highest percentage of foreclosure discount.

Is your house in the foreclosure process? What are you doing about it? Have you decided to let it proceed? Are you trying a workout? Are you thinking about walking away?

Leave your comment here so we can help with your efforts and decision making process.

Sell your Home or Keep it and Rent it Out?

For sale - for rent

Advantages of renting:

1. The property will provide income over time and for your retirement.

2. Right now, we’re in a buyer’s market meaning there are more homes for sale than there are buyers to buy, so you may be forced to sell at a loss.

3. Less people are able to qualify for a home loan because borrowing requirements have tightened meaning, even if someone wants to buy your home, they may not be able to.

4. The number of people renting homes is increasing.

Disadvantages:

1. dealing with tenants

2. legal issues

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How to Have an Open House, 2

Open House

We are investors who buy and sell quite a number of homes in the Greensboro area.  You may be thinking about an open house to sell the home you live in.  I highly recommend having one.

I LOVE having open houses.  We do, however, prepare for them.

Of course,we have our signs and flyers in the yard. I send out, on average, 350-450 letters to surrounding homes telling neighbors the day and time of the open house and that we pay referral gifts for finding our buyer.

The day of, I put out directional signs to the house from every direction with balloons tied on each sign.  I almost ALWAYS have people in the house the entire 2 hours we’re open (2-4pm on Sunday).   We us NO newspaper advertising.   Huge waste of money.

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Welcome to Spring

Daffodils

Here in Greensboro, it’s been a long, cold winter.  10th coldest winter on record, in fact.  We’re so happy happy to be throwing open our windows and getting back outside.  Daffodils are everywhere.

Yesterday, the first day of Spring, our temperature got up to 77*!  Spring made her glorious entrance and I, happily, spent the day outside wandering garden shops and putzing around in the yard.

Are you ready for Spring?  Do you have your list prepared for home “spring cleaning”?

Now’s the time to get ready for yardsales – to get rid of things, not to buy more!  It’s time to give your home a facelift inside and out.  It’s time to get prepared for your open house.

Have you read my article Landscaping Adds Value!  Landscaping adds so much:  curb appeal, personal enjoyment, help for the environment and, did you know, it can actually add value to your home.  According to Money Magazine, landscaping adds 7%-14% to your home’s value!

So, get out, enjoy the great weather and do something wonderful for your home, your neighborhood, your environment and your investment!

Welcome to Spring!

Open House – it’s time!

Open door

If you’re planning to sell your home, it’s time to get ready for Open House.

The nicer weather is bringing people out and you want to have your home’s best face ready to be seen! Even if you’re not putting it on the market for another month, now is the time to be getting it ready. Here are some things you need to do:

1) Clean up the clutter! Clean out cabinets and closets. Throw out what you can; give away what can be passed on; box up what you want to keep that you won’t be using often. This gives your home a more open and airy feeling for buyers who will be coming through. It also gets you closer to being ready to move! Read this: Cleaning Out!

2) Clean up the yard. Get rid of all the winter debris – anything dead or dying. Rake the yard well and throw out new seed. Freshen up flower beds with bark or straw and plant flowering plants when the weather allows. Cut back overgrowth.

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More Unique Ways to Sell Your Home

If you have a home for sale today, you’re not alone, by far!

How do you get your home to stand out so it will sell? First of all, read my post, Unique Ways to Sell a Home.

Then, listen to Barbara Corcoran on this Good Morning America video.

How Many Ways can Lenders Prevent a Closing?

It’s a rhetorical question. I do not want to know. I am certain that the answer is a number way larger than I care to think about.

However, I did just find one more answer to add to my list of personal experiences.

We have a buyer for a flip who is very qualified; high credit scores, plenty to put down, good job.

Well, the closing took longer than promised (no real surprise today) and our buyer had to be out of the rental he was in. As we were scheduled to close any day (we had passed the first date because of “lender error”) we let the buyer move in and he is paying us a daily amount until we close.

The property itself also passed qualification with flying colors; passed inspection, appraisal came in high (we always sell below market value to keep our properties moving).

So here’s the rub, the warning and the frustration.

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Equity – New Work for Equity Requirements

equity. new work-for-equity requirements

Well, we recently got caught in another regulation change on our way to closing. Are you aware that there are new work for equity requirements? Do you even know what that means?

We do a lot of lease to own contracts for selling. We buy homes and put tenants under lease to own because they’re unable to get traditional financing. We work on their credit and give work for equity credits to help them raise their needed down payment. That’s been working beautifully for years. As with everything else in the 2010 finance regulations, new requirements!

1.  For existing construction, which is generally our area: only repairs or improvements listed on the appraisal are eligible for work for equity. Any work or materials not included on the appraisal are not eligible.                                                         

OK, so here’s the problem. What appraisal? This means that, before I put a tenant in with work for equity opportunities, the lender wants me to get an appraiser to look at the work they will be doing and set a price for it. Ugh.

Then, the appraiser must look at it after the work is done to confirm the work and the value. Ugh.

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