From The Washington Post
The Senate voted to renew the government's $8,000 tax credit for first-time home buyers through the first six months of next year as part of a broader bill designed to extend unemployment benefits.
For the first time, the tax credit program would also enable many homeowners who buy a new primary residence to receive a $6,500 refund.
The measure was attached to a bill that would provide 20 weeks of unemployment benefits in more than two dozen states with jobless rates above 8.5 percent and up to 14 weeks elsewhere. Another provision in the bill would allow businesses that had operating losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years.
The bill, which passed 98 to 0, should reach the House floor by Thursday, House Majority Leader Steny H. Hoyer (D-Md.) said in a statement. His office said the legislation would then go to the White House for the president's signature.
The Obama administration has previously supported extending the $8,000 tax credit, and without congressional action the program would end Nov. 30.
Under the bill, first-time home buyers would receive the $8,000 tax credit if they sign a contract by April 30 and close on it by June 30. The plan would also make those who buy a new primary residence eligible for the $6,500 credit if they owned their current home for at least five consecutive years in the previous eight years.
But the measure limits the purchase price of the home to $800,000. It also imposes income caps so that people who make more than $125,000 annually and couples who make more than $225,000 would not be eligible for the program, which is estimated to cost $10 billion.
Sen. Johnny Isakson (R-Ga.), a longtime advocate of the tax credit, praised passage of the bill in his chamber but said the extension would be the last one. "Tax credits like this only work by creating the sense of urgency to take advantage of them," Isakson said in a statement.
The tax credit and the broader bill in which it is included are part of a series of Democratic-led initiatives aimed at helping the economy and people who have lost their jobs.
The unemployment benefits of more than 1 million people would lapse without this extension, according to the National Employment Law Project, a nonpartisan group that tracks the issue. More than 15 million Americans are unemployed, more than a third of them for longer than six months.
Although the legislation gained wide bipartisan support, it had been mired in bickering for weeks as Republicans tried to attach amendments that Democrats opposed. Party leaders from both sides voiced support for the core measures, including the tax credit.
Supporters of the tax credit, including the real estate industry, say it has energized home buyers and helped increase sales. But critics say the program is too expensive and has attracted mainly people who were going to buy a home anyway.
In the Senate's measure, taxpayers would be able to claim the credit on their 2009 income tax return for purchases made in 2010.
Ridge Lake, Conway - Announcing a price reduction on 237 Wedgefield Drive, a 2 bath, 3 bdrm single story. Now 
MLS® $220,000 - Priced to Sell!.
Property information
It continues to be an excellent time to purchase a home. There are many factors that work in favor of homebuyers, both those looking to make their first home purchase and those seeking to move up into a larger home.
In recent weeks, there have been many indicators pointing to an improving real estate market, so buyers should act now while conditions remain ideal.
Consider these reasons why now is a good time to buy a home:
- Housing affordability remains high.This allows buyers to purchase a bigger home, or one in a better location, than they might have in the past.
- The number of homes on the market has started to decrease. Yet, homebuyers still have a wide variety of homes to choose from, making it more likely they will find their dream home.
- Mortgages are at historically low levels, and some buyers are even able to get 30-year fixed rates below 5 percent. Low mortgage rates also positively impact affordability and allow buyers to enjoy lower mortgage payments for the lifetime of their loan. This may be of particular interest to renters whose rent payments typically rise each year.
Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to latest survey. The Pending Home Sales Index rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5. Lawrence Yun, NAR chief economist, said not all contracts are turning into closed sales within an expected timeframe. “The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said. “No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which was originally set to expire at the end of November.”
With the new age of online house hunting, I have sellers asking me if Open Houses really work.
Q: I am about to put my four-bedroom home on the market for $475,000, with a 180-day listing. The agent says she will hold one open house for the general public. She says we don’t need any more because open houses don’t sell homes. Is she right?
— Myrtle Beach,SC.
A: Heck no, though her opinion is certainly shared by many real-estate agents who would rather do anything else on their weekends than baby-sit a house. I can personally attest to their effectiveness, and not just in boom times: In 1987, while stocks were collapsing and recession was on the horizon, the first real-estate agent I ever used sold the first home I ever owned to a buyer who drove by, saw the open-house yard sign, wandered around for a while and made a full-price offer on the spot.
But many agents tell me that open houses are no longer necessary because most buyers search for homes on the Web. Indeed, the National Association of Realtors’ Profile of Home Buyers and Sellers says that nine out of 10 buyers search on the Internet. I don’t agree.
While it’s easy to spend an afternoon blasting through slide show after slide show of homes for sale, photos alone don’t sell homes. They can’t convey how a home smells, sounds or feels — and, as anyone who has seen a room shot through a wide-angle lens knows, they can deceive.
Buyers know this, yet some just don’t want to make a personal appointment with an agent to visit a home that interests them, just as some folks don’t like sales clerks hovering in the background when they shop for clothes. Open houses give these people a chance to browse without too much pressure.
The NAR’s survey shows old-fashioned open houses have remained consistently useful to consumers, even in the age of YouTube video marketing pitches and virtual home tours with jazzy musical scores. Since 2001, the number of buyers who said they found a house they eventually bought through an open house or yard sign was constant at about 15%. Nor have economic ups and downs made much of an impact on how people regard them. In 2006, 47% of buyers said they used open houses as an information source in their home search; in 2008, the number was 48%.
And sure, open houses also attract nosy neighbors, bored Sunday drivers, decorating addicts and petty thieves. But all except the last are harmless and may wind up falling in love with your house, or talking it up to someone else who will.
Thieves, meanwhile, can be thwarted by locking up your valuables and prescription drugs — which you should do before putting your house on the market anyway.
Of course, while your house is open, you should make sure that your home is free of clutter, pets, children, scattered toys, extra cars in the driveway — and you.
Clean like crazy beforehand, preferably with good-smelling citrus-based organic cleaners that won’t upset anyone’s allergies, and don’t forget the windows (remove the screens so the most light shines in).
Draw back the drapes and turn on the lights. Make sure your lawn is mowed, your hedges trimmed and flowers are blooming in pots by your doorway.
To increase traffic, try some unusual marketing strategies, like holding your open house during rush hour, or coordinating your open house with others in the neighborhood. (Perhaps you can get together with the neighbors and arrange to have a different small snack served at each, like a progressive dinner.)
But whatever you do, don’t choose an agent who won’t hold at least one open house a month. In this economy, you need to use every tool possible to draw attention to your property.
If you’re planning an open house:
- Clean like crazy beforehand, preferably with good-smelling organic cleaners that won’t upset anyone’s allergies.
- Clear out the clutter, pets, toys and even extra cars from the garage.
- Draw back the drapes, clean the windows and remove the screens so the most light shines in.
- Mow the lawn, trim the hedges and put some blooming flowers in pots by the doorway.
We wanted to share with you some AWESOME Statistics Year-to-date:
So far this year Weichert, Realtors Southern Coast in Myrtle Beach, SC has:
o Held 548 Open Houses
o Generated 203 Pending Contracts from these Open Houses
o Closed 141 Contracts so far from these Open Houses
o Listed 219 Properties from holding these Open Houses
There is a reason why Weichert, Realtors Southern Coast sells more - Because we do more!
Spectacular Waterway Views
• 1,350 sq. ft., 2 bath, 2 bdrm single story - $350,000 - Signature Series
Spinnaker Cove, Little River - This is just one of a few signature style condo's in Spinnaker Cove. Features include 9 foot ceilings, ceramic tile floors, wrap around balconies, elevator in building, crown molding throughout. Community also has private pool and private marina. You'll enjoy the spectacular views of the waterway from every room This place is just a must see!
Property information
You've probably seen the ads: Investors in expensive suits boasting about the easy money they've made snapping up foreclosure bargains. But truth be told, buying a foreclosure property is neither easy nor a guaranteed bargain.
Sure, with the number of foreclosures surging, it's possible to find a distressed home selling at a discount to those around it. But often there are pitfalls surrounding these abandoned homes that buyers should be aware of.
"By the time you get them fixed up, in some cases you have paid more than retail (or market value)," says Washington, D.C., real-estate investor Lance Young, who has authored a series of books on buying foreclosures for real-estate data firm RealtyTrac.
To effectively shop for a foreclosure home, says Los Angeles real-estate attorney Laurence R. Clarke, you need to understand the foreclosure process, the risks and the timing necessary to close the deal.
It also doesn’t hurt to have some help from a seasoned agent who has handled a lot of bank-owned sales as a buyer's representative. But be wary of anyone who claims to know too much about what lenders will accept and when, Young says.
"This market is so crazy I would be cautious of anyone who says they know where the market is going," he says.
The foreclosure process
Let’s start with a basic definition of foreclosure, how it works and how long it takes.
The foreclosure process is a means by which a bank can recover the amount owed on a defaulted loan, by repossessing the property that secured the loan.
The average foreclosure starts when a homeowner misses a mortgage payment and the lender files a notice of default. This is a public record and can be a first step for buyers in finding distressed properties, says Alexis McGee, co-founder of Foreclosures.com and author of "The Foreclosures.com Guide to Advanced Investing Techniques You Won't Learn Anywhere Else."
If the property owner doesn’t pay the owed amount in 60 to 90 days (or whatever timeline is dictated by the state you live in), a public auction notice is generally recorded that sets a sale date for the home.
If the property doesn’t sell at auction, the lender takes ownership of the property with the intent to sell it and recover its money. These bank-owned homes are often referred to as REO properties, a term that stands for “real-estate-owned.”
However, the foreclosure process differs widely from state to state. States with so-called judicial foreclosure laws require banks to go to court or file a lawsuit to repossess a home. This initial filing is called a “lis pendens,” meaning “suit is pending.”
Nonjudicial states do not require this. The deed of trust signed by buyers typically includes a power-of-sale clause, authorizing a trustee to sell the real estate to pay off the debt if it’s in default. The notice of default kicks off this process.
It’s important to be familiar with what the laws are in your state before embarking on your search, as they can affect the amount of risk you must shoulder and the timing for buying a foreclosed property, McGee says.
A foreclosure in a judicial state such as New York can take more than 12 months, while one in Texas can take as little as 60 days, she says.
Now that you know the process, let’s move on to your options in buying distressed properties, and the risks and rewards of each.
3 ways to buy a foreclosure
1. Short sale
When the value of a home has sunk below the balance of the mortgage or mortgages on it, owners will often try to get the bank to agree to a short sale.
Under this arrangement, if you make a fair-market offer on a home that is less than the amount owed, a bank can agree to accept this offer and forgive the remaining debt on the property, staving off a foreclosure for the owner.
It can be a good deal if it works, experts say. But getting the bank to agree can be a lengthy and aggravating process both for the seller and the buyer.
“What you are going to find is many potential buyers go into a short sale, then the bank won’t say ‘yes’ or ‘no.’ This can go on for six months where they won’t give you an answer,” attorney Clarke says.
There’s a lot more paperwork for the owner to prove his insolvency, and if there is a second mortgage on the property, you have to persuade that lender to remove or reduce its lien, something that may or may not happen. Short sales do not wipe out these junior liens.
It’s best for: buyers who are in no hurry to move, or investors who are having a hard time finding deals in their community.
2. Auction
Another way of purchasing foreclosures is to buy them at auction on the courthouse steps. Plenty of investors do this, often because it’s a way to buy an attractive property with multiple liens.
But for most people, this option is fraught with risks, experts say. For one thing, you don’t get to see the interior of the house before you buy, you don’t get to conduct your own inspection, and often you have to evict the former owner.
“There could be horrendous things wrong with it,” Clarke says. “You better know what you’re doing or know that the price is so good, that even if it’s a disaster inside it will still be worth it.”
You also have to be ready with a check that day for the full amount you plan to bid.
Moreover, you must do your own title search — there are no title insurance policies here — or else liens on the property could prevent you from getting clear title when you are trying to sell.
And many states offer a right of redemption for the previous owner — a time period in which he can get his property back if he pays the lender the outstanding loan amount, plus interest and the lender’s costs in foreclosure.
You’d hate to buy a property at auction, pour money into it to fix it up and then have the owner reclaim the property and these improvements. It’s rare, but investors typically try to head this off in right-of-redemption states by purchasing the “redemption rights” from the previous owner for a few hundred or a few thousand bucks before or after the auction.
It’s worth noting that online auctions are emerging in the foreclosure space. If you investigate this option, be careful that the auction house you’re dealing with is selling the property and not a lien on the property, experts caution.
It’s best for: seasoned investors only. There is too much risk involved for people who don’t make their living in real estate. And frankly, investors say, often the minimum bid is no great bargain.
3. REO
These are the properties that went to auction but were not bid on, and so they reverted to the lender holding the mortgage.
In a hot market, these properties will sell for full market value. But these days, with sales sluggish and banks holding large inventories of these REO properties, many lenders are motivated to discount the price to move the properties off their books.
Just how much depends on the market, the financial condition of the bank and how many other foreclosure properties are in the area.
“If you are willing to buy into a neighborhood with some blight — a lot of foreclosures — that’s where you will see your heaviest discount, as much as 40%”, McGee says.
However, it’s more common to find REO properties running 10% to 20% lower than market value. That may not sound like much of a discount, but on a $450,000 house, a $45,000 discount can mean the difference between qualifying for a loan or not.
The good news, experts say, is that REO homes are lot less risky to buy than properties bought through a short sale or auction. For one thing, all of the junior liens have been wiped out. And, unlike an auction property, you can tour and inspect the home just like any other home on the Multiple Listing Service.
But, investors say, they are not without their own set of complications, including damage from an unhappy former owner. Some agents recall irate borrowers pouring cement down the toilet to mess up the plumbing, or intentionally flooding the house to inflict water damage and mold.
If a property has been sitting empty for a while, there’s a chance it might have missing appliances, dead landscaping or damage from squatters. So it might be a good idea to bring a contractor along to find out what kinds of repairs are needed and what they will cost before you make a bid. McGee suggests that for every dollar you spend on repairs you should knock $2 off the price of the home. “You shouldn’t do the work for free,” she says.
Investors caution that while you want to look for a fixer, you don't want to choose a place that needs to be gutted, because you will have a hard time getting financing for it.
Conduct a little research with the home’s last listing agent, if you can. Some REOs have wound up in foreclosure multiple times, because there’s something wrong with the property or its location.
“Sometimes there’s a reason the thing went into foreclosure,” Clarke says. “Just because it’s a foreclosure doesn’t make it a good buy.”
It’s best for: anyone who is interested in buying a property below market value and who is willing to do a little research.
The key pieces of advice for successful foreclosure buying, experts say, are to be educated, be thorough and be unemotional about the houses you bid on.
There’s a lot of competition for some of the better bank-owned properties, says REO broker Leo Nordine of Nordine Realtors in Hermosa Beach, Calif. His office fields dozens of offers a day on some properties.
“The good ones get multiple offers. I’ve had people who’ve made offers on 10 of our houses and haven’t gotten any of them,” Nordine says.
“Be prepared to look at a lot of foreclosures and get a feel for the market before hopping in there,” Young adds.
In 2008 alone, the housing bust wiped out an estimated $2 trillion in home values. But for the first time in a long time, we are finally seeing an upside.
The same falling home prices that wreaked so much havoc in the economy are queuing up as the solution to the bust.
With prices down about 25% from their 2006 peaks, homes and buying incentives are tempting bargain hunters once again. Many economists agree that we've seen the bottom of the market and can see a faint but discernible light at the end of the long, dark tunnel. Sale volumes are up in many parts of the country, but prices aren't.
In early April, the average 30-year, fixed-rate mortgage loan dropped under 4.8% to historic lows, according to Freddie Mac, prompting some qualified buyers to buy and others to refinance.
At a spring speech, Harvey Rosenblum, executive vice president and director of research for the Federal Reserve Bank of Dallas, said the economy will improve markedly in 2010 and should be back on track by 2011. Housing, which led the country into this economic mess, could well lead it out, he said, partially because of the Obama administration's $75 billion mortgage relief plan.
The stimulus plan, in part, is offering first-time homebuyers a tax credit up to $8,000, plus a refinancing program that gives much-needed help to owners who are struggling with mortgages and incentive to their lenders.
Credit is finally starting to flow again, and prudent families with a reasonable down payment are for the most part getting the go-ahead to buy. Ian Shepherdson, chief U.S. economist at High Frequency Economics, noted this spring that falling housing prices are likely to slow heading into the summer months and possibly show improvement, cautioning that "foreclosures are weighing heavily on prices."
A history lesson
There are some important lessons to learn from the bust, lest we be doomed to repeat our mistakes. In a nutshell, here's what happened:
Years of robust health in the housing market prompted overinvesting, quick flipping, overbuilding and credit overextension, enabled by cheap financing. Homes began to exceed their brick-and-mortar and land values vastly, and owners started borrowing against hoped-for run-ups in future values. Meanwhile, builders cranked into high gear to accommodate zealous investors and builders.
Caught up in the frothy market, lenders and buyers alike bucked basic risk-management principles by implementing unsustainable mortgage arrangements, zero-down deals and other dubious lending programs, many with upward-adjusting ARMs — adjustable-rate mortgages that would later cut the legs out from under them.
Meanwhile, some financiers read aggressive federal anti-redlining guidelines as a green light to lend to everyone with a pulse. Lenders pushed these and other mortgage risks onto institutional investors the world over via mortgage-backed securities and bonds, which even some of the world's best financial minds failed to identify as ticking time bombs.
The last wave of investment homes was sold abruptly at big losses, and values started dropping across the board, especially in places such as Florida, California and Nevada. ARMs reset and foreclosures continued to spiral. Suddenly, hundreds of thousands of people owed more on their homes than they were worth and had nowhere to turn. Soon, the stock market tanked, the values of retirement plans were slashed and millions of jobs were lost.
The net result: Real estate has been repriced. The rest is history — a history we should not soon forget.
The repricing of home values almost everywhere in the country brings with it a whole new real-estate reality, one that marks a return to some of the real-estate "rules" of the past. It's a reversion to many tried-and-true fundamentals you should recognize and comprehend:
1. Save smart for a down payment. It's true that tying up all your equity in a mortgage can take away your emergency cash buffer in a downturn. But with the market starting to stabilize, the benefits of a large down payment — from 15% to 20% — will pay off in the form of higher equity, lower payments, better interest rates and more readily available refinancing.
2. Borrow within your means. Just because you're approved by a lender for a specific mortgage amount doesn't mean you can really afford the home. The wholesale defaults that occurred on tens of thousands of too-lenient loans carry a strong message: Live within your budget. Lenders grew more complacent with underwriting and appraisal standards because double-digit annual price appreciation lulled them into believing their collateral was safe. In their gamble, they abandoned the three C's of mortgage lending — credit, capacity and collateral — and everyone lost. Until the run-up in values, a safe mortgage on a home was considered no more than three times a buyer's annual family income. Some old-school traditions need to become new-school traditions.
3. Buy for the long term. This isn't the time to try to make a fast buck in real estate. There's still some market pain left, and it's unclear when prices will rebound. If you're buying this year, plan on staying put for the long haul.
4. Your market is unique. National housing trends don't mean anything. Understand your market's dynamics, which include the health of the local job market, local foreclosure statistics, price movements, a home's average time on the sales block, the lack — or abundance — of newly built homes coming upstream and the prices of comparable sales in your specific neighborhood of interest.
5. Watch for the pricing warning signs in the next cycle. Continued home-price run-ups year after year should raise a big, bright, red flag in your castle. From 2000 to 2005, U.S. housing prices increased by an average of 53%, with many markets far exceeding that, including California at 109%, Nevada at 94% and Florida at 90%. That party ended abruptly, and nearly everyone suffered a hangover.
There are several steps to complete before the house is yours. Closing consists of all the necessary final steps involved in sealing the deal on a home purchase. It includes:
The offer to purchase
There's no foolproof way to make an offer that's guaranteed to be accepted by the seller. But once you find your perfect house, it's wise to move fast. A good rule of thumb is to make an offer that's eight to 10 percent below the asking price, though that might not work in some areas based on trends in the market. This gives you some room to negotiate, but don't top what you've predetermined to be the highest price you can afford.
The deposit
Also known as earnest money, this is a demonstration of good faith and commitment by the buyer to the seller. It is usually 1 percent of the home's purchase price and is included in an offer to purchase. Either the real estate agent or the seller's lawyer holds the deposit in trust until the deal closes. If you decide not to close on a deal once your offer has been accepted, you may lose your deposit and be sued for damages. If the seller does not accept your offer, your deposit will be returned. If the sale proceeds, your deposit is usually applied to your down payment.
Contingencies
These are certain requirements specified in a contract that need to be met before the buyer is required to close. Typical among them: the buyer's securing of financing and an acceptable house inspection. Generally speaking, an inspection contingency covers a 10-to-14-day period from the acceptance of the contract, and financing contingencies run for 30 days. But in a seller's market, buyers may be asked to fulfill their contingency requirements in shorter time frames.
Home inspection
In a home inspection, a professional conducts a thorough examination of a property to assess its structural and mechanical condition. The idea here is that a trained home inspector will be able to catch potential problems that a buyer might not detect.
The contract
This follows the acceptance of an offer by the seller, and it is a legal and binding obligation, on the part of the buyer, to purchase the property if any contingencies are met. It outlines the details of the transaction, including: a description of the property, the selling price, the date of closing, the possession date and any applicable contingencies.
Settlement sheet
Also called a "closing statement" or a "settlement statement," this is a document that the Department of Housing and Urban Development requires to account for all financial aspects surrounding the sale and purchase of a home. It provides an enumerated list of the funds that were paid at closing. Items on the statement include real estate commissions and initial escrow amounts (money or securities deposited with a neutral third party - the escrow agent - to be delivered upon fulfillment of certain conditions). The Real Estate Settlement Procedures Act requires that a copy of the settlement sheet be distributed to both parties at least one day prior to settlement.
Closing documentation
Before you can close on a house, some paperwork must be completed. This includes a title search to make sure the title is clear, title insurance to protect the buyer and the lender from an oversight regarding a claim on some aspect of the property and an application for homeowner's insurance (necessary for securing a mortgage).
Closing costs
The total amount of closing costs varies, but may include: a loan origination fee, an appraisal fee, the cost of a credit report, a lender's inspection fee, the cost of title insurance, a mortgage broker fee, taxes and a fee for document preparation. Your lender is required to give you prior notice of fees associated with your loan.
Final arrangements
Before the deal is closed and you take possession, you must make some practical arrangements regarding utility service and first mortgage payment.
Settlement
Settlement describes the payment of the balance of the purchase price the buyer owes on the property, and the transfer of the title. It takes place on the possession date specified in the agreement.
So you've requested a mortgage and received three or four home loan offers. Now what? Here are the most important questions to ask each lender.
1. What is the interest rate?
This is the most obvious question. The interest rate is used to calculate your monthly payments, and it will determine how much you'll pay over the life of the loan. But you'll need to understand more than simply the quoted rate. A good benchmark for comparing offers is their annual percentage rate (APR). This figure combines the interest costs and other fees charged by a lender over the life of the loan, and expresses them as a yearly percentage. Make sure to also ask for an itemized list of what's included in each APR calculation, so you know you're making a fair comparison, as some lenders don't include all of their fees in the calculation.
2. Will the interest rate change over the life of the loan?
In the case of a fixed rate mortgage, the interest rate will remain the same for the entire term of the loan. Adjustable rate mortgages, however, have interest rates that change periodically. If you're considering an adjustable rate mortgage, make sure you understand what the adjustment period is -- that is, how often the rate will change (usually annually). Also, ask what the index and margin are that will determine your rate, and find out what caps will protect you from large rate increases. You can request a chart showing the past performance of the index the rate is based on, which will give you an idea of the rate swings other borrowers have experienced in the past with the same mortgage.
3. Will I be charged points?
A lender may offer to lower your rate if you pay discount points up front. One point is equal to 1 percent of the principal - two points on a $150,000 mortgage, for example, will cost $3,000, and might lower your rate by 0.5 percent. Lenders may also charge origination points, which are an administrative fee for processing your application and do not affect the interest rate. Make sure you understand which type you are paying for.
4. What are the closing costs and other fees?
Ask each lender for a good faith estimate of their closing costs. (Lenders are required by law to provide one within three days of your application.) Take the time to go through each estimate carefully to be sure you understand what each item means. This is important when comparing offers as lenders sometimes use different terminology for the same item.
5. Will you lock-in the interest rate?
A lender may allow you to lock-in the interest rate and points quoted in your offer for a specific period of time, often 30 to 60 days. This will protect you if rates go up during the time it takes to process your application. Ask what date the lock-in becomes effective and whether there is an additional fee involved -- and get the agreement in writing.
6. How will my down payment affect the cost of the loan?
Some lenders require only a very small down payment of 3 or 5 percent, and some even offer zero-down-payment loans. But these may carry significant costs to offset their inherent risk. Typically, if your down payment is less than 20 percent, the lender will require you to pay for private mortgage insurance (PMI). On the other hand, you may be able to reduce the cost of your loan, or at least improve the terms, by making a larger down payment.
7. What documentation do you require?
Lenders will ask you to provide a bundle of personal information, such as your income, employer, social security number, information about your assets and an appraisal of your home. Ask for a checklist so your application is not delayed by missing paperwork.
8. What are the payment terms?
Ask each lender what method of payment they require, such as sending back a coupon with a check or arranging an automatic withdrawal from your bank. Determine whether there is a grace period (typically a week or two), and ask about late payment fees.
9. Can I pay the loan off early?
Chances are you may want to refinance your mortgage before the term is complete. So check whether a lender will charge you a prepayment penalty for doing so. Some may also charge a fee for paying down a substantial portion (more than 20 percent) of the principal before it is due. In many cases, prepayment penalties decline each year, and may eventually disappear.
10. How long will it take to close the loan?
Processing a mortgage application can be time-consuming. Ask each lender how long they expect it will take to review your documentation, check your credit rating and approve your loan. A minimum of two weeks is typical, though it is not unusual for it to take six to eight weeks to close a mortgage.
11. What might delay the process?
Ask each lender what information -- employment, marital status, other outstanding debts -- they will be checking, and make sure you advise them of any changes in these areas. You can also head off problems by checking your own credit file a couple of months before shopping for your mortgage.
Ridge Lake, Conway - Announcing a price reduction on 237 Wedgefield Drive, a 2 bath, 3 bdrm single story. Now 
MLS® $225,000 - Priced to Sell!.
Property information
The Sun News - Tuesday, Oct. 13, 2009
Adva Saldinger
The Grand Strand real estate market is showing some stability as condominium and single family home sales rose significantly in September - the fourth month of increases in at least one segment of the market.
Condo sales were up 10 percent and single-family home sales increased by 8 percent in September, when compared to the same month last year, according to statistics compiled Monday from the Multiple Listing Service.
September was the first month there was roughly even growth in the condo and single family home markets in about two years, said Tom Maeser, a real estate analyst for the Coastal Carolina Association of Realtors. The increases are encouraging but the market won't reach overall stability until there is a quarter with consistent growth in condo and residential sales.
Median prices, the price at which half sold for more and half sold for less, continued to drop in September with the median single family home price down 15 percent from last September to $170,000 and the median condo price down 13 percent to $128, 750.
"This is extremely encouraging and the prices being down to me is not discouraging in that, that is what is driving up sales," Maeser said. "Foreclosures and short sales have created some fabulous prices and as a result of that ... people are taking advantage of the market."
Price is a key factor driving buyers to the market, said Rachel Broadhurst of Century 21 Broadhurst and Associates.
The prices are creating opportunities for buyers to purchase homes for far less than the true value of the property and in some cases for less than the cost of building the house, she said.
"I just feel certain we're at the bottom. I feel we're bouncing along at the bottom," she said.
Penny Boling of Century 21 Boling and Associates agreed.
"I think people are afraid they'll miss out on the good properties," she said. "I think they feel they've seen the bottom and they've got to make the move to get the location they want," she said.
She said September was the best month in the past 16 months for her company and that sales get stronger every day. Many of the sales are short sales and foreclosures but people are buying other properties as well.
About 20 percent of sales since the beginning of the year have been foreclosures or short sales, according to the MLS. Short sales, which have become popular amid the tough market, occur when a seller tries to avoid foreclosure by negotiating with the lender to sell the property for less than the amount owed on the mortgage.
But it is still difficult for some buyers to get financing, especially on oceanfront condos, Boling said.
"Today the real people who can afford to buy are buying. There is no secret, no magic," she said. As a result, her company has seen an increase in cash buyers. About 35 percent of sales in September were cash sales, according to the Multiple Listing Service.
Lenders have slightly loosened the tight restrictions on borrowers, said Alex Holbert, the broker-in-charge at Remax Town & Country, and people with good credit are able to get loans.
He said consumer confidence is driving the increase in sales along the Grand Strand and the first-time home buyers tax credit is helping as well.
"The buyer and seller have sort of discovered a renewed confidence level, that we're not all just going to evaporate," Holbert said. "
September sales for his company were the best in a long time as people are seeing a bottom and looking to purchase real estate, he said.
"The tempo of business makes me very positive that we are going to pop out of this thing sooner rather than later," Holbert said.
That renewed consumer confidence and low interest rates has translated into more traffic and more inquiries at The Litchfield Co. in Pawley's Island. Sales at the company were up significantly in September, said Chuck Houseman, a senior sales executive at The Litchfield Co.
"People are tired of waiting for it to hit the bottom," he said. "Obviously in their mind, and in mine, it's close enough where we see more emphasis on the market bouncing back."
Despite sporadic monthly increases, overall sales were down for the quarter - 8 percent for single family homes and 6 percent for condos. Even those decreases point to the market getting better because the drops aren't as drastic as the same quarter last year when sales were down 29 percent for single family homes and 33 percent for condos, Maeser said.
"I honestly believe the Myrtle Beach area is prepared to recover quicker than most other places," he said. "We're still a high demand area; people want to live here."
Home buyers are finding that the battered real-estate market offers just as many opportunities for headaches as for bargains.
Lots of home buyers are learning about patience these days. In August, nearly a third of overall housing sales were distress sales, according to the National Association of Realtors, up from 18% in March 2008, when it began tracking such sales. The figure includes both foreclosures and so-called short sales, in which the lender agrees to accept less than the full balance of a mortgage in order to unload the property.
Buying distressed properties isn't easy. Bidding wars are erupting for the lowest-priced foreclosures. Experienced investors with cash are elbowing aside first-time buyers who need mortgages. And banks generally sell property "as is," without the defect disclosures required of other owners. Short-sale buyers, for their part, often face delays of weeks or months as they wait to hear back from lenders—and from the institutional investors who bought securities based on the mortgages.
Distressed-property buyers also often have to cope with the fallout from the ruined lives of previous owners, such as vandalized properties and liens from second mortgages, taxes, unpaid water bills, homeowner-association dues and court judgments. For all that, final sale prices often aren't significantly lower than average in some areas, because the foreclosure glut has also driven down prices for sellers who aren't in default.
Buyers have to be thoroughly prepared by securing financing in advance and making sure they have a strong stomach, experts say. They should seek out agents with extensive experience and training in distressed property because the transactions are often complicated and time-consuming. Pushing and prodding bank officials, loan servicers and others is a big part of the job.
Short sales like the Shearns' are particularly complicated. Lenders require detailed information about both buyers' and sellers' finances, and homeowners generally have to prove hardship. The entire package of documents is scrutinized not just by lenders but by the mortgage investors. Second- and third-lien holders frequently hold up transactions demanding a larger share of the settlement. The average transaction takes four to six months or more, agents say.
Buying a foreclosure is usually speedier than a short sale because lenders already possess the property. But there are other drawbacks. State laws vary considerably with respect to legal procedures surrounding foreclosures. Many states require judicial proceedings for foreclosing on a home that can take more than 12 months, a period during which the home may be vacant or occupied by tenants or squatters. Homes may have appliances, pipes and even electrical wiring ripped out.
Buyers of bank-owned properties are usually stuck with whatever hidden problems they discover, including construction defects, and they seldom get additional price concessions. For these reasons, it's especially important for distressed-property buyers to have a thorough inspection by a qualified home inspector or inspection engineer, as well as a thorough title search and title insurance.
Buyers must be prepared and ready to move on a dime. If they're paying cash, they have to certify they have the funds available. Those who need financing should obtain pre-approval from a lender before even looking at properties. Successful foreclosure buyers often bid significantly above the asking price.
Although there are alot of hassles with buying distressed property, there is also alot of potential to obtain some great bargains. Buying distressed property is not for everyone, only for those who have the patience, the funds for repairs and the knowledge of the process should attempt going after those bargains.
Write an effective Open House ad with clear directions. Call your local newspaper's classified department at least two weeks in advance to order your Open House ad.
Make sure your house is "market ready," inside and out.
Safety First! Keep stairways clear. Avoid possible injuries and litigation.
Make Closets Look Bigger! Neat, well-ordered closets show that space is ample.
Have your Open House no longer than four hours. This reduces wear and tear on you and increases the odds of people visiting simultaneously. Have a "Guest Registration" book for visitors to sign.
Secure at least three and preferably five open house directional signs to lead prospective buyers from all major intersections to your house. place a large, profesional sign in a highly visible spot in front of your house. Leave space for visitors to park.
Keep things light and bright. Turn on all lights. Open all drapes.
Escort all prospects all prospects through your home. Put all valuables in a sfe place.