Real Estate Information Archive


Displaying blog entries 1-10 of 34

Hurry, Because It is Going Fast!

by TeamForYOUrDreams

There have been so many false predictions of the recovery of the real estate market that every bit of good news is greeted with scepticism.  Oh, yeah, hurry because it is going fast!  As a result, many buyers are sitting there being sceptical while the market takes off and leaves them behind.  Or, they could look at the numbers and react to the reality while there is still time.

Across the nation, we used to have many to many homes for sale compared to the number of properties that were actually purchased.  If the sales continued at the same pace, it would take years to work through the inventory.  Now, ProTech Valuation Services May Home Forecast shows that there is a 6.3 month supply of homes for sale.  That means that if sales continue at the same pace, the current inventory will be sold in 6.3 months.  This is the lowest level since 2006.

All real estate is local.  In Raleigh, Durham, Chapel Hill and the rest of the Triangle, the inventory is down and the number of sales are up.  As a result, the prices are starting to rise.

I enjoy the buyers agents I deal with who try to justify their outrageously low offers for homes in Raleigh, Cary and the Triangle by trying to reference the poor real estate market.  That is about as believeable as trying to convince Mrs. Lincoln that she and Abe had a wonderful time at the play at Ford's theater. 

The market still has some areas that are slower to recover.  However, the numbers show it is starting to change.  So, you should change to keep up with what is happening now. 

Remember when you could get any kind of a loan that you wanted if you had a credit score of 700?  Now, the average credit score for the loans made in the last six months was 750.  When you consider that the highest possible credit score is 850, you can see how incredibly high this is.  It is even more astounding when you consider that the average credit score required to get a loan increased by 10 points in the last six months.  Many people thought that the problem with the real estate market is that the lenders would not provide loans for anyone to buy a home.  Now you have the statistics to prove it.

Did you think the credit score was the only stringent requirement?  Remember when a 20% down payment was plenty to get any loan.  The average down payment for approved loans in the last six months was 24%, which increased 3% in the last six months. 

The other factor in making a loan is the debt to income ratio i.e. the amount of your fixed debts divided by your income.  For decades, you looked for a "front end" ratio of 28% and a "back end" ratio of 36% to 50%. Front end is household expenses and back end is total fixed debts including credit cards.  So, what do you need to get a loan now?  An average front end ratio of 23% and a back end ratio or 34%.  To visualize this, the total debt of the average approved borrower is about one third of their income.  In other words, you need to have two thirds of your income that you can save.  

So, with these nearly perfect applicants, the lenders could process them quickly, right?  After all, it used to be normal to be able to get a loan fully processed in 30 days.  Now it takes 44 days, and the time to get the loan approved increased by 10% in the last six months.

What did it take to get your loan turned down?  The average credit score of someone rejected was 699 i.e. one point below what used to give you any loan you wanted.  To get turned down, your down payment averaged 17% and your debt to income ratios of 27% and 43%. 

The Origination Insight Report by Ellie Mae gives the statistical information needed to answer the question "Why is the real estate market failing to improve even though home prices are low, interest rates are at record lows, employment is increasing and more people are moving to the area?"  The asnwer is that lenders are not loaning to mere mortals, they only loan to the super humans. 

So, you can not only thank the lenders for getting us into this mess, but for keeping us there. 


Help! The Lender Wants More Money From Your Short Sale

by TeamForYOUrDreams

What if the bank demands more money from your Short Sale?

If you have a contract to sell your home in Raleigh, North Carolina for $200,000. You might feel that the sale is hard enough to face when you consider that it was once worth about $215,000 .  When the mortgage is larger than the money you will get from the sale it is a Short Sale. You submit the package to the lender who says they are going to disapprove the Short Sale because your sale price is way below their opinion of the market value for the home.  Maybe your lender believes your home is worth more than a similar size home in Cary.

What went wrong?  The bank wants to aviod giving the property away, so it gets an appraisal or a broker price opinion (BPO).   Many times that price is too high.  This was such a big issue in California that they had to pass a law that makes it a crime for a real estate agent to intentionally put too high a price on the property.  Why was this necessary?  The BPOs are frequently created by the real estate agents who will be the ones to sell the property if it is foreclosed.  In other words, if these agents caused the short sale to fail with a high value in BPO, these agents could get to list and sell the home. 

What do you do now?  Don't lay down and play dead.  Nearly every lender has a way to dispute the value in the appraisal or BPO.  Let's look at the method that Fannie Mae uses.

The standard Fannie Mae messages from their Valuation desk says that the Realtor needs to submit a package to the loan servicer and they say

"Complete packages includes a completed Submission form in Excel format and agent documents which may prove a lowered FNMA value. The qualifying criteria for a value dispute is as follows:
When disputing Minimum Net Reserve, at least one of the following documents must be included in the submission for review:
-Appraisal or Buyer's BPO (BPO that the Servicer did not order)
-CMA Report (w/ comp photos and descriptions), Listing History & Realtor Comments
-MLS Sheets of 3 to 6 Comps, Listing History & Realtor Comments
-Inspection Report with photos of repairs needed
-Detailed Contractor's Estimate with photos of repairs needed."

The real estate agent who has the property listed for sale will submit any one of the above items.  If the house is in bad condition, the simplest thing is to get a contractor to bid the cost of the repairs.  Appraisals are costly, so real estate agents typically submit a Comparative Market Analysis (CMA) with a history of the listing and some analysis by the real estate agent.  As an example, I have a Short Sale in Durham that is being reviewed by Wells Fargo.  The sales price in the contract is $100,000 and Wells Fargo believes the value is $115,000.  So, I sent them six comparable properties, three of which were sold in the last six months and the other three are for sale.  I included the showing service report of all of the times that the property was shown to a prospective buyer.  At one time, I had the property listed at $115,000, and  we had virtually no showings.  Every Realtor knows that if no buyer will even take a look at the property at that price, it will not sell for that much.  While real estate agents understand this, it is takes a little education to get a loss mitigation negotiator to believe it.

So, if your lender says it wants a higher price because its BPO indicates a higher value, that is not the final answer.  You challenge the value by furnishing the facts and figures like you see in the Fannie Mae procedure.  Then, you hope that the mistake will be corrected and your Short Sale will be approved.

For a more complete discussion of correcting BPO values in a Short Sale, go to

The more Short Sales that get approved in the Triangle area of North Carolina, the less number of foreclosures and the faster the market will recover.

Is the Real Estate Market Going Up or Down?

by TeamForYOUrDreams

Which way is the real estate market going, up or down?  That depends on whose statistics you believe.  The Case Shiller index says the market has gone down in value for the last five months straight.  It is not surprising that the Case Shiller index is favored by the default servicing industry, those that see the glass half empty.  In other words, if you are selling in Raleigh, Cary or Morrisville, North Carolina it is a buyers market.   On the other hand, John Burns Real Estate Consulting says that their analysis is outdated.  That firm conducted its independent research in 97 markets across America and found that prices were rising in 90 of them.  From January to March, 2012, the real estate consulting firm says that the average price increased by 1.1%   They say that in the last month, prices are up in 93 of the 97 markets.  These folks see the glass half full.  In other words, if you are selling your home in Wake Forest, Garner or Holly Springs, North Carolina, it is a seller's market.

How do you explain the different conclusions?  They collect the data differently.  Case Shiller takes its information from closed sales.  Most sales take 30 to 60 days to close. Then, it takes 30 to 60 days to collect the data.  The John Burns Real Estate Consulting survey uses properties at the point when the sales contract is signed.  The consulting firm claims that their data indicates what is going on currently, while the other studies review past history.  The consulting firm says that the housing market recovery is under way, but it could turn at any moment, particularly if the media publicizes the Case Shiller index's pessimistic view of the market.

So, if you are selling in Raleigh, Cary or Knightdale, North Carolina, you want to believe the John Burns Real Estate Consulting survey.  If you are buying in Wake Forest, Garner or Holly Springs, North Carolina, you want to refer to the Case Shiller index to support your offer.  Who is right?  It depends on who you believe and whose method of collecting data is more reliable.


Short Sale Rules for HAFA Just Changed

by TeamForYOUrDreams

HAFA Short Sale Process Just Changed Again

The US Treasury issued Supplemental Directive 12-02 on March 9, 2012 to revise the Home Affordable Foreclosure Alternatives (HAFA) Short Sale program.   What does that mean for the HAFA Short Sale process?  More sellers will qualify for HAFA and more sales with junior liens will close.

A HAFA short sale applies only to a seller’s principal residence, so investment properties are not allowed.  The Treasury regulations that were first adopted for HAFA required the owner to occupy the home in order to qualify for HAFA. Every rule has an exception, and a HAFA Short Sale was allowed if the owner had moved over 100 miles within the last 90 days to get a job.  Later, this exception was modified to be that the owner was allowed to move within the last 12 months for any reason.  The latest revision says “There are no longer any occupancy requirements for HAFA eligibility.”   The home still needs to be the owners principal residence under Section 121 of the Internal Revenue Code, that requires the owner to live in the property for two years during the five years before the date of the sale.  You have to enjoy the complexity of an IRS rule, right?.   The directive does not discuss whether HAFA still requires that the seller must not have purchased another principal residence in the year before the sale, but I assume that is still applicable

What does this do?  More sellers will qualify for HAFA.  I did a short sale of a townhouse in Raleigh where the seller had moved out and took a new job, but she had not moved over 100 miles.  With the regulations that were in effect at the time, this Raleigh Short Sale did not qualify for HAFA.  With the current regulations, this Raleigh Short Sale would not have been eliminated on this basis.

Second and third loans are called junior lien holders because they are loans recorded against the property after the first loan.  The example that most people know is a Home Equity Line of Credit (HELOC) that is put on the property as a second loan.  The former rules limited the payment to all junior lien holders to $6,000.  Now, the regulations increase the amount allowed for these lien holders to $8,500.  This is the total allowed for the sum of the payments to all of the junior liens.  So, if you have a Cary Short Sale with a first, second and third loan, the total that can be paid to remove the second and third liens from the Cary Short Sale property is $8,500.

Do you agree that governmental regulations are sometimes odd?  The structure of HAFA qualifies for humorous.  HAFA is a program to allow Short Sales of the first loan on the property.  This HAFA policy restricts what can be done with second loans.  The lenders who own second loans do not have to follow these rules.  This is about the same as expecting the people who are driving in one state to obey the traffic regulations for the next state.  While it may be humorous, this change in the rules will permit the lenders who have first loans to pay more money to the lenders who have second loans.

What does this do?  More HAFA Short Sales will close on homes in the Triangle area of North Carolina because more money means more lenders will accept the proposed offer.  So, if you have an Apex Short Sale with a second lien of $80,000 and a judgment for $5,000, you may be able to get the junior liens to agree to your Short Sale in Apex with an offer of $8,000 to the second loan and $500 to the judgment because most junior lien holders will settle for 10% of the amount owed.

A HAFA Short Sale seller gets a relocation incentive of $3,000 paid at closing.  How do you get a Wake Forest Short Sale seller who is broke to move out of the house?  Provide some money to pay for the expense of moving  The new amendment to this policy allows the relocation incentive payment only if the borrower or a tenant is living in the property and they are required to move out when the Short Sale closes.   This change in regulations makes sense.  You pay for relocation only if someone has to relocate.   The result is that the lenders who approve the Short Sale will get more money in these situations.

What does this do?  The incentive to do a HAFA Short Sale just became less.  There might be a few Short Sale sellers in the Triangle who were encouraged to do a HAFA short sale by the $3,000.  Those owners of Triangle real estate might make a different decision.

There are less exciting changes to the regulations for monthly payments that allow the borrower to make the full payment during the Short Sale and the there is a change in the reporting of a HAFA Short Sale to the credit reporting bureaus. 

Is this good for Triangle Short Sales? Yes.  More sellers will qualify for HAFA, more sales with junior liens will close and the lenders pay relocation benefits only when someone relocates.

If you want to have a complete understanding of the entire HAFA Short Sale processs from start to finish, look at

Posted by Tim Burrell -

We had a lot of good responses to the question of why the Media covers real estate in the manner that it does.  We had some people say it is the liberal media trying to make trouble for the incumbent Republicans.  We had some others saying it was the financial medial trying to make trouble for the Democrats.  We had others saying that they try to make stories that look like watching a train wreck, as that is what gets people's attention.  But the best explanation came from a member of the media who asked not to be identified.  So, here is what that member of the media had to say:

I think the most accurate media bias offered thus far is one on negative stories.  Compelling news stories are usually those with conflict, or intense human interest.  They are not always easy to find.  They are not always the best reflection of the community.  But there's time to fill. So the news is always looking for and accentuating the conflicts. "Housing market doing well" - not a conflict.  And there's no human interest in that.  "Housing market tanks" is a conflict.

Those pumping the "liberal media" bit are listening to a lot of Rush Limbaugh.  WRAL is owned by Jim Goodman, no bleeding heart liberal, from what I've heard. WRAL was the station of Jesse Helms, for goodness sake.  WTVD is owned by Disney.  NBC-17 by Media General.  Both publicly traded companies which treat local TV stations as ATM's.  The agenda is money, not politics.  Whatever sells. Conflict, real or imagined, sells.  That's all that is.

Besides, here are some provocative growth stories the "liberal media" has not covered:  1) in heat of drought, local water rules did not make big business do anything about conservation.  Not one water mandate. Zip.  2) Paul Coble v. Rodger Koopman in County Commissioner race in 2006.  Coble funded by developers who don't want to pay anything toward public school construction.  Koopman calling for impact fees, which have been the law in California for 20 years.  Coble could pay for TV spots.  Koopman could not.  Coble creamed Koopman with developer money.  If Koopman had won, the school funding debate in Wake County would be very different.  He'd be driving the agenda with three other Democrats on the Wake County Commission, who are a puzzling very silent minority.  No media other than the Independent touched it.   3)  Your NCAR $50 mandatory assessment to raise $10M to fight future real estate transfer tax ballot measures.  Is the assessment legal?  Is it coerced funding for political action?  The complaint is now filed with the State Board of Elections -by one of your realtors. NCAR claims the coerced assessment for political purposes is tax deductible.  I wonder what the IRS thinks of this?  But the story is too remote for our TV news taste buds.

 As for realtors and media:  1)  Your PR is not good.  Every month, the Triangle realtors release the stats (usually on a Friday afternoon, which looks like they are trying to bury the news), but then don't offer up their "take" on the numbers.  The MLS officials are not available.  I can't remember when I've seen the head of the Triangle MLS quoted in the N&O.  He's never been available for me.   No one is obligated to talk, but if they don't, the media may find someone to do it, and they might be less qualified.  Same goes for Durham Realtor head. They call back 10 minutes before you go on air.  It's so transparent.  2) I may be wrong, but I think a big barometer of the housing market is the comparison of median EXISTING HOME SALES from the same month the previous year.  I see lots of big press focusing on that. WSJ, LA Times, CNBC.  But why, why in the past has the Triangle MLS included NEW homes in that figure?  That is very misleading.  New home prices are not a very good indicator to answer the question, "How is this market effecting the value of the home I own now?"  Other MLS's can extract the NEW HOME SALES.  Why not Triangle MLS?  3)  I can't tell you how many Pollyanna interviews I've gotten from realtors.  They just can't bring themselves to say, "Now might actually be a better time to rent."  Or  "Flipping real estate for the quick turn might be a little more difficult right now."  You won't get it.  I do get, "It's always a good time to buy."  I had one realtor tell me now was a good time to buy because interest rates are going up.   There are credibility issues to say the least.  4)  Realtors love to trumpet the AVERAGE HOME PRICE number if it's going up.  But that too can be problematic.  It can be misleading when lower end homes are not selling.  And right now, the lower end homes are not selling.  And in many places, it's the low-end buyer who has been hit by the sub-prime riptide.  Highest foreclosure rate in America - Merced, California - where buyers are lower income. You're right about RealtyTrac.  I've read an interesting WSJ story which explained RealtyTrac foreclosure numbers are inflated, problematic and self-serving.  At the same time, CNBC and the WSJ use them.  So what do you do?  Use the numbers from Administrative Office of the Courts?

My advice:  if you have to deal with the media, I'd seek out specific reporters you trust.  Remember the news bosses are probably looking for a negative story.  But you can use that to your advantage.  If the negative peg is legit, admit it for credibility's sake.  But then also offer up your silver-lining.  Maybe insist before hand that if you are quoted, they must include your positive advice as well.  Hey, if the market is down, it is a good time to buy if you are going to hang onto the property for a long time.  And if you are mis-quoted or misrepresented, hit them hard.  Call them.  Call their boss.  Threaten never to talk to them again.  If you are a valuable source to good reporters, they will want to treat you right.   But hey, the media is a pain in the ass.  And they are some of the least accountable in the community.  Problem is they always have the last word.  And they usually have a bigger megaphone. 

 BOTTOM LINE:  Blaming the media for the real estate mess is... a bunch of whining bull----.There, I've said it.  This downturn was soooo predictable, with all the loopy mortgages, no-doc this, liar loan.  I had one mortgage broker tell me- "You find your house, we'll find the loan to get you in it."  That guy has skipped town and moved to Texas.

( I deleted some material here as it would have allowed the reader to figure out who this member of the media is).  You don't sell the home, you don't sell the neighborhood, you sell the school district.  ... thinks public school impact fees are legit.   I am suprised you realtors have hitched your wagon to the home builders to oppose impact fees.   KB Home and all the other national builders pay school impact fees in CA.  They have for decades.  And the homes are not so much more exensive out there because of the impact fees.  People pay more because of the weather.  And they don't have school over-crowding crisis in new sub-divisions.  And realtors can HONESTLY tell home buyers where their kids will go to school next fall.

This is Tim again.  While I disagree with some of what this person says, I enjoyed looking at the situation from that point of view.  I get a lot of reporters calling me for information on the Raleigh real estate market, so this was a good education to see how the medial looks at my profession.  I am a stong believer in completely free press, so even if I disagre with what you say, "I will defend to the death your right to say it."  What do you think?

Submitted by: Bob Rodwell

I hear that question a lot. Since home prices are often shown as a price per square foot, and property taxes seem to be based significantly on the home size, both sources should be accurate – so why do they disagree, and sometimes by a lot?  There are several reasons. 
In Wake County (see, tax records use measures in whole feet, so they show rounded rather than precise figures. Picture a two-story simple box-style house, for which the tax records show a “footprint” of 40 feet long by 30 feet deep, or 2400 square feet. If the true measure of the home is 40 feet long by 30 feet 3 inches deep, that’s really 2420 square feet. So tax record measures will rarely match an appraiser’s or real estate agent’s measure, even if both are right, as in this example. But that’s a relatively small difference, and does not explain some of the much larger ones seen. Here are the big difference makers I’ve seen recently.
  1. The home shrank! One example: a townhome for which the tax records had 2892 square feet. The MLS listing had 2300 square feet. What happened to 592 square feet? The home was a model home for the subdivision. At the time the tax records were defined, the home included the builder’s office. Later, when it was sold, that large office was converted to a garage, which does not count in the heated square feet. But the tax records have not been updated (I don’t know why).  
  2. The home grew! This is much more common: a home is recorded reasonably accurately in the tax records, and the owner finishes off an attic or basement area later. Perhaps the owner got the appropriate permits and inspections, perhaps not – but in either case the tax records were not updated to include the new square footage. If you are looking at a home where the MLS listing (or seller in a for sale by owner home) shows significantly more footage than the tax records do, find out why, as there are some risks and costs to consider if an unpermitted addition was made.
  3. Tax records show the wrong house! Not really, but sometimes builders provide standard floor plans for the tax records, but then deviate from those plans, perhaps finishing off an optional bonus room for example. All permits and inspections are ok, but for whatever reason the tax records still reflect the plan, not the finished product. I believe this to be the main cause of the difference in a home I showed recently where the tax records showed 2470 feet and MLS showed 2720 – almost 10% larger.
  4. Tax measures are guesses sometimes! Tax measures are taken outside, but not inside. So if they think the home has a 2-story foyer or a partial bonus room over a garage – they have to guess at how much to allow for those differences from the “footprint” measures. I’ve shown a home where the tax records showed a basic box 2-story house, in effect incorrectly counting the both 2-story foyer and the 2-story breakfast nook twice.
I recommend, first, that we don’t get too carried away with expecting precision in either tax or MLS measures. There are lots of other factors affecting the property tax value or list price. Expect reasonable accuracy. And if they differ by 1% or so, don’t worry. There is the rounding aspect and some homes are pretty tricky to measure.  If the measure is reasonably accurate, isn’t it more important if the home meets your needs or not? 
Second, if you just don’t think a home you are seriously considering is sized correctly, ask your agent or the home seller to explain the difference. It may fit one of the scenarios above. If your concern persists, ask your agent to measure the home. Recognize this takes time and effort, so please save those requests for where needed!  Know that if you will need a mortgage to buy a home, it will be measured by an appraiser, and that measure will be used to help determine the loan value. If the appraiser finds significantly fewer feet than advertised, the appraisal value may come in lower than your offer price and ruin the deal.  So if there is a real risk of that happening, re-measure before making your offer!

Revitalizing Downtown Raleigh’s Real Estate


Submitted by Lisabeth Tunell. 

Since 2004 Raleigh’s downtown has been trying to lure not only businesses and restaurants but also incentives for projects that involved converting old building into condos or replacing them altogether.

It seems to be working….

Several projects have been completed in the “center-city’s renewal” district and are on the market and selling despite the market. It seems that people are looking at downtown Raleigh as they would any other large downtown city except for less money.

These projects are among several recent changes on a six-block cluster southeast of the intersection of Fayetteville and Martin streets.

On the block across Davie Street, a pair of towers including an eco-friendly mix of shops, offices, hotel rooms and residences is scheduled to be built. The project, called Edison, would surround a 1,250-space parking deck being built on the block.

To the northwest is the RBC Plaza and that is presently the Triangle's tallest tower and of course the 96-year-old City Market is also poised for upgrades.

As you can see there are many choices to choose from so if you are in the market for a condo that has that “urban” or “eclectic” feel to it contact us.


Downsize or not??? That is the question….


Submitted by Lisabeth Tunell:

My oldest daughter graduated and leaves for college in August. My youngest daughter is a junior. This leaves me with the question of whether I start to think about downsizing after she leaves the nest next August (09). My home is large enough to accommodate all but with just me and my husband….we would be rattling around.

I am sure many couples face this question when their children leave home and move on.  I myself would like to downsize simply because I am tired of cleaning 4200 square ft.!!! I would much rather have a smaller home and have a place where my children can come home to visit (for a while) and leave again.

We are in a golf/tennis community and play both so I would like to stay in the same community.  I have come to love my home as we have it decorated just so, the drapes, the wallpaper, the fabric and the paint all coordinate. My closet is organized so I can find everything as is my kitchen.  My Christmas decorations fit in the unfinished basement just so as does my workout gym and the rest of my “junk” When I think about moving….I get a headache….and yet it is appealing. Why?

I don’t know I just know that a lot of couples do and that is why the Real Estate industry still does business.  No matter what the statistics tell us there will always be someone looking to buy/sell/move…. so I will be in the market starting next spring and selling/buying regardless of what the economy tells me because cleaning a smaller home has to take “half” the time which will leave more time for golf and tennis!!!


If interested in downsizing, call us and we can help you also!


Nationwide Tour....


Submitted by Lisabeth Tunell

Nationwide Tour…professional golf in my backyard…..

I have missed only ONE Nationwide Tour so far and that was the first year it started at Wakefield in 2000. What a great experience it is to go out your back door to watch these guys play and know one day soon you will possibly see some of them on the PGA Tour. This is golf at its best because these guys have a big incentive….. to win and play with the “big boys”.

The Nationwide Tour has arrived at TPC Wakefield Plantation and starts today through Sunday June 8th. Total purse is $500,000 and winning share is $90,000.

The Tournament Players Club Wakefield Plantation opened as a private member club in July of 2000.  The par 71, 7,257 yard, 18-hole championship golf course was designed by three-time U.S. Open champion Hale Irwin. The TPC at Wakefield Plantation lies on 217 acres adjacent to Falls Lake.  Here, native pine trees, ponds and creeks remain in their pristine natural condition, framed by 18 carefully sculpted holes whose beauty will only serve to complement their surroundings. Five different sets of tees allow for a enjoyable round for players of all skill levels.

The course is set up differently for these pros but on Monday June 9th members get to try their drive, swing, pitch and putt on the same course and see how they would have faired.

If you are a golfer and would like to say “Professional golf in my backyard…..”next year, call us! 

Displaying blog entries 1-10 of 34

Contact Information

Photo of Team For Your Dreams, Inc. Real Estate
Team For Your Dreams, Inc.
REMAX United
7721 Six Forks Road, Suite 110, Raleigh, NC 27615
Raleigh NC 27615
Fax: 310-347-4041