Huntersville, Lake Norman | NAR Settlement Guidelines

The NAR settlement agreement also mandates two key changes to the way members and MLS participants do business.

1. NAR agreed to create a new MLS rule prohibiting offers of compensation on the MLS. This would mean that offers of compensation could not be communicated via an MLS, but they could continue to be an option consumers could pursue off-MLS through negotiation and consultation with real estate professionals.
2. NAR also agreed to create a new rule requiring MLS participants working with buyers to enter into written agreements with their buyers before the buyer tours a home. NAR has long encouraged its members to use written agreements to help consumers understand exactly what services and value they provide, and for how much.
   
   
   
   
   

Let's sit down and discuss the ins and outs on how I can assist you and navigate these new waters in Real Estate Transactions!  

Huntersville|Lake Norman|Charlotte | A Seller’s duty to disclose latent material Defects

 QUESTION: In reading last week’s Q&A (Disclosure, Material Facts, the Residential Property Disclosure Statement, and the Due Diligence Fee, release date: 6/4/2020), I was surprised to learn that a seller has a legal duty to disclose a material defect about their property when the seller knows about the defect and the defect is one that is not discoverable by the buyer in the exercise of reasonable diligence. I have long understood that a seller can’t hide or actively misrepresent a material fact about their property, but I didn’t know that a seller has a duty to disclose latent material defects. Can you give me a real-life example of when a seller got into trouble for not disclosing a material defect?

ANSWER: Yes. The case of Everts v. Parkinson was decided by the North Carolina Court of Appeals in 2001. It involved the sale of a house in Wilmington in 1993 that was clad with synthetic stucco. Approximately two years after moving into the house in 1988, one of the owners, Mr. Parkinson, began to discover rotting pieces of brick molding around at least seven windows or doors. He replaced the rotting brick molding himself. Later, a painter who power-washed the house discovered that one of the windows was rotted in the sash, jamb, and part of the sill. Again, Mr. Parkinson made the repairs himself. He testified that the work “didn’t appear that complicated,” but an engineer who inspected the house testified that the window had undergone extensive repair behind the surface cladding between the inner and outer walls.

Mr. Parkinson later hired a company to build a band of stucco around the perimeter of each window to protect the windows from water. The president of the company testified that he told Mr. Parkinson the bands would not provide any waterproofing and that all the company was providing was decorative banding.

At the time of sale, the Parkinsons did not inform the buyers, Mr. and Mrs. Everts, about any of the repair work that Mr. Parkinson had done or about the construction of the stucco bands. The Everts’ home inspector testified that he did not observe any problems with the windows or doors and that he was not able to observe the perimeter joints of the exterior windows because they were concealed by the stucco bands. He also testified that he had not been informed of any moisture intrusion problems, and that if he had, he would have performed an intrusive test by inserting a moisture probe into the synthetic stucco. According to the inspector, it was not the normal practice of his company to perform this kind of test unless it was provided with information about water intrusion problems.

In its opinion, the Court of Appeals stated that “[a] duty to disclose material facts arises where material facts are accessible to the [seller] only, and he knows them not to be within the reach of the diligent attention, observation and judgment of the purchaser.” The Court concluded that a jury could infer from the evidence that material defects were known to Mr. Parkinson, that he knew the Everts’ were not aware of the defects and would not discover them in the exercise of diligent attention or observation, that Mr. Parkinson therefore had a duty to disclose the existence of the defects to the Everts’, and that his failure to do so supported their claim of fraud.

Huntersville | Lake Norman - Duty of Good Faith and Disclosure of Material Facts

 

Know Your Rights

QUESTION: Closing is two weeks away, and my buyer needs to sell their existing home in order to obtain a loan and close. Today we received notice that the buyer of my client’s home is terminating. My client is freaking out and demanding that I do not tell the seller about the termination. My buyer is also debating whether to inform the seller next week that if my client does not receive a refund of their Due Diligence Fee, they will delay terminating the current transaction all the way through the grace period in the contract. What do I do?

ANSWER: You need to immediately disclose to the seller or listing agent that your client may not be able to close. You also need to inform your client to seek legal counsel regarding the potential negotiation of the Due Diligence Fee.

The North Carolina Real Estate Commission has long instructed that a principal’s ability to complete a transaction is a material fact. This category of material fact “includes any fact that might adversely affect the ability of a principal (seller or buyer) to consummate the transaction such as: [1] a buyer’s inability to qualify for a loan, [2] a buyer’s inability to close on a home without selling a currently owned home, or [3] a seller’s inability to convey clear title due to the commencement of a foreclosure sale or judgment lien on the property.” 2022-2023 General Update Course, Section 1, Material Facts: Speak Up! Failure to disclose a material fact is the number one reason why agents are disciplined by the Commission. Here, your client’s likely inability to close is clearly a material fact that must be disclosed to the listing agent regardless of your client’s direction to the contrary.

As for the strategy to obtain a refund of the Due Diligence Fee, your client needs to be informed by legal counsel that every contract has an implied duty of good faith and fair dealing. North Carolina Courts have “consistently held that [i]t is a basic principle of contract law that a party who enters into an enforceable contract is required to act in good faith and to make reasonable efforts to perform his obligations under the agreement.” Blondell v. Ahmed (NC Court of Appeals 2016). Here, it sounds like your client may attempt to violate that duty in an attempt to obtain a refund of the Due Diligence Fee. Assisting your client in this endeavor may expose you to liability and violate both the License Law and the Code of Ethics. As such, it would be best to strongly advise them to use legal counsel in order to negotiate a termination of the transaction.

© Copyright 2023. North Carolina Association of REALTORS®, Inc.

This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain. Any unauthorized reproduction, use or distribution is prohibited.

Want To Buy a Home Now? Consider These Strategies

 I received this information from a Lender my clients have used.   She is with Prosperity Mortgage.  Give her a call.   

Tammy Rivard

Relocation Sales Manager
NMLS # 561867
Office: 952-967-2599

Tammy.Rivard@PHMLoans.com

Whether you're a first-time or move-up home buyer, you may be considering postponing a purchase if your area's affected by climbing home prices. Or you may be balking at today's mortgage interest rates.  More on that in the next post!

However, no matter where prices and rates may be, you have some different strategies to consider.

Buy now, refinance later. While it's impossible to predict when interest rates will change, almost all lenders expect rates to eventually go down. If you're buying in an area where home prices are still rising, this approach could be worth considering, especially if you're renting and not building equity.

Make a larger down payment. If you have the funds to do this, it could help you in several ways. In addition to a possibly lower interest rate on a mortgage, it will provide lower monthly payments. Also, you may be able to forgo mortgage insurance or cancel it sooner than later.

Consider a shorter loan term. While this translates into higher monthly payments, it also earns you a lower rate. For example, while the current average rate for 30-year loans was 6.71% earlier this week (according to Freddie Mac), 15-year loans came in at an average rate of 6.06%. You'll also save quite a bit in long-term interest.1

What To Consider Before Selling Your Home

 Selling your home is a huge leap forward in your life, so it's vital to be as prepared as possible before you put it on the market. Small changes can make a huge difference in how much your property is worth.

Thinking of Selling? Learn More about Selling with Roby

Before you list your home, take the time to consider each of these ideas and think about the impact they'd make on the price you can grab for it. 

1. Does the Exterior of Your Home Shine?

One of the biggest things to keep in mind when you're selling your home is that the exterior needs to wow and impress! This is the first part of your property people will see when they pull up and the first thing that will influence their opinion on whether or not they want to buy your property.

 

To update things, look into adding a brick cladding system, or check the brick cladding on your property and make sure it's in good shape and able to protect the property. Creating a safe and inviting home is vital to getting buyers in the door.

2. What Do Your Listing Photos Highlight?

When people look at your home's listing, the photos need to pop up and tell them to look at your home more. Not only should they be high-quality, clear, and well-lit, but these photos should also be able to guide their eyes from room to room to show off the details that make the property incredible.

 

Highlighting areas like a gorgeous white stone fireplace will make a lot more sense than catching a great photo of the bathroom sink. Take your time, and be purposeful in the angles and subject matter you choose. Hiring a professional photographer can make this step a lot easier!

3. Is There Noticeable Dust or Debris in the Home?

Dust and debris in a home can scare away buyers in the blink of an eye. When people are picturing their future in a home, they don't want to be confronted by gross debris and skin shed by whoever owns it first.

 

Deep clean the entire home, but focus your energy especially hard on areas like bathrooms, kitchens, and laundry rooms. These areas are especially prone to dirt and gross residue, so wipe that away and clear the minds of buyers.

4. Have You Staged Your Property?

Did you stage your home? A staged property will sell faster while also bringing in far more money than a home that fails to do so. You can stage using your own furniture if you have modern belongings, but most sellers turn to furniture rental companies that will stage the house for you.

 

This lets your home look brand new and professionally decorated without causing you to go deep into debt buying furniture that you don't want or need.

5. How Old is Your Roof and Siding?

Your roof and siding will need to be updated every twenty to fifty years, depending on the materials and the weather conditions of the area you're in. A wood shake roof can look incredible, but if you don’t properly maintain it and keep it in good working order, it could prove disastrous for your home’s value.

 

The older these parts of your home are, the less likely buyers will be interested in sealing the deal. Update them for that good return on investment every seller wants.

6. Can Your Home Handle Moisture or Water Damage?

Water is one of the most destructive forces out there, able to whittle away wood or stone over the years or floor a home and ruin it from wall to wall. If you want to protect your property and give buyers a chance to have faith in the house they're looking at, look into waterproofing technology.

 

Not only will this keep moisture out, but it can help lower insurance rates and give buyers peace of mind in a wild climate that's been shifting over the last few years.

7. Are All Brick and Stone Surfaces in Good Shape?

Brock and stone are huge deals in 2023, as many buyers are looking to return to natural textures and more earthy tones. Consider power washing the exterior of your home and heavily cleaning any surfaces of these materials on the interior of your home as well. These are the stars of the show, so it's vital that you let them shine.

 

If your home doesn't have any brick or stone but instead has a lot of natural wood, make sure to make that shine instead. Work with what you have, but make the buyers think it's a dream come true.

Your Home Should be an Eye Catcher!

Whether your home is sixty years old or six months old, you should be able to sell it in no time. Follow some of these ideas before you put your property on the market: they could make you hundreds of thousands more. 

Courtesy: Max Shafer. a freelance writer that loves sharing his knowledge and expertise on real estate. He lives in Land O’ Lakes, Florida where he enjoys spending time with his wife and researching real estate trends in his free time. Max’s work as a freelance writer can be found on Building Product Advisor, a new construction industry resource launching in Fall 2022.

Charlotte|Lake Norman - Prepare To Buy A Home In 2023

Carolina Living Real Estate

We Can Guide You Through the entire process with Professionalism, Patience and Experience!

 

Let's connect to get the process started!

Charlotte|Lake Norman|Huntersville Housing Market Prediction 2023

Carolina Living Real Estate Is Here to Assist

 

Huntersville, Charlotte, Lake Norman| How to Get The Best Mortgage Rate

Carolina Living Real Estate is Great At Guiding Your Through the Entire Process

 

Contact us for a No Obligation discussion of Your Needs!

Huntersville|Lake Norman|Charlotte How Homeownership Impacts You

 

New From Carolina Living Real Estate

June is National Homeownership Month, and it’s the perfect time to reflect on how impactful owning a home can truly be. When you purchase a house, it becomes more than just a space you occupy. It’s your stake in the community, an investment, and a place you can put your stamp on.

If you’re thinking about buying a home this year, here are some of the benefits you'll experience when you do.

The Emotional Benefits of Homeownership

Because it’s a place that's uniquely yours, owning a home can give you a sense of pride and happiness in several ways.

Your Home Can Reflect Your Tastes and Personality

Investopedia puts it like this:

“One often-cited benefit of homeownership is the knowledge that you own your little corner of the world.”

That knowledge can lead to a powerful, emotional connection to the place where you live. But so can the realization that your home will grow with you. Because it’s yours, you have the freedom to make updates to it as your needs and tastes change. As Logan Mohtashami, Lead Analyst for HousingWire, says:

“The psychology is that this is yours and you’re going to make it as good as possible because you’re in for a long time, . . . “

And that can create a greater sense of ownership, pride, and connection with your home and your community.

It Can Enhance Your Neighborhood and Civic Engagement

Homeownership can lead you to get even more involved with your local area. After all, you’re putting your roots down in a location and will want to do what you can to help improve it, much like your home. In a recent report, the National Association of Realtors (NAR) says:

“Living in one place for a longer amount of time creates and [sic] obvious sense of community pride, which may lead to more investment in said community.”

The Financial Benefits of Homeownership

When you choose to become a homeowner, you’re making a financial decision as well. That’s because your home is also an investment.

It Can Help You Feel Financially Stable

Homeownership is truly one of the best ways to improve your long-term financial position. Not only will you have a predictable monthly housing expense that can benefit your budget in the short term, but you’ll also gain equity as your home appreciates in value and you make your monthly mortgage payment. As Freddie Mac says:

“Building equity through your monthly principal payments and appreciation is a critical part of homeownership that can help you create financial stability.”

It Can Grow Your Wealth

Because of your growing equity, you can build your net worth as a homeowner. And when you compare the difference in net worth between a renter and a homeowner, it’s clear that owning a home truly offers a great way to build your long-term financial position.

According to the latest data from NAR, the median household net worth of a homeowner is roughly $300,000, while the median net worth of renters is only about $8,000. That means a homeowner’s net worth is nearly 40 times that of a renter.

Bottom Line

Homeownership is truly a way to find greater satisfaction and happiness and to build financial freedom. If National Homeownership Month has you dreaming about purchasing a home, then let’s connect to begin the process today.

Huntersville | Charlotte | Lake Norman : Thinking of Selling? How Much Equity Do You Have?

 

Do You Know How Much Equity You Have in Your Home? Let Carolina Living Real Estate Help You Figure It out!

Some Highlights

• If you’re a homeowner, your net worth has gotten a big boost. That’s because recent home price appreciation has increased your equity.
• Your equity grows as you pay down your loan and as your home increases in value. Over the past year, the average homeowner’s equity grew by $55,300.
• Ready to sell? Let’s connect to talk about how you can use that equity to fuel your next move.

Huntersville, Lake Norman,Charlotte | Key Factors That Impact Affordability Today

 

Carolina Living Real Estate Has the Know How to Help!

You can’t read an article about residential real estate without the author mentioning the affordability challenges that today’s buyers face. There’s no doubt homes are less affordable today than they were over the last two years, but that doesn’t mean homes are now unaffordable.

There are three measures used to establish home affordability: home prices, mortgage rates, and wages. Let’s look closely at each of these components.

1. Home Prices

The most recent Home Price Insights report by CoreLogic shows home values have increased by 19.1% from last January to this January. That was one reason affordability declined over the past year.

2. Mortgage Rates

While the current global uncertainty makes it difficult to project mortgage rates, we do know current rates are almost one full percentage point higher than they were last year. According to Freddie Mac, the average monthly rate for last February was 2.81%. This February it was 3.76%. That increase in the mortgage rate also contributes to homes being less affordable than they were last year.

3. Wages

The one big, positive component in the affordability equation is an increase in American wages. In a recent article by RealtyTrac, Peter Miller addresses that point:

“Prices are up, but what about wages? ADP reports that job holder incomes increased 5.9% last year but rose 8.0% for those who switched employers. In effect, some of the higher cost to buy a home has been offset by more cash income.”

The National Association of Realtors (NAR) also recently released information that looks at income and affordability. The NAR data provides a comparison of the current median family income versus the qualifying income for a median-priced home in each region of the country. Here’s a graph of their findings:

As the graph shows, the median family income (shown in blue on the graph) is greater than the qualifying income needed to buy a median-priced home (shown in green on the graph) in all four regions of the country. While those figures may vary in certain locations within each region, it’s important to note that, in most of the country, homes are still affordable.

So, when you think about affordability, remember that the picture includes more than just home prices and mortgage rates. When prices rise and rates rise, it does impact affordability, and experts project both of those things will climb in the months ahead. That’s why it’s less affordable to buy a home than it was over the past two years when prices and rates were lower than they are today. But wages need to be factored into affordability as well. Because wages have been rising, they’re a big reason that, while less affordable, homes are not unaffordable today.

Bottom Line

To find out more about affordability in our local area, let’s discuss where home prices are locally, what’s happening with mortgage rates, and get you in contact with a lender so you can make an informed financial decision. Remember, while less affordable, homes are not unaffordable, which still gives you an opportunity to buy today.

An Expert Advisor Will Give You the Best Advice in Today’s Market

 

Huntersville/Charlotte/Lake Norman| Carolina Living Real Estate Can Be That Trusted Advisor!

Having an experienced guide coaching you through the process of buying or selling a home is important in a normal market – but today’s market is far from normal. As a result, an expert real estate advisor isn’t just good to have by your side, they’re essential.

Today’s housing market is full of extremes. Experts project mortgage rates will continue to rise this year, and that’s driving significant demand for homes as buyers want to make their purchases before rates climb even higher. At the same time, an absence of sellers is leading to record-low housing inventory. This imbalance in supply and demand is creating bidding wars and driving home price appreciation as well as considerable gains in home equity.

These market conditions can feel overwhelming, but you don’t have to go at it alone. Having a trusted expert to coach you through the process of buying or selling a home gives you clarity and confidence through each step.

Here are just a few of the ways a real estate expert is invaluable:

Contracts – Agents help with the disclosures and contracts necessary in today’s heavily regulated environment.

Experience – In an unprecedented market, experience is crucial. Real estate professionals know the entire sales process, including how it’s changed over the past two years.

Negotiations – Your real estate advisor acts as a buffer in negotiations with all parties throughout the entire transaction and advocates for your best interests.

Education – Knowledge is power in today’s market, and your advisor will simply and effectively explain market conditions and translate what they mean for you.

Pricing – Finally, a real estate professional understands today’s real estate values when setting the price of your home or helping you make an offer to purchase one.

A real estate agent is a crucial guide through this unprecedented market, but not all agents are created equal. A true expert can carefully walk you through the whole real estate process, look out for your unique needs, and advise you on the best ways to achieve success. Finding an expert real estate advisor – not just any agent – should be your top priority when you’re ready to buy or sell a home.

What’s the key to choosing the right expert?

It starts with trust. You’ll want to know you can trust the advice they’re giving you, so you need to make sure you’re connected with a true professional. No one can provide perfect advice because it’s impossible to know exactly what’s going to happen at every turn – especially in today’s unique market. But a true professional can give you the best possible advice based on the information and situation at hand. They’ll help you make the necessary adjustments along the way, advocate for you throughout the process, and coach you on the essential knowledge you need to make confident decisions. That’s exactly what you want and deserve.

Bottom Line

It’s critical to have an expert on your side who’s well versed in navigating today’s rapidly changing market. If you’re planning to buy or sell a home this year, let’s connect so you have a real estate professional on your side to give you the best advice and guide you along the way.

Huntersville|Lake Norman|Charlotte This is not a Housing Bubble like 15 years ago!

 

4 Simple Graphs Showing Why This Is Not a Housing Bubble

A recent survey revealed that many consumers believe there’s a housing bubble beginning to form. That feeling is understandable, as year-over-year home price appreciation is still in the double digits. However, this market is very different than it was during the housing crash 15 years ago. Here are four key reasons why today is nothing like the last time.

1. Houses Are Not Unaffordable Like They Were During the Housing Boom

The affordability formula has three components: the price of the home, wages earned by the purchaser, and the mortgage rate available at the time. Conventional lending standards say a purchaser should not spend more than 28% of their gross income on their mortgage payment.

Fifteen years ago, prices were high, wages were low, and mortgage rates were over 6%. Today, prices are still high. Wages, however, have increased, and the mortgage rate, even after the recent spike, is still well below 6%. That means the average purchaser today pays less of their monthly income toward their mortgage payment than they did back then.

In the latest Affordability Report by ATTOM Data, Chief Product Officer Todd Teta addresses that exact point:

“The average wage earner can still afford the typical home across the U.S., but the financial comfort zone continues shrinking as home prices keep soaring and mortgage rates tick upward.”

Affordability isn’t as strong as it was last year, but it’s much better than it was during the boom. Here’s a chart showing that difference:

If costs were so prohibitive, how did so many homes sell during the housing boom?

2. Mortgage Standards Were Much More Relaxed During the Boom

During the housing bubble, it was much easier to get a mortgage than it is today. As an example, let’s review the number of mortgages granted to purchasers with credit scores under 620. According to credit.org, a credit score between 550-619 is considered poor. In defining those with a score below 620, they explain:

“Credit agencies consider consumers with credit delinquencies, account rejections, and little credit history as subprime borrowers due to their high credit risk.”

Buyers can still qualify for a mortgage with a credit score that low, but they’re considered riskier borrowers. Here’s a graph showing the mortgage volume issued to purchasers with a credit score less than 620 during the housing boom, and the subsequent volume in the 14 years since.

Mortgage standards are nothing like they were the last time. Purchasers that acquired a mortgage over the last decade are much more qualified. Let’s take a look at what that means going forward.

3. The Foreclosure Situation Is Nothing Like It Was During the Crash

The most obvious difference is the number of homeowners that were facing foreclosure after the housing bubble burst. The Federal Reserve issues a report showing the number of consumers with a new foreclosure notice. Here are the numbers during the crash compared to today:

There’s no doubt the 2020 and 2021 numbers are impacted by the forbearance program, which was created to help homeowners facing uncertainty during the pandemic. However, there are fewer than 800,000 homeowners left in the program today, and most of those will be able to work out a repayment plan with their banks.

Rick Sharga, Executive Vice President of RealtyTrac, explains:

“The fact that foreclosure starts declined despite hundreds of thousands of borrowers exiting the CARES Act mortgage forbearance program over the last few months is very encouraging. It suggests that the ‘forbearance equals foreclosure’ narrative was incorrect.”

Why are there so few foreclosures now? Today, homeowners are equity rich, not tapped out.

In the run-up to the housing bubble, some homeowners were using their homes as personal ATM machines. Many immediately withdrew their equity once it built up. When home values began to fall, some homeowners found themselves in a negative equity situation where the amount they owed on their mortgage was greater than the value of their home. Some of those households decided to walk away from their homes, and that led to a rash of distressed property listings (foreclosures and short sales), which sold at huge discounts, thus lowering the value of other homes in the area.

Homeowners, however, have learned their lessons. Prices have risen nicely over the last few years, leading to over 40% of homes in the country having more than 50% equity. But owners have not been tapping into it like the last time, as evidenced by the fact that national tappable equity has increased to a record $9.9 trillion. With the average home equity now standing at $300,000, what happened last time won’t happen today.

As the latest Homeowner Equity Insights report from CoreLogic explains:

“Not only have equity gains helped homeowners more seamlessly transition out of forbearance and avoid a distressed sale, but they’ve also enabled many to continue building their wealth.”

There will be nowhere near the same number of foreclosures as we saw during the crash. So, what does that mean for the housing market?

4. We Don’t Have a Surplus of Homes on the Market – We Have a Shortage

The supply of inventory needed to sustain a normal real estate market is approximately six months. Anything more than that is an overabundance and will causes prices to depreciate. Anything less than that is a shortage and will lead to continued price appreciation. As the next graph shows, there were too many homes for sale from 2007 to 2010 (many of which were short sales and foreclosures), and that caused prices to tumble. Today, there’s a shortage of inventory, which is causing the acceleration in home values to continue.

Inventory is nothing like the last time. Prices are rising because there’s a healthy demand for homeownership at the same time there’s a shortage of homes for sale.

Bottom Line

If you’re worried that we’re making the same mistakes that led to the housing crash, the graphs above show data and insights to help alleviate your concerns.