Charlotte Real Estate Blog

Charlotte, NC was not supposed to be strongly affected by the housing downturn.  Everybody in Charlotte was told that we would be one of the last cities to feel the housing slump and would be one of the first cities to stabilize.  This has not played out theway that everyone expected. 

Worries about Charlotte's real estate market did not really scare the public until Wachovia was bought by the San Francisco based Wells Fargo.  Charlotte is known as a banking city.  The scare ooccurred again when there was talk of Bank of America being moved to New York.  Now that we have a new CEO located in Charlotte this has been forgotten.  The city has always attracted a large amount of young college graduates and has always had the jobs to support the growth.  Since Wachovia was bought by Wells Fargo it does not feel that this is the case.  Only recently has Charlotte been able to again attract the young/educated crowd because of new companies moving to the area because of Charlotte's affordability. 

Over the last several months the city has not grown as fast as it was projected.  Uptown real estate has felt the worst of the market.  The condo prices Uptown have dropped dramatically and there are still a lot of short sales.  In 2007 there were multiple sky-rises on the way up and there was talk of many more.  The downtown area was suppose to be getting a lot of retail on the streets to help support the living style of Uptown residents.  One of the condo buildings (The Catalyst) was unable to contract enough of the units so the building has turned into a rental high rise.  Another project (The Park at Caldwell and Third) failed and has been bought by a group of investors.  They hope to turn the building into a hotel/condo building.  The VUE is the other large building that looks to be almost complete.  The builders stopped building for about a month because they had not received money from the investors.  The building is under construction again and they hope to close several of these units in September 2010.  The VUE will be the tallest condo building in Charlotte. 

The Uptown condo market is projected to be the the area of Charlotte that appreciates the most over the next 10 years.  This is probably because this is the area that has taken the hardest hit and because the Charlotte Chamber of Commerce is continuing to lobby hard for Uptown retail. 

The housing market has seen declining prices over the past 2 years.  These prices are continuing to drop but it feels that we are finally starting to stabilize.  Buyers are still wanting to present low offers and they expect to have most of their closing costs covered.  With interest rates on the way up I expect to see some move up buyers dropping the prices of their houses so that they can lock in a low rate on their next purchase. 

High unemployment in Charlotte is the number one cause of the slow recovery.  Once the unemployment rate drops I expect the Charlotte housing market to be on the way up.

There are some important deadlines that everyone needs to be aware of. 

If you are planning on buying a house and you are a first time home buyer....you need to be under contract by April 30th, 2010 and you must close on the property and have the deed recorded by June 30th, 2010 if you want to receive your $8,000 first time home buyer tax credit.  (Remember...if you purchase a house that is less than $80,000 then you only get a tax credit in the amount of 10% of the purchase price)

To qualify for the tax credit your adjusted gross income must be $125,000 or less if you are single...and $225,000 if you are a joint filer.

If you are a move up buyer and want to receive your $6,500 tax credit then the deadline dates remain the same.  You must be under contract by April 30th, 2010 and must close by June 30th, 2010.  You must have lived in your current house for 5 of the last 8 years and the next house that you purchase cannot be priced over $800,000.

Also, here is a new one I bet you haven't heard about.  If you are going to be getting an FHA loan...starting April 4th, 2010 you can only receive 3% of the purchase price from the seller to use towards closing costs and pre-paids.  This will be more of an issue for people buying houses that are priced at or below $150,000. 

Also starting on April 4th, 2010...if you are receiving an FHA loan your upfront mortgage insurance premium will be increasing from 1.75% to 2.25%. 

You can get an FHA loan if your loan amount is $303,750 or less and then you are only required to have a down payment of 3.5%.

These deadlines are coming fast and if you think you want to buy a house for the first time or if you are a move up buyer then you should really start to make a move.  Interest rates are going up and I do not believe that the government will ever offer these buyer incentives again in the future. 

I read a quote in a news article a few months ago that I believe stands true in this real estate market.......If you are renting and don't buy a house in this market, you are either broke or stupid!  It is as simple as that.

If you are interested in buying new construction then you should be aware of what the builder/developer will expect. 

Be prepared to use the builder's contract and forms.  The contract will be much longer than the normal North Carlina Offer to Purchase and the contract will also be pro-builder.  The contracts do not protect the buyer as much and they also set stipulations that at times seem ridiculous.  It is important to work with well reputable builders so that you can trust that they will honor your rights as a buyer and to insure that your earnest money will be available if you have a legit reason to back out of the deal.

Expect to be told how much earnest money that you will be depositing.  Usually real estate agents will tell their buyer clients that they need to put down 1% of the purchase price as earnest money.  Often the builders will require a set amount...much higher than 1%....and you may have to sign that this money will be used to start more new construction in the subdivision. 

Be prepared to be pressured into using the builder's preferred lender.  Many builders will offer a lot of closing costs to attract the buyer but they make this money back by putting a slightly higher interest rate on your loan.  When the builder sells the mortgage on the open market they are probably making more than the amount of closing costs that they offered you...so make sure your agent pressures them to not only increase the amount of closing costs offered but to also argue about the interest rate and they will usually drop this to an "almost competitive" rate. 

Ask the builder's preferred lender to provide you with an estimated closing cost sheet prior to signing the contract.  Often they throw in bogus charges that your agent should argue to have removed. 

Expect the builder to complete all necessary repairs.  You are buying new construction and you have the right to expect it to be perfect when you close on the property.

If you are buying a house that is not already built, be sure that you get a list of the upgrades and a price sheet for these.  You need to have every upgrade that you expect to be in the house in writing.  When you view a community's model home, the house is decked out with all the possible moldings and upgrades and the price they are offering on their to be built houses do not include these upgrades.

New Listing ~ 13804 Mallard Lake Road, Charlotte, NC 28262

$280,000

I just listed a great 4 bedroom 2.5 bath house in the Mallard Lake subdivision.  This house was built by McCar Homes in 2006.  The house has between 3,000 and 3,600 square feet.  The tax records list the heated living area at 3,459 square feet.  The house has a 2 car garage. 

The exterior construction is stone and vinyl...easy maintenance.  The back yard has a retaining wall and an extended patio.  The owners have also added a lot of landscaping to this house that you will not find in the rest of the subdivision. 

The house has an open foyer with the formal living room and the formal dining room at the enterance.  The downstairs also includes an office, breakfast room, half bath, laundry room, kitchen and great room that is open to the second floor.  The owners have added tinted windows to the great room to help keep the heat out. 

Upstairs features 4 bedrooms, including the master, and 2 full baths.  The house shows like a model and is move in ready.  There are 2 staircases in this house.

The house is prewired for surround sound and has an alarm system in place with an extra keypad in the master bedroom.  The master bathroom has dual vanities.

Lot 4 Hawkstone Dr. in the Chatsworth Subdivision....Waxhaw, NC

I just listed a lot for $75,000 that is just over 0.75 acres and is located in an estate style subdivision, Chatsworth.  This really is an incredible deal.  The lots in this subdivision have never been listed under $100,000.  This lot does not back up to a main road and was previously listed at $119,000. 

The house across the street is listed for $729,999 and there are two others on the street listed at $659,990 and $885,000.

The lot has water and sewer and has a beautiful house directly next door.

Lot 4 Hawkstone Dr. in Chatsworth needs a new owner and a new house....check it out!

New information on the first time home buyer tax credit.

CNNMoney.com released an article that is causing many people to be confused.  The article talks about how first time home buyers will no longer be able to e-file their taxes if they want to receive the tax credit.  This article is misleading to many. 

To read the article click here.

I spoke with several CPA's today and now I understand the article.  If you have already closed on your house prior to filing your taxes then you will not be able to e-file your taxes. The reason for this is that there was a lot of fraud.  People were buying houses and claiming them as their first home purchase when in fact they owned investment properties or were not even claiming their purchase as a primary residence.  Now the IRS is requiring that a separate form 5405 be mailed to them along with a copy of the closing report and a copy of your drivers license to prove that this is your first home purchase and to insure that you are using it as your primary residence. 

If you are planning on filing your taxes and THEN closing your house before June 30th (remember you must be under contract by April 30th) then you can still e-file.  You will e-file your taxes and will have your tax return to show to your lender.  Once you close on your house you will need to amend your taxes and will then have to mail the IRS a copy of the closing report and a copy of your drivers license.  It will be 1-5 months before you receive your tax credit check. 

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Short Sale Negotiating Process of 2009

I am sure that you have heard the horror stories of short sales and how they can seem like a never ending process.  While they are definitely more tricky than a normal sale they can even be confusing to other agents who have dealt this short sales in the past.  It seems that every short sale transaction is different and that every bank has a different procedure to move the file closer to a closing date. 

This has been my experience with short sales in 2009:

My first short sale transaction took place in January of 2009.  I represented the buyer who found a house that was new construction where the builder was going under.  The list price had already been approved by the bank and the transaction was very fast and smooth.  Since, the banks have been swarmed with short sales and foreclosures and it seems that the process has changed a lot....at least with the banks I have been dealing with.

Since my first short sale closing I have obtained several short sale listings.  2009 was a learning experience for all agents in the short sale category but while many agents steer away from them I am looking to obtain more.  I would be lying if I said that short sales are easy but they are another piece of the pie that all agents should be chasing. 

When you take a listing as a short sale you should start by notifying your lender that you will be attempting to sale the property for less than you owe.  The lender will give you a list of information to send to them.  This usually includes a hardship letter explaining your loss of income and your reason for being unable to continuing to pay your mortgage, 2 years of tax returns, income statements, tax bills, pay stubs, bank statements and anything else the banks think may be useful in getting a full picture of your financial status.  Once the banks have received this information, they will keep it until you receive an offer.  Some banks will give you an idea of what the property should be listed for in order for them to do a short sale but many will just allow the agent to list the property to try to obtain multiple offers.    If it is several months before you receive an offer the bank will ask for updated financial information.

So now that you send the offer to the bank, what's next?

It could take days or months for the file to be looked at depending on the bank.  Some banks are definitely harder to work with than others.  Once they start to work on the file they will either order a broker price opinion or a full appraisal of the property.  The bank will want to have a pretty good indication of the current market value before they will allow the property to close.  Again this process can take several days or several weeks. 

The banks I have dealt with will only look at the highest and best offer.  The other offers are still there incase the buyer of the best offer decides the walk.  The bank will ask the sellers to sign the highest and best offer but this does not form a contract because the MLS should state that the closing of the property is contingent upon 3rd party bank approval.  Until the bank approves the offer and approves the short sale, a contract is not formed between the bank/sellers and the buyers. 

Once everything has been approved, the buyers will begin obtaining financing and will perform all necessary inspections and the property will move towards closing like a normal sale.

I hope this helped somebody understand what is going on with short sales.

New Listing | Avenue Condominiums Unit 3202 | $399,999

210 N. Church St. Unit 3202 Charlotte, NC 28202

I just received a new listing...and this one came off of my website and this is a short sale.  This unit has 2 bedrooms, 2 bathrooms, 2 parking spaces and a storage area.  The unit has hardwood floors in the entry halls, kitchen and living room.  The kitchen has all stainless steel appliances and shows great. 

The amenities in the Avenue Condominiums are hard to beat.  They offer a concierge service, fitness room, theatre room, resort-like pool, rec. room with pool table, outdoor grilling and fireplaces.  The environment is very hip and is a great place to meet some new friends that live in the building.  The outside fireplaces have couches and flat screen televisions where groups will hang out and watch a game or movie. 

The unit is on a corner and all of the exterior walls are glass.  It has amazing views of the city and is priced very aggressively. 

Park South Station Information

Take Park Road south of the city and take a right onto Archdale just south of SouthPark.  Park South Station will be 0.7 miles on your left and you will enter the community at the bottom of this neighborhood map. 

The units that are marked with red marker are sold but as you can see the community has a long ways to go.  This is a Ryan Homes community and because of their business plan, the builders will not build the units until they are under contract. 

This property is the old location of Celenese and because of this the community is located on a Brownsfield.  A Brownsfield area is where a commercial business used to be and has contaminated the soil and now the area has been cleaned up and is being used as residential space.  Ryan Homes has done a great job of cleaning and contaminated soil and they continue to test the ground after every hard rain. 

What does this mean for a buyer?

• Since this is a Brownsfield area you will only have to pay a portion of your property taxes for the first several years
• You will not be using city water and will have a higher water bill than normal

I sent a mass email to the 100+ agents in my office last week about the stigma that comes with a Brownsfield...they agreed that it is definitely something that needs to be disclosed and explained to the buyer but it doesn't seem to have a strong negative impact on buyers decision. 

Ryan Homes is offering competitive prices for new townhomes and they are also able to throw in several upgrades to make your new place just the way you want it. 

All of their units come with:

• 10-Year Warranty
• Energy efficient gas heat and central air conditioning
• 50 gallon quick recovery water heater
• 9 foot ceilings on the main floor
• Oak railings with primed spindles
• GE appliances
• Luxury owner's bath with soaking tub....some floor plans have a separate shower
• Cultured marble vanity tops
• 42 inch Maple Recessed cabinets with crown molding

These items come standard but Ryan Homes can take you to their design center and you can customize your house with the colors and upgrades that you like.  Make sure your agent asks for these upgrades under the price that has already been quoted to you.  New construction subdivisions are more likely to throw in upgrades than to lower the list price because they want to keep the home values at a certain level. 

Park South Station amenities: 

• Gated Community
• Very large pool
• Club house
• Fitness center

Park South Station Home Owners Assocation fees = $195/month