The house is bank owned.  (a foreclosure)

On the surface, it appeared to be in amazingly fantastic condition.  The appliances in the kitchen were brand new!  They still had the owners manuals hanging on them.  This is becoming a somewhat common practice.  Banks know that kitchens help to sell houses and they seem to have forged strong relationships with Whirlpool as almost every bank owned house I show these days, has brand new Whirlpool appliances!

So we made an offer, did some back and forth negotiation, and quickly came to terms on a great price.  All banks that sell foreclosed homes, insist on AS-IS clauses.  Standard practice.  You can still have inspections done and make the contract contingent upon it but don’t expect the bank to fix things….

We had an inspection and everything looked pretty good except the air handler for the HVAC system.  That appeared to be shot!  Not good…  These things are very expensive!  And no buyer would ever be able to purchase this house with an FHA loan.  (FHA loans require the house to be in almost perfect condition)

It looked like we were going to have to pull out of the deal and move on.

As a last ditch effort, I made a plea to the listing agent.  I let him know that the HVAC system required a new air handler.  My buyers would not be able to purchase it since they were going with an FHA loan.  BUT, it also meant that NO buyer could purchase the house and since it’s in the mid $150K’s it’s VERY likely that most future buyers would want to go this same route.

That puts the selling bank in an interesting position…  They could be looking at being stuck with this house for a very long time.  Disclosing the broken air handler to all future buyers and waiting for someone to purchase the house in cash as an investment….

My last ditch effort WORKED.  We were able to get the bank to front the money to replace the air handler.

While more times than not, as-is WILL mean as-is, sometimes when it all comes down to selling a house now or waiting many more months to find a new buyer, sellers can be convinced to make certain repairs.

Check it out. The helicopter shoots are INSANE.

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According to a national survey commissioned by Prudential Real Estate which revealed consumers are optimistic overall regarding the real estate market and see rising value in property, indicating that 65% of current shoppers are unaffected by the expiration of the tax credit and will continue shopping.

Read the full story here.

Equilibrium Home Price: $215,054.00

Overpriced: 21%

12-month Price Forecast: -9%

*Forbes relied on Local Market Monitor to rank each metro.

Disagree?  Read the story and decide for yourself.

But I’ve been wondering, with the thousands of short sales and foreclosures happening nationwide, how will lending institutions handle the huge number of people with badly damaged credit?  Will today’s strict lending guidelines continue, rendering all of those people untouchable and unable to buy anything for years to come?

The answer seems to be: maybe not…

Fannie Mae announced this week, that they will be relaxing their guidelines on lending to buyers who have gone through a short sale in the near past.

According to this article on Realtor.org, Fannie Mae will soon be OK with buying mortgages with borrowers who have undergone a short sale as soon as two years prior.  Previously, if a short sale experienced borrower somehow found a bank to write them a mortgage, that bank would be stuck with it for at least four years.

Fannie Mae buys a massive number of mortgages from banks every year and their guidelines for mortgage borrowers typically become the industry standard.  Now that they are relaxing their position on lending to those who have been through short sales could be the beginning of a larger “mulligan” period in american credit history.

Time will tell….

S.1057, which would stop the SC Building Code Council’s fire sprinkler mandate for new residential construction, will be considered on the floor of the Senate this week.  Unless the General Assembly acts, fire sprinklers will be required for all new residential construction starting January 1, 2011, adding significantly to the cost of housing.   Take a minute to defend your business and your industry and have your voice heard before it is too late!

Please contact your Senator and urge him to vote for S.1057 that insures that the residential fire sprinklers will not be mandated in South Carolina in 2011.  Keep the American Dream of homeownership alive for all South Carolinians.

Sincerely,

Cashion Drolet
Sr. VP of Government Affairs
SC REALTORS

We can’t protect against every hazard, but fire is a major problem.  It costs lives as well as extra insurance money every year.  By requiring sprinkler systems, we can make families (and fire fighters) in our state safer.  Simplistate urges you to encourage your legislator to vote against S.1057 so that sprinklers will become mandatory in 2011.

March 2010: Residential Real Estate Sales Up 22%; Prices Hold Steady

Preliminary data from the Charleston Trident Association of REALTORS® shows 691 homes sold at a median price of $185,000 in March. This represents a 22% increase in sales and maintenance of the median price from March 2009, when 568 homes sold at a median price of $185,000.

Year-to-date, 23% more homes sold at prices 3% higher than this time last year. Thus far in 2010, 1,670 homes sold at an average median price of $185,501. At this time last year, 1,357 homes had sold at an average median price of $180,473.

This suggests a strong beginning to the typically busy spring and summer seasons, which got off to a slow start in 2009. “The activity in the early months of 2010 is incredibly encouraging—every month, we’re seeing sustainable growth in home sales and prices are holding steady” said Jeremy Willits, 2010 CTAR President. “We didn’t have sales numbers in this range until May or June in 2009” said Willits.

Though no one is sure what the months following the expiration of the tax credit will look like, Willits concurs that the homebuyer tax credit appears to have done what it was supposed to do. “The tax credit was not intended to be a long-term initiative. It incentivized the purchase of a home, following a year of uncertainty and volatile market activity. It was designed to help stabilize the market and that’s exactly what we’ve seen it do in Charleston” said Willits.

Rising mortgage rates and the uptick in buyer activity could encourage potential buyers looking to make an investment in real estate before they are priced out of the market. Following last week’s rise in mortgage rates, from 5.03% to more than 5.20% last Wednesday, some potential buyers realize that low rates and market affordability won’t last forever. For every 1 percentage point rise in rates, 300,000 to 400,000 would-be buyers are priced out of the market in a given year, according to the National Association of REALTORS®.

There were 9,849 active listings on the market as of March 31, 2010. March represents the third consecutive month with less than 10,000 properties on the market.

FEBRUARY 2010 ADJUSTMENT

Preliminary numbers reported for February 2010 indicated 509 properties had sold at a median price of $179,900. Adjusted numbers now show that 541 properties sold at a median price of $179,755.

BERKELEY COUNTY

In March, 145 homes sold at a median price of $163,343 in Berkeley County reflecting a 6% increase in sales volume and a 1% change in median prices when compared to last March, when 137 homes sold at a median price of $165,000.

CHARLESTON COUNTY

378 residential properties changed hands in March in Charleston County, increasing by 31% when compared to March 2009’s 288 sales. Median prices have risen 9% since last year, settling at $246,000 this month.

DORCHESTER COUNTY

142 homes sold in Dorchester County in March at a median price of $148,400. Sales activity has increased by 27% when compared to March of last year, when 112 homes sold. Median prices have dipped 8% to $148,400 as compared to March 2009, when the median home price was $161,000.

Please note: “Preliminary number” indicates all sales and values for closings posted within 10 days following the close of the month. “Adjusted number” indicates the value after all sales have been posted.