For Sale by Owner: Off MLS Listing is Risky Business

Since 2013, there has been an increase in sellers pre-selling properties and listing them off the Multiple Listing Services(MLS). Core Logic reported that in 2013, 53% of real estate transactions conducted in the U.S. were not listed on the MLS. Most sellers do not hold a real estate license, and are not permitted to use the MLS - the standard listing portal for a licensed real estate agent. Although buyer’s agents are willing to work with For Sale by Owner (FSBO) listings, they are not permitted to give the seller any advice or access to marketing. 

Sellers who want to list a FSBO may be losing out on tens of thousands of dollars in real market value on a property, especially if they list properties without an up-to-date appraisal or current market research. Often a seller will list a FSBO based on the sale price of a neighbor’s home, which may or may not be the best choice for a comparable property. A local real estate agent lists properties continuously in their regional sales area and is best suited to offer a market comparison in the neighborhoods he or she covers. Remember, tax assessments, though readily available, are not the best tool for gauging a property’s true market value at any give point in time.

One nuance about FSBO sales that should give sellers pause is the fact that an experienced buyer’s agent may hold the upper hand in a FSBO real estate transaction. Why? The seller may not be familiar with state laws and fiduciary codes and/or ramifications of contract issues that crop up during negotiations. Even with a lawyer creating a real estate contract on a property, the final outcome of a For Sale By Owner (FSBO) real estate sale may be held up over a variety of issues. Experienced REALTORS know how to circumvent these roadblocks quickly and keep a property transaction on track.

FSBO is Not Equal to a REALTOR’s Advertising Potential
Working with a professional REALTOR is worth the commission under these circumstances. A FSBO has a limited opportunity for marketing, becoming more heavily reliant upon web real estate portal sites such as Zillow.com. With a seasoned agent, advertising penetration for a property is far greater. For example, I list my properties for sale in Williamsburg, Virginia on four MLS websites. This gives my sellers and extensive area of coverage so that other agents can see the listing and buyers on the MLS can also see it. My MLS listings are also republished on Realtor.com, which is owned by the National Association of Realtors and is also a reputable website in the industry. My broker, Coldwell Banker Traditions, also has a listing mechanism on its locally based website, where my client properties receive excellent visibility. Not all REALTORS list properties this widely on the Web, so check with individual real estate agents and ask them for specific information about advertising provided for client listings through MLS and other venues on the Web.

There are other disadvantages to listing properties without an agent. If the owner happens to miss a showing with a potential buyer, he or she may miss the opportunity to sell a property altogether. For real estate sales in my territory, Southeastern Virginia, an owner is not permitted to use legal forms created by the Virginia Association for Realtors (VAR), unless they are licensed.   Real estate forms are formally copyrighted by the VAR and sanctioned for use only by membership. This puts the seller at another distinct disadvantage in the transaction. Having to create legal forms anew is not only time consuming, it may increase costs for an attorney.

            Besides some of the more obvious advantages to listing with a licensed real estate agent, there is also a common misconception that the use of a real estate lawyer will save money versus paying agents’ commissions. The seller still has to pay the buyers agent fees (which is variable by state and type of real estate transaction). All FSBO sales contracts must be created and finalized with a lawyer. The sales process involves having the buyer read the contract and make changes. The lawyer revises the contract appropriately and it is presented at closing. Lawyers in Virginia charge far more to create an original contract (in my experience) than the commission on the seller’s side - in most instances. Sellers who want to go it alone should seriously consider the lawyer’s fees may be more expensive, and are largely unpredictable, depending upon the number of legal forms needed, length of negotiations and additional contract requirements.
          
            Sellers need to forgo the FSBO and get smart in a real estate market that is definitely on the move in many regions of the U.S. Pricing is trending higher in the 2014 market and inventories are low in many markets. So sellers need to have expert advice on pricing real estate at current market value now - more than ever. In addition to potential loss of profits from home sale, the seller may easily run up against legal and contract issues that may not be quickly resolved. Worse yet, these matters may be settled too late to adhere to the time limits on certain loans such as FHA and USDA. If the seller does not know what they’re doing and timeframes are not heeded, this can cause the buyer to forfeit a loan. In turn, the property loses a good buyer and valuable time on the market.

Be wise and don’t engage in risky business – listing a property off the MLS or without a licensed agent. It is best to have the representation of a licensed agent for a variety of reasons. The main reasons are: the seller will have expert advice, will most likely sell the property sooner and the property will command a fair market price. Say no to FSBO. Instead, seek out a capable real estate professional in your region for piece of mind.     

Visit: http://www.voncannonrealestate.com/articles/for-sale-by-owner-off-mls-listing-is-risky-business.php

Single Female Homebuyers Numbers Increase in Today's Real Estate Market

Recent statistics show single women homebuyers outpace male homebuyers. They are currently capturing nearly 20% of the home buying market compared to approximately 10% for single men (National Association of Realtors). Single women make up 20% of this real estate market- a remarkable increase compared to the mid 1980s, when they were only 10% of the buying market.

Why have so many women decided to enter the home market? There has always been a home market for widowed and divorced women. This type of female homeowner has increased by the numbers of professional women who are making strides in careers and are perfectly capable of purchasing a home. Some may want to make an investment that eventually pays off as a resale or rental unit, while others want a comfortable, secure place to live that suits their lifestyle choice.

Yet when women purchase homes, the process they go through is much different from men. Many men are focused on the amount of space a home has, or the extra features. Men are inclined to want something immediately, and begin the process of paying for it. Women tend to conduct more research and deliberate on different choices. For women, making an emotional connection to the real estate agent and the home are important considerations in the whole process. Women and men definitely have differing approaches to home purchases.

Who is the Female Homebuyer?

What are the characteristics of a female homebuyer shopping for a home? There are actually many different groups of female homebuyers. These include: divorced, widowed, single mother, never married and more. For many professional women, an investment in a home purchase is simply a matter of getting tired of renting and wanting to modify their own space and/or to make a solid investment for the future.

There are also more female real estate investors in the current market then in the mid 1980s. They want to purchase homes that need renovations because the investment will pay off after the rehab is complete in a resale (also known as flipping). Or, the property will be renovated, then placed on the open rental market to produce a monthly income.

Single mothers are looking for properties with enough indoor/outdoor space so their children can play - as well as safe playgrounds nearby. Single mothers want secure neighborhoods with other families as neighbors, so their children can socialize and play with their age groups.

Divorced and widowed women and women who have never married without children may be searching for the complete opposite in a home and a neighborhood. Their ideal dwelling may be a quiet, secure place in a neighborhood without many children.

There are, of course, other types of women homebuyers - some who defy categories. All have the same interests at heart: owning a sanctuary for themselves and their loved ones and having a piece of the American dream.

What Do Women Want in a Home?

When it comes to being very specific about a property, the desires of the women homebuyer are paramount. Often women will not settle for anything less than what they want. Some of these particular aspects of homes include: large closet spaces, jetted bathtubs, a secure neighborhood, a separate laundry room, a spacious kitchen and more. Homes that are move in ready, requiring very little renovation, are often preferable to women homebuyers.

What Types of Properties Do Women Tend to Purchase?

Female homebuyers with careers often purchase townhouses and condominiums, because they have limited time outside of work and these types of property investments require low maintenance. Some women will opt for a single-family home in a secure place with a manageable amount of space.

Many single females on the market today are first time homebuyers. So, real estate agents will need to step them through the initial process of home financing and home purchase.

One thing is for certain. As women continue to make achievements in the professional world, the number of homebuyers will increase in numbers, too. And, women's preferences in housing will begin to shape the features of the actual properties that are sold. For now, one in five purchases are made by single women. This should be plenty of impetus for builders and renovation specialists to cater to women's taste.

Renovation loans: FHA 203(k), Fannie's Homestyle Renovation Mortgage & Conventional Rehab Loans

By Elaine VonCannon, ABR, SRES, Associate Broker, Notary, Team Leader, Property Manager, Award Winning Agent

With a plethora of homes still sold as short sales and foreclosures, renovation loans are increasingly popular with homebuyers. Many family dwellings are being redesigned for additional family members these days. As rental housing costs rise, families decide to live together and save money. There are multiple situations that could apply: boomerang children, aging parents, or divorced with grandchildren - the family home is in need of expansion or renovation to ensure everyone fits comfortably.

Rehab loans such as the FHA 203(k) program or the Fannie Mae HomeStyle Renovation Mortgage are the perfect answer for some first time homebuyers, too. If the borrower qualifies for the 203(k) program, the buyer can borrow based on what the house is expected to be worth after the home rehab is completed.

I will summarize some common home renovation loans available to consumers and some of the requirements for each. Interest rates are subject to vary for each loan detailed, so be sure to check with a qualified loan officer first, before embarking on a home purchase or refinance.

Renovation loans are effective for consumers and banks and mortgage companies because they offer the necessary resources to remove foreclosures from the market and redo them. Plus, these loans provide first time homebuyers, (who have historically been 30-40% of a healthy real estate market), the opportunity to renovate before moving in.

FHA 203(k) Rehab Loan

FHA insured home renovation loans are more popular now then ever before, because resources for renovations are greatly needed. A streamline 203(k) loan includes less than $35,000 in renovations. For homebuyers needing over $35,000 in rehab work, a full 203(k) is necessary.

To qualify for the FHA 203(k) loan, the borrower must agree to hire a real estate consultant to assess the construction plan and sign off on each phase. The project must be completed in six months, with five draws (or payments to contractors) allowed. A list of approved property renovations is included with the loan. Many borrowers feel this loan is too complicated – or the list of renovations too restricted for their projects. But the interest rate on FHA loans is low enough to make it worthwhile.

If interested in a FHA 203 (k) loan, find a mortgage broker with experience in this type of rehab loan to complete the transaction. "FHA loans are typically available for owner occupied residences. These loans are government insured and have a more expensive mortgage insurance rate (PMI), with a 1.75% up front payment and a monthly payment of 1.35%, compared to other loan products," says Jeff Hurd, Mortgage Banker with Fidelity Bank Mortgage in Newport News, Virginia. "With conventional rehab loans, the consumer has the option to pay all of the PMI up front, monthly or have the lender pay it (LPMI)," added Hurd.

Fannie Mae's HomeStyle Renovation Mortgage

When comparing the Fannie Mae HomeStyle loan to the 203 (k), Hurd says the HomeStyle loan product offers more flexibility with repairs and renovations and in the types of homes purchased. "The Fannie Mae HomeStyle Loan offers a wider scope of renovation projects, and can be utilized on a second home and an investment property as well as a primary residence," noted Hurd.

Other advantages of the Fannie Mae HomeStyle Renovation Mortgage include less money down then conventional rehab loans (a minimum of 5%) and less cost for the mortgage insurance. "Monthly mortgage insurance payments are reduced with higher down payments and/or a good credit score above 680. The conventional Homestyle will typically present a PMI pricing advantage over FHA," says Jeff Hurd. With Fannie Mae's HomeStyle Renovation Mortgage, home purchases and improvements can be combined into one loan for virtually any property - and it doesn't have to be Fannie Mae owned. The repairs or renovations must be permanently affixed to the structure and add value to the property. Lenders have to be pre-approved to sell this product, so make certain to ask the loan officer if he or she is participating in this home finance program.

Rehab Loans – the Time is Now

Hurd says now is a great time to purchase a home with a rehab loan. "There are so many houses that may be in distress. Whether the house is bank owned, or it's a foreclosure or short sale, or a homeowner is upside down and doesn't want to put the money into a property to fix it up - there are homes to choose from. Right now homebuyers have a good opportunity to buy a house for a great price and renovate it with the financing. These rehab loan products make it easier to buy a house and complete home rehab projects at the same time, before the move in date." Chances are excellent that a consumer can purchase a property, make the necessary renovations and walk out of the transaction with equity in the home. Hurd says, "There is a market of savvy consumers ready to acquire these houses now."

The housing market has changed tremendously over the last five to seven years. Because there are still vacant properties available in this real estate market, rehab loans are a means of obtaining these properties in need of repair. Homebuyers now can expand their choices of homes to live in because they can remodel to suit their needs. Real estate investors can purchase, rehab and rent or resell the property.

Rehab loans are an excellent stimulus for the real estate market and a great way for homebuyers to purchase what they want without having to worry about liquidating cash investments or having tens of thousands of dollars in addition to a mortgage to fund home renovations.

Frank Dodd Act: How it Impacts Procuring a Mortgage

By Elaine VonCannon, ABR, SRES, Associate Broker, Notary, Team Leader, Property Manager, Award Winning Agent

The Dodd Frank Law is going into full effect on January 10, 2014 and it will definitely affect the way homebuyers obtain financing for home purchases. It will have a direct impact the back offices of banks and mortgage brokers, by imposing more compliance protocols. According to Rachel Alexander, columnist for Townhall.com “All loan originators must now be qualified, licensed, registered, and issued a unique identifier.” Alexandar predicts that under these conditions, some mortgage companies will be going out of business.

Though the law is intended to further protect the consumer from banking debacles such as the recent mortgage and real estate meltdown of 2008 – it also has an undesired effect. Some elements of Dodd-Frank Law inhibit many potential homebuyers from obtaining a mortgage for a desired property. As creditors are well aware, there are many professionals and families still in recovery from the recession. This means that borrowers with secure jobs that lost a home in foreclosure or short sale and have not yet attained a high enough credit rating will be left out of the home buying arena. Homebuyers need to check with their lender for credit score requirements that are currently being used to procure a mortgage. Different types of loans have different requirements.

For those who are lucky enough to have secured employment since the recession began, most creditors are looking at stable employment in these positions for a minimum of 2-3 years to qualify for mortgages.

Positive effects of the law for consumers are not to be overlooked. The Dodd-Frank law eliminates the rules of mortgages past - which tied the origination fees to the dollar value of the loan. The Law puts a cap on the amount of money a loan originator can charge for a loan, and eliminates other extraneous bank fees as well. In the beginning, the Dodd-Frank law will take diminish mortgage companies’ bottom line. It is presumed these additional costs for loan origination will be handed down to the consumer, eventually.

Dodd-Frank is creating a real estate market that is top heavy with investors who, since 2009, represent one third of all real estate sales. Cash purchases on properties are not only popular with investors, but with individual homebuyers as well, who want to avoid the mortgage banking qualification process.

Instead of protecting the consumer, many of the restrictions put into place have put a stranglehold on the mortgage lending process for many Americans. Here’s a summary of mortgage lending qualifications that stymie homebuyers:

1. Down payments of 3-20% are required now depending on the loan program. The only 100% financing available is from the USDA and VA loans.
2. Stable income is established. Three years of income tax forms must be submitted, along with current W-2s.
3. The cap on debt to income ratio is 43%.
4. Homebuyers in most cases must also pay for closing costs, another financial hurdle that affects the timeframe of purchasing a home.

Investors Benefit from Dodd-Frank

Real estate investors are heavily represented in the current market. Many have liquid assets at their disposal and want to put them to work in real estate. However, the home vacancy rate is still hovering at 10%, indicating there is an abundance of inventory and not enough homebuyers to offset this. Investors realize there are more families and individuals on the rental market, so the market for the purchase of rental homes, townhouses, condominiums and multi-unit complexes has picked up and in some markets, new construction of rental units is on the rise.

Real estate investors are advised to take advantage of this market and examine real estate portfolios for properties that have reached full depreciation (12 years in most cases). If a property is fully depreciated – it’s time to purchase a new investment property and start the depreciation process anew. Investors should also identify a seasoned property manager to make certain once the home is acquired it is occupied by qualified tenants and maintained.

Learn more about real estate investment properties that are a great deal in your area, call 757-288-4685 or visit:http://www.voncannonrealestate.com.

International Luxury Real Estate Purchasing and Selling

Elaine VonCannon proudly bears the Coldwell Banker Previews International designation, a title she has earned over the past 13 years as a buyers agent and real estate listing agent specializing in luxury homes for sale in Virginia.  In 2012, VonCannon became an Associate Broker for Coldwell Banker Traditions in Williamsburg, Virginia, providing her VIP clients with far more expertise than the average REALTOR.

With well over a decade in experience at selling distinguished homes, Elaine VonCannon can market prestigious real estate effectively, and reach qualified buyers. When representing the buyer, assessing the actual quality of a luxury home is an important skill. She pays special attention to the property’s architectural, structural and aesthetic characteristics, in addition to the features of the landscape and exterior of the property.  

Estate Homes in Virginia

VonCannon has successfully completed the sale and purchase of numerous estate properties that are well-appointed, prestigious residences offering privacy and the comforts a luxury buyer expects.   Situated just two to three hours south of Washington D.C. and close to the Northeast corridor, luxury real estate properties in Virginia are easily accessible to major metropolitan areas. These estate homes are often located in the stunning waterfront areas in the Chesapeake Bay region and Virginia’s countryside.   

Purchasing Luxury Homes and Real Estate

Coldwell Banker International Previews is a program designed for distinguished buyers searching for mansions, estate homes, horse farms, waterfront homes, historic homes or other types of ‘one of a kind’ properties.   Elaine VonCannon’s service to her clients includes confidentiality, discernment and respect.   She is known for exceeding her client’s expectations and negotiating the best possible price and contract on luxury real estate properties.     

Selling Estate Homes and Other Types of Luxury Real Estate

VonCannon and her team provide global marketing services for sellers in the luxury home market by listing exceptional estate homes for sale on her premiere website, EstatesInVirginia.  In addition to her websites, VonCannon places luxury home and real estate listings in Coldwell Banker’s CBSREC Buyer’s Guide and website -- geared directly toward the international real estate market. Luxury properties listed with VonCannon Real Estate display the Coldwell Banker Previews ‘for sale’ sign and provide a Previews information sheet outlining the unique, upscale highlights of the property.  

In today’s real estate market, it is essential to choose a real estate professional who is willing to work diligently to protect the interests of the VIP client.  The VonCannon Real Estate team brings a wealth of experience in the Virginia real estate market and reaches international audiences, too. Work with Elaine VonCannon and you will access her expansive networks, global connections, marketing expertise and resources to buy or sell a magnificent residence unlike any other.      

To find luxury real estate in Virginia, visit http://www.voncannonrealestate.com or http://www.estatesinvirginia.com.   

Virginia Real Estate Professional Earns Broker License and Coldwell Banker Previews Designation

(Williamsburg, VA)   Elaine VonCannon is now an Associate Broker for Coldwell Banker Traditions in Williamsburg, VA.  She recently obtained her broker license from the Virginia Department of Professional and Occupational Regulation after successfully completing several educational modules, including Virginia Real Estate Law and Appraisal. In addition to obtaining her Virginia Broker License, Ms. VonCannon is an Associated Buyers Representative (ABR) and Senior Real Estate Specialist (SRES) and a seasoned property manager. She has assisted her clients in buying and selling residential and commercial real estate in Virginia for 13 years.  

Elaine VonCannon has two websites where Virginia real estate listings can be viewed online, VonCannonRealEstate.com and EstatesInVirginia.com. 

Coldwell Banker International named her a Coldwell Banker Previews Specialist this year, enabling her to showcase some of the most prestigious luxury real estate in Virginia to affluent buyers worldwide. 

“Elaine VonCannon is a real estate professional who understands what it takes to be an industry leader and is committed to her profession,” says Sam Mayo, associate broker and director of business development for Coldwell Banker Traditions.  “She recently added the titles of Associate Broker and Previews Specialist to her list of accomplishments, and we are very proud to have Elaine as part of our team,” he added.

Elaine VonCannon and John Starke, a financial advisor in Richmond, Virginia, hold joint real estate and investment seminars at churches, civic originations and for the general public.  Topics include:  1031 tax free exchanges, first time home buyers, senior buyers, investment properties and Delaware Statuary Trust. Individuals learn how to take a deeper look at real estate investment strategies, re-examine them and execute new ideas for maximum profit. 

Mayo also noted VonCannon, “Blends her real estate success and business knowledge with a true desire to help her customers and clients, and it doesn’t get much better than that.  Elaine is to be commended for becoming a broker as well as earning her distinction as a luxury homes specialist.” 

Elaine’s radio shows and televisions interviews and syndicated articles on real estate topics are easily accessible on her websites.  Home buyers can sign up for a free home 

Master Planned Communities versus Retirement Communities: A Comparison

In the year 2012 and beyond, retirees who are 50+ are seeking a certain type of lifestyle. Retired adults are not just seeking a home in Virginia, North Carolina, South Carolina, Florida or Arizona, where there is a warmer climate most of the year and property taxes are lower than Northern states. For many, full enjoyment of retirement includes continued good health. Excellent health is dependent upon activity: physical, social and intellectual.

Retirement Communities are a Lifestyle Choice for Those With Health Issues
In the recent past, retirement communities have been a popular choice for those in their 60s, 70s, and 80s -- because many offer easy transitions into assisted living and skilled care, should the health of one or both partners fall into decline. This option is still popular and a wise choice for many – especially those without long-term care insurance or children nearby who have time and space to tend to their parents’ health.

Master Planned Communities are a Choice for Many Who Retire Early
Plenty of professionals are finding themselves retired at an earlier age than 65. Adults aged 50+ are either retiring early by choice or because organizations offer them sweet financial deals with an early out. For many in this category, and even some well into their 60s and 70s who remain active, the most desirable lifestyle is an active retirement in an elegant, well-appointed home in surroundings which make it easy to engage in physical and social activities.

Many have been postponing retirement due to uncertain economic times. Some are being told to retire early, as organizations and companies cut back. With recovery from the recession a reality retirement is already on the increase and so is the popularity of living in a master planned community.

Those Who Enter Master Planned Communities Retain Equity in Their Homes
One major advantage in selecting a master planned community over a retirement community is that the homeowner continues to retain equity in a property they have spent a lifetime financing. A home in a master planned community is purchased through a REALTOR and a mortgage or deed of ownership is obtained. Monthly or annual fees usually apply for lawn maintenance, use of golf course, fitness area, clubhouse and other facilities, and additional usage fees may also be added.

Retirement Communities Often Require Large Up-Front Sums to Enter
In most retirement communities, the homeowner must first sell their home in order to meet the financial qualifications to enter the community. A large sum of anywhere from $150,000 and up, is required, and is not usually refunded upon death. The individual must pay the retirement community additional monthly fees for dining, health care, access to fitness facilities and other services. This monthly fee is usually set at one rate, and if health declines, the person may enter assisted living or skilled nursing care. Retirees who have lost their spouse, or whose children live out of state or country, often select a retirement community over a master planned community to ensure they have health care, transportation, and other services, when it becomes necessary.

Master Planned Communities in Williamsburg, Virginia
In Williamsburg, Virginia, there are some excellent master planned communities. Two examples include: Colonial Heritage and Ford’s Colony. These are gated golf communities where luxury homes may be purchased with yard care included, access to restaurants on site, contemporary fitness centers with a full calendar of activities, walking paths that wind through wooded and natural areas, and more. There may be age restrictions for residents of the community (usually 50 or 55+ are only allowed to reside there) and houses can be expensive -- ranging from $250,000-500,000 or more.

Many adults who conclude their professional careers find master planned communities to be their retirement destination of choice. Others see retirement communities as a wiser option, especially if they are aging with health issues. Whatever the choice is for living in retirement – individuals and couples will find the perfect match for their own lifestyle.

Visit VonCannon Real Estate or Estates in Virginia to view homes for sale in master planned communities in Williamsburg, VA.