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Covid-19 and its Impact on Real Estate in the Miami Valley

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During this unprecedented time, I wanted to share some of the real estate information and updates I have been receiving over the last week. If you are like many homeowners, I’m sure you have legitimate concerns about how the coronavirus pandemic is going to impact your home value and your mortgage, if you have one. I share those concerns and have been reading the best real estate information currently available, and wanted to share it with you. Obviously, this situation is fluid and rapidly changing, and as more news and information continues to come in,I will use this single post going forward to add any additional updates.

This could get lengthy so I’m going to break this information up into a few sections. First section will be help and resources. This will be where you can find updates on what mortgage lenders and the government are doing to offer respite to homeowners who are facing economic hardship during the pandemic. I will then share how real estate professionals in all aspects of the home buying and selling process are changing the way we do business in order to keep everyone protected. Finally, I will share some of the most up-to-date information about home values and what experts believe we can expect in the aftermath of this pandemic. There is no doubt we are in for some difficult months ahead and while no one knows for certain what the future holds, I think it is important to face the future with as much solid information and knowledge as we have available to us- that’s my goal. Let’s get to it.

Help and Resources

*It’s imperative for you to take action if you have been laid off. Contact your lender as soon as possible.

We recently got news of a respite for FHA borrowers. All foreclosures and evictions are being suspended for 60 days for homeowners with an FHA loan for a single-family dwelling.
From the FHFA website:

“To help borrowers who are at risk of losing their home, the Federal Housing Finance Agency (FHFA) has directed Fannie Mae and Freddie Mac (the Enterprises) to suspend foreclosures and evictions for at least 60 days due to the coronavirus national emergency. The foreclosure and eviction suspension applies to homeowners with an Enterprise-backed single-family mortgage.”

In addition, FHFA is providing mortgage forbearance for borrowers impacted by hardship due to coronavirus. Forbearance allows for a mortgage payment to be suspended for up to 12 months.
You will need to contact your mortgage provider for details, and if you have been laid off, please don’t delay in contacting your lender.
You can read the entire FHFA press release here.

The Veterans Benefits Administration is encouraging lenders to offer mortgage relief programs to VA mortgage holders. You can read their press release here. If you are a VA mortgage holder facing economic hardship, please contact your individual mortgage provider to see what programs they might offer.

If you are a USDA mortgage holder, the USDA has informed lenders of a foreclosure and eviction moratorium for all USDA Single Family Housing Guaranteed Loans Program (SFHGLP) loans for a period of 60 days, in connection with the Presidentially declared COVID-19 National Emergency, read the press release here, and contact your mortgage provider for details.

Individual lenders have begun to post their own policies and ways for consumers to contact them for assistance, this is a list of known mortgage lenders and servicers who have set up programs to help homeowners. You will need to contact your mortgage provider or mortgage servicer directly for details, and if your provider is not on this list, but you are facing hardship, please contact them anyway as this list will be evolving.

Bank of America

Chase

Truist

Servicers (those who collect the payments for investors/banks and interact with consumers) are providing information for how homebuyers can reach out for assistance, I will add to this as I find more information:
Mr. Cooper

Flagstar Bank

How the Buying and Selling Process are Changing

*As I was writing this blog post, Governor DeWine issued a Stay At Home Order for Ohio. The impact this will have on the economy is unknown right now, still, as we learned from the foreclosure crisis, it’s important to remember people are moving- people will continue to buy and sell homes, but the process of buying and selling is going to change. Real estate transactions already in progress should be able to carry on, but expect some delays and changes in how certain processes get done. A few things you can expect- you are going to see increased use of virtual tours and 3-D tours, and tools like Zoom. If you do physically show up at a home, you are likely to travel in your own car, you might be asked to wear footies, you might be asked not to touch surfaces like light switches and doorknobs, your agent might be using gloves or wipes to open doors… It’s going to be different and we are all doing what we can to continue to protect the public as much as possible. Here in Dayton, we were still accustomed to Round Table closings where the buyers and sellers all sit across the table from each other and paperwork gets passed from one person to the other. This is changing. Title companies are putting safe closing protocols into place, and the federal government is expected to pass legislation allowing for remote online notarizations nationwide, and lenders are taking applications via Zoom. Please keep in mind, Realtors and people working in the real estate industry are problem solvers. If you have any unique concerns or needs, please discuss with your Realtor. We are here to help and believe me, we get special needs requests on a regular basis, so don’t hesitate to discuss your concerns.

This is probably a good time to mention another safety concern- electronic fraud. This has been going on for some time, but we know the scope and techniques are rapidly increasing. This is important- never trust wiring instructions sent via email or even voicemail. Cyber criminals are hacking email accounts and voicemail and sending emails and messages with fake wiring instructions. These emails, texts, and voicemails are convincing and sophisticated. What you must do is to always independently confirm wiring instructions in person or via a telephone call to a *trusted and verified* phone number. Never wire money without double-checking that the wiring instructions are correct.

 

Home Values

There’s no getting around this- we are living in an unprecedented time and we do not know for certain what the future holds. That being said, there are people who are looking at data from the past to recognize trends and there is some information we can use to try to determine what we are headed for. One of the best things we can do to ease our fears is to educate ourselves with research, facts, and data. Digging into past experiences by reviewing historical trends and understanding the peaks and valleys of what’s come before us is one of the many ways we can confidently evaluate any situation. With concerns of a global recession on everyone’s minds today, it’s important to take an objective look at what has transpired over the years and how the housing market has successfully weathered these storms.

 

1. The Market Today Is Vastly Different from 2008

We all remember 2008. This is not 2008. Today’s market conditions are far from the time when housing was a key factor that triggered a recession. From easy-to-access mortgages to skyrocketing home price appreciation, a surplus of inventory, excessive equity-tapping, and more – we’re not where we were 12 years ago. None of those factors are in play today. Rest assured, housing is not a catalyst that could spiral us back to that time or place.

According to Danielle Hale, Chief Economist at Realtor.com, if there is a recession:

“It will be different than the Great Recession. Things unraveled pretty quickly, and then the recovery was pretty slow. I would expect this to be milder. There’s no dysfunction in the banking system, we don’t have many households who are overleveraged with their mortgage payments and are potentially in trouble.”

In addition, the Goldman Sachs GDP Forecast released this week indicates that although there is no growth anticipated immediately, gains are forecasted heading into the second half of this year and getting even stronger in early 2021.Three Reasons Why This Is Not a Housing Crisis | MyKCMBoth of these expert sources indicate this is a momentary event in time, not a collapse of the financial industry. It is a drop that will rebound quickly, a stark difference to the crash of 2008 that failed to get back to a sense of normal for almost four years. Although it poses plenty of near-term financial challenges, a potential recession this year is not a repeat of the long-term housing market crash we remember all too well.

2. A Recession Does Not Equal a Housing Crisis

Next, take a look at the past five recessions in U.S. history. Home values actually appreciated in three of them. It is true that they sank by almost 20% during the last recession, but as we’ve identified above, 2008 presented different circumstances. In the four previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6% (see below):Three Reasons Why This Is Not a Housing Crisis | MyKCM

3. We Can Be Confident About What We Know

Concerns about the global impact COVID-19 will have on the economy are real. And they’re scary, as the health and wellness of our friends, families, and loved ones are high on everyone’s emotional radar.

According to Bloomberg,

“Several economists made clear that the extent of the economic wreckage will depend on factors such as how long the virus lasts, whether governments will loosen fiscal policy enough and can markets avoid freezing up.”

That said, we can be confident that, while we don’t know the exact impact the virus will have on the housing market, we do know that housing isn’t the driver.

The reasons we move – marriage, children, job changes, retirement, etc. – are steadfast parts of life. As noted in a recent piece in the New York Times, “Everyone needs someplace to live.” That won’t change.

Bottom Line

Concerns about a recession are real, but housing isn’t the driver. And while there seems to be a lot of should-be and probably here, I heard an interesting comparison of what we faced in 2008 to what we face today and that is to think of 2008 as an economic tornado. We Daytonians know from first hand experience- a tornado comes in and destroys everything, and in the aftermath, everything needs to be rebuilt. That was the economic devastation we faced in 2008. What this pandemic is creating is more like an economic snowstorm. Things have shut down, we are certainly in for some difficult times, but hopefully once the snowstorm has passed, we can shovel out rather than rebuild everything. How deep will this recession go? How long will it last? Who exactly will be affected and how? No one knows for certain and we are only just beginning this process, but I can tell you from working as a Realtor during the 2008 recession- people still need and want to buy and sell homes, and there will be an end to this.

This is all a very fluid situation but we will get through this. I hope the information I have posted here is useful to you and your loved ones, and I will continue to update this post as things change, and if you have questions about what it means for your family’s home buying or selling plans, let’s connect to discuss your needs.

Stay healthy, stay strong, stay together!

 

5 Tips for Making a Competitive Offer in the Dayton Real Estate Market

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It’s 2019, it must be a Seller’s Market, right?
Well in Dayton, that depends on the location and the price point.

Photo by Lea Böhm on Unsplash

Upscale homes can linger on the market or may need to reduce their price in order to sell, so if you are buying a home in that market, you can probably take your time. But in the more affordable price range, it’s definitely a Seller’s Market. How do you make a great offer in a hot Seller’s Market? Below are 5 steps provided by Freddie Mac and me, to help buyers make offers, along with some additional information for your consideration:

1. Get Pre-approved.
“Don’t even think of submitting an offer without a strong pre-approval letter.”
Getting pre-approved will not only show home-sellers that you are serious about buying, but it will also allow you to make your offer with confidence because you’ll know that you have already been approved for a mortgage in that amount.

2. Determine Your Price
“You’ve found the perfect home and you’re ready to buy. Now what? Your Realtor will be by your side, helping you determine an offer price that is fair.”
Based on your agent’s experience and key considerations (like similar homes recently sold in the same neighborhood or the condition of the house and what you can afford), your agent will help you to determine the offer that you are going to present.

3. Submit an Offer
“Once you’ve determined your price, your agent will draw up an offer, or purchase agreement, to submit to the seller’s real estate agent. This offer will include the purchase price and terms and conditions of the purchase.”

Talk with your agent to find out if there are any ways in which you can make your offer stand out in this competitive market! A licensed real estate agent who is active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer. It’s not always possible, but I try to reach out to the listing agent to see if they can share any specific needs the seller might have. Perhaps they need a flexible closing date, or they would prefer occupancy after closing. If we can find out those details prior to submitting an offer, it can help. Buyers sometimes me about the effectiveness of a heart-felt letter to the sellers. I have seen that work, but I have also seen it not make a difference at all. Most sellers are more concerned with their bottom line and your ability to secure a loan and follow through on the purchase, than your emotional feelings towards their home, and a letter may not address either of those issues, and in fact it could put you in a weaker negotiating place if you overshare. Discuss with your Realtor to make sure it’s a smart move in your situation.

4. Negotiate the Offer
“Oftentimes, the seller will counter the offer, typically asking for a higher purchase price or to adjust the closing date. In these cases, the seller’s agent will submit a counteroffer to your agent, detailing their desired changes, at this time, you can either accept the offer or decide if you want to counter. Each time changes are made through a counteroffer, you or the seller have the option to accept, reject or counter it again. The contract is considered final when both parties sign the written offer.”

If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspector uncovers undisclosed problems or issues, you can typically negotiate repairs that may need to be made with the seller or possibly cancel the contract altogether.

5. Act Fast
“The inventory of homes listed for sale has remained well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes.”

Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as quickly as possible. This is a bigger problem in certain markets than others. For example, as I was writing this, I calculated the absorption rate for the zip code of 45420. The absorption rate is a calculation of how quickly it would take the current For Sale inventory to sell, if no other homes came on the market. We use the absorption rate to determine if we are currently in a strong buyers or sellers market, with six months considered a normal, or balanced market. For the zip code of 45420, in a price range of $85k-$145k, the absorption rate is 2.7 months! Good news if you are a seller, but that’s hyper-competitive for buyers. Don’t delay putting in an offer on a home you love!

Bottom Line
Whether buying your first home or your fifth, having a local, full-time Realtor on your side is your best bet in making sure the process goes smoothly.

 

10 Steps to Buying a Home

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While buying a home in Dayton Ohio is a process that tends to follow a predictable series of steps, some steps can be complex and may need more oversight to see them through successfully. Think of a real estate agent as a trail guide. They’ve been down this path many times before, they know where the tricky parts are and how to proactively navigate through those brambles. Having an experienced professional (that would be me!) guiding the process can help get your transaction completed smoothly.  Let’s take a quick overview of each step:

Step 1- Find a Realtor You Can Trust
First things first- Trust! You have to find a Realtor who is going to really listen to your needs and who YOU feel comfortable with. When interviewing Realtors pay attention to what and how they are communicating with you. Is this transaction about YOUR needs and wants, or is it about a commission check for them? Of course we work to pay our bills just like you do, but YOUR needs come first. You should have no doubt that your Realtor is working in YOUR best interest, not her own. At our first meeting, we will sit down and discuss YOUR needs and wants, and I will briefly explain the buying process and my fiduciary duty to you.
A further discussion about Step 1, can be found here.

Step 2- Explore Your Financial Options & Get Pre-Approved
Can you afford to buy a home right now? And if so, how much home can you afford? How much home is in your financial comfort zone. You see, you might be able to afford a home, but maybe not in the neighborhoods you really want (I can tell you about some financial options if that is the case). Or financing a home is not the issue, but how big a mortgage do you really want? If you enjoy spending money on something other than a mortgage, I completely understand and won’t push you to buy more home than you are comfortable with. All of these questions need to be taken into consideration in order for you to be happy with your home. I don’t want you to happy with your home for the first month you live there, I want you to be happy for as long as you live there! Over the years I have worked with a number of lenders I can introduce you to, each one tends to specialize in a particular type or style of loan, that way, you can tailor your financing to help you meet YOUR individual needs and find a loan you can actually live with.
For more details about financing a home, check out the blog post, here.

Step 3- Exploring Neighborhoods
This is important. You buy a home, but your neighbors come with it. Don’t let other people tell you where to live- including a Realtor. Do your own due diligence when searching out neighborhoods. Here’s my tip- find out when the middle school lets out and park near a bus stop and listen and watch the middle school kids as they walk home. You will learn a lot about the neighborhood by observing middle schoolers- think about it. That age has no filter on their mouths. Stop by the neighborhood on a Saturday and talk to the neighbors- don’t be shy- neighbors are a wealth of information not only about what is happening in the neighborhood, but about any home you happen to be interested in. Utilize this excellent source of first-hand knowledge as most neighbors love to talk and welcome in potential new neighbors.
Find more detailed information about finding neighborhoods, here.

Step 4- Finding a Home, AKA The Fun Part
This is where the planning and research you’ve done in the first 3 steps pays off. Now we get in my comfy car and head out to explore the homes and indulge in some dreaming. I will set you up in the MLS so only the homes that meet your needs get sent directly to your inbox. We can discuss the pros and cons of each home. I will look for potential flaws- not to scare you away, but to make you aware of issues you might have to address down the road. Nearly every flaw that is found either by me, by you, or by an inspector, has a solution but the question is always- are you comfortable with it? So we will look at floor plans and how they might be a good fit for your lifestyle, but we will also try to find out if there is water in the basement or duct work, if the windows need replaced and are there HOA rules and regs that restrict the type of window replacement? Stuff like that comes up in almost every home. Remember, I’m the trail guide. I’m here to help you find solutions.
This step is discussed in more detail, here.

Step 5- Making an Offer
Not nearly as stressful as it may seem, I will give you stats on homes in the area, as much of the history of the home as we can find, and anything else that might help you determine not only what the seller might accept, but what you will be comfortable with, because sometimes those are two separate things, and if we can get to a meeting of the minds, then we have an accepted contract. The contract itself is one used by the Dayton Area Board of Realtors, approved by their cadre of legal experts, and used by agents in the general area. In brief, it describes the home, the offer you are making, and the timeline to be expected. This is a legally binding contract so it’s important that you understand it. We will take some time with this step because I will go over it with you  clause-by-clause, discussing the ramifications of each item in the contract and answering your questions and concerns.
Details about Making an Offer can be found here.It's gonna be alright

Step 6- Negotiation Period
Stay calm. Most offers are not accepted without some negotiating between buyer and seller so we enter into a negotiation period where any number of things might need to be tweaked in order to make all parties happy. The typically negotiated items are price, seller-paid closing costs, and a closing date, but don’t be surprised if things like appliances, occupancy dates, and earnest money get changed. Everything is negotiable, so don’t panic, stay calm, and trust your Realtor (see Step 1!).
Negotiating an offer can be stressful, but knowing what to expect will help. Find out how to navigate the negotiation period, here.

Step 7- Inspection Period and Transaction Coordination Period
A lot happens behind the scenes during this time frame- typically about 2 weeks total. This is the time when you are contractually able to make any inspections you want to have made. Usually buyers start with whole house and wood destroying insect inspections and see where that leads them. We also need to get title work started and the lender begins working on getting the loan approved, appraisals ordered. Don’t panic, you have hired professionals, we do this work for a living so your Realtor will make contact with your lender and the title company you’ve chosen and we will get to work coordinating all those items. Your job at this point is to hire the inspector ( I can give you a list of the best in the area), go to the inspection to learn more about your home, cooperate with your lender to provide any additional documentation they might need as they work through the underwriting process, and to secure home owners insurance.
Inspections and loans and titles, oh my! Take a look at Step 7, here.

Step 8- Repair Period
Depending on what the purchase contract says, once you get the results of the home inspections, if there are any habitability issues that were discovered, you can decide whether you will ask the seller to make repairs. Like Step 5 when you made the offer, the repair period is usually done with some negotiating involved. If an agreement cannot be reached, again, depending on what your contract says, you have an option to terminate the contract. At this point, you’ve likely spent money on inspections and other fees so it’s not a small thing to walk away from the contract. One of the reasons I look for flaws when we initially see the home is that while I am certainly not an inspector, there can be potential problems that you might want to know about before you make an offer.  This is also the time any title issues would be discovered.
Get the details on negotiating repairs, here.

Step 9- Clear to Close
At this point, all contract contingencies have been removed and the underwriter has okayed the loan, we have a clean title, and we are clear to close. You would schedule utilities to be transferred into your name, we schedule a 24 walk-through inspection to check that the home is in the condition it was when you wrote the offer, and we schedule the closing.
Almost there- Check out more about Step 9.

Step 10- The Closing
In Dayton, we often hold “round table” closings where all the parties still down at the same time and sign documents to transfer title, the final step to home ownership. By systematically and carefully working through the previous steps, we’ve successfully navigated the process and you are now ready to create memories in your new home. Congratulations- you did it!
What happens at the closing?

Let’s Talk About TRID

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TRIDWe know from the real estate crash of 2008 that there were a lot of people who bought homes without a thorough understanding of their mortgage. We know that some lenders were not forthcoming about disclosing the details of mortgages to their clients. All that has created new lending regulations in which lenders are now required to disclose details, make certain that clients understand their loans as best they can, and have documentation that shows clients were given details of the loan requirements and penalties. That’s all well and good. What this means for you as a home buyer or seller, is that starting in October, loans might take longer to process than before, and you might need extra time to close the loan than real estate professionals are typically accustomed to. The changes are known in the industry as TILA RESPA Integrated Disclosure, but your lender and Realtor are likely to call this, TRID.

Real estate contracts have a closing date written into them. This date is negotiable, is typically based on time needed for buyers and sellers to move, and on the ability of the buyer to obtain financing. In the past, as a rule of thumb for the Dayton area, barring any moving deadlines, sale contingencies, or specific directives from a lender, we were able to plan on a cash purchase taking about 2 weeks, a conventional loan 30-45 days, and a standard FHA loan about 45-60 days. More complicated loans do exist and we would work closely with the lender to try to determine a closing date.  Once that closing date has been agreed to, to change it requires more negotiating and new signatures of all parties. It can get very difficult to renegotiate this date once it has been agreed to so we need to be as accurate as possible about this from the beginning. Having a knowledgable and communicative lender is crucial to getting solid closing information from the start, and with TRID changes, having a good lender is even more critical.

What TRID changes is how the loan and all costs associated with it, are disclosed, how the lender complies with those new rules, and the timeline for final delivery of the loan details to the buyer. This timeline can be fluid, creating difficulty with moving dates, same-day closings, and other logistic problems, and that’s why Realtors and lenders are advising building in extra time for closing. Borrowers will have three days after receipt of the Closing Disclosure to review the information, any changes that need to be made will start a new three day period. This could get tricky and that’s why you need a lender who will be proactive, and communicative with you and your agent from the very beginning. Check with your Realtor to make sure they have a closing cushion in the purchase contract.  Some Realtors, myself included, are using an addendum that speaks directly to TRID regulations and discloses that government regulations must be met and any lender-required extensions will be agreed to, but in the end, this will compel all of us to work more closely than we might have in the past, which is great for buyers and sellers, and having the loan details spelled out to you so can be as informed about it as possible is something that should have been done all along.

Originally posted at www.TheBrickRanch.com

(Illustration by NicName, used with permission, text added by author.)

 

New condos on the block: The McCormick

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More residential options are coming to downtown Dayton, which is good news as more people living downtown should bring more business, more activity, more stuff! This time it’s the old Park Place apartments on E 1st St that are being converted into urban loft-style condos, and the building will be called, appropriatelyMcCormickenough, The McCormick.

Baseball lovers, Dayton Dragons fans take note- 5 units have views of the 5/3 Field, but because the building is in a relatively open part of the city, all units have unrestricted urban views. The McCormick lofts are listed by Steve Seboldt at Sibcy Cline (937-224-1234). Steve is very familiar with all the condo developments in downtown Dayton and tells me one of the features he most enjoys about the McCormick is the location. He spent one evening watching a game from the unit on the fourth floor. “It’s like you are right in the stadium,” he said.

Steve hails from Chicago and has an appreciation for urban loft living. He describes the condos as “laid out as true lofts with exposed beams, bare brick exterior walls and open duct work. Unique feature of these lofts include sliding “barn doors” especially in the front bed room which is next to the open living area.  This feature, in addition to being a neat “architectural”  loft feature, allows the front bedroom to be kind of an extension of the living area since most of these sliding doors have wider openings than normal doors.  This allows for a flexibility in living space where the front bedroom can be an office, a tv room or a second bedroom.” The100_8234floorplans I saw had tons of character with a nice blend of industrial and warmth- gorgeous exposed brick, fantastic glass shelving, warm wood finishes. The large windows let in lots of natural light as well.

Interior finishes can be upgraded, but each unit as is has bamboo flooring in all main living areas, carpet in bedrooms, and durable man-made flooring in baths and kitchen area.  Kitchens have stainless appliances.  To make the unit even more flexible, each kitchen has a island/breakfast counter that is on casters so it can be re-positioned throughout the condo for more flexibility when entertaining. That’s a great touch, and with the “barn door” sliders, you have more option for living and entertaining in each unit.

Everyone wants to know about parking and security. Seboldt says “Parking is fenced, and each unit gets 2 assigned spots.  The parking lot will be restriped and an architectural fence will replace current fence.” There is also an electronic card key access and a keypad protected elevator.

So. Really, what’s the neighborhood like? Downtown Dayton is your neighborhood so it’s baseball, performing arts, 2nd St Public Market, Riverscape, the new Water Street development. It’s a great location to be close to everything. Floor plans and prices will vary from unit to unit depending on number of bedrooms and100_8229upgrades, but Steve says “Pricing is way less than you would expect to pay for this type loft with this location.” Currently, pricing is listed as $56,000- $187,000, which make these a great option for anyone who is looking not only for a primary home, but also a 2nd home, and for empty-nesters looking to move to downtown.

You can find out more information at the Sibcy Cline website, or talk to your Realtor about seeing one today!

Historic South Park Neighborhood Open House

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BradfordLiving in a historic district is not like living anywhere else, and living in Historic South Park is no exception. This community is active, vibrant, neighborly, and very community-oriented. Curious to know more? This Sunday, November 3, 2013, from 2-4 p.m., Historic South Park is hosting a Neighborhood Open House.

Ten different homes are going to be open to visitors, all of them are currently listed for sale. A wide variety of homes will be represented during this event, everything from small, affordable bungalows, to large showcase homes and everything in between.

But it’s not all Realtors. There will be South Park neighbors co-hosting at a few of the Open Houses to give you an opportunity to speak directly and candidly with folks who live in the neighborhood. PerrineThose are the people who can talk at length about all the activities, groups, support available in the South Park neighborhood, as well as the pros and cons of living in, and caring for, these special historic homes.

Ghostlight Coffee is where your tour begins- stop in for maps, flyers, printouts, and of course, some awesome coffee, and then spend the afternoon in this lovely community. It’s Historic Real Estate Porn for you addicts, and some serious home shopping for anyone looking to buy a home.

The list of homes on the tour, and the listing agents and brokerages (maps and details are available at Ghostlight Coffee, 1201 Wayne Ave):

  • 217 Perrine – Michael Royce, Royce & Associates – Listing Link
  • 3 Bradford – Kamela Kordick, Kamela & Co – Listing Link
  • 604 Oak – Kamela Kordick, Kamela & Co  – Listing Link
  • 219 Adams – Sean Clark, The Home Group – Listing Link
  • 14 Johnson- Sean Clark, The Home Group
  • 15 Johnson-Private Seller
  • 28 Bonner-Private Owner
  • 208 Bonner- Holly DiFlora, The Home Group – Listing Link
  • 121 James- Holly DiFlora, The Home Group – Listing Link
  • 559 Wyoming- Holly DiFlora, The Home Group – Listing Link

BonnerThis event is free and open to the public, so please, come out and enjoy the dynamic and picturesque neighborhood that is Historic South Park!

11-2-2013, Update:
Be sure to stop by Blommel Park while you’re in the neighborhood. From 2-4pm the South Park social committee will be grilling up hot dogs and will be available to answer any questions you might have about the neighborhood.

 

Dayton, Foreclosures, and Caveat Emptor!

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Dayton is the second-best metro area in the nation for good deals on foreclosures. You probably saw that news and for some buyers that will be good news, but only if you are prepared.

Sandalview 033Foreclosures are a different beast than buying a home via a traditional home seller so if you are looking at these homes, here are a few tips to make your Dayton home-buying experience more productive, your real estate agent can give you details.

Foreclosures are popular right now and that means you need to plan ahead. These homes can sell in a matter of days, and often sell with multiple offers involved. If you are going to look for foreclosures, know the neighborhood you want, have your finances in order, and let your Realtor know your plans. She can set you, and/or herself, up in the Dayton Area Board of Realtors MLS system to receive email alerts when any property that meets your criteria comes on the market. You will know within hours of it hitting the MLS that a home is available. Be prepared to move quickly on the best homes and discuss with your Realtor ahead of time how you are going to craft on offer. Keep in mind that the best homes end up in a multiple offer situation in which case you will be asked for a “highest and best” offer, so have some idea of what your highest and best offer would be so you can respond to the bank in a timely manner.

One thing to keep in mind is that the seller- the bank- is very much like the Honey Badger in that Bank Don’t Care! This is strictly a business transaction, it’s all about the money, but by clearly understanding that the bank is concerned 100_6085with their bottom line, you can make them an offer they can’t refuse.  How do you do that? Glad you asked!

Cash is king. If you can pay cash for a home your offer stands a better chance of being accepted. Many transactions fall apart because in the end the buyer can’t get financed for some reason or the other and financing a home typically takes 30 days or more, whereas most cash sales can close within two weeks. Banks know this and if two offers come in exactly the same except one is cash and one is financed, they are probably going to take the cash offer- wouldn’t you? If you are financing a home, make sure you have your finances in order before you submit a bid, and that your loan will work with foreclosed homes. Many loans require extensive inspections and foreclosed homes may not pass. Discuss these details with your lender and Realtor ahead of time so you all know what type of home you can purchase.

One of the things you might choose to do is to remove inspection contingencies. Not a good choice for the novice or inexperienced home buyer, but when you make an offer on a home, you have the option to get inspections done. Inspections are a very good idea, highly recommended, but if you are familiar with construction and understand what you looking at, you might choose to forego inspections. Many foreclosures will have all utilities turned off so you will not get a chance to test plumbing or electric, furnace and air conditioning. It’s crucial to be knowledgeable under these circumstances. If you do have inspections, you may have to pay to have the utilities turned on so be prepared.

Not asking a seller to pay your closing costs is a common way to boost the strength of your offer as well, as is being able to close as soon as possible.

What can you expect from a foreclosed home? Deferred maintenance. If someone cannot pay their mortgage, they are typically not in a position to make repairs on the home. Also, these homes could be left vacant for years before they are on the market. They may have had pipes burst, they may have had animals loose in them, the copper might be stripped, appliances will probably not come with the home, the furnace and air conditioner might be missing. Broken windows are not unusual, and if it has sat vacant for awhile, the water meter might have been removed by the county and someone has to pay to get it replaced- likely, that someone is you.

Cosmetically, foreclosures tend to fall into two categories, either the home needs work- carpet, paint, new cabinets and fixtures, or, the home had some 100_6088serious issues and the bank has paid for cheap fixes and cover-ups. If it looks too good to be true, it probably is, and there is always something unexpected that needs repair so make sure you have cash on hand for that.

Be prepared to sign reams of paperwork and disclosures, be prepared to act quickly, make sure you and your Realtor are signing everything that needs to be signed, and are submitting the offer in the manner requested- very crucial. If you have a doubt about either the process or the home, back away, think about it, and if necessary, move on. Know your limits, and share those with your Realtor so you do not get caught up in an unnecessary bidding war. It’s a good idea to keep looking at homes while you wait for the bank to respond to your offer. That can help you keep things in perspective, and you can quickly move on to another property if you lose the bid.

Foreclosures are not for everyone. They require cash reserves, knowledge, patience, flexibility, and preparation. If you are thinking at all about purchasing a foreclosure, discuss the pros and cons with your Realtor, ask if she might show you a few so you get an idea of what you are in for, and most importantly, be absolutely honest with yourself about your skills, experience, knowledge, and finances.  Dayton is a great place to buy foreclosures, but only if you know what you are doing.

 

 

Eco-Rehabarama 2012

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If you missed the Eco-Rehabarama in Huber Heights, never fear. I took some great pictures of the homes and want to share them to inspire the Midcentury Modest home owners among us. These homes were a joint effort between CountyCorp’s The Housing Source, and the Home Builders Association of Dayton (HBA) and showcase not only the possibilities for Dayton’s older housing stock but also the creative minds of the builders who were involved in this tour.

Note: The Housing Source continues to renovate and sell homes throughout some of the first-tier suburbs of Dayton and their website is the best source for information about the Neighborhood Stabilization Program and homes that are for sale at any given time. In addition, The Housing Source allows local Realtors the opportunity to host open houses at some of their homes, so check their facebook page for updates. 

Photo credits: T Lussier

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National Open House Weekend 2012

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For at least a few years now, the National Board of REALTORS has held a National Open House Weekend. REALTORS across the country are encouraged to hold their listings open on the same day or weekend, typically during the height of home shopping season. This year, National Open House Weekend is April 28-29, but our local custom in Dayton is to hold Open Houses on Sunday, so for Dayton, today is the day.

Some people love Open Houses, it’s a bit of a hobby for them. Some people would love Open Houses if only they didn’t have REALTORS attached to them. Well, can’t do anything about that. We are there to show off the home and answer questions about the home. Last year in this space I wrote a post called 4 Quick and Dirty Tips for Making the Most of an Open House and that advice still holds up today:

1)Don’t try to avoid the Realtor. We do need a record of who is visiting the home, it’s something we are obligated to do for the sellers.  You wouldn’t want random folks walking in and wondering around your home, would you? No one does, and an Open House doesn’t change that. We know there are a plethora of reasons why people visit Open Houses- we are okay with that, but realize you are a guest and will be expected to sign in with at least a name.

2) About the reasons you are there? Whatever they are, it’s fine. The best thing to do, as always, just be honest about why you are there: You are a neighbor and always wanted to see the home; or you are looking for decorating tips; or you are looking for a home for yourself or a family member- whatever your reason, it’s okay for you to admit it up front. The Realtor will appreciate the honesty, and then she can be helpful. If you are there for decorating tips, the Realtor can find out where items were purchased, what the color the master bedroom walls are painted, and who does the landscaping.

3) If you are working with another REALTOR, tell the hosting REALTOR upfront. Realtors have cooperating agreements with each other, which means that even if you are working with another Realtor, we will be happy to give you details about the property, because ultimately we are there to sell the home. Just remember that hosting Realtors work for the seller, so be careful about what you say- it could be shared with sellers.

4) If you are not currently working with a Realtor, you can use Open Houses to interview them. When an Open House is busy, you may not get the time to talk in private or indepth, but you will certainly get a good indication of whether or not you want to have that Realtor help you with such an important transaction.

Go have fun today at an Open House! Enjoy yourself and do a little dreaming. A complete list of homes in the Dayton area that are participating in National Open House Day, or any given Sunday, can be found via the Dayton Area Board of REALTORS Open House search link.

How to use an FHA 203k renovation loan to Eco-Rehabarama your own Dayton home

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When you head off to the Eco-Rehabarama in May (details here), you might go to find your next home- the homes will be for sale- but seeing as there are 10 homes on the tour and they are expecting a couple hundred guests, obviously not everyone who visits is going to buy one of those homes. Many guests will be looking for inspiration for either their own home, or, information on how to turn a classic brick ranch into a stunning dream home. You will find it all at the Eco-Rehabarama, but today I wanted to share some information that might help you finance not only a home, but the renovations as well.

This can be done through a relatively unknown loan called an FHA 203k loan. It’s basically mortgage and renovation

financing rolled into a single loan and a single closing. I spoke with Mortgage Banker, Jerry Stewart, of Evolve Bank & Trust in Dayton, 937.528.6881, to find out how home buyers in Dayton can benefit from using the FHA 203k renovation loan. Here’s what Jerry said:

There are several things that make these renovation loans so great and often they are the only option for home buyers.

By renovating an existing property you are really choosing location over property specifications and we all know the three rules of real estate, location, location, location. So you can now buy that distressed or obsolete home in that desired location.

Sometimes buyers want to live in a specific community, but the price of a move-in condition home make that area off limits to them. The buyer may not have the cash on hand, or skills to do renovations on a distressed home themselves.
The FHA 203k loan can help with that. This is going to be important factor for older cities like Dayton and the first-tier or inner ring suburbs, which have a tremendous stock of aging homes and distressed neighborhoods. What better way to get those homes updated and the neighborhood values stabilized than by renovating existing housing stock, like the homes you will see at Eco-Rehabarama. The photos used in this article are before-and-afters from the same home, pulled from the Dayton Area Board of Realtors. While the 203k loan wasn’t used to finance these updates, this is an example of the type of work the loan could cover. Jerry explains another way home values are improved through this loan:

The other factor is value. When bank foreclosures or REOs are placed for sale, if they do not meet the minimum home standards that conventional and government loans require, they can only be bought with cash. This severely limits the amount of potential buyers. Lowering the number of buyers in turn lowers the eventual sales price. This gives you a great advantage to come in and buy these homes at a substantial discount and finance the needed updates.

Think about the ramifications for older neighborhoods: this can increase the number of owner occupants and decrease the number of investors, absentee owners, and negligent landlords that can devastate communities. But a buyer’s financial stability is also increased when the renovations are financed through a renovation loan. Jerry explains it like this:

With upgrading the major mechanicals you provide a certain level of certainty for years to come. The majority of home buyers in our area are doing so for the first time. Finding a home is the first part of home ownership but staying in the home is the most difficult part. Why not renovate the major mechanicals at purchase, and make the process that much more enjoyable, not to mention the tax credits.

A number of the short sales and foreclosures we see are being sold in mid-remodel, in other words, the buyers simply ran out of money or their financial situation changed and they are unable to finish needed upgrades or cosmetic improvements to the home. Sadly, it’s back on the market and it’s distressed, and the neighborhood is suffering as well. The FHA 203k loan can help get these homes mechanically sound at the time of purchase so the families do not have to come up with the money for those repairs later.

Ultimately though, for anyone who is looking for a renovation loan, this is a labor of love, with all the benefits of creating the home you’ve always wanted. Jerry talked about the emotional benefits of making a house, a home:

By doing it this way you make it yours. You pick the kitchen, the carpet, the square footage, not the previous owner. In 15 years of originating these loans the majority of projects I’ve done didn’t require renovations but the owners wanted to make it their own at the time of purchase.

So your home doesn’t have to show a need for renovations- it does not have to be distressed, you can simply finance your wish list using this loan as well.

Meanwhile, over the past few years the big box home improvement stores have made it easier for buyers to get the 203k renovations done with a minimum amount of hassle. As an example, you can see Lowe’s REBuildUSA program here for some general information about the process.

This loan is not going to be for everyone. It takes patience, organizational skills, and tenacity, but if you are looking for a way to finance your home and the renovations you’ve dreamed of, talk to your own lender, or Jerry at Evolve, to see if you qualify for the FHA 203k loan.