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What is happening to Interest Rates?

by Cynthia LaChapelle

 

Interest rates have been rising all year. This has affected your home buying power. The higher the rate, the less home you can afford for the exact same payment. In other words, the same-priced home costs you more per month. For more information on buying power, go to  For Buyers/Questions.

Example:  A $425,000 conventional loan at  3.95%  equals  $2016.78  PI (Principal and Interest)

                                     The exact same loan at    4.54% equals  $2163.53 PI  (Principal and Interest)

                                      $146.75 more per month.  (Not including tax, homeowner's insurance,  etc.)

Interest rates show no signs of stopping or reversing. In fact, the Federal Reserve raised interest rates on Wednesday. Chairman Jerome Powell said that two more increases were on the way this year. (Mortgage rates fluctuate based on many factors not just the Fed rate.)  See Rate Table at bottom.

One help in purchasing power is that the caps on Fannie Mae/Conventional Mortgages and FHA/HUD mortgages have increased for this year. This allows you to purchase more home and/or need less down payment.

Loan Limits for 2018

            HUD                                         Conventional

  • Wake $318,550                      $453,100
  • Orange  $379,500                    $453,100
  • Durham  $379,500                 $453,100        
  • Johnston  $318,550               $453,100
  • Chatham  $379,500               $453,100

 

2018 Interest Rate Chart

 

Data for this Date Range

 

June 7, 2018

4.54%

May 31, 2018

4.56%

May 24, 2018

4.66%

May 17, 2018

4.61%

May 10, 2018

4.55%

May 3, 2018

4.55%

April 26, 2018

4.58%

April 19, 2018

4.47%

April 12, 2018

4.42%

April 5, 2018

4.40%

March 29, 2018

4.44%

March 22, 2018

4.45%

March 15, 2018

4.44%

March 8, 2018

4.46%

March 1, 2018

4.43%

Feb. 22, 2018

4.40%

Feb. 15, 2018

4.38%

Feb. 8, 2018

4.32%

Feb. 1, 2018

4.22%

Jan. 25, 2018

4.15%

Jan. 18, 2018

4.04%

Jan. 11, 2018

3.99%

Jan. 4, 2018

3.95%

 

All information contained is deemed accurate but not guaranteed. Reader should conduct their own due diligence and not rely on these figures and calculations. Need a Loan Analysis?

Beware the "Buy Your House Quick and Easy" Trap - Part 1

by Cynthia LaChapelle

Mr. Tan had received about 20 mail pieces before he finally called the phone number.  Someone seemed to want his rental property very much. 

  •          

  •           I Want to Buy Your House.  

  •           Sell with No Commission or Hassles. 

  •            I'll Buy Your House AS IS.  

 

These are some of the letters and post cards. It sounded like just what he needed  to cash out of the house he had bought in the 1980s for his parents. He originally went under contract in December to sell for $209,000, which seemed like a great price considering it needed work.  That was also a good bit above the tax value. The investor making the offer was with Citylink, a national company, which gave him assurance that they had the money and would close quickly as promised. But they did not. Actually, he soon saw his house posted for sale in the Multiple Listing Service (MLS) by an unfamiliar realtor for $224,000. Mr. Tan was surprised, because he was told that Citylink was buying the home. 

He contacted the original investor for answers, and the listing disappeared from the MLS. It "expired" after only 11 days on the market. (If listings are withdrawn, paperwork signed by the property owner must be filed with the MLS, but a listing can expire without ever submitting anything -even the original document - to MLS.) 

Then he told Mr. Tan that Citylink had decided not to buy the house. He said that he was very sorry and annoyed at the company that he purported to work for, so he was going to leave Citylink and try to help Mr. Tan under the name of his own company.  But he wouldn't be able to buy the house himself, because he didn't have the financial resources that the big company had.  

The investor put Mr. Tan's house under a new contract for sale at $175,000. Mr. Tan agreed to a $34,000 price drop. The financial noose was tightening. Since he had agreed to sell his house for a very attractive $209,000 with no fees or commissions, he had moved out his tenants and his mother. His house was no longer producing income, and he had to pay rent for his mother's apartment. 

The justification for the much lower price was that the company had hired an inspection which showing that the house needed a lot of work. This condition was obvious from the beginning, but now it was the pretext for lowering the price drastically. Mr. Tan was willing to do it, because he was now financially committed to selling the house. He had a new monthly burden, but he really had no idea what had already been done to the public records to force his sale without his knowledge and how far this would go.  

Read part 2 for more of the story 

A House, A House, my kingdom for a house...

by Cynthia LaChapelle

Want to buy a single family house in this area? How many bidding wars have you been on the losing side of trying to get an average home of an average price? Why is this happening, and when will it end?

The big story in our current market is how hot the market really is. Prices keep rising as inventory levels keep decreasing. Boomers aren't selling and builders can't make up all the slack.

Supply and Demand

It's a Catch-22 that the Boomers don't sell, because there aren't enough homes to move up or down into. Add that the new home builders got behind in production during the downturn last decade. However, now that they are building again, they are building higher priced homes.

The Triangle area just hit a historic high sales price - an average of $303,000 for our market, according to Stacey Anfindsen. He is a long time appraiser and provider of market statistics to the Triangle MLS, author of the TARR report and acclaimed expert on local market data.

Anfindsen says that annual prices usually peak around the beginning of the third quarter and dip in the fourth. The average price could stay above $300,000 for the first time.

Builders have starting prices for single family homes from $400,000 in much of the Triangle, and that does mean starting price. You expect upgrade charges, but I've noticed that many of the new homes I'm selling now have an added price of tens of thousands of dollars for every lot. Nothing is included.

 Below that price point is generally townhomes and condos. The inventory of townhomes and condos increased by double digits over $199,000, due in large part to the new construction. Most of that construction is now hitting the $250,000 and up buyers.

Conventional Loan Limits

Those wanting a new single family home have a second problem. It can be more difficult to get a loan above $424,100. These "conventional" loans are packaged and sold on the secondary market (think Wall Street) so the lenders' source of funding is constantly replenished.

 

Most counties have a maximum mortgage limit of $424,100 for a single family residence, ($543,000) for two units, ($656,350) for three units & ($815,650) for four units. These limits are applicable for purchase and refinance mortgage loans.

It's generally easier to get a conventional loan. Fewer buyers are eligible to buy homes the further you go above the $424,1000 limit.  

That circles back to supply and demand. Offsetting the loan limits is that builders are providing a supply of single family homes. The effect is a slight softening of the higher priced resale homes, because the builders are tapping into a limited market of buyers. 

If You Want to Do Anything in Real Estate, You Better Know the Rules

by Scheryl McDavid
Scheryl McDavid
Broker with LaChapelle Properties 

 

It’s an understatement to say that internet shopping has taken over the real estate industry. Who hasn’t used Zillow, Trulia or Redfin to find their next home or investment? So, my interest was definitely piqued when my mentor offered me her copy of Zillow Talk: The New Rules of Real Estate by Spencer Rascoff and Stan Humphries, who chronicle the rise of their powerful real estate search app and all the data that went into creating it. And that, my friends, is exactly what makes Zillow so useful, it’s the data. More than 3 terabytes of it (that’s one million million).

If you’re thinking about selling a house, here’re some pricing pointers from the book that you’ll want to keep in mind:

  • On average, sellers overprice their homes by 6.9%
  • When a home is overpriced, it tends to sell for less than market value
  • Overpriced homes can almost double the time it takes to sell them (often as long as 4 months!)
  • 47% of sellers end up cutting their list price to make a sale

Here’s the good news:

  • Houses priced at fair market value tend to sell for 2% above the asking price
  • Homes with “psychological” or strategic pricing — where you place a “9” in place of the last non-zero digit — may sell up to 4 days faster and for slightly more money than those with all zeros in the price ($299,900 vs. $300,000, for example)

Published in 2015, I think a number of Zillow’s findings are still relevant for our area today:

  • Negative equity reduces the housing supply; “under water” homeowners don’t sell when there’s no down payment for their next home
  • Low mortgage rates create higher demand because of easier financing
  • Both of these conditions create a market with fast-rising prices (North Hills, Raleigh, I’m looking at you)

 All this sounds a lot like another real estate bubble might be coming, so I appreciated, especially, the authors’ refusal to offer predictions of how the real estate market will perform following the 2008-2009 crash. Instead, they use an interesting quote from Donald Rumsfeld, “There are known knowns … there are known unknowns … But there are also unknown unknowns.” Rascoff and Humphries suggest that America has the data and the understanding to avoid another devastating bubble.

The main takeaway is this, read the data, understand the data, and get to know your area really, really well. And yes, even with Zillow, Trulia and Redfin in your pocket, this can be overwhelming. So, if you’re going to buy, sell or invest in real estate, get some help from a professional who can guide you and there will be a lot fewer unknown unknowns to hurt you.

Home Staging

by Cynthia LaChapelle

You may have heard that it doesn't take much effort to sell a house in this market these days. I've even heard other realtors say they don't bother to stage or prep a house for market. While you can get away without working at it, I don't think it serves the client. It’s commons sense that the house that has buyers fighting over it and generating a bidding war is going to go for a higher price than the one that people will settle for.

You don't have to go all out, and there is a perfect comfort level for every seller.  Some clients want to do whatever is necessary to get top dollar, some are willing to do only simple changes that will double their money or better, and some just want it sold without as little hassle as possible. I let them know what I recommend based on those desires. 

The idea isn't to present the house the way it's most comfortable to live. This is a show. We start with cleaning and decluttering. If you are moving out of town, you may want to get rid of a lot of possessions before you take the time and expense to pack and ship a lot of things. You can donate household items to charity and get a tax deduction. You can also box up things you won't need to use for a while along with some larger furniture that may make the rooms seem smaller, and put these in storage until your move. You will be happy you've done this in the period of time between contract acceptance and your closing date, because that is a little stress of your back during a fairly hectic time.

After I give my opinion, I bring in my Stager, Honey. (Yes, that her name and yes, she is very southern.) I pay her for one consultation, and we make the most of it. Since I've already gone through and given my advice and opinions she covers a lot in that session. If we haven't made a decision about repainting in some areas, she can help make that decision and which colors may work best with the carpet, tile, counters and things that can't be changed.

She picks items that need to stay and need to go. She goes through the closets and storage to find decor items that are just the thing to make a room pop. Best of, she is the queen of artful rearranging. She makes lovely scenes on walls and surfaces that were jumbles. 

I keep up with the trends in home styles and decor so that I can advise clients and market their homes. Colors to put a house on the market trending now are grays and beige. Both color families can work, and there is a hybrid,“GREYGE." Somehow these are both at the same time and tend to change as the light changes.

Some of Honey's current favorite colors are Accessible Beige, Silver Strand, Rainwashed, Quietude #6212, Agreeable Gray, Urbane Bronze, Sea Salt (Sherwin Williams Colors). 


I learned a trick of the easy way to pick the ceiling color. You don't want stark white ceilings, but you usually want a nearly white color.

(Remember this is to sell your house, not a design statement.)  Paint ceilings a 25% saturation of the wall color. You don't have to worry about finding the lightest possible color in the color chart that correlates to your wall color any more.

My next blog will have more on choosing colors and fixtures that drive the buyers to a bidding frenzy, especially what is cost efficient.

TREIA Presentation Invite & Info

by Cynthia LaChapelle

 

You're invited to a presentation!

Cynthia LaChapelle, has been a real estate broker since 1986, a TREIA (Triangle Real Estate Investors Association) board member for 12 years and past President. She is a also an investor, rehabber and landlord. After working with Century 21, Remax and Fonville Morisey, she opened her own brokerage in 2005. 

This landlord presentation will be an owner’s perspective of the following issues:

  • Criteria for acquiring buy and hold property in the Triangle area
  • Tips and tricks for choosing and managing tenants
  • Protecting yourself
  • Avoiding legal trouble

Cynthia also will share some of her forms that she uses as a landlord.

 

When: Thursday Oct. 27  11:30-1:30

Where: Prestownwood Country Club - 300 Prestonwood Parkway, Cary NC

Please register by noon Tues Oct. 25 for rate of : Cost $15 TREIA members, $30 guests

https://www.treia.com/Events.aspx?ID=Women-in-Real-Estate-WIRE-15-10-26-2017

New House Blues

by Cynthia LaChapelle

New House Blues

I recently closed a new construction sale here in Cary that had some interesting twists at the end. I had made several offers for the Buyers over the Fall and Winter. It's a very hot market,  and we had gotten none accepted. Then we spotted an inventory/spec home that a large builder had. It was a great deal, but I had still negotiated a bit more. 

The home was nearly finished when we went under contract. It needed things like flooring, paint   and finishing touches. The problems came when the house wasn't finished to acceptable standards. This was a $500,000 home, and while it wasn't custom, the builder had done a vastly better job for me with another client only a few months earlier. Many items were unacceptable. Among the worst things was wavy sheetrock, imperfections in the mirrors, the tile grouts were mismatched due to repairs, paint and sheetrock that had been marked for repair in the walkthrough hadn't been redone, and the most unsightly thing was the stainless steel range vent that rises to the high ceiling was bent. This was after one repair attempt.

We had noted all these things along the way with the supervisor. We'd had an inspection done, and not all of those items had been finished.  As we noted repairs from Day One, he'd said that he would do what he could, but not to expect everything to be done. He had about six stock answers to say no to our requests that he rotated through. I nicely refused to agree.. one, two, three through six times. My theory is if you can't say yes, let me find the person who can say yes.

This went up to the minute of the final walk-through. There were too many items that were undone, dirty and just not right. There were paint flecks all over the floors, carpets were dirty, and the wife was unhappy. We all know the adage, "If Momma's Not Happy, Nobody's Happy." I must make her happy.

This wasn't OK. The Buyers and I discussed this with the supervisor well past our allotted walk-through time. I got as many concessions as I could from him and gave the Buyers their options. I went to the sales office, but the onsite agent wasn't there. The lender was, so I got him involved. I got the closing attorney involved. Then we went up the food chain to the main office. I sent pictures and said we may not be able to close. We went to the attorney's office unsure of what we would end up doing

I finally got an executive to put into writing that all the Buyers requests would be done. He gave us his word, and we closed. They got a new stainless steel range vent, new mirrors, fresh paint everywhere, a deep cleaning, and everything on our list done!

The Buyers asked what happens when other buyers have these problems. I'm not sure, but I can guess. How many times were they told that this is normal, just accept it? Dozens...each time. How long does it take to wear a Buyer down in a stressful situation where they don't know the rules? A lot less than that.

I was well rewarded for my effort, because the Buyers were really happy with my service. He even told my husband that he could never have talked to them like that. That means I did my job. "Clients Are Protected" is my motto and my mission.  

 

Is a Survey Important?

by Cynthia LaChapelle

 

Is a Survey Important?


A picture is worth a thousand words. 

A survey can be mildly interesting or critically important, yet mortgage companies no longer require a survey, so I always recommend my clients get one when buying a home. They literally show things that the attorney can't see on a title search. 

The biggest encroachment I saw was several years ago. I had suggested my buyers order a survey, and it showed that a large part of the next-door neighbor's beautifully landscaped and fenced yard actually belonged to the property that my clients were buying. It stretched from about six feet wide in the front to thirty feet in the back along the entire side of the lot. It was a huge chunk of their yard. Both of the homes had been purchased nearly seven years earlier, and neither property had used brokers, so neither knew to buy a survey. We had to hold the closing until the sellers could have the neighbor's fence removed from their yard. (At one point the seller went out with a sledge hammer when the neighbors left for the weekend. Luckily I was there and advised him to go through better channels. This is how feuds get started.)  Since it was nearly seven years of allowing the neighbor to use their yard (even unknowingly), they were very close to creating a legal claim to keep it. 


How annoying is it when someone lays claim to your yard?

Sometimes it's by mistake, and sometimes they are trying to claim some extra space. Someone will mow "over the line" by a little or a lot, and the owner's blood pressure will shoot up, sure that this is on purpose. Other times the neighbors will plant trees or shrubs on the neighbor's yard. Quite often just having those little orange flags put along your borders can jog the neighbors' memories that this is your lot.

Don't build a fence or add any structure to your yard until you know where the lot lines are for certain. The city of Raleigh requires a survey to be drawn and flagged if a fence is built, as do many homeowner's associations. 


Hidden easements

Your attorney will perform a title search when you purchase a home, but they often don't show an easement.  For example:

•You would want to know if you can't fence the back 30 feet of your lot due to a utility easement. 


•You might like to know if the lines that pump jet fuel from Apex to the airport lie underneath your lot- especially if you were planning to dig a pool.

Since many homeowners will end up ordering a survey at some point in the future, you might as well get one when you are purchasing the property when you might still have some leverage to get a problem resolved by the previous owner.

For more information on how to be a savvy home buyer or seller, contact Cynthia.

Annual Holiday Party

by Cynthia LaChapelle

Annual Holiday Luncheon for the office at Prestonwood Country Club. L-R Frances Wirth, Bill Hasse, Abby Kurtz, Sarah Ruiz, Stacy Millon, Walter Beard and Cynthia LaChapelle. The paper crowns are from our Christmas Crackers. Happy Holidays. We appreciate everyone who helped us make this a fantastic year.

Why Do We Protect?

by Cynthia LaChapelle

LaChapelle Properties was born from the idea that doing a really good job for people should be more important than how how much commission a broker could make. 

Thirty years ago, Cynthia LaChapelle took a call one evening from a man with credit problems interested in buying a home. She worked with him to repair his credit and he was able to buy a nice home for his family. He confided that hers was the last call he had ever planned to make - just one more try to provide for his family before he ended his life. He'd made so many phone calls and no one else would help him, he said.  Since that day, helping people has become the main mission of Cynthia LaChapelle and the foundation of LaChapelle Properties.

Buying or selling a home is the largest single investment most people will ever make. It is fraught with dangers and opportunities for both loss and gain. It is worth having a professional protecting your interests.  That is what we are here to do.

Our motto is Clients Are Protected for a reason. Webster's Dictionary definition #1 of Client is "One under the protection of another". Customer is "Someone who buys goods or services from a business". Most companies I worked at called people Clients, but they were treated like Customers. Brokers promoted how much business they had (i.e. how much money they made) as an enticement for new customers.

We get paid for our work too. We work hard for our pay. Our clients often get more money for their properties, or come out thousands better in repair negotiations, or find out something major/expensive because of a further inspection or investigation or just something that we knew. We are always studying and updating our knowledge of properties, hazards, legalities and all aspects of real estate to better serve our clients. We could make more money if we spent that effort on new sales techniques to lure people to hire us, but then we'd have lots of customers and few clients.

We keep working to learn how to make you more money, not ourselves. How weird is that? It's so weird, Mrs. LaChapelle had to found a new company to make it the Number One Mission.  

Displaying blog entries 1-10 of 21