This is just my opinion, but I wanted to comment on the number of calls I get every week about lease purchases.  I think they are probably overrated.  From personal experience, sellers enter into them reluctantly because they couldn't outright sell their house.  Some investors like to offer lease purchases to be able to charge inflated rents, large, non-refundable deposits and a higher sales price.  Buyers tend to think that since their credit isn't quite where it needs to be, the act of doing the lease purchase will help their credit score along, allow them to save some money and so on.  In reality, fast forward 12 months & what I tend to see is that the buyer either no longer wants to buy the house if they do qualify but more often than not they just still don't qualify for a loan - the problems that prevented them from buying in the first place are still present. 

So, in the end the buyers waste thousands on deposits, inflated rent, etc. while the seller is either disappointed they still have to try to get the house sold.  Or the seller in the investor scenario is grinning because they knew it wouldn't work out - if it did, the contract price was top of the market anyway so they'd be glad to sell at the terms they set out.

I advise people constantly to think about continuing to rent until your finances are in order instead of getting into a lease purchase.  Then, when you are armed with a pre-approval letter the world is your oyster.  You have way, way more homes to shop from, you have more negotiating power so you'll get a better price & term on the home, and you haven't wasted thousands.  Not to mention all the disappointment on both sides.  If you are a seller, I would tell you not to enter into a lease purchase unless you are fully ready to expect the worse and end up being a landlord for a year or more, cleaning carpet, painting & ultimately putting the home back on the market.

Schools are important to your home hunt for two reasons:

1) If you have kids or are planning to, there are the obvious reasons - you want them in the best schools available.  By first figuring out which schools you are open to, you will greatly narrow your house search from hundreds of homes to maybe dozens.  This is a great way to narrow the search and save time. 

2) Even if never plan to have kids, schools are such an underlying factor that affect property values.  In Guilford County, you will see values change fairly drastically depending on what school district you property is in.  Being in a popular school district might make the difference in selling your home very quickly for a very high percentage of market value versus very slowly for less money as there are less buyers interested in moving to the are with the less popular schools.

All this being said, this is a factor that certainly changes with time, and what is a great school today may , unfortunately be a failing school in years to come.  And vice versa, a school with poor rankings today may very well turn around and be the next hot place to get your child enrolled in years to come. 

Answer:  You simply look at what other folks have been paying for similar properties in recent history.  Or ask your Realtor to 'run comps' for you.

I just had a client ask to show them a FSBO (for sale by owner) home that was priced at $350,000.  I said I'd love to, but I first wanted to see where the seller got their price from.  Turns out, the home was listed about thirty or forty thousand dollars too high.

Now, had someone contracted to buy the home for 325K, they would probably think they were getting a deal (wow $25,000 off list price!) when in reality they would've overpaid by at least 10 thousand dollars as the home is worth about 295-315K in the current market.  Just goes to show - the asking price on a home is not always based in reality.

It seems everyday now I am asked to do a market analysis for a homeowner in hopes of selling and moving on with their lives.  In so many circumstances, folks have no idea what has been going on around them in their own neighborhood – that prices have declined by 20% and that in order to sell they’d have to take a huge loss in the tens of thousands of dollars.  I guess I’m writing to suggest that you stay on top of your market value.  A good Realtor can run this data and analyze it for you at no charge.  Just like an appraisal, this info is only really valid for a short period of time (i.e. you wouldn’t want to use an appraisal from 6 months or a year ago – it needs to be recent).  It’s not all doom & gloom, but if you bought in 2006-2008, there’s a good chance you’ll be in a similar situation if you need to sell. 

Did you know there are 5 loan work-out programs a lender could propose to homeowners in default?

1. Short Sale - Homeowner owes more on the note than the proceeds of sale would cover, so the lender agrees to take the loss.  There are many tax implications - consult an attorney and a CPA.  These generally take 150 days to even get a response to an offer currently!
2. Forbearance By the Lender - Lender takes past due payments and adds them to back of loan to allow you to get back on track.
3. Repayment Clause - Lender Re-amortizes loan term from 30 to 40 years (for example) or divides overdue balance to be paid back over a period of months rather than one lump sum.
4. Partial Claim From Mortgage Insurance Company
5. Contact NC Commissioner of Banks (http://www.nccob.org)
   

I've spoken to numerous home owners that spent months if not years trying to sell their home after bouncing around from Realtor to Realtor, and often a large part of what they were concerned with was saving 1 or 2% on the real estate commission. 

Now, the commission is surely the largest expense of selling, but I always ask these sellers this:

'By listing with a Realtor that agrees to cut their rate 1%, what are you saving when they don't sell you house after 6 months?  You are saving exactly 1% of zero - nada!  Plus, you have wasted your most valuable marketing time while you days on market (DOM) have risen - often stigmatizing your property.'

Not to mention that a properly exposed & marketed home will help sell a home for more - far exceeding any marginal reduction of commission.  So, before you focus on potential 'savings' - think about the cost of not working with someone that will earn their commission and get you a faster result and higher sales price.

I just wanted to write a quick post to give my two cents about the day-to-day practices in Greensboro real estate that I see as gimmicks.  You'll often see the following in real estate advertising:

• Home warranty!
• Seller to pay closing costs!
• Job loss protection!
• No HOA dues for 6 months!
• Interest rate buy down!

Now, there's nothing wrong with any of these practices, but I always advise my buyers to be aware of these options and decide which are important to them individually.  Then, disregard who's offering what - find the house you want to pursue and try to negotiate the items you want on the property you want! 

There are segments of buyers that didn't capitalize on the tax credits and are still in the market to buy a house.  There are different reasons for this such as:

• They were tied to a lease during the tax credits.  I just got a call on one of my listings from some nice folks that have a lease up in November, and they are in the market to buy now. 
  
• They didn't have their finances or credit in order at the time.
• Maybe it wasn't the right timing due to the birth of a child.
  

The point is, as much as everyone would've liked to taken advantage of the tax credits last year and early this year, it just wasn't the right time for everyone.  So breathe easy sellers - people are still buying real estate in the Triad!

Just a quick rant about why first time buyers on through to savvy real estate investors should understand the difference between tax value and market value.
 
The tax value of a property simply tells you how much money you'll be spending in taxes per annum - nothing else.

The market value of a property tells you what similar homes have sold for recently - indicating what the actual value of the property is at this particular moment.

So often I get asked the following:  'Hey Zane, how much are they asking for that house?'  The next question is always 'Hey Zane, what's the tax value of that house?'.  The question is fine if you want to know how much the taxes will run you, but everyone asks for the wrong reason.  I'm guilty of it too, and it's human nature to want a deal, but these folks should be asking 'Hey Zane, what's the market value of that home'.  If you buy a house for tax value, you could be getting a steal of a deal - but you could also be paying too much - it's just not a good measuring stick.

In determining what the property is worth, you can decide if you are making a good purchase or investment.  This is just one factor in determining a good strategy for making an offer to purchase on a particular piece of real estate in Greensboro, NC.