Charleston

What many people do not know is that appraisals are the key ingredient to obtaining a home loan. Appraisals are now ordered by a 3rd party unless the buyer is using an FHA loan. Long gone are the days when the lender could call up their favorite, educated, experienced appraiser to determine the value of the home. This has created some major problems that need to be addressed! I am going to give you an example of what you may encounter right now! Let’s say I represent the seller who has his multi-family income producing duplex under contract. It appraised in Nov of 2007 for 165K.  (Worst case scenario the market in this community has dropped 20% since then) The offer price was $138K. The single-family DETACHED comps for this area would put the price of this home well above 160K! With that said, they have to find multi-family comps so that is where the problem starts. Unfortunately the buyer was not obtaining an FHA loan so the appraiser was ordered through a 3rd party. The appraisal came back at 90K with comps that were NOT comparable! When I spoke with the appraiser I could tell he was inexperienced and uneducated as he/she used comps that were not comparable and was unfamiliar with the “gross rent multi” method. That is the method that should hold the most weight when an appraiser determines a value for an income producing property. It can be used to suggest a value and/or adjust for location value. I contacted three (3) appraisers who all felt the individual did not do a good job and they all felt they could justify at least 130K. We paid for an appraisal to verify this but unfortunately it cannot be used. So what does this mean for my seller? At the moment they can either pull the property off the market, hope to find a cash buyer and/or hope a buyer obtaining financing gets a lucky draw and the bank hires a experienced appraiser. This is truly sad since the value is their unlike other times where foreclosure and/or short sales have dropped neighborhood values drastically. YES, appraisers do use distress sales as comps. In my opinion it is  TRULY IGNORANT but as one appraiser I spoke with said, “it is considered market value because it was similar in condition and location. It was also the price someone was willing to sell and pay”! I guess you can make a case either way. I am going to go much more in detail about other issues that can come with appraisals and what options do we have! Did you know your agent can work with the agent in trying to justify the value? The lender CANNOT! I will say it is a very delicate situation with a liability so be careful. I hope you enjoyed the blog and as I said, I am going to dedicate a few more to the sensitive subject of appraisals! As always, consult your local real estate expert and never recommend any information found in this blog as each transaction is unique. Lastly, laws differ from state to state so once again always consult your Realtor first!

571 Two Mile Run Johns Island, SC 29455

PRICE: $135,900

LOT: 0.31 Acres Marsh Front

Description:

BANK OWNED! LOWEST PRICED LOT ON THE MARSH IN GRIMBALL GATES! Here is your chance to build your dream home on a cul-de-sac MARSH FRONT lot with an affordable price. Grimball Gates is an elegant gated community with a nature trail, fishing pier and floating docks. This lot truly offers the best of Johns Island living for an inexpensive price. Agents read notes & contact L/A for showings!

Please contact The Fred Holland Team with any questions! josh@fredhollandrealty.com or 843-343-1307

1208 Gregorie Commons Johns Island, SC 29455

Price: $499,900

BED: 5   BATH:  3 1/2   Square Footage: 3002

Description:

BANK OWNED!! LUXURIOUS LIVING AT AN AFFORDABLE PRICE WITH A PREMIER JOHNS ISLAND LOCATION! Agents alert your home buyers and investors! Rushland is an extravagant community with prime location being just a dozen minutes to Downtown Charleston! This gorgeous home is priced WELL below the PPS for Rushland over a 1 year period. (Note CMA included A,AC,P & S)Everything about this home suggest quality & elegance. Starting with the exterior, this home has cement plank siding, fashionable metal roofing,a full front porch overlooking a beautiful front yard with views of a Lagoon made complete with your very own palm trees and a white picket fence! The back of the home has a large deck creating wonderful river & lagoon views. The large lot provides plenty of room for off-street parking and the home is equipped with a 2 car garage. The interior of the home speaks it for itself. The custom tile, beautiful hardwoods and wall to wall carpet cater to every individual and their flooring preference. The gourmet kitchen has stainless appliances, a kitchen island, gorgeous cherry cabinets and granite countertops. The large living room has custom shelving, fireplace, outside access and wonderful views. The master bedroom has two ceiling fans with his and her closets,. The master bath is equipped with a whirlpool tub, custom tile walk-in shower, private water closet and dual vanity sinks. All the fixtures in this home are top notch and the vanity countertops are absolutely stunning! The impressive staircase leading to the 2nd floor is made out of wood with Iron Balusters. The LARGE 3rd floor bonus room is wired for surround sound and offers priceless views of the river & lagoon. Rushland has three (3) community docks on the Intra Coastal, miles of walking trails, stocked lagoons, a community pool and a clubhouse/Open Air Pavilion. The bank has informed us to get this property SOLD! With this price, we should achieve their goal! ALL JENN-AIR Stainless Appliances Convey!! Agents Read Notes
If square footage is important – MEASURE!!

If you have any questions or would like more information on any other properties please contact The Fred Holland Team. You can reach us at (843) 343-1307 or josh@fredhollandrealty.com. Please visit www.fredhollandrealty.com to view this listing and more!

A-1 Mariner’s Cay Marina Folly Beach, SC 29439

Price : $72,000

Description: **BANK OWNED!** MARINERS CAY IS A COMPLETELY RENOVATED,PRIVATE MARINA SITUATED ALONG THE PROTECTED AND PRISTINE FOLLY RIVER. MINUTES TO THE STONO RIVER AND OPEN WATER. THIS IS A GATED COMMUNITY W/ FULL SERVICE FACILITIES WHICH INCLUDE CITY WATER,POWER HOOK UPS FOR BOTH 30AMP & 50AMP ELECTRICAL SERVICES,STATE OF THE ART FUEL PUMP, PUMP OUT STATION,AND FULL SERVICE SHIP STORE AND DOCKMASTER SERVICES. OTHER AMMENTIES INCLUDE RESTROOMS,SHOWERS AND LAUNDRY FACILITIES. PRIVATE ENTRY FROM PIER TO THE DOCKS. ****60′ X 23′ SLIP****BRING ALL OFFERS.

What is earnest money? When a buyer attempts to buy a home they should, but are not required to,  give some sort of earnest money. This suggests to the seller that the buyer is serious about buying the home. It’s more or less a good faith jesture. Once my buyer’s write an offer I then have them write a check to the escrow agent. That agent is usually the listing or selling real estate company. I then make a copy of that check to submit with the offer. Once the contract gets ratified we then have 48 hours to deposit that check into an escrow account. There is not an industry standard for the amount of earnest monies required. I generally suggest 1% but have seen much less or more. When a seller accepts a contract they will pull that home off the market. That means they are risking valuable marketing time in hopes that you are a serious buyer. If there is not any earnest monies then the buyer has much less risk.

What if I do not buy the home? If you are a buyer and have proper contingencies in place then you should receive your earnest monies back. A seller can choose not to sign a release and in South Carolina we cannot release monies until this is taken care of. If your a seller, then unless the buyer is in a clear breach of contract I always suggest signing a release. In most cases the buyer receives their monies back and you lose the marketing time that the home was marked as contingent in your local MLS.

The Fred Holland Team hopes this blog gives you a little insight into earnest monies. Remember that each market is different and to always consult your local expert. If you have any questions for us, please email josh@fredhollandrealty.com or call (843) 343-1307.

What are closing costs? These are costs that will be acquired at the closing. In most cases the day before closing you will receive a HUD-1 aka Settlement Statement. That settlement statement will itemize all of the costs to a buyer or seller. It will also tell a buyer how much to bring if any to the table. The monies are usually requested to be in the form of a cashier’s check. Some example of closing costs to a buyer are:

Origination Fee= 1%

Attorney Fee’s

Pro-rated Items such as interest, HOA fees, insurance and more.

Title Insurance

Misc Fee’s

Appraisal

and more….

A good way to have a buyer save their liquid and bring the least amount of monies to the table (if any) is to request the seller to pay the buyer’s closing costs & KEYWORD pre-paids. I think it is vital to have a buyer with plenty of reserves in the bank when they purchase a home. By the seller paying the buyer’s closing cost it enables the buyer to only increase or maintain the amount of reserves they already have. Unless you are going FHA the max amount that can be paid is 3% of the purchase price. In past years 3% used to cover almost all of the closing costs. As of late I have noticed that 3.5-4% is what is needed to cover closing costs. Of course this all depends on when you are closing, where you are buying, how much are you financing, are you receiving any discounts, the purchase price of the home & more.  With FHA financing the seller can pay up to 6% in closing costs. This cannot be applied to a down payment though. Unfortunately, the down payment assistance program is no longer available. I personally felt this was a wonderful product that allowed a responsible buyer with good credit, work history and more to purchase a home if they did not have 3.5% to put down. Before you make an offer on a house ask your agent to run a HUD for you or get a good faith estimate from the bank. Review the form and pay attention to your closing costs. Ask your agent if you should ask the seller to pay closing costs. In the standard South Carolina real estate contract their is a closing costs clause, in this section I write “seller to pay 3% in buyer’s closing costs and pre-paid items.” In my experience most buyer’s request the seller to do so.  With that said, it may not be a good option for you. For example, if you are financing much less than the offer price I would suggest just offering 3% less instead of asking for closing costs. Remember a big part of your actual costs are based off the loan price and the seller may be able to pay all your closing costs with less than 3% allowing them to net more at closing. Please ask your lender what happens to the extra monies if your total closing costs are less than 3% and you requested the seller to pay 3%. Some products or markets may allow monies to be applied in different places.

The Fred Holland Team sincerely hopes you enjoyed this article. Please remember to consult your local expert before taking advice from this blog.

Contingency! When you’re attempting to purchase or sell a home, this word will be the most important! I would like to give a brief description of some you will see and what to expect.

When I work with buyer’s I always attach an addendum to my contract’s. Addendum’s supersede the contract so that is where I place my buyer’s contingencies. That addendum states that “the contract is contingent on buyer’s sole approval of all inspections, financing and affordable insurance. In the event buyer is not satisfied this contract is considered null & void or re-negotiable and earnest monies will be returned.” This reiterates some items already placed in the contract but it’s always good to reinforce them. Take note  that it has no dates and vague terms. An example is affordable insurance: What is affordable? When do you have to decide by? This addendum helps insure my buyer’s protection from the negotiations to closing.

What should the seller’s know? What do they do when they receive this addendum?

If I received an identical addendum and represented the seller, then I would advise that they counter the addendum. I would suggest adding date caps and removing the affordable insurance contingency. You want to make sure that this is a serious buyer whom is not wasting your valuable marketing time. The earnest money should suggest the seriousness of the buyer. Without risk of losing the earnest  the buyer may not be as serious or motivated as others with their monies at risk. You as the seller can always refuse to sign a release but unless you have good reason, it is not wise. By countering the addendum it allows the buyer and seller to take equal amount of risk. The idea is to avoid situations where the buyer’s does not  show up to the closing and the seller has made repairs and/or arrangements to move. Keep in mind the buyer usually takes possession on the day of closing so the seller is almost always packed up well before then.

I hope this article gave you some insight into the wonderful world of real estate. Please remember to always consult your local agent and do not use this article as advice solely for your transaction. Each real estate deal is unique. The real estate business is constantly changing and evolving. New laws appear and old ones may disappear. If you every have any questions about our local market please don’t hesitate to contact The Fred Holland Team!

2221 Telfair Way Charleston, SC 29412

Price: $214,000

Bed: 2  Bath: 2  Sq. Ft.:  1074

Description:

15K PRICE DROP! This high demand style in Mira Vista is priced to sell! Truly a great location at a great price. The best condo community on James Island offers many amenities. A swimming pool, hot tubs, wonderful fitness area and a security gate to offer seclusion. This popular floor plan comes with custom made bamboo blinds, crown molding throughout,washer, dryer and laminate floors. Both bedrooms are good size and each have their own bathroom. One bedroom has garden tub and the other has access to a screen porch. Close to the connector and just a short drive to the beach. HOA includes insurance.
If square footage is important – MEASURE!!

If you would like more info on this property or others then contact The Fred Holland Team! You can reach josh at (843) 343-1307 or email me josh@fredhollandrealty.com

We will now take a look at the process of selling a home. In today’s market I cannot stress the importance of using an agent to sell your home. Imagine this, in the years that the real estate market was booming 9 out of 10 for sale by owners still ended up using an agent to sell their home.  Today’s market is one the most challenging our profession has ever seen. It is our duty to be honest with seller’s and our seller’s to be honest with us. I can’t stress the importance of this.

Find an Agent: The first and most important step!  Make sure you hire someone you are comfortable with. Interview them and they should interview you. I always approach each listing appointment with an idea that I am interviewing them as they interview me. The process of selling a home can build some great friendships and also destroy them. I like to make sure that I am working for a seller that I feel is honest, understanding and willing to do what I need them to. Make sure you build a relationship built on trust. You will most likely disclose things to your agent that your close friends don’t know.

Run a CMA & Estimate Closing Costs: Once you have hired an agent it will be time to decide pricing. The first step would be to gather your mortgage statement and figure a payoff. The agent will then run a CMA on your home. This is basically an appraisal for real estate agents. The agent should also run an estimated closing costs sheet. This will include your loan payoff. Once you and the agent determine that the market at least supports the price you need to payoff the loan and closing costs, you should then set a list price. I like to offer my clients 2 different types of pricing. An aggressive and conservative price. I then explain the different type of marketing packages that come with it. The seller then makes a decision based on the information I gave them. In most cases we meet in the middle of the two prices.

Sign a Listing Agreement: Once you have determined a price and start date, you will then sign a listing agreement. Make sure you read carefully through the entire agreement before signing anything. You may also have other documents to fill out such as: Lead-Based Paint Disclosure, Seller’s Disclosure & more. It will depend on which state you are located in or which agent you hired.

Get an Offer: Once the property is put up for sale and has been placed in the local MLS, it’s time to hopefully get an offer. Please note that in this market, it takes time to sell a home. I never promise a seller I will sell their home in a timely fashion. What I do promise is to give 110% to achieve that goal. Ask your agent to run a new net sheet at the offer price to see what you would net if you accepted that offer.

Negotiate & Contingencies: Once you have received an offer you can then counter, decline or accept it. Please have your agent explain all the contingencies the buyer has put in place and what are the key dates. In SC, the seller is usually asked per the contract, to provide a clear CL100. In most cases you will be required to deliver a free & clear title.  Some buyer contingencies you may see is: inspection, financing, insurance, cl100, clear title, contingent on the sale of the buyer’s home & more.

Hire an Attorney: You will then need to hire an attorney to handle your deed prep. I suggest hiring the attorney and doing the CL100 after the buyer has removed some of the contingencies. Of course I make sure that the dates on the contract allow me to hold off and everything will still be done in a timely fashion. By holding off that decreases the chance you would owe any monies to the attorney or have paid for a CL100 you cannot use if the buyer backed out of the deal.

Possession: Make sure that you are packed up and cleared out the day of closing. In most cases the buyer will take possession as soon as the closing is over. Unless you negotiate possession after closing, make sure you are prepared. During the process of this contract make sure to maintain the home in the same condition it was when the buyer made the offer. Make sure to ask your agent about possession.

HUD & Closing: When you get to the attorney’s office you will sign deed documents and review the HUD. The HUD a.k.a settlement statement will itemize all the costs of your transaction. The seller usually has 5 closing costs. These are: Real Estate Fee, Deed Prep, Pro-rated taxes, CL100 and Deed Stamps. Once all the documents are signed and the monies have been received you will have sold your home! Please note that closing costs vary from transaction to transaction. In no way, shape or form is this a guarantee of what your closing costs will be or only be.

There is so much more to a selling a home but hopefully this will give a little insight on what to expect. You should always consult your local agent. The Fred Holland Team truly wishes that your transaction is a successful one and we are available 24/7 for all your real estate needs.

115 W. Erie Ave. Folly Beach, SC 29439

Price:  $504,900

Bed: 3   Bath:  2 1/2  Sq. Ft:  1792

Description:

This Folly Beach property is located just a short walk to the beach, one block to Center Street and has plenty of off-street parking. Agents, this home has something for every buyer. How about an affordable primary residence with luxurious upgrades? An inexpensive Folly Beach property for our 2nd home buyers? For the investor, it has proven long term rental income at $1700 (lease through Dec. 2009) a month with a wonderful tenant and unit A is now a vacation rental. Your buyer’s will love the attention to detail and quality that the interior of this home has to offer. Equipped with Brazilian Hardwood Cherry Floors throughout, Ceramic Tile in the bathrooms, wall to wall Carpet in the bedrooms, Nickel Finished Hardware & Fixtures, Custom Ceiling Fans, Slate flooring in the spacious Gourmet Kitchen with Granite Countertops, Kitchen Island & Stainless Appliance that convey! The separate dining room has plenty of room to have a nice family dinner. The LARGE master bathroom has a garden tub, stand-up shower & private toilet. Enjoy a nice Folly day relaxing on either of the two decks that are accessible from the first & second floor! Last but not least, ALL FURNISHINGS CONVEY! That’s right! At this price, which is well below what the seller paid, all furnishings convey! THIS IS NOT A SHORT SALE BUT INSTEAD GREAT PRICING. SELLER CAN CLOSE QUICKLY