One of the first questions I get from a buyer when I first meet them is what will it cost to hire you (me)? I will address this question but first you must understand a few things. It is illegal for agents at different companies to group together and decide on what commissions will be offered. It is not illegal for a COMPANY to tell their agents what the commissions offered will be. Some examples are:

Joe with ABC Realty had a company meeting. At the meeting he was told that any member of ABC shall take no less than 6% commission aka Brokerage Fee for each listing they get. This is legal. Now let’s say Joe with ABC  Realty met with Samatha at XYZ Realty and they said that neither company will list a property for less than 6% commission or Brokerage Fee. This is illegal. That is why you will see advertisements from different companies offering special commission rates, rebates or discounts. A rebate can be a touchy subject but basically it is monies given by the real estate company at closing to the individual who used that agents company to buy or sell their home. I personally will never offer a rebate but we will always negotiate our commissions.

Buyer’s agents can receive their compensations in numerous ways. I personally only receive my compensation from the listing agent who receives their monies from the seller. If I have a buyer who wishes to pursue a For Sale By Owner than I will ask for a commission directly from the seller in the form of a “one-time showing agreement”. If he declines then I will not receive any compensation if my buyer buys that home. This is a personal choice and practice. Make sure to read your buyer’s representation agreement carefully and ask how will your agent receive his compensation. Some agreements may call for the buyer to compensate the agent.

An important question to ask when you hire a listing agent is what will the compensation be to the buyer’s agent. Its unfortunate but some agents may or may not show homes unless they are offered a certain amount of commission. This could be  a very important issue when trying to sell your home. In this market every potential showing is important. Is it unethical for a buyer’s agent to not show a home that may fit their clients needs because of the compensation offered? I will leave that to you to decide!

We once again thank you for reading our blog and remember to always consult your local Real Estate expert ! If you would like to contact us about this blog or others please email me at josh@fredhollandrealty.com or call 843-343-1307.

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!

First and foremost a short sale is not a foreclosure! A short sale is a property that is still owned by the person who bought the property. Unfortunately the individual ATTEMPTING (take note) the short sale has usually run into financial hardship. In most cases they have tried to sell the home well before they decided to do a short sale but market conditions do not support the price they owe. 

A foreclosure is a property that is owned by the Bank. Another term associated with them is REO (real estate owned). After the foreclosure process is finished they then hire an agent (in most cases) to list and sell the property. As a buyer you have 3 chances to purchase that home. The first is before it’s foreclosed on. You can find which properties are about to be foreclosed on by hiring a thorough agent. You can go to the auction (if auctioned) and attempt to purchase it there. Lastly, you can purchase the property once the bank takes ownership and it has been listed.

Most individuals do not know what a short sale is or that they have that option. In that case an educated agent can honestly be a saving grace.  If the individual is behind on their mortgage and the market is not supporting the price they owe, a short sale can be the answer. I found out that most individuals believe there was nothing they could do but let the home go into foreclosure. If they did know about short sales they did not know that a short sale can possibly save that persons credit. In speaking with experts I have come to the conclusion that the day a bank forecloses on an individual their score drops 200-300 points. Since SC is a judicial state the bank can the place a deficiency judgment on that person credit after they sell the property. In most cases the bank takes a large loss compared to what is owed when it sells. That could drop your score another 50-100 points.  By doing a short sale your worst case scenario would be a deficiency judgment for the difference between the amount owed and what it sold for. In a lot of cases they don’t even place a judgment on your credit! Reasons to not be approved for a short sale by the bank include but are not limited to: having a large amount of savings or taking a loss well below the market value of the property, which is assessed after the BPO is hired.

Purchasing a short sale can take up to 6 months. You have to make the contract contingent on 3rd party approval. That means you have to get approval from the bank. Once you write a contract on a short sale the seller will put a financial packet together and send that with the contract to the bank. The bank will then assign a negotiator to that file and order a BPO. Once the bank approves or disapproves the price you can then move forward with the purchase of the home. When I take a listing that is going to attempt a short sale I try to keep the price within 25% of the amount owed. That will increase the chances of it being approved. If you are seller it is important to know that you are ATTEMPTING a short sale and in no way, shape or form does it halt the foreclosure process. You can be foreclosed on while attempting the short sale!

Purchasing a foreclosure is a much faster and smoother process. It is pretty much the same as a purchasing an owner occupied home. The main thing to know about is the bank addendums. These are documents that you will have to sign and cannot alter if you want to purchase the home. They are tailored to protect the bank and punish the buyer for any type of breach. Make sure to review these addendums thoroughly before signing them.

Please note that this blog does not guarantee any scores on your credit or promise that a short sale is your best option. Please consider renting, consult with an attorney or your agent before doing anything. This is not a recommendation as each person circumstances may vary. Please understand that the process goes into much greater detail but I tried to keep that as short and sweet as possible while including some of the important information.

THE FRED HOLLAND TEAM

Each time LaJuan or I get a new listing we will post it in our blog. This week we have two new listings!

       1960 Folly Road Charleston, SC 29412      

PRICE:  $2,200,000

4.00 ACRES with Marsh VIEW, PRICELESS LOCATION and ZONED C4! TALK ABOUT EXPOSURE. A recent study indicated that on average 1000 cars per hour arrive on Folly Beach. Another study done by SCDOT indicates that 14K-18K cars would passy by this location. As many locals know, the weekend traffic is at a stand still. This means more potential customers for your business as they wait to get on the beach. There is also a new gas station and Piggly Wiggly directly across the street! Considered a luxury to some, this property has public utilities available and can be accessed from Folly Road or Teal Marsh Road. The property is in the City of Folly Beach and has design board approved plans which have been uploaded. The plans contain mixed use and call for a 42 unit residential community and strip center.

1030 Secessionville Road Charleston, SC 29412

Price:  $199,000

JAMES ISLAND BELOW 200K! This 3 bedroom 2 BATH (take note) home is located only 10 minutes (that’s with traffic) from downtown, 5 minutes from Folly Beach. Huge fenced in backyard for pets with 7′ X 10.5′ shed. Two bedrooms are carpeted and share a bathroom on the east side of the home. Between those bedrooms and the master bedroom lies Italian ceramic tile in the kitchen and dining area and floating hardwood floors in living room. Living room has 14′ vaulted ceiling, kitchen and dining area have 12′ ceilings. Master bedroom has new brazillian cherry wood floors and 12′ vaulted cathedral ceiling. The heating/AC unit is just a few years old. Two huge live oaks on either side of the two-car driveway.

Please contact the Fred Holland Team with any questions regarding these listings and more… josh@fredhollandrealty.com   or 843-343-1307

81-E  Ashley Ave. Charleston, SC 29403

Price: $148,900

Bedrooms:  1     Bath:  1    Sq. Footage:  543   Built:  1850

Description:

SHORT SALE & MAJOR PRICE REDUCTION! PRICED EXTREMELY BELOW VALUE!  This condo is located minutes to the marina and connector. You can enjoy jogging around colonial lake or walking to all the wonderful restaurants, night life and Downtown activities. Why pay for a parking spot when your condo offers off-street parking and you can walk or ride your bike to MUSC, VA or C of C. Don’t miss this chance to buy a 1 bedroom Downtown condo in the prestigious Harleston Village.  Investors imagine the rental demand to students and medical professionals! Please note home has been vacant for some time and was reduced 60K+. At 218K it was still priced below comps based on price per sq foot! HOA INCLUDES: flood insurance, exterior insurance, pest control, annual termite bond, water and more. This is an attempted short sale so it’s contingent on 3rd party approval.

Contact the Fred Holland Team for more information regarding this listing and more. josh@fredhollandrealty.com or 843-343-1307. Or visit our website at www.fredhollandrealty.com

 In this blog I will be discussing the different types of investing in real estate. I have found out that when most people think of investing in real estate the first word that pops in their head is “flip”.  That is only one of many ways to invest in real estate. A local lender told me this when his CEO visited them at a retreat. He spoke about the Charleston Market and how he, like the many experts, felt the Charleston Real Estate Market will be one of the best in the nation. With the instability in the bond, mutual fund and stock markets investors are looking for something concrete. (literally)  I would like to go into detail about several reasons experts believe our market will be one of the best but I will save that for another blog.

The most common call I receive when it comes to investing in real estate is about foreclosures and short sales. I will eventually post a blog explaining the process of buying a foreclosure or short sale and how they differ. A foreclosure or short sale can be great buys for investments but more importantly first-time home buyers. Foreclosures/Short Sales are priced extremely well to avoid low-ball offers. This means that in most cases they sell extremely fast.  Foreclosures/Short Sales allow buyers to buy in communities that they could not normally afford to live in. It also allows them to possibly have some equity and use the home as a stepping stone.  In most cases the home will need immediate attention cosmetically. We call this swequity.(sweat+equity)

On the beaches you have vacation rental investing. This by far is the highest dollar amount return you can receive.  The actually percentage return is not nearly as good as another type of investing that I will explain below. Foreclosures on the beaches are a little rarer than the surrounding areas.  With that said, beaches have depreciated drastically in the last few years and many believe this has created great buying opportunities . That means you have a chance for instant equity or possible appreciation in the future. To obtain the highest ROI (return on investment) then beachfront is the way to go.  We have several homes for sale and in the rental program. Examples include a 2.1M dollar property that returned over 100K in rental income during its first year in the program. We have 1.1M dollar listing that returns about 80K a year. Once you move from beachfront your dollar amount return begins to drop. If you are looking for the best returns based on percentage then some examples would be 2nd row listed at 499K and averaging 40K a year in rental income.

Another type of investing is in low-income housing. When it comes to investing in Charleston, this is your lowest risk. With Mutual Funds, Bonds and Stocks not returning what they have historically many people are pulling their money out and looking for other areas to invest in. This has had the highest demand for the past few years. The idea is to buy in areas that are low-income and at a price range of 70K or below. On average a 3 bedroom home rents for $725.00 a month. With the right agent and good negotiating you can also buy with instant equity. That means a 70K home rented at $725.00 a month would return at least 12% in rental income alone!  Any appreciation or equity is a bonus! These homes usually require low maintenance and with a good inspection you can know what you are getting into prior to closing.

There is also long term rental investing. This does not return as high a percentage as low-income investing but it can be a good investment.  The average 3 bedroom 2 baths home brings about $1200.00 a month in rental income. This does depend on the location and area. The idea is to find something below market value, rent it so it pays for itself and when the market is corrected sell for a profit. You will need a diligent and experienced agent to find the best possible buy at that time.

Lastly, you have flipping. Currently this is the riskiest way to invest in Charleston Real Estate. I prefer people  that are planning to flip to purchase the home with cash. This way if it ends up sitting on the market for a while you have very little overhead. The idea is to find an extremely good buy. It can be a total renovation, tear down and/or a home that needs some “TLC”.  You would then purchase that home, have your contractors lined up and put the home back up for sale as soon as possible. Having experience in this type of investing I know firsthand what it takes to be successful. Cash is king when it comes to “flipping”.

We are also certified HUD buyer agents. Please contact me for more information.

THE FRED HOLLAND TEAM

Please consult your agent before purchasing a home. Please note that this blog is not a recommendation or advice on where and what to purchase. I cannot predict or guarentee any appreciation, equity or profits. There is always risk when investing.