Carol Lawhun's Real Estate Blog | Rapid City, SD | First Time Home Buyers, Sell Your Home, Market Conditions, Mortgage, Homes

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Carol Lawhun
REALTOR®

    ABR®: Accredited Buyer's Representative
    CRS: Certified Residential Specialist
    CNE: Certified Negotiation Expert™
    State Certified Real Estate Instructor

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What is Title Insurance?

Posted by Carol Lawhun | on Friday, June 12th, 2009 at 3:27 pm
Category: Title Insurance.
Tags: , , ,

The title company researches the property records to make sure there is clear title to transfer. In our market, it is customary for the sellers pay for the ‘title insurance’ to the buyer from the title company. Rapid City buyer’s pay for title insurance to the lender in the amount of their loan – it is usually found on their Good Faith Estimate of closing costs from their first appointment with their lender.

This document from the Rapid City title company [their commitment to provide title insurance] summarizes their research. It will itemize any recorded liens against the property, as well as any issues that need to be solved before clear title can be transferred. For example, it is common for an existing mortgage to show up that needs to be paid off before the final copy of the title insurance can be issued for the new owners.

‘Schedule A’ shows the legal names of the buyers & sellers, the legal description of the property, and the amount of the policy (the price you are paying for the property).

‘Schedule B’ itemizes requirements that must be met for the final title insurance to be issued and exceptions the insurance does not cover. Some of these excepted items (such as unrecorded mechanic’s liens) can be covered for an additional cost.

The end of this title insurance commitment may include a copy of the plat map, copies of the documents granting utility easements, and a copy of the original covenants.

The Rapid City buyers receive the final title insurance, after the old seller’s mortgage has been paid off, and the buyer’s new mortgage recorded at the court house. This could take, typically, around six weeks or so after closing to receive it.

If you have any questions about title commitments, please contact me at caroll@PropertyByReferral.com.

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Current Market Conditions (Part 2 of 2)

Posted by Carol Lawhun | on Tuesday, May 26th, 2009 at 12:05 pm
Category: Market Conditions.
Tags: ,

Another side of the market worth considering is how many total properties are selling. Those numbers are down significantly. Total numbers of residential properties sold in 2009 are down about 37%. The break down between the types of properties fall in this way: the number of existing family homes sold during the first four months of the year are down 30%, number of new construction homes sold are down almost 47%, and number of townhome/condo sales sold are down almost 49%.

In a nutshell, this is a decent market for everyone. Buyers still have a lot of choices for homes and phenomenal interest rates available. First time home buyers may still qualify for up to $8000 in tax credits which does not have need to be paid back. That credit is available to buyers who close before December 1st, 2009. Fewer people are selling, but they are still getting close to what they were getting a year ago.

These statistics in both of these blogs are relevant to both buyers and sellers. They provide objective information which can help in pricing homes to sell as well as how to write offers which get accepted. However, remember each individual property needs to evaluated as to where it is priced as to market price.

For more statistics, or questions on how to maximize your strategy in today’s market, contact me at caroll@PropertyByReferral.com.

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Current Market Conditions (Part 1 of 2)

Posted by Carol Lawhun | on Tuesday, May 26th, 2009 at 11:55 am
Category: Market Conditions.
Tags: , , ,

Rapid City market conditions are pretty stable, even though they are still a little soft. According to our local multiple listing service statistics total residential average sales prices for the first four months of the year are down from $169,280 in 2008 to $162,812 in 2009. So overall, our total sales price is down about 4%.

Average price of new construction single family homes is down about 11% compared to the first four months of 2008 while the average sales price of existing single family homes is only down about 3%. Existing single family homes average days-on-market has increased only 3 days from 2008 (2009 statistics show 75 days for the first four months average). For new construction, average days-on-market for the first four months increased from 129 in 2008 to 181 in 2009.

Townhomes and condos have strong sales statistics during the first four months of 2009. Average sales price has increased almost 17% from $154,926 to $180,976. The average days-on-market has decreased this year from 138 days to 90 days, an impressive drop of almost 35%.

For more information contact me at caroll@PropertyByReferral.com.

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Greetings From Washington D.C.

Posted by Carol Lawhun | on Monday, May 18th, 2009 at 11:55 am
Category: Realtor.
Tags:

As President-Elect of the Dakota Chapter of the Council of Residential Specialists, I have come to Mid-Year leadership meetings in Washington DC. It has been fun, but more than that it is good to connect with leading REALTORS® from all over the United States.

The Council of Residential Specialists is a national organization which champions professionalism and effectiveness for clients. For a REALTOR® to earn the CRS designation they must complete additional educational classes as well have verified experience.

I have found the CRS classes to be the best classes I have taken. They are also some of the more expensive REALTOR® education available if one only looks at the dollars invested. If instead one looks at the gain to ourselves and our clients, the classes are the best investment we could make.

As a buyer or seller, it can be difficult to know what the alphabet soup of letters behind a REALTOR’s® name really mean. The CRS designation means we, as your agent, are part of only about 4% of the REALTORS® in the United States, and we believe in investing in our professionalism for the ultimate benefit of you, our client.

For more information about the CRS designation, please email me at caroll@PropertyByReferral.com

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Mortgage Option with 100% Financing

Posted by Carol Lawhun | on Monday, May 11th, 2009 at 11:27 am
Category: Mortgage.
Tags: ,

Rural Development loans (www.rurdev.usda.gov/sd) may help some people with lower or moderate income levels obtain mortgages with 100% financing. These are designed to help people with good credit and steady incomes that may not have the down payments funds saved for conventional financing.

This government backed loan guarantee looks at credit history, ability to pay, and debt-to-income ratios. For a rule of thumb to see the amount a buyer may qualify for, the mortgage payment (principle, interest, taxes and insurance or PITI) divided by gross monthly income, needs to be equal or less than 29%. Buyers also need to have their total debt divided by their gross monthly income be less than 41%.

This program can be combined with SD Housing loan programs available to first time home buyers. For homes which close before December 1, 2009, there may also be a tax credit of up to $8000 for first time home buyers.

This program is available for homes outside of towns with over 20,000 people. Locally, this can include homes outside of Rapid City; close to Rapid City each address needs to be checked individually.

If you would like more details, please contact me at caroll@PropertyByReferral.com .

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First Time Home Buyer Advantages

Posted by Carol Lawhun | on Monday, May 4th, 2009 at 10:16 am
Category: First Time Home-Buyers.

First time home buyers right now have some great incentives. Qualified buyers (based on income) may choose to use the South Dakota Housing Program (SDHA). Rates for loans insured by SDHA have just changed to 4.75% for fixed rate. There is a stepped program where the rates start at 3.75% and step up over five years to 5.75% maximum. Using a stepped program allows people to have slightly lower payments in the beginning when they have all of the expenses of moving in to a home or may be advantageous to people who can foresee pay raises in the future. Buyers need to qualify at the maximum rate to get the loan, thus avoiding the problems which hit the sub-prime market. Locking in the fixed rate (4.75%) or Fixed Rate Plus options (5.25%) are great options for people with stable income right now.

First time home buyers closing before Dec 1, 2009 may also be able to qualify for the $8000 tax credit. (See my blog on the tax credit). The SDHA loans may be pared with other loan programs such as VA or FHA. If you would like more information about how these programs work together, please contact me at caroll@PropertyByReferral.com.

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Sell Your Home Quickly, Part 3

Posted by Carol Lawhun | on Wednesday, April 22nd, 2009 at 10:55 am
Category: Sell Your Home.
Tags:

A couple of final tips to sell your home quickly:

  • Kitchens & baths sell homes – keep them squeaky clean. Look at them with an objective eye. Do they look tired and dated? Some new paint, door handles, and faucets may go a long way to improve their style, and your bottom line.
  • Maximize the lighting in your home. Use simple timers if you aren’t there to turn lights on before showings. During the day let lots of natural light stream in through clean windows during showings.
  • Don’t over upgrade just to sell. Some updating will help the home sell quicker and for more money. Other upgrades have a limited return. (For a list from the National Association of Realtors of remodeling projects and their average return on investment, email your request to caroll@PropertyByReferral.com).
  • Keep your pets incognito. Even if people know you have pets, they should be able to walk through your home without seeing clues such as feeding dishes and toys.
  • Ask a friend if there are any odors in your home (i.e. pets, smoking, or mustiness). If there is a smell, find the source and fix it. Even light odors can kill a sale.
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Sell Your Home Quickly, Part 2

Posted by Carol Lawhun | on Monday, April 20th, 2009 at 12:28 pm
Category: Sell Your Home.

Tips for getting the best price when selling your home in any economy:

  • Always be ready to show – keep the home clean & neat. When buyers see dirty homes they may question the level of routine maintenance. In a market with a lot of competition they may decide to just move to the next home.
  • Neutralize and take ‘you’ out of your home. It may not be as much fun to live there, but it is easier for the buyers to visualize themselves living there. Remember, your goal is to transition from this being your home to it belonging to someone else. Help them see the possibilities for themselves.
  • Paint can really freshen up a place. Keep the colors light and neutral. (For example, bright sunshine yellow is not neutral but a soft butter-cream yellow is neutral). Make sure the paint job is done well without brushing on the trim or ceiling.
  • Start preparing for your move – remove some furniture and items from the rooms and closets. I use a general rule of thumb of removing about a third from an average home. People will look in closets and drawers, so help them look spacious and neat.
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Sell Your Home Quickly, Part 1

Posted by Carol Lawhun | on Tuesday, April 7th, 2009 at 11:56 am
Category: Sell Your Home.
Tags: ,

Ever heard that REALTORS® own homes may sell for a bit more than the homes they list for other people? Would you like to know why? The answer is they follow their own advice on how to maximize the impact of their marketing. Selling quickly for top return requires working at both the marketing and following some basic principles. First up – Curb Appeal.

  • Have your home look welcoming and well groomed from the street. Trim up untidy bushes and landscaping. Dispose of unsightly brush piles. Add a punch of seasonal color – perhaps a wreath on the front door and a new welcome mat.
  • If you don’t have a green thumb and are on a budget, try a planter with nice looking potted silk plants from a second hand store.
  • Keep your siding and trim clean and maintained. Chipped paint can be a problem for some appraisals besides looking unslightly.
  • Make sure your doorknob & key work smoothly so buyers don’t start wondering what else needs work.

Remember, most buyers want to be excited about their future home. They want to send pictures to family and friends and hear how cute it looks.

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First Time Home Buyer Tax Credit as Modified in the American Recovery & Reinvestment Act

Posted by Carol Lawhun | on Wednesday, April 1st, 2009 at 12:46 pm
Category: First Time Home-Buyers.
Tags: , ,

Congress has amended the tax credit for first time home buyers for homes purchased from January 1, 2009 to December 31, 2009. A person (or couple) qualifies for the full credit they (either of them) did not own their principal residence during the previous three years and if they did not make over $75,000 for an individual or over $150,000 for joint filers (adjusted gross income). The credit phases out with income limits of $95,000 for an individual or $170,000 for a couple).

The tax credit amount is the lesser of $8000 or 10% of the home purchase price. This is an increase over the 2008 tax credit of $7500. Another change over the 2008 version is that 2009 home buyers do not have to repay the tax credit if they stay in the home for over three years. If the home is sold within three years, the entire tax credit is due to be paid back as a recapture amount at the time of the sale.

This credit can be used to pay down the purchaser’s income tax liability when filed. If the tax credit is greater than the buyer’s liability the difference can be refunded back.  This first time home buyer credit is part of the federal act passed by congress.

There are other programs to also consider when buying a home. South Dakota Housing Authority has it’s own program for first time home buyers, there are FHA loans to help people, and there is a Rural Development Program for people who want to buy outside of city limits. I am running out of time now, so more on those programs on another blog!

If you would like help charting your way through the home buying process, please contact me at caroll@PropertyByReferral.com

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Market Recap

  • Avg. Sales Price: $176,000

  • Avg. Days on Market: 79

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