The Freeman/Davis Home Team Blog

The Freeman/Davis Team at Coldwell Banker/HPW is proud of our long-time emphasis on assisting first time buyers with this important step in their lives. If you or someone you know is beginning to think about buying a home, we have important information on the selection process, resale considerations when buying, the $8,000 tax credit (which you may be able to use as a portion of your down payment) and the entire homebuying process. Visit http://www.homesearchraleigh.com/, http://www.freemandavishometeam.com/ and www.WakeCountyRealEstate.com for information essential to know for such an important purchase. Then email or call us at 919-649-6638 for a personal consultation.

As a first time buyer, your biggest challenge is to balance livability and profitability in a way that makes sense for you and your family. Remember, you are buying a home first and an investment second. Of course, there’s no foolproof formula for buyer success, but there are steps you can take to stack the odds in your favor:

Tip 1: Leverage free and low-cost resources

There’s an abundance of free and low-cost resources for home buyers on the Web. A Web search can turn up helpful articles, buyer guides, online tools and purchase/ refinance calculators. Keep an eye out for helpful tools like step-by-step guides and checklists to help organize your search. Some Web sites now offer online tools to help you estimate home prices and search for undervalued properties.

Tip 2: Check out the new models

Real estate’s old guard seems to be under assault at every turn today as traditional broker’s battle competition from discount and Web-based brokers. Today, buyers have more options than ever before. You can use a full-service broker, discount broker. To make buying more affordable, consider the home buyer rebate programs that are becoming more popular. Rebates can help offset closing costs, which are a real obstacle for many first-time buyers. Be aware that some states currently ban real estate rebates all together, and others limit rebates to credits applied to closing costs.

Tip 3: Lock in a realistic budget

To save time and trouble, first time buyers should have a realistic budget in mind before they shop for homes. One way to determine how much house you can afford is to get “pre-approved” by a lender. Pre-approval means you know exactly how much of a loan you’ll qualify for, so you can limit your search to homes in the right price range. Pre-approval also boosts your credibility and negotiation position with sellers.

Tip 4: Buying — personal decision, business transaction

The Department of Housing and Urban Development (HUD) advises home buyers to create a wish list to help focus priorities. That way, you’ll remember that a spectacular foyer is nice-to-have, but safety and services are essential. Having clear goals will help keep you from getting carried away with emotional factors. Sellers who love their homes tend to ask too much, and buyers who fall in love can end up overpaying. With a little research, you can get can get an objective estimate of property value to make sure the seller has set a fair asking price. There are tools and resources on the Web to help you better understand home valuations.

Tip 5: Don’t let closing costs surprise you

Once you understand the buying process, you should understand and budget for transaction costs. In addition to your down payment, buyers pay most of the closing costs when purchasing a home, including things like inspection fees, title insurance, taxes and more. Closing fees can add up to 5-7 percent of purchase price, and must be paid before you get the keys. Your lender can provide what’s called a “good faith” estimate of your closing costs. Most closing costs are not negotiable but some are. When you’re comparing lenders, don’t be shy…ask which fees are negotiable, then ask if any discounts are available. Finally, be cautious about “no-cost” closing promotions because the lender may be simply passing on the costs in the form of a higher interest rate.

Tip 6: Build a support team

Buying a home is a big investment and a big decision, but you don’t have to go it alone. Remember, at each step of the way, there are people and resources to help you. Use the Internet and ask friends for referrals. Don’t be afraid to pick up the phone and call real estate professionals, mortgage providers, title companies and insurers to ask questions. These professionals should be good resources to help you learn more about home buying, because they want to earn your business. If they are not helpful, then you have also learned something important…that they don’t deserve your business.

Tip 7: Clean up your credit

Low credit ratings mean that buyers won’t qualify for the best available interest rates and fees, which could mean considerable extra expense each month for the life of the loan. First-time buyers should check their credit scores and fix any problems before applying for financing.

Tip 8: Begin with the end in mind

Author Stephen Covey’s advice for effective living also applies to effective home buying. Resale may not your primary consideration, but it’s an important factor. Can you buy in an up-and-coming neighborhood or region? How is the “commutability” from your new home to local employers? How good are the local schools? A few queries to your favorite search engine will turn up free or inexpensive school rating services. Also be on the lookout for outdated features when you buy. If the those small closets and harvest gold appliances seem out of step now, you can bet that they won’t look any better to prospective buyers in a few years.

Tip 9: Don’t move without The Freeman/Davis Team

Call us now at 919-649-6638 and visit our websites: www.HomeSearchRALEIGH.com, http://www.freemandavishometeam.com/ and http://www.wakecountyrealestate.com/ for more information and complete listings of every home for sale in the Raleigh area MLS.

We’re here to help YOU make GOOD DECISIONS!

Summer is one of the most popular seasons for holding a yard sale. But simply holding a yard sale doesn’t necessarily mean you’ll end the day with lots of extra money in your pocket. If you’re planning on clearing out your clutter this summer, here are ten tips to help make your yard sale a success:

1. Start your yard sale earlier than other yard sales in your area so shoppers will start their shopping day with you.
2. Don’t schedule your yard sale on a holiday weekend or during a big event in your area (like a sporting event or festival).
3. If it rains, take down your signs and reschedule your sale so you can maximize traffic on the day of your sale.
4. Before your own yard sale, visit other sales in your neighborhood to get an idea of typical prices.
5. Place all of your items (except for large items) on tables so shoppers don’t have to bend.
6. If you plan to sell electrical items, have an outlet and extension cord handy so you can show shoppers that the items work.
7. If you want to sell larger ticket items, look for those items in a local circular and then attach the ad to your item so shoppers can see that they are getting a great deal.
8. If you have a variety of items that men would like, place them on their own table. If married couples stop by your sale, both parties will enjoy looking.
9. Advertise your sale ahead of time in your local newspaper classified section, on community boards at your local food stores, and online at places like www.Craigslist.org.
10. Wait until the morning of your garage sale to hang signs in your neighborhood, and make sure you take them down that day to avoid any fines from your homeowner’s association or your town. You don’t want to have to use all the cash you earn to pay a fine!

And remember, a successful sale is also a safe sale. Keep money in a pouch around your waist instead of in a cash box (which could get stolen while you are helping shoppers), don’t accept checks (which could bounce), and never allow strangers inside your home to use the bathroom or telephone.

Follow these tips, and you’ll be well on your way to having less clutter in your home, and more cash in your pocket!

Ken Atkins, executive director for Wake County Economic Development (WCED) (www.raleigh-wake.org), has announced that Raleigh was named one of the top 10 U.S. cities for growth potential by Kiplinger’s Personal Finance.  For its 2009 Best Cities list, the publication examined trends in population, unemployment, income and cost of living among U.S. cities that have “solid employment opportunities and the talent to create new, well-paying positions.”  Analysts looked not only at the number of jobs, but also the quality of those positions and the ability of cities to hold on to them when the economy softens.  Raleigh’s high ranking was based largely on an economic base created by North Carolina State University, Duke University, the University of North Carolina at Chapel Hill and Research Triangle Park.  For the complete Kiplinger story, visit www.kiplinger.com/magazine/archives/2009/07/best-cities-2009-where-the-jobs-are.html.

The top 10 cities on the list included: Huntsville, Ala.; Albuquerque, N.M.; Washington, D.C.; Charlottesville, Va.; Athens, Ga.; Olympia, Wash.; Madison, Wis.; Austin, Texas; Flagstaff, Ariz.; and Raleigh.

Raleigh metropolitan area has been named the “Best Place for Business and Careers” for the third straight year by Forbes.com. Forbes reviewed the 200 largest metropolitan areas in the US and examined 11 different criteria: colleges, cost of doing business, cost of living, crime rate, culture and leisure, educational attainment, income growth, job growth, projected job growth, net migration and subprime mortgages. The Raleigh-Wake County region is strengthened by its strong job growth (both past and projected), low business costs and highly educated workforce. Forbes.com points out while Raleigh cannot fully escape the impacts of the current recession, it will be one of the places to lead the nation’s economic recovery.

Forbes also has released its list of the top 5 cities where Americans are relocating and Raleigh was again at the top of the list, followed by Austin, Charlotte, Phoenix and Dallas. 

To determine the fastest-growing metro areas in the country, Forbes used 2008 population estimates for metropolitan statistical areas with a population of more than 1 million, released March 19, 2009, by the U.S. Census Bureau. Forbes then compared the 2008 population estimates to the previous year’s data to see which areas had grown the most, percentagewise.

The cities that made the list share similar qualities: more business opportunities, better weather and more affordable housing. The top three areas according to the data are Raleigh, N.C., ranking first, which jumped 4.29% to nearly 1.9 million; Austin, Texas, which came in second, with a 3.77% increase to almost 1.7 million; and Charlotte, N.C., which moved up 3.36% to 1.7 million.

Raleigh is a great place to live and buy a home.  An earlier blog story here talks about how Raleigh Ranks #2 for a real estate rebound as announced on The Today Show on NBC during the interview with Barbara Cocoran for the “Today’s Real Estate” segment.

If you’re looking to make a move to the Raleigh area, contact the Freeman/Davis Team at www.FreemanDavisHomeTeam.com and www.HomeSearchRALEIGH.com.  We are area experts, having lived here most of our lives.  Call us at 919-649-6638 and let’s talk about your next real estate move.  In fact, regardless of where you are moving to or from, we can help with our network of great real estate agents across the country.  Visit www.CertifiedRelocators.com for more information and registration.

Barbara Corcoran, founder of the New York real estate firm The Corcoran Group, has come out with the top 5 markets on the verge of recovering from the housing downturn.

Corcoran said on NBC’s Today Show that her list factors included overbuilding, population and job growth, demand from first-time home buyers, vital downtowns, and well-educated populations. She also said she looked for places that had early waves of foreclosures because those places might now be coming out of that cycle.

Corcoran lists Denver at the top but the great news for those of us in the Triangle area is that Raleigh takes the second spot. As far as I’m concerned, there is no problem being a bridesmaid when you’re talking about just missing the top spot in the country for real estate rebounds.

For more details about the Raleigh area and the great real estate on the market, talk with the Freeman/Davis Team at Coldwell Banker/HPW. We’re here to help you learn all about the area and all it has to offer. Ask about the $8,000 First Time Buyer Tax Credit and see every home listed in the area’s multiple listing service (MLS) with a visit to www.HomeSearchTRIANGLE.com, www.HomeSearchRALEIGH.com and www.FreemanDavisHomeTeam.com. As long time residents of the Raleigh/Durham area, we’ll make you feel right at home and help you make good real estate decisions.

A very important week is in store, with two important announcements due toward the end of the week. As you know, the “mark-to-market” accounting issue has been discussed in this newsletter many times, and this Thursday should be a big day on that front. The Financial Accounting Standards Board (FASB) is set to announce their ruling on whether to modify mark-to-market, and perhaps allow cash flow analysis to determine valuation of financial assets. Not a coincidence, the strength we have seen in Stocks over the past couple of weeks has been fueled by speculation that mark-to-market will be modified, thereby helping reinvigorate the financial system of our country. I will be watching very closely to see what happens and how the markets respond.

On Friday, the Labor Department will release their Jobs Report for March. Last month’s report showed that 651,000 US jobs were lost in February, while revisions for the prior two months showed that an additional 161,000 jobs were lost between December and January. Given that last week’s Initial Jobless Claims report showed that the number of people collecting state unemployment benefits has reached a record high - jumping to a seasonally adjusted 5.56 Million - it will be important to see what Friday’s report reveals.

As you can see in the chart below, Bonds are currently trading between key technical levels, with a ceiling of resistance overhead, and a floor of support underfoot. But remember: Strong economic news - such as a positive change in the “mark-to-market” situation - will likely cause Stocks to rally, and Bonds and home loan rates may worsen in response.

Call the Freeman/Davis Home Team at 919-649-6638 and let us put you in contact with our premiere Lending Manager, Beth Prochaska.  Together, we can find you the home of your dreams at financing terms that you will find favorable now and in the many years to come.  Let us be your “Trusted Advisors” in real estate and mortgage finances.  Visit us online at www.HomeSearchRALEIGH.com and www.FreemanDavisHomeTeam.com.  You can comment on our blogs anytime and we would love to hear what you have to say at www.iRaleighBlog.com and www.HomeSearchRaleighBlog.com.

For the Fannie Mae 4.5% Mortgage Bond chart, visit www.iRaleighBlog.com

Those of us living in the Raleigh area now have proof that we’re Number 1! Statistics released yesterday show that Raleigh and Cary combine to make up the fastest-growing metropolitan area in America. 

The combined Raleigh/Cary population increased to 1.1 million people between July 2007 and July 2008, a 4.3 percent jump, according to the U.S. Census Bureau data.  We’re certainly not surprised, after all we have the top hospitals, the best universities, the Research Triangle Park AND two teams in the NCAA Tournament.

Cary, with more than 134,000 residents, has quickly become a place for families as more than half of households have children under 18 years old.  Cary’s attractiveness begins with the great state in which we live.  One big draw to North Carolina is the climate and secondly, the abundant education and economic opportunities.  With those things in mind, families then want to choose a community a safe, attractive and diverse community like Cary.

In Raleigh, the number of incoming residents within the city limits over a 12-month period has dropped, according to city statistics. About 9,000 new people are expected to have moved into Raleigh from June 2008 to July 2009. Historically, that number is between 12,000 and 15,000.  Still, Raleigh is continuing to grow, but not at the same rate as Cary; we can see it in the number of building and inspection permits.

Wtih 11 of the 100 fastest-growing counties nationwide being in North Carolina, I am convinced that Raleigh and Cary will fare better during the downed economy than other parts of the country.   We’re a great place to invest; we’re close to the beaches, close to the mountains.  And did I mention basketball?  There’s no other place to enjoy March Madness than in the Triangle area of North Carolina.

Come grow with us!  Learn all about the area and see every home listed in the area’s multiple listing service (MLS) with a visit to www.HomeSearchTRIANGLE.com, www.HomeSearchRALEIGH.com and www.FreemanDavisHomeTeam.com.  As long time residents of the Raleigh/Durham area, we’ll make you feel right at home and help you make good real estate decisions.

An unexpected rise in Housing Starts for February was reported this morning, coming in better than expected at 583,000 versus estimates of 450,000. 

Building permits for new homes rose to a 547,000 annual rate when expectations were for 500,000.  Although this does not constitute a trend, it is a good start. Hopefully we will see this momentum contributing to our spring market for new home sales as well as resales.

With the new incentives offered by the government, I do believe that we are in for a significant rebound in real estate, especially in the Raleigh/Durham area. If you’re keeping a watchful eye on the economy and feeling like it is time to make your move, call the Freeman/Davis Home Team at 919-649-6638 and visit www.HomeSearchRALEIGH.com for every home listed in the Raleigh/Durham MLS.

On our blog sites, we will provide helpful information on the new programs available to help you realize the dream of homeownership.  Here are the answers to a number of questions regarding how the stimulus package applies to your situation. 

Tax Credit for Homebuyers

First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit Versus Tax Deduction

It’s important to remember that the $8,000 tax credit is just that… a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if a homebuyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Better still, the tax credit is refundable, which means the homebuyer can receive a check for the credit if he or she has little income tax liability. For example, if a homebuyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit… and still receive a check for the remaining $4,000!

Phase-out Examples

According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

To break down what this phase-out means to homebuyers who are over those amounts, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.

Remember, these are general examples. You should always consult your tax advisor for information relating to your specific circumstances.

Homes that Qualify

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.
Higher Loan Amounts

More good news – there is an extension on the additional tier of conforming loan amounts which had been first established in 2008.  This tier of home loans is those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750.  These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.

Additional Housing-Related Provisions

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements for more than one million modest-income homes through weatherization. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs. Specifically, it establishes a new program to upgrade HUD-sponsored low-income housing (for elderly, disabled, and Section 8 housing) to increase energy efficiency, including new insulation, windows, and frames.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

More Help for Homeowners in the Future
Another thing to keep an eye on in the coming weeks is President Obama’s plan to help struggling borrowers before they are faced with a default on their mortgage.

According to reports, the Obama administration is discussing plans to help borrowers who are struggling to stay afloat, but who have not yet fallen behind on their payments. At this point, details are scarce; however, reports indicate that President Obama is looking to spend approximately $50 Billion to directly help homeowners before they face foreclosure and financial disaster.

While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

Good news for buyers and sellers in the Raleigh NC area - your investment is considered one of the strongest and soundest in the nation!

Builder and Hanley Wood Market Intelligence have just released their top 15 strongest housing markets in the nation - and Raleigh, NC was ranked an impressive #6, out of all major markets in the country!  What helps Raleigh make the grade?

- Raleigh NC is a state capital with multiple major universities

- Through the third quarter of 2008, Raleigh was still adding jobs at an impressive rate of 1.9 percent.

- Population is over 1 million, AND population is growing at one of the highest rates of any top metro market over the past five years.

- Median home price of $221,900 is well below other major cities in the mid-Atlantic and Northeast.

What else helped these top markets make the list?

A lack of the huge run-up in prices that later led to rampant deflation elsewhere.  Raleigh has seen slow, steady growth - including a 4% appreciation rate in 2008 when many areas were depreciating.  Good news for sellers, and also good news for buyers worried about future values.  

It’s not just Raleigh either - North Carolina as a whole remains one of the best places to live in the country.

Charlotte and Wilmington also made the list - that’s 3 out of 15 for North Carolina.  Texas is hot too - with four of the top choices.  And Seattle WA also remains one of the strongest US markets. 

Recent Raleigh/Triangle statistics reflect what the researchers saw - sales are increasing, and inventory has dropped significantly over the last year. 

Interested in the statistics for your particular area or neighborhood?  Contact The Freeman/Davis Home Team at FreemanR@hpw.com or call 919-649-6638.  Visit our websites at www.FreemanDavisHomeTeam.com and www.HomeSearchRALEIGH.com for the latest market news as well as full listings for Raleigh area real estate and homes for sale in the MLS. 

Well, it was a nice idea while it lasted. 

Yesterday, lawmakers in Congress reached a swift compromise on a $790 billion stimulus package but the proposed $15,000 credit for new home purchases has been removed from the bill in an effort to reduce its cost. The compromised bill whacks an item that’s generated a lot of excitement in home-selling circles in recent days.

The measure would have cost an estimated $35 billion.  Realtors such as myself and home-builders had given it their full-throated support calling it the the most effective way to stop the downward spiral of home prices.  Many of us in the Raleigh real estate general brokerage business have potential buyers who have been waiting to see whether the credit went through before purchasing a home.

While some economists were skeptical, saying it would artificially prop up the housing industry and do little to help people most in need, the majority of us have said the incentive would be a strong boon to the housing market. What was proposed and cut from the stimulus package yesterday, would have been a much more effective measure than the $7,500 credit enacted last year, which is required to be paid back in subsequent tax years. The $15,000 credit would not have had to be paid back, and would have been effective for one year after the bill was enacted.

Either way, it looks like history.  While many of us are disappointed at the outcome, there are many excellent reasons to purchase now rather than wait.  Many homes on the market have cut their list prices, there is a large number of listings to choose from and interest rates are at historically low levels.  Contact us and we can begin your search online.  Visit www.HomeSearchRALEIGH.com and www.FreemanDavisHomeTeam.com to get started!

What do you think about this outcome?  Leave your comments below!