When a house for sale has an offer to purchase made and the seller and buyer come to an agreement on all the terms, sign and initial where appropriate and delivery of the contract is completed, that property is said to be “Pending” or “Under Contract” or “In Escrow”, depending on where you are. That means that - if all the parties follow through with their obligations - the property will close and change hands.

Pretty straight forward, right?

I get asked on a regular basis - usually by a client who is the buyer - whether someone else can buy the house ‘ out from under them’. They want to make sure that all the stress they’re going through will pay off with a new house.

The answer is that, while the contract between the parties is binding on all, it ain’t sold until it’s closed and the deed recorded. For that reason, offers can continue to be presented to the seller up to the last minute. The very last. As in, until the register of deeds at the county courthouse has stamped the paperwork, reflecting the new owner’s information. Further, not only can offers be presented, they must be, by NC real estate licensing law.

But a presented offer cannot override a contract. So, if you’re worried about being bumped out of position on a house which you’re buying, relax. If you’re hoping to buy a house that someone else beat you to - sorry. Unless the original contract falls through for some reason, you’ll need to start looking at other houses.

The good news is, I can recommend a really good agent!

I can clearly remember the moment when I thought my new, young husband had lost his mind and that I had married someone who must have bumped his head as a child. It was when, as we sat in a Chinese restaurant on the town square in Chelsea, Massachusetts that Cute Husband said, “We need to buy a house”.

I blew noodles and soy sauce all over him laughing.

I was only 23. He was only 21. Yes. I was a child and he was virtually a toddler. And we had a new born - the wonderful Lindsay - to boot.

Buying a house was something I associated with magic. Or at least with adults. Who were we to think about doing such a thing?

But the truth is, it ain’t magic. Or brain surgery. Or impossible.

And even in these weird real estate times when the sky seems to be falling, buying a house is pretty straight forward. What it takes is determining your price with a good lender, getting associated with a good Realtor (hmmmm… To whom could I link you on that score?…) and jumping in.

It’s all about the numbers. If you pay your bills on time, have a job and want to join the ranks of those who get to itemize deductions on tax returns, then start the process. I am happy to answer any questions you have, whether you live in my area or not. I believe in homeownership.

After I stopped laughing at Cute Husband for having the nerve to think we could buy a house, we started looking and - wonder of wonders - we bought a house. He, Lindsay and I moved our little selves in and never looked back. Since then it’s been two more children, a few more houses and and plenty of admitting that if all had been left to me, we’d still be living in a 3rd floor walk up with bad heat, paying too much in rent.

So, don’t be like me. Be smart. Be brave. You won’t regret it.

When the Federal Reserve members got together really, really early on Tuesday morning - or late, late Monday night - of this week and did what they did, true financial news was made.

And what they did was drop the overnight funds rate (what banks charge each other as they make use of your money and mine) an incredible 3/4 of a point. A “point” is 1% interest rate. You may here about mortgage lenders charging a “1 point loan origination fee”. That means they’ll charge 1 percent of the loan amount to make the loan. More about that later…

So, back to the Feds. The reason they made this dramatic move was that international stock markets were in what can only be described as a melt down on Monday. In one of the few lucky breaks our economy has had in recent months, our stock market was closed for the MLK holiday so was not melting down. And the Feds wanted to make sure the heat was off when the opening bell sounded on Tuesday. A broad stroke was required to calm nerves. And stroke they did. And while the market dropped a bit down on that day, it was nothing like the 5%, 7%, 10% losses the other markets had experienced on Monday. And the market was up for the week by Friday. First time in 2008 that’s happened.

What does all this mean to you? It means that interest rates on mortgages are as low now as they’ve ever been. My favorite lender was quoting 4.875% on 15 year loans for a short while this week.

4.875%!!!!

So, if you are even thinking about buying a house, particularly in my neck of the universe here in Greensboro, NC, and if you have decent credit, the TIME IS NOW. Again - and I am running the risk of being the online version of a broken record (for those of you old enough to know about vinyl records) property values in Greensboro are not in the boat some other areas are. We aren’t seeing values drop. So buying is a good idea.

It’s a buyer’s market. This doesn’t happen often.

Plenty of inventory.

Crazy low interest rates.

And me!

What more could you ask?

I get this question often from both first-time buyers and those who have purchased property before. It’s a good question. And at some point a buyer will often wonder whether the appraiser, home inspector, Realtor, lender and all other parties involved in the transaction are happily colluding in order to close a deal, whether or not it’s in the best interest of the buyer.

There’s no doubt that there have been unscrupulous “professionals” who have engaged in a wink-wink/nudge-nudge mentality or turned a blind eye to issues that should actually raise red flags and perhaps stall or tank the deal. But those parties have always been in the minority and now that a bright light is being shown on real estate loans, they’re running back under their rocks. They’ll most likely turn up in another industry but, thankfully, they’re going to find it more difficult to jack things up in real estate.

But back to the main topic: The difference between an appraisal and a home inspection is that the appraisal determines the dollar value of a property. A home inspection checks out the soundness of the main systems of a property to see if things are working as they should.

The appraisal is required by the bank to verify the house is worth what they’re lending.

The home inspection is not required by anyone but is always a good idea.

You as a buyer will generally be expected to pay for both the appraisal and the home inspection, and usually “up front”. That’s a good thing.

Why?

Because it should give comfort to know that the appraiser and the home inspector won’t have a vested interest in whether the transaction goes through or not. They’ve performed the service and been paid. If the deal falls apart, it won’t impact them. So you as a buyer don’t have to worry that people who are supposed to being verifying that you’re buying a good house aren’t setting you up for failure.

I’ve also been asked how it is that the appraisal can come in exactly where the contract price is. That has made more than one of my buying clients scratch their heads. And I understand how it can look fishy. “How can the appraisal come in EXACTLY at $219,900 when that just happens to be the purchase price? What’s up with that??”

The reason is that the appraiser knows the contract price as soon as they get the order. They are hired by the bank - although the buyer pays for it - in order to verify the value. The bank wants to make sure that they are making a good loan. The appraiser’s job is to support the price.

But if they can’t, they won’t.

I’ve had lenders advise me that an appraisal has come in lower than the contract price on a pending sale. Fortunately, very often the seller will just adjust the price and the buyer comes out even better. At the very least, the standard “Offer to Purchase And Contract” that is used by Realtors here in North Carolina protects buyers from having to close on a property when the appraised price is not at or above the contract purchase price.

In short, if the appraisal comes in lower than the contract price, the buyer is not obligated to close.

The home inspection is a whole different story and will be for another day. Or three. (Inspections are where transactions can get REALLY interesting!!)

The press is consumed with a short list of topics: the presidential race, Brittany’s level of psychosis, and the state of real estate. And it’s a toss up as to which of the last two are the most screwed up.

No doubt that the real estate market in many areas is struggling. And in some places prices are dropping precipitously. But not everywhere. Not here in Greensboro, NC.

As I’ve written several times, our market has generally enjoyed steady but modest increases in prices over the years. It has been good, sustainable growth. Since we didn’t see double-digit jumps in values as did some markets (California, Florida, Nevada) we aren’t going through a “correction”. Our prices, for the most part, have continued to increase, even midst the dire reports in the news.

Of course, there are - and always have been - exceptions. For those properties that are in foreclosure, the price may be lower than others in the neighborhood. But not always. And some large volume builders have started offering incentives to lower their inventory. But not all builders.

In general, homes in the Greensboro area continue to sell at about 95%-97% of their asking price. This can difficult for buyers coming in from other parts of the country to accept. And really hard for those who have bought into the idea that all sellers are ready to get rid of their homes at fire sale prices. It just ain’t happening.

All that having been said, it is certainly a Buyer’s Market. What that means in this area is that there is more inventory on the market than there was 18 months ago and that homes are remaining on the market longer. And interest rates are great.

Does this mean that the seller whose property is listed at $245K will knock $15K off the price, pay $5K towards your closing costs, throw in a fridge and baby-sitting for year? Well, you can try. But be prepared to so irritate the seller that they refuse to negotiate with you. You may end up paying more for the house than you would if you had made a reasonable offer in the first place.

Best advice is to connect yourself with an experienced Realtor who can provide you with some guidance, comps, etc., and then listen to that person!

If your goal is to get someone to come off their price by 15% or 20%, then just look at overpriced houses. If you want to buy a house that you’ll be happy to come home to every day and that’s worth what you’re paying, look at the properties that meet your criteria, take advantage of the low interest rates, and be happy that you can take advantage of having so many good choices.

There. I feel much better.

Now, will somebody please help Brittany get herself together!?

I’ve had many questions over the years about property taxes in Greensboro and how they’re figured, how they relate to market value, how a homeowner pays them, etc.,

Seeing as how I’m getting ready to pay our property taxes for this year (gulp) I thought it was a good time to write about the topic.

[I'll be writing about how property taxes are handled in the Guilford County, North Carolina market. Your mileage may vary]

Property taxes are figured by multiplying the tax rate by your property’s tax value. Both of these numbers are determined by the county and/or city. Within Guilford County, as with most places, there are different tax rates depending on location, municipal services available, fire district and various factors. The tax rate can be and usually is adjusted every year and is determined by the city and county budgets. The powers that be figure out how much will be spent on services and so how much must be charged in property taxes.

The tax value is determined once every 8 years. Yes, that’s 8 (e-i-g-h-t) years. That’s the maximum number of years allowable by North Carolina law and Guilford County uses every bit of them. What happens is that appraisals are done on representative properties throughout the county and the surrounding properties are adjusted based on the subject property. Thus is born the tax value.

What can be deceiving to buyers is that the tax value can be pretty far afield from the market value. This is because the tax value is “updated” only once in eight years. Fortunately, in Guilford County, market value (what people have been paying for houses based on market conditions) has steadily increased. You might see a home that sells for $210,000 and the tax value is $168,700.BTW, this is a reason that sites like zillow.com and others don’t necessarily reflect accurate market values on homes. The data is pulled from tax records and Greensboro tax records will show what a municipal appraiser valued a house at in about 2004 or so. You can see properties that have actually sold recently as well. Just be aware that some of the data should be used as a tool in determining the price range of a neighborhood - not the last word on it.

In Guilford County, the city of Greensboro has the highest tax rate. For this, we have trash pick up, city water and sewer services, complete fire and police coverage, street maintenance and various other services. The more remote or rural the part of the county, the lower the tax rate. And for this, properties in the outlying areas may be on well and septic systems, have to pay for trash removal, may have different fire coverage, and so on.

So, what ARE taxes in Guilford County?

For 2007, the top property tax rate is $1.32640/$100 of value. That means if a house is valued at $100,000 and it’s taxed at the City of Greensboro rate, the annual tax bill will be $1,326.40.

If the house is in, say, the Whitsett community (northeast of Greensboro) the annual tax bill will be more like $754.00

You can get more information and detail about all this at the Guilford County tax department site.

And remember that in most cases, your mortgage bill will include your property taxes (and homeowners insurance). In the case of the Greensboro house noted above, your mortgage payment would include 1/12 of the annual taxes, or about $113.

That’s the “T” in the phrase “P.I.T.I“, which is mortgage-speak that the mortgage payment will include Principal. Interest. Taxes. Insurance. The mortgage company collects money throughout the year and when the bill is sent out, they pay it.

All of this can seem confusing if you’ve never had to think about it before. Post a question or email me if you like. And remember that, while only death and taxes are certain in this life, paying taxes is the preferable burden!

Wow. The economic news couldn’t be weirder.

What usually happens is that the real estate market follows whatever the heck is happening in the economy in general. That means, if the economy has taken a hit due to stocks, gas prices, war…whatever….the housing market may follow. But what is happening now is that the real estate market is impacting the economy.

This is bass-ackwards.

But it’s true.

As with many other aspects of modern life, we live in interesting times.

Fine. What does this all mean to you? All you want to do is buy a house. You just want to own the place you’re paying for every month.

What all this means is…..

…Almost nothing. At least, not if you’re intending to buy a house in MOST of the country that isn’t southern California, Florida, Arizona, Michigan and a couple of other places where housing values have dropped in the last few moths.

Greensboro, NC and the surrounding areas have been stable. We’re always stable. We’re pretty boring. And right about now, when real estate drama is making headlines, boring is cool.

There’s plenty of inventory.

Interest rates are awesome (about 6%-6.5%)

Sellers are more freaked than you could possibly be as a buyer.

This is a classical “buyer’s market”. These don’t come along all that often. This is historic.

And it’s in your favor. So go for it.

If you have a job, pay your bills on time and want to own your own home, there have been few better times to try.

Witness proof that you can still buy a house and smile when it’s all over.

This is Angie & James. They are newly married, and decided they wanted to think about buying their own home. They’d both had enough of renting.

But who can buy a house these day? After all, the news is all about how there’s a credit crunch, the sub prime lenders and borrowers have jacked it up for all the rest. The real estate bubble has burst. Right?

Well, look at these two. They don’t have any special secrets, didn’t listen to late night infomercial tricks about getting rich in real estate. They just did things the way that have always worked. That is, they talked with a good lender, looked at all the homes that were within their price range, had some good guidance (excuse me while I blush) and ended up with a great home.

So, if you’re in the market for a home - especially in or around Greensboro, NC, take heart. Interest rates are STILL in the low 6% range and if you have a job, a decent credit history and feel like you’d rather pay your own mortgage rather than someone else’s (and don’t fool yourself, if you’re renting, you are paying a mortgage…It’s just someone else’s and they’re getting the benefit) then contact me. Or contact another Realtor. Buying your own home continues to have the same intrinsic value it always has and it’s well worth the effort.

Look at these two. They’re thrilled.

They honored me by inviting me and my husband to their house warming party. James had already built a 400 sq. ft. deck, a privacy fence and painted a very pink bedroom to a more James-friendly hue. Angie had made every room her own with just the right touches. And she said to me the best thing she could. She said she never wants to leave that house.

Now, I’m sure they will both want to move one day. And I hope they call me when they do. But the whole point of buying your own home is that you’re happy to go there at the end of the day. Your job may irritate you. Your boss may treat you like a moron. Traffic might make you scream. But if you feel better being at home than anywhere else, it’s all good. It’s what “home” is all about.

Always has been.

I got an IM from Patrick Beeson this morning with a link to a NY Times article about how the current housing drama has some prospective home sellers wanting to list their houses for more than the market will bear right now. There is reference to how this is some odd human trait in times of market downturn. Well, I m here to tell you, ain’t nothing new about it at all.

Home sellers very often want more for their homes than they re worth. They also think their houses have more square footage than they actually do, forgetting that the 1850 square place they bought cannot become 2100 square feet without a bunch of construction people hanging out at their home for weeks and weeks. Only our waist lines increase in size over time without us knowing. Our houses do not.

This brings up a common question: How much is a house worth if I paid “X” to purchase it, spent “Y” on remodeling the kitchen and “Z” on a state of the art irrigation system?

The quick answer is, it’s worth what someone will pay for it. Your total money invested is your issue, not the buyer’s.

Likewise, if you inherited the house and paid nothing for it, you wouldn’t expect to give it away.

So, pricing a house properly is key to having a happy outcome. This is the same whether the market is hot, ice-cold, or nicely temperate, as it is in the Greensboro area.

And when buying, remember that one day you’ll most likely be selling. Make a mental note of the square footage. It won’t be changing unless you make it happen. (But keep an eye on your waist line!)

Many of us prefer to live in blissful ignorance of certain facts of life: the effects of gravity on the human form, how many calories are really in three slices of deep dish pizza with the works, what our parents did with each other to bring us into this world.

A really easy thing to avoid thinking about is our credit score. It can seem really scary to find out what some faceless entity has determined our credit worthiness is. Even worse, it can be frightening to own up to the fact that we pretty much create our own credit score. Who needs to face that bit of reality?

We all do.

And there is nothing to fear, really. Really. If the news is better than you expect - say, FICO score of 730 - hazzah, hazzah. Pat yourself on the back and keep doing whatever it is you’ve been doing.

If the news is more sobering - a score that looks more like a batting average - then swallow hard, look at how you got there and make some changes.

What can be done? First of all, don’t think you’re the only one. Managing your relationship with money is like any other in your life. It takes work. Lots of it. And diligence. And compromise. And sacrifice. And a sense of humor for when things are rough. Many, MANY people don’t have the credit scores that they want. Folks with plenty of money as well as those who have less disposable income. Medical doctors, bricklayers, financial planners, restaurant owners and even Realtors (yikes!) can struggle to manage their money.

So, take heart. It isn’t a badge of shame. It’s just where you are right now. And a few changes over a few months can make a big change in your scores.

Here are some suggestions:

These are just a very few suggestions. If you’re finding that you must use credit each month to cover your expenses, scale back on your lifestyle. Obviously, there are circumstances that can make this very difficult - health issues, for one. But many of us have come to see luxuries as necessities. Again, successful relationships require sacrifice at times. And if you can make your relationship with money and your finances work, you’ll find that so much of the rest of your life seems easier.