is Due Diligence Fee Taking The Place Of Earnest Money In Charlotte, NC.?

A trend seems to be coming up in transactions in the Charlotte, NC. market. Sellers are asking for more money on due diligence and less or nothing on earnest money. Which bodes the question as to why? Due diligence was supposed to be the dollar amount the buyer pays the seller directly to take the house off the market and allow the buyer to perform the necessary inspections, get the home appraised and finalize the loan documentation. At the end of the due diligence period if the buyer did not say they were not going forward with the transaction they would be able to recoup their earnest money but would only have lost their due diligence fee. because the way the system was set up last year the average fee ranged from $100.00 to a couple of hundred dollars and earnest money was from $1000.00 and up depending on the price point of the house and type of loan you were doing. But a trend seems to be happening and I am one that has for the past few months been doing the same thing..... Selling agents are asking for a larger due diligence fee and less or no earnest money. I am noticing (and am doing it myself), that fi the buyer is putting $1000.00 down I am asking for half in due diligence fee and the other half in earnest money. I just had an offer negotiated where the seller asked for no earnest money and all the money in due diligence fee.... So why is the trend heading that way? The main reason I think is that too many transactions recently are not closing and sellers are left with $100 or $200 and lost time off the market for the house. It is becoming more common in the agent comments "back on market buyer financing fell through". Or because buyers do not have a lot at stake in the transaction and they see another house they like they are walking away during the due diligence period..... As mortgage underwriting has tightened their standards, more and more loans are not getting approved near the end or the requirements they are asking is driving some buyers out of the market in the last hours of the deal. Sellers are getting upset because they have taken the house off the market in the prime selling season and want some type of restitution. I have been advising my sellers to ask for almost all the money in due diligence fee. They ask me what if the buyer balks at it. My answer is then they are not 100% totally sold on your house a still shopping around or settling and may walk anyway. With inventory levels so low this has become the time where sellers can dictate stronger terms on the negotiating table and good listing agents are doing that for their clients right now... Dave diCecco Realtor/Broker Coldwell Banker United Cell:704-519-7895 ddicecco@cbunited.com www.davedicecco.com

Charlotte, NC. Housing Stats And trends For March 2013

There is a lot of talk about the housing market in Charlotte, NC. and whether it is improving or if this is a smoke screen. Being one of the largest metro areas in the United States and one of the fastest growing this trend plays a vital impact on home sellers and home buyers alike. So I decided to do a monthly analysis versus the previous year and two years ago during the same month and see where the trends are and how they are impacting the housing market in Charlotte, NC. here are the stats for march 2013: First, let's look at inventory of available homes buyers have to choose from in the Charlotte, NC. region. In 2011 there were 23781 homes for sale in March. In 2012 there were 19473 homes for sale in March. Last month there were 13746 homes for sale. That is a decline of 58% in two years of available homes buyers have to choose from. Second, the average sale price of homes in the Charlotte, NC. region for March 2011 was $195,336. In 2012 the average sale price was $196,214 and last month the average sale price was $216435. That is an increase of 10.7% in the average sale price in the Charlotte, NC. market. Third, let’s look at days in inventory. How long are houses sitting on the market? In 2011 the average home sat on the market for 13.2 months before being sold. In 2012 the number improved to 9.7 months and last month it improved to 5.0 months. That is a dramatic drop in inventory of over 75% in two years. What the trends are showing is that the housing market is out of the recession and available homes for sale have decreased to the lowest levels we have seen in over 5 years coupled with prices slowly creeping back up and more buyers out there than homes available and you have signs of a robust market in Charlotte, NC. If all three factors were trending equally it could be the market fixing itself. But the fact that inventory has declined 25% less than average days on market means we are getting more buyers out there than homes right now and it is starting to cause prices to go up. This is a good thing for the housing industry and the economy. Coupled with the fact, home prices are not skyrocketing to adjust for decrease of inventory shows a stable growth in the Charlotte, NC. market. Dave diCecco Realtor/Broker Coldwell Banker United Cell: 704-519-7895 ddicecco@cbunited.com www.davedicecco.com

When Do You Schedule Your House Closing In Charlotte, NC?

When do you schedule to close your Real Estate transaction in Charlotte, NC. to close? Do you have specific times each month you prefer to close a house transaction? Specific times a day you rather close? Does your Realtor gives you options or just tells you when you are closing? As a Real Estate agent I was always told when I had a buyer financing a house that the closer to the end of the month you could close a transaction the better. The reason was simple. If you close a house on the 30th of the month the buyer pays one or two days interest (depending if there are 31 days in the month). Then they do not have a payment due until the beginning of the second month. By this I mean if you closed on January 30th your first payment would not be due until March 1st. Same as if you closed on April 30th your first payment would not be due until June 1st... and so on. So there was a huge benefit to waiting to close later in the month....It cost the buyer less money. Because if you closed on the 10th or 15th of the month you would have your first payment due the same time as if you closed on the 29th or 30th of the month except you would be paying more upfront for the interest from that date to the end of the month. Because when you make that payment you are actually paying for the previous month. In other words you are paying in the rears. but what if there is a delay in the closing? Let's say you always schedule your closings for the last days of the month and in the late afternoon so your buyers do not have to miss too much work. But something happened and you cannot close at that time or day do to a glitch with the mortgage lender or the seller or one of a hundred things that can and do go wrong with a closing. What do you do? Now the buyer has to wait to the next day or the next month to close.... Can they still close out in time for the month and what are they to do that night with their items? These are things that as buyers and sellers we do not think about but as Real Estate agents we deal with on a regular basis. Two things I like to do. One is schedule a closing with a couple of business days left in the month and make the closing for the morning. For one, this allows me some flexibility if there is glitch in the package at the last minute to still get it closed that day. If it cannot close that day I still have time to get it closed by the end of the month for my client. Because what if your lease is up at the end of the month and you do not make the close. is your Landlord or apartment complex going to let you stay for free or charge you a proration or a full month rent? It can cost you more by scheduling the closing alter in the month than sooner... I always inform my buyers that this is why i recommend closing on a certain day and time. it is up to them to make the decision that is best for them....But I believe as a Real Estate agent it is my responsibility to give them information to help them make a decision that is the best informed. I am shocked when most tell me that they never thought of that and no one explained that to them in their past transactions. So when you are buying a house and have to decide on when to close; choose carefully. The time and day can be deciding factors that can have an impact on your loan and time frame and ultimately the cost to you out of pocket... Dave diCecco Realtor/Broker Coldwell Banker United Cell:704-519-7895 ddicecco@cbunited.com www.davedicecco.com