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Dave's Charlotte Real Estate Blog

By dave | Broker in Charlotte, NC
  • When Buying A Home Do You Know What A Pre-Approval versus Pre-Qualification Loan Approval Is?

    Posted Under: Home Buying in Charlotte, Financing in Charlotte, Property Q&A in Charlotte  |  February 19, 2014 9:14 AM  |  707 views  |  No comments

    As we enter the spring selling season and the last of the snow is melting away here in the Charlotte, NC. area and temperatures are rising back up to the 50's and 60's buyers are starting to come out of their hibernation and look at homes.  With the rise in buyer activity comes multiple offer situations. One thing I always advise a seller to look at when in multiple offers is the pre-approval or pre-qualification letter.  It can make a difference between two offers if they are close.

      So, what is the difference between a pre-approval letter and a pre-qualification letter?  Quite a bit actually.  When you go to talk to a bank about a mortgage generally you do not know the house you want to purchase yet.  You are checking to see if you can qualify for a mortgage and how much of a mortgage you can qualify for.  Thus the lender will typically do a pre-qualification letter to let you go out and shop for a house with.  Now, do not get me wrong; there is nothing wrong with a pre-qualification letter but it is just that...a pre-qualification.  This means that the lender has taken your personal information and pulled all three credit bureaus and reviewed it with you and based on the information on there and what you have VERBALLY told that mortgage broker for income and assets is what they are basing the qualification letter on.  In other words they are taking you for your word on most assets and income.  Unfortunately, there are things that the mortgage broker will not ask because it is early in the process and that could actually hinder your buying power.  For example, you told him you made $50,000 last year combined.  However; a portion of it was a bonus which you never got before or overtime for which you do not always get....  Those usually cannot be included in your income because they are not consistent or steady.

    On the other hand a pre-approval letter means that the mortgage broker has done everything that they would do with a pre-qualification but have taken it a step further.  They have your w-2 for the last two years and have seen your paystubs and bank statements.  They have visually verified your income and money situation as well as job through documentation.  After putting that information in the computer they were able to give you a pre-approval letter.  

    A lot of people will tell me so what....  But the difference is your buying power is stronger with a pre-approval letter versus a pre-qualification letter.   As a seller they would rather they see a pre-approval so that there is a little more verification of funds and income up front and the chances of the deal closing are greatly improved.

    It does not hurt to start out with a pre-qualification letter but once you find a home you want to put an offer in on I recommend to all buyers that they contact the mortgage broker and update the approval letter from pre-qualification to a pre-approval to strengthen their offer...

    Dave diCecco
    Realtor/Broker
    Helen Adams Realty
    Cell: 704-519-7895
    ddicecco@helenadamsrealty.com
    www.davedicecco.com     

  • Relocating To Charlotte NC.: Economic Development

    Posted Under: Home Buying in Charlotte, Property Q&A in Charlotte  |  January 22, 2014 9:21 AM  |  307 views  |  No comments

    In this ever changing landscape I have noticed more and more people are moving to where jobs are and unlike previous generations that stayed where they were for most of their lives the newer generations tend to be on the move more.  One area that is popular among people moving is Charlotte, NC.  I have decided to devote a series of blog posts to the many reasons why people are moving into the Charlotte region on a daily basis.

      First is economic development.  The number one reason people move is for their jobs or to find one.  Charlotte has become a robust area for job seekers over the past few years. There are a lot of reasons why.  According to the Charlotte chamber of Commerce the Charlotte region in the past year alone Charlotte has seen 6,790 new firms invest over 12 Billion in new Charlotte facilities.  This coupled with Hoover's report that Charlotte is home to over 3400 companies that have revenues over 1million annually. 

    But the main reason Charlotte thrives with job seekers is we are home headquarters to eight of the fortune 500 companies and 274 of them have facilities in the Charlotte area.  That means over half of the 500 largest companies in the United States have a stake in the Charlotte market.

    This diversity has helped Charlotte thrive even in the economic down turn.  We are the second largest banking center in the United States behind New York.  That has helped us create numerous jobs in the banking and financial sector which has added to the job growth of the Charlotte region.

    But we are more than just fortune 500 companies and a banking center hub.  We have a large manufacturing base as well as an international companies in the Charlotte region.  In fact Charlotte is the largest hub for international companies in the state of North Carolina.

    When you visit Charlotte for the first time you can now see why there is an ever constant flux of construction going on as the city of Charlotte is constantly growing and expanding to meet the demands of companies here and ones moving into the Charlotte region.....

    This is the first reason I hear from most people on why they chose the Charlotte region to relocate to and one of the reasons I chose Charlotte a little over eight years ago to call home when I was leaving Connecticut.

    Dave diCecco
    Realtor/Broker
    Helen Adams Realty
    Cell: 704-519-7895
    ddicecco@helenadamsrealty.com
    www.davedicecco.com 

  • Buying A Home In Charlotte, NC. With Seller Paid Closing Costs

    Posted Under: Home Buying in Charlotte, Home Selling in Charlotte, Property Q&A in Charlotte  |  January 18, 2014 11:43 AM  |  467 views  |  No comments

    One thing that every buyer is going to ask for on an offer is the seller to pay closing costs or concessions.  Depending on the price point of the house and the type of loan the buyer is asking for it is not uncommon for the buyer to ask the seller for seller assistance in their closing costs.  In fact unless the buyer is paying cash for a house chances are they are going to ask for some help from the seller in covering some of the expenses associated with the mortgage.


    In a market where FHA loans and low down payment loans are prevalent buyers are scrambling to get the necessary down payment together to get a mortgage and trying to leave a little room for moving and doing any personal touches to a house.  Thus if they have saved the necessary down payment they are going to ask for some seller help in getting the closing costs paid in order to close on the house.

    But what are closing costs?  Closing costs are basically the fees associated with the buyer purchasing the house that the mortgage lender charges.  Some fees are pretty fixed such as an appraisal, credit check, and attorney fees and usually do not fluctuate too much from lender to lender.  The variable ones are the home owners insurance (which the buyer obtains) which is pre-paid for a year up front at closing.  Another is the property taxes being escrowed into the mortgage so the mortgage company can pay them when the bill comes do as well as the mortgage insurance.  The other fee is the loan origination fee which is what the lender charges to process the loan and give you the mortgage.

    Are closing costs always the same?  The direct answer to this is NO.  Yes some of the fees are pretty standard and your Realtor should be able to figure out the monthly taxes and how much the lender is going to need to escrow.  As well I recommend before any buyer puts an offer in on a house to get an insurance quote so we know what that fee will be.  Then there is the inspections.  Some will pay for them upfront and others roll it into the closing costs associated with the loan.

    What if I do not use all the closing costs?  There is an old adage that is poetic here.  If you do not use it you lose it.  So if you ask the seller for $5000.00 in closing costs and do not use the whole amount of money then you lose the portion that is not used and receive no credit back for it at closing on the price of the house.  When the seller is negotiating the offer they are factoring in the sale price minus the closing costs; thus they have a net number they are looking at to walk away with. But according the contract it is UP TO that dollar amount.  So if you do not need it all you do not get any of it back.

    I always advise buyers and recommend that you do the same when buying a home; to ask a lot of questions.  I will call the lender and ask them for a breakdown of their fees (if I do not deal with them on a regular basis) and estimate for the buyer and expected closing costs.  One thing I do not want a buyer to do is leave money on the table when negotiating an offer….They work hard for their money and every little penny I save them can add up over the course of a 30 year mortgage.  So, I will estimate the closing costs and usually ask for that amount minus $200.00.  I tell the buyers it is better to have to come with a little extra then to have to give the seller a lot more.  

    I was prompted to write this because I was on the listing end of a transaction where the buyer asked for $4000.00 in closing costs but in the end only needed $2600.00.  They were furious that they could not get a credit from the seller for the difference in the money.  They wanted to know what they could add to the costs or have done to increase the amount so they could get all the money form the seller.  Like I explained to the seller….They did not use it they lost it and you just gained $1400.00 that you did not figure on at closing.  When we went to do our buyer end ironically we were short $258.00 on the closing costs form what we asked the seller for and had to come up with it.  They then said now we understand why you did it that way.  I said yes, I represent you and it is in my best interest to protect your interests and get you the most house for the least amount of money…..  

    So, if you are looking to buy a home and ready to make an offer in the Charlotte, NC. Area make sure to check to make sure you are not asking too much for closing costs and also to little…..It is your money after all.

    Dave diCecco

    Realtor/Broker

    Helen Adams Realty

    Cell: 704-519-7895

    ddicecco@helenadamsrealty.com

    www.davedicecco.com

  • Forbes Ranks Charlotte, NC. Housing Market As A Best Buy In 2014

    Posted Under: General Area in Charlotte, Home Buying in Charlotte, Property Q&A in Charlotte  |  January 18, 2014 11:37 AM  |  496 views  |  No comments

    Every year we hear what the best things to buy are and the best places to live.  I decided to do a google search and came across a Forbes magazine article published on December 26, 2013 that listed what they felt were the 10 best places to purchase homes in 2014.

    Now like any list I read online I wanted to know how they got to the numbers ad what factors they placed into calculating why certain cities were considered a "Best Buy" in the housing market. They used data from market monitor and based it on cities with a population of at least 575,000 people. From there they based their analysis on population, home prices and local job economy.

    These are all good factors to base on whether the area is a good choice and area to purchase homes or if the prices have inflated to a point where the growth is already there.  Fortunately,  Charlotte, NC. has not done that.  With a growing population caused by a lot of people relocating to the area because of the weather and job prospects the growth  in the Charlotte area has been steady with people moving in and we have seen this steady of a growth over the past few years.

    Charlotte, NC. also did not see the drastic drop in home prices other parts of the country did.  We did have a decline in home prices form the peak but not at the drop other parts of the country suffered.  This has helped to keep less home owners underwater and helped keep the prices rather stable for the past couple of years with modest growth in prices.

    Last, Charlotte, NC. has seen a boom in job growth with the merger of Wachovia and Wells Fargo and relocating to the Charlotte area most of their headquarter jobs, being home to Duke Energy (one of the largest utility companies in the south) and with the influx of fortune 500 companies coming to the Charlotte area over the past few years.  This has helped create jobs for them and the ever expanding infrastructure of Charlotte as well and the offspring of jobs it has created....Thus making Charlotte, NC.  a desirable destination for job seekers.

    Based on this data Forbes figures the Charlotte, NC. housing market to increase by 23% over the next three years as they feel that the housing prices are down 15% below what the market value should be right now....This placed Charlotte, NC. as the third best city to purchase a house in on the Forbes list of best buy cities. 

    So, if you are looking to buy a house in the Charlotte, NC. market this looks like it is going to shape up to be a great year to buy a house while prices are still affordable and interest rates are still low....   

    Dave diCecco

    Realtor/Broker

    Helen Adams Realty

    Cell: 704-519-7895

    ddicecco@helenadamsrealty.com

    www.davedicecco.com

  • Get An FHA Mortgage With a 580 Credit Score

    Posted Under: Home Buying in Charlotte, Financing in Charlotte, Property Q&A in Charlotte  |  January 18, 2014 11:34 AM  |  809 views  |  1 comment

    As we turn to the New Year there are some laws and changes in the mortgage process that could hurt some people from getting mortgages and there is the expected interest rate climb with home prices slowly escalating upwards making the home buying pool for prospective home buyers a little smaller.  I want to tackle this week some of the questions and concerns people have moving into 2014 looking to buy a house.   With the start of the New Year it is a time a lot of potential home buyers begin the process of looking for a house and finding the right mortgage.  A lot of it goes hand in hand since most Realtors have a few trusted lenders they use all the time to refer clients to…

    The biggest issue I see home buyers concern with is credit score.  This is the driving factor on whether you can purchase a house with a mortgage or not.  I have had past clients who made more than sufficient money to afford a home but could not qualify because there credit score was to low…  So, what is an acceptable credit score to get a mortgage today?

    Most people tend to look at FHA for their mortgages because it offers the smallest required down payment that anyone can qualify for a mortgage with.  A standard FHA loan requires 3.5% of the sale price as a down payment.  But what are the credit score guidelines to get one of those mortgages?  Everyone seems to think if bank A cannot approve me for an FHA loan because of my credit score then bank B will not be able to either.  That is not true….

    The federal government has a basis for which they will insure these types of loans.  To qualify for the 3.5% down payment you must have a score greater than 580.  If you have a score between 500 and 579 you can qualify for a 90% loan where you have to put at least 10% down.  Now the question is find a lender that takes those scores….

      Most lenders out there today require the credit scores to be anywhere from 620 to 640 minimum to qualify for an FHA loan.  If you do not have that as a middle score between all of your credit bureaus they will generally decline you or offer some assistance to you in helping to get your credit score up….But there is a lender I use that will approve an FHA loan with a credit score as low as a 580.  Yes, I said a 580.

    I know that most people will think there is a catch to this. There is not any.  The qualifications are the same as a person who has a 620 or a 640 score.  It is just that the mortgage lenders are answering to stockholders and shareholders and the risk is greater with a lower score and the paperwork is more scrutinized and they do not want to take on that risk level…….

    So,  if you have a middle credit score of at least 580 ( by this I mean throw out the highest and the lowest and the other score) then call me because I have a lender that WILL approve you with that score as long as you meet the other FHA requirements. 

    Dave diCecco

    Realtor/Broker

    Helen Adams Realty

    Cell: 704-519-7895

    ddicecco@helenadamsrealty.com

    www.davedicecco.com

  • How Is The Housing Market In Charlotte, NC. November 2013?

    Posted Under: Home Buying in Charlotte, Home Selling in Charlotte, Property Q&A in Charlotte  |  December 16, 2013 8:27 AM  |  344 views  |  No comments

    There is a lot of talk about the housing market in Charlotte, NC. and whether it is improving or if the rise in interest rates has caused the market to slow down and prices to lower while inventory creeps back up . A monthly analysis versus the previous year and two years ago during the same month allows me to compare and see where the trends are and how they are impacting the housing market in Charlotte, NC.  Here are the stats for November 2013:

    First, let's look at inventory of available homes buyers have to choose from in the Charlotte, NC. . In 2011 there were 7497 homes for sale in November. In 2012 there were 5367 homes for sale .  Last month there were 3959 homes for sale. That is a decline of 53% in two years of available homes buyers have to choose from.   

    Second, the average sale price of homes in the Charlotte, NC. for November 2011 was $199,542. In 2012 the average sale price was $210,287 and last month the average sale price was $231,643. That is an increase of 14% in the average sale price in the Charlotte, NC. market over the past two years during the month of November.

    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 11 months before being sold  in November. In 2012 the number improved to 6.7 months and last month it improved to 3.9 months. That is a dramatic drop in inventory of over 65% in two years for the average homes ist on the market that sold.

    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.

     
    However; in comparison to last couple of months the trend is showing that the housing market has stabilized and some prices are remaining stable for the past few months with slight increases being seen.  Generally this time of the year we start to see homes slowly decline a little bit as sellers are taking their homes off the market with the holiday's.  Yes there are fewer buyers now but it still is a great time to sell your home and buy a home.  As a seller you have less competition with existing homes and buyers have less competiton when looking at a home and are not feeling as rushed to buy a home in fear that someone else may scoop it up first.  The out look is looking good for both sellers and buyers as interest rates are still at historic lows and affordability is high and sellers are taking advantage of the limited inventory to get their homes sold. And buyers are taking advantage of aggressive rates right now before the spring market when it is expected rates will start to increase.
     
    Dave diCecco
    Realtor/Broker
     Helen Adams Realty 
    Cell: 704-519-7895
    ddicecco@helenadamsrealty.com
    www.davedicecco.com

  • Ballantyne Area Of Charlotte, NC. One of Top Searched Zip Codes

    Posted Under: Home Buying in Charlotte, Home Selling in Charlotte, Property Q&A in Charlotte  |  December 11, 2013 11:35 AM  |  352 views  |  No comments
     

    The other day I was reading an article published by Realtor.com about the hottest markets and areas in the country.  Being in Real Estate I always like to know where people are looking to move to and from.  So the article peaked an interest in me as to where people are searching for homes in the United States.

    In reading the article I found that the Ballantyne area of Charlotte, NC. came in at number 5 on the most searched zip codes in the United States.  The zip code of 28277 is a very popular destination among people moving to Charlotte and apparently with people looking to move into the Charlotte area as well.

      There are a lot of good reasons why Ballantyne area of Charlotte is so popular.  It has a great location in Charlotte located in the southern side of Charlotte right up against the South Carolina border.  Because of it's location it has easy access to major highways and to uptown.  With various routes you can take as a commuter to go to uptown the area is a great destination for commuters.  It is approximately a 30 minute ride to uptown from there or you can take a short drive over to the light rail (approximately 10 minutes away) and take the light rail into uptown and not have to deal with the traffic at all. Or if you need to go to the airport you are only about 15 to 20 minutes away from Charlotte Douglas Airport which is an international airport and a major hub for US airways.

    Another thing that it has going for it is major businesses are now starting to call the Ballantyne area home with it's affordable retail space and space to grow.  Met life this past year recently moved it's corporate offices to the area and office parks are sprouting up as businesses are moving into the area.  Wingate University is moving one of its satellite campuses over to Ballantyne as well.  

    Residents have long considered the area great and people moving in with school age children or looking at areas of Charlotte with some of the highest rated schools are looking in Ballantyne as well.  With newer schools having been built the demand to get into those schools has helped keep the area housing market relatively strong through the recession.

    In addition, there are numerous shops, restaurants and stores popping up in Ballantyne area as well.  Also a quick drive will take you to the Carolina Place mall or to the South park mall both within fifteen minutes of Ballantyne...

    Known for its location it is also home to some great golf courses and a short ride away from major attractions like Carowinds amusement park and the time warner arena as well as sporting events.

    Considering a move to the Charlotte area look and see why many people are considering the Ballantyne area for their next move....To see homes that are available there click on the link for all homes for sale in Ballantyne.

    Dave diCecco
    Realtor/Broker
    Helen Adams Realty
    Cell: 704-519-7895
    ddicecco@helenadamsrealty.com
    www.davedicecco.com

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