Not Staying Long? Cut Out High End Renovations

Renovators, say hello to Hardy board and goodbye to granite countertops.

According to a new article over on CNNMoney. com, here's what not to do in today's market:

• Buy a home you know you're not going to live in very long.
• Spend oodles of money on high-end updates and renovations.
• Expect to get that money back plus a profit one or two years after you purchase the home.

Yes, a few short years ago you could do all of those things and not only recoup your money, but probably make a profit to boot:

"During the housing boom, updating a kitchen with high end materials like cherry wood cabinets and a Viking stove was a sure bet to boost a home's value. Homeowners often recovered about 80% of the cost when the house was later sold."

That was yesterday.

If you are going to remodel in today's market, and know you won't be staying in your home more than a few years, it might be wise to scale back the scope of your interior projects as well as the type of materials you use.

"...with so much more inventory on the market for buyers to choose from, they [buyers] just aren't as impressed with the bells and whistles. Now most upscale renovations are returning less than 70% of their cost, according to a recent survey from the National Association of Realtors (NAR) and Remodeling magazine."

However, exterior renovations still seem to be paying off:

"...returns for high-end exterior renovations are still holding up, according to the NAR report, with better pay-offs than interior work.
For example, sprucing up a home's look with expensive fiber-cement siding, which looks like wood but is more durable, returns 88% on investment, more than any other renovation NAR evaluated."

Say good-bye to granite countertops - CNNMoney.com

Property Virgins

For me, watching home buying shows on cable when I get home from a long day of listing appointments, house showing, and contract negotiations, is probably the very last thing I want to do. Who wants to watch work after work? So when one of my clients, a first time home buyer, started talking about a show called "Property Virgins" a few nights ago, it was the first I had heard of it.

So, imagine my sense of deja vu when I was reading today's posts over at fivecentnickel and saw this:

"I was watching the show Property Virgins for the first time the other night, and I was shocked at what I heard on that show. Let me give you a rundown…
The buyer was a single woman who wanted the best quality in a house, but didn’t want to spend a lot of money. She knew exactly what she wanted and how much she wanted to pay, and she wasn’t willing to budge much on either issue.

The property expert seemed nice enough, and she was a saint for dealing with the opinionated buyer, but halfway through the show, she said something that stopped me cold. She had just shown the buyer a home that was brand new and had everything the buyer wanted. The problem? It was $40,000 more than the buyer wanted to pay.
The ensuing conversation went something like this. These aren’t exact quotes, but you’ll get the idea.

Expert: The price on this property is $240,000.

Buyer: What? I definitely can’t afford that!

Expert: That’s about $1700 a month, not including insurance and HOA fees.

Buyer: The insurance and HOA fees are extra? I really can’t afford that. This is what I want, but I’m not paying that price.

Expert: Well, there is another option. We can do a 35 year loan and bring your payments down to $1500 a month.

Buyer: That’s just so much money! I can’t take on that much debt! (I was cheering for her at this point).

Expert, talking privately to the camera: She’s only thinking about the big number here. She can easily afford the monthly payment. That’s what she should be looking at… Whether or not she can afford the monthly payment."

The writer of this post, Lynae from Being Frugal, is absolutely right to be horrified. Most of my first time buyers aren't looking anywhere near the price range described above and even then, I know that as little as $5,000 or $10,000 can put them over the edge. If you're working with a buyer's agent (and hopefully you are) and you feel your agent is pushing you to view or buy properties that are out of your financial comfort zone, you might want to first confront your agent. Be very clear about how much you have been approved for by your lender and/or what you are comfortable borrowing. Just because you qualify for $200,000 doesn't mean you have to buy that much house on your first time out. If, after talking to your agent, you feel like you are still not being heard, it may be time to find a new agent.

And what about "only thinking about the big number"? What else are you supposed to think about? That's why they call it the bottom line, fool. It is absolutely essential to consider HOA fees and property taxes when calculating the monthly payment for a property.

Take property tax. In Knoxville, for example, if your new $100,000 home is only in the county, and you're taxes are roughly $600 per year, that's $50 per month added to your payment. But if your home is in the city as well as the county, you're going to have roughly double that amount, meaning you're going to be adding roughly $100 per month to your payment.

HOA fees , especially for condos, vary widely in our area and what you get for that money also varies widely. I've recently been looking in the $100,000 range with the above-mentioned first time buyer, and HOA fees for those properties range from $50 per month to almost $200 per month. Paying an extra $200 per month, in addition to the property taxes, on a $100,000 home is a pretty big pill to swallow.

As I've said before, a home is one of the biggest investments of your life, so ask as many questions as you need to up front. And educate yourself. The rest of Lynae's post brings up some very good points for first-time homebuyers to ponder before they buy.

As for me, I'm going to continue to watch all of my CSI-like forensics shows after work and let all the forensics people watch the home buying shows.

First Time Homebuyers, Think For Yourselves! fivecentnickel.com

Tennessee Named Among States With Affordable Housing

Brett Arends from The Wall Street Journal Online has a post today on Realestatejournal.com. While the majority of the post deals with answering questions about the overpriced and bursting Florida real estate market, the last question he answers has to do with where consumers can find "cheap" housing:

"While the hot spots on both coasts ballooned wildly during the bubble, the "heartland" remains your classic overlooked value play. In states like Indiana, Ohio, Missouri, Michigan, Georgia and Tennessee, house prices are actually a lot cheaper, compared to personal incomes, than they were thirty years ago. "

Arends goes on to say that affordable housing is a major cost advantage when a company is thinking about where to locate itself. Definitely one of the reasons Knoxville was named best city to relocate to in '07.

More folks and businesses moving our way means a better economy and stronger home sales. Yeah!

Good news on a day with a lot of not so good news.

Q&A: Overvalued Markets; The "Affordable" Mortgage - Realestatejournal.com

Tuesday Link Round-Up - Easy Being Green Edition

Thinking you'd like your home to be more energy and environmentally friendly but don't know where to begin? Realestatejournal.com has a few suggestions other than the usual suspect suggestions of extra insulation or compact fluorescent lightbulbs.

Home is where "green" can start - Realestatejournal.com

Thinking all that energy efficient stuff is great and all but don't have money to do it? How about working it into your ReFi?

Energy Efficient Mortage - Topix

Finding the Right Buyer's Agent for You

Last week I talked about why should use a buyer's agent. But how do you find a good one?

The first, and most important, step is to ask around. We do a lot of referral business and chances are your friends or family have used an agent they think is worth recommending.

If you still have a choice to make, one way to narrow your results down is by looking for agents who have the ABR, or Accredited Buyer Representative, designation. This means that they have received additional in-depth training on how best to serve a buyer's interests in matters such as determining the offer price and contract negotiations. This can be really helpful to you, especially if you are trying to negotiate closing costs and repair costs. It also lets you know that this is an agent genuinely interested in working with buyers, as opposed to an agent who is more concernced with listings. You can find ABR designated agents in your area at the ABR/REBAC website.

Once you have found some ABR designated agents, it's time to interview them. Remember, this is a big purchase, and you have the right to choose who represents you. When you talk to potential agents, here are some good questions to ask:

• How long have you been licensed?

And longer isn't necessarily better. New agents are hungry agents and will usually be much more willing to drive you anywhere you want to go and show you as many homes as you can handle. On the other hand, more seasoned agents have the advantage of knowing more about neighborhoods and having more contract negotiation experience.

• Do you work alone?

This is an important question, because some agents, especially big time ones, have assistants or team members who show clients property, and even negotiate contracts for them. You want to make sure the agent you first meet and feel comfortable with is the one who is actually going to be driving you around and negotiating for you. If the agent does work with an assistant or team members, ask to meet the person or people you will be working with on a regular basis.

• What role will you play in my home buying process?

Some agents work harder than others, and you want a hard worker. Here is a list of what a typical buyer's agent will do for you throughout your transaction:

• Help you find information on mortgages and mortgage officers.
• Guide you through the pre-approval process.
• Provide you with copies of all forms that you will required to sign as part of submitting an offer and take time to answer any questions you have about them.
• Search the MLS based on your specifications and send youistings that meet your search criteria.
• Get you more information about homes, subdivisions, neighborhoods and schools.
• Schedule and coordinate all showing appointments.
• Show you a slew of houses.
• Help you make an informed offer by researching comparable properties that have sold in the same neighborhood/area as the home you are interested in.
• Negotiate with the listing agent on your behalf.
• Represent your interests only -- not the seller's.
• Help you select a home inspector and guide you through the home inspection process.
• Schedule the closing.
• Facillitate communication between the listing agent/sellers, your mortgage company, and the title/closing company, so that your home closes on time.
• Go to closing with you to handle any last minute issues which may arise.

This is not an exhaustive list. and you will find agents that go above and beyond this list. You will also find agents who fall short of it. The important thing is that you know what to expect from them up front.

• Do you require your clients to sign a Buyer's Representation agreement and, if so, what does it entail?

Many states, like Tennessee, require a Buyer's Rep agreement to be signed before or at contract. And this is a good thing, as it protects you and the agent. It is up to the individual agent in our state as to whether they use an exclusive or non-exclusive agreement. Generally speaking the exclusive agreement locks you into the agent for a period of time, whereas the non-exclusive does not. Both forms have a section for how an agent will be compensated should the buyer choose to purchase a for sale by owner home where the seller is not offering a cooperative commission to buyer's agents. This is usually left to the agent's discretion, but he or she will have to fill this section in before you sign. Some will require that a buyer agree to pay them a certain percentage of the sales price or a flat rate if they buy a FSBO with a non-cooperative seller. Sometimes an agent will also stipulate what, if any, compensation he or she expects if they show you property for a period of time and you decide not to buy anything. This is not that common is our area, but with rising gas prices, I've heard of more agents writing this into their buyer rep agreement. Some even charge a gas fee per day or week of showings.

• What if I find a FSBO property?

As mentioned above, your agent should lay out their FSBO compensation policy in the buyer rep agreement. However, some agents aren't fond of FSBOs or simply don't want to deal with them and will tell you that up front. It's much better to know where your agent stands up front.

• What happens if I decide I don't want to work with you anymore?

It happens. You work with an agent for a while and you either a) find out they're a total creep, b) find another agent you like better, or c) just don't jive as well as you thought. Personality conflicts happen and even if you signed an exclusive buyer rep agreement, it should be possible for the agent's broker to reassign you to another agent within the company. These policies differ from brokerage to brokerage, so make sure you find out what your options will be up front.

Finally, make sure you feel comfortable with your new agent. This should be a person you like and trust a lot. Not only is he or she going to be helping you make one of the biggest purchases of your life, you're also going to be spending a whole lot of time in the car with them.

Monday Link Round-Up - Weather Update Edition

Today's weather:




Partly cloudy with a slight chance of HELOC freeze ... - Calculated Risk

and the National Weather service has issued a basement tornado advisory. - The Onion

In other news -

The Second Creek Greenway is coming! - Knoxviews.com

Williamson County Makes Forbes List

Here's some good news to start off your work week.

Williamson County, Tennessee, home to Franklin and Brenwood, has just been named on Forbes' new list of "Best Places to Get Ahead" - places where income growth and job growth are highest.

"There are very few economies that have grown as much from manufacturing as those in Tennessee, due, in part, to its more hospitable business environment and less entrenched unions. Williamson County, outside of Nashville, has a median income of $81,449, up almost 18% from 2000. Jobs have jumped 5.5% per year over that time."

Other places that made the list include Stafford County, outside of Washington D.C.; Forsyth County, GA, outside of Atlanta; and Delaware County outside of Columbus, OH.

Best places to get ahead - Forbes.com

Home Shows, Magazines Adapt to New Market

Looks like homeowners and Realtors aren't the only folks having to do things differently since the market started self-correcting. Networks like Knoxville-based DIY and home magazines like Better Homes & Gardens are changing their content to better fit the times:

"Fix-and-flip shows have given way to programs that focus on living more with less, and home magazines increasingly spotlight segments for budget-minded consumers.

'We put much more emphasis now on projects for a mix of budgets,'says Gayle Butler, editor in chief of Better Homes and Gardens magazine."

But that doesn't mean that business is bad. Knoxville-based HGTV's senior VP of content and development says that his network is doing just fine despite the upheavel in various local real estate markets:

"'Does it mean people stop getting married, having children or getting job transfers across the country? No," he says. "We offer property shows that help people, so our ratings have never been stronger.'"

DIY TV, magazines adjust to changing housing market - chicagotribune.com

Negotiating in a Buyer's Market

Lowball offers are the new black. Every time I go to the office, I hear another story about someone's client who insisted on submitting an obscenely low offer on a home, because said client has heard about how horrible the real estate market is. This drives most of us crazy because 9 times out of 10, two things are going to happen in this scenario:

1. Seller counters back at near listing price, offended by the lowball offer.


2. Seller rejects offer outright, offended by the lowball offer.

And a lot of times the buyer winds up losing the house either because a) someone else submits a reasonable offer, or b) because negotiations break down due to seller's aforementioned offense at low ball offer. Either way, nobody winds up happy.

As I've said here before, just because every business pundit on every news channel in the country is saying the real estate sky is falling, that does not mean that it's falling over Knoxville. Yes, we're in a buyer's market and buyers here can definitely get away with asking for more concessions now than they could a few years ago - a great thing for all you buyers out there. But with few exceptions, you're not going to get that $250,000 home for $200,000. Really, you're not. Sellers in some parts of the country may be desperate to sell, but most sellers here aren't. They're just really anxious to sell and there's a big difference between those two.

Most home sellers out there right now aren't looking to get rich. They're just looking to sell their home for more than they paid for it, and definitely for more than they owe on it.

But it's human nature to haggle. If people don't negotiate, they don't feel like they got the best deal they could.

While lowball offers are definitely warranted in some situations (I'll be covering that topic in a future post), most of the time it's that good old fashioned negotiating that gets you a good deal. Not a steal, but nothing to sneeze at either.

Like I said, it's a buyer's market out there. That means there are more houses for sale than buyers. Increased inventory means:

• More choices for buyers.

Instead of there only being one house for sale in your price range in a chosen area, there might be three or four or even five. This means you are much more likely to find exactly what you want, rather than having to comprise on certain things because there's only one house available in the neighborhood.

• Longer days on market for most listings.

This takes away the need to rush into an offer. Time was when a client would find a house they loved, decide to sleep on it, and wake up and the house was sold. Bummer. While this can always happen, the odds are a lot lower now, which gives, you the buyer, a little more time to make your decision to pull the trigger.

• More negotiating flexibility.

Two years ago there was very little of this. Many times sellers were getting multiple offers on homes, so the sales price would actually be higher than list price. Having a little wiggle room, like 2-3% of list price, is pretty nice.

• Buyers can ask for more concessions.

This was also somthing that wasn't nearly as likely to fly a few years ago. Need some closing costs? Ask for them. Want repairs made on the house? You might get that too. Home warranty? Certainly can't hurt to ask.

Sometimes you can negotiate all of these things into your offers. Sometimes you'll only get one or two. The trick is to be smart, not greedy. Think about what you really need (closing costs) or want (lower price) and go for it. But before you do, go find yourself a good buyer's agent? Please?p>

Friday Link Round-Up

TVA hits us one more time - Tennessean

Which we apparently can't afford anyway - RealEstateJournal

Need to cheer yourself up now?

Go take a spin on Knox County's very first roundabout! - KNS

Trading Places

Why buy or sell your home when you can swap it?

Why You Should Use a Buyer's Agent

I am constantly amazed at how few people know how Realtors operate. Even people who have been around the home buying and selling block quite a few times are unclear on what roles we play in a real estate transaction, what we can and can't do by law, and even how we get paid.

One of things that always blows my mind is how many people buy a home directly from the listing agent. Now, this isn't necessarily a bad thing for you, and, trust me, there is nothing we love better than selling our own listings.

But know this: you are absolutely 100% entitled to have your own agent represent you in your home buying transaction. And as much as I love getting the much bigger commission check that selling my own listing gets me, I will go on the record and highly advise you to use what we in the business call a buyer's agent. A buyer's agent is a real estate agent who is trained to work with buyers and when representing a buyer, represents only the buyer's interests in a transaction.

Why use a buyer's agent?

Well, let's say you're looking for a new house in the Knoxville area. You're really excited and so you start religiously gathering and scouring home magazines, spending countless hours on Realtor.com looking for homes that have (hallelujah!) more than one picture, and going to a gazillion open houses and being harrassed by tons of real agents who want to sell you their listings or make you their client. Annoying, right?

Next, you email and call the listing agents, trying to get more info on listings that catch your eye and either a) don't hear back from them, b) find out the house has sold/exploded/fallen into a sink hole, or c) you luck out and make some appointments to see some properties. Separate appointments. That you have to drive to in your own car. Using your own gas. $2.99 a gallon gas.

OK, so you get to these properties and find yourself thinking a) what on earth do the pictures on Realtor.com and this house have in common b) I wonder what time the train comes through the backyard, c) I wish this listing agent would stop trying to convince me that grasscloth is so out it's almost back in, or d) wow, I really like this house.
Whew! Finally! That was a lot of work, but you did it.

Congratulations! Now, all you have to do is put in an offer! The listing agent will write and present the offer on your behalf, and depending on the agent, will either default to facillitator status (try to be completely neutral to both sides) or will continue to represent the seller --either way leaving you unrepresented in one of largest and most expensive financial transactions of your life. Yikes.

Now let's look at the same scenario with you using a buyer's agent. First, you meet with your carefully selected agent (more on this later) and discuss everything you're looking for in your dream home. Your agent will start searching the MLS for you, sending all listings that meet your criteria.

After you look at all these juicy listings landing in your email inbox, you choose your favorites and tell your agent when you'd like to see them. He or she will schedule the showing appointments and prepare some information on each home, including a current listing brief and tax record.

Then you go look at houses. In your agent's car. Using your agent's $2.99 gas. Going with your agent, you are able to see 5, 6, or even 7 homes in just a few hours.

Still want to go to open houses? No problem. Just tell the host agent at each home that you are already working with an agent, and they should (by Tennessee state law) stay far away from you, leaving you to view the house in peace. Ah!

After going through the home viewing process with your agent for a few days or weeks, you find your house, the one you want to make an offer on. Your agent will help you determine an asking price by looking at recent comparable sales in the neighborhood. He or she will also help you with elements of the offer such as asking for closing costs or repair costs. Your agent then writes up the offer, submits it to the seller's agent, and negotiates the offer on your behalf, with only your best interests in mind. You get the house you want, and feel like you got the best deal possible because you were well represented by a knowledgable professional.

Much better, right?

And here's the best part: because buyer's agents in our area get paid from a percentage of the seller's listing commission, their services are absolutely free to you, the buyer. Rock!

So, now you're probably wondering how you can find yourself a really good buyer's agent, right? That's coming up in a future post. Stay tuned!

Ragsdale Tip Money

Yes, a Knox county couple just paid their tax bill with $1,700 worth of Sacagawea dollar coins. Many of the $25 coin rolls had the following message written on them:

"For Ragsdale Tip Money"

I especially like the fact that it was the husband's idea, but the wife somehow wound up being the one to actually deliver the coinage. Nice.

Debt Reduction for Dummies

Crappy credit means a crappy credit score. And a crappy credit score means either a) a higher interest rate on your conventional home loan, or b) no conventional home loan. In fact, a credit score of 620 or better is now required for all conventional financing, FHA not included. That's up from 580 just a short time ago. It may not sound like much, but those 40 points have squeezed a lot of folks out of the home buying market.

If you're one of them, cleaning up your credit report is the only way to get back in the game, and that means not only getting rid of debt, but also not accumulating any more of the nasty stuff. Luckily for you the nice folks over at Dumb Little Man have put together a list of 20+ Ways to Get Rid of Your Debt For Good. While it's not a step by step guide, it does contain a lot of great advice. And before you go getting all "Duh!" over ideas like-

1. Stop Adding More Debt



2. Get Rid of Your Credit Cards
   

stop and ask yourself this: if all these suggestions are so durn easy, why aren't you doing any of them?

How Knoxville Ranks in Housing Affordability

The NAHB/Wells Fargo Housing Opportunity Index's 4th Quarter report is out . The index ranks housing affordability by percentage of homes in a metro area that are affordable for a median income family in that area. Knoxville ranked 63rd nationally, with 68.4% of homes being affordable for median income families. Regionally, Knoxville ranked 16th, coming in just behind Chattanooga in 8th place, and Memphis in the 11th spot.

What Will $1,000,000 Get You in KTown?

Well, it depends on where you are, accorinding to Forbes.com. In Dallas or Houston, you'll get a nice 5,000 sq ft home with 5 or 6 bedrooms. If you're buying in Manhattan, you'll have to downsize a little, as your 7 figures will only get you a 600 sq ft, one bedroom apartment. Ouch.

So what will $1,000,000 get you Knoxille?

In the MLS today, there are 74 Knox County Properties with a list price of $999,000+. Here's a sampling of homes listed right around the $1,000,000 mark:

• A 98 year-old 5570 sq ft completely renovated historic home on 5+ acres in Fountain City


• A 6400 sq ft estate home with 4 BR, 3 1/2 BA on 2+ acres in Halls


• A secluded 3400 sq ft compound on 17 acres in South Doyle


• A 5 BR, 4 1/2, 5500 sq ft custom home in Westmoreland Heights


• A 7,000 sq ft lakefront home in River Club


• A 7,300 sq ft, 5 BR, 4 1/2 BA estate home in Fox Den -- minus the chandelier over the breakfast table, which does not convey (hey if you can afford 1,000,000 big ones, you can afford your own breakfast table chandelier, am I right?)
  

Lower Median Price Is Not Depreciation

Get ready to get confused.

I was just over at Property Scope and saw this alarming headline-

"Knox Home Prices Fall In January"

Yes, the Knoxville Area Association of Realtors sales data for Jan. '08 is out - let the number crunching begin! Let's read what else Property Scope had to say-

"The median sale price of Knoxville-area homes fell in January.
According to the Knoxville Area Association of Realtors, the median sale price of a two-bedroom home was $66,000 last month, a drop of more than 12 percent compared to the January, 2007, median of $75,700.
Larger homes were off less dramatically. The median price for a three-bedroom was $144,000, down $1,000 compared to a year ago, while the median price for a home with four or more bedrooms was $218,000, also down $1,000."

That all sounds terrible, especially the 12 % in 2 BR homes. What makes me want to tear my hair out is that this article, especially the headline, makes it sound like home values have dropped, when the author is actually talking about a drop in median home prices.

So what's the difference?

A median home price is the halfway point between the most and least expensive homes sold in an area in a given period of time. It is not an average of home sales prices and it is not an indicator of home value, per se. If more people are buying more expensive homes in an area, the median home price rises, just as if more people are buying less expensive homes, the median home price drops. This does not necessarily mean the value of the homes they bought increased or decreased.

What the KAAR median home sales data tells us, is that more less expensive homes sold in Jan. '07 than in Jan. '08.

But the KAAR data also includes average or mean homes sales data. Average home price is calculated by adding all of the sales prices for a type of home together and dividing them by the number of properties sold.

OK, now, let's take a look at average or mean. home sales price in the KAAR data, just for laughs & giggles-

• Average sales price of a 2 BR home was down 7%
• Average sales price of a 3 BR home was down about .03%
• Average sales price of a 4+BR home was up about .05%

So, according to the mean or average sales data, one of these categories actually rose. This could be because property values went up. It could also be for the same reason that some folks don't trust mean sales figures - the most expensive homes tend to skew the data upward (the same can be said for foreclosure or distressed property sales, which skew data downward).

I told you it was going to be confusing.

What is clear is that the Knoxville house market has slowed, at least compared to Jan '07. Days on market is up and there is more inventory. However, as I wrote about last week, the condo market is chugging right along, doing extremely well in spite of all this.

As for your own home, don't lose hope yet. Real estate pricing is a tricky business. Your home's market value depends on many factors -- desirability of your neighborhood, recent neighborhhood sales, updates, general condition, whether or not train tracks were laid in your back yard since you bought it, and, of course, location - not just on KAAR sales data.

KUB Tree Trimming

KUB's still not making any friends with all it's tree trimming. While I'm not a huge fan of some of the chopping they've done in my neighborhood, I also wasn't so psyched a few weeks ago when one of my neighbor's huge, old trees took out a transformer.

What do you think? Are you tired of KUB chopping up your neighborhood? Do you think they're being too aggressive or do you think all that pruning is really necessary?

KUB Tree Trimming Still At Issue - KNS

Is That Remodel Worth It?

We live in a nifty little tri-level that we bought from the original owner, who, if the wagon wheel light fixtures were any indication, was not very much into the home renovating. Needless to say, we have put in a good bit of sweat equity in the last couple of years, including all new interior paint, new toilets and sinks, new light fixtures, and a 1/2 new kitchen - the other half is awaiting a nice, big closing. So, I was intrigued when I found this quiz on the Sweat Equity website over at diynetwork.com. It's only 10 questions, but the answers are very interesting.

You might also check out the rest of the Sweat Equity site. They have a remodel budget estimator as well as tips on which remodel projects will get you the best return when you sell your home.

Knoxville Condo Prices Strong

Knoxville has always had a great condo market, thanks to an abundance of empty nesters, relocating retirees, and UT students. Now, the latest quarterly survey by the National Association of Realtors (R) shows that our condo market is still going strong:

"The strongest condo price increases were in Bismarck, N.D., where the fourth quarter price of $125,000 rose 20.8 percent from a year earlier,followed by the New Orleans-Metairie-Kenner area of Louisiana, at $173,300,up 17.8 percent, and Knoxville, Tenn., where the median condo price of$160,800 rose 10.6 percent from the fourth quarter of 2006. "

Chalk that up on the "What bubble?" side of the real estate market debate.

Type rest of the post here

To Prepay or Not To Prepay

Lifehacker recently wrote up an article by J.D. Roth over at Get Rich Slowly called Mortgage Prepayment Made Easy: Own Your Home in Half the Time. Roth goes through all the various options of getting your mortgage paid off early and throws out the most common suggestions of:


Refinancing from a 30 to 15 year mortgage
Signing up for your bank's bi-weekly payment program
Making one extra payment a year
Paying an extra $100 per month

Instead, he suggests pre-paying the next month's principal in addition to each monthly payment.

And although he acknowledges that a lot of financial folks say that paying off a low interest loan is silly, he still thinks the psychological freedom of owning your home outright is worth it.

What do you think? Do you do anything to try to pay off your mortgage early? Or do you think that money is better off invested somewhere else?

Pay Off Your Mortgage in Half the Time - Lifehacker

Mortgage Prepayment Made Easy: Own Your Home in Half the Time - Get Rich Slowly

Mike Lowe, Real Estate Developer

Mike Lowe lost his bid for the county tax assessors office, so he's going into real estate. I hope he doesn't get caught in the crunch.

Lowe to Leave Trustee's Office After 33 Years - KnoxNews.com
Type rest of the post here

Knoxville/Knox County Neighborhood Conference

The Knoxville/Knox County Neighborhood Conference is coming up on Saturday, March 8 at 8 am. Who doesn't love learning how to efficiently utilize government/community services that early on a Saturday morning?

Interested neighborhood groups, homeowners associations and regular old citizens can register here.

West Knox Developers May Be Caught in Crunch

This appears in today's new issue of Metro Pulse in the Ear to the Ground section:

"The slow-down in the national housing market and the credit crunch may come home this year as development slows in Knox County. While homes continue to sell, there is expected to be a reduction in volume. This is bad news to developers who have subdivisions with vacant lots heavily financed and no likelihood of building a house and selling them.
Insiders say four to five West Knox County developers may not survive the crunch. They have not been helped by the revolution on Knox County Commission—the number of commissioners considered developer- friendly has been reduced. Look for an effort to increase density on subdivision sites to increase profit per unit and look for rejection to result in some people becoming overextended."

Ear to the Ground - Metro Pulse
Type rest of the post here

Knoxville Foreclosures

Interesting article today on knoxnews.com about Knoxville foreclosures as compared to the rest of the state and country. There's good news and bad news. The bad news is:

• There were 2,770 foreclosure filings in Knoxville in 2007, which is a 47% raise from '06 filings.


• 6 out of every 1000 Knoxville area households entered some stage of foreclosure in '07

Before you head for the hills, here's the good news:

• Out of 100 major metro areas, Knoxville ranks 72 in foreclosures. Compare that with Nashville at 59 and poor Memphis at 13!


• Although delinquincy rates on subprime mortgages in Tennessee as a whole are 3-4% higher than in the rest of the country, delinquincy rates in Knoxville were only 9.9% at the end of '06 as compared to the country's average of 18%.

It goes on to say that there is no glut of foreclosed properties in the Knoxville market, as anyone perusing http://www.firstpreston.com/ can tell you. Again, take a look at the Memphis foreclosures for a comparison. It's night and day.

And although regular home sales were down 10% in Knoxville in '07, we know from KAAR sales data that homes are still appreciating in Knoxville, always a good sign.

So what does this all mean? It means what a lot of people have been saying all along -- Knoxville is a great market. Very few markets in the country will not be affected in some way by what's happened in the mortgage industry, but, relatively speaking, Knoxville is doing pretty durn good. I just don't think the mortgage crisis can keep Knoxville down.

Forgoing Foreclosure - knoxnews.com

In Defense of Real Estate Agents

I get it, I really do. You don't like/trust/want to be near us Realtors.

Maybe you had a bad experience in the past. Maybe you saw American Beauty and think we're all obsessive compulsive freaks who inwardly chant "I will sell this house today!" as we try to convince you that the swamp in the backyard is really a tropical lagoon. Maybe you just buy into the stereotype and think we're all pushy, crass, shallow, and greedy.

Fine. You're absolutely right. There are definitely agents out there who are guilty of some or all of those things. I run into them every now and then myself. They're the 1% that give the rest of us a bad name.

The rest of us, the other 99% aren't all that bad. Really.

True, we're a little different than your Average Joe. You have to be a little tweaked in the head to voluntarily choose a profession in which you work 60 hours and week and still don't know for sure if you're actually going to get paid.

And we're not generally rocket scientists, although we do come from very diverse educational and career backgrounds. Some of us were software engineers who got canned after the tech boom. Some of us are retired professors. Some of us just wanted to have a flexible schedule to be able to spend more time with our friends and families.

And sure, we're salespeople. But sales is a very small part of what we do. We're also negotiators, communicators, advertising copywriters, marketers, researchers, interior decorators, house cleaners, armchair psychologists, stand-in therapists, punching bags and shoulders to cry on.

It's a tough way to make a living.

And we do it for a few different reasons. The first one, the dirty one, is that when it pays, it pays well. No always, of course. But sometimes. And we live for those sometimes. We wait for months for those times, because that's when we get to pay off bills, buy some new clothes, and go out for a big steak dinner.

But we also do it because we love it. We love the game. We love working the deal until it works. You couldn't do everything we have to do day in and day out if you didn't. Your soul would implode.

And we love helping people. No, really, we do. We honestly want to help you find the house of your dreams. Trust me, there is no better feeling than the feeling I get when a client walks into a house, stops, stares, and makes a strange but wonderful sound somewhere between, "Awww!" and "Ooooh!" It's the "this is my house" sound and it's a beautiful thing.

So give us a chance. The market may seem scary and buying and selling houses is definitely stressful, but those things are part and parcel of the process. We, as Realtors, are here to help you through all of that. But only if you let us.

Overheard in the Office

"Oh, you want to look in Knox, Blount, and Anderson counties? Great! Why don't we take your car?"

Knoxville Parkway Update Meeting

Avoiding the Dreaded Fridge Swap

I do a lot of open houses and aside from eating a lot of cookies and playing a lot of Scrabble on my cell phone, I also occasionally have buyers come through. Now, it may just be because I always hang out in the kitchen during open houses - easy access to aforementioned cookies is important - but it seems like these potential buyers always inevitably ask the same question: does the refrigerator come with the house?

The quick answer can always be found on the listing sheet. It either is or it isn't. But this is real estate folks, and everything's negotiable.

If, for example, you're making a really good offer on a house, I don't think for a minute that most sellers, the same ones at least, would mind parting company with that Kenmoore or Whirlpool in order to get their house sold. Lowballers usually don't get fridges. Sorry. But if you're making that really good offer, whether or not the fridge is listed in the MLS as being included in the sale of the home, then I say ask for it, already. Just make sure you get it in writing. You can do this by:

1. Asking for it in the contract.


2. Asking for it very specifically in the contract. Like make and model number specific. If your agent is worth his or her salt, he or she will not mind making an extra trip to your future dream home to get this information for you. I know I would do it for my clients (wink, wink).

With your make and model number right there in black and white on the contract, you will hopefully be able to avoid the seller taking the nice, new, expensive, stainless steel fridge and replacing it with the old, nasty, yucky, avocado green beer fridge from the garage -- also known as the dreaded Fridge Swap.

Happy House - and Fridge -Hunting!

Bubble? We Don't Got No Stinkin' Bubble!

The skies may be falling on LA, Las Vegas, and Jacksonville, but as far as I can tell, the sky over Knoxville is pretty much intact. Shaky buyer and seller nerves aside, our market is doing, well, just fine, actually. Don't believe me? No need, for I come armed with fancy numbers from the Knoxville Area Association of Realtors. Ready? Here goes-

• In 2006, the average sales price of a 3 bedroom home in Knoxville was $162,300 and average time on the market for that home was 83 days.
• In 2007, the average sales price of a 3 bedroom home in Knoxville was $170,900 and average time on the market was 92 days.

Now, math was never my strong suit (I know, scary to admit in my line of work), but by my ciphering, that means there was an increase in the price of that 3 BR home. Appreciation, no less! Granted, Mr. Joe Q. Homeowner had to wait 9 extra days to get his check at the closing table, but considering all the doom and gloom coming through the airwaves these days, those numbers don't sound too bad at all to me.

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