Category Archives: Selling a house

A Different Kind of Showing

A Different Kind of Showing

Come see another side of my photography besides real estate, at a free public exhibition!

As you know, I have been blessed to have had my photographs published on many occasions. These have primarily been underwater images. They have appeared in newspapers, books, magazines, as well as in long-term exhibits at the Aquarium of the Americas, Tennessee Aquarium, and the American Museum of Natural History in New York.

Several of my photographs are currently part of a free exhibit presented by the Parish Photography League, of which I am a member. This coming Saturday, February 13, 2016 we will be hosting a grand opening from 2PM to 5PM. (Click here to see the event on Facebook.) The exhibit is within the historic Denham Springs Old City Hall in downtown Denham Springs, Louisiana. There will be complimentary food and drink as well as great photography, much of it from right here in our area. Local restaurants generously providing food include LaShish Greek and Mediterranean Restaurant and Café du Jour at The Whistle Stop, both of which are among our very favorite places.

The Old City Hall is located at 115 Mattie Street, Denham Springs, LA 70726. It is just off the Denham Springs Antique District. The exhibit itself opened to the public on Monday, January 18 and will be open until May 15, 2016. Hours for the Old City Hall building are Monday-Friday 9AM-5PM, Saturdays 10AM-5PM, and Sundays 1PM-5PM.

The exhibit features the photography of the Parish Photography League’s membership. Come on out and view some great pictures, and join us on February 13 for the grand opening.

The Dreaded Holiday Real Estate Slump

The Dreaded Holiday Real Estate Slump?

But, as with Santa, we have to wonder: Is it real, or imaginary?

In our opinion, the answer is a little bit of both. There is no question that as the holidays approach, buyers get caught up in preparing for the season. Also, some sellers may not want showings to take place, as they’re having parties and company at their houses. Agents are people too, and have their own holiday obligations and commitments as well.

However, it seems that many buyers, sellers, and agents too readily accept as fact that “real estate is going to slow down for the holidays”, so they themselves slow down. Thus, their belief brings about the very result they fear! What we have seen is that this belief is contagious. Sellers all too often decide to take their houses off the market and “wait until next year” or “hold off until the spring”, missing out on months of prime exposure. Buyers sometimes make the same mistake.

This holiday “can’t do” attitude is something we heartily disagree with. At this wonderful time of the year, we do not let up one bit in marketing our listings or working with our buyers. The result is that historically, the months of November and especially December have been among our very busiest ever!

Rather than looking at the holidays as a time when “everything is going to slow down”, we recognize the great opportunity it presents for buyers and sellers. People have time off of work, students are out of school, and those who are motivated seize this opportunity with gusto.

If you have a house to sell, let us put it on the market for you NOW. While others sit around “waiting till next year”, YOUR house can be getting all the activity!

If you’re a buyer, RIGHT NOW is the time to be looking. There is less competition from other buyers, meaning you’ll have more homes from which to choose.

Even though the holidays stay busy for us and our clients, we still do take time to enjoy all that they offer. No matter what, be sure you do the same, and set aside time for celebration, relaxation, family, friends, and God.

Have a blessed holiday season!

How a faraway tropical storm or hurricane can affect your closing

How a faraway tropical storm or hurricane can affect your closing

Both buyers and sellers need to keep abreast of tropical storm activity, and plan ahead to avoid insurance issues.

The Atlantic hurricane season begins June 1 and ends November 30, meaning it is in effect for 6 months out of every year! Thus, there’s a 50% chance that you could be closing on a sale or purchase during hurricane season. There is an important aspect to be aware of regarding named storms, because even if a storm doesn’t threaten our area, it can still impact real estate closings in a major way.

If you are planning on buying or selling a property, always stay current on the status of tropical activity. The reason is that insurance companies use a “hurricane box”, shown on the map above, as a guideline for writing homeowners and flood policies. The area of the box may vary slightly from company to company, but this one, which begins at 20 degrees N latitude and 80 degrees W longitude, is a good example. Once a named storm enters the box, insurance companies will no longer issue new policies, nor increase coverage on existing policies. This status is sometimes referred to as “non-bind”. When an insurance company officially commits to a policy, they “issue a binder” or are “bound” to that policy. Thus, when they are in non-bind status, no policies are bound, and no insurance can be obtained. They stay in non-bind status until the storm is no more, which can take days.

As a real estate closing draws near, one of the crucial steps required by the buyer’s lender is the binding of the homeowners insurance policy. Also, if flood insurance is mandated, it must be bound too. Usually insurance is bound in the late stages leading up toward closing, but therein lies the danger. Should the insurance not be bound, and a named storm enters the box, the closing would likely be delayed, possibly for a considerable time. That in turn could cause the contract date to pass by, the buyer’s rate lock to expire, and/or many other problems. All of these issues are serious, and can make the entire sale fall through. Therefore, closing delays must be avoided at all costs. (Keep in mind that the government-mandated changes to closing procedures effective October 3, 2015 are another potential cause of delay.)

To avoid problems due to named storms, both buyers and sellers MUST pay close attention to tropical activity. (Click here to reach an excellent website for monitoring the tropics.) If you’re a buyer and it seems even remotely possible that a named storm might enter the box around the time of closing, get the insurance bound IMMEDIATELY! If you are a seller, don’t rely on the buyer knowing about this and acting on it. Be proactive and have your agent contact theirs to make sure it is done. Otherwise, your sale could be in jeopardy.

By staying aware of potential storms, and taking care of the insurance binder(s) ahead of time, closings can proceed as planned, even if a named storm enters the box after the insurance is bound.

If you have any questions about how to handle this, give us a call or email!

Changes coming in October 2015

Changes coming in October 2015

In just a few weeks, 2 significant changes are being implemented which will affect residential real estate transactions.

These changes are:

1. On October 1, 2015, the upfront guarantee fee for Rural Development (RD) loans is increasing. Currently, RD loans require that the buyer pay a 2.0% upfront guarantee fee. After October 1, the fee will increase to 2.75%. To illustrate the difference this will make, let’s use a $150,000 loan as an example. Currently, the fee would be $3,000. At the new rate, it will be higher by $1,125.00 for a total of $4,125.00. This increase means buyers will have to bring more money to closing, or finance it into their loan, or negotiate it from the seller.

As long as RD has issued their commitment (in other words, has approved the file and sent it back to the lender to finish the pre-closing process) by September 30, 2015, the existing rate will still apply. As we’ll discuss in another article, RD is and has been taking about 32 days to issue their commitment after receiving a file from a lender. If this turnaround time continues, loans will have to be sent to RD by August 29, 2015 if they are to obtain the RD commitment prior to the fee increase.

2. The government has mandated that effective October 3, 2015, new forms and procedures must be used on ALL closings. According to title companies and others, it will take longer to get to closing, and other delays as well as higher closing costs may result. This was supposed to become effective on August 1, but concerns from the real estate industry, as well as errors which were found in the new forms and procedures, prompted the government to push it back to October. In our opinion, this will not provide any benefit to buyers and sellers whatsoever. Instead, like almost everything the government does when it meddles in private markets, the only result will be more paperwork, more delay, and more costs.

These changes are not minor, and will make the process of buying or selling a home take longer and cost more.

If you are thinking about buying or selling, there is still enough of a window left to avoid these upcoming issues. However, you must act fast in order to do so.

If you have any questions about either of these impending changes, post them below and we’ll get you the answers fast.

Details, Details, Details!

Details, Details, Details!

It is crucial to include as much information as possible when selling a house, as sometimes one key item makes all the difference.

Not long ago we listed a beautiful home. It was about 30 years old, but had been lovingly maintained. When listing the house, the seller was concerned about the walk-in bathtub which had been installed. They told us that the cost of doing so was $10,000.00! The seller feared that because the tub was not a common feature, it might turn off some buyers.

Our reply was that while not the most common type of tub, this was truly a top-quality fixture, and one which they certainly would not want to remove. We said it was quite possible that it would catch the attention of buyers who might very well need such a tub for themselves.

Only 8 days after listing the house, we received a full-price offer, and closed the sale soon afterwards. While communicating with the buyer’s agent, we learned that they had been hunting 6 months for a house which was suited for their elderly parent, who has special needs. Upon seeing this home’s wonderful tub, they immediately wrote their offer. It didn’t hurt that they loved the rest of the house too, but the tub is what clinched it.

Another well-maintained older home had been listed for 8 months with another agent. When the listing expired, the owners chose us to represent them. At the listing appointment, the owners gave us lots of information about the updated electrical panel, high efficiency AC system, solar shades, incredibly low utility bills, and many other great aspects of the house. We were amazed. When we asked why none of this was in their previous listing, they said the other agent had told them, “That stuff isn’t important!” We listed the house, and included all of its great features. The owners told us they had gotten more showings after 2 weeks with us than they had during the 8 months they were listed before! The house had many showings, received multiple offers, and successfully sold.

Details and information are VERY important to buyers, which is why we are so thorough in our listings. All it takes is that ONE right buyer to sell a house, and if they see up front that your home has the feature or features which they need, then they will look no further, and your house is sold.

Flood map changes

Flood Insurance part 4 – Flood map changes, and how they can affect you

Flood insurance rate maps (FIRMs) are periodically updated. Those changes can dramatically affect your flood insurance rates.

Part 4 of a 4-part series: Part 1   Part 2   Part 3   Part 4

As you saw previously in our series on flood insurance, the flood zones as defined on the official Flood Insurance Rate Maps (FIRMs) are a huge factor in determining flood insurance rates. Be aware that FIRMs are periodically reviewed and updated. Doing this is a long and complex process, in which scientists study the elevation and topography of the land, the adjacent bodies of water, manmade developments, etc. All this produces (hopefully) a map which indicates the likelihood of flooding in any given area. Flood maps and flood zones are very controversial, because sometimes it seems that areas which have never flooded are considered high risk zones, and vice versa. Nevertheless, the federal flood maps are the official standard used.

Since these maps change periodically, that means the flood zone designation for a given location can also change. This can be a good or a bad thing. It is possible that a house which had been in a high risk zone is now located in zone X on the new map. More often, it seems that the opposite occurs. A house which may have been in flood zone X for years could suddenly fall into zone AE, meaning flood insurance would be required. This happened to our own house with the new Livingston Parish flood map which came out in April 2012. However, since we already had a policy in place, we are allowed to keep it and receive the preferred (low-risk) rate, at least until the government changes its mind.

The flood map shown here is for a portion of north Walker. White areas are flood zone X; blue areas are the high risk zones (AE) according to the 2001 flood map; red areas are the current high risk zones from the 2012 map. Note how some areas improved while others got added to the high risk zones.

When flood maps change, the base flood elevation (BFE) for a particular area can also change. If it is determined to be higher than it was before, that can have a massive impact on the cost of flood insurance. As we discussed in part 3, rates are determined by how high (or low) a house lies relative to the BFE. If a house was at +2, and the new map raises the BFE by 2.5’, the insurance would go from a few hundred dollars a year to a few thousand!

When a home is reclassified as being in a high risk flood zone, the lender will require the owner to purchase a flood insurance policy if there is not already one in place. Currently, they are allowing such homes (like ours) to either continue or purchase a policy at the preferred rate, as long as certain requirements are met. Click here for details. This is a special form of “grandfathering.”

Other types of grandfathering are currently allowed. Owners of houses built before a FIRM existed for that location can elect to pay a “pre-FIRM” rate instead of getting a flood elevation certificate and paying the standard rate based on that elevation. Houses which were built above grade at the time of construction (builders are not allowed to construct homes which lie below the base flood elevation) but whose elevations are later changed on new flood maps can also receive a grandfathered rate. Grandfathering is a good, sometimes absolutely necessary, choice for homes which otherwise would have very high standard rates.

Unfortunately, grandfathering has, at least for now, come to an end! The Biggert-Waters Act was signed into law and took effect in October 2013. The short version is that the federal government has discontinued all forms of grandfathering for flood insurance! No matter how high it would make the cost for the homeowner, they want all flood insurance policies to be based on standard rates and elevations. Many people are in an uproar about this. Homeowners in some areas are being told that their policies are soon going to cost tens of thousands of dollars per year! If fully implemented, this will be a catastrophic blow to a lot of homeowners, as it will make their homes unaffordable for themselves along with anyone who might want to buy them. This is an impending disaster.

In our opinion: With Biggert-Waters, the federal government is pulling the rug out from under hardworking American homeowners. We can understand them not wanting to keep paying out billions in flood claims on risky properties. However, we believe they should not have gotten into the insurance business in the first place! Now that they are though, they should honor the promises they made on existing homes. If they want to avoid insuring high-risk properties, they should do so from here on out, but NOT penalize homeowners who trusted them to provide the coverage they promised.

In conclusion:

  • ALWAYS CARRY FLOOD INSURANCE ON YOUR HOUSE, REGARDLESS OF FLOOD ZONE! WE CANNOT STRESS THIS ENOUGH.
  • If you are planning to buy a house, look CLOSELY at flood zones. We are extremely careful about this when working with our buyers, as it is a very important factor, especially today.
  • If you get a house under contract, be sure to ask your insurance agent to check it for any prior history of flooding. Past flood claims on a house may cause new claims to be denied!
  • Keep abreast of the Biggert-Waters Act, and the current efforts to modify or block it. Though it may not affect you right now, remember that flood maps change, and those changes, along with provisions of the Biggert-Waters Act, could someday apply to you.

2016 UPDATE

The uproar about Biggert-Waters, and its potential impact on housing, were so bad that Congress had to pass the Homeowner Flood Insurance Affordability Act (HFIAA) in 2014. This law rolled back much of Biggert-Waters, and perhaps most importantly, restored grandfathering. This means that a house properly built to the flood standards effective at the time of construction can remain rated by those standards (such as elevation and zone) even if the maps change. HFIAA also enforced accountability on the NFIP, and set an absolute cap on residential rate increases of 18% per year.

Here is an excellent summary of Biggert-Waters and HFIAA as presented by the National Association of Realtors.

NOTE: As we have stated many times, we believe carrying flood insurance is critical, even in X zones! As you saw, our former house in St. Bernard was completely flooded by Katrina. It was in an X zone, and we had elected to carry maximum flood coverage. For a cost of $317, we were saved from financial ruin. (That same policy today is only about $450.)

ANOTHER REASON TO CARRY FLOOD INSURANCE IS THAT IF IT LAPSES, THE PROTECTIONS OF HFIAA WILL NOT APPLY!

Many of the provisions for grandfathering etc. are only allowed when continuous coverage has been maintained. For example, if you were in an X zone without coverage, and a new map change rezones you into AE at a low elevation, your policy will be rated by the new standards. The fact that it was previously an X zone will not count at all!

We are a prime example. We bought our house in Walker in 2005. At the time, it was in an X zone, and we purchased maximum coverage which we have kept continuously in force. When the map changed in 2012, the line between X and AE now cuts through 1 room of our house, so technically we’re in zone AE now. However, because we have maintained continuous coverage, we still pay the X rate.

Following the 2016 flood, issues with regard to flood insurance are more important than ever! Be sure to subscribe in order to get our updates, both here and on Facebook as well.