Emotion – Real Estate’s Friend or Foe?

For the most part, being a real estate professional is one of the most rewarding jobs one could possibly imagine. Of course like every vocation though, there are drawbacks. Today I would like to expand upon the word ‘emotion’ as it relates to real estate.

For Buyer’s, more often than not emotion plays a large part of the buying decisions. You can rationalize a home all you want but at the end of the day, you must be attracted to it enough to envision your life in this domicile. (guess you could say it is similar to getting married…?!) 🙂

Here are a few places where both Buyers and Sellers could hurt themselves and ultimately their ability to negotiate deals successfully.

Inspection Reports

  • First of all, when a Buyer requests an Inspection Report on a home that they are interested in purchasing, the Seller is under NO obligation to repair anything
  • Most Sellers will cooperate in getting important items corrected however, on occasion some Sellers are so offended by the inspection report (because they believe that their home is perfect the way it is) that they stomp their feet and on occasion knock themselves out of a contract
  • On the flipside, Buyer’s sometimes demand that every item is fixed on the list and if you understand inspection reports, it is not uncommon for these reports to be full of minor cosmetic issues such as: a light bulb needs replacing; there’s a small 10 inch hairline crack in middle of the driveway; a downspout tray is not lined up properly, etc.
  • So just for the record, for every Seller that blows up a contract over small stuff, there is an equal opportunity Buyer doing the same thing, and that is just wrong!

Appraisals

  • Sorry, but in today’s Buyers Market, the Buyer and Seller have very little to do with the final contract price. This sound incredulous? Well, sorry but it is not. The Buyer, if seeking a loan, will secure an appraisal and if the appraisal comes in less than the contract price, the Seller better be prepared to negotiate or risk the loan. Here is an example.
  • The Cronk’s agree to purchase home from the Grinch’s for $300,000 and fully execute a contract. The bank appraisal comes in at $280,000 and the Cronk’s don’t have an additional $20,000 in cash to make up the difference. Therefore, the Grinch’s agree to rewrite the contract and accept $280,000 or, the Cronk’s are forced to walk. Seem unfair? Well it is not unfair at all as the appraisers today have to work from a very strict set of guidelines (due to banking debacle of 2008).
  • The norm though in these situations are that if the Sellers want to sell bad enough and if the Buyers like the house enough, a new price will be negotiated by the Brokers somewhere between $280,000 and $300,000. It is important to know that the Buyer has the majority of the power though, not the Sellers
  • Sellers want to believe their home is worth more than market value and become EMOTIONAL as heck about this. And while they are entitled to do so all they want, they have to face the facts at some point and realize that they have zero chance of selling their home and moving on with their lives unless they accept market value, not their idea of market value.
  • Big Picture: If Sellers can take emotion out of this appraisal equation, remember that the day after you close on the home you will eat spaghetti the same way, put your shoes on the same way and fall asleep watching TV after 10pm just the same.

Good Realtors probably minored in Psychology because unfortunately we are forced to deal with emotional and occasionally irrational folks. The deals that go the smoothest are typically those where both parties have realistic expectations while the ones that drag out are either caused by banks or, someone not using sufficient logic.

Therefore, the next time you are involved in a real estate transaction, please check your emotion/ego at the door! Happy Realtor. Happy Life! 🙂

I Love NASCAR!!

So by me stating that, do you think less of me?? Do you think I am nuts to watch 43 drivers make left hand turns for 500 miles for 30 Sundays in a row? Do only rednecks watch NASCAR and go the races?

In 1977, as a Jr. at University of Tennessee, Scott Ferguson, a fraternity brother of mine, had a poster on his wall above his bed of Daryl Waltrip and his green and white #88 Gatorade Oldsmobile.

NASCAR

Scott professed his admiration of Daryl on numerous occasions and well, being a NY Yankees fan, NY Rangers Fan, NY Knicks Fan and NY Giants fan, I just kind of sneered in bewilderment as to what the attraction could be to stock car racing. Just didn’t make sense to me.

After graduation I found my way further south to Atlanta, where I was a resident during the crazy 80’s. One of my biggest clients, Gene Harris, who worked for Lockheed Aerospace, was a big NASCAR fan and so I took Gene and his son Phil (who worked with me) to the Atlanta 500. Yes there were a lot of beer guzzling noisy fans but was that really any different than a Giants or Jets game?

Once they said “Gentlemen, Start Your Engines”, I was hooked. The thunderous roar from 43 engines was mind boggling and when these drivers started down the straight-aways at speeds closing in on 200mph, well I had never seen anything like it and the rush was just immense. And anyone who doesn’t think a NASCAR driver is an athlete is nuttier than a bag of peanuts. Do you think you could drive a hollowed out tin cup race car with little to no air conditioning on a 100 degree Alabama day with track temperatures hovering around 140 degrees doing 200mph running inches apart from a pile of competitors also doing 200mph while engaging 31 degree banking?

Last summer I visited Wrigley Field with a friend of mine and we watched the Cubs lose 1-0 to the Diamondbacks. It was her first time at a MLB game and she found it really boring. And she was right because there were only 4 hits in the game and one was a home run for the opposing team. The only thing that kept her attention was watching how much food everyone was eating and beer they were guzzling in a 2 ½ hour span.

Like with all sports though, if you don’t pull for either a player and or a team, sports can be terribly boring. However, because of that picture of Daryl Waltrip on Scott’s wall in our Fraternity house, I followed the career of Daryl for decades and now am a Dale Earnhardt Jr. fan, aka Junior, aka JuniorNation! I follow others but these have been my two main drivers and are responsible for me watching almost every NASCAR race since probably 1983.

So if you move south, be careful about putting down NASCAR to the people you make friends with because you are almost certain to find NASCAR fans amongst the most unlikely group of people you can imagine. Like anything in life, do NOT knock NASCAR till you have attended a race!!

NASCAR

Recently, Chris Creekmore and I attended (along with over 100,000 race fans) the Bojangle’s Southern 500 at Darlington National Speedway in Darlington, SC for a NASCAR Sprint Cup Race. #88 Dale Earnhardt Jr. and #4 Kevin Harvick battled down the front straight away for one heckuva finish!

Carolina Plantation Real Estate – Best of Brunswick Award Winners!

Brunswick County Real Estate - Best of

After over 7,000 ballots were tallied, the readers of the Brunswick Beacon selected the winners of the Annual Best of Brunswick Awards – which are presented to the winners of over 70 categories. Out of  nearly 180 real estate agencies in Brunswick County, the people chose Carolina Plantations Real Estate as their third favorite real estate firm!!

I am extremely proud of our accomplishments as a small firm and it proves that our unique business model is successful. We were runner up to two extremely larger firms and congratulations to them for their efforts, and for us to even be considered amongst the giants, well, we truly are honored.

The teamwork in our office is unlike any real estate office in the region. We have weekly meetings where we share what is current in the market and trends in the industry. Our goal is to continually keep learning so that we can provide as much information as possible to our clients so that they can make well informed decisions.

Patty McGrath, Nancy Boston, Christopher Columbus Creekmore, Court Terhune, Nolan Payne, Peggy Earwood, Pat Coye and myself, Doug Terhune, make up Team Carolina Plantations. Our knowledge of the market is vast and of the area even larger. Our website has over 12,000 visitors per month because we make searching real estate easy and rewarding. Our office location on Hwy 17 is the best in the county and I think we have the largest real estate sign in North Carolina! And as you are probably aware, our monthly eNewsletter reaches over 27,000 email addresses – and its goal is to bring you interesting stories about real estate, local commerce, local movie production and more.

And to those of you who voted for us, we thank you for your support and next year we will add in a link to Carolina Dreamin’ where everyone would be welcome to vote on your favorite categories.

Promises, Promises

Chinese Food

In early spring of 2002, I was having lunch at the golf course clubhouse where I worked as an on-site agent, and struck up a conversation with a gentleman who just finished his morning round. Come to find out, he moved into the community back in 1998, which made him one of the first 100 or so homes built in the development.

Anyway, I was eager to learn how to sell this community and felt that asking for testimonials was incredibly important. After a five minute ditty on why he and his wife selected this community, he shared with me that he had one regret. Apparently he and his wife LOVE Chinese food and where they lived up north offered 3-4 local restaurants that delivered to their home. That wasn’t the case at their new community.

He went on to say that when they want Chinese food delivered, they call the closest place, which is about 17 miles from their home. When the food is ready, the delivery person calls and they both head out towards their common destination. When they meet, it is under a dim light at an old gas station and the gentleman said he always feels kind of funny paying some young kid twenty bucks for Moo Goo Gai Pan and Szechuan Chicken.

What he admitted is that when he moved to the community in 1998, the developer promised them that there would be grocery stores and restaurants at the entrance to their development built within 3-4 years. Well, it’s now 16 years since those promises were made by an anxious agent and developer and this couple, if they still live in the same home, still have to drive 16 miles roundtrip (as does the delivery person) each time they want to pick up their delivered Chinese food.

In the mid 2000’s, Brunswick County was famous for building ‘Virtual Communities’. People came down for a weekend and enjoyed Big Tent Events that included boat rides, helicopter rides, hot dogs & hamburgers, clever marketing material and so on. They were taken to newly cut in roads and purchased homesites left and right. Unfortunately, communities up and down the entire east coast starting going belly up at the end of 2008, leaving many angry customers in their wake. Customers mind you that spent $100,000 – $450,000 for a 1/3 acre homesite.

The one word that seems to have been erased from the English language with regards to real estate over the past 7 years is “Risk”. People have zero tolerance for it as nobody can afford to make mistakes of this magnitude and retire happily/successfully.

So if you have yet to find your perfect place to retire, just keep in mind that if someone tells you to close your eyes and imagine a road, swimming pool, clubhouse, golf course, houses, etc., that this might be the closest anyone comes to seeing those items become reality. Virtual communities are no longer considered something of the future, as they are now a thing of the past.

Breaking Down 55 or Older Communities

Age restrictive communities have been around for years. Some folks have just had their fill of kids and don’t want to share their community with children after 5pm. In general though, children are permitted in age restrictive communities but, there are rules that must be followed.

The below pool policy for visiting grandchildren was taken directly off the website of a large adults only community in the southeast. Go ahead and read it:

What are the rules for visiting grandchildren?
Children under the age of 19 may be a guest a maximum of 90 days in a calendar year. Children must be at least 4 years old and potty-trained to use any of the pools. Children ages 4-16 years of age are welcome at all pools during children’s hours only and must be accompanied by a supervising adult (non-guest). Pool monitors are present and may answer any questions or concerns.

At a glance this really sounds ok however; the whole premise is that kids up to 19 years old must be accompanied by adults in all pools and only during times where young ones are permitted to be in the pools. Well, so much for Grandma & Grandpa headed to the pool after dinner for a quick swim with the grandchildren!

Since it would be an exhaustive search to find the correct answer, my 12+ years of working with people who are looking at Southeastern NC to retire to provides me the luxury of making an educated guess on this question: What percentage of people retiring in the southeast retire in age restrictive communities? Answer: Less than 5%, or perhaps considerably less than that.

So just what is the draw to age restrictive communities? Noise for one is the #1 driving factor, and nuisance is a strong second. To each his own and who is anyone to judge if this is the lifestyle someone chooses, correct? Again, the percentage of adults moving into these types of communities is a fraction of the retiring public.

Everyone knows that Del Webb is a branded name synonymous with age restrictive communities

_______________________________

so I found the age restrictive policies for Sun City Summerlin/Las Vegas:

55 Year Age Restriction Policy per
The FAIR HOUSING AMENDMENTS ACT of 1988 (the “Act”)
HOUSING FOR OLDER PERSONS ACT 1995: FINAL RULE
(Department of Housing and Urban Development: 24 CFR Part 100)

INTRODUCTION
The Fair Housing Act (Title VIII of the Civil Rights Act) exempts “housing for older persons” from the Act’s prohibition against discrimination because of familial status. Section 807(b)(2) ( C ) of the Act exempts housing intended and operated for occupancy by persons 55 years of age or older which satisfies certain criteria HUD has adopted implementing regulations further defining the “housing for older persons” exemption at 24 CFR part 100, subpart E (Housing for Older Persons Act, hereinafter: HOPA).

There are 4 factors required for a facility to claim the 55 and older exemption:
(1) that the housing be intended and operated for persons age 55 and older; (24 CFR 100.304)
(2) that at least 80 percent of the occupied units be occupied by at least one person who is 55 years of age or older; (24 CFR 100.305)
(3) the housing facility or community must publish and adhere to policies and procedures that
demonstrate its intent to operate as housing for persons fifty-five (55) years of age or older. (24 CFR 100.306)
(4) the housing facility or community must also comply with rules issued by HUD for the
verification of occupancy. (24 CFR 100.307).

Sun City Summerlin is qualified for the exemption as a community for 55 year or older persons. The intent is stated in the Sun City Summerlin Community Association, Inc. CC&R’s (Article 4.2 (a)) and By-laws (Article 2.1) as well as by the age restriction rules adopted and enforced by the
Association. This document’s purpose… READ MORE

So does that mean that 95% of those retiring are living in communities without age restrictions? Yes, the answer is Yes however, there is an however. Since I know Brunswick County quite well, let’s do some exploring on how we have so many retirement communities here without any legal age restrictions yet, most everyone seems to be perfectly happy with the lack of policies.

There are over 20 Plantations in Brunswick County – and in case you are not aware of the marketing lingo by developers, a “plantation” is a community that has very nice amenities such as pools, tennis courts, golf course, fitness center, activities, etc. The draw to Brunswick County is weather, beaches and affordability – along with the myriad of plantations to select from.

Brunswick County historically has served various service industries, such as golf, beach, restaurants, hotels and general tourism. If you break that down, the overwhelming majority of workers in our area are hourly, and that means that their price range for a home hovers around $100,000 with both parents working (combined annual income would range from $30,000 – $50,000). We have a true absence of white collar jobs here, as there are virtually little to only a few “Class A” office buildings within the county.

The average single family home starting price in the 20+ plantations is over $200,000, and that knocks out an incredibly high percentage of young families. Therefore, since plantations are not economically feasible for so many young couples, the population of retirees dominates the landscape. And therefore the number of young children living inside these plantations is often almost zilch.

So, while we do not have official documents banning children from our public areas, streets, sidewalks and community amenities, we really don’t need them. Sure there might be a sprinkling of children in all plantations but it seems that the higher the price is of the average home, the less children you see.

As a general rule, our plantations here are grandchildren/children friendly plus, let’s unfortunately not forget about how many kids are moving back home and often with their children! And remember, you can only keep kids locked up in the house for so long! 🙂

Age restrictive communities have their place in the food chain of places to possibly retire to, so if you are averse to sharing your community with young ones, then you have some options up and down the east coast. WC Fields once said when asked “How do you like children”, to which he replied “Medium Rare, Medium Rare”. In Brunswick County, we welcome grandchildren yet we do always recommend to build your guest rooms to be comfortable BUT, not TOO comfortable! 🙂

Are Investors Back???

Back in 2009, a proud young man from Miami called our office to inquire about the value of his investment homesite he purchased in 2006 during a developer ‘big event’ weekend. Believe he had $225,000+ invested in his 1/3 acre nature homesite. According to one of our Brokers here, the young man had also purchased some investment property in south Florida that was not faring very well and he just needed to be reassured that his NC property was still sound.

When my Broker researched the property, he asked the young man if he wanted the truth about the current status and value, and of course he said Yes! So that he had some perspective, we passed along to him that nothing had happened to his homesite in three years in terms of infrastructure (ie roads being paved, curbs, utilities, access to the homesite, etc.) and that there were no homes built yet in this section where 200+ homesites were sold to anxious buyers.

The young man seemed a bit dismayed by the lack of progress and the escalation of broken promises so he naturally asked the Broker what he felt he could get for the property if he were to put it on the market. Well, the reply was “your homesite is not worth a ham sandwich”. There was about 10 seconds of silence and the young man almost broke down in tears.

Investing in land, stocks, bonds, marriage, a business, sports or almost anything can be a nerve-wracking experience. That is why it is always good to take your time and research any investment you decide to jump into. Recently throughout the southeast a number of investment groups have been on the lookout for semi completed developments to invest in. In Brunswick County alone we had over a dozen communities that were in the process of being developed go belly up and leave the original development vacant. Some had roads and utilities while others had partial infrastructure.

Home and Land Investing

In the past several months I know of several WEEKEND LAND SALES EVENTS that have taken place in NC. Homesites have been reduced to a fraction of the initial intended prices and a marketing team comes in, builds a new entrance, surveys and stakes the homesites, advertises to everyone in their massive databases, puts up a tent, brings in 40 sales agents and attempts to use the herd mentality to sell all the homesites in 3 hours.

Some of these marketing groups have been successful and some not as much as the others. The key though is not whether the group that picked this property up from the bank makes money, but whether these are legitimately good bargains. Here are some Pros & Cons that everyone might want to consider:

PROS

  • The prices are reduced
  • Basic infrastructure should be in so that you can build right away

CONS

  • When you have 100 Buyers together under a tent and 50 homesites to sell, you invariably have a herd mentality going on, and many people the world over make huge mistakes in these pressure cooker environments
  • Most of these communities have zero amenities (pools, tennis, fitness, golf, etc.), so chances are strong that most people purchasing these sites will never build on the sites
  • That translates, down the road, to the overwhelming majority of these homesites coming back on the market – which in turn means values will drop significantly as investors simply want to get rid of their investments once they know they are not going to appreciate
  • These marketing groups are not developers. As soon as they have everyone’s money, they are down the road to their next opportunity never to be heard from again.

As a general real estate Broker, I am perplexed as to why someone would risk $39,000 on a homesite in a 4 street community with zero amenities or homes built. Plus, these slick marketing groups don’t even let you know where the community is located! (Don’t ignore all the Warning signs!) Conversely, anyone today can walk into St James, Sea Trail, Brunswick Plantation, Winding River, RiverSea and numerous other communities and purchase a $35,000 homesite in a plantation that has hundreds/thousands of homes built, all infrastructure & amenities in and community activities always going on.

While our market here is doing well, just go to this link and see the number of homesites that are on the market in twenty of the leading plantations in the area: Click Here.

In just these plantations alone there are over 1,100 homesites for sale, so with our current absorption rate we probably have a 5-7 year supply.

If you are going to invest in real estate again, do like you did years ago and research the developer, builder, sales team, etc. before you make any kind of commitment. In the past 7 years the average American has removed one word from the real estate vocabulary, and that is the word “risk”. And if you don’t investigate as to how much risk you are taking on, you just might wind up with a ham sandwich one day instead of a good investment.

Meet The New Neighborhoods at Brunswick Forest in Leland, NC

Currently there are 12 neighborhoods in Brunswick Forest – the #1 selling community in the Carolinas. Each neighborhood offers their own architectural style and lifestyle plus, each has a target range for homes. This allows people who are considering Brunswick Forest to find a neighborhood that matches their own budget and personal tastes.

Today the top selling neighborhoods are Cape Fear National, Park Landing and Shelmore. Here is a look at each.

Cape Fear National Golf course is one of the Top 10 courses along the Carolina coast. With 5 separate tee boxes and southern vistas, this 18 hole masterpiece is one golf course you have to play. However, even if you don’t play golf you can enjoy the serenity of it by living on and or around the course. The Cape Fear Neighborhood has homesites beginning in the low $100s and complete home packages begin in the mid $400s and range up to the low $700s.

Shelmore is a quaint Cottage Community with lots of front porch living along the beautiful Hammock Lake. The Cottages have large front porches and most have rear alley way entrances to your garage. The timeless architecture is very appealing and the soft pastels are easy on the eyes. And be sure to check out The Hammocks @ Shelmore, as these are a brand new collection of enticing Low Country homes that compliment the Cottages at Shelmore.

Lastly, Park Landing opened its streets a year ago to rave reviews and this collection of predominantly one story hardy board homes has proven to be the hottest neighborhood in Brunswick Forest. With price points for a single family home beginning in the high $200s to mid $300s, you will find Park Landing to be all the home and yard you need as you retire in the warmth of the North Carolina sun.

Call Carolina Plantations Real Estate today at 910-755-7557 for a complete tour of Brunswick Forest, Leland, Wilmington and all other communities that might suit your needs.

The Villages at Brunswick Forest

What really separates Brunswick Forest from all other communities in Brunswick County is The Villages at Brunswick Forest, in Leland, North Carolina. Sure you are only 8 minutes to the waterfront Historic downtown of Wilmington, NC from Brunswick Forest, but you may not even need to leave your own community for many of your day to day needs.

lg_001Entrance Night

Inside The Villages at Brunswick Forest, you will find (and all of these have been built within the past four years) a 45,000’ Medical Center (New Hanover Regional Medical Center) – which has all your basic doctors; Blue Wave Dentist office; CVS Pharmacy; BB&T Bank; Lowe’s Grocery Store – regional upscale chain; Pizzetta’s Italian Restaurant – Sal and Vito are from NYC!; Murray Framing & Art Studio; Port City Java – areas #1 Coffee Chain; Veterinary Hospital with grooming and boarding and more.

Coming Soon (as in currently under construction) are Tideline Fabrics – complete window treatments and fabrics for your home; Cosmetic Surgery Center; Builder and more!!

Call Carolina Plantations Real Estate today at 910 755-7557 for a complete tour of The Villages at Brunswick Forest, the community of Brunswick Forest, Leland, Wilmington and all other communities that might suit your needs.

The Humorous Side of Retiring to Florida

A Few years ago, my wife and I moved into a retirement development on Florida’s southeast coast. We are living in the “Delray/Boca/Boynton Golf, Spa, Bath and Tennis Club on Lake Fake-a-Hachee”. There are 3,000 lakes in Florida; only three are real.

Our biggest retirement concern was time management. What were we going to do all day? Let me assure you, passing the time is not a problem. Our days are eaten up by simple, daily activities. Just getting out of our car takes 15 minutes. Trying to find where we parked takes 20 minutes. It takes a half-hour in the check-out line in Wal-Mart, and 1 hour to return the item the next day.

Let me take you through a typical day: We get up at 5:00 am, have a quick breakfast and join the early morning Walk-and-Fart Club. There are about 30 of us, and rain or shine, we walk around the streets, all talking at once. Every development has some late risers who stay in bed until 6:00 am. After a nimble walk, avoiding irate drivers out to make us road kill, we go back home, shower and change for the next activity.

My wife goes directly to the pool for her underwater Pilates class, followed by gasping for breath and CPR. I put on my ‘Ask me about my Grandchildren’ T-shirt, my plaid mid-calf shorts, my black socks and sandals and go to the clubhouse lobby for a nice nap.

Before we know it, it’s time for lunch. We go to Costco to partake of the many tasty samples dispensed by ladies in white hair nets. All free! After a filling lunch, if we don’t have any doctor appointments, we might go to the flea market to see if any new white belts have come in or to buy a Rolex watch for $2.00.

We’re usually back home by 2:00 pm to get ready for dinner. People start lining up for the early bird about 3:00 pm, but we get there by 3:45 because we’re late eaters. The dinners are very popular because of the large portions they serve. We can take home enough food for the next day’s lunch and dinner, including extra bread, crackers, packets of mustard, relish, ketchup and Splenda, along with mints.

At 5:30 pm we’re home, ready to watch the 6 o’clock news. By 6:30 pm we’re fast asleep. Then we get up and make five or six trips to the bathroom during the night, and it’s time to get up and start a new day all over again.

Doctor-related activities eat up most of our retirement time. I enjoy reading old magazines in sub-zero temperatures in the waiting room, so I don’t mind. Calling for test results also helps the days fly by. It takes at least a half-hour just getting through the doctor’s phone menu. Then there’s the hold time until we’re connected to the right party. Sometimes they forget we’re holding, and the whole office goes off to lunch.

Should we find we still have time on our hands, volunteering provides a rewarding opportunity to help the less fortunate. Florida has the largest concentration of seniors under five feet and they need our help. I myself am a volunteer for ‘The Vertically Challenged Over 80.’ I coach their basketball team, The Arthritic Avengers. The hoop is only 4-1/2 feet from the floor. You should see the look of confidence on their faces when they make a slam dunk.

Food shopping is a problem for short seniors, or ‘bottom feeders’ as we call them, because they can’t reach the items on the upper shelves. There are many foods they’ve never tasted. After shopping, most seniors can’t remember where they parked their cars and wander the parking lot for hours while their food defrosts.

Lastly, it’s important to choose a development with an impressive name. Italian names are very popular in Florida. They convey world travelers, uppity sophistication and wealth. Where would you rather live: Murray’s Condos or the Lakes of Venice? There’s no difference — they’re both owned by Murray, who happens to be a cheap bastard.

I hope this material has been of help to you future retirees. If I can be of any further assistance, please look me up when you’re in Florida. I live in the Leaning Condos of Pisa in Boynton Beach.