Does it make economic sense to build a new, custom home?  That has been the key question the past few years for most home buyers in the greater Charlotte, NC and Lake Norman, NC markets.  The main reason was because there was and is so much inventory out there that it was hard to justify the new home price per square foot vs. existing inventory price per square foot.  On top of that, if you segment out the distressed inventory (short sale, foreclosures, REO’s, etc.), those price per square foot numbers were dropping the averages even more.   For the past few years I’ve told my clients that they were crazy to look at new construction with all the deals to be had out there.

That is until now.  I recently was out with some out of town clients looking at homes in the price range of $350k-$600k in the Lake Norman, NC area.  What we were very pleased to find out was that there were 2 or 3 home builders and developers offering to build brand new construction homes that were VERY competitive with even the distressed property pricing.  Perhaps these situations are derived from a distressed situation in itself, meaning that the developers and builders have been sitting on these lots forever and have come to realize that the only way to move the lot and get it off the books is to build on it and make a small margin on the construction.  Or, maybe they just realize its a great strategy in response to most buyer’s recent feedback in the industry on buying foreclosures.  We saw this in neighborhoods like Pebble Bay in Denver, NC and even The Point in Mooresville, NC.

What we are finding is that most buyers really can’t see past the “clean up” or “upfit” work needed in most distressed situations.  The result is a home run when they can purchase new construction for similar pricing.

Mike Moulton is President and head Broker at Bee Home Solutions, Inc. serving the greater Charlotte, NC real estate market.  704-885-0488.

Below are the Top 5 Financial Hazards That Homeowners Facing Foreclosure Must Avoid:

1.) Loan Modification/Repayment Plan – This is a possible solution to foreclosure if the homeowner contacts the bank early in the process. Some lenders are willing to change the terms, such as interest rate or payment amount or extension agreement (extending the amortization period for the remaining principal). The homeowner must be employed and needs to have steady income to qualify. If a homeowner is not currently employed, has filed for bankruptcy protection or does not make enough income they will not qualify for a repayment plan. In most cases the repayment plan/ loan modification is structured in such a way that the new payment for the homeowner could even be HIGHER than the previous payment. Or, the new payment is very close to the old payment and a couple past due payment have been added to the back end of the loan. It is for these reasons that most loan modification plans are not approved by the lender servicing the loan.

2.) Deed-in-Lieu – This is a voluntary foreclosure. The deed–in–lieu takes place when a homeowner in default voluntarily signs a deed giving the ownership of their property back to the lender who issued them the mortgage. Homeowners may mistakenly decide that this is the best option so that they can move on with their lives; however, this is may only be an illusion. Many lenders are aggressively pursuing homeowners in default to pursue the deed-in-lieu of foreclosure option. The reason the lenders pursue this option is because it saves them a tremendous amount of money. A deed-in-lieu saves expenses associated with the foreclosure because the bank does not have to pay an attorney for the fees associated with the foreclosure process.

3.) Bankruptcy – Homeowner’s facing foreclosure often file Chapter 7 as a solution to the foreclosure. Many attorney’s will advise their clients that if they file for Chapter 7 that they will not need to worry about the house. While debts are erased, the bank still needs to be made whole and will need to sell the house. The lender will foreclose on the property to force the sale and repossess it. This results in double jeopardy for the homeowners, as they find that they not only have a bankruptcy on their credit history, but also a foreclosure. The damage done to their credit will eliminate their ability to get a new loan of any kind for five years for the foreclosure, with more years added for the bankruptcy.

4.) Refinance – When properties were appreciating, this option made sense. Today, most homeowners owe more than their property is worth. To complete a refinance, the bank will order a new appraisal and will lend out 80 to 90 percent of that number. If the house is over-leveraged, the homeowner and the property will not qualify for a refinance option.

5.) Mentally Checking Out – Often homeowners are so overwhelmed by the process of foreclosure and what it could mean for their immediate future as well as the years down the road, they do nothing: they mentally check out. This mistake will result in at least one of the following penalties, on top of losing the house, and one’s ability to be approved for a loan for at least five years. They are: 1) the 1099; and 2) the deficiency judgment.

Note: The above opinions are those of Michael Moulton and not to be construed as legal advice.  They are based on his experiences in working with foreclosure situations with past customers.  For more information on your particular situation, please contact his office at 704-885-0488.

Beautiful 4 bedroom home in desirable Edinburg subdivision in Ballantyne area of Charlotte, NC. Home has bonus room ideal for home office, additional bedroom or kids playroom. Formal dining room and dining area off kitchen which opens to family room, patio and  large fenced-in, landscaped back yard. Master suite has large soaking tub with dual vanities. Attached 2 1/2 car garage with opener.

A great pre-approved short sale deal without the long waiting hassles.  Normal closing time.

The US economy needs a boost.  The US dollar is deflating everyday.  Since the crash of the sub-prime markets a few years ago, many potential homeowners don’t not have the opportunities that they used to when selecting housing.  For some this is a blessing in disguise, for others, they need to get creative and find ways to accomplish their home buying dreams.

There are so many great real estate deals out there in the market right now that if you can get access to cash or a loan then you can be a player or at least secure a great deal for your personal residence.  I’ve personally seen bank owned properties selling for 40 to 50 cents on the dollar.  The key to that sentence was “on the dollar.”  I now beg to ask what is the value of the dollar and what will it be in a year from now?  Its not backed by silver or gold. Will we all be spending $10 for a gallon of gas a year from now? If so, trade in your V8′s for Mini Cooper now.

It will be interesting to see if there is any boost to consumer confidence with the worlds largest figure for terrorism disposed of.  Congratulations to the US Armed Forces for their excellent work.  Take care,

Mike

This popular area is close to I485 and Ballantyne for great shopping, nightlife, and restaurants.  This home also is in an area of excellent school systems. Call Mike today to schedule a showing and for more information at 704-564-7639.

Do you have a question about a home or want to talk about selling yours? Or, if you have any other questions or comments on any of our many programs, then feel free to submit your inquiry in the form below or call via our contact information below. You will get a response as quickly as possible.  We are extremely confident that we can custom tailor a solution to fit your needs today!

Michael Moulton, Broker-in-Charge/Realtor/Investor

Office phone: 704-885-0488

Debbie Rodriguez, Customer Care Specialist/Broker

Office phone: 704-885-0488

Equal Housing Opportunity Provider

HAFA is designed for homeowners who have applied to HAMP for assistance but have had no success with their loan modification program. To participate in HAFA, homeowners must still meet HAMP’s eligibility criteria (principal residence, first-lien mortgage, serious delinquency, unpaid balance under $729,750, and a mortgage payment over 31 percent of gross income).

Watch the video for more details. Bee Home Solutions, Inc. is a licensed real estate firm in NC and helps to provide numerous no fee solutions to homeowners facing foreclosure.  704-885-0488 begin_of_the_skype_highlighting              704-885-0488      end_of_the_skype_highlighting.

Come and check this one out at:

1214 Montford Drive, Charlotte, NC 28209

Call Mike to setup a showing time: 704-885-0488

Master Bedroom

Family room - 1st View

Family Room - 2nd view

Cozy Den

Covered Patio

Guest Room

Spacious Kitchen with Breakfast Nook

Mike also addresses our viewers that have been joking with me about the videos going over 1 minute in length.

Checkout the video below and be sure to tune in next week for the 1 Minute Real Estate Quick Tip by Mike Moulton

Please provide your comments to this blogpost with your thoughts!
Thanks

Mike

Also, if you are facing foreclosure in the greater Charlotte area feel free to visit our site at http://www.charlotteforeclosurechallenges.com to view an abundance of free resources to answer all of your questions.

Watch last weeks video on The Difference between buying a HUD, REO, or Short Sale Property here