Qualfying Ratios Explained If You Are Applying For A House Mortgage

Can you qualify for a house mortgage in Hendersonville, North Carolina?  Qualifying for a mortgage is not a mystery.  It is common sense.

If you and you spouse earn $10,000 per month, does it make sense to you that you can not afford a $10,000 per month mortgage payment?  Of course you can not.  You would certainly be able to afford a $2800 ( PITI ) per month payment.  Your house payment would be 28% of your gross income.

The bank figured out a long time ago that most people will make their house payment if the total house payment is less than 28% of their total income. This is called housing expense ratio.  The bank wants your house payment to be less than 28% of your income.   If your gross income were $5000 per month, the bank would want your maximum house payment to be $1400 per month.

This seems simple enough.  There is another factor.  It is called total obligation ratio.  The way this works is the bank is concerned with your total monthly recurring obligations.

Qualifying ratios are important when getting a morgage

Let's go back to our hero that is earning $10,000 per month gross between him and his spouse.  The banks wants ALL of his payments to be less than 36% of his gross income.

Let's assume he is driving a car with a $300 a month payment .  His wife has a $200 per month car payment also.  His Visa card has a minimum payment of $100.  His Kohls credit card has a minimum payment of $100.  His Macys credit card has a minimum payment of $100.  His Sears credit  card has a minimum payment of $100.  The payment on his boat is $200 per month.

He applies to the bank for a mortgage loan to buy a new house.  The bank takes his $10,000 per month income and multiplies it by .36.  The maximum total obligations that our hero can qualify for is $3600.  Our hero has $1000 in obligations already.  The bank subtracts the $1000 from the $3600.  Our hero can qualify for $2600 per month , not $2800 based on his housing expense ratio.

Due to his other obligations, he can only qualify for $2600 house payment.  This is called total obligation ratio.  http://rondclimer.blogspot.com/2015/01/qualifying-for-real-estate-mortgage-in.html  Here is a link to more insight.

How can he get the house that he wants that costs $2800 per month?  He can put more money down to lower his monthly payments or sell his boat or pay off a couple of those credit cards.

Debt is the biggest problem in qualifying for a mortgage loan.  If you are planning on buying a house soon, start paying off debt and incur no new debt.

If you live anywhere near Hendersonville, North Carolina and want to buy a new house, call me at 828 755 6996 .  I will get you started.  If you are interested in a career selling real estate, our company, Keller Williams Realty is looking for new real estate agents.  Contact me at www.firstrealestateschool.com   I can get you started with that also. 

When Selling Real Estate in Carolina, Understand Due Diligence

     Almost all real estate contracts written by Realtors in North Carolina have a "due diligence" clause.  This is a clause that states that the buyer has a period of time (fill in the blank) to investigate the property and the transaction.  Then the buyer can decide IN THE BUYER'S SOLE DISCRETION, to proceed with or terminate the contract.

     The buyer pays a fee to the seller called the due diligence fee. This fee is paid to the seller at the time of acceptance of the offer.   How much?  If you are the potential buyer making an offer, a hundred bucks sounds good.  If you are the seller, that means that, if after fill in the blank days, the sellers get to keep the hundred bucks.  During the "due diligence" period, the buyer, IN THE BUYER'S SOLE DISCRETION, could back out on the transaction.

     Let's take a really close look at this.  You have your $300,000 house for sale.  You have a $200,000 mortgage at 5% interest.  Your taxes are $1500 per year.  Your insurance is $800 per year.  Your HOA dues are $600 per year.  Just to make sure the story is interesting, let's assume you have moved out and the house is vacant.  Every day that you own that house costs you money.

Ron Climer can be reached at 828 755 6996 in Hendersonville, N.C.

     How much does it cost you to own that house per day?  Your interest is $27 per day or $821 per month.  Your taxes are $4 per day or $123 per month. Your insurance is $2.20 per day or $65 per month.  Your HOA dues are $1.65 per day or $50 per month. 

     You receive an offer that is acceptable to you with a hundred dollar due diligence fee. If you accept the offer, you get to keep the hundred bucks no matter what.  The due diligence time is thirty days in this contract. The amount of time and the fee is negotiable between the buyer and the seller.  This is the deal we made in this example.  Twenty nine days later, IN THE BUYER'S SOLE DISCRETION, your buyer decides not to buy your house.

     Let's see.  Mr. Seller, You have paid 29 days interest ($783) while your house was not for sale.  You have paid taxes($116) while your house was not for sale.  You have paid insurance ($63) while your house is not for sale.  You have paid HOA dues($47) while your house was not for sale.  You have probably paid water and electricity while your house is not for sale.  It has cost you about $1250 to sit and wait for the. buyer to make a final decision.  Your Realtor has not advertised your house.  Your house has not been for sale in the MLS.  No one has shown your house. Now you are back to square one.   The good news is you get to keep the hundred dollar due diligence fee.    Your $1250 that you have paid on your not for sale house is wasted.  What is the solution?  Get a larger due diligence fee from your buyer.  The amount of the fee is negotiated between buyer and seller.  You can't be mad at the buyer for offering you a hundred dollars due diligence fee.  You can only be mad at yourself for not demanding enough due diligence fee to cover your cost of ownership while the buyer is having his inspections done and applying for a mortgage. In our example, that would be $1250.  If the buyers state that they only feel comfortable paying $500 due diligence fee, that is no problem.  We can shorten the due diligence time to ten days.  Get a due diligence fee that will cover your cost of ownership during the due diligence period.  All of these terms are negotiable before you sign the contract.  They are not negotiable after you sign the contract.  

     If the buyer backs out for any reason or no reason during the due diligence period , the North Carolina Association of Realtors contract says they get their escrow deposit back.  The deal is off.  If the buyer doesn't like the home inspection.  He doesn't get approved for his loan.  He loses his job or his company transfer him to Dallas.  His wife leaves him for a better looking guy.  No matter why the deal dies during the due diligence period, the buyer gets the escrow deposit back and the seller can keep the due diligence money.  If the due diligence money is a hundred bucks, the seller will be annoyed.  If the due diligence money is enough to cover the ownership costs, that will seem fair to most sellers. If the due diligence fee is $5000, the seller will be glad the buyer backed out.

     How do we determine the due diligence fee?  We determine it by negotiation between the buyer and the seller.  When the seller receives an offer with a hundred dollar due diligence fee, the seller just counter offers with a $1250 due diligence fee. If your listing agent tells you that is a bad idea, show him this article.

     Do not confuse the"due diligence" fee with the escrow money deposit. They are not the same thing.  The due diligence fee check is handed to the seller at acceptance of the contract.  That money belongs to the seller no matter what happens next.  If the deal closes or does not close, the seller keeps the due diligence money.

     The escrow deposit is another item.  The earnest money deposit is held by an escrow agent, the listing Realtor or an attorney.  The purpose of this money is for the buyer to let the seller know that he is earnest and sincere with this offer.  If the buyers do not get to closing for some reason that is not excused in the contract, the buyers forfeit that money to the seller.  If the due diligence period is ten days, after ten days, the sellers keep the due diligence money. Closing does not occur until thirty days after the due diligence period is over (in our example).  The buyers are bound to close.  If they do not, they forfeit their earnest money escrow deposit.   How much should the earnest money escrow deposit be? Who decides that?  It is decided by negotiation between buyer and seller.  The larger the earnest money escrow deposit, the fewer problems the seller will have .  Insist on a large deposit.

     Picture this.  The buyers have entered into a contract to buy the seller's house.  The buyer's have put up a $1250 due diligence fee and a one thousand dollar earnest money escrow deposit.  The due diligence period has come and gone.  The inspections have gone well and the buyers are approved for the loan.  One week before closing, the buyers find a house that they like muuuuuuch better.  They forfeit their earnest money  escrow deposit and go buy the other house.  If the sellers had insisted on a $25,000 escrow deposit, this would not have happen.  If it did, the sellers would not be too mad.  Get a large earnest money escrow deposit.

     As you read this article, you need to consider your position.  Are you a buyer or a seller?  As a buyer, a hundred dollar due diligence fee looks good with a $500 earnest money escrow deposit.  If you are a seller, you, at least, want the due diligence fee to cover your cost of ownership during the due diligence period just in case the buyer does not proceed with the transaction.  Understand this.  The due diligence fee does not cost the buyer anything if the deal closes.  When the transaction closes, the seller gives the due diligence fee back to the buyer as a credit on the closing statement. It only costs the buyer if the transaction doesn't close.  It is going to cost someone if the transaction does not close.  Likewise, the earnest money escrow deposit does not cost the buyer anything if the deal closes.  If the buyer backs out the day before closing just as the seller is closing the door to the moving van, the seller will be crying.  The seller needs to be certain that the escrow deposit is large enough to assuage the pain. In the listing agreement that most North Carolina  Realtors use, the contract states that, if the earnest money escrow deposit is forfeited, it will be split fifty fifty between the seller and the Realtor.  The real estate listing agent should be agreeing with the seller that a large deposit is a good thing.  

     If you have property for sale in western North Carolina near Hendersonville or Asheville or Tryon or Saluda or Columbus or Arden or Mill Spring or Lake Lure or Bat Cave, contact me.  I can help you with that.  If you are interested in relocating to the most wonderful place on earth, call me.  If a vacation house sounds appealing, contact me.   That is how we got here.  We bought a vacation house here in Tryon, North Carolina ten years ago.  Last year, we moved from Orlando, Florida into that vacation home.  Here is a video about the best kept secret in Carolina.  Check it out.  https://www.youtube.com/watch?v=8XzOw95TQ0E                   www.ronclimer.com        

Hendersonville, North Carolina Realtors Weathered In Still Got Four New Listings

     Today is February 18, 2015.  The weather outside is frightful.  The Hendersonville, North Carolina Board of Realtors still got four new listings submitted.  Since I am a Realtor member of the Board of Realtors, I have this information to share with you. Today's new real estate listings are:

This being "snowed in" is a new experience for Ron  Climer

1 Laurelwood in Fletcher, North Carolina for $259,000
110 Village Greenway in Flat Rock, North Carolina for  $319,900
123 Ridge Lane in Flat Rock, North Carolina for $484,000
109 Woodglen Court in Flat Rock for $749,000
and one condominium
111 Shepard Square in Brevard, North Carolina for $138,500
and one townhouse
137 Thea Lane in Fletcher, North Carolina for $119900

     If  I can help you look for a new house in the Hendersonville, North Carolina area, please call me ,Ron Climer, at 828 755 6996.  If you have a Hendersonville house that you would like someone else to own, contact me.  If you have any questions about real estate, leave a comment here or call me whichever is easier for you.  You can access the entire Hendersonville MLS through our website at www.hendersonvillekw.com .  Check it out.

In Hendersonville, North Carolina Here Are Today's New Homes For Sale

     Today is February 4, 2015.  The Multiple Listing Service foe Hendersonville, North Carolina had  ten new real estate listings yesterday.  As a Realtor, member of the Hendersonville MLS, I am privy to this information.  The ten new Hendersonville houses for sale are:

Call Ron Climer for your Hendersonville real estate needs

128 Vance Place in Lake Lure, North Carolina for $229,000
74 N. Greenwood Forest Drive in Etowah, North Carolina for $199,000
274 Stone Hollow Road in Fletcher, North Carolina for $229,500
14  LaCoste Drive in Hendersonville, North Carolina for $414,500
21 Maple Street in Brevard, North Carolina for $219,000
118 Turley Falls Road in Hendersonville, North Carolina for $163,000
112 Fulton Drive in  Hendersonville, North Carolina for $167,000
273 Bluebird Road in Lake Lure, North Carolina for $285,000
23 Dartmoor in Flat Rock, North Carolina for $508,000
713 Blyhte Street in Hendersonville, North Carolina for $265,000

and two condominiums

350 East Allen in Hendersonville, North Carolina for $275,000
160 Whitney Blvd in Lake Lure, North Carolina for $59,900

      I am a Realtor at Keller Williams Realty Mountain Partners at 404 S. Main Street in Hendersonville, North Carolina.  If I can help you to own one of these house or any other houwww.hendersonvillekw.com        If you have a house that you need to sale, call me.  I can help you with that also.
se, please call me, Ron Climer, at 828 755 6996 or if you want to use the entire Hendersonville, North Carolina MLS, go to our website at

New Houses For Sale In Hendersonville, North Carolina

     Today is January 31, 2015.  The Hendersonville Board of Realtors MLS has published a list of yesterday,s new listings.  I am a member of the Hendersonville Association of Realtors.  I have access to this list.  I try to share it with you every day.  In the Hendersonville area today, we have eight new real estate  listings.  They are:

     175 Green Hill in Mill Springs, North Carolina.  The price is $265,000 

     168 Pinar Road in Arden, North Carolina.  The price is $225,000
     231 Rubin Wilson Road in Mill Springs, North Carolina.  The price is $310,000
     20 Fieldstone Court in Arden, North Carolina.  The price is $225,000
     730 Buncombe Street in Hendersonville, North Carolina.  The price is $379,000
      156 Pamlico  Road in Fletcher, North Carolina  The price is $225,000
     580 White Oak mountain Road in Columbus, North Carolina.  The price is $499.900
     446 Concord in Fletcher, North Carolina.  The price is $999,000
     And one condominium
     503 Fox Den Court in Hendersonville, North Carolina.  The price is $224,500

      If I can do anything to make your house hunting more pleasant or easier, call me, Ron Climer, at 828 755 6996.If you want to see all the houses on the Hendersonville Multiple Listing Service, use our website at www.hendersonvillekw,com
    

New Hendersonville Houses For Sale In The Multiple Listing Service

     Today is January 20, 2015.  We have six new Hendersonville houses for sale in the Hendersonville, North Carolina MLS.  They are:

7 Claremont Drive in Flat Rock, North Carolina.  The price is $339,000
95 Bowen Terra Drive in Hendersonville,North Carolina.  The price is $450,000
821 North Oak Street in Hendersonville, North Carolina.  The price is $60,000
55 Wake Robin Place in Hendersonville,North Carolina.  The price is $324,900
75 Casual Corner Lane in Hendersonville, North Carolina.  The price is $118,000
1423 Ridgecrest in Hendersonville, North Carolina.  The price is $149,000  

     We also had three condominiums in Hendersonville come onto the real estate market.

404 Water oak Lane in Hendersonville, North Carolina.  The price is $184,900
224 Wiltshire Circle in Fletcher, North Carolina.  The price is $169,000.
504 Davis Mountain Road in Hendersonville, North Carolina.  The price is $182,500

     The real estate market in Hendersonville is certainly heating up.  If you are thinking of selling your home, you could not find a better time.  If you need any free advice, contact me, Ron Climer, at www.ronclimer.com or read some of my other articles here at "Ron Climer Mountain Messages" or call me at 828 755 6996.   If you would like to see all the houses for sale in Hendersonville and 13 other counties in western North Carolina, go to our website at www.hendersonvillekw.com .

Here is a video about housing expense ratios https://www.youtube.com/watch?v=Wy1Y7zDO3M4    

In North Carolina's Residential Real Estate Contract, Understand the Due Diligence Clause.

     In Hendersonville, North Carolina and other parts of the country, when a buyer buys a house from a seller, a common custom is to put up a binder deposit, an earnest money deposit.  This money is customarily held in escrow by the Realtor or an attorney.  The purpose of this small amount of  money is for the buyer to let the seller know that he is earnest and sincere about buying the property.  The buyer usually puts up this money, say $5000 on a  $500,000 house.  The Realtor puts the money in escrow until closing.  Then the money is turned over to the seller.  If the buyer backs out of the transaction for a reason that is not allowed by the contract, the buyer forfeits this money to the seller.

If you have a house for sale in Hendersonville, Call Ron Climer

     An equally common custom is to have the contract contingent on several conditions such as the financing being approved by the bank or a home inspection.  There may be several contingencies.  They are expressed in the contract.  If one of these contingencies are not met, the buyer can refuse to close and get his earnest money deposit returned. 

     In North Carolina, we have invented this thing called due diligence.  The standard contract that most North Carolina Realtors use for residential sales states that the buyer, AT THE BUYER"S SOLE DISCRETION, can decide to proceed or or terminate the transaction during the due diligence period.  If the due diligence period is thirty days, the buyer, for absolutely no good reason can decide not proceed with the transaction. The buyer will not forfeit his escrow deposit.  The only money that the buyer will forfeit is the "due diligence"  fee that the buyer paid to the seller at the time of signing the contract.   Do not confuse "due diligence" money with escrow earnest money deposit.  They are not the same thing.  The earnest money escrow deposit is held by an escrow agent.  The "due diligence money is paid directly to the seller at the time of signing the contract..  The seller gives this money back to the buyer at closing if there is a closing.  If the buyer backs out, the due diligence money belongs to the seller.  The buyer gets his escrow money back.

     Picture this.  Mr. Seller has a $200,000 mortgage at 5% interest  on his house that is for sale.  His taxes are $2000 per year.  His insurance is $1000 per year.  He has moved out of the house in Hendersonville, North Carolina and has moved to his new house in Raleigh, North Carolina where he has a new job.  How much does it cost Mr. Seller to own that house in Hendersonville every day?  It looks like his interest is about $27 per day.  His taxes are about $5 per day.  His insurance is about $3 per day.  At the behest of his Realtor, he has kept the electric and water turned on while the house is for sale.  That is about $10 per day.  It is costing Mr. Seller about $45 per day to own this house.  Mr. Buyer makes an offer to buy the house with a $5000 escrow deposit and a $50 "due diligence" fee paid directly to the seller.  The "due diligence" period is 30 days.  Twenty nine days after signing the contract, Mr. Buyer backs out on the transaction because he can not get a mortgage at 3%  like he was hoping to.  Mr. Realtor gets no commission.  Mr. Seller has his house 'back on the market' .  This adventure cost Mr. Seller about $
1300 in carrying costs.  Mr. Seller is back at square one looking for a buyer.

     Everything in a contract is negotiable.  Maaaaaaaaaybe Mr. Seller should have asked for a $1300 "due diligence" fee.  Mr. Seller gives the money back to the buyer at closing.  That is what it says in the standard North Carolina Residential real estate contract .  If there is no closing, Mr. Seller keeps the "due diligence" fee.

     If you have your house for sale in western North Carolina, maybe it would be a good idea to get a copy of the contract that your Realtor will be asking you to sign soon and read it.  Be certain that you understand it.  If you have a house anywhere near Hendersonville, North Carolina and you would like someone else to own that house, I can make that happen.  call me, Ron Climer, at 828 755 6996.  If you are looking to buy a house in western North Carolina, contact me at www.hendersonvillekw.com  or www.ronclimer.com

Qualifying For a Real Estate Mortgage In Hendersonville, North Carolina

     You hear so much about qualifying for a real estate mortgage.  "Experts" talk about it like it is a big mystery who can qualify and who can not qualify for a real estate mortgage .  The bank, the lender, just wants to know if it is likely that you will pay back the mortgage loan.

     Two things are vital for the mortgage lender to know.  The lender wants to know your payment history.  In today's world, this is expressed as your credit score. The lender feels that if another bank repossessed your car last year and you have defaulted on a couple of credit cards in the past, it is unlikely that you will make your mortgage payments.  If you have paid well on your car and your credit cards in the past, it is very likely that you will be approved for a real estate mortgage.  You know whether or not you pay your bills on time.

Ron Climer at Keller Williams Realty in Hendersonville, N. C. 

     The second important thing that the Mortgage lender wants to know is your income ratio.  This is just common sense.  If your income is $3000 per month gross, it is very unlikely that you can make a $3000 per month house payment.  The mortgage lender requires that your house payment (principal,interest, taxes & insurance) not exceed 28% of your income.  If you and your wife earn $3000 per month (gross) , the mortgage lender will not loan you money with a payment of more than 28% of your income or $840.  If your gross income is $6000 per month, you could have a house payment of $1680 (PITI).  That is pretty simple.  Don't you agree? 

     It gets complicated when the bank looks at your total obligation ratio.  If you are earning $6000 per month income and you already have debts the bank looks at your total obligations.  .  You already have a car payment and a boat payment and a ATV payment and a motorcycle payment and a credit card payment.  All your monthly obligations including your house payment can not exceed 36% of your gross monthly income. $6000 x 36% equals $2160.  If all your obligations exceed $2160, your loan will be disapproved.   The mortgage lender does not assume that you will pay your house payment first.  If you have these other obligations, the mortgage lender does not want to put you in a situation where you don't have enough money to pay all your bills.  The maximum total obligations ratio is 36%. 

     If this is as simple as I describe, why do most Realtors require you to get a pre qualification letter from a mortgage lender before they will show you houses or submit your offer to a seller?  The answer to this question is that many,many people forget that their car was repossessed last year or they forgot about that bankruptcy two years ago.  When you enter into a contract with a real estate seller to buy his house, he takes his house off the market.  No Realtor shows that house.  It is marked 'pending' in the MLS.  Mr. Seller wants to know for certain that the buyer has the financial ability to qualify for the mortgage loan.  Don't be mad if Mr. Seller does not want to take your word for it.  Mr. Seller having his house off the market can cost him several thousand dollars in interest and other carrying costs.  This is serious.

     Pre qualifying is better for the buyer too.  After talking to a mortgage lender, many buyers find that they can qualify for a larger loan than they thought they could.  Many buyers have the reverse experience.  Either way, it is better to know the facts.  If you can qualify for a $400,000 mortgage, you probably won;t find a $300,000 house that you like.  Inversely, If you are out looking at $400,000 houses and you can only qualify for a $250,000 mortgage, that will only result in disappointment and frustration.  Get yourself pre qualified before you start looking at houses.If you would understand this better with a video  https://www.youtube.com/watch?v=Wy1Y7zDO3M4     Watch this.  If you have a friend that is looking for a house, send this link to them. 

     At Keller Williams Realty Mountain Partners in Hendersonville, North Carolina, we have an in house mortgage lender right in our office.  This pre qualification process is quick and painless.  If I can help you get pre qualified or help you find your next house, call me, Ron Climer, at 828 290 1245 or www.ronclimer.com  or  www.hendersonvillekw.com
     

Real Estate Agents Must Obey The Fair Housing Act in Hendersonville, North Carolina

     In 1866, Congress passed a law that made it illegal to discriminate based on race.  In 1968, Congress passed a law, the Fair Housing Act, that made it illegal for anyone anywhere in the United States of America to discriminate based on race, religion, sex, national origin, color, familial status of handicap.

     When customers are working with Realtors, they need to understand the position that this puts the Realtor in. It is a violation of federal law for a Realtor to discuss race or sex  or religion  or national origin etc.  of the neighbors in a residential transaction.  Your real estate agent may or may not agree with the law.  They are bound to obey this law.  The consequences of disobeying this law are severe.  Often, Mr. Customer can not understand why Mr. Realtor will not answer his questions about whether or not there are lots of kids in the neighborhood.  Mr. Realtor will not answer your question about kids in the neighborhood because it is a violation of the Fair Housing Act to discus "familial status".  Mr. Realtor will not discuss race or religion or any of the other protected classes. It is a violation of federal law for Mr. Realtor to discuss this with you.

     Customers ask Mr. Realtor,"Is this a good Christian neighborhood?"  Mr. Buyer is not violating the law by asking but Mr. Realtor is violating the law, the  federal Fair Housing Act by answering.  A smart Realtor will tell his customer that he can not discuss these matters and take this opportunity to explain to his customer about fair housing.  It is the law.  It is not PC.  Don't be mad at your real estate agent for obeying the law.  Mr. Buyer is not violating the law by asking but Mr. Realtor is violating the law if he answers these questions.

     However, Mr. Seller would be wise to read this article twice as well as get plenty of more information about the Fair Housing Act.  If Mr. Seller instructs his real estate agent that I do not want my house shown to people of a certain religion or to people from a certain country, Mr. Seller is violating the Fair Housing Act by making this request.  A smart Realtor will advise his client, Mr. Seller that he can not accept that instruction to break the law.  He will ask the seller to please withdraw that instruction.  If Mr. Seller insists on discriminating even after his Realtor has told him that this is unlawful, a smart Realtor will withdraw from this relationship.  You can always find another customer.  It is hard to find another North Carolina real estate  license.  The truth is, if Mr. Realtor conspired with the seller to violate the Fair Housing Act, losing his real estate license would be the least of his problems.

     If a lawsuit should occur, it will occur in federal court.  Federal court is more expensive than local court.  Ask you attorney.  Understand this law.  Understand that your real estate agent has no reasonable choice but to obey this law.  Do not be mad at your Realtor.  She probably wasn't even born when this law was passed.  If you are looking to buy or sell a house in Hendersonville or Saluda or Tryon or Columbus  or any where else in western North Carolina, contact me, Ron Climer at 828 290 1245 or   828 755 6996 or www.ronclimer.com              www.hendersonvillekw.com

Expired Real Estate Listings in Hendersonville, North Carolina

     Mr. Owner hates it when six months go by and his house that he listed with a Hendersonville Realtor did not sell.  It expired in the Multiple Listing Service.  The big question is why did my  real estate listing expire?  Was it because the real estate agency did not advertise it enough?  Was it because I have a cement plant next door?  Was it because the house was a little messy?  Was it because my agent did not return my calls so I assume he did not return other calls also?  Was it because of my functional obsolescence?    http://www.rondclimer.blogspot.com/2015/01/with-hendersonville-north-carolina-real.html   If you have forgotten what functional obsolescence is, read use this link to read about it.  Functional obsolescence  is in a lot of Hendersonville houses.

     Probably, most likely, I'm pretty sure that the reason your property did not sell after being exposed to the marketplace through the M.L.S.  for six months is that the price is too high.  Did you turn down any offers?  Did you have a lot of showing that did not turn into offers?  Did you have only a few showings?  When a house is for sale in Hendersonville at a too high price, a good Realtor can often get an offer at the right price from a buyer.  A mediocre Realtor has no chance.  It takes a lot of sales skill to get a buyer to make an offer on a house that the buyer and the Realtor recognize as being too much.  Also, if that Realtor is experienced, he knows that he will have to do an equal amount of salesmanship on the listing agent and the seller before we get to closing.  Why not just go show a right priced listing to his potential  buyer?   The over priced listing just sits on the market and expires in six months.

     We had an excellent sales trainer at Keller Williams Realty Mountain Properties  ( www.hendersonvillekw.com ) that taught me a new phrase.  She said,"Mr. Seller, You are the high bidder for your own property.  You get to keep it."   Isn't that a great thought.  Picture this.  You just got a new job in  Atlanta.  You listed your Hendersonville house with a Hendersonville Realtor for $300,000 even though the Realtor recommended a $285,000 price based on his research.  Then you get a $280,000 offer.  You decline that offer and buy your Hendersonville house back from the buyer that wants it.  You are the high bidder.  You get to keep on making payments on a house in Hendersonville while you are living in Atlanta.  Six weeks later it expires in the M.L.S.  If your listing has expired in the M.L.S. , it is likely overpriced.

     If your motivation to get rid of your Hendersonville house has increased during the last six months, here is a couple of things you can do to get it sold.  Pay the Realtor a commission.  In Hendersonville many Realtors list houses at 6% commission.  They advertise  your house in the Hendersonville Multiple Listing Service at a 3% commission split with the co operating agency.  This is a wonderful system that has been around for over fifty years. Realtors call this co operating .  It is the most powerful tool a Realtor has for selling houses.  It works like magic.  It is the backbone of the real estate business. Picture this.  Mr. Realtor has a buyer client looking to buy a $300,000 house.  He looks in the M.L.S. for $275,000 to $325,000 houses.  He finds six houses  that meets his client's  needs.  Five of those houses have a 3% co op fee.  Mr. Realtor glances at that as he is doing his research.  One of those six houses has a 3.5% co op fee.  Why is that?  That is because that listing agent listed that house at a 7% commission.  When he advertised it in the M.L.S. he offered the co op agent 3.5% .  The co op agent quickly does the math .  If he sells his client a $300,000 house with a 3% co op fee , he will have a $9000 check come into his office.  He probably has a fifty fifty commission split agreement with his employer which means that he will earn $4500.  If he show s the house with the 3.5% co op fee, $10,500 will come into his office and he will earn $5250.  Do you think he will certainly show the 3,5% house?   He will.

     There is a great book written by Michael Leboeuf  titled ,"The Greatest Management Principle In The World."   The basic premise of the book is that people do what you pay them to do.  If you want you Hendersonville house to get shown and therefore sold, raise the commission.  This is human nature on display. No matter what business you are in, I highly recommend Laboeuf's book.  It is worth reading.

     What else are you looking for in your next Realtor?  Find a Realtor that has knowledge and enthusiasm.  I have knowledge.  I share that knowledge with my peers and the general public through this and other blogs and through You Tube. .  Google my name, Ron Climer.  I also have enthusiasm.  I have enthusiasm for real estate.  This is not a hobby for me.  I have been selling real estate for thirty years.  I work at getting my listings sold.  If you are looking for a Realtor to get your property sold in western North Carolina, contact me at 828 755 6996 or www.ronclimer.com

Selling Your House For Sale By Owner In Hendersonville, North Carolina

     First and foremost, if you are selling your own home without a Realtor in Hendersonville, North Carolina or anywhere, you need a written contract, a blank contract.  You need a contract form for the buyer and you to sign.  I spend a lot of time chatting with people that are selling their own house without a Realtor.  Exactly half of those people do NOT have a contract ready to be signed.  This seems to me like going fishing with no fishhooks.  " We will get some fishhooks after we find some fish.", they tell me.  If you are selling your own house, get yourself a contract.  When the buyer says," I love it I want it.", get them to sign the contract and get a deposit.  That how it starts.  Here is a good idea.  Read the contract.  If the contract says," Seller to pay North Carolina excise tax", find out how much that tax is .  Get a contract.  You will never get to the closing table without one.  You can't catch fish without fishhooks. 

     If a person has decided to sell their own  house without the aid of a Realtor, a little preparation will help a lot.  Get prepared to give potential buyers directions to your home.  Every one does not have GPS.  Get prepared to get the transaction closed.  Call an attorney or title insurance company.  Ask them what they need from you when you get a buyer.  Learn a little about buyer closing costs so you can tell the potential buyer.  Mr. Buyer will not buy your house until he knows how much cash he is going to need to get to closing.  You could contact a mortgage company to get this information for your potential buyer or you can hope you will find a buyer that already understands how financing works and what it costs.

     Another thing you need to know about is marketing.  If all you have is a little paper sign in the yard with your phone number, that is probably not enough marketing.  You do need a sign, a nice sign.  A sign down at the main road  with an arrow is a big help also.  Here is a tip.  Put your area code on the sign.  Many people that are looking to buy a house in Hendersonville are not from Hendersonville.  They don't know that the area code is 828 for  Hendersonville, North Carolina.

     If you go to Lowes to buy your sign, for a few shekels more, you can also get a little information tube to put flyers in.  It bolts to the sign.  You fill it up with flyers that tell potential customers about the property.  These are especially beneficial to for sale by owners because if your price is five hundred thousand and they can only afford  a three hundred thousand dollar house, they won't waste their time or yours calling you.  When you make your information flyers, put lots of pictures and all the information that you can think of.  Tell them the taxes, schools, grocery store, HOA dues. Put the price on the flyer.  If you advertise on Craigslist or any other internet sites, put lots of pictures.  Potential buyers love pictures. 

     The more knowledge you have, the easier your transaction will go.  Even though North Carolina is a caveat emptor state, most Realtors encourage their seller clients to use a written disclosure form as an addendum to the contract.  This is not required but it diminishes the likelihood of some aggravating  legal action after closing.  Maybe, as a for sale by owner, it would be a good idea to use a "latent defect" disclosure form letting Mr. Buyer know about any problems that you know about.  If your house was built before 1978, a lead base paint disclosure is required by federal law.  If you fail to disclose the existence of lead base paint, Mr. Buyer can come back after closing and bring a lawsuit when his kids can't memorize the times tables.  http://www2.epa.gov/lead/real-estate-disclosure   Pardon my sense of humor.  Here is a link to give you the real details. 

     Knowledge of financing will help you get a buyer.  You don't have to be a financial expert.  It would certainly help if you can tell Mr. Buyer how much he needs down and how much are his monthly payments if he buys your house. He will need this information before he makes a final decision.  Maaaaaaaybe you will find a buyer that already knows about financing.  You only need to know for your price.  Call any mortgage company .  Tell them your price and ask them how much down and how much per month.  They will tell you.  Call me Ron Climer.  I will tell you. (828 290 1000) . 

     Knowledge of things about your property like where kids go to school, how much are your taxes and HOA dues and electric bill etc. is something that most buyers want to know.  Have this information available.  Most buyers want to know this information before they make a final decision.

     Another thing you need to get your house sold is patience.  You need patience and forgiveness with people.   Often buyers are slightly inconsiderate of your time .  Don't get mad if a buyer makes an appointment to look at your house at 2 o'clock Saturday afternoon, then NOT show up.  Here is a tip from an old experienced Realtor.  Call that potential buyer at 9 AM on Saturday and confirm that appointment.  Save yourself some aggravation.  You need patience and forgiveness when buyers say things that that you may find offensive.  Don't get mad when they tell you your kitchen is "dated".  What does that mean anyway?  Don't get mad if it becomes obvious that Mr. Buyer is wasting his time and your time by looking at your house.  That is just the way things are in the world of selling real estate.  I don't know why people spend their time looking at houses that they can not or will not buy.  But, they do.  Realtors spend a lot of time learning how to adios the ones that can not buy.  http://ronclimer.blogspot.com/2011/04/when-in-doubt-blow-em-out.html   As a for sale by owner, just smile, be patient  and say good bye.  It seems to me to be almost impossible for a for sale by owner to pre qualify buyers.  It would be OK to just bluntly ask them. "Can you folks afford a $$$$$$$ ( your price) house?"  They might lie to you but they might fess up and tell you no and leave.  Feel free to give them my name and number as they go. They can afford something, just not your house.  Patience and tolerance is necessary for your mental health.

     One last thing that I must address is your personal safety.  The North Carolina Real Estate Commission has added a personal safety session to the North Carolina real estate license course that  real estate brokers have to take to get their real estate license.  Be safe.  Put away any valuables and weapons when you are showing the house.  Be extremely aware that you have a total stranger walking through your home.  Please recognize that this is a dangerous situation.  Treat it as such.  I can and I will write an entire article about this subject.  For now, just be aware and be careful.  Be safe. 

     If you try for sale by owner for what seems to be an appropriate time and it doesn't work as well as you hoped, consider listing your house with a Realtor.  I would welcome an opportunity to talk with you and show you what we at Keller Williams Realty Mountain Partners do www.hendersonvillekw.com  to get houses sold faster and usually for more money and always with less hassle.  Call me, Ron Climer at 828 290 1245   or www.ronclimer.com if I can help you get your house sold.  Also, after it is sold, call me if you want to buy another house in Hendersonville, North Carolina.

In Hendersonville, North Carolina Will The Real Estate Seller Take Less Than Asking Price?

      Will the seller take less than the asking price for this house in Hendersonville, North Carolina?  This is a question that Realtors are often asked by lookers and buyers.  A smart Realtor will answer that question by suggesting that the buyer make an offer.  Looking at houses for sale in Hendersonville, North Carolina is no fun whether you are a buyer or a Realtor.  What is fun is buying a house in Hendersonville or Flat Rock or Tryon.  Buying is fun.

     If your Realtor has shown you a $1,000,000 house, he must believe that you can afford a million dollar house.  You must believe that you can afford a million dollar house or you would not be wasting your time looking at it.  The problem is that you believe, for some reason, that THIS house is not worth $1,000,000.  Don't waste your time asking the Realtor if the seller will take less than the asking price.  Let's cut to the chase.  Tell the Realtor what you are willing to buy it for right now.  Would you buy this house for $900,000?  If you would, tell the Realtor.  Don't make him guess and beg you to give him this vital information.  Tell Mr. Realtor that you are ready, willing and able to buy this house today for $900,000.  If you make your $900,000 offer and the seller says no, keep looking.

     Ask your Realtor," Can we make this offer and keep looking?".  I am sure he will say yes.  Your offer doesn't turn into a contract until Mr. Seller does say yes.  He will never say yes until you make an offer.  If you are a buyer, get over "offer reluctance".  If you take the time to look at the house, make an offer.  Don't try to guess what the seller is willing to do.  Don't try to guess how little the seller will take.  Don't lament that the seller is crazy.  Don't be mad at your Realtor for showing you overpriced turkeys.  Make an offer.  If you have this thought," I would buy this house for $875,000", tell your Realtor.  He will know what to do.

     As a Realtor, I have attended many seminars about how to read the buyer's mind.  I don't quite have it mastered yet.  Tell your Realtor what you are thinking.  If you don't tell him, don't be mad because he doesn't know. 

     My wife buys antiques.  Often she will drive several miles to look at an antique that is advertised for $500.  When she gets there, it is nice but it is only worth $300.  We have a cliche at the Climer household," You have done the hard part"   You have driven to look at the antique.  You know it is not worth $500.  You have done the hard part.  Do the easy part.  Make an offer.  You can be sure that she does offer the owner $300.  He can say yes or he can say no.  Often he says no and calls back six weeks later and says yes.  Does that happen in real estate ?  Yes, it does. Make an offer.  You have done the hard part.

     If you are looking to buy or sell real estate in western North Carolina, contact Ron Climer at www.ronclimer.com or call me at 828 290 1000.  That is the phone number for Keller Williams Mountain Partners, a real estate company that puts the customer's interest first.  www.hendersonvillekw.com  

Can The Owner Finance The House in Hendersonville, North Carolina ?

      The easiest way to get your house sold is to hold the mortgage for your buyer.  This is simple as pie.  Lets assume Mr. Seller has his free and clear house for sale for $100,000.  Mr. Buyer makes him an offer to buy it if he will take $30,000 down payment and hold a purchase money mortgage for $70,000 at 6% interest with payments of $500 per month.  How could Mr. Seller go wrong?  What are the odds that Mr. Buyer will default on this mortgage?  Pretty slim.  If Mr. Seller is reluctant, Mr. Seller could ask for $40,000 down and hold a $60,000 mortgage at 6% with $500 per month payments.  Where could Mr. Seller invest that money at a 6% safe return in today's world?  This is a good deal for Mr. Seller and Mr. Buyer.

      What is the advantage to the seller?  His property is sold.  He has a $500 per month income.  What is the advantage to the buyer?  He doesn't have to get the property appraised and surveyed and  beg the bank to loan him the money and pay them $3000 in junkola  fees.  Also read my other article about owner held mortgages.  http://ronclimer.blogspot.com/2013/04/seven-reasons-why-i-love-owner-financing.html  What is the advantage to the Realtor?  We are sitting at the closing table a week after contract.  You gotta love that.

     Why don't more buyers buy this way?  Why don't more sellers sell this way?  Because they don't understand it.  Their Realtor doesn't understand it .  Cash is easy to understand but is often hard to find.  Owner financing will solve every one's problem.  If you have any questions about owner financing or any aspects of a real estate transactions, call Ron Climer at 828 290 1000.  The more you know, the easier it is to sell or buy real estate .  If I can  help you get your real estate sold or help you buy some real estate , contact me.    www.ronclimer.com      www.hendersonvillekw.com

     If you prefer a video explanation   https://www.youtube.com/watch?v=pRyWo--Wg0I