Viji Sashikant\’s Blog

CNN Money™s report on Feb 1, 2011 revealed 10 unexpected cities with the fastest-growing foreclosure rates out of the 100 worst-hit places.  Whittling it down to 5 cities, Realtor.com posted these top 5 cities. Sadly, 2 are in South Carolina and 2 in our neighboring states! These cities have one thing in common, says Realtor.com, they™re battling a growing number of job losses leading to more home owners™ default on their mortgages.Here are the Top 5 cities with the fastest-growing foreclosure rates in the country:

1. Spartanburg, SC
Foreclosure rate: 1 in 60 homes
228% increase in foreclosure filings in 2010 ” making it the nation’s fastest-growing foreclosure rate. The city™s unemployment rate hit 12.7 percent in 2009, dropping to 10.9 percent in 2010, yet still well above the national average

2. Albuquerque, NM
Foreclosure rate: 1 in 46 homes
60% increase in foreclosures in 2010. In the past decade, it was one of the fastest-growing metro areas attracting young professionals and retirees.

3. Myrtle Beach, SC
Foreclosure rate: 2.25 percent
44% increase in foreclosures in 2010. Once a big draw for vacation-home buyers, the city™s second-home market was crushed by the recession when tourism dropped and unemployment increased.

4. Savannah, GA
Foreclosure rate: 1 in 40 homes
37% increase in foreclosure filings in 2010. Many of the foreclosures in the city are in its Historic District or The Landings, popular areas where home prices rose quickly during the housing boom days.

5. Charlotte, NC
Foreclosure rate: 1 in 50 homes
37% increase in foreclosure filings in 2010. Charlotte had become the 33rd largest metro area in the country, growing by more than 30 percent in the past 10 years. Source: œ5 Unexpected Foreclosure Hotspots Daily Real Estate News, February 4, 2011    

œReduce, re-use, recycle, respect.

Well said!

2010 was the year of everything that was historically low – interest rates for buying a home and home prices. And there was a large inventory of homes on the market.  

Paradoxically, it was one of the worst years for home sales. Why was 2010 such a bad year? I worked with a number of buyers all year long. The easiest part was viewing homes, the hardest was getting a loan. That left a lot of buyers frustrated and bewildered.

Here were some reasons:

1. Low credit scores. 620 is the magic number. Banks and mortgage companies have made loan requirements stricter – your credit scores have to be 620 or higher to qualify for a loan. I start off every home buyer consultation by asking buyers to check their credit scores with the 3 credit bureaus: Experian, Equifax and TransUnion. There are many websites where you can check them for free like FreeCreditReport.com, CreditReport.com and FreeScoreOnline.com. Credit bureaus provide credit reports for a fee.
But first, check your credit report for accuracy. According to a July 2004 report by the U.S. Public Interest Research Group, 25% of reports contain errors that are serious enough to result in the denial of credit. Be sure to report any inaccuracies to the three credit-reporting agencies.

2.  Little or no credit history! I had a buyer who had moved in with her mother to save money for down payment. She had been really cautious about spending, but in the process, she had little or no credit history! That makes her a high risk to lenders. Building credit history takes time and some lenders will consider your rent payments and utility payments as part of your credit history.

3.  No money for down payment and closing costs. One couple had great credit scores and both had comfortable jobs. But they had no savings and could not get help from their families for down payment.
Gone are the days when you could get 100% financing. VA loans and the City of Columbia Loan Programs offer loans to credit-worthy home buyers with just $500 or $1,000 for down payment. FHA loans require 3.5% as down payment.
First-time home buyers are often unaware that in addition to down payment, they may also be required to pay for closing costs i.e. costs involved in getting a loan, title search and attorney fees. Sometimes, sellers are willing to pay for closing costs but my advice is to be prepared and ask your lender for an estimate of your closing costs.
So saving up for down payment and closing costs is the smart way to go.  
 

Here are some things to consider for boosting your score:

1.  Don’t be late. Missed payments lower your score drastically. Late or missed payments, foreclosures and bankruptcies count for one-third of your credit score. So make sure you pay those bills on time. If you already have a late payment on your report, depending on your track record with the company, ask for a “goodwill adjustment”. If you’re a one-time offender, your wish should be granted.

2.  Pay down balances. One-third of your credit score is based on the amount you currently owe in relation to your credit limit. So try to keep your balances at 50% or less of your credit limit.

3.  Keep old lines of credit open. Another 15% of your score comes from how long you’ve been managing credit. Closing old accounts shortens your credit history and lowers your score. Lenders also take into account the average age of your accounts, so an older account can help balance newer credit.

4.  Limit new credit. Take on new credit only when you need it. New credit can hurt your score twice. New inquiries for credit count for 10% of your score ” and a flurry of new credit requests can lower your score. Also, once a new credit line is secured, the average age of your accounts will shorten, which in turn can drag down your score even more.    

Check the Federal Trade Commission™s (FTC) website www.ftc.gov and click on Building a Better Credit Report for a detailed account. Or talk to your lender for recommending a reputable credit counseling organization.

2010 has to be the year for happenings in real estate that left us with our mouths hanging open, saying: Wh-a-a?

If you™ve been in real estate for more than 2 years, you have pretty much met most kinds of people. Columbia is the state capital of South Carolina, has a downtown university and is home to Fort Jackson where military newbees undergo basic training. So there is always a good mix of local idiosyncrasies and imported eccentricities.

Which get accentuated In the economic downturn. With more sellers than buyers, buyers became positively aggressive. They wanted homes at rock-bottom prices and low-balled every offer. They demanded that sellers fix every little item they didn™t like. What they wanted was the deal of the year!

Sellers, for the most part, anxious to sell their homes, gave in to buyers™ demands. Except for a few.

So¦ here are the 3 most peculiar real estate happenings in 2010¦

The first¦

Mr & Mrs Seller have a neat well-maintained 4-bedroom home in the suburbs. A 2-story home, it has a large sunroom, a nice level yard, and is in a good school district. It was new on the market.

My buyers (who had by now seen over 50 houses and getting tired of house-hunting) were really interested. It was perfect for their large family, the sunroom was ideal for the kids to play in bad weather and schools and shopping were near.

I pulled up some comps, the home seemed to be priced well, and so we made an offer.

Imagine our shock, when, instead of a counter-offer, we were told that the sellers were raising the asking price!!!

Could they do that? Apparently, they could and did. They blamed their listing agent for pricing their home too low!

We backed out of the deal. 8 months later, the home is still on the market!

The second¦

In these troubled times, when a lot of eager buyers are just not getting a loan, the lease-to-own option has become popular. How it works is that the buyers move into the home while they are repairing their credit, and close on the home when they are approved for a loan. The buyers and sellers enter into a contract with a definite closing date. The buyers pay a deposit upfront (to be adjusted against the sale price when they close on the home) and pay rent for the months that they are in the home. In the event, the buyers renege on the contract, the sellers keep the deposit.

This deal seemed perfect. The buyers™ loan officer was confident that they could repair their credit in just 3 months. We gave them an additional 3 months¦ just in case.

The closing date stipulated by the buyers came and went. The buyers could not be reached by phone or email, and inevitably, doors were not opened for personal visits. Then the buyers moved out and started sending a spate of obnoxious emails.

The buyers had broken the contract. Could the sellers keep the deposit? Not so easy! Well¦ the buyers had not left the keys behind and could not be reached. The sellers had to go through the whole legal route before someone could even enter the home. When, at last, they could, they found that the buyers had changed all the locks “ big hefty locks on all the doors!

The sellers own the home and can change the locks, right? Wrong! The sellers, who live in another town, have to go through more legal hassles and expense before they can change the locks, put the home back on the market, and get the deposit.

The third and best story¦

This home was going towards foreclosure. So we attempted a short sale i.e. try and sell the home before the mortgage company forecloses on it “ something that neither the mortgage company nor the sellers want. The rationale is that a lowered price, approved by the mortgage company, would attract buyers and initiate a quick sale.

All went well. Buyers put in an offer, the price was negotiated, and a contract was drawn up. The buyers needed 3 months to close which was okay by the sellers and the mortgage company.

Meanwhile, as the sellers had not paid the HOA fees, the HOA started foreclosure proceedings.

The sellers were not worried “ the first lien holder was the mortgage company. The mortgage company was not worried “ they were the first lien holder. The buyers were not worried “ they would close on the home before this HOA foreclosure threat.

Well¦ the buyers took too long, the mortgage company didn™t do anything and the HOA foreclosed on the home! The new buyer not only bought the home for a ridiculous amount (my monthly grocery bill is more), they promptly registered the deed!

The original buyers received their earnest money check but they still need to find another home. The mortgage company has a large unpaid debt on their books. The sellers are in limbo – is their debt to the mortgage company wiped out? No one knows.

 Can™t wait for 2011.  

        Like other in-town communities all over the U.S., there has been a revitalization of neighborhoods in Columbia. Cottontown, near downtown Columbia, is bounded by Grace Street in the north, Elmwood Avenue in the south, Bull Street on the east and Main Street on the west. Just minutes from USC, the State House, major hospitals and the interstates, this is urban living at its best.

This Saturday (October 23, 2010), 7 homes for sale are open to the public from 10:00 am to 12 noon.

      Cottontown was designated an official Architectural Conservation District on June 3, 2009. It is a vibrant area where homeowners take extra pride in preserving the beautiful architectural style of the homes.

      Most homes have been renovated. Large findly front porches still spill out onto sidewalks.  Inside, original hardwoods and wood-burning fireplaces define living areas, while  remodeled kitchens and bathrooms  reflect contemporary design.    Cottontown also boasts a lively neighborhood association with a website, newsletters and activities all through the year. It is a common sight to see residents walking, jogging or just strolling under the leafy canopy of beautiful old oaks, elms and maples.

      Come visit Cottontown this Saturday “ who knows, this may be the place for you!  

Check out the current interest rates from SC State Housing Finance & Development Authority! Interest rates are between 4.75 and 4.875% for the First Time Home Buyer, Single Parent and Disability Programs.

Depending on the category, there is  Down Payment Assistance of $5,000 that may be forgivable!

Call me at 803-348-9922 for more details and current Rate Sheet.  

As reported in North County Times on July 29, 2010, Southern California Edison  plans on covering almost five square miles of roofs with solar panels, enough to power 324,000 homes. 500 megawatts will be generated, a utility spokesman said.

    Contracts have been granted to private installers to build and run 60 megawatts of solar power panels on commercial warehouses and factories in Riverside, Los Angeles, and San Bernardino counties, with an additional 190 megawatts of panels to be awarded later.

    Mark Nelson, Edison’s director of generation planning, said the project was born out of the utility’s need to meet a state-mandated deadline to generate 20 percent of its power from renewable sources by this year. “These large commercial roofs came into play — 250,000 to 1 million square feet,” Nelson said. “This was one of the few ways you could get a significant amount of renewables on the grid in short order.”

    A homeowner today, without any of the utility economies of scale, can pay as little as $5.12 per installed watt. With some work, Nelson figured Edison could get that price cut in half, and at the same time learn the intricacies of large-scale solar installation and pass those lessons on to customers. The utility has started construction on 40 megawatts of its own panels at five sites in San Bernardino County.

From Alliance to Save Energy

A new bill, œ10 Million Solar Roofs Act of 2010 for providing funds for solar energy systems found support in a U.S. Senate committee on July 21, 2010.

The bill, sponsored by U.S. Sen. Bernard Sanders, Ind-Vt, would require the secretary of Energy to provide states with money to finance rebates, loans and other incentives for the purchase of solar energy systems, for consumers and businesses alike.

The goal of the legislation is to install solar energy systems on 10 million properties by the end of 2021 or “10 Million Solar Roofs Act of 2010.” To accomplish this task, $250 million is allotted for fiscal year 2012 with the addition of “such sums as are necessary” between 2013 and 2021.

The 10 Million Solar Roofs Act will provide rebates that cover up to half the cost of new solar systems!  Here’s how the Ten Million Solar Roofs Act works:

A homeowner who installs a 5-kilowatt solar system, depending on location, would produce enough electricity to cover most, if not all, of an average electric bill. The solar panels would produce excess power during the day that can be sold back to the utility, covering some or all of the cost of electricity when the sun is not shining.
Cost of 5 KW system today @ $7,000 per KW = $35,000
Federal tax credit = 30%
Cost after Federal tax credit = $ 24,500

Most states offer additional tax incentives.  For example, if a homeowner could get an additional rebate of $1.75 per watt, the system cost is now reduced to $15,750.    

The Ten Million Solar Roofs Act would provide an additional rebate of as much as $1.75 per watt, covering up to 50% of the remaining cost.

Result: the homeowner pays $7,875 for the solar system.  

Benefits for Homeowner:
- radically reduced annual power bill
- increased home value    

Benefits for the nation:
- reduction in expensive construction of new power plants
-  moving towards zero-dependency on foreign oil
-  reduction of green house gases
-  lowered health care and other costs associated with air and water pollution from fossil fuels  

BTW, California and New Jersey are the #1 and #2 states for installed solar in the country.  

A stop in Columbia at the Family Shelter on April 24^th

COLUMBIA, SC “ For two weeks in April and May, the CEO of Dancing Deer Baking Co. undertakes an extreme personal journey on behalf of 600,000 homeless families throughout the U.S.   52-year-old Trish Karter will ride her bicycle 1,500 miles over 15 days from Atlanta to Boston, stopping at homeless shelters along the way. She will bring the Deers™ tradition of gingerbread house making to the families temporarily living in the shelters, and spotlight initiatives to solve the problem and end homelessness. She plans on arriving at her company™s Boston headquarters just days before Mother™s Day 2009 in a symbolic gesture to the mostly single mothers who struggle to keep their homeless families together.  

œAs an entrepreneur and single mother, I stand in awe and admiration of the hundreds of thousands of mothers across this country that wake up each morning not knowing if they™ll be able to provide a bed for their children that night, said Karter. œThis ride is my chance to hear these families™ stories first hand and to put a human face on tough statistics that will worsen in 2009. In a sinking economy, a company™s lifeline is not just its cash balance, but its mission. I encourage other business leaders to use their platforms as vehicles of social progress, which ultimately will create a better business climate and society for us all.  

She will stop at the Family Shelter in Columbia on April 24^th and will be joined at the City limits by cyclists from various local cycling groups organized by BikeColumbia. Cyclists are encouraged to join her along the route by downloading cue sheets that outline her daily routes from city to city or contacting BikeColumbia.            

About Family Shelter

The Family Shelter is a non-profit agency located on Two Notch Road in Columbia. Established in 1979, Family Shelter’s mission is to provide emergency housing and supportive services to homeless families in order to enable them to transition to permanent housing and a stable family life. Family Shelter is the only shelter in the Midlands area exclusively for families.

According to the National Alliance to End Homelessness, every year, 600,000 families with 1.35 million children experience homelessness in the U.S. and the problem is expected only to worsen in 2009 due to the nationwide economic crisis and housing crunch. The largest percentage of homeless children is under the age of five. Last year in Columbia, Richland School District One identified approximately 1,200 homeless students attending their schools.

About Dancing Deer

Dancing Deer is a company of people who are passionate about food and community. Known for all-natural cakes, cookies, brownies and baking mixes, the company has won many national awards and accolades for its distinctive products and innovative business practices.   All employees are stakeholders in this women-owned enterprise.   Sold in gourmet and natural food stores nationwide such as Whole Foods Market and Williams-Sonoma, the company also ships directly to consumers.

For more information, contact Jonathan Artz @ 771-7040 or jartz@columbiafamilyshelter.org.  

Welcome to Viji Sashikant’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Columbia.