Property Management - A Wild Story For the Books.

The week was wild...and stressful....and interesting...and jaw dropping!   

Carolina Living Property Management had 2 applicants for a home we are/were managing in Mooresville, NC.  NOTE:    This is an extremely rare and extreme occurrence and is not at all indicative our our services.   

We vetted the two Vietnamese applicants and everything came up positive.  The main red flag was the applicants desire to pay in cash and to also pay 6 months up front + security deposit.   The explanation was that they were scoping out a place to open a restaurant and they had cash from a restaurant they have in California.  "Restaurants deal mostly in cash"

Since that was somewhat questionable, the applicants invited he owners and the myself over for a dinner to cook an authentic meal.  The dinner was awesome.

Once in the home, the tenants invited neighbors over for the same type dinner, walked the neighborhood and essentially conned everyone into believing a new restaurant was imminent

All this was done in March.  In early April the We visited the home to check on things and ensure everything was going well.

Low in behold by the 3rd week in June, we were called and told the K9 drug sniffing dogs were on site.

This is where it got interesting.  The Narcotics division had gotten a tip and had knocked on the door to just ask questions.  Once there, they smelled something strong and asked to enter.  The tenants tried to block the door.  BIG Mistake!  Given this probable cause, they did a quick look around and handcuffed 2 people and waited for the official search warrant.

Subsequently, while waiting, another car circled around the home a couple of times.  The officers coyly left (but not really).  They left someone close by and drove down the street.  As stupid criminals usually do, the stupid car came back again!   Immediately the narcotics officers raced back from close by and with guns drawn and arrested the two new arrivals.

Needless to say, the neighbors were getting the Reality show of their lives!

Once we were able to see the home, we found a home that was amazing and heartbreaking at the same time...

Here is what they did.

They ripped up all the carpet.

They hung copper wire from the one wall to the other to hang ultra violet lights.

They built new circuit boxes to create a huge number of additional outlets to plug lights and the numerous fans they needed.

They drilled big holes in the ceiling of the closets to run new duct work all the way to the attic.

In the upstairs bedrooms they did not pull up the carpet but they did tape plastic down on the carpet and also created all the electrical havoc.

In the bathrooms there was a lot of chemicals we believe were being used as fertilizer.

In all 700 plants were pulled from the home.

Needless to say the tenants are in jail, for a long time... Enough Said.

NOTE:  Insurance is covering the damage.  Renting your home?  Call your insurance agent!

The Psychology of Selling Your Winston Salem Area Home

Selling your Winston Salem home can be a very stressful endeavor. I laugh at those that feel Realtor’s just put a sign in the yard and wait for a buyer. In my many years of Real Estate, I can’t recall a time that this happened. Even the times we have gotten an offer in almost record time, the various aspects of negotiations and closings challenges make a Realtor’s job one of wearing many different hats.

We live in a world where everyone wants to win and we are driven by visual stimulation.  Successful listings of homes stand out online and are the one’s which have professional photos and Virtual Tours.  This is why, we hire professional photographers for all our listings.  

There are other aspects of selling your Winston Salem area home that we also try to emphasize.

The front of the home needs to be stellar.  It is the first thing potential buyers see and can be a showing killer if the first thing they see is run down porches, hedges/buses, yard, shutters,siding (where applicable), and gutters.

The home should be free of clutter and things the may distract potential buyers from seeing what you really have to offer.

Obviously, if you reside in the home, you have to be able to live a normal life.  You may even want to consult with someone that can help with  home staging  especially if you are not having any luck and the home is vacant.

All of these things are important but the most important is Pricing.   Let me be blunt and say two things that are very important:

1.  It does not matter what Zillow says.   Zillow does not enter your home and has no idea what our MLS says with regard to closing prices, upgrades in the home, seller concessions, neighborhood amenities etc.

2,  It does not matter what the Tax value is. Tax value has a sole purpose of creating a way for the city and county to generate revenue.  It has nothing to do with recent sales.

Let us as Realtor’s show you reports of recent sales.  This is what Realtor’s look at when they represent buyers and advise them on what is priced competitively.  If you are too high, Realtor’s will tell their clients that you are not realistic and advise them to skip your home.

Ever heard a friend or colleague say he/she bought something and said “I got a great deal”, “I got it for exactly what I wanted to pay” or something of that nature.  This is all about the feeling of winning the deal.  Both buyers and seller’s want to feel they got the best deal possible.  I have used creative methods to handle this situation numerous times and strive  to help my clients get that satisfaction of “I got a great deal”

I am happy to discuss with you your goals etc., with no future obligations.

Winston Salem - How Does Foreclosure Affect Tenancy?

 

QUESTION:   We are a property managers. A tenant in a property I manage recently received a formal notice of a foreclosure sale. The tenant called me and said he is not going to pay next month’s rent. He also claims that because of the foreclosure, he is entitled to a refund of his entire security deposit. What should I do?

ANSWER:  Tenants in properties that are involved in foreclosure proceedings have certain legal protections under both state and federal laws that entitle them to either stay or leave, in certain circumstances.

Under North Carolina law, a tenant who resides in residential property having 15 dwelling units or less may terminate his or her lease after receiving what is known as a “notice of sale” issued by the foreclosing lender. To properly terminate the lease, the tenant must give written notice to the landlord (or the landlord’s agent) and the effective date of the termination may be no sooner than 10 days after the date of the notice of sale. Upon termination of a rental agreement in this manner, the tenant is liable for the rent due pursuant to the rental agreement, prorated to the effective date of the termination, payable at the time that would have been required by the terms of the rental agreement.  The security deposit would be handled in the same way you would handle any other security deposit as of the termination of the tenancy.

Unlike the North Carolina statute, which authorizes tenants to terminate a lease, a federal statute known as the “Protecting Tenants at Foreclosure Act” protects tenants who wish to stay in the leased premises. The statute forces the purchaser at a foreclosure sale to recognize an existing lease, as long as that lease is with a “bona fide tenant”. A tenant will be considered bona fide if he or she is not the owner of the premises (or a close family member), if the lease was the result of an arms-length transaction, and if the rent specified in the lease is not “substantially” less than fair market rent. There is an exception for a purchaser who buys a foreclosed property and will occupy the premises as a primary residence. That type of purchaser is permitted to terminate an existing lease but must provide the tenant with a 90-day notice to vacate.

The bottom line for your situation: the fact that a property is “in foreclosure” does not relieve the tenant from the obligation to pay rent as required by the lease, at least until that lease is properly terminated. You should provide the tenant with a copy of the statute (NCGS 42-45.2) and then wait to see if he provides written notice of termination.

© Copyright 2012 - 2024. North Carolina Association of REALTORS®, Inc.

This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain. Any unauthorized reproduction, use or distribution is prohibited.

Winston Salem | What do buyers and sellers need to consider when apportioning due diligence fees and earnest money deposits?

 

This is a good one to discuss with me!

QUESTION: I handle residential sales and take filling out our contracts very seriously. I need some guidance regarding how to set a due diligence date when there is no earnest money deposit and how to advise clients when negotiating the DD fee and EMD. What is the relevance of a due diligence period in contracts that do not have any EMD and what should clients know when negotiating these fees and deposits in the standard purchase agreement?

ANSWER: First, you know that leaving the due diligence date blank can create ambiguity as we discussed here, while inserting N/A was discouraged here. Nevertheless, when there is no earnest money deposit, there would be no difference in the outcome of disputes between the parties if they had entered the Effective Date, the Settlement Date, or any date in between. In all cases, the buyer can terminate any time prior to the closing and the seller’s damages are limited to the due diligence fee paid. Further, we know from our article here that buyers who pay nothing in due diligence fees continue to possess all the due diligence rights to inspect and investigate the property. Even after a due diligence period ends, buyers continue to have the right to do inspections and perform their due diligence as discussed here.

Initially, a seller may think it best to negotiate all fees as due diligence, as those fees are typically nonrefundable. However, when the seller does not apportion some amount to earnest money, the buyers can walk away at the closing table and leave the seller knowing they just went through the expense of moving all their belongings out of the property. With an earnest money deposit and reasonable due diligence period established, a seller can keep the buyer invested and more likely to decide whether to proceed before the end of the due diligence period rather than just before closing. Additionally, large due diligence fees are more likely to be litigated by buyers who claim some material misrepresentation was used to induce them into contracting with the seller. Conversely, a large earnest money deposit that could have been refunded after a diligent inspection of the property puts both parties in a better position to weigh their options before closing.

Buyers certainly prefer to have the ability to recoup an earnest money deposit after undertaking inspections and other due diligence rather than committing to the due diligence fee at the outset. Rather than leaving the due diligence date blank, both sides of the transaction should seriously consider apportioning the initial payments between due diligence fees and earnest money deposits. In sum, the best practice is to discuss with your clients the advantages of having both a due diligence fee and an earnest money deposit in their purchase agreement.

© Copyright 2023 - 2024. North Carolina Association of REALTORS®, Inc.

This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain. Any unauthorized reproduction, use or distribution is prohibited.

Winston Salem | Are You Looking For Down Payment Assistance?

 

See if the home you are interested in is available for Assistance: Check Home Address

DPR Program Directory

Owning a home is a dream for many, but the financial hurdles of buying a house can often feel insurmountable. One major obstacle is the down payment, typically a significant upfront cost that can deter prospective buyers. However, there’s good news: over 2,300 down payment assistance programs exist across the U.S. to help make homeownership more accessible. In this guide, we’ll explore how these programs work and how you can apply for them.

Understanding Down Payment Assistance Programs

Down payment assistance programs are initiatives offered by various entities, including government agencies, non-profit organizations, and even employers. Their primary goal is to provide financial support to qualified homebuyers, typically in the form of grants, loans or tax credits, to help cover a portion or all of the down payment and sometimes closing costs.

These programs vary widely in terms of eligibility criteria, funding availability, and the amount of assistance offered. Some programs are specifically tailored to first-time homebuyers (40% of programs do not have a first-time homebuyer requirement), while others may target certain demographics or geographical areas. It’s essential to research the specific programs available in your area to determine which ones you may qualify for.

How Do Down Payment Assistance Programs Work?

While the specifics can vary, the general process of accessing down payment assistance typically involves the following steps:

1. Research and Determine Eligibility: You can use the free Down Payment Resource search tool to find available programs and determine your eligibility based on factors such as income, credit score, and home purchase price. 
2. Apply for Assistance: Once you’ve completed your search, you can connect with a mortgage lender and get pre-approved. Or, if you already have a lender in mind, you share your results with your loan officer and complete an application. The application process may involve providing documentation such as pay stubs, tax returns, and bank statements to verify your financial situation. We’ve outlined a few important questions to ask your mortgage lender that can help you get started.
3. Attend a Homebuyer Education Course: Most down payment assistance programs require applicants to complete homebuyer education courses, especially first-time buyers. These courses can be done in-person or virtually and provide valuable information about the homebuying process, financial management, and homeownership responsibilities.
4. Receive Approval and Assistance: If your application is approved, you’ll receive confirmation of your eligibility and details about the assistance you qualify for. This assistance may come in the form of a grant, forgivable loan, low-interest loan or tax credit, depending on the program.
5. Purchase Your Home: Keep in mind that some assistance programs may require you have a home in mind before applying. That’s why it’s essential to work closely with your lender and real estate agent to ensure a smooth transaction.
6. Comply with Program Requirements: Most down payment assistance programs have specific requirements that you must meet to maintain eligibility. For example, you will need to occupy the home as your primary residence for a certain period or fulfill certain homeownership responsibilities.

Tips for Applying for Down Payment Assistance Programs

Navigating the world of down payment assistance programs can seem daunting, but with careful planning and research, you can increase your chances of success. Here are some tips to help you along the way:

• Start Early: Begin researching down payment assistance programs well in advance of your planned home purchase. Some programs have limited funding and may have waiting lists or application deadlines.
• Improve Your Credit Score: A higher credit score can increase your chances of qualifying for assistance and securing favorable terms. Take steps to improve your credit by paying bills on time, reducing debt, and correcting any errors on your credit report. 
• Gather Documentation: Be prepared to provide documentation of your income, assets, and financial history when applying for assistance. Having this information readily available can streamline the application process.
• Seek Professional Guidance: Consider working with a HUD-approved housing counselor, mortgage lender or real estate professional who has experience with down payment assistance programs. They can help you navigate the process and identify the programs that best suit your needs.
• Stay Informed: Keep abreast of changes to down payment assistance programs and eligibility requirements in your area. Subscribe to newsletters, attend workshops, and regularly check program websites for updates.

What Are You Waiting For?

Down payment assistance programs can be a valuable resource for prospective homebuyers, helping to make homeownership more attainable. By understanding how these programs work, you can increase your chances of successfully accessing assistance and achieving your goal of owning a home. With careful planning and diligence, the path to homeownership can become a reality.

Winston Salem | Contract Questions Regarding Fixtures and personal property

 

QUESTION: Is a free-standing refrigerator included as part of the sale if it’s advertised in MLS but not identified in the Offer to Purchase and Contract?

ANSWER: No. Buyers and sellers are not MLS participants, and nothing in an MLS listing magically becomes a part of any contract between a buyer and seller. The Contract also specifically provides that it contains the entire agreement of the parties.

QUESTION: Is a utility building that is not on a permanent foundation included as a part of the sale if it’s not listed as an exception in the Offer to Purchase and Contract?

ANSWER: Yes. “Utility building” is on the list of items in paragraph 2(b) that the buyer and seller agree will be included as a part of the sale unless excluded if they are present on the property. The fact that the utility building is not on a permanent foundation is irrelevant in this situation.

Winston Salem | What About Last Minute Due Diligence Repair Requests

 

QUESTION: More and more it seems that buyers are waiting until the last minute – sometimes literally – of the Due Diligence Period to submit their repair requests. It is very frustrated with this kind of negotiation tactic.  What can we do about this problem?

ANSWER: We have previously written here and here and here that a buyer should not wait until the last minute to make their repair request. Given the disadvantage to the  buyer when the repair request is made last minute, we are not sure how this could be a “negotiation tactic” that actually helps the buyer. Nevertheless, if the seller does  receive a last minute request, there are several ways to approach the issue.

First, the seller could agree to the repairs they feel comfortable with and proceed with the transaction. Once the Due Diligence Period ends, the buyer cannot walk away for  any reason or no reason. Since the Earnest Money Deposit is at risk for the buyer, the seller can complete the repairs knowing that the buyer has more to lose if they  consider terminating the transaction.

Second, the seller can decline to perform any repairs at all. In cases where the buyer is submitting a repair request quite literally minutes before the end of the Due Diligence  Period, the seller will not have time to review all the requests and make their own evaluation. Declining to make repairs will put the ball back in the buyer’s court and make  them decide whether the take the property “as-is.”

Brokers should note that there is nothing in the contract that requires repair requests to be made at a certain time. Repairs can be made during or past the Due Diligence  Period, even though buyers are encouraged to submit their requests early to ensure the agreed-upon repairs are done properly as required by the Offer to Purchase and  Contract (Form 2-T). The seller is under no obligation to make repairs under Form 2-T unless they agree in writing to do so. Informing your seller of these parts of the Form 2-T at the outset of the transaction will help them make a better-informed decision should the buyer make a last minute request.

Release Date: 10/4/2018

© Copyright 2018 - 2024. North Carolina Association of REALTORS®, Inc.

This article is intended solely for the benefit of NC REALTORS® members, who may reproduce and distribute it to other NC REALTORS® members and their clients, provided it is reproduced in its entirety without any change to its format or content, including disclaimer and copyright notice, and provided that any such reproduction is not intended for monetary gain. Any unauthorized reproduction, use or distribution is prohibited.