Renovators, say hello to Hardy board and goodbye to granite countertops.

According to a new article over on CNNMoney. com, here’s what not to do in today’s market:

• Buy a home you know you’re not going to live in very long.
• Spend oodles of money on high-end updates and renovations.
• Expect to get that money back plus a profit one or two years after you purchase the home.

Yes, a few short years ago you could do all of those things and not only recoup your money, but probably make a profit to boot:

“During the housing boom, updating a kitchen with high end materials like cherry wood cabinets and a Viking stove was a sure bet to boost a home’s value. Homeowners often recovered about 80% of the cost when the house was later sold.”

That was yesterday.

If you are going to remodel in today’s market, and know you won’t be staying in your home more than a few years, it might be wise to scale back the scope of your interior projects as well as the type of materials you use.

“…with so much more inventory on the market for buyers to choose from, they [buyers] just aren’t as impressed with the bells and whistles. Now most upscale renovations are returning less than 70% of their cost, according to a recent survey from the National Association of Realtors (NAR) and Remodeling magazine.”

However, exterior renovations still seem to be paying off:

“…returns for high-end exterior renovations are still holding up, according to the NAR report, with better pay-offs than interior work.
For example, sprucing up a home’s look with expensive fiber-cement siding, which looks like wood but is more durable, returns 88% on investment, more than any other renovation NAR evaluated.”

Say good-bye to granite countertops - CNNMoney.com

For me, watching home buying shows on cable when I get home from a long day of listing appointments, house showing, and contract negotiations, is probably the very last thing I want to do. Who wants to watch work after work? So when one of my clients, a first time home buyer, started talking about a show called “Property Virgins” a few nights ago, it was the first I had heard of it.

Brett Arends from The Wall Street Journal Online has a post today on Realestatejournal.com. While the majority of the post deals with answering questions about the overpriced and bursting Florida real estate market, the last question he answers has to do with where consumers can find “cheap” housing:

“While the hot spots on both coasts ballooned wildly during the bubble, the “heartland” remains your classic overlooked value play. In states like Indiana, Ohio, Missouri, Michigan, Georgia and Tennessee, house prices are actually a lot cheaper, compared to personal incomes, than they were thirty years ago. “

Arends goes on to say that affordable housing is a major cost advantage when a company is thinking about where to locate itself. Definitely one of the reasons Knoxville was named best city to relocate to in ‘07.

More folks and businesses moving our way means a better economy and stronger home sales. Yeah!

Good news on a day with a lot of not so good news.

Q&A: Overvalued Markets; The “Affordable” Mortgage - Realestatejournal.com

Energy Efficient Mortage - Topix

Last week I talked about why should use a buyer’s agent. But how do you find a good one?

The first, and most important, step is to ask around. We do a lot of referral business and chances are your friends or family have used an agent they think is worth recommending.

If you still have a choice to make, one way to narrow your results down is by looking for agents who have the ABR, or Accredited Buyer Representative, designation. This means that they have received additional in-depth training on how best to serve a buyer’s interests in matters such as determining the offer price and contract negotiations. This can be really helpful to you, especially if you are trying to negotiate closing costs and repair costs. It also lets you know that this is an agent genuinely interested in working with buyers, as opposed to an agent who is more concernced with listings. You can find ABR designated agents in your area at the ABR/REBAC website.

Once you have found some ABR designated agents, it’s time to interview them. Remember, this is a big purchase, and you have the right to choose who represents you. When you talk to potential agents, here are some good questions to ask:

• How long have you been licensed?

And longer isn’t necessarily better. New agents are hungry agents and will usually be much more willing to drive you anywhere you want to go and show you as many homes as you can handle. On the other hand, more seasoned agents have the advantage of knowing more about neighborhoods and having more contract negotiation experience.

• Do you work alone?

This is an important question, because some agents, especially big time ones, have assistants or team members who show clients property, and even negotiate contracts for them. You want to make sure the agent you first meet and feel comfortable with is the one who is actually going to be driving you around and negotiating for you. If the agent does work with an assistant or team members, ask to meet the person or people you will be working with on a regular basis.

• What role will you play in my home buying process?

Some agents work harder than others, and you want a hard worker. Here is a list of what a typical buyer’s agent will do for you throughout your transaction:

• Help you find information on mortgages and mortgage officers.
• Guide you through the pre-approval process.
• Provide you with copies of all forms that you will required to sign as part of submitting an offer and take time to answer any questions you have about them.
• Search the MLS based on your specifications and send youistings that meet your search criteria.
• Get you more information about homes, subdivisions, neighborhoods and schools.
• Schedule and coordinate all showing appointments.
• Show you a slew of houses.
• Help you make an informed offer by researching comparable properties that have sold in the same neighborhood/area as the home you are interested in.
• Negotiate with the listing agent on your behalf.
• Represent your interests only — not the seller’s.
• Help you select a home inspector and guide you through the home inspection process.
• Schedule the closing.
• Facillitate communication between the listing agent/sellers, your mortgage company, and the title/closing company, so that your home closes on time.
• Go to closing with you to handle any last minute issues which may arise.

This is not an exhaustive list. and you will find agents that go above and beyond this list. You will also find agents who fall short of it. The important thing is that you know what to expect from them up front.

• Do you require your clients to sign a Buyer’s Representation agreement and, if so, what does it entail?

Many states, like Tennessee, require a Buyer’s Rep agreement to be signed before or at contract. And this is a good thing, as it protects you and the agent. It is up to the individual agent in our state as to whether they use an exclusive or non-exclusive agreement. Generally speaking the exclusive agreement locks you into the agent for a period of time, whereas the non-exclusive does not. Both forms have a section for how an agent will be compensated should the buyer choose to purchase a for sale by owner home where the seller is not offering a cooperative commission to buyer’s agents. This is usually left to the agent’s discretion, but he or she will have to fill this section in before you sign. Some will require that a buyer agree to pay them a certain percentage of the sales price or a flat rate if they buy a FSBO with a non-cooperative seller. Sometimes an agent will also stipulate what, if any, compensation he or she expects if they show you property for a period of time and you decide not to buy anything. This is not that common is our area, but with rising gas prices, I’ve heard of more agents writing this into their buyer rep agreement. Some even charge a gas fee per day or week of showings.

• What if I find a FSBO property?

As mentioned above, your agent should lay out their FSBO compensation policy in the buyer rep agreement. However, some agents aren’t fond of FSBOs or simply don’t want to deal with them and will tell you that up front. It’s much better to know where your agent stands up front.

• What happens if I decide I don’t want to work with you anymore?

It happens. You work with an agent for a while and you either a) find out they’re a total creep, b) find another agent you like better, or c) just don’t jive as well as you thought. Personality conflicts happen and even if you signed an exclusive buyer rep agreement, it should be possible for the agent’s broker to reassign you to another agent within the company. These policies differ from brokerage to brokerage, so make sure you find out what your options will be up front.

Finally, make sure you feel comfortable with your new agent. This should be a person you like and trust a lot. Not only is he or she going to be helping you make one of the biggest purchases of your life, you’re also going to be spending a whole lot of time in the car with them.

Today’s weather:

Partly cloudy with a slight chance of HELOC freeze … - Calculated Risk

and the National Weather service has issued a basement tornado advisory. - The Onion

In other news -

The Second Creek Greenway is coming! - Knoxviews.com

Here’s some good news to start off your work week.

Williamson County, Tennessee, home to Franklin and Brenwood, has just been named on Forbes’ new list of “Best Places to Get Ahead” - places where income growth and job growth are highest.

“There are very few economies that have grown as much from manufacturing as those in Tennessee, due, in part, to its more hospitable business environment and less entrenched unions. Williamson County, outside of Nashville, has a median income of $81,449, up almost 18% from 2000. Jobs have jumped 5.5% per year over that time.”

Other places that made the list include Stafford County, outside of Washington D.C.; Forsyth County, GA, outside of Atlanta; and Delaware County outside of Columbus, OH.

Best places to get ahead - Forbes.com

Looks like homeowners and Realtors aren’t the only folks having to do things differently since the market started self-correcting. Networks like Knoxville-based DIY and home magazines like Better Homes & Gardens are changing their content to better fit the times:

“Fix-and-flip shows have given way to programs that focus on living more with less, and home magazines increasingly spotlight segments for budget-minded consumers.

‘We put much more emphasis now on projects for a mix of budgets,’says Gayle Butler, editor in chief of Better Homes and Gardens magazine.”

But that doesn’t mean that business is bad. Knoxville-based HGTV’s senior VP of content and development says that his network is doing just fine despite the upheavel in various local real estate markets:

“‘Does it mean people stop getting married, having children or getting job transfers across the country? No,” he says. “We offer property shows that help people, so our ratings have never been stronger.’”

DIY TV, magazines adjust to changing housing market - chicagotribune.com

Lowball offers are the new black. Every time I go to the office, I hear another story about someone’s client who insisted on submitting an obscenely low offer on a home, because said client has heard about how horrible the real estate market is. This drives most of us crazy because 9 times out of 10, two things are going to happen in this scenario:

1. Seller counters back at near listing price, offended by the lowball offer.
2. Seller rejects offer outright, offended by the lowball offer.

And a lot of times the buyer winds up losing the house either because a) someone else submits a reasonable offer, or b) because negotiations break down due to seller’s aforementioned offense at low ball offer. Either way, nobody winds up happy.

As I’ve said here before, just because every business pundit on every news channel in the country is saying the real estate sky is falling, that does not mean that it’s falling over Knoxville. Yes, we’re in a buyer’s market and buyers here can definitely get away with asking for more concessions now than they could a few years ago - a great thing for all you buyers out there. But with few exceptions, you’re not going to get that $250,000 home for $200,000. Really, you’re not. Sellers in some parts of the country may be desperate to sell, but most sellers here aren’t. They’re just really anxious to sell and there’s a big difference between those two.

Most home sellers out there right now aren’t looking to get rich. They’re just looking to sell their home for more than they paid for it, and definitely for more than they owe on it.

But it’s human nature to haggle. If people don’t negotiate, they don’t feel like they got the best deal they could.

While lowball offers are definitely warranted in some situations (I’ll be covering that topic in a future post), most of the time it’s that good old fashioned negotiating that gets you a good deal. Not a steal, but nothing to sneeze at either.

Like I said, it’s a buyer’s market out there. That means there are more houses for sale than buyers. Increased inventory means:

• More choices for buyers.

Instead of there only being one house for sale in your price range in a chosen area, there might be three or four or even five. This means you are much more likely to find exactly what you want, rather than having to comprise on certain things because there’s only one house available in the neighborhood.

• Longer days on market for most listings.

This takes away the need to rush into an offer. Time was when a client would find a house they loved, decide to sleep on it, and wake up and the house was sold. Bummer. While this can always happen, the odds are a lot lower now, which gives, you the buyer, a little more time to make your decision to pull the trigger.

• More negotiating flexibility.

Two years ago there was very little of this. Many times sellers were getting multiple offers on homes, so the sales price would actually be higher than list price. Having a little wiggle room, like 2-3% of list price, is pretty nice.

• Buyers can ask for more concessions.

This was also somthing that wasn’t nearly as likely to fly a few years ago. Need some closing costs? Ask for them. Want repairs made on the house? You might get that too. Home warranty? Certainly can’t hurt to ask.

Sometimes you can negotiate all of these things into your offers. Sometimes you’ll only get one or two. The trick is to be smart, not greedy. Think about what you really need (closing costs) or want (lower price) and go for it. But before you do, go find yourself a good buyer’s agent? Please?p>

TVA hits us one more time - Tennessean

Which we apparently can’t afford anyway - RealEstateJournal

Need to cheer yourself up now?

Go take a spin on Knox County’s very first roundabout! - KNS