To Prepay or Not To Prepay

February 15, 2008

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Lifehacker recently wrote up an article by J.D. Roth over at Get Rich Slowly called Mortgage Prepayment Made Easy: Own Your Home in Half the Time. Roth goes through all the various options of getting your mortgage paid off early and throws out the most common suggestions of:

Refinancing from a 30 to 15 year mortgage
Signing up for your bank’s bi-weekly payment program
Making one extra payment a year
Paying an extra $100 per month

Instead, he suggests pre-paying the next month’s principal in addition to each monthly payment.

And although he acknowledges that a lot of financial folks say that paying off a low interest loan is silly, he still thinks the psychological freedom of owning your home outright is worth it.

What do you think? Do you do anything to try to pay off your mortgage early? Or do you think that money is better off invested somewhere else?

Pay Off Your Mortgage in Half the Time - Lifehacker

Mortgage Prepayment Made Easy: Own Your Home in Half the Time - Get Rich Slowly

Mike Lowe, Real Estate Developer

February 15, 2008

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Mike Lowe lost his bid for the county tax assessors office, so he’s going into real estate. I hope he doesn’t get caught in the crunch.

Lowe to Leave Trustee’s Office After 33 Years - KnoxNews.com
Type rest of the post here

Knoxville/Knox County Neighborhood Conference

February 15, 2008

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The Knoxville/Knox County Neighborhood Conference is coming up on Saturday, March 8 at 8 am. Who doesn’t love learning how to efficiently utilize government/community services that early on a Saturday morning?

Interested neighborhood groups, homeowners associations and regular old citizens can register here.

West Knox Developers May Be Caught in Crunch

February 14, 2008

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This appears in today’s new issue of Metro Pulse in the Ear to the Ground section:

“The slow-down in the national housing market and the credit crunch may come home this year as development slows in Knox County. While homes continue to sell, there is expected to be a reduction in volume. This is bad news to developers who have subdivisions with vacant lots heavily financed and no likelihood of building a house and selling them.
Insiders say four to five West Knox County developers may not survive the crunch. They have not been helped by the revolution on Knox County Commission—the number of commissioners considered developer- friendly has been reduced. Look for an effort to increase density on subdivision sites to increase profit per unit and look for rejection to result in some people becoming overextended.”

Ear to the Ground - Metro Pulse
Type rest of the post here

Knoxville Foreclosures

February 14, 2008

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Interesting article today on knoxnews.com about Knoxville foreclosures as compared to the rest of the state and country. There’s good news and bad news. The bad news is:

  • There were 2,770 foreclosure filings in Knoxville in 2007, which is a 47% raise from ‘06 filings.

  • 6 out of every 1000 Knoxville area households entered some stage of foreclosure in ‘07

Before you head for the hills, here’s the good news:

  • Out of 100 major metro areas, Knoxville ranks 72 in foreclosures. Compare that with Nashville at 59 and poor Memphis at 13!

  • Although delinquincy rates on subprime mortgages in Tennessee as a whole are 3-4% higher than in the rest of the country, delinquincy rates in Knoxville were only 9.9% at the end of ‘06 as compared to the country’s average of 18%.

It goes on to say that there is no glut of foreclosed properties in the Knoxville market, as anyone perusing http://www.firstpreston.com/ can tell you. Again, take a look at the Memphis foreclosures for a comparison. It’s night and day.

And although regular home sales were down 10% in Knoxville in ‘07, we know from KAAR sales data that homes are still appreciating in Knoxville, always a good sign.

So what does this all mean? It means what a lot of people have been saying all along — Knoxville is a great market. Very few markets in the country will not be affected in some way by what’s happened in the mortgage industry, but, relatively speaking, Knoxville is doing pretty durn good. I just don’t think the mortgage crisis can keep Knoxville down.

Forgoing Foreclosure - knoxnews.com

In Defense of Real Estate Agents

February 13, 2008

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I get it, I really do. You don’t like/trust/want to be near us Realtors.

Maybe you had a bad experience in the past. Maybe you saw American Beauty and think we’re all obsessive compulsive freaks who inwardly chant “I will sell this house today!” as we try to convince you that the swamp in the backyard is really a tropical lagoon. Maybe you just buy into the stereotype and think we’re all pushy, crass, shallow, and greedy.

Fine. You’re absolutely right. There are definitely agents out there who are guilty of some or all of those things. I run into them every now and then myself. They’re the 1% that give the rest of us a bad name.
The rest of us, the other 99% aren’t all that bad. Really.

True, we’re a little different than your Average Joe. You have to be a little tweaked in the head to voluntarily choose a profession in which you work 60 hours and week and still don’t know for sure if you’re actually going to get paid.

And we’re not generally rocket scientists, although we do come from very diverse educational and career backgrounds. Some of us were software engineers who got canned after the tech boom. Some of us are retired professors. Some of us just wanted to have a flexible schedule to be able to spend more time with our friends and families.

And sure, we’re salespeople. But sales is a very small part of what we do. We’re also negotiators, communicators, advertising copywriters, marketers, researchers, interior decorators, house cleaners, armchair psychologists, stand-in therapists, punching bags and shoulders to cry on.

It’s a tough way to make a living.

And we do it for a few different reasons. The first one, the dirty one, is that when it pays, it pays well. No always, of course. But sometimes. And we live for those sometimes. We wait for months for those times, because that’s when we get to pay off bills, buy some new clothes, and go out for a big steak dinner.

But we also do it because we love it. We love the game. We love working the deal until it works. You couldn’t do everything we have to do day in and day out if you didn’t. Your soul would implode.

And we love helping people. No, really, we do. We honestly want to help you find the house of your dreams. Trust me, there is no better feeling than the feeling I get when a client walks into a house, stops, stares, and makes a strange but wonderful sound somewhere between, “Awww!” and “Ooooh!” It’s the “this is my house” sound and it’s a beautiful thing.

So give us a chance. The market may seem scary and buying and selling houses is definitely stressful, but those things are part and parcel of the process. We, as Realtors, are here to help you through all of that. But only if you let us.

Overheard in the Office

February 13, 2008

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“Oh, you want to look in Knox, Blount, and Anderson counties? Great! Why don’t we take your car?”

Knoxville Parkway Update Meeting

February 13, 2008

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Avoiding the Dreaded Fridge Swap

February 12, 2008

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I do a lot of open houses and aside from eating a lot of cookies and playing a lot of Scrabble on my cell phone, I also occasionally have buyers come through. Now, it may just be because I always hang out in the kitchen during open houses - easy access to aforementioned cookies is important - but it seems like these potential buyers always inevitably ask the same question: does the refrigerator come with the house?

The quick answer can always be found on the listing sheet. It either is or it isn’t. But this is real estate folks, and everything’s negotiable.

If, for example, you’re making a really good offer on a house, I don’t think for a minute that most sellers, the same ones at least, would mind parting company with that Kenmoore or Whirlpool in order to get their house sold. Lowballers usually don’t get fridges. Sorry. But if you’re making that really good offer, whether or not the fridge is listed in the MLS as being included in the sale of the home, then I say ask for it, already. Just make sure you get it in writing. You can do this by:
  1. Asking for it in the contract.

  2. Asking for it very specifically in the contract. Like make and model number specific. If your agent is worth his or her salt, he or she will not mind making an extra trip to your future dream home to get this information for you. I know I would do it for my clients (wink, wink).

With your make and model number right there in black and white on the contract, you will hopefully be able to avoid the seller taking the nice, new, expensive, stainless steel fridge and replacing it with the old, nasty, yucky, avocado green beer fridge from the garage — also known as the dreaded Fridge Swap.

Happy House - and Fridge -Hunting!

Bubble? We Don’t Got No Stinkin’ Bubble!

February 12, 2008

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The skies may be falling on LA, Las Vegas, and Jacksonville, but as far as I can tell, the sky over Knoxville is pretty much intact. Shaky buyer and seller nerves aside, our market is doing, well, just fine, actually. Don’t believe me? No need, for I come armed with fancy numbers from the Knoxville Area Association of Realtors. Ready? Here goes-

  • In 2006, the average sales price of a 3 bedroom home in Knoxville was $162,300 and average time on the market for that home was 83 days.
  • In 2007, the average sales price of a 3 bedroom home in Knoxville was $170,900 and average time on the market was 92 days.

Now, math was never my strong suit (I know, scary to admit in my line of work), but by my ciphering, that means there was an increase in the price of that 3 BR home. Appreciation, no less! Granted, Mr. Joe Q. Homeowner had to wait 9 extra days to get his check at the closing table, but considering all the doom and gloom coming through the airwaves these days, those numbers don’t sound too bad at all to me.