Monday, May 18, 2009

Interest Rates for May 18, 2009


30 yr fixed – 4.5% APR 4.629% 360 P&I Payments @ $1013.37

15 yr fixed – 4.25% APR 4.474% 180 P&I Payments @ $1504.56

- based on $200,000 loan and excellent credit


30 yr FHA/VA fixed – 4.625% APR 5.242 360 P&I Payments @ $1007.17

- based on $200,000 sales price


Great Rate – 5.55% APR – 6.131% 360 P&I Payments @ $562.11

Great Advantage – 5.85% APR – 6.446% 360 P&I Payments @ $580.56

Great Start –6.15% APR – 6.760% 360P&I Payments @ $599.54

-based on $100,000 sales price

Rates courtesy of Sarah Suits, for more information & details call or email: 423-339-5463

Flat Fee or Limited Service Listings

With the downturn in the economy in general and housing in particular, many sellers are understandably looking for creative ways to maximize the cash they will net from the sale of their home. Many find themselves considering a "For Sale by Owner," or FSBO. The problem with this approach is that the vast majority of buyers search online or through buyer's agents when looking for a new home. While there are many services that will publish FSBO's to a website, the fragmentation of the different sites means that your potential buyer is trying to find a needle in the proverbial haystack. Buyer's agents, when looking for homes for their clients, rarely search FSBO's unless they have personally seen a home that meets that client's needs. Smart sellers realize that the fastest and easiest way to sell their home (often for the highest price) means a listing on the local multiple listing service (MLS) and the assistance of a buyer's agent.

How can an experienced seller capitalize on their own expertise? One way is through so called "flat fee," "limited service," or discount listings. The most accurate of these terms is "limited service." You truly get what you pay for and the services provided by the typical listing broker certainly has its place. However, for the homeowner or investor who has experience with the selling process and doesn't necessarily need those services, paying a flat fee instead of a seller's agent commission in order to have their home placed in the local MLS may be the best and most cost effective option.

Even though we are a locally owned Chattanooga/NW Georgia area full service real estate brokerage, we recognize that some sellers want more options than all or nothing. Click here for more information including pricing and services offered. Click here to find out why a discount listing through Julia Odom & Southern Style Realty is preferable to choosing an out of town internet based company.

Wednesday, May 13, 2009

Sweet Diversity

May 14th, 5.30pm
South Chattanooga Recreation Center
1151 W. 40th St in Alton Park/St. Elmo.

Join me and the residents of District Seven for a sugar rush the likes of which have not been seen in Alton Park for lo these many years.

Hosted by the Chattanooga City Office of Multi-Cultural Affairs and Councilman Manny Rico, Sweet Diversity gives the residents of District Seven (Ridgedale, Alton Park & St. Elmo) a chance to show off their cultural heritage and culinary skills.

Sweet Diversity is free and open to the public. Individuals, neighborhood associations and community groups are welcome to take part in the festivities. Participants bring desserts, distribute recipes, and display information about their cultural & ethnic background.

(Pictured: My soon to be famous pecan tartlets)

Tuesday, May 12, 2009

Hamilton County Market Statistics

All of Hamilton County
All active, residential listings as of 5/11/09: 2,663

Pending or contingent listings (under contract) as of 5/11/09: 486
Residential listings closed (sold) during April 2009: 226
Number of months to sell current actives at April's sales pace: 11.8 months

Hamilton County, under $100,000
Active, residential listings: 532
Pendng or contingent listings: 122
Residential listings closed during April 2009: 69
Number of months to sell current actives at April's sales pace: 7.7 months

Hamilton County, $100,000-200,000
Active, residential listings: 991
Pendng or contingent listings: 211
Residential listings closed during April 2009: 107
Number of months to sell current actives at April's sales pace: 9.3 months

Hamilton County, $200,000-400,000
Active, residential listings: 749
Pending or contingent listings: 136
Residential listings closed during April 2009: 45
Number of months to sell current actives at April's sales pace: 16.6 months

Hamilton County, over $400,000
Active, residential listings: 396
Pending or contingent listings: 20
Residential listings closed during April 2009: 5
Number of months to sell current actives at April's sales pace: 79.2 months

Sunday, May 10, 2009

Is Now a Good Time to Sell?

I came across this article recently and found that it articulates very well the advice I've been giving my clients lately. Particularly this statement:

"It's a good time to sell if you're looking to upgrade your house," says Timothy J. Cabrera, president of Atlanta Interest Mortgage & Financial Group, "because there are so many opportunities to buy a larger home, and the financing rates are so favorable, and so we don't know how long they're going to stay at this level."

One of the things I've found recently is that entry level homes, many of which are competing with foreclosures and distressed homeowner's for buyers, may have lost some value, but very little in comparison with larger and higher end houses. The reason, in my opinion, is that many 2nd & 3rd level homeowners are sitting on the sidelines believing that they should wait to sell even if they want to trade up. This is creating a bottleneck of demand that is depressing the upper levels of the housing market far more than entry levels. For many of these homeowners, they might be better off selling their entry level home now at a slightly lower price than they would like while benefiting from ridiculously low interest rates and 2nd tier home prices which have fallen further than what they would discount their current home.

Here are some numbers that approximate the Chattanooga real estate market:

You purchased your home in 1999 for $90,000 at 7% interest with 100% financing. Your monthly payment is currently $600 (principal & interest only*). We determine that your home might have sold for a net price of $120,000 at the peak of the market but you decide to accept an offer of $108,000. You take the $18,000+ and use it to purchase a home that would have sold for $195,000 at the housing peak but which you are able to purchase for $160,000. Because you are able to get financing at 4.75% your new monthly payment is only $740 on a principal amount of $142,000 ($160,000 less the $18,000+ down payment you have from the sale of your previous home). You have "lost" $12,000 in appreciation on your first home ($120,000-108,000) but you've also "gained" $35,000 on the purchase of your second home ($195,000-160,000) while, at the same time, lowering your interest rate significantly.

This is a purely hypothetical example but it demonstrates the benefits that you may find if you are looking for a larger or upgraded home.

Another point made in the article is this:

"If you do decide to invest money in your house, do it for yourself. Don't spend a fortune only for the future homeowner, since spending $30,000 on improving your kitchen and assuming that will add $30,000 to the purchase price is, of course, a gamble."

Now is not the time to be making costly upgrades to kitchens & baths in the hope that it will increase the value of your home. The corollary of this statement is that, if you decide that you want to sell, DO spend small sums on upgrades and repairs that will make your home stand out among foreclosures and distressed homes which are often dated or in need of TLC. Repainting older cabinets, replacing hardware and worn laminate counter tops can be done inexpensively and will pay off with a quicker sale, if not necessarily a significantly higher sales price.

Contact me for more information about the Chattanooga real estate market or what you can do to get your home ready for selling.

*Sample payments above assume 30 yr fixed rate mortgage. APR will vary depending on individual lender fees.

Wednesday, May 6, 2009

Focus on Ferger Place: Chattanooga's Historic Neighborhoods

You may have already read my overview post on Chattanooga's historic neighborhoods. Now I'd like to take the time to look at a few neighborhoods in depth, beginning with Ferger Place.

Ferger Place is made up of only two main streets: Morningside Drive & Eveningside Drive and has been listed on the National Register of Historic Places since 1980. Ferger Place was one of the earliest examples of urban planning, even though, at the time it was built, the neighborhood was relatively rural.

Ferger Place was originally designed by Ferger Brothers Real Estate and most of the structures are good examples of bungalow or Craftsman style architecture. The term "bungalow" can be misconstrued to mean that the homes are smaller than average. Nothing could be further from the truth with regard to Ferger Place. Most Ferger Place homes are in the 2000-3000 square foot range. Certainly not a small home even in today's term and definitely grand for the period.

The small, pleasant neighborhood was in a relatively rural area upon being developed as the city’s first “restricted private park.” Surrounded by numerous farms, the entrance columns were erected with gates in order to keep farm animals from wandering into the area, making it one of Chattanooga's first gated communities. When entering Ferger Place today, one is still required to pass through the same stone, shingled-top entrance posts, just as people did back in 1910.

This community has, unfortunately, not been untouched by decay and many of the homes fell into disrepair over the course of the neighborhood's 100 years. Today, many of the structures have been lovingly restored to their former glory while understanding the needs of today's families. Click here for a list of properties currently available within Ferger Place.

Some information taken from Ferger Design.

Tuesday, May 5, 2009

Interest Rates for May 5, 2009

United Community Bank


30 yr fixed – 4.625% APR 4.755% 360 P&I Payments @ $1028.28

15 yr fixed – 4.25% APR 4.474% 180 P&I Payments @ $1504.56

- based on $200,000 loan and excellent credit


30 yr FHA/VA fixed – 4.75% APR 5.370 360 P&I Payments @ $1021.88

- based on $200,000 sales price


Great Rate – 5.55% APR – 6.131% 360 P&I Payments @ $562.11

Great Advantage – 5.85% APR – 6.446% 360 P&I Payments @ $580.56

Great Start –6.15% APR – 6.760% 360P&I Payments @ $599.54

-based on $100,000 sales price

Rates courtesy of Sarah Suits, for more information & details call or email: 423-339-5463

Sunday, May 3, 2009

Historic Chattanooga Neighborhoods

There are numerous historic neighborhoods in Chattanooga if you like the character and soul of an older home.

The following is a brief introduction to some of the communities close to downtown and their progress in restoration:

Ft. Wood:
This is the community around the UTC area in Chattanooga. Most of the houses here have already been restored, and command top dollar. Several of these are being used as fraternity houses. There are also a couple of bed and breakfasts in this area. Click here for more information about Fort Wood.

This area is the south part of downtown including Main Street and the area surrounding the Chattanooga Choo Choo and runs south down Broad St. Lots of interest and development has been initiated in the area recently and a new magnet school has spurred growth (the individual neighborhoods that make up the Southside area include Jefferson Heights, Cowart Place, & Ft. Negley)

St. Elmo: This neighborhood is located at the foot of Lookout Mtn, TN. Lots of larger 2-story homes and larger lots. Conveniently near Ruby Falls, the Incline and Rock City. There is a small group of shops and eateries including locally owned Umbra Essence Candles & Mojo Burrito at the entrance to the residential area. St. Elmo is one of several designated Historic Districts in Chattanooga with strict review guidelines for any exterior renovations.

North Shore
Just over the river from downtown, this community includes the homes north of Frazier Avenue, and between Barton Ave and North Market Street all the way up to Mississippi Ave, have a numerous bungalows and a few Victorians on rolling hills and twisty roads which lend charm and a few good views. Frazier Avenue and River Street have numerous shops and restaurants, although a few of the businesses have recently moved to larger quarters on nearby Manufacturer's Road. North Chattanooga, as this area is known, is one of the most sought after areas by urban hipsters and families alike. As such, property values are higher here than in almost any other area of the city.

Highland Park: Bounded by Holtzclaw and Willow, McCallie and Main, this neighborhood surrounds Tennessee Temple University. Several Alumni and home restorers have been fixing up these houses over the late 1990's and early 2000's. The bulk of the homes on Chamberlain and Duncan have been renovated, nearly as many on Bailey and Union have been restored. These homes command a premium price, particularly those with original historic details. The Highland Park Neighborhood Association sponsors a tour of homes each year. The neighborhoods of Highland Park, Ridgedale, Oak Grove, Orchard Knob & Bushtown are often collectively referred to by Chattanoogans as Highland Park.

Glenwood: Located north of McCallie Avenue and running North on Dodds Avenue towards Memorial Hospital, it features large stately Dutch Colonial homes, surrounded by bungalows, with smaller Craftman cottages dotted throughout the neighborhood. Many of the homes have been restored, and they have an active community association which sponsors an annual jazz festival. The local Greek Orthodox church also puts on a Greek festival every year.

Ferger Place: A very small "U" shaped neighborhood with very large well maintained homes that go for top price. It's just across Main Street from Highland Park. Ferger Place is another Chattanooga neighborhood listed on the National Register of Historic Sites.

Missionary Ridge: Numerous stately homes line Missionary Ridge. South Crest & North Crest run the length of this community and afford a very scenic drive. They have a very active neighborhood association. One thing that stands out to visitors is the presence of both cannon and plaques marking various significant Civil War sites. The Battle of Missionary Ridge was one of the most important battles of the Civil War and the history of "The Ridge" is always visible.

Ridgedale: Located 3 miles from downtown, this is a community of homes filled with late Victorian, early Craftsman cottages and bungalows. It is located between Highland Park and Missionary Ridge and to the south of Glenwood. Homes are just beginning to be restored over the past few years. Bargain hunters seeking a deal have been snapping up homes along Bailey Avenue and the first few blocks bordering the Highland Park community. Back in the 20's and 30's the portion of Dodds avenue running through Ridgedale was lined with stores and it was the shopping district before the advent of malls and urban sprawl. Some prominent Dodds Avenue businesses now include: The Barking Legs Theater, the longtime business of the Associated Fabric Shops, & Cafe Lamont. The McCallie School for Boys is also a prominent landmark within Ridgedale.

Oak Grove: This community lies between 23rd St and Main Street, and between Dodds and Ferger Place. The northwest corner of the neighborhood that borders Main Street has a small Mexican restaurant & grocery, Tienda Jalisco that is frequented by local residents. This area hopes to benefit from the revitalization of Main Street and perhaps get overflow growth from Highland Park.

The City of Chattanooga has a complete listing of all neighborhood associations throughout the city.

Saturday, May 2, 2009

Current Interest Rates

Rates as of April 28, 2009

United Community Bank


30 yr fixed – 4.375% APR 4.503% 360 P&I Payments @ $998.57

15 yr fixed – 4.25% APR 4.474% 180 P&I Payments @ $1504.56

- based on $200,000 loan and excellent credit


30 yr FHA/VA fixed – 4.75% APR 5.370 360 P&I Payments @ $1021.88

- based on $200,000 sales price


Great Rate – 5.55% APR – 6.131% 360 P&I Payments @ $562.11

Great Advantage – 5.85% APR – 6.446% 360 P&I Payments @ $580.56

Great Start –6.15% APR – 6.760% 360P&I Payments @ $599.54

-based on $100,000 sales price

Rates courtesy of Sarah Suits, for more information & details call or email: 423-339-5463

Friday, May 1, 2009

Chattanooga Outdoors

From hang gliding to hiking, rock climbing to river running, Chattanooga has everything an outdoor enthusiast or extreme sports lover could want. A perennial favorite of Outside Magazine, Chattanooga has a lot to offer the outdoorsman (or outdoorswoman as the case often is).

White water rafting/kayaking
There are lots of options for Chattanoogans but the A1, end all, be all is the Ocoee River. Home of the 1996 Olympic white water events, the Ocoee has long been a favorite among Hamilton County residents. It also draws day visitors from North Carolina, South Carolina & Georgia. It's just that good. Camping facilities and gorgeous hiking trails along with the tamer Hiwassee River (inner-tubing can sometimes be as fun as surfing the whitewater) are nearby for the waterlogged.

Hang gliding
Lookout Mountain is the premier place in the South East for gliding effortlessly over a valley floor. Lookout Mountain Hang Gliding is that place. For the less experienced, tandem flights are available. If you're afraid of heights, DON'T LOOK DOWN. On the other hand, if you want an experience you will never forget, suit up and run off the edge of a mountain.

Rock Climbing
With the varying stone makeup of the surrounding mountains, Chattanooga has become a mecca for climbers with some calling Lookout Mountain's Sunset Rock the birthplace of sandstone climbing in the South. There is no doubt that Chattanooga boasts some of the best climbing in the region with a number of indoor climbing gyms to get your fix even when the weather doesn't cooperate.

Chattanooga Images

Click here for a great slideshow of iconic and modern Chattanooga images by Robert Lz including Moccasin Bend, the Tennessee River Gorge, Point Park, Lookout Mountain, the Hunter Museum, the Tennessee Aquarium, the Walnut Street & Market Street Bridges, the National Cemetery, Ross' Landing, the Tivoli Theatre, the Pickle Barrel, downtown brickwork sculptures, the Southern Railway Building, the South Side, the North Shore, Coolidge Park, the Southern Belle riverboat and, of course, the Chattanooga Choo Choo.

First Time Home Buyer Alert!

THDA, Tennessee Housing Development Agency, has introduced their anticipated second mortgage program. The program is designed to be used in conjunction with the stimulus tax credit for first time home buyers. The purpose is to assist potential home owners by providing a no interest loan which will enable many first time home buyers to purchase a home with little or no cash out of pocket. THDA recommends that borrowers use their tax credit to pay the loan off, when the credit refund is received.

Some details:

The THDA second mortgage is for the down payment. It is only available with an FHA loan closed with the THDA Great Rate or THDA Great Advantage programs.

The minimum credit score is 620.

THDA's maximum income & purchase price limits apply.

The program is offered to first time home buyers.

If the borrower decides not to repay the second mortgage with their tax refund, payments can be made. The loan is interest free until June 1, 2010. At that time the loan will convert to a 10 year term with an interest rate 1% above the first mortgage rate.

For the THDA Great Rate program, the current interest rate is 5.55%.

For the THDA Great Advantage program, the current interest rate is 5.85%.

The second mortgage can be used for downpayment or for closing cost, but is in the amount of the 3.5% FHA minimum down payment. The second mortgage can be used with other sources of closing funds that are acceptable to FHA: gift funds, seller paid costs, and of course the 2% grant from the THDA Great Advantage program.

More details on THDA programs are posted here.

If you have any questions about eligibility for this program, please contact me for more information.

Reprinted with permission from Richard Smith, American Acceptance Mortgage, Inc Chattanooga, TN (888) 474-9920 x 15

Richard's blog

Buying a HUD Home in TN

Buying a HUD house, i.e. a home owned by the Department of Housing and Urban Development, is generally the same as buying any other home with a few key differences.

1. HUD homes are listed for a set amount of time, usually around 10 days, before any offers will be considered. At the expiration of this bid period, all offers received from owner occupants will be considered. If an acceptable offer has been received, the winner bidder will be notified and the home is then under contract assuming that all original paperwork is received by HUD within 48 hours of notification. If no acceptable offers are received, new bids will then be reviewed on a daily basis going forward. Any offers received before midnight of a particular day are considered to have been received at the same time. Non-owner occupant offers are not considered during the initial bid period. It is a federal crime to represent yourself as an owner occupant if you do not intend to occupy the home for a period of at least two years.

2. HUD allows 3% of the purchase price to be used for closing costs. This amount is already built into the price of the home and an offer for the full asking price which requests this 3% is still considered by HUD to be a full price offer.

3. HUD uses a numeric formula to determine whether or not to accept an offer. So called "low ball" offers will never be accepted. Contact me for more information on what types of offers will usually qualify as a winning bid. HUD reduces the price of its listings on a regular basis. The amount of these price reductions is, in almost all cases, 10% of whatever the original asking price was.

4. HUD homes are usually listed as being "insured," "insured with escrow for required FHA repairs," or occasionally "uninsured." What this means to the buyer is that, if you are using FHA financing, a home "insured" will not require any repairs. "Insured with escrow" will require some repairs as part of the conditions of sale. With non-HUD houses, these repairs would have to be completed prior to the closing of the sale. With HUD homes, the repair allowance amount, shown in the listing, is added to the amount of your loan and amortized into your monthly payment. After the closing of the sale, you will be required to complete these repairs and pay for them out of your pocket within a specified period of time - usually 90 days, although extensions are usually possible. Once the repairs are completed, the FHA appraiser will return to assess the repairs, making sure they have been done to FHA specifications. At that point, the homeowner will submit receipts for the work and will be reimbursed from an escrow account set up by your lender. If the total of the receipts is less than the amount in the escrow account, the remainder will be credited back to the balance of your loan. Any amounts over the escrow amount will not be reimbursed. If a home is listed as "uninsured," FHA financing is not available. These homes generally require fairly extensive repairs and should be considered by investors or by those who are comfortable tackling relatively long term projects. ***Not all FHA lenders are able to close an FHA loan with escrow***

5. HUD requires a $1000 earnest money deposit for most sales. For lower priced homes, $500 is acceptable. This earnest money check must be in the form of certified funds.

6. HUD is currently offering "$100 down payments" for buyers utilizing FHA financing. This program is subject to change or discontinuation, but for qualified buyers, your earnest money deposit may be the only out of pocket expense to you to purchase a HUD home! Compared to the 3.5-5%+ required for almost all other purchases, this could mean the difference between being able to afford the home of your dreams now or having to wait to save up a down payment.

7. HUD provides a "Property Condition Report" which assesses the overall condition of the home with a checklist of all structural, mechanical and, to some extent, cosmetic items in the home. You can find this report on any currently listed home by clicking here and searching by the address. This report is not a substitute for your own home inspection. Problems with plumbing or electrical systems are often shown simply as not functional without specifying the source of the needed repairs.

8. HUD does not provide utilities for prospective buyers to perform their inspections.The buyer must have any needed utilities turned on in their own name and must pay for any costs to do this. If the inspection will be performed from October-March, a $75 fee is required to cover the cost of re-winterizing the home after your inspection. In addition, your may not back out of a contract without forfeiting your earnest money due to required repairs unless the repairs are: A. structural and/or mechanical; B. were not immediately evident upon a visual inspection, and C. were not listed in the property condition report.

9. HUD requires a very specific pre-approval letter with very specific information from your lender before they will return a binding contract. This letter must be submitted within 48 hours of notification of acceptance and must be from a direct lender, not a mortgage broker. It is best to use a lender (and REALTOR) who is familiar with and has experience completing HUD transactions.

10. Only registered real estate professionals may show and sell HUD homes. Contact me for more information or to view a HUD home. Click here for a list of currently available HUD homes.