Home After Home

When you are buying real estate or selling real estate in Baton Rouge or anywhere for that matter, the negotiations are one of the most critical components.  Ask yourself a few questions before entering into any negotiation.

1. When do I want or need to close the sale?
2. What is the most I will pay for this home? or What is the least I will sell this home?
3. What incentives can I give to the other party so that they will want to work with me?
4. What else is a make-it or break-it factor for me?

Number 1 is important because it can control your move in and move out dates.  If you have a lease you may want to close near the end of your lease, but not AFTER the expiration of the lease. If you have a home to sell and a home to buy you may need to coordinate these dates so that they "sync".

2. Price.  They say that's all that matters, but it's not ALL that matters. Price is important but I doubt a few thousand dollars within your target number would keep you from moving forward... or at least it shouldn't. Know what you want your bottom line to be, but be flexible enough that if you get close to it, you can still make progress.  Here's another tip that may help. Don't make a counteroffer over a couple of thousand dollars either. Yes I know that $2,000 is a lot of money.  But is it enough money to keep you from realizing your goals and making the move you're wanting or needing to make? It shouldn't.  That's not enough money to keep you stagnant so don't let it stall you in a negotiation. Your real estate agent should be compentent enough to provide you with cost estimates so that you know how much money you need to bring to the closing or how much money you'll walk away with from the closing.  These numbers are "estimates" but they should be close enough for you to make an informed decision. Ask your realtor for a "seller's net sheet" or a closing cost workup if you are a buyer.

Incentives! Don't forget the gravy.  Gravy is what makes the deal more palatable to the other side.  If you are a seller leaving the washer, dryer, and refrigerator might be the gravy to the buyer. If you are a buyer, coordinating a closing date that works for the seller may be the gravy for them.  Buyer's: It's also helpful to know that if you are preapproved or have proof that you have cash to buyer and don't have to sell a home then you are more attractive to the seller than other buyers.  Figure out what little "extra" you can give the other side to help them out and you're negotiation will start and end much smoother!

Number 4: Make-it or Break-it.  You need to know what is a deal-breaker for you before you enter into the negotiations.  This will save you time, effort, and stress! For instance, if you are a buyer and you only have $5,000 to work with and you know that will cover your downpayment but not your closing costs, then you know that it's a deal breaker for you if the seller doesn't cover your closing costs.  If you are a seller and are moving for a job relocation, your deal-breaker may be if the buyer can't fit with your closing dates.  Know what your absolute deal-breakers are upfront.  When you start to think through this process, you'll realize that some items that you thought were deal-breakers may be more flexible.

That's only a few items that go into a good negotiation.  It's not like buying a car. If you don't like the deal at the car dealership you can leave and go to another dealership and find the exact same car. No. With houses it's different. You're buying a home. Or you're selling a house. In either case, you can't just turn tail and walk away.  There isn't always another exact replica of that house that you want to buy in that neighborhood (although, I guess in some neighborhoods there are) and if you are selling there isn't always another buyer standing in line to buy your home.  So work with what you have to get you what you want.  In the end, you'll be happy that you made a deal that works for everyone AND you got to move on with your life!

If you are considering a move to Baton Rouge, then you might want to read up on what's going on in and around town. Of course, you want to look at the real estate in Baton Rouge, but you also need to know that there's lots of action here and lots to do if you know where to find it.  Here are a few of my top picks.

Sports
With two universities in Baton Rouge, LSU and Southern, there's lots of sports action, year round.  This time of year, most of the action is in the new Alex Box Stadium at LSU and it's a home-run hitter for Baseball fans.  To keep up with LSU sports schedules (basketball, football, baseball, and more) go to www.LSUSports.net. That's where all the current information is along with the results of the latest games.  And to get current sports information for Southern go to www.subr.edu/athletics/.

Theater
If you want to take in a play or a musical you'll probably be looking for the Baton Rouge Little Theater company or Swine Palace Productions.  Both offer a great selection of plays.  For a nice evening out, try their websites to see "what's playing". www.BRLT.org or www.SwinePalace.org

Arts
If it's Art you're looking for there are several smaller galleries around town, but I'll mention only two here. There's the Baton Rouge Art Gallery and the Shaw Center for the Arts. Both have interesting schedules.  The Shaw Center for the Arts is a newer building in downtown Baton Rouge near the riverfront and it includes a theater which shows plays and a sushi restaurant on top floor.

Entertainment
If you're looking for a little entertainment you might want to check out Live After Five which is an outdoor, open-air music concert (party) on the streets of downtown Baton Rouge on Friday's 5p-8p. Before you go, be sure to view the current schedule so you can see who's playing!

Now, that's enough to get you started. Even if you are only in town for a few days to look at homes that are available, try to make time to enjoy yourself while you're here!

We experienced a drawn out market slow down following Hurricane Gustav in Baton Rouge, LA.  The slowing in the market seemed to have caused a slight dip in the overall average sold price of homes in Baton Rouge. I have been tracking the average monthly sold price in Baton Rouge from 2002 to present and charting the values to keep up on the current status of the market.  The chart is very revealing.

First, many people think that our market prices skyrocketed after Hurricane Katrina and remained overpriced. However, that's not the case -- as the chart shows. Hurricane Katrina caused a spike that rapidly dropped right back down in just a few months.  Following Katrina, the national economy started to experience a downturn as housing values in major markets across the nation plunged.  From the media, the public perception was that housing values were plunging everywhere - including Baton Rouge. That, too, was a myth. Yes there are areas around the country experiencing plunging values, but Baton Rouge was largely insulated from the effects of the failing economy.  This too can be seen in the chart.

Baton Rouge did experience a slow down during 2009.  But recently real estate activity has picked up. Reports are coming in from local lenders and agents that they are busy. But now, we can also see the values reflecting the upswing on the chart. You'll notice what appears to be a fairly stagnant rate in the values for 2009, and an uptick for Feb 2010.  I've been telling people that I'm expecting a great 2010 and February is evidence of that possibility.  No one can predict the future - not even me - so I think it's important for sellers to stay ahead of the market and to be realistic on their pricing if they expect to sell their homes.  Buyers, now is not the time to try to be overly lowballing sellers on your offers. Insulting the sellers, will not accomplish anything. And, if the market really is taking an upswing, you need to be realistic on your offer prices.  If everyone is realistic, the market will continue to move in a positive fashion and provide an improvement in the overall economy for Baton Rouge.

For your review, here's my chart of Baton Rouge real estate values.  Remember, this is NOT a valuation of your home. It's an average of all homes sold all over Baton Rouge.

Gareth posted this great checklist for new home owners. Here you go....

How does buying a "short sale" affect the buyer?  So many buyers are asking this question and it’s a good one.  Sometimes us REALTORS sound like we are speaking a foreign language.  We talk about ARM’s, Buy Downs, BPO’s, CMA’s, Negative Am, and so on.  It’s worth explaining rather than using our “industry dialect”
Lets first talk about “short sales” and how it affects buyers.  A short sale is simply a transfer of ownership with the seller’s lender agreeing to accept less then the total amount owed on the seller’s loan or loans.  All of the seller’s loans on the property must be paid or satisfied by the banks in order to convey a “clean” title to the buyer.   There are situations when the proceeds of the sale will not satisfy the seller’s payoff.  So the seller is “short”, thus a “short sale”.  For any buyer purchasing such a property it can be a blessing in disguise.

 
● GETTING GOOD VALUE - The buyer is likely to get these properties below appraised value.  Ultimately the bank has the final say on all the terms of the agreement. 

● BEING PREPARED - The sales process takes longer then traditional sales.   Since there is one more person involved, obtaining an accepted sales agreement takes longer.  In light of the fact that many lenders across the nation are flooded with Short Sales and Foreclosures, the one property that you are buying is of little priority to the bank.  It is only one drop in the bucket that is already full to the rim.   We sometimes wait weeks or even months to get a response from a bank on an offer on a property.

● ACCEPTED AGREEMENT - Once the bank agrees, the buyer then proceeds with the terms of the agreement just as they would with any other sale.   Inspections, appraisal, and all the usual details spelled out in the sales agreement.  Keep in mind, the property may or may not have utilities turned on.  Many times the buyer will turn on the utilities in order to do inspections.  In some cases, the buyer is so thrilled with the terms of the sale they may elect not to have utilities turned on for inspections.  This is on a case by case basis to the satisfaction of the buyer and in compliance with the terms of the agreement.   In most cases, the buyer will be purchasing the property in its “as is” condition.  Expect no repairs to be done by the seller or the bank.  This is one reason the buyer will get a good value.   The bank will have their process.  After receiving a complete package from the listing agent and the seller, it is highly likely the bank will order a Broker’s Price Opinion (BPO) or an Appraisal.  Then the bank will present to their investor for approval of the contract.  This all sounds easy, but is a time consuming process that can take weeks or even months.  When the REALTOR tells you the property has been assigned to a short sale negotiator, then the ball will begin rolling.  Until then, time is frozen, and no progress occurs.  Having successfully closed many short sales in Baton Rouge, La, I have learned to teach agents and buyers to expect enormous delays in the process. Remember “patience is a virtue”.

● CLOSING THE SALE - The bank must also approve the final sales documents before the closing takes place.  Primarily they are interested in approving the HUD which is a statement showing the details of all money involved in the transaction.  Since it’s a short sale, they definitely do not want to see any proceeds going to the seller.  Will the buyer be faced with any unusual title issues?  As long as a reputable closing agent does their job, the answer is no.  One of the jobs of the closing agent is to verify that the title conveyed is clean with no liens or encumbrances.  The buyer can also buy an owner’s title insurance policy from the closing agent.  So when you accept the keys to your home at the act of sale, you can feel good about your home.

● HOME OWNERSHIP - It’s been said that the misfortune of one can be the fortune of another.  This can be true to buyers who are buying such properties.  Just remember, your penance is weathering the time factor and remaining patient.   This is can prove to be money in the bank for you.   Happy house hunting!

The lending industry is constantly changing. This year new changes are coming to the FHA loan. The good news is that FHA is keeping the low down payment of 3.5%.  Here are a few of the upcoming changes:

•  Upfront mortgage insurance premium is increasing to 2.25%. Previously it was 1.75%.  FHA will continue to allow buyers the option of paying the premium upfront or financing it into the loan.
• Borrowers with a credit score below 580 will need a 10% down payment. All other borrowers will be able to stick with the 3.5% minimum down payment.
• FHA is looking to increase the annual premium which is currently capped at .55%.  By increasing this number, the upfront MIP may be reduced.  (Note to the consumer: The annual premium affects the MIP that is added to your monthly payment.)
• Maximum seller concessions will be limited to 3%. (Previously sellers could contribute up to 6% towards the buyers settlement fees.)

When will the changes go into effect? The upfront MIP increase will be implemented in Spring of 2010. FICO Score and down payment requirements will be implemented in the Summer of 2010.  The seller concessions change will start in the Summer of 2010.

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Specs:
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5 Full Baths
2 Half Baths
4804 SF Living Area
1.17 Acres
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I was out the other night at the poker tables when the player next to me found out that I am a REALTOR. She asked, "What's the average price per square foot for Baton Rouge?" What a question! I figured it would be good to answer that question in a blog post.

First, let me say that Baton Rouge hasn't been hit hard by the failing economy around the rest of the country. We have not had the bottom fall out of our real estate market. In fact, while we have felt the repercussions of weakened economy, the impact has been minimal.  Throughout 2009 we felt the impact of fewer sales. Coupled with fewer sales there has also been a slight drop in home prices.  As the lending practices have tightened, the sales have slacked up.  Here's a chart that shows the number of sales in Jan and the number of sales for the whole year for the Baton Rouge Real Estate Market over the past few years.

Here in 2010, we've had 204 transactions for January.   This number actually surprised me when I looked at it. What we are feeling is an increased demand in the movement of buyers and an increase in the number of sellers ready to list.

But that's just the "number" of transactions in Baton Rouge. Now, let's look at average sales price over the same period.

Those numbers show some movement and stabilization in the market.  You can see that our prices haven't just bottomed out like some other markets around the country.  Now, my prediction - not that I'm an expert in statistics - is that we'll see prices graduate upward a bit in 2010.

So, now that we've covered the background here are some rough numbers for a few neighborhoods around town. This is not intended to be a market analysis for your home. Your home should be compared to homes that have similar finishings, similar size, and similar age.  These are averages based on the past year of of all sales in each area.

For information on your home or a home you are looking to buy talk to your realtor about specific data that pertains to your subject property.

The important point in all of this is not just that real estate is local. It's more than local. I could provide you with an average price per square foot for Baton Rouge, but what would that tell you? I say it would tell you absolutely nothing about Baton Rouge. The ranges vary greatly from neighborhood to the next. All of the neighborhoods on the list above are very desireable areas with lots of activity, but still there is a great variance from one part of town to the other.

I am very proud to announce to you all, that one of my favorite people, Linda Fredericks was awarded the top honor this year as REALTOR of the Year by the Greater Baton Rouge Association of REALTORS.  Ok, yes she's my mom and I am, admittedly, partial.  But after all these years of knowing how great she is, it's wonderful to see that quality admired by the rest of the professionals in our association.  So, in honor of Mom, here's a little bit about her career that contributed towards her being named the 2009 Realtor of the Year.

Linda's career started a long, long time ago in a galaxay far far away... ok, well, a long, long time ago.  She began her career in real estate as a secretary for an appraiser where she worked for five years.  Her next step was to get a real estate license, which she did in 1975.  Back then it was a simple process to get a real estate license and no training was available to her.  So, for her first sale, her client signed a blank purchase agreement and gave her a $100 bill for a deposit. She took the cash and the blank contract  back to the office, handed it to her broker, and said, "Now what?"  She's certainly come a long way from that first sale. She quickly rose to become the top producer at her office and has remained one of the top producers no matter what office she's worked at since then.

In 1990, she opened up a RE/MAX franchise in Baton Rouge. She and her partners recruited the best of the best to work with their office until deciding to sell 9 years later.  She moved to another RE/MAX office and continued to excel in sales and wining awards each year.  In 2001, her daughter (that's me), came to work with her on her team.  In November 2009, the two of us decided that we could be of greater service to our clients by opening a new office called Home After Home. 

Linda has not only helped thousands of families with their real estate needs. She was the first ABR in Baton Rouge and one of the first in the state of Louisiana.  After obtaining her ABR (Accredited Buyer's Representative) designation, she then teamed up with a local real estate school to train other agents on Buyer Agency.  Buyer Agency was a major change in the way real estate business was conducted and it required a paradigm shift in the way REALTORS think about their business.  Prior to the onset of buyer agency in Lousisiana, the Realtor was an agent of the seller... even if they were taking the buyer around to see houses.  This great new step in real estate enabled the buyer to receive their own representation.

Staying on the cutting edge of real estate Linda been on the Internet marketing herself and her listings as long as it's been available.  She keeps her business on the leading edge of technology, and even opened her new company for that purpose.  Home After Home is, by design, a technology-based real estate company.

Within her local association she has been a member of almost every committee at some point during her career. She has chaired committees, heard arbitration and ethics hearings, and played a part in setting policy within the Greater Baton Rouge Association of REALTORS.  She is even a past president of 2008.  At the state level she has been a director and been on many committees.  She has attended the NAR legislative meetings and is an active participant in the real estate industry at all levels.

She is a firm believer in giving back to the community and believes in charities that keep the money local and provide assistance right here in her own city.  To that end, she has been an active participant in the Children's Miracle Network for many years and has participated in a woman's build with Habitat for Humanity.  She offers her time to Our Lady of the Lake Hospital and Ollie Steel Burden Manor as a volunteer.  At Ollie Steel she is a Eucharistic Minister and particiaptes in activities with the residents.

Children have her heart. For many years she was a sponsor of various child soap box derby racers who participated in the NDR (National Derby Rallies).  She helped children in Texas and Louisiana obtain the materials to build their race cars and traveled to races around the country.

Linda is a giving person who credo is "helping others."  That's why she is a REALTOR... so that she can help other people.  Whether it's helping a buyer, helping a seller, or just giving a home owner advice to make it though a tough time, she has had a healthy career because she enjoys what she does.

The day is quickly approaching. We've been working everyday adding technology and furniture to create a great office experience for clients and agents.  Next week, we unveil the product of all our hard work and we'd like to invite you!

Please join us for our Grand Opening/Christmas Celebration at Home After Home.  Here are the details:

When: Thursday 12/10/09, 4pm - 8pm

Where: Home After Home
5800 One Perkins Place
Building 5, Suite C
Baton Rouge, LA 70808

RSVP: 225-341-BRLA or 225-341-2752

Please stop in for a visit and enjoy a refreshment or two!

If you are interested in helping us plan or provide for the party please contact Linda or Bridget Fredericks.