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By: Charles Woodall
Managing Broker

http://www.dothanhomesearch.com

So your agent calls and says that he/she has received an offer to purchase your home. What are your options? More importantly, what is your best option? First, your agent is required by law to prepare what is typically called a net proceeds estimate, or seller net sheet, that shows you what your bottom line with likely be. Your decision on which of these options to choose should be based on a thorough understanding of this net proceeds estimate. Say it with me now…Focus on the bottom line!

Accepting the offer

If you can live with the numbers, then this is absolutely the best option. As I mentioned before, focus on the bottom line of the net proceeds estimate your agent prepares for you. An offer asking you to pay closing costs and down payment assistance may net you as much as a cash offer, depending on how the numbers work. Don’t get caught up in everything the buyer is asking for. Ask yourself, “Is this bottom line number a number we can live with?”

Making a counter offer

If the offer is not something you can live with, then a counter offer to the buyer might be in order. Your best strategy should be to change as few items as possible in your counter offer. Give the buyer, based on their original offer, everything you can. It makes everything easier when you adjust the price and leave everything else the same. That is not to say that nothing should be changed except the price. This is where your agent earns part of their commission, by advising you and helping you formulate a good counter offer.

Turning down the offer

Probably the least advisable of the three choices, declining an offer outright can work against you. You have a ready, willing, and presumably able buyer that likes your house enough to make an offer. By summarily rejecting their offer, you can completely turn them off and send them to your competition. Even if the offer is ridiculously low, make a full price counter. Doing so shows them that you want to sell, but they need to make a more reasonable offer.

Offers are too hard to come by, especially in the current market. Focusing on getting your house sold at terms and conditions you can live with should be yours and your agents top priority.

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By: Dick Henk
Broker Associate, SRES, GRI, E-Pro

http://www.dkhenk.com

I’m sure you’ve seen them; the alphabet soup of letters that some real estate agents have after their names. The National Association of REALTORS encourages agents to pursue further education opportunities to better their real estate careers, and for taking these advanced classes we are awarded what is called a designation, which is the letters you see after the name. Successful agents must keep current on industry related issues, evolving technology, changing legalities, and new marketing ideas.

Although other designations exist, only 20 are official NAR designations and certifications. Here is a brief explanation of a few that you will see most often.

GRI stands for Graduate, REALTOR Institute - This one requires a minimum of 90 hours of education covering real estate related topics such as business planning, fair housing, and contracts. If the real estate pre-license class were the equivalent of high school, the GRI designation could be said to be a college degree.

ABR stands for Accredited Buyer Representative - Prepares REALTORS for working with buyer clients in real estate transactions and provide the quality of service and degree of fidelity to buyers that sellers have customarily enjoyed.

CRS stands for Certified Residential Specialist - Content for this designation is centered on high content training in the systems and strategies of residential real estate. Also, a higher level of real estate experience is required to receive this designation.

SRES stands for Senior Real Estate Specialist - Designation for REALTORS that have chosen to earn a greater understanding of the distinct real estate goals, concerns, and needs of seniors.

There are other designations outside of these offered through the National Association of REALTORS, including one I received this last month. The CPS designation, which stands for Competitive Pricing Specialist and is awarded to experienced REALTORS that use the unique comparative market analysis system sold and promoted by XpertCMA.com. Unique because it compares properties on the market today rather than from months ago.

You usually can’t go wrong by seeking out REALTORS that promote this alphabet soup of letters after their name, because they have made a committment to their profession and to furthering their knowledge to better serve buyer and seller clients.

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By: Charles Woodall
Managing Broker

http://www.dothanhomesearch.com

Tom Grant has a post on his blog about the importance of title insurance. If you are considering purchasing a home, even if you have already found one and are waiting to close, READ THIS POST!

Here in the Dothan real estate market, it is fairly rare for a home buyer to purchase an owner?s title insurance policy. Many rely on the policy that the lender gets to cover them if anything such as Tom mentioned goes wrong. It is very important to remember however that the lender?s policy typically only covers the amount of the loan. Any down payment, or equity, the buyer may have is not covered by the lender?s policy. So whether you are paying 5% down or buying a property with cash, an owner?s title policy probably makes a lot of sense.

Consult with the attorney that will be handling your closing about an owner?s title insurance policy. A couple of hundred dollars now can prevent a lot of headaches over the years.

Have questions about title insurance? Contact us or post a comment to this post below.

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By: Judy Spears
Broker Associate, CRS, ABR, GRI, CNHS

http://www.judyspears.com

Excerpts From USAWeekend

1) Homeowners insurance does not cover flooding.

Homeowners insurance typically covers losses associated with wind, lightning, burglary, vandalism, etc. Flooding is a specific damage and is not lumped into other categories, so under no circumstances is flooding covered under your homeowners policy. The only way to get flood insurance coverage is through the National Flood Insurance Program administered by FEMA.

2) Do not depend on Federal Disaster Assistance

“A community must be declared a federal disaster area before it is eligible for disaster assistance,” says Bob Rusbuldt, of the Independent Insurance Agents & Brokers of America. “Federal disaster assistance declarations are awarded in less than 50% of flooding incidents.”  If the flooding is very localized to just a few houses, which is usually the case, then a disaster declaration is likely not going to happen.

3) Flooding doesn’t stop at the line on the map

One third of all flood claims come from moderate to low risk areas and heavy rains can occur anywhere and any time. And don’t think that because of our ongoing drought that it can’t happen in Dothan right now. Flooding can and does occur where you least expect it.

4)Flood Insurance prices depends on location of property.

There are a couple of different “zones” for determining the risk for flooding, and therefore the amount of flood insurance premium. The nationwide average for flood insurance coverage is less than $500 annually. That’s often less than the interest on a federal disaster loan, plus you don’t have to repay the money. Your lender will typically require flood insurance if your home is in one of the risk areas.

5)Flood insurance is structured in 2 parts.

Comprehensive flood coverage should include two policies: one for the structure and one for the contents of the home. Make sure you get coverage for a basement if you have one.

I learned about the risks of not having flood insurance first hand. Back in 1995, the Dothan area received about ten inches of rain in a three hour period. The ground was very dry at the time, but it still couldn’t absorb that much water in that short of a time span. About six inches of water entered my home on the south side of Dothan, in a location that is not considered a flood prone area. It was depressing to watch my shoes float through our living room.

Being as close as we are to the gulf coast, the rainfall from tropical systems is always a threat during summer and fall. It is better to spend a few dollars each month on flood insurance than risk what could be thousands of dollars on replacement and repairs.

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By: Charles Woodall
Managing Broker

http://www.dothanhomesearch.com

I will be sharing with you in the coming weeks and months some basic knowledge related to real estate here in the Dothan area. Some of this information you will already know, some you may not. The goal is to give you all the information you need to have a good working knowledge of real estate and the real estate transaction.

This particular post has to do with what we call the MLS, which is an acronym for Multiple Listing Service. Nearly all of the real estate companies in Dothan are members of the Dothan Multiple Listing Service, Inc., which basically is a central database of all the information on the homes listed for sale by each member company. Here is how it works. Each time a member of the MLS lists a house or other property for sale, with the seller’s permission, we list it in the MLS. In doing so, we are offering compensation to other MLS members in the hopes that they will bring a buyer for the listed property. Every real estate agent that works with a company that is a member of the MLS has access to information on all the property listed in the MLS, no matter which company has it listed.

This is a great benefit to the seller, because they get exposure to buyers not only through the efforts of the company they list their property with, but every other MLS member company and their agents. This is also a huge benefit to buyers, because they can work with one real estate agent to see basically any property that is listed for sale in Dothan. Buyers don’t have to call the company whose sign is in the yard every time the see a house they want more information on. They can work with one agent to see any property they have an interest in.

If there is a real estate topic that you would like addressed in the Dothan Real Estate 101 series, leave us a comment below. We will be happy to answer any question you may have, and chances are there will be many other readers with that same question.

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By: Charles Woodall
Managing Broker

http://www.dothanhomesearch.com

We as real estate professionals are asked all the time about the relationship between what is called the?Federal Funds?Rate (fed rate for short), and mortgage rates. The most common?question is “I heard on the news that the government lowered the fed rate, so will mortgage rates come down?” To answer that question, we first need to look at how and by whom each of these rates is determined.

The?Federal Runds?Rate is the interest rate the Federal Reserve Banks charge depository institutions on overnight loans.?The fed rate?is an administered rate, set by the Federal Reserve Banks, rather than a market rate of interest. The fed rate acts as the gas pedal for?our economy. Lowering?this rate?is like hitting the gas, giving the economy a boost by putting more money in. Raising the fed rate is akin to pressing the brakes on the economy; doing so tightens the supply of money making it harder to borrow.

Mortgage rates?are a market-determined interest rate for long-term residential mortgage loans. Mortgage rates are competive rates, set individually by mortgage lenders, and are based on the demand for mortgage-backed securities.?Because there are so many factors that can effect mortgage rates, such as unemployment, the stock market, inflation, etc., the public perception of the economy can be the leading cause of a change in rates. As a general rule, watch the various economic data. If the data shows hesitancy and confusion, mortgage rates may fall. Conversely, if the data shows strength and low unemployment, rates may rise.

Since?they?are governed by market forces and not controlled by the government like the fed rate, is there anything we can?watch to guage where mortgage rates will go? Yes, in fact there is. Watching the movement of the 10-year Treasury bond is a great way to get an idea of where mortgage rates are heading. Historically, mortgage rates have followed the movement of these treasury bonds.

What’s the bottom line? A change in a short-term interest rate such as the fed rate may not affect rates on long-term interest rates such as mortgages directly. However, along with many other economic factors, the fed rate does play some small role in determining what interest rate you will get when you buy your new home in Dothan.

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