Archives: October 2023

The SIRP System

Is your house still on the market in this volatile real estate market?

Try using our SIRP system to get your home sold faster.

  • What does SIRP stand for?
    • Strategic Incremental Reduction in Price
  • How does it work?
    • We will agree to lower the price of your home by a set amount every two weeks for a specified period with a maximum reduction in place.
  • Is it right for me?
    • If your home has been on the market more than 30 days and has not had an offer, this system is for your.
    • It is also popular with sellers who have not had enough showings on their home.
    • The goal at Pate Realty Group is to have 4-6 showings every week and have offers after twelve showings.
  • How do you as the seller engage in the SIRP system?
    • If your home is already listed with Brian Pate, contact him and he will get the paperwork approving this process for you.
    • Pick a day of the week (Brian recommends Thursdays) to apply the reductions and how often they will be done.
    • Brian will take care of the paperwork and start the process the following week.

Preparing Your Home for Photography and Videography

Preparing for photography and videography at your listing is a crucial step in presenting your property in the best light to potential buyers. A well-organized and visually appealing presentation can greatly enhance your chances of attracting interested buyers. Here’s a comprehensive checklist to help you prepare for the photography and videography session:

1. Clean and Declutter:

  • Deep clean the entire house, including floors, windows, and surfaces.
  • Remove clutter, personal items, and excessive decorations to create a clean and spacious look.
  • Remove half of what is in your closet.

2. Exterior Appeal:

  • Trim and tidy up the landscaping, including mowing the lawn, pruning bushes, and weeding.
  • Clean the driveway, sidewalks, and entrance areas.
  • place outdoor furniture, cushions, and decor items to create an inviting outdoor space.

3. Interior Preparation:

  • Turn on all lights, including overhead lights, lamps, and under-cabinet lighting.
  • Open curtains and blinds to let natural light in.
  • Make beds neatly and fluff pillows.
  • Arrange furniture to create a sense of space and flow.

4. Kitchen:

  • Clear countertops of unnecessary items.
  • Hide away kitchen appliances, dish racks, and cleaning supplies.
  • Showcase clean and matching dishware or utensils.

5. Living Areas:

  • Arrange seating areas to highlight the room’s functionality.
  • Fluff and arrange cushions and throws.
  • Remove personal items like family photos.

6. Bedrooms:

  • Make beds with clean and coordinated bedding.
  • Clear nightstands and dressers of personal items.
  • Ensure closets are organized and not overcrowded.

7. Bathrooms:

  • Set out fresh, coordinating towels and rugs.
  • Clear countertops of personal items, toothbrushes, and toiletries.
  • Close toilet lids.

8. Dining Area:

  • Set the dining table with stylish place settings.
  • Use decorative elements like centerpieces or table runners.

9. Special Features:

  • Highlight unique selling points like fireplaces, architectural details, or built-in shelving.

10. Outdoor Areas:

  • Arrange outdoor seating, cushions, and decor items.
  • Clean and prep any outdoor amenities like pools, decks, or patios.

11. Pet Preparation:

  • Hide pet toys, bowls, and litter boxes.
  • Arrange for pets to be temporarily relocated during the session.

12. Final Touches:

  • Do a final walkthrough to ensure everything is in place and looks inviting.
  • Check for any visible flaws or repairs that need attention.
  • Make sure all lights are working properly.

13. Extra Tips:

  • Consider hiring a professional stager for expert guidance.
  • Communicate with your realtor about any specific features you want to highlight.

By following this comprehensive checklist, you’ll be well-prepared to showcase your property’s best features during the photography and videography session. A well-presented listing can make a significant difference in attracting potential buyers and ultimately securing a successful sale.

If you have any questions, please contact Brian at brian@paterealty.com or by text or phone at 919-669-4575.

Waiting For Rates To Go Down: What is the cost?

Home buyers waiting for rates to go down, are losing every dollar they gain in a lower rate, and then some, to rising home prices.

Example:

October 20, 2022

Median Pending Home Price:      $375,000

20% Down Payment:                   $75,000

Loan Amount:                              $300,000

Interest Rate:                                7.08%

Monthly P&I Payment:                 $2,012.05

Total Paid Over Life of Loan:         $724,338

October 20, 2023

Median Pending Home Price:      $395,000 (a 5.3% increase)

20% Down Payment:                   $79,000

Loan Amount:                              $316,000

Interest Rate:                                8.257%

Monthly P&I Payment:                 $2,375.56

Total Paid Over Life of Loan:         $855,201.6

In this example, this prospective buyer that has tried to save $375 per month has actually cost themselves $130,863.60 over the life of the loan.

What will rates do next?

Many people have asked me recently, “What will rates do next?” Sometimes it comes in the question of, “When will rates go down?”

Predicting what rates will do is not my strong suit. What I do know is this:

Buyers waiting for rates to go down, are losing every dollar they gain in a lower rate, and then some, to rising home prices.

The Mortgage Bankers Association (MBA) has unveiled its predictions for the housing market in 2024, anticipating significant growth in mortgage origination volume and other key indicators. According to the MBA’s latest report, they foresee a robust year ahead, but caution of potential economic challenges.

MBA’s projections indicate that the total origination volume for 2024 is expected to reach a substantial $1.47 trillion, an 11% increase from 2023.  

By loan count, the report indicates that the overall mortgage origination volume is also poised for growth, projecting a 19% increase from 4.4 million loans in 2023 to 5.2 million loans in 2024.

Despite the resilience of the U.S. economy throughout 2023, the MBA’s outlook includes a cautious note. They anticipate a mild recession in the first half of 2024, driven by a combination of factors including higher interest rates, tighter credit conditions, and a gradual depletion of household savings accrued during the pandemic era.

The report highlights the impact of fiscal and monetary policies on mortgage rates in 2023. While the Federal Reserve’s hiking cycle may be nearing its conclusion, the timing of rate cuts is uncertain. Lower rates are expected to stimulate homebuyer demand and bolster the inventory of existing homes, thereby supporting the purchase origination volume in 2024.

As we transition into 2024, the job market is anticipated to slow, leading to fewer job additions and an increase in the unemployment rate from the current 3.8% to 5.0% by year-end 2024. Meanwhile, inflation is expected to gradually decline, aligning with the Federal Reserve’s 2 percent target by mid-2025.

Amidst economic slowdown and falling inflation, long-term rates are expected to decrease, which should result in lower mortgage rates. However, a persistent spread of approximately 120 basis points between mortgage and Treasury rates, due to various factors, remains a key consideration. MBA’s baseline forecast suggests that mortgage rates will end 2024 at 6.1% and reach 5.5% by the end of 2025.

Despite economic shifts, the MBA remains optimistic about national home prices. They expect growth over the next three years, buoyed by limited inventory driving price appreciation. First-time homebuyers are poised to play a significant role in housing demand, although they will face challenges including high median purchase and interest payments, limited for-sale inventory, especially for entry-level homes, and restricted credit availability.

The report also notes that new home sales continue to outpace existing-home sales, as buyers increasingly turn to newly constructed homes due to limited existing home listings and intense competition in the bidding process. Data from the Builder Applications Survey indicates consistent year-over-year gains in purchase applications in recent months.

The MBA’s forecast paints a positive picture for the housing market in 2024, despite potential economic headwinds. Mortgage origination volume, purchase originations, and home prices are all expected to experience growth, while the job market and inflation are anticipated to undergo adjustments in the coming year.

Home Inspections

What To Expect When You’re Inspecting

In this photo of a crawlspace, the pier supporting the home has been compromised to allow for an improperly supported water pipe to stay on its path.

Getting a home inspection when buying a house is crucial for several reasons. Firstly, it helps ensure the property is in good condition and free from significant defects that could lead to costly repairs.

Secondly, a home inspection provides valuable information about the home’s overall safety. It can uncover issues like electrical hazards, structural weaknesses, or the presence of harmful substances like mold or asbestos. Identifying these issues can prevent accidents and health risks.

Additionally, a home inspection can assist in negotiations with the seller. If the inspection reveals significant issues, a buyer can use this information to negotiate a lower purchase price or request that the seller make necessary repairs before the sale closes.

Lastly, having a professional inspector assess the property gives you peace of mind. By knowing precisely what you are getting into, you can make an informed decision about the purchase.

A home inspection is a prudent step in home-buying, offering protection, information, and potential savings overall.

Here’s what is typically covered in a home inspection:

1. Structural Components: Inspectors assess the home’s structural integrity, including the foundation, walls, roof, and overall construction. They look for signs of damage, settling, or structural issues.

2. Exterior: The inspection includes an examination of the exterior of the property, including siding, windows, doors, and the condition of the landscaping. Any potential drainage or grading problems affecting the property will be noted.

3. Roof: The inspector will inspect the roof for signs of damage, leaks, or wear and tear. They may also estimate the remaining lifespan of the roofing material.

4. Plumbing: The plumbing system is examined for leaks, water pressure issues, and the functionality of fixtures such as sinks, faucets, toilets, and showers. The water heater is inspected as well.

5. Electrical:  Inspectors check the electrical system for safety and compliance with local codes. This includes the inspection of outlets, switches, circuit breakers, and the main electrical panel.

6. Heating, Ventilation, and Air Conditioning (HVAC): The HVAC system is evaluated for proper operation and maintenance. This inspection includes the furnace, air conditioner, ductwork, and ventilation.

7. Insulation and Ventilation: Inspectors assess the insulation in the home to ensure energy efficiency and may check for adequate attic and crawl space ventilation.

8. Appliances: Major appliances included in the sale, such as the stove, dishwasher, and microwave, are assessed for functionality.

9. Interior: The interior inspection covers walls, ceilings, floors, doors, and windows. Any visible issues, such as cracks or water stains, may be documented.

10. Attic and Crawl Spaces: These areas are inspected for signs of leaks, insulation problems, or pest infestations.

11. Basement or Foundation: The condition of the basement or crawl space and any potential moisture or structural issues are examined.

12. Safety Issues: Home inspectors pay attention to safety concerns, such as radon, mold, asbestos, or lead-based paint.

After the inspection, the inspector typically provides a detailed report that outlines their findings, including any defects or issues discovered. Buyers can use this report to negotiate with the seller, request repairs, or make an informed decision about the purchase.

A home inspection aims to thoroughly evaluate a property’s condition, identify potential problems, and provide buyers with valuable information to make informed choices in the home-buying process.

Mold In A Home

A mold inspection is crucial in evaluating and addressing mold issues in a home. Here’s a brief overview of what a mold inspection entails and the potential remedies if mold is found in a home:

Mold Inspection:

A mold inspection is a comprehensive assessment of a property to identify the presence of mold and determine its extent. It typically involves the following steps:

  1. Visual Inspection: A certified mold inspector visually examines the property, looking for signs of mold growth. This inspection includes checking common mold-prone areas like basements, crawl spaces, bathrooms, and areas with water damage.
  2. Moisture Assessment: Moisture is a critical factor in mold growth. Inspectors use moisture meters to identify areas with high humidity or moisture intrusion, which can promote mold growth.
  3. Air Sampling: Mold spore sampling is conducted to assess the air quality. Air samples are collected both indoors and outdoors to compare mold spore levels.
  4. Surface Sampling: Swab or tape samples may be taken from suspicious areas to identify the type of mold present.
  5. Report: After the inspection, a detailed report is provided, outlining the findings, including mold type and extent. This information helps in determining the severity of the problem.

Remedies for Mold:

If mold is found in a home, it’s essential to take prompt action to address the issue. The specific remedies may vary depending on the severity and extent of the mold problem. Here are typical steps:

  1. Remediation: Professional mold remediation is required for extensive mold infestations. Certified mold removal specialists use proper techniques and equipment to remove and clean affected areas safely.
  2. Fixing Moisture Issues: Addressing the source of moisture is crucial to prevent mold from returning. Remedies may involve repairing leaks, improving ventilation, and reducing humidity levels.
  3. Replacement: In severe cases, materials like drywall or insulation may need to be replaced if they cannot be adequately cleaned.
  4. Preventive Measures: Implementing preventive measures such as proper ventilation, using dehumidifiers, and maintaining a dry environment can help prevent future mold growth.
  5. Testing After Remediation: Conducting a follow-up mold test after remediation is advisable to ensure that the problem has been effectively addressed.

Lead Based Paint

The seller of any home in North Carolina, constructed prior to 1978, is required to provide a Lead Based Paint Disclosure to any potential buyer. That disclosure is designed to let buyers know of any known existence of lead-based paint, or to give the buyer the opportunity to inspect for the presence of lead based paint in the home.

In North Carolina, lead-based paint inspections are essential, especially in older homes, due to the potential health hazards associated with lead exposure, particularly for young children and pregnant women.

Lead-Based Paint Inspection Process in North Carolina:

1. Hire a Certified Inspector: The first step is to hire a certified lead-based paint inspector. In North Carolina, inspectors must be certified by the North Carolina Department of Health and Human Services (NCDHHS) to conduct lead-based paint inspections.

2. Visual Inspection: The certified inspector will visually inspect the interior and exterior property to identify potential areas with lead-based paint. They’ll look for surfaces with lead-based paint, commonly used in homes built before 1978.

3. Testing: If lead-based paint is suspected, the inspector may conduct testing. This inspection involves taking paint samples from various home areas, particularly areas prone to wear and deterioration, such as windowsills, doors, and trim.

4. Laboratory Analysis: The paint samples are sent to a certified laboratory for analysis. The lab will determine if the paint contains lead and provide the lead concentration in each sample.

5. Report: The inspector will compile a report that includes the laboratory results and a summary of their findings. This report will indicate whether lead-based paint is present and, if so, the locations and levels of lead contamination.

6. Recommendations: The inspector may recommend managing or abating lead-based paint hazards. This process could include repainting with lead-safe practices, encapsulation, or more extensive abatement if lead hazards are severe.

Red Flags for Buyers Regarding Lead-Based Paint:

1. Age of the Property: Homes built before 1978 are more likely to have lead-based paint. Buyers of older homes should be especially vigilant.

2. Chipping or Peeling Paint: Visible chipping, peeling, or deteriorating paint, especially on windows, doors, and trim, can be a red flag for potential lead-based paint hazards.

3. Cracked or Damaged Surfaces: Cracked or damaged painted surfaces can release lead dust or chips, increasing the risk of exposure.

4. Home Renovations: If the property has undergone recent renovations, it’s essential to inquire about lead-based paint testing and abatement procedures, as disturbing lead-based paint during renovations can create hazards.

5. Reports and Disclosures: Buyers should review any lead-based paint inspection reports or disclosures the seller provides. These documents can provide valuable information about lead hazards in the property.

6. Children or Pregnant Residents: If young children or pregnant women reside in the home, taking extra precautions and considering lead testing is crucial, even if no obvious red flags are present.

Buyers concerned about lead-based paint hazards should consult with their real estate agent and consider hiring a certified paint inspector to assess the property thoroughly. It’s essential to address any lead hazards appropriately to ensure the safety of occupants, especially children.

Why should I get a survey?

Do you remember in the movie, “Dirty Dancing,” where Johnny Castle (played by Patrick Swayze) told Baby (played by Jennifer Grey), “This is my dance space, this is your dance space; you don’t go into mine and I don’t go into yours?” This is a great way to think of a survey.

A survey completed by a professional will do the following:

  • Find the property corners set by stakes and identify the property lines with flags
  • Find the accurate lot size of the piece of land
  • Give a graphic representation of the property known as the “plat.”
  • Identify encroachments of neighboring properties like fences and driveways over the property lines.
  • Identify all easements on the property including utility and private easements
  • Identify any right of ways that others may have on the property.

In other words, the survey establishes the boundaries of your property, or “your dance space.”

Here at the Pate Group, we recommend a survey to every one of our clients. Without the survey, you are taking many risks that can cost you dearly. Here are our top 5 reasons for getting a survey on your new home:

  1. You might be saving money at the closing, but you could be costing yourself thousands in legal disputes should an issue arise at a later time.
  2. Many buyers think that the title insurance will cover anything that is incorrect. In most situations, that is not the case unless you have a survey completed prior to purchase and any issues remedied.
  3. Don’t assume that details from an existing survey are correct. In addition, NEVER trust the source when it is the seller or listing agent. It is the responsibility of the buyer to verify details about the property.
  4. Don’t assume that all existing easements are known. I had an example where an easement for a new construction home wasn’t going to be recorded until closing and it was not on the current plat map. It almost caused the termination of the transaction.
  5. The survey also will identify if the house is in a flood plain. Normal insurance does not cover flood damage. If the house you are purchasing is in a flood zone, you will want the flood insurance as extra coverage.

In addition to getting a survey during the Due Diligence period (inspection period), it is also a good idea to get a survey updated if you are doing improvements like building a driveway, fence or wall. In many cases, homeowners associations will require a copy of the survey when applying for approval from an architectural review committee.

A survey can also come in handy to solve boundary disputes between neighbors. There is a little expense involved, but by knowing your property lines, it will help you get along with your neighbors.

Roof Inspection

A roof inspection typically includes thoroughly examining the roofing system to assess its condition and identify any issues. This process can be necessary for homeowners, buyers, and sellers to determine the roof’s health and potential maintenance or repair needs. Here’s what a roof inspection may encompass:

  1. Exterior Assessment: The inspector will visually inspect the roof’s exterior. They will check for signs of damage, such as missing or damaged shingles, cracks, or wear and tear. They’ll also look for any debris or vegetation accumulated on the roof.
  2. Interior Inspection: In some cases, the inspector may also check the property’s interior for signs of roof leaks, which involves looking for water stains on ceilings, walls, or attic.
  3. Flashing and Vent Inspection: The inspector will examine the flashing around roof penetrations (like chimneys or vents) to ensure they are adequately sealed. They’ll also check the condition of vents, gutters, and downspouts.
  4. Shingle Condition: If the roof has shingles, the inspector will assess their condition. They’ll look for curling, buckling, or shingles that may have come loose. Damaged or missing shingles can be indicators of potential problems.
  5. Roof Deck Inspection: The inspector may access the roof deck from the attic, drone, or by walking on the roof (if safe), which allows them to check for rot, moisture damage, or structural issues.
  6. Overall Roof Structure: The inspector will evaluate the overall structure of the roof, including its slope, framing, and any visible signs of sagging or damage.
  7. Assessment of Roof Age: They will try to determine the roof’s approximate age, as the lifespan of different roofing materials can vary.
  8. Recommendations: Based on their findings, the inspector will provide recommendations for any necessary repairs or maintenance. They may also estimate the remaining lifespan of the roof.
  9. Documentation: A comprehensive report with photos may be provided to the homeowner or relevant parties, detailing the inspection findings and recommendations.

It’s important to note that the specific details of a roof inspection can vary depending on the inspector’s expertise and the type of roofing material. Regular roof inspections can help homeowners maintain their roofs, prevent leaks, and extend the life of this crucial part of a home.

HVAC Inspection

An HVAC (Heating, Ventilation, and Air Conditioning) inspection is critical to assessing the condition and functionality of a home’s heating and cooling systems. Here’s an overview of the process and red flags that home buyers should be aware of:

Process of an HVAC Inspection:

  1. Visual Inspection: The HVAC inspector starts with a visual examination of the heating and cooling systems. They check for visible signs of damage, wear, or improper installation. The inspection includes the furnace, air conditioner, heat pump, and associated components.
  2. Testing: The inspector tests the HVAC system for proper operation. This part of the inspection involves turning on the heating and cooling systems to ensure they function as expected. They check for adequate airflow and assess temperature output.
  3. Air Duct Inspection: Inspectors may inspect the air ducts for leaks, blockages, or signs of damage. Proper ductwork is essential for efficient HVAC operation.
  4. Thermostat Inspection: The thermostat is examined to ensure it functions correctly and accurately controls the temperature.
  5. Safety Checks: Safety features of the HVAC system are evaluated, including checking for gas leaks (if applicable), ensuring proper ventilation for combustion appliances, and inspecting electrical connections for safety.
  6. Filter Assessment: The inspector may check the condition of the air filters and recommend replacement if they are dirty or clogged. Clean filters are essential for efficient HVAC operation and indoor air quality.
  7. Efficiency Evaluation: In some cases, inspectors may assess the energy efficiency of the HVAC system. This analysis helps home buyers understand potential energy costs associated with the system.

Red Flags for Home Buyers Regarding HVAC:

  1. Old or Outdated Systems: If the HVAC system is significantly old or outdated, it may be less energy-efficient and more prone to breakdowns. Home buyers should consider the age of the system and whether an upgrade or replacement is needed.
  2. Inconsistent Heating or Cooling: If there are noticeable temperature variations between rooms or floors, it could indicate problems with the HVAC system or inadequate insulation and ductwork.
  3. Strange Noises or Odors: Unusual noises, such as banging or squealing, or strange odors from the HVAC system are red flags. These could indicate mechanical issues, blockages, or even safety concerns.
  4. Lack of Maintenance Records: If the seller cannot provide records of regular HVAC maintenance, it may suggest neglect, and the system may not be in optimal condition.
  5. High Energy Bills: If the current homeowner has experienced unusually high energy bills, it may be a sign of an inefficient HVAC system that needs attention.
  6. Frequent Repairs: If the HVAC system has a history of frequent breakdowns and repairs, it may be a sign that it’s nearing the end of its lifespan and needs replacement.
  7. Non-Compliance: Ensure the HVAC system complies with local building codes and regulations. Non-compliance could result in costly upgrades or repairs.
  8. Mismatched Components: In some cases, HVAC systems may have mismatched components due to improper installation or replacements. Incompatible components can affect the efficiency and performance of the system.

An HVAC inspection involves assessing the heating and cooling systems, ductwork, safety features, and overall functionality. Home buyers should be alert to red flags such as old systems, inconsistent performance, unusual noises, and a lack of maintenance records, as these can impact the comfort and efficiency of the home.