"Jack and Jill went up a hill to fetch a pale of water"...in 2017...in North Carolina. Buying and selling a home with a community well...

Back in the 1800s, many homes had shared community wells for their water supply.  Many residents of Kenya and third world countries still utilize this system.  In 2017 America, you don’t come across community wells often…except if you live on acreage out in North Carolina, next to the Amish community like one of my good friends.

Recently, I received a call from one of my long term high school girlfriends and her husband, asking for some advice on selling their home in North Carolina, which also utilizes a community well for their water supply.  Their water supply goes a little like this:

  1. Public water and sewer are not available in their neighborhood, so the home shares a community well with 5 other residents.

  2. My friend’s house does not have its own pump, private septic, or drain field.

  3. The water bill comes from the power company, who has rights to the community well.

  4. The community well sits on one man’s property, and he’s paid the bill for EVERYONE for the last 10 years ($50 per month), until my friend and her husband moved in.

  5. When the man, whose property the well sits on, got tired of paying the water bill for all 5 residents and stopped, my friend and her husband were sort of forced to pick it up. Since then, they have been paying for water for EVERYONE.  The water system is typically regulated by the state and has to meet all government guidelines, but I am not sure what ball got dropped over on this side of town, but this was/is not being regulated.  Apparently, after further research, this small country community was supposed to have an “HOWA” or Home Owner Well Association.  All home owners in this community were supposed to pay a monthly fee for water to the HOWA President, and an escrow was to be in place for well repairs. Obviously, this was/is not being done, and although my friends tried to head this HOWA group up, they weren’t able to get any participation from the community residents. In this case, the next step is to place a small lien against the homes of the residents who don’t pay their water portion, but that was more trouble than it was worth to them. 

My friend proceeded to tell me, that of course, they had to disclose this water situation in their listing.  The day she called me, they had received 3 offers in the same day.

  1. Offer one wanted a pump installed.  ($4k and up cost to seller)

  2. Offer two wanted their own well installed.  ($6k and up cost to seller)

  3. Offer three offered $10k over list price and didn’t ask for anything concerning the well situation. SCORE!!! We have a winner.  As you can see, this individual was financing their well concerns into the price, and I anticipate they will recoup this cost one day when they go to sell.  

So, in conclusion.  Selling or buying a home with a community well can be tricky.  My advice would be to 1) Make sure BEFORE BUYING, that the state regulates your community well or shared water system, so you don’t end up in the situation above, where you are paying everybody’s water bill; 2) Don't pay everyone's water bill. :)

Lauren Dorrity
THE TEN COMMANDMENTS when applying for a Real Estate Loan!
  1. Thou shalt NOT change jobs, become self-employed, or quit your job.

    This is not the time to become an “entrepreneur”, to get mad at your boss and tell them to kick rocks, or to decide to become a dolphin trainer after 10 years in manufacturing.  Stay put until after closing.

     

  2. Thou shalt NOT buy a car, truck or van (or you may be living in it)!

    Someone once bought a big ole F150 right in the middle of their loan application process.  What did it do? It killed their debt to income ratio, their loan, and their house purchase.  Wait till after you purchase the home to get a new car.

     

  3. Thou shalt NOT use charge cards excessively or let your accounts fall behind.

    Don’t decide to stop paying your bills at your apartment just because you are purchasing a home.  This will throw a wrench in your loan application when suddenly, your credit score is as low as your cholesterol level! 

     

  4. Thou shalt NOT spend money you have set aside for closing.

    Taking a celebratory trip to Vegas a week before closing to mark your next steps into adulthood, and blowing all your closing cash at the casino, is no bueno.

     

  5. Thou shalt NOT omit debts or liabilities from your loan application.

    Once upon a time, a husband and wife decided to purchase a home.  During the loan application process, husband finds out wife has 2 secret credit cards she’s been jacking up to the sky for the last 3 years. What happened?  They almost got divorced.  What else happened?  The loan fell through and the husband had to reapply with his name and credit only.  

     

  6. Thou shalt NOT buy furniture or appliances.

    Sure, that $2,300 sectional would look AMAZING in your new living room.  But DON’T GET IT until AFTER you purchase your home…unless you use cash from a buried tin can in the back yard.

     

  7. Thou shalt NOT originate any inquiries into your credit.

    Thinking about applying for a new credit card just to get 10% off at Belk?  Don’t. 

     

  8. Thou shalt NOT make large deposits without first checking with your loan officer.

    When suddenly, out of nowhere, $15,000 shows up in your bank account. This will throw up red flags during your application and could delay theprocess.  Ask permission first.  

     

  9. Thou shalt NOT change bank accounts.

    I’m not sure why, just don’t do it.

     

  10. Thou shalt NOT co-sign a loan for ANYONE!

    Cousin Fred has had a rough year.  He needs a co-signer for a mattress at Rent-A-Center.  I know you want to help cousin Fred out, but DON’T DO IT!  Don’t let cousin Fred’s lack of $250 and unfortunately circumstances blow up your house investment plans.  As an alternative, offer to let him rent your couch for $10 a night until closing. 

Lauren Dorrity
“Home Staging is for the Birds” …said no smart home seller ever!

Think home staging is a waste of time? Think again.

Recently, my coworker told me her brother sold his house in Charleston.  The buyer loved their décor so much (German accents), not only did they get a full price offer, but the buyer also bought almost all the interior items as well.  The buyer even cried while making her offer because she was so touched by the connection she had to the décor.  Sounds extreme doesn’t it? It happens...and not just in Charleston!!!

Just last month, in Greenville, my sister sold her townhouse.  Not only did she also receive a full price offer within a week, but the buyers wanted to mimic her entire decor look…exactly down to where she hung things on the walls. (she wasn’t willing to sell the furniture like the seller above) I had several Realtors who dogged me about the listing price.  I even had a quick flashback to k-5 when one Realtor got so mad at me about the price, she hurled insults and called me names. LOL Professional right? Shortly after, the home appraised at or above list price.  To date, my sister’s townhome is the highest priced sell in the neighborhood.

I could share many others stories, but it comes down to it being a proven fact, that well decorated homes sell for 10% more.  Think about it this way.  Unless you are an investor who flips ruff houses, as a regular Joe/Jane wanting to find a home to live in, you want to be able to see yourself happy in a cozy nice home/space.  If you walk into a house, and there are funky smells, dark rooms, Christmas décor up in Spring, and messes everywhere…why would you want to live there?  Because of the potential you see in it?  Maybe! But typically, most folks have trouble seeing through all this to the true potential.

Overall, clean, well-groomed homes are ESSENTIAL to selling fast and selling strong. To learn more, read the 2017 Profile of Home Staging on the National Association of Realtors website.  https://www.nar.realtor/reports/profile-of-home-staging

Lauren Dorrity
Leasing Commercial Space - The Difference Between a NNN Lease and a Gross Lease
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Renting commercial space is a completely different ballgame than renting a house or apartment. The success or failure of the Tenant (Lessee) and their business may ride on certain terms of the lease. Before you approach a Landlord (Lessor), you should understand how commercial leases differ from the more common residential leases.

First, here are the main distinctions between Commercial and Residential leases:

  • No Standard Lease Form – There are a variety of commercial lease formats. Each commercial lease is modified to the landlord and tenant’s needs, and can range in length from 2-80 pages. Therefore, you need to carefully examine each commercial lease agreement offered to you.  On average, it normally takes 20 hours to review a commercial lease agreement, and that’s if the negotiations go smoothly.
  • Less Consumer Protection Laws - Commercial leases are not subject to most consumer protection laws that govern residential leases - by example, there are no caps on security deposits or rules protecting a tenant's privacy.
  • Long-Term and Binding - You cannot simply break a commercial lease. Depending on what circumstances arise, along with your lease language, there are potential outs, but it is a legally binding contract, and a good deal of money is usually at stake.
  • Negotiability and Flexibility - Commercial leases are commonly subject to much more negotiation between the business owners and the landlord.  Depending on the type of business leasing this space, sometimes special language is tailored specifically for each Tenant and their use. Landlords are often eager for tenants and willing to extend special offers including free rent, TI allowances, waiving security deposits, and more.

Secondly, there are multiple forms of commercial leases. The most common ones are listed below:

Triple Net (NNN) - The term NNN Lease, or “Net Net Net” Lease, refers to a lease where the Tenant is responsible for not only the rent, but the operating expenses also (base rent + NNN).  The NNN, refers to the:

  • N – Common Area Maintenance (CAM): Typically, under CAM, the Landlord covers expenses related to parking lot/sidewalk cleaning, landscaping, debris removal, snow/ice removal and exterior lighting for the shopping center, etc.
  • N – Real Estate Taxes:  These fluctuate as value of the center rises.
  • N – Insurance: The landlord’s insurance on the common areas, the structure/exterior, loss of rental insurance, or any other item the Landlord wants to insure. The Tenant’s insurance should be on furniture/fixtures/equipment and for claims occurring inside the space leased.

In a NNN lease, the Tenant bears the entire risk of unexpected changes in operating expenses.  These expenses can change/fluctuate year to year and is most often a direct pass through expense of the actual costs to maintain the center.  Your NNN lease should give you the right as the Tenant to request back up documentation for the Landlord's year expenses.  Also, always request a CAP in the lease so the Landlord NNN increases aren't open ended.  

What makes the Triple Nets so expensive? The number one reason is property taxes. Just like a house, when a building is sold, the title changes hands, or building is re-built or remodeled, the county tax assessor will adjust the value often times by raising the tax base. This tax base is then passed on to the Tenant (Lessee) under a triple net lease.

Some leases want the Tenant to submit a reserve fee of $500.  This benefits the Landlord only, in that, in the case the NNN goes up, he’s not in the hole.  Why is the non-beneficial to the Tenant?  The Landlord is holding your money interest free.  We strike this from leases.

 Other formats:  Single Net Lease (N); Double Net Lease (NN)

Gross Lease (modified lease) – This is also known as the Tenant friendly Lease.  This is a lease where the Landlord assumes the operating expenses. A Gross Lease is generally an all-inclusive “out the door” payment structure. The Landlord is one who bears the risk of unexpected changes in operating expenses.

So, before you sign anything, make sure you understand and agree with the basic terms of the lease, such as the amount of rent, the length of the lease and the configuration of the physical space.  Don't forget, unlike leasing an apartment in downtown Greenville, almost everything is negotiable with a commercial lease.  The negotiation process doesn't start until someone says "no". 

Lauren Dorrity
First Steps for Buying Your First Home!

So you have decided to accomplish your goal of buying you first home, but where do you start?

You need only 2 things to get started...

#1 Get Pre-Approved

You will need a pre-approval letter from a mortgage lender to accompany any offer you make on home.  What is this?  It is a letter from your lender stating you are a legit buyer and this is the amount you can spend.  To be frank, a lender will approve you for as high of a loan as they possibly can, but only YOU know what size mortgage you are comfortable with, what other debts you have, and what your true budget will allow.  Keep in mind, you don't want your mortgage to exceed 1/3 of your gross income MAX.  1/4 is ideal, and the standard rule of thumb, also known as the "housing ratio" or "front-end ratio", is 28% of income before taxes, so don't overextend yourself.  Remember, on top of your mortgage, is your taxes and insurance payment, which will tack on a few hundred dollars more to your monthly payment.

How do I get a pre-approval letter?  You obtain this from a mortgage lender.  A mortgage lender can be your local bank, credit union, or a mortgage broker. It is important to realize that you have the opportunity to shop for a great lender who not only provides good interest rates, but a lender who is dependable and that you feel comfortable with.

To apply for a pre-approval letter/mortgage, you will need several necessary documents like current tax returns, proof of employment, pay stubs, and any other financial statements a lender may need to determine your new mortgage obligations. Once pre-approved, you will receive a pre-qualification letter stating the amount you want/can spend. This letter will also explain the type of loan you are getting, such as a Conventional Loan, USDA Loan (100% financing) VA Loan (100% financing) or FHA Loan (96.5% financing.) Your trusted mortgage lender will help you determine the best loan for you, as well as help you determine the amount of down payment needed for your loan option. 

Some loans require absolutely NO down payment! Hannah recently had a buyer this summer who qualified for an USDA Loan ,which is a program offering 100% finance in rural areas. Hannah helped her buyer find a home in a USDA area that met her desires perfectly. When representing this buyer, Hannah negotiated in the deal that the seller would pay all of the buyer's closing costs. At the end of negotiations, they got the home for the price they wanted, with all the closing costs paid. On the day of closing, the buyer didn't bring any money to table, and she bought the home with NO down payment and NO closing costs. 

These kind of good deals are out there and it is a lot easier than you realize.

#2 Get a GREAT Realtor!

Think its expensive to engage a professional?  See how expensive it gets when you engage an amateur!  Or worse...go at it without a Realtor at all!!!  The "fake it till ya make it" quote does not apply here!!  Buying a home without a Realtor is like going to court without an attorney.  Why in the world would you want to make one of the largest purchases in your lifetime without expertise behind you.   "Even with real estate experience, and while obtaining my SC real estate license, I, Lauren, still used a Realtor when I purchased my first home.  Why?  Because I wasn't about to pretend I knew what I was doing when making the largest purchase of my life.  I had no clue. Luckily, I had an experienced "go-getter" Realtor to help me through the process."  Unless you have a LOT of experience in real estate, and have purchased before, you should not freestyle this process alone.

A solid buyer agent is an absolute must when buying your first home.  Your first home holds so many precious memories and accomplishments. We understand the importance of the space you will call home. As Realtors, we are here to represent you and protect your interests during the process of buying. We make sure everyone stays on track and upholds their obligations during that important real estate transaction.

At Palmetto Property Brokers we know Upstate SC. We know what areas qualify for USDA Loans. We also know what homes will pass VA Loan or FHA Loan inspections. Not all homes will pass inspections for a government funded loan, but we can help you determine what will be good fit. Some buyers want a fixer upper, and some want a turnkey home.  There are perks to both options.  However, when it comes to flipping, regardless of how easy HGTV makes a fixer upper look,  flipping a home is not for everyone. Hannah & Lauren are honest professionals who are willing to tell you when something is not the best deal or the right fit for you. You need Realtors like us who know construction, and can point out the major issues you may overlook.

Hannah & Lauren will walk you through the entire buying process step by step, from the home inspection, to appraisal, and at closing.  And our job doesn't end on closing day.  You may call on us for just about anything, like finding that mover, painter, or transferring your utilities.

We want to help you and we aim to make the process as easy as possible. Give us a call today!  

Lauren Dorrity
Equifax Security Breach - Protective Measures to Take if you were one of the 143 MILLION Americans affected.

If you have a credit report, there’s a good chance that you’re one of the 143 million American consumers whose sensitive personal information was exposed in a data breach at Equifax, one of the nation’s three major credit reporting agencies.

Here are the facts, according to Equifax. The breach lasted from mid-May through July. The hackers accessed people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also stole credit card numbers for about 209,000 people and dispute documents with personal identifying information for about 182,000 people. And they grabbed personal information of people in the UK and Canada too.

There are steps to take to help protect your information from being misused. Visit Equifax’s website, www.equifaxsecurity2017.com. (This link takes you away from our site. Equifaxsecurity2017.com is not controlled by the FTC.)

  • Find out if your information was exposed. Click on the “Potential Impact” tab and enter your last name and the last six digits of your Social Security number. Your Social Security number is sensitive information, so make sure you’re on a secure computer and an encrypted network connection any time you enter it. The site will tell you if you’ve been affected by this breach.
  • Whether or not your information was exposed, U.S. consumers can get a year of free credit monitoring and other services. The site will give you a date when you can come back to enroll. Write down the date and come back to the site and click “Enroll” on that date. You have until November 21, 2017 to enroll.
  • You also can access frequently asked questions at the site.

Here are some other steps to take to help protect yourself after a data breach:

  • Check your credit reports from Equifax, Experian, and TransUnion — for free — by visiting annualcreditreport.com. Accounts or activity that you don’t recognize could indicate identity theft. Visit IdentityTheft.gov to find out what to do.
  • Consider placing a credit freeze on your files. A credit freeze makes it harder for someone to open a new account in your name. Keep in mind that a credit freeze won’t prevent a thief from making charges to your existing accounts.
  • Monitor your existing credit card and bank accounts closely for charges you don’t recognize.
  • If you decide against a credit freeze, consider placing a fraud alert on your files. A fraud alert warns creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you.
  • File your taxes early — as soon as you have the tax information you need, before a scammer can. Tax identity theft happens when someone uses your Social Security number to get a tax refund or a job. Respond right away to letters from the IRS.

Visit Identitytheft.gov/databreach to learn more about protecting yourself after a data breach.

https://www.consumer.ftc.gov/blog/2017/09/equifax-data-breach-what-do

Lauren Dorrity
Buying vs. Renting in Greenville, South Carolina
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There are pros and cons to buying and renting, and it depends on your disposable income and preferred lifestyle. 

Here are 3 Reasons buying is a great option! 

1) Build that equity: Your home should increase in value over time, so you will have the opportunity to build equity. Unfortunately, renting will only put money in the pocket of your landlord.   Home equity is the value of ownership built up in a home or property that represents the current market value of the house less any remaining mortgage payments. This value is built up over time as the property owner pays off the mortgage and the market value of the property appreciates. Allowing you the potential flexibility to take out a second loan for home improvements, tuition, emergency expenses and more. Many people consider their home equity as a savings account or investment.

2) Living your way: As a homeowner, you can delight in the freedom to paint the walls, wallpaper a bedroom and landscape as you’d like, knowing that a landlord won’t be calling in to express his objection to the improvements. The walls and grounds are yours to enjoy. What’s more, you can choose to own pets, hire your own contractors, and move to a new home according to your time frame—not that of the lease.

3) Security and Pride: You will gain a sense of security knowing that you have a place to call home. You will not be at the mercy of a landlord's decisions of renewing your lease and possible fees that come with lease renewals. You will have that home to build memories of your favorite family traditions.  Most of all you will be able to pride yourself in accomplishing that dream of owning a home. 

Many folks think: "Well what if I own a house and lose my job?"  Many may panic at this idea, and rightfully so, but there are solutions to everything.  Don't let that scare you out of purchasing a home.  For others who like to rent, there is always a renter not far away who will rent or lease your home for almost twice what your mortgage is.  This not only covers your mortgage payments and protects your credit during a potential hard time, but also allows you some extra income as well.

As Realtor professionals of the Upstate SC, we can help you locate a creditable and local Mortgage Lender to get you on the right path of purchasing that perfect home. We also know the area so well that we can help you get into that great neighbor who allows you to live the life you have dreaming of.  

Contact Hannah and Lauren for more perks of buying in the Upstate SC! 

Lauren Dorrity