Jan 26, 2010 – A Special Note on Outer Banks Condominiums for Sale

Condominium ownership offers some very clear advantages for out of town homeowners, however, lending limitations have recently (Dec 30, 2009) been put in place that may affect your purchase. Although cash buyers are not affected by these changes, we ask that you consider the reasons behind lender caution on new condominium communities before deciding to buy with any source of funds.
New vs Established: Developers typically control and direct an HOA representing their projects until a super majority of units are sold. At that time, the HOA and common amenities/common space is ceded to Homeowner control and the HOA elects individuals or a management company for accounts payables and receivables. On the Outer Banks, the HOA of a condo community would normally be responsible for the following: Common insurance (liability for the grounds and amenities plus hazard and flood for “outside walls”); Parking lot maintenance and area lighting, collection of dues and maintenance of financial records; pool/tennis/workout facilities and staffing; community septic system and ground maintenance.  When a project is 75%-90% sold out, the developer transitions this to an elected Board of Directors made up of homeowners.  Until completely sold out, the developer will also be responsible for contributing its share of HOA dues to pay for those things listed above.
New condo projects typically will have some finished and some future amenities for community ownership and use. In new projects the health of the developer is critical because finishing or maintaining amenities and unsold units will rely on the developers financial health. A developer who is not financially sound may be unable to obtain funds for future planned amenities, or even worse, may be unable to maintain the unsold units and existing amenities under its control.
Established communities where more than 90% of units are already sold to individuals are not subject to these pitfalls. Any individual owners who fall into delinquency are subject to liens by the HOA. If they fail to pay, the HOA has the right to foreclose and force a sale to collect HOA dues. This rarely happens, however, because delinquent homeowners will normally pay to prevent this. Should a lender foreclose on an individual homeowner’s unit, the HOA would be paid through this process before the lender could take clear title.

Worst Case Scenario:  Imagine a condominium project whose Homeowner Association is directed and controlled by an unsound developer. Common insurance and developer shares of HOA dues may go unpaid. Any default by the developer on its development loan could also lead to foreclosure of common amenities and developer owned units by the lender. We have seen this happen in Waterside Villages in Grandy in 2009. Unfinished units, streets and pool/tennis facilities were taken over by BB&T and are still held in limbo. Many homeowners there, faced with an impossible situation and with no chance of resale at any price, simply walked away from their homes and were also foreclosed on individually by their mortgage lenders. A lapse in common insurance on any project would prompt an immediate notification of each homeowner’s mortgage company. All mortgages require collateral for the loan to be properly insured creating an overwhelming burden for the homeowner. Remember, “outside wall” hazard and flood insurance (aka The Master Policy) could not be taken out on individual condo units so a small number of homeowners could potentially be forced to cover all unsold units and grounds at their expense.
Threshold for Lending on New OBX Condos: The biggest factors making loans available or not for condo purchases are outlined below. These are subject to change as federal guidelines change, however, they are current Dec 30, 2009.
•   Loan to Value must not exceed 90% for primary home occupancy and 75% for second home occupancy
•   All Units, amenities and common areas within the project must be 100% complete with no additional phasing
•   Non-residential use must not exceed 20% of total square footage (such as retail or office space or amenities such as workout rooms)
•   90% of the project must sold and closed
•   30% combined maximum ownership by various investors
•   HOA must be controlled by unit owners NOT developer or lender
•   No single person or entity may own more than 10% (this includes bank ownership due to foreclosure on the developer)

The following page will name some specific communities that are potentially affected by these new, stricter requirements. Our hope is that after reading this material our condo buyers and investors will have a better understanding of challenges to newly built condo purchases as well as a benchmark for investing with cash in a new condo complex. The Dean Agency has compiled this information and any of our brokers will gladly discuss it in detail and in reference to specific communities on the Outer Banks of NC.
The Dean Agency recognizes condo ownership as an excellent option on the Outer Banks and in no way discourages condominium purchases. Many of our established communities offer excellent quality of life, sound investment opportunities and are well managed by their respective HOAs. Before purchasing any North Carolina condominium buyers are encouraged to review condo declarations in details, as they are entitled to by NC law. The Dean Agency brokers can provide these documents in advance of any purchase offer as well as exploring the potential for loan difficulties. Because real estate on the Outer Banks is unique in nature we look forward to answering our prospective buyers’ and clients’ questions in detail.
Wise investment decisions are the result of fact finding and carefully weighing options. Your Dean Agency broker is a valuable resource in this process. We look forward to speaking with you.
See you at the beach!

John Dean, Broker in Charge
The Dean Agency
Outer Banks Real Estate Brokers

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Outer Banks & Nags Head NC Foreclosure Homes and Bank Owned Property for Sale. Contact our REO specialists - oceanfront, golf course, luxury bank owned homes & foreclosures for sale. Our Brokers will email current OBX foreclosure list. Bank Owned- REO OBX

Search Outer Banks Shorts Sales Here.

Short Sales are beginning to take off from Corolla to Nags Head. Search the link above to see the best deals on Outer Banks Short Slaes. The Dean Agency offers the most complete information and a free, easy search of Short Sales. See short sale listings in Corolla, Carova, Manteo, Nags Head, Duck, Southern Shores, Kill Devil Hills, Colington, Rodanthe, Buxton, Frisco, Hatteras.  

The Dean Agency has ALL Nags Head, Corolla, Hatteras and other Outer Banks Foreclosure Listings. No registration is required to search! www.OuterBanksHomesforSale.com offers bank owned Outer Banks homes, with maps and larger photos for buyers to search. What makes this site unique is that buyers and investors can now search Sold Data to understand the market much better. Registration is required to search sold data - MLS rules require this. No other Outer Banks foreclosure website can offer this. Anyone searching all about obx foreclosures, short sales and listings should check it out and use it as a resource.

Outer Banks Short Sale - Real Examples

Click here to See ALL Outer Banks Short Sales

FOR IMMEDIATE RELEASE

PR Log (Press Release) – Jan 08, 2010 – After 2 frustrating years of attempting short sale from Nags Head to Corolla to Hatteras, The Dean Agency sees 2010 as a year when these sales will greatly improve. Broker in Charge, John Dean explains,” After two years of chaos in short sale on the Outer Banks, a better system for success is in place. Buyers and sellers should understand though, that these transactions will never be as simple as foreclosure sales or straight private sales. By mid-2009, we had developed much better ways of getting these closed and 2010 looks even better.”

The Dean Agency has already closed millions of dollars in short sales but believes these distress sales will take a much bigger role in ‘10 numbers.

A short sale is any net sale amount that is less than the principle amount owed by the borrower. Additionally, most sellers can’t or won’t cover the short fall and the transaction then requires the seller’s lender approval prior to closing. Lender approval has been an enourmous challenge for 2 main reasons. First, many lenders were reluctant to forgive or term out the shortage. Secondly, sellers and their agents have had an impossible time finding the correct department and personel to negotiate with at the various lenders.

Make no mistake, these transactions are win win for Buyers and Sellers. The Dean Agency supplied 3 examples below to illustrate the value in short sales on Outer Banks NC. The Dean Agency has maintained a leading role as buyer brokers and listing brokers in all distressed sales (foreclosures & short sales) since 2007.

REAL LIFE EXAMPLE - Adam Burkhimer, Senior Broker at The Dean Agency recently listed and sold a short sale property in a Hatteras community. This oceanside beach house was built in 2005, 2600 square feet and fully furnished. The seller’s combined debt exceeded $820,000, although the current market value was around $450,000. After 3 months of negotiation on the seller’s behalf, Burkhimer got lender approval for a sale around $450,000 fully furnished and still in the vacation rental program. The transaction closed in September, releasing the seller from any further obligation. The buyer aquired an incredible bargain with around a 10% gross return on investment.

REAL LIFE EXAMPLE - John Dean, Broker in Charge recently closed a short sale, representing the buyer on an oceanfront short sale on Hatteras Island. Just weeks from foreclosure on the property, Dean’s buyer aquired this 4 bedroom oceanfront home, fully furnished for just $420,000. The house is adjacent to Hatteras National Seashore and has stunning ocean and sound views. “This price would have been unheard of in any other circumstance,” says Dean. His buyers made their offer in August 2009 and the transaction closed in January 2010. “Yes, it did take a long time and my buyers had to be very patient, but how long could most people wait to save $100,000? My buyers got a lower mortgage rate at closing than they had been promised in August so they won twice on this one,” Dean relayed.

REAL LIFE EXAMPLE - Burkhimer closed on an oceanfront short sale December 2009 in Nags Head representing the buyer. Burkhimer found his client a premium 7 bedroom, oceanfront Nags Head home with an elevator and hot tub in Village at Nags Head. The cash offer for $1.2 million was submitted in mid-October 2009 and closing occurred mid Dec 2009. Burkhimer explains the speed of this short sale,” We made a cash offer and upped the primary offer from another buyer that knocked them out and put my buyer in first place. The seller’s bank gave us 10 days to close or they would foreclose on the seller’s property. My buyer was prepared and made it happen.” The rental income is over $100,000 per year and the buyer plans on using the house quite a bit in the off season. “This buyer was really savvy and this was his third offer on distressed property on the Outer Banks,” said Burkhimer. “We spent 16 months to place this buyer in the exact right situation.”

“The Dean Agency has better prepared clients due to the information we provide, financial and statistical analysis we generate for them and the usefulness of our website. This is why our guys consistently get the best deals on investment properties,”  explained Anna Hunt, senior Broker when asked the secret to success in distress sales.

To enlist The Dean Agency’s services visit them online at www.OuterBanksHomesforSale.com or call 1 866 340 1166.

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Outer Banks & Nags Head NC Foreclosure Homes and Short Sale Property for Sale. Contact our REO & Distressed Property Specialists - oceanfront, golf course, luxury bank owned homes & foreclosures for sale. Our Brokers will email current OBX foreclosure list. Bank Owned- REO OBX

2010 Outlook for Foreclosure Sales - Outer Banks Real Estate

THE DEAN AGENCY

FOR IMMEDIATE RELEASE

PR Log (Press Release) – Jan 13, 2010 – The supply of foreclosure properties is slightly down as of January 2010 - 57 active foreclosure listings on the Outer Banks. This is NOT due to a slowdown in foreclosures on the Outer Banks. In many cases properties are being delayed in their sale due to the explosion in bankruptcies by borrowers. In other cases banks are overwhelmed and simply cannot deal effectively with the process of getting bank owned property to market. Bankruptcy typically delays marketing a minimum of 5 months.

Non-bankruptcy timeline for The Dean Agency is as follows: Notice from lender that we have been chosen to represent them on a given asset arrives with a laundry list of tasks to complete within 1 week. These include determining occupancy status, preparation for eviction of tenants or borrowers,  a thorough inspection of the physical condition and repair recommendations and finally, a lengthy evaluation of probable market value. A second opinion by another broker and then a true, certified appraisal will all contribute to the list price. After this initial flurry of activity there is typically a 30-90 day time period before we can list and legally advertise the property. Of course, this varies between lenders and each property tends to have its own conditions and circumstances that also contribute to this.

I say probable market value  because a property over $530,000 may require very difficult financing for a potential buyer or by contrast, we may quickly find a cash buyer - availability or lack of financing options can greatly affect ultimate selling price. Properties under $400,000 will typically be much easier to price accurately and predict marketing time more correctly. This is because they will be financed with conforming (non-jumbo), conventional fixed rate loans that are much more widely available in today’s credit depleted loan market. Cash offers will also be much more likely in this price range. A desirable resort property will have a VERY short shelf life - maybe 10 to 15 days.

THE INCREASE IN MULTIPLE OFFERS: “Bring your highest and best offers by 5 PM”, words that every Buyer’s Agent hates to hear. We have seen this with increasing frequency on desirable foreclosure properties and short sales in the last 6 months. We prepare our clients for this situation in advance for one simple reason; we will bring them the very best returning investment properties and these will certainly receive multiple offers within a few days of listing or after a dramatic price reduction. This is a very precarious time for buyers because the “best deals”, as we define them,  totaled only about 12 pieces of real estate in 2009.  I estimate that the entire 2009 market had only 50 highly qualified and ultra savvy buyers at any one time aggressively searching and ready to make offers on some or all of these until they made an acquisition. That translates to about 4 competing offers per “best deal.” That also translates into 3 disappointed, “day late and a dollar short” buyers per “best deal.” Our successful clients on these properties took our guidance on being prepared PRIOR to even identifying a property of choice. This allowed them to move within a day, and sometimes within hours and beat out other buyers from other firms. Because of new pricing strategies by lenders on bank owned property that developed late in 2009, multiple offers are a reality for anyone seeking the “best deals” on the Outer Banks.  For a definition and examples of “the best deals” as The Dean Agency defines them, consult with a broker at 866 340 1166. If you choose to become a client of The Dean Agency you will be well prepared to navigate a multiple offer situation.

NEW PRICING STRATEGIES ON REOS FOR 2010. The foreclosure market seems to be ever changing. The biggest change for buyers is dealing successfully with new list price strategies. With everyone afraid to call the bottom, lenders are under pricing assets to create an auction like climate in which they will receive multiple offers usually exceeding list price. This clearly rules out leaving money on the table for lenders and has been very, very successful. In most cases too, this has been a win/win situation. Most buyers were able to end up with over 9.5% gross return on purchase price. This is sufficient to get positive cash flow when properly managed. The “best deals” of course, will exceed this.

DON’T BE THIS GUY! In 100% of the “best deal” scenarios there is at least 1 grossly misinformed buyer that will always lose out. Here is a generic profile of this buyer so that you can avoid being a sure loser in the race for the best deals. This buyer will invariably ignore all sales data, comparable sales and advice by the buyer’s agent. This buyer has a set percentage of list price they will offer, let’s say 70%. This unfortunate buyer type cannot differentiate value from price. If he receives a discount on price he perceives value - what a terrible approach to investing! His agent will likely search out “soft” sellers whose agents indicate greater flexibility so this unwise buyer can feel he got a bargain. His agent will avoid seeking value because this buyer is not searching for value, he is searching for a discount. A wiser buyer will allow his agent to establish value OUTSIDE of the seller’s number. More specifically, who wants a 30% discount on a house that is 50% overpriced? The Dean Agency establishes value for our clients’ consideration based on a handful of independent factors. If you are a true investor you seek value, not discounts. Value may mean paying 6% or 7% over list price in a multiple offer, highest and best situation to acquire a property 10-15% undervalued. As hard as this may be to swallow, acquiring a well valued property often means competing aggressively with other buyers and winning. So with regard to unwise buyer, seeking discounts in lieu of value - DON’T BE THAT GUY!

HIERARCHY OF OFFERS - Not all offers are created equally, especially with regard to bank owned and foreclosed property. Banks will show preference to a properly crafted offer and many times accept it over higher priced offers. To find out what constitutes a well crafted offer for a particular REO property contact your Broker at The Dean Agency. We do not publish that information as it is proprietary and is not “one size fits all.”

THREE TYPES OF FORECLOSURE SALES - There is no trick to finding foreclosures on the Outer Banks. There are three ways to buy a bank owned property. First is the courthouse auction. This is only for the most seasoned, professional investors because the opportunities for disaster are many. You could easily buy a $100k house with a $50k lien - not great investing. There are NO protections for the buyer in this method so all the burden is on you. You may find this is a very expensive learning curve. Secondly, you can attend foreclosure auctions. This has not produced very many sales in our market although there have been many. Reserves are set high and few bidders ever make acceptable bids. Expect to pay a large 5% or more Buyer’s Premium to the auctioneer on top of purchase price. Expect to do all inspections prior to the auction as well. Losing your earnest money deposit becomes more likely at auction as well. Title issues and liens will be resolved for the most part, unlike the courthouse auction. The third and most straightforward method to purchase foreclosures through a broker when listed on MLS. Buyers can retain all the normal NC protections for buyers, providing they use a Broker specializing in bank owned property who can craft a protective offer. The other advantage is transparency - you can easily search all foreclosures at http:// www.thedeanagency.com and compare your wants and needs. We prefer this method because our buyers are better informed about the property and better protected by NC law.

Any serious buyer should have an experienced REO broker working for them in this fast moving market.

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Outer Banks & Nags Head NC Foreclosure Homes and Bank Owned Property for Sale. Contact our REO specialists - oceanfront, golf course, luxury bank owned homes & foreclosures for sale. Our Brokers will email current OBX foreclosure list. Bank Owned- REO OBX

Outer Banks Short Sale - Real Examples

FOR IMMEDIATE RELEASE

PR Log (Press Release) – Jan 08, 2010 – After 2 frustrating years of attempting short sale from Nags Head to Corolla to Hatteras, The Dean Agency sees 2010 as a year when these sales will greatly improve. Broker in Charge, John Dean explains,” After two years of chaos in short sale on the Outer Banks, a better system for success is in place. Buyers and sellers should understand though, that these transactions will never be as simple as foreclosure sales or straight private sales. By mid-2009, we had developed much better ways of getting these closed and 2010 looks even better.”

The Dean Agency has already closed millions of dollars in short sales but believes these distress sales will take a much bigger role in ‘10 numbers.

A short sale is any net sale amount that is less than the principle amount owed by the borrower. Additionally, most sellers can’t or won’t cover the short fall and the transaction then requires the seller’s lender approval prior to closing. Lender approval has been an enourmous challenge for 2 main reasons. First, many lenders were reluctant to forgive or term out the shortage. Secondly, sellers and their agents have had an impossible time finding the correct department and personel to negotiate with at the various lenders.

Make no mistake, these transactions are win win for Buyers and Sellers. The Dean Agency supplied 3 examples below to illustrate the value in short sales on Outer Banks NC. The Dean Agency has maintained a leading role as buyer brokers and listing brokers in all distressed sales (foreclosures & short sales) since 2007.

REAL LIFE EXAMPLE - Adam Burkhimer, Senior Broker at The Dean Agency recently listed and sold a short sale property in a Hatteras community. This oceanside beach house was built in 2005, 2600 square feet and fully furnished. The seller’s combined debt exceeded $820,000, although the current market value was around $450,000. After 3 months of negotiation on the seller’s behalf, Burkhimer got lender approval for a sale around $450,000 fully furnished and still in the vacation rental program. The transaction closed in September, releasing the seller from any further obligation. The buyer aquired an incredible bargain with around a 10% gross return on investment.

REAL LIFE EXAMPLE - John Dean, Broker in Charge recently closed a short sale, representing the buyer on an oceanfront short sale on Hatteras Island. Just weeks from foreclosure on the property, Dean’s buyer aquired this 4 bedroom oceanfront home, fully furnished for just $420,000. The house is adjacent to Hatteras National Seashore and has stunning ocean and sound views. “This price would have been unheard of in any other circumstance,” says Dean. His buyers made their offer in August 2009 and the transaction closed in January 2010. “Yes, it did take a long time and my buyers had to be very patient, but how long could most people wait to save $100,000? My buyers got a lower mortgage rate at closing than they had been promised in August so they won twice on this one,” Dean relayed.

REAL LIFE EXAMPLE - Burkhimer closed on an oceanfront short sale December 2009 in Nags Head representing the buyer. Burkhimer found his client a premium 7 bedroom, oceanfront Nags Head home with an elevator and hot tub in Village at Nags Head. The cash offer for $1.2 million was submitted in mid-October 2009 and closing occurred mid Dec 2009. Burkhimer explains the speed of this short sale,” We made a cash offer and upped the primary offer from another buyer that knocked them out and put my buyer in first place. The seller’s bank gave us 10 days to close or they would foreclose on the seller’s property. My buyer was prepared and made it happen.” The rental income is over $100,000 per year and the buyer plans on using the house quite a bit in the off season. “This buyer was really savvy and this was his third offer on distressed property on the Outer Banks,” said Burkhimer. “We spent 16 months to place this buyer in the exact right situation.”

“The Dean Agency has better prepared clients due to the information we provide, financial and statistical analysis we generate for them and the usefulness of our website. This is why our guys consistently get the best deals on investment properties,”  explained Anna Hunt, senior Broker when asked the secret to success in distress sales.

To enlist The Dean Agency’s servicse visit them online at www.OuterBanksHomesforSale.com or call 1 866 340 1166.

# # #

Outer Banks & Nags Head NC Foreclosure Homes and Short Sale Property for Sale. Contact our REO & Distressed Property Specialists - oceanfront, golf course, luxury bank owned homes & foreclosures for sale. Our Brokers will email current OBX foreclosure list. Bank Owned- REO OBX

Bank Owned Foreclosure home for sale in Duck! Oceanside and great Oceanviews. Bank owned homes are a great deal for the right buyer. Looking for a second home or simple to own rental in OBX? Check out this 4 bedroom bank foreclosure in Duck.

http://www.thedeanagency.com/listings/61090.php

There were major differences in Outer Banks buyer preferences and sales stats from 08 to 09. Take a look at these bullet points to see what market shifts we’ve experienced. These are current April 24, 2009.

• Total number of unit sales is down 27% in 2009 so far
• Oceanfront Single Family Sales are down 32% in 2009
• Single Family Sales are only down 13% in 2009
• Condo Sales are down a staggering 55% in 2009
• The Main Beaches, S Nags Head to Corolla (paved road only) produced 58% of Single Family sales under $500k in 2008 but produced 63% of the same in 2009 so far
• In 2009, single family sales under $500,000 rose 2.5%
• Single Family Sales over $500,000 dropped 44% in 2009

Buyers were reflecting a strong preference for single family homes in the core markets in 2009 and the aversion to higher rates on Jumbo Loans (+417,000). Higher downpayment requirements of 2009 (20%) also influenced buyers to choose less expensive homes. More sales were geared to relocation and second home buyers choosing the less expensive and non-rental markets of the west side locations.

Clearly, the market has shifted to less extravegant purchases, in more mainstream locations and away from condos, co-ops and mobile homes. Our high standard of living and high quality of life continued to draw new residents and retirees to the Outer Banks. The investors with shallow pockets have gone, however, those who love the Outer Banks and its lifestyle are still coming.

Search Outer Banks Foreclosure Real Estate for Sale Here!

Need an Outer Banks foreclosure real estate buying guide? Click Here!

We offer the most complete, free search of bank owned real estate on the Outer Banks NC.

Duty Broker 866 340 1166