If you haven’t been active in the real estate market in the past few years — buying or selling a home — the term “Appraisal Management Company” (AMC) may not ring a bell with you.   But it’s important to understand what the term AMC and how appraisals work, because today, the appraisal can be a potential deal-killer when you’re trying to sell, buy, or refinance.

Suppose you found a home you really love.  You have made what you believe is a fair offer and the seller has accepted.   You are under contract.   You’ve had the property inspected from top to bottom and reviewed all of the seller’s disclosures.  You’ve given all your financial data to your bank/ mortgage broker, and you’re already picking out furniture because you think it’s a done deal.

Then, you get an unexpected call from your mortgage person, saying the property didn’t appraise at or even near purchase price.   This turn of events could easily scare a first-time buyer from going through with the purchase.  For a more experienced buyer or seller, it becomes, at a minimum, a major kink in the process.   Unfortunately, this scenario is happening now more than ever in all markets throughout the country and here is why.

In May 2009, the Home Valuation Code of Conduct (HVCC) was adopted. The HVCC was meant to reduce the potential for the type of inflated property appraisals that often occurred during the real estate market boom, which some believe contributed to the subsequent bust.    Back in the day, in some situations, appraisers and mortgage folks (and sometimes real estate agents and buyers/sellers) were working together to get a property to appraise at a high number just to get a deal done. Lenders sometimes turned a blind eye to get a loan through. 

The goal of the HVCC was to put a distance between the appraiser and the bank or broker, in order to get a truly independent appraisal of the property.   In theory, it was a good idea.   In practice, it is sometimes makes it impossible for sellers to sell, buyers to buy or homeowners to refinance.

Since HVCC’s passing, the lender — instead of selecting a preferred, locally experienced appraiser — usually orders the appraisal through a third-party AMC.  These new companies will often price an appraisal at half of what an experienced, local appraiser would charge. The AMC, in turn, may hire the least expensive appraiser, someone from outside the area.    Often the out-of-town appraiser isn’t a member of the local MLS, nor are they even familiar with the area. This can result in appraisals that are considerably off the mark from a property’s true market value.

Most banks have a process by which you can dispute an appraisal.  This generally requires the buyer or their agent to supply other comparable sales and explanations as to why they think the appraiser’s value is off.   The review takes some time, often longer than allowed in the contract and can go either way.  If it fails, these are some other options:

• If both parties still want to move ahead, the best plan is to extend all time frames and switch to a new lender.
• Another option is to reduce the purchase price, if both parties agree.

• The final option, depending on the deal, is for the buyer to bring more money to close.

It makes the most sense for all parties to work together to keep the deal going.

The trick is to avoid getting into this situation to begin with. If you’re a seller or a listing agent and you get a call from an appraiser to set up the appraisal appointment and they have an out-of-town area code, that might be your first red flag.  Ask them on the phone if they’re familiar with the area, if they’re a member of the local MLS, and how many appraisals they’ve done in the area in the past six months. If you feel the appraiser isn’t experienced, you can ask for another.

Also, come to the appraisal prepped with knowledge of recent comparable sales.  If you, as the seller or listing agent, are active in the local market, you can shed light on certain comparable sales for the appraiser. The listing agent and the seller have likely been physically inside all of the most recent sales, while the appraiser has not.

You might point out that one comp didn’t have a view, that the kitchen for another comp wasn’t renovated, that a third comp was in a superior location or had an unbelievable deck off the kitchen, or that comp four was a distressed sale.

Most appraisers will appreciate the data, though some will not, depending on how you deliver the information.  Pushing him or her around with comps or seemingly treating them disrespectfully will only alienate the appraiser and hurt your deal.   Treat the appraiser not as an enemy, but as a member of your team.

For more information about Highlands and Cashiers North Carolina, and for access to the HighlandsNC/CashiersNC MLS, contact Meadows Mountain Realty today, 828-526-1717 or email us today at info@meadowsmtnrealty.com.

Our homes’ HVAC systems are some of the hardest working machines that we use. Air conditioning units and heating units endure harsh elements year round. They also switch quickly between use and disuse; long periods of disuse contribute to mechanical failure, especially when the machines are not maintained or serviced during this period, and are not eased back into constant use.

Because these systems are manufactured to withstand both elements and periods of disuse without complications, many residents are complacent with minimal HVAC maintenance.

As the summer season winds down, many homeowners may begin to experience the first signs of trouble with their air conditioners and HVAC systems. Instead of waiting until the end of the season, or the beginning of the next summer season, homeowners who experience any trouble with their cooling system should call a serviceman immediately. A qualified serviceman or HVAC repair technician can troubleshoot a home’s HVAC system and make small adjustments and repairs as needed. Often, these early repairs can head off major problems that are more costly, and more inconvenient to homeowners.

For more information, visit http://www.askexpertexpress.com.

For more information about Highlands and Cashiers North Carolina, and for access to the HighlandsNC/CashiersNC MLS, contact Meadows Mountain Realty today, 828-526-1717 or email us today at info@meadowsmtnrealty.com.

“The U.S. debt crisis is likely to cost home buyers at least $122 per month,” says Gibran Nicholas, chairman of the CMPS Institute, an organization that trains and certifies mortgage bankers and brokers. “Bonds issued by Fannie Mae and Freddie Mac will probably lose their AAA status if the US credit rating is downgraded.” This means that mortgage rates will likely go up. The monthly payment on a $200,000 30-year mortgage would increase by a whopping $240 per month if mortgage rates go up slightly from 4.51% to 6.43% like they were just 3 short years ago. Even if interest rates only go up by 1% it would cost an extra $122 per month.

If you have an adjustable interest rate tied to LIBOR or US Treasuries, your mortgage rate will probably fluctuate a little over the next few months as banks, investors and money market funds figure out what to do with the temporary loss of a AAA credit rating for US Treasuries.

“Many investment funds are only allowed to invest in AAA rated investments,” Nicholas says. “This means they will have to either (1) change their bylaws in order to keep their US Treasuries and mortgage bonds; or (2) sell their US Treasuries and mortgage backed securities. This will cause Treasury and mortgage bond yields to fluctuate considerably over the next few months, adding even more uncertainty to an already fragile mortgage and housing market.”

So how bad can this debt crisis get? Do you think it would be too risky to get a $150,000 mortgage if you were a homeowner making $150,000 per year? Most people would agree that you wouldn’t be over-extending yourself in that situation. In fact, your lender would probably consider you a very safe credit risk and be very eager to lend you the money.

“That’s exactly what the U.S. debt burden would be like if the debt ceiling was increased,” says Nicholas. “Our country generates around $15 trillion dollars per year in economic activity, and all we are asking for is a total ‘mortgage’ or debt burden of around $15 trillion. If this was such a high risk proposition, nobody would be loaning us money and we’d be paying much higher interest rates on our debt.”

Now, switch hats for a minute and go back to the homeowner making $150,000 per year. How would the scenario change if they suddenly were at risk of no longer generating $150,000 in annual income? What if their debt was simultaneously growing by about $15,000 per year (meaning they’d owe $165,000 next year, $170,000 the year after, etc.)?

“That’s what the current crisis is all about,” Nicholas says. “The U.S. debt burden is growing by about $1.5 trillion per year and our elected officials are jeopardizing even the $15 trillion in economic activity that we do have as a nation. That’s why the rating agencies are probably going to temporarily downgrade our credit rating. The bottom line is that we don’t have a ‘debt crisis’, we have a ‘credibility crisis.’ There will be some temporary negative consequences because of all this even if the debt ceiling is increased at the last minute.”

For more information, visit www.cmpsinstitute.org.

We have reached the midway point of the year.   Today, we want to look back over the first six months and give you what we believe were the five items that have had the biggest impact on the real estate industry so far this year.

The Government Wants Out of the Mortgage Business   From the original outline of the Dodd-Frank regulations to the talk of closing Fannie Mae and Freddie Mac to the proposed Quality Residential Mortgage (QRM) guidelines, the government has made it very clear that they want to dramatically limit their involvement in the mortgage industry. What will come of this? Will private industry step up and fill the void created? What will be the increased cost to the consumer? Only time will tell.

Despite Early Headlines, Sales are Increasing    Headlines earlier in the year announced the total collapse of the housing market. To those in the know, it was obvious that comparing sales numbers in the first four months of this year to the same period last year made absolutely no sense. The largest tax credit ever given to home buyers expired on April 30, 2010. Large numbers of transactions were dragged forward last year so buyers could take advantage of the credit. Pending home sales (transactions going into contract) on the other hand have done quite nicely and many institutions (ex. Fannie Mae, Freddie Mac, NAR and Moody’s Analytics) are projecting good sales numbers throughout the rest of the year.

Amid Warnings of a ‘Double-Dip’, Prices Began to Stabilize  Prices continued to retreat for the first few months of the year and brought the bears out. Some called for another major fall in prices (15-20%) and almost all recalculated their projections to show continued depreciation. Just as these new projections were made available, some pricing indices announced that values actually increased (though by a rather minimal percentage). Again, those with the best understanding of the market were quick to explain…

Foreclosures Were Delayed Longer Than Originally Projected   Distressed properties (foreclosures and short sales) have a major impact on the values of all properties in an area. Because of paperwork challenges, the flow of these properties to the market was virtually shut off. At the beginning of the year, most experts believed the banks would correct these challenges by the end of the first quarter. That didn’t happen and therefore many of these properties were delayed coming to the market. This is a major reason why prices seemed to recover: there were fewer discounted properties available for sale. Most now believe that the banks are within 60-90 days of releasing this inventory and that prices will again begin to soften.

Main Stream Media Begins to Announce “Now Is the Time to Buy!”   With prices and interest rates at historic lows and the chance that mortgages will become more costly as the private sector steps in, many in the main stream media are announcing that buying a home now makes sense. In the last 45 days, the Wall Street Journal, Forbes Magazine, National Public Radio (NPR) and CBS Money Watch have all ran articles calling for the readership to consider buying now!

If you would like more information on real estate in Highlands or Cashiers NC, give on e of the brokers at Meadows Mountain Realty a call today at 828-526-1717 or send us an email to info@meadowsmtnrealty.com.

Over six years ago, the churches in the Cashiers community came together to combine their outreach efforts to provide food to those in need in the area.   The Fishes and Loaves Food Pantry is the result of that collaborative effort.  The organization is run totally by volunteers and is made possible by the generous donations from individuals, churches and community service organizations. 

The Pantry spokesperson, Carole Stork says “We average over 2,000 family visits annually, distributing approximately two and a half tons on food per month.”    She goes on “The people we serve are a mixture of local residents and Latino immigrants who are out of work primarily in the winter months, plus a number of senior citizens.”  

On July 2nd, the group will host their Annual Big Ol’ Mountain Country Breakfast to benefit the Pantry.    The proceeds from this popular event will support efforts to feed the hungry throughout the year.   Join them from 7am until 11am at the Cashiers Community Center on Highway 64 (the Highlands Road).   The breakfast organizers are looking for another big turnout this year serving generous portions of food prepared with care and time-tested recipes.

If you cannot attend the breakfast, but would like to donate to the Pantry, send your contribution to Fishes and Loaves Food Pantry, P.O. Box 865, Cashiers NC 28717.

On Saturday, June 18th, area residents and their guests will have an opportunity to experience the beautiful, mystical way of life in the mysterious land of Shangri-La.     This Asian-based evening is the theme of REACH of Jackson County’s eighth annual fundraiser and will take place at the Country Club of Sapphire Valley beginning at 6:30 pm.   

Shangri-La will be filled with music and dancing.   The Gamelan Ensemble will feature traditional instruments and sounds from the Far East.   The evening will also feature a buffet dinner, drinks, no-stakes casino style games and a silent auction featuring many unique items from the area as well as high-adventure experiences.

REACH is hoping for a great turnout for the event.  Executive Director of REACH, Kim Roberts-Fer says, “We are asking for the public to come out for an evening of fun at Shangri-La to help assist REACH of Jackson Country with the funding of our core services.  With this past year being our toughest financially, it is our hope that you are able to support our mission.”    Throughout it’s 33 year history, this non-profit organization has been helping end domestic and sexual violence, as well as child abuse in the area.   Crisis counseling, legal assistance, community education, emergency shelter and a 24-hour crisis hotline are just a few of the service offered by REACH.

Tickets for Shangri-La are just $75 per person and are available by contacting REACH of Jackson County at 828.631.4466 extension 207.   For more information of sponsorships or donations contact REACH at 828.631.4488 extension 207 or email REACH at outreach@reachofjackson.com.

1. Get help from a short sale expert

Not all real estate agents today have worked with properties that are offered as a short sale. An agent experienced in short sales can identify which homes are being offered as short sales, help you determine a fair purchase price, and advise you on what to include in your offer to make the lender view it favorably. Ask agents how many buyers they’ve represented in short sales and, of those, how many successfully closed the transaction.

2. Build a team

Ask agents to recommend real estate attorneys knowledgeable in short sales. Your attorney can do a title search to identify all the liens attached to any property that peaks your interest. You must understand that because each lien holder must consent to a short sale, a property with multiple liens, like first and second mortgages, mechanic’s and condominium liens, or homeowners association liens, will be harder to purchase. Although you will have to pay for the title search up front, but it can also help weed out less desirable properties requiring multiple approvals.

3. Know the home’s fair market value

By agreeing to a short sale, lenders are consenting to take a loss on the loan they made to the sellers to purchase the home. The goal of the lender is to keep those losses as low as possible. If your offer is substantially less than the home’s fair market value, it may be rejected. Your agent can help you identify the price that’s good for you. The lender will determine whether approval is in its best interest.

4. Expect delays

There are two stages to a short sale. First, the sellers must consent to your purchase offer. Once you have come to an agreement with the seller, then they must submit it to their lender, along with documentation to convince the lender to agree to the sale. The lender approval process can sometimes take weeks or months, even longer if the lender counteroffers. Expect bigger delays if several lienholders are involved; each can make a counteroffer or reject your offer.

5. Firm up your financing

Lenders will weigh your ability to close the transaction. If you have a pre-approval letter from your lender for a mortgage, have a large downpayment, and can close at any time, they’ll consider your offer stronger than that of a buyer whose financing is less secure.

6. Avoid contingencies

If you must sell your current home before you can close on the short-sale property, or you need to close by a firm deadline, your offer may present too many moving parts for a lender to approve it. Also, consider ordering an inspection so you’re fully informed about the home. Keep in mind that lenders are unlikely to approve an offer seeking repairs or credits for such work. You’ll probably have to purchase the home “as is,” which means in its present condition.

The brokers at Meadows Mountain Realty have the knowledge and experience to help you with a short sale.   Give us a call today at 828.526.1717 or send an email to info@meadowsmtnrealty.com.     For a list of short sale and foreclosure properties in Highlands, Cashiers, Sapphire and Glenville North Carolina, visit our website.    

This article includes general information about tax laws and consequences, but isn’t intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice.

Ferns are beautiful, lacy, green, delicate, natural… pick your adjective.     Many are native to our Highlands Cashiers Plateau and can provide a great natural addition to your landscape. They are said to impart a calm grace, yet they are tough, durable and adaptable.

I became fascinated with ferns after moving to North Carolina from California in 1998, and must confess that I was not aware of them until I moved here.

The Hay-scented Fern figures prominently as the Meadows Mountain Realty logo, both in its pale green summer colors and its golden tan fall tones. An “invasive” species, this one is easy to grow, but can take over your garden, and I am having some difficulty removing my excess plants. it spreads by underground root rhizomes or runners. This fern grows in “drifts” which appropriately describes the pattern. It can be used to hold soil on sunny slopes, but you must be  conscious of its growth habit.

This list presents the ferns I have liberated from the wild and transplanted successfully in my gardens.

If you wish to start growing ferns, but prefer not to capture them in the wild, they are available in most of our local nurseries.

There you will find many kinds of ferns, not all of which will survive our winters. If you want perennial ferns, it is important to ask the nursery personnel which ones will survive here. Remember that ferns have been on this planet for over 240 million years, and are found in all hemispheres, but they can be very selective about the environments they choose to accept.

For instance, my favorite is the Southern Maidenhair, but it has to be replaced each year.

The Autumn Fern, from Asia, is very hardy here, as is the Japanese Painted Fern. Both are notable for their unusual colors. the Autumn Fern is a reddish brown when it unfolds in the Spring, and the painted fern is an unusual bluish-gray color.

If you wish to explore the enchanted world of ferns, just Google Ferns. The images that come up on the Connecticut Botanical Society website  http://www.ct-botanical-society.org/ferns/index.html   are particularly useful, and The Brooklyn Botanic Garden paperback  Ferns..Wild Things Make a Comeback in the Garden   is a good practical handbook.

For more information on ferns in the mountains or real estate in the mountains of western North Carolina, give Bill Peavey a call at 828.526.1717 or email Bill at billp@meadowsmtnrealty.com.

Despite the doom and gloom the media portrays regarding today’s real estate market, several unique opportunities exist for home buyers, in particular, luxury home buyers.

While home prices across the country have dropped or stabilized to varying degrees, luxury home prices have been slashed, in many cases, as the market for such high-end properties has dwindled in challenging economic times.  This presents a great opportunity, for those who have the financial resources, to purchase a luxury home that might have been completely out of their range six years ago.

Purchasing a luxury property, however, is unlike a standard home purchase. I advise all my luxury-home clients to consider the following before embarking on their search:

1. Weigh the finances carefully.
Even if you’re ready to pay cash for your luxury home, you still want to ensure you’re getting the best possible value and potential return on investment from your home purchase. Make sure you truly have the financial wherewithal to remain in the home as long as you’d like. Consider the stability and growth potential of your future income before moving forward.

2. Have your documentation in order.
Many luxury home buyers derive their net worth from a variety of sources and investments. Given the high-end purchase price of a luxury home, along with today’s unstable economic climate, prequalification is often necessary when it comes to luxury purchases.

3.Investigate alternative search methods.
The best luxury property deals might not be found through traditional real estate search engines but rather through word of mouth. Make sure you’re working with a professional real estate agent who is well connected and networked in the communities your are considering

4. Seeing is believing.
Expansive square footage, sprawling property, and a bevy of incredible views often make luxury homes difficult to completely capture in photos, videos or virtual tours. A visit in person is an absolute must to make sure you’re not missing any potential details and, conversely, to make sure the property lives up to its image.

5.Consider the future.
Your luxury home investment needs to be carefully considered for the future, in particular your expectations in terms of your return on investment. Most luxury home buyers are buying a lifestyle and don’t intend on flipping their home anytime soon. Given the volatility that still exists in today’s market, make sure you’re not headed into your luxury purchase with unrealistic thoughts of financial gain but rather to enjoy a spectacular home for many years to come.

We would be happy to share more insights and strategies for buying a luxury home.   Please feel free to email us for further information.     There are many opportunities in the Highlands NC and Cashiers NC real estate markets right now.     Prices are as low as we have seen in years, mortgage rates are still historically low and sellers are motivated.     Call any of our brokers at 828-526-1717.

Sitting regally atop a small knoll overlooking the seventeenth fairway of the course which was first played by legendary golfer, Bobby Jones, the 4th Cottage combines the charms of yesteryear with the comforts of today.

Family and friends eagerly gather on the large front porch to enjoy the gentle breezes that stir the uppermost branches of decade old trees.   You are deep into your favorite book, but it is hard not to break away for a glance at the graceful swans that swim in Club Lake just a few hundred yards below.  Throughout the spring, summer and fall, the meticulously manicured grounds are ablaze with color. The combination of native and cultivated plants dresses the landscape in eye catching splendor.  The gently rolling lawn reminds you of homes found in your favorite movie.

From its first days in 1928 until today each owner has sacredly guarded the homes integrity. Wainscot paneling of pre-blight chestnut warm the walls of the Great Room with its massive stone fireplace and beamed cathedral ceiling. Built-in library book cases installed when famed author-psychiatrist, Corbett Thigpen, best known for The Three Faces of Eve, owned the home from 1955 to 1980, provide the perfect repository for your cherished books, photos and family memorabilia.    In 1999 the current undertook to renovate the cottage with the help of local architect Dennis DeWolf.    Paying careful attention to preserve the integrity of the original cottage, they set out to update the home with all of the features that families expect in a twenty-first century home.

Visitors to the home following the renovation marvel at the finished product.  A large stone fireplace on the expanded porch closely resembles the original one that anchors the Great Room.  Even the most finicky chef would feel at home in the updated kitchen.  The master suite with its his and her baths provides the perfect escape for a busy couple to rest and recuperate from a day filled with all the activities that Highlands has to offer.  Adjacent to the bedroom is a room which is an idyllic spot for a small office or library, or dressing room.  Use your imagination to personalize this space to your specific needs.  Throughout the house your eye is drawn to carefully thought out design details that you seldom find in homes built today.

When family and friends come for a visit, they will enjoy their own privacy in one of two guest cottages.   In addition, there is a workout studio and a two car garage.      

The 4th Cottage might just be the perfect mountain home.     For more information, contact Michelle Muraco at Meadows Mountain Realty at 828.526.1717 or by email at michelle@meadowsmtnrealty.com.