Convergence theory

With the euro now worth almost 1.60 USD, house values dropping in the States and more and more sellers there unable to move their properties, circumstances couldn’t be more felicitous for buyers.

More and more property owners in the States are willing to negotiate price, to an almost unprecedented degree. The crisis in the sub-prime mortgage industry has led to an untenable situation for many homeowners who are faced with skyrocketing payments from their adjustable rate mortgages.

While the current drop in house values can make for some interesting bargains, there are also some safeguards you should take in this market. One of them is to demand an appraisal contingency:

In addition to the standard financing and inspection contingencies, it's a good idea to include an appraisal contingency for the property to appraise for the purchase price. Due to the softening market, some appraisals are coming in low. If you make an offer without an appraisal contingency and the home appraises for less than the purchase price, you could have to make up the difference in cash.

http://www.doityourself.com/stry/softeningmarket

But if you have been thinking of buying, you should take notice of the confluence of current circumstances. They are unique and, obviously, time-sensitive.

our day

Sorry, faithful viewers, but, yes, I’m enamoured of this property.

It's indeed the one you’ve seen below, and I could watch the seasons change forever. As can you.

The dollar plummets: 1.56 American dollars for a single euro, as of today.

And, if you have been following previous posts concerning the byzantine intricacies of the American real estate process, you should know that the owner of this fetching property will also be paying the “closing costs” [the exorbitant add-ons of settlement fees, which, once upon a long-ago first purchase time, emptied my bank account].

Today may be an odd one, and it is, out of time and out of place, the 17th decreed the 15th, but all shall be well. Time to hear the words, listen to the music, raise a glass and, perhaps, contemplate what comes next...

A special gift

Today I'm welcoming some special guests who would like to introduce their very own piece of heaven to you - in their words and pictures and, obviously, from their hearts.

The Surles Estates is a privately owned property, now For Sale by Owner. To access YOUR ridge top land, you will drive through a secluded mountain cove to your private driveway. Almost three acres (2.84) of lush hardwoods, this gorgeous house site boasts electricity, a five-hundred foot deep well, and a spectactular view. Through the crystal clear air of the Appalachian Mountains, you can see two towns away to the highest point in Georgia, Brasstown Bald.

Soon it will be Spring and the sourwood trees will blossom with hundreds of thousands of small white flowers from which the owner, Michael Surles’ bees make golden honey. Then come the yellow and purple violets and dwarf iris. Later there will be more rare varieties of wild flowers found only in this area.

In Summer there is every kind of cooling, exhilarating fun on spectacular nearby lake Nottely. Cozy Cove boat dock will take care of your boat and sell you the bait to fish the pure cool waters. Or sun yourself and the kids at the man-made beach.

In Fall, the foliage will become a dazzling spectrum of colors and the annual pageants of the Arts, Local Indigenous Music, Storytelling and hand-made Crafts Fairs will commence.

As Winter comes on, the tourists will leave. What they don’t know is that in some ways, winter is the best season. By a cozy fire, with a good book or with the entire world (via high speed Internet-DSL access ) at your fingertips, you can de-stress. Or conduct your own business affairs as you sip hot chocolate in your ‘jammies’ and look out upon the bare bones of the oldest mountain range in the world. This private landscape will sometimes be covered with lacy, luminescent ice, or with beautiful brushings of snow. (And in Georgia the winter days will be interspersed with some clear and spring-like ones as well……)

With the thriving international metropolis, Atlanta, Georgia, only a short two-hour drive south, you could travel all over the world or simply enjoy big-city culture for an evening.

Are you ready to leave the Old World behind and begin writing your own personal history? Become landed gentry (with property to pass down to your family) in the New World. Or invest in a second home in the United States. There is no better time, especially since the exchange rate is all in YOUR favor right now…..

Stealing Beauty

One of the things that comes as a surprise to many is the incredible variety – both literally and figuratively – of the American landscape.

Much more than cookie cutter holiday villas and midtown skyscrapers, there are small villages everywhere, north to south, east to west, all different from each other and distinctive in any number of ways. There are breathtaking vistas, climates of every sort and, except in urban centres, an astonishing amount of space.

One of the things I want to do here is to introduce you to places you never knew existed. Quirky, perhaps, certainly unique, always enchanting.

If you fancy something that satisfies on any number of levels, imagine this spectacular view, picture yourself standing here with a cup of tea, awed and comforted at the same moment.

Yes, by goodness, a real long cabin. But not just any old nostalgic piece of rustic real estate, rather a sublimely well fitted out home, from the two full baths, central heating and cooling systems to the exceptionally sophisticated kitchen.

But imagine further. Imagine all this AND a local community renowned for the quality and reach of its local theatre, not to mention superb trout fishing. A community which belies all stereotypes and is warm, welcoming and eclectic.

It is tucked into an unspoiled corner of the American southeast, affording absolute privacy, yet close to anything you might fancy, whether it be the arts, music or even airports.

And who could imagine that it can be had for a mere €200,000?

Real Estate Agents: how they work

The process of purchasing property in the United States is really quite straightforward, although one might not appreciate that while immersed in the game.

Real estate may be purchased directly from the owner or, if it is listed with an estate agent [“real estate agent”], he will necessarily act as a middleman, handling all discussions and negotiations with the seller. The reason for this is that the real estate agent in the States is acting FOR the seller, as their agent, not as yours. This is how they earn their commissions, a percentage of the purchase price which come directly out of the proceeds of the sale. While this obviously gives them a financial incentive for obtaining the highest possible sale price, their motivation to actually close the sale can be even more paramount.

The “listing agent” may not be the person who is actually showing property to you, however, since, if the property is “multi-listed” [that is, not an “exclusive” for the listing agent], then any other agent can advertise, show and “sell” the property. In this case the agent with whom you are working will negotiate with the listing agent who will, in turn, negotiate with the seller. If a sale is made, the two agents will then split the commission.

Yes, double the incentive to keep the sales price high.

Is there any way to avoid this ménage à troi?

Yes, if the property is for sale by owner [meaning not listed with, and thus under contractual obligation to, an agent], by dealing directly with the listing agent [who might be more amenable to a lower sales price, since her commission will obviously be higher than if you were dealing with another agent] or by using a “buyer’s agent.”

Buyers agents are just appearing in Ireland, but they have been around for quite some time in the States. The idea is that they, unlike the real estate agents, are working for you, the buyer, acting in your interest, negotiating for more favourable terms and so forth. They do not work for free, of course, charging the buyer flat fees and/or a percentage of, yes, the purchase price on the property. This can create a fairly convoluted dynamic, raising questions as to possible collusion between the buyer’s and seller’s agents [again given the incentive to maintain an elevated sales price], whether or not the buyer’s fee can be financed and various other issues.

I have never used a buyer’s agent myself, and most of my experience with real estate agents has been fairly benign. Given the nature and complexity of the industry, I have found that, despite all the obvious caveats, successful agents tend to be remarkably knowledgeable, smart and flexible.

My best advice would include:

Research the local market as much as you can. This includes reviewing the “comps” [details of completed transactions of similar properties in the area] yourself, rather than having them cherry picked by an agent or seller.

Carefully evaluate any potential agents, preferably before they show you a property [since once an agent has shown you a particular property, you will be stuck with her if you do decide to purchase it]. Ask to see her sales records and references, investigate the agency with which she’s associated and make sure she’s fully conversant with any and all regulations concerning foreign nationals.

If you do decide to use a buyer’s agent, do all the above and then some.

But Where?

Perhaps you have a long honed fantasy of a beachfront Malibu bungalow or a sleek Manhattan condo, a hilltop spread overlooking the valleys of Northern California or a luxurious nouveau-palazzo in Florida.

Or perhaps you haven’t a clue.

If one were to believe the standard buzz, all “foreign” buyers in the States are limiting themselves to scooping up condos in Florida and New York City. I believe the term 'self-fulfilling wishful fantasies' might apply, since those are two markets with some of the highest inventories of unsold properties in the country.

Now I will admit to having very firm preferences of my own, but that comes from having lived almost everywhere in the States. Seriously. Boston, Connecticut, south-central Pennsylvania, the suburbs of Washington DC, Baltimore, Savannah [Georgia], Michigan, Texas, San Diego, LA. OK, I’m starting to appal myself.

I have also holidayed in Orlando and Captiva in Florida, Hilton Head in South Carolina, Philadelphia, Chicago [seriously!], Manhattan, Atlantic City and Cape May in New Jersey, and, well, to hell with it, let’s stop there and just assume I’ve made my point.

If you’re planning on spending any time at all in your American property, then it really is important to have – even above and beyond the numbers - a sense of the place. The world of difference between, say, a New England village and a city like Los Angeles goes far beyond the obvious disparities of geography and size. It would be more akin to the contrast between a retreat in the Cotswolds and Ankara.

While you will most certainly be plied with sterling numbers and avowals of profitability, you will also meet with naïve assumptions of your thorough familiarity with a property’s neighbourhood, mores and culinary heritage.

My suggestion is to spend as much time learning about the above as possible, even if you’ve actually visited, and fallen in love with, the place. At the very least read the local newspaper, especially the adverts [if you find an abundance for bail bondsmen, cheque cashing services and furniture rental emporia, then you know you’re in the wrong place, or at least in the dodgy end of Savannah or San Diego. Or, frankly, in an increasingly large portion of the American panorama.].

Depending on your fancy, you may wish to see if there’s a library in town or a non-franchised “Irish” pub, a ban on outdoor smoking and/or drinking on the beach [seriously], more houses of worship than restaurants and criteria of similar ilk.

As for me, it would be a very old stone cottage set in the rolling, smoky hills of Connecticut, but, then again, I came back to Ireland.

caveat emptor, really

A bargain hunter’s paradise. The best investment in the globalised universe. The perfect parking place for those SSIA monies.

Or so we’re being told. At least by the glossy adverts for Manhattan penthouses and Florida condos. The endless round of overseas exhibitions flogging far-flung enclaves for the rich and not so famous.

But the truth is there really are incredible deals to be had, and they get more and more incredible every day as the dollar sinks ever lower to our fair euro. Unfortunately, for every honourable estate agent [no, not quite always an oxymoron] there are an abundance of fly by night scam artists, and for every profitable venture there is a property supplement or ten worth of shoddy, overpriced “villas.”

I am neither estate agent nor shill, but rather someone who knows the US market intimately. My hope is that I can help provide prospective buyers with important links, sound advice, reputable resources and even, occasionally, something exciting that won’t be found in those corporate supplements or exhibitions.