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Pre-qualification vs. Pre-Approval - Baton Rouge Real Estate

by Blake Hanna

Pre-Qualified

Getting pre-qualified is the first step you should take after finding a Realtor you like and trust. It's highly recommended as it's let's you know where you stand financially and if you can in fact obtain financing to buy a home. You supply a bank or lender with your overall financial picture, including your debt, income and assets. After evaluating this information, a lender can give you an idea of the mortgage amount for which you qualify. Pre-qualification can be done over the phone, on the internet, or in person, and there is usually no cost involved. Loan pre-qualification does not include an analysis of your credit report or an in-depth look at your ability to purchase a home.

The initial pre-qualification step allows you to discuss any goals or needs you may have regarding your mortgage with your lender. At this point, a lender can explain your various mortgage options and recommend the type that might be best suited to your situation.

Getting pre-qualified for a loan gives you an idea of how much you might qualify to borrow. You have not actually applied for a loan and the mortgage lender has only your word on your income, assets and liabilities. None of your information has been verified, the loan amount is in no way guaranteed. You may be given a pre-qualification letter that merely states you are likely to be approved for a mortgage.

Pre-Approved

Getting pre-approved is the next step, and it tends to be much more involved. You'll complete an official mortgage application and supply the lender with the necessary documentation to perform an extensive check on your financial background and current credit rating  From this, the lender can tell you the specific mortgage amount for which you are approved. You'll also have a better idea of the interest rate you will be charged on the loan and, in some cases, you might be able to lock in a specific rate.

Getting pre-approved  means that not only have you given the mortgage lender information on your income, assets, and liabilities, but your information has been checked and verified. The mortgage lender may also have pulled your credit report to learn about your credit history and credit-worthiness.

Blake Hanna, Realtor

225-298-6900

Blake@patwattam.com

The Pat Wattam Team

RE/MAX First

The Highest and Best Use? - Baton Rouge Real Estate

by Bill Arey

Whenever I drive by this location near the intersection of Old Hammond Hwy and Jefferson Hwy I think back on what used to be at this very location. This location was the epicenter for fine dining in Baton Rouge when I was growing up. I found this brief history in the Baton Rouge Business Report - In 1973 Charles Brandt opened Chalet Brandt, a refined gourmet restaurant, and for the next 30 years the restaurant would serve as one of Baton Rouge’s finest dining establishments. Known for its traditional French cuisine, Chalet Brandt was beloved by locals and renowned for its top-flight service and elegance. In 1995 Brandt sold the restaurant to his son Eric, who continued to operate it until its closing in 2002.  

The original Chalet Brandt building was demolished some years ago and on the site a new restaurant was built - the architectural design is garish and shabby chic. It doesn't strike me as the best and highest use of this once hallowed ground to fine dining.

Bill Arey   REALTOR

The Pat Wattam Team

ReMax First

bill@patwattam.com

How To Win in a Multiple Offer Situation - Baton Rouge

by Pat Wattam

What do you do, as a buyer, when you find yourself competing with another buyer for the same house?  This is a multiple offer situation.  Some buyers get scared and back out of the bidding process.  That's fine if there are plenty of other houses out there that meet your needs.  But when if the inventory is low?  Or what if this is the perfect home for you?  How can you stack the cards in your favor?  

First, you need a REALLY good REALTOR to help you.  In Baton Rouge I know that as a listing agent, one of the first things I look at is when I am presenting multiple offers to my seller is who is the agent writing the offer.  Does that agent have a track record of closing properties or do their deals typically fall through.  2nd, I look at who the lender is.  Is it a lender I have had good success with or is it a lender who gives a pre-qual letter that means nothing and I have experienced deals that fell through.  And speaking of the pre-qualifying letter, what does it say?  Has the lender verified your credit?  Your income?  Your cash available for closing?  How strong is your letter?  Has the lender run your file through desktop underwriting?  These things are important when you are in a multiple offer situation.   A strong letter from your lender can make all the difference!  

Now, the other parts of the purchase agreement that are pretty obvious are - what's your offer?  Go in with your best offer.  Don't be afraid to go above list price and, KEY WORDS, don't make the offer subject to appraisal.  That means, if the house doesn't appraised for your offer, you have to pay the difference out of pocket.  I had one the other day where the buyer had to pay $7,000 over list because the backup offer we had was willing to pay $10K over list price!!

Another place you can tighten up a purchase agreement to make a seller look favorable on you would be a short time for the inspection process.  It would be smart to call your inspector and get on his schedule before you have an acceptance so that you can have something attractive to offer a seller.

There are a few other things we have up our sleeves to help you win an offer.  Like I said, when in this situation, you need a good REALTOR to advise you!!  Call us any time!  

Why Didn't They Buy My House - Baton Rouge

by Pat Wattam

Why didn't they by my house?  This is a common lament of many sellers who are getting lots of showings on their home but no one's making an offer.  How disheartening that can be when you are taking the time to make your home spotless and sparkling clean.  You may had made some updates throughout the house but the buyers still say your house needs updating.

The first question I have myself when I see this happening with one of my Listings is : Are there any homes pending in the sellers price range, area, and sq ft.   If the answer is yes, then my job is to take a look at those homes and see what they had that my sellers' house doesn't have. If those homes have the slab granite in the kitchen and the bathrooms, fresh paint, and new carpet AND their list price on the their house is the same or lower than yours, that's why they sold and not you did not.   

If the homes that are pending our floor pricing your house then that's the issue.  But what if no homes are pending that are similar to your house,  what do you do then?   It depends on the time of the year.  There is some seasons that are just very slow in general such as when school gets out or when school starts back up or during the holidays.

But the real answer is - if your home is getting  many showings and you have no offers something has to change. When I have between 10 and 15 buyers come to see a home the house should have an offer on it. If you're getting no offers,  including lowball offers, then you have priced yourself out of the Market or your condition does not support your price.  Make a change and make the house sell!

Your REALTOR is  your best guide to help you determine what needs to be done to get your house sold.   Many sellers don't want to believe that price and condition are that important.  They think with the right marketing we can drive in the buyers and one will make an offer. Part of that is true.  Our marketing does drive in the buyers but marketing cannot make a buyer want to buy your house.  Once they see the house, the house and the price have to sell it.  

So, if your house is getting lots of showings and no offers, update the condition or lower the price! Check out our videos on the subject then give us a call!   

Appraisal Issues - Baton Rouge

by Pat Wattam

Let me lead off by saying the real estate Market in general is heating up!  Many areas of the counter are experiencing low inventory and more buyers than homes available for sale.  Which can lead to appraisal issues.  Even though the real estate market in Baton Rouge is not THAT bad, we are seeing pockets where a homes are receiving multiple offers and not enough selections for the buyers.

When you buy or sell a house, the lender will order an appraisal to make sure that the price the home is sold for is what it is worth, just in case the buyer defaults and the lender ends up foreclosing on the house.  The lender wants to make sure they limit their risk.  In a normal market - not a sellers' market or a buyers' market - this usually works quite well.  There are enough homes to select so that if a home does not appraise and the seller refuses to reduce the house to the appraised value, the buyer can find another house to purchase.  The seller will eventually get the point and will either sell at the right price or take their house off the market.

However, if you are in a sellers' market - that means, there are few homes to select from - or in a rising market which means home prices are rising faster than the appraisals can document (remember, appraisers look back 6 months to find comparables - not much help when the market is heating up going forward) - then if the appraisal comes in short, typically the seller may have one or two back up offers who just want to get this house and will be willing to pay over appraised value.  They do this recognizing that the market is moving up and  figures the appraisal value of the house will soon be what they are paid for it.  If you are the buyer in this situation, unless you have the ability to get extra cash to pay the difference you may be left out of the housing market.

If you are the seller in a buyers' market - meaning there are lots of homes to select from and the buyer can be very picky - then if your appraisal comes in low, you need to just reduce to the appraised value so you can go on with your life.  Waiting for the market to come up to the value you want for your house could take years in this situation.

However, what do you do when the house you are buying or selling does not appraise and the appraiser did not give any value for items that other houses didn't have, or selects the wrong comps?  This is pretty tricky today.  The BUYER is the one that needs to protest.  The listing agent can help find comps to justify the value, or find mistakes or things left out in the appraisal.  It's up to the lender to decide if these things warrant going back to the appraiser.  When I have this issue with a buyer, I typically change lenders so that I can get a new appraisal for my buyer.  

A good REALTOR can help guide you when this issue arises.  

Over the long run real estate values have a history of going up in cities and towns enjoying growth and healthy economies. I looked at three of south Baton Rouge's most popular residential areas - Southdowns, Capital Heights, and Roseland Terrace (City Park/Garden District) to see how property values have done in the last almost 20 years. Our local MLS has data going back to 1997. The average $$ per sq ft in these three areas was around $65-$75 per sq ft in 1997. By 2015 the average $$ per sq ft had grown to approximately $165 pre sq ft. If you would like to know the trends in your neighborhood give me a call at The Pat Wattam Team  225-298-6900.

Bill Arey  REALTOR

The Pat Wattam Team

ReMax First

225-298-6900

bill@patwattam.com

Knock Knock Children's Museum - Baton Rouge Real Estate

by Bill Arey

 

Construction of the Knock Knock Children's Museum is coming along. It will be a great addition to the community - located near City Park. The website for the museum says "Knock Knock Children’s Museum is a community spark for engaging, playful learning experiences that inspire and support lifelong learning."

Bill Arey REALTOR

The Pat Wattam Team

ReMax First

bill@patwattam.com

Rock Concerts - Baton Rouge

by Pat Wattam

I have complained for years that we don't have enough high quality rock concerts coming to Baton Rouge. They always go to New Orleans and sometimes Lafayette, but not enough here  Over the next 30 days or so we are so fortunate to have 3 big acts - spanning generations and genres!  

First, March 3rd we have the Beach Boys!  Mike Love is still rockin' in with songs of beaches, surfing, and fast cars!  Talk about a trip down memory lane!!

Of course, they are a little older now - but still a great show!  It's probably been 20 years since I have seen them.

Then, on March the 10th we get none other than Robert Plant himself!  Hoping he'll through in a couple of Lepplin tunes along with his new stuff.  But anyway you look at it, it is Robert Plant with his 'oooh baby' sung like no other!

And then Rounding out this trio of concerts i James Taylor.  Now, I have never heard him in concert but he seems to have a great following and I always enjoy him on TV.  That concert in is April 18th.  

Tickets for all concerts can be purchased at Ticketmaster.  And we don't have to drive to New Orleans!  Join me at these fabulous shows!

Two years ago (2/28/2014) I wrote a blog post looking at the Market for foreclosed properties in our area - the post said....

3,587 properties (houses, townhomes, condos) have sold in the last 6 months in our local  MLS area. Out of those - 526 were FORECLOSED......... that is almost 15% of the total sold!!!. Approximately 60% of the properties sold for under $100,000. On the other end of the price range, about 3% sold for $300,000 or more.  

I was curious....... what are the statistics regarding foreclosed properties in our current market? 4,186 properties (houses, townhomes, condos) have sold in the last 6 months in our local MLS area. Out of those 317 were FORECLOSED........ that is 7.6% of the total sold. Approximately 47% of the properties sold for under $100,000. On the other end of the price range, about 1.5% sold for $300,000 or more. These numbers show that things have gotten decidedly better in our market in the last 2 years. Sales were up 17% but the number of foreclosures sold was down almost 50%. Let's hope this trend continues.

Bill Arey   REALTOR

The Pat Wattam Team

ReMax First

bill@patwattam.com

Displaying blog entries 1-9 of 9

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Pat Wattam
RE/MAX First, Independently Owned and Operated
4750 Sherwood Common
Baton Rouge LA 70816
Office Direct: 225-298-6900
Office Main: 225-291-1234
Fax: 225-295-1234

RE/MAX First
Each Office Independently Owned and Operated
Main: 225-291-1234

Licensed by the Louisiana Real Estate Commission