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VOL. 41 | NO. 43 | Friday, October 27, 2017

Sellers, lenders make most of real estate feeding frenzy

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It’s not difficult for a Realtor to find free food and drink lately as listings are lingering on the market and the listing agents are hosting various lunches, breakfasts, wine and cheese parties, and even songwriters in the round a la the Bluebird in efforts to lure buyers and other Realtors into houses.

Lenders, inspectors, title companies and all the ancillary cottage industries surrounding the real estate planet are offering invitations to meet with agents with other offers of food and drink. Some of the apartment people will provide a one-night stay in order for a Realtor to enjoy the ambience and convenience of their dwellings. Many will throw in a couple of months of free rent.

There are a few trailers for sale or let and, yes, Mr. Miller, there are rooms available, as well. The short-term rental craze and financial opportunities there continue to drive the condos that do not – at least as of yet – have restrictions against the STRs.

As for lenders, there are scads of new loan officers who entered the profession while the city was afire and their companies were overrun with buyers pouring into Nashville from all over the country.

Things are different now, and many of those new to the industry are forced to pound the streets in search of Realtors hoping to earn their business. Most use the opening line that they want to share their newest product, but there is one rub. There is no new product. The new product is that they can fund a loan quickly.

Well, as long as the credit is perfect, the appraiser cooperates and the underwriter does not notice anything such as the appraiser citing there is no bathroom in the lower level. Wait a minute! Hold everything!

The underwriter sees the MLS listing stating there is a bathroom in the lower level, and the appraiser says all the bathrooms are on the main level. That happened last month. In that case, the appraiser had to change the appraisal, which, thanks to Dodd-Frank, means the closing is put off three days thanks to a typo. Unload the trucks. At all of the houses. No one is going anywhere.

At least the government protected them. A bathroom that floats from the basement into the main level of the house could be problematic. As Ronald Reagan once quipped, the nine most feared words in the English language are “I’m from the government and I’m here to help.”

It was an honest mistake that caused unnecessary inconveniences to many.

In defense of appraisers – and their product – an appraisal is still the best deal in all real estate. Finally, the appraisers have raised their fees after years of charging too little, but at $450 it is difficult to find more information, detail, research in one package for the money.

The barriers to entry into this field are filled with education requirements and on the job training.

With the appraiser management companies, once again the result of federal legislation, it is important for those seeking careers in the appraisal field to affiliate with a company schooled in bureaucratic protocol. When the new regulations came into effect, some of the more talented appraisers were overlooked for appraisals, as those more competent in government relations thrived. Things have leveled now, and the good and the bad are thriving.

One good thing for the appraisers is that if foreclosures come back into vogue, the lending institutions will need appraisals on the foreclosures. And the owner occupant buyers will need loans, thereby providing those new to the lending market some fresh wares.

As we learned from The Lion King, it’s “The Circle of Real Estate Life”

Sale of the Week

Even in the wild, exciting realty times the city has experienced the past few years, very few properties sell for more than $4 million. For the record, two in 2017, one in 2016, two in 2014, two in 2013 and three in 2012, or 10 in the past five years according to Realtracs, the Middle Tennessee Residential Multiple Listing Service.

Last week, 4403 Honeywood Drive sold for $4.6 million in slightly more than three months after Courtney Jenrath listed it for $5,890,000.

By listing for more than $5 million, the odds of the property selling were reduced by 50 percent, as only five single-family residential properties have sold for more than $5 million during the past five years in Davidson County.

Dropping into $4 million territory would have doubled the chances of selling.

As luxury home sales go, 1,026 homes priced between $1 million and $2 million sold during that five-year period, while that number dropped to 124 for houses between $2 million and $3 million. The number drops to 40 for homes between $3 million and $4 million.

The house on Honeywood has two lots, so it almost doesn’t count. The additional lot adds $800,000 to $1.25 million to the value.

The house rests on 3.14 acres, and the additional lot adds 1.28 acres. In this case, the buyer’s broker, Belle Meade real estate wiz Steve Fridrich, says that his buyer is not going to develop the lot, thereby making it a comparable sale in the single-family category.

Listing agent Courtney Jenrath hails from the halls of Fridrich and Clark and is consistently found in the upper-end market, as is her broker, Steve Fridrich. This sale went for $524 per square foot, as the home includes six bedrooms, seven bathrooms and a powder room. It has 8,783 square feet, a four-car garage and a swimming pool.

The grand entrance features marble floors and a floating circular staircase. Jenrath describes the house as “a family estate for 99 years.” The property taxes are $29,469 for this year. For those taxes, the owners could utilize Julia Green schools.

Years ago, a builder listing one of his Belle Meade projects was prompted by MLS to list the schools – meaning the public schools – for which his house was zoned. He listed Ensworth as the elementary school, Montgomery Bell Academy for middle school and Harpeth Hall for high school.

For all of his honesty, he was fined, and the current system does not allow such entries.

Richard Courtney is a licensed real estate broker at Christianson, Patterson, Courtney, and Associates and can be reached at richard@richardcourtney.com

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