Good news for investors:  Price & Company Realty obtained a copy of a letter from James Lockhart, conservator of the Federal Housing Finance Agency (overseeing Fannie Mae and Freddie Mac), to Charles McMillan, President of the National Association of Realtors.  (You can read the letter here.)

As you know, Fannie and Freddie recently lowered the number of allowable investor properties from ten to four.  This new limit forced many investors away from Fannie and Freddie’s standard loans and into higher cost investor loans and “hard money” financing.  The change was the last straw for many Myrtle Beach real estate investors, who threw in the towel and are now standing on the sidelines waiting for something to happen.

In the letter, Lockhart promises that Fannie and Freddie are now reconsidering that change, which “reflects an appreciation of the role for investors in the housing recovery.”

Because we in the Myrtle Beach area are so investor-heavy, this would be a welcome, and much-appreciated, ray of hope.

Sellers almost always overprice their homes. The market statistics prove this. On our MLS today, there are hundreds, if not thousands, of homes that will never sell at (or near) their current price.  The biggest reason for this is what I like to call SOS: “Seller’s Ostrich Syndrome.”

Even in this market, however, most homes do sell at (or near) their market value. But helping a seller understand their home’s market value is a conversation most Myrtle Beach real estate agents can’t stand, allowing instead their seller to stick their head in the ground.  True market value is that price at which a buyer will buy (and think they got a good deal) AND at which a seller will sell.

Market value is NOT:

1. How much you paid, plus some abstract dollar amount.
2. How much your neighbor’s house sold for, plus some abstract dollar amount because you like your home better.
3. How much anyone thinks it is worth, especially if they are a Realtor trying to get your listing.

For many sellers, today’s market value is just plain ugly. We know what it is like to lose equity, and we always try to balance what our sellers want with what the market demands.  And we strive to avoid SOS. Here are some tips to keep in mind:

1. Forget about what your home used to be worth. Homes sell, listings expire, and foreclosures and short sales are popping up everywhere. Buyers don’t care what you paid. They care about location, size, quality and condition.

2. What will your home be worth next month? We’ve had sellers reject offers that they considered too low, only to accept lower offers later because of continued market declines. If you think there is a chance that prices are going to fall further, price your home at today’s market value - don’t wait.

3. More marketing does not justify overpricing. Yes, it’s a good idea to differentiate your home from everyone else’s homes for sale. But every buyer that is attracted to your home will be attracted to other, similar homes, too. And if yours is overpriced, which will they buy?

4. Beware the appraiser. The last thing you want is to endure the hassle of offer, counter-offer, negotiation, inspection and packing, only to discover that your home didn’t appraise for the selling price. Do your homework - or make sure your Realtor does theirs - and establish a selling price based on three recent sales of similar properties.

5. Be the best! From a buyer’s perspective, they want value: the best house they can get, at the best price they can find.  And with the help of the Internet and/or a good Realtor, they’ll find it.  Sellers must first know the market and their competition, then create value for buyers. In today’s market, buyers are in control, they know that they are in control, and they won’t buy your home unless they believe they’re getting value.

Imagine this scenario:  the balance of the mortgage on your home is $300,000, and you just lost your job. A couple of months down the road, you are unable to make your mortgage payment, and the bank does what banks inevitably do in this situation.

Now, the bank does not want to own your home, so they sell it - at any price - to the first reasonable buyer.  In this example, let’s say that the bank sold your home for $200,000.

Since the bank knows your financial situation, and recognizes that you aren’t likely to cough up the $100,000 difference, they may forgive the $100,000 difference and go on about their business.

The reality here is that your financial situation hasn’t changed either way because of this $100,000.  Until recently, however, our friends at the IRS looked at this situation and decided that by forgiving your debt, the bank handed you $100,000 in cash.  And you can bet that the IRS wants a piece of the pie, so the IRS called this $100,000 “income” and taxed it.

Can you imagine?  Are you outraged?  You should be!

Here’s the good news:  last December, Congress acted responsibly and provided temporary relief from this ridiculous tax policy, but only for the 2007, 2008 and 2009 tax years, and only for principal residences.  So the wave of foreclosures happening right now is exempt, which should help - at least in some small part - stabilize our housing market and should help many homeowners in these situations.

Whenever I come across an excellent example of something I’d like to emulate - or I think you’d like to emulate - I always try to post it here and find a way to link it to Myrtle Beach real estate.

Today’s example has absolutely nothing to do with real estate, other than the subject of the post being my 8 year-old son, Greg.

About a month ago, we happened to be in a local indoor sports venue called “Sports Zone.”  And on this particular afternoon, the local Elks Lodge was running their annual Soccer Shoot-Out for local kids.  We did not know this in advance and, in fact, when Greg first saw it, he wanted nothing to do with it. (This is a kid that, if he can’t immediately be the best at something, he doesn’t want to even try it.)

In the end, the magnetism of “fun” won out over the possibility of being anything other than The Best.

The kids in his age range were given three chances to kick a soccer ball through five increasingly-smaller goals, for a total of 15 chances.   We watched a couple of kids do pretty well, and then it was Greg’s turn.  For a kid that has never played soccer, we agreed that he did quite well, scoring 12 out of 15 goals that day.

Imagine, then, our surprise at receiving a letter inviting us to an award ceremony  at the Elks Lodge a week later ~ apparently the kid who never played soccer was one of the top three!

Now imagine our surprise to discover that the non-soccer player won first place, AND was being invited to the state championship.

Well, the state championship was this past weekend, and Greg, who has now decided that he WANTS to play soccer (because apparently he CAN be number one), fully understood that he was going up against all the other #1’s in South Carolina.

Right before they called his name, he turned to me and said, “Dad, if I do really well, do you think that Mom will let me play soccer on a team?”

Ah, the moment of truth.

“I don’t know if she will, with all of your other activities, but I’ll back you up if you do well here today.”

He flashed the normally-mischievious smile which I now understand was actually dogged determination. Now he had a tangible reason to do well this day.

Greg tied for first place in his age group, and the Elks hastily set up a tie-breaker in which both children were to kick five balls through the narrowest goal, winner take all.

The other child went first - four goals. Greg looked at him, with his soccer team uniform and Go-ahead-beat-this look on his face.  Greg stepped up - four goals.

Tie-breaker number two presented both kids with more pressure, and it showed. The other child went first again, and was only able to score two goals.  Greg looked at me with the fierce determination we all have with a winning goal in plan view.

When it was all over, Greg had scored only one goal.

But the most amazing thing happened. It did not faze him one bit.  His determination to find a way to get Mom to let him play soccer on a team took him to the state championship against the Number One soccer-playing kid in South Carolina - and only one measly goal separated them.

And his determination won - Mom said Greg can play on a soccer team next year.

Where will your determination take you in 2009?

Since you and I aren’t going to get bailout money from Washington, let’s make sure that Washington helps the Myrtle Beach real estate market recover.  Tell Washington to direct more of the bailout funds toward alleviating challenges in real estate and everyone affected by it.

The National Association of Realtors issued its Four Point Plan today, which would:

1. Make the $7500 first-time homebuyer tax credit available to all buyers, and eliminate the repayment requirement. The credit’s limited availability and repayment requirement severely limit the credit’s use and effectiveness.

2. Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent. New rules set to take effect in 2009 will reduce them. Now is not the time to limit mortgage affordability.

3. Get the Treasury relief program back on track and target more funds to mortgage relief. Create a federal mortgage interest buy-down program to make below-market rates available and stabilize home prices.

4. Permanently bar banks from engaging in real estate brokerage and management. The banks have proven they have enough to do to simply manage the loan process. Banks should not manage home sales and purchases.

If you agree, make your voice heard!