OBX Neighborhood

Outer Banks Coastal Insurance Costs Are Going Up!

In this time of grave concern about the costs of owning a home, be it your Primary Residence, your Second Home or a Vacation Rental Investment Home, the last thing any of us need to deal with is an increase in an expense of home ownership. Well, here on the Outer Banks and all Coastal Counties in North Carolina, we are facing a pretty significant increase in the cost of insuring our homes.

Foreclosures are many, short sales are happening routinely and most are suffering from a lack of work to total loss of much they have enjoyed, grown to love and care for and upsetting families and lives. Why do we, in the times we are facing in this Country, have so much adversity... and who is trying to help us. Here on the Outer Banks, the Economic Stimulus Plan a few think will help, shares no help here (in my opinion). 

Here in Dare and Currituck Counties, the Outer Banks REALTORs and Outer Banks Home Builders are fighting for our rights to a fair assessment and application of actual facts as it relates to the Insurance situation we are facing! These two groups share a Governmental Affairs Director who has endless hours in her research and informational help; almost bordering on a Lobbyist type of work. She has helped our County and local business people pursue an alliance with most all Coastal Counties in North Carolina. Although the alliance is still doing some ground work, that alliance will be a long term benefit to our people.

As part of our work as REALTORs, we have a duty and obligation to help keep the public informed by researching and providing accurate information and put it out there for all to know. To that end, our Government Affairs Director provided a History and fact finding piece that I am including below with the Blessing of the Board of Directors of the REALTOR Association. It is very important information.

You should read and ACT! Everyone is going to feel the pinch and additional cost; even the tenants will feel the affects. This piece is LONG but well presented and I am providing it to you in total without any changes; as required. As the Legislative Chair for the Outer Banks Association of REALTORs, I welcome and encourage comment and questions from those who read... BUT READ IT!

Thanks for taking the time to Read!

Here you go:

The information below was included in last week's Outer Banks Association of REALTORS^®' Legislative Briefing. The Briefing is published by the Outer Banks Association of REALTORS^® as a benefit of membership. We are encouraging you to forward this Approved release of a portion of the 'Legislative Briefing' as information for your clients, homeowners, and anyone else who is willing to help by publishing this information in other venues in order to reach as many people as possible!  We NEED homeowners to contact their representatives to help MAKE A DIFFERENCE!

Please ensure if you are forwarding this information, to provide credit to the owners of this information, being the Outer Banks Association of REALTORS® and the Outer Banks Home Builder’s Association!

 INSURANCE - IT'S WORSE THAN YOU THINK!
PLEASE READ AND TAKE ACTION!!

Coastal Insurance – What You Need to Know… and What You Need to DO!
Send comments to willokelly@gmail.com, Government Affairs Director
Outer Banks Association of REALTORS^®      Outer Banks Home Builders Association

 Here's the breakdown:

o         A 2% Per Occurrence Deductible (5% in Bald Head Island) for any wind damage went into effect under the Beach Plan and Fair Plan February 1, 2009. For renewals and continuations, the effective date is April 1, 2009. This is not a 1% to 2% increase! Beach/Fair plan deductibles were flat rate deductibles – ex. $1,000 on a $100,000 to $200,000 policy; $2,000 deductible over $200,000. Therefore, if you have a $400,000 policy – instead of paying $2,000 towards any wind damage – you will now have to pay $8,000 every time there is wind damage! The deductible is not tied to a hurricane – it is for ANY wind damage whether it is caused by a thunderstorm or nor'easter, etc. If a thunderstorm causes wind damage in Raleigh and that same storm hits the Coast – Raleigh residents might only have to pay $500 and for the same storm damage here – it's $10,000 on a $500,000 house. $500 vs. $10,000 for thunderstorm damage. And if another storm happens to cause wind damage in the same year – that's another $10,000 up front you'll have to pay. Are you now asking yourself – how fair is that? The official notice of the changes can be found at: http://www.ncjua-nciua.org/uw/mailings/web%20notice%20rate%20deductible.pdf. 

• Beach Plan Surcharge Increases – A surcharge is a multiplier to the advisory homeowner's rates ordered by the Dept. of Insurance. The surcharge increases are as follows effective February 1, 2009: For Homeowner's (full peril) – the surcharge is being increased from 1.15 to 1.25. For example, if the ordered rate is $1.00 – then under the Beach Plan you pay $1.25 for insurance. For Homeowner's Wind policies the surcharge factor of 1.05 is being increased to 1.15 – for every $1.00 ordered rate – you pay $1.15 for wind coverage under the Beach Plan.  The surcharge is meant to be a deterrent to people from buying coverage under the Beach Plan. The problem is that the surcharge is not a deterrent because the Beach Plan is the only option available to us, especially for wind coverage.  People are not calling their insurance agents and asking for Beach Plan coverage - they are being told their only option is Beach Plan coverage!

• So, now here in the eighteen coastal counties, citizens with Beach Plan coverage have an enormous deductible increase and a 15% and 25% surcharge - whereas most citizens in the western part of the state actually get DISCOUNTED RATES for homeowner's coverage because it is a competitive market. We get surcharged - they get discounted.

• Now let's look at the rates statewide: Effective May 1, 2009 new rates go into effect. A chart and territory map can be found at http://www.ncdoi.com/Media/Documents/2009_HO_RateChangesWithMap.pdf.  Please open these documents and print to follow along. The Rate Revision Chart shows the Counties/Cities in each territory; the territory number identified on the map; the rate percentage filed by the rate bureau (rate that was requested); the rate percentage ordered by the Insurance Commissioner; the dollar amount filed; and the last column shows the dollar amount ADVISORY RATE ordered by the Insurance Commissioner. First line show that the Currituck, Dare and Hyde beach areas, territory 7, is going to have a 6.5% increase - equivalent to about $2,122 for homeowner's insurance on a $150,000 frame home under an HO-3 policy, classes 1 - 6. On a $300,000 policy - that's $4,244 for general homeowner's insurance: fire and liability. Now add wind insurance AND if necessary - flood insurance. Go to line 7 - Gaston, Mecklenburg and Union Counties. Their rates are going down 6% - equivalent to about $499 per $150,000 of coverage. BUT REMEMBER - THEIR RATES ARE DISCOUNTED! So on a 300,000 policy, those is Gaston, Mecklenburg and Union Counties might only be paying $800 for general homeowner's insurance and they do not have to pay for additional wind coverage or flood insurance. AND they only have to pay a small deductible! $800 in Mecklenburgvs. $4,244 in the Dare beach area for the same HO-3 -general fire/liability policy. Add the wind/hail coverage and flood and you are probably looking at possibly $7,000 - $8,000 in insurance costs. I don't think anyone that lives on the coast has a problem with paying more for coverage because of being adjacent to the Atlantic Ocean, but are you now thinking even more - How is this fair?

• If you read the Raleigh News and Observer/Charlotte Observer over the latter part of 2008 - you would have seen in articles and letters to the editor the opinion that that the coastal counties are all wealthy citizens who are not paying their fair share. Those "beach" people are getting off easy paying "cheap" insurance rates under the Beach Plan. Well, we've already dispelled that myth above! And for those "wealthy beach" people - the Beach Plan covers the 18 coastal counties of Beaufort, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Hyde, Jones, New Hanover, Onslow, Pamlico, Pasquotank, Pender, Perquimans, Tyrrell, and Washington.

• The citizens west of I-95 have been led to believe that their insurance rates are going to go up because the Beach Plan does not have enough in reserves and surplus to cover losses in the event of a major hurricane - a 1 in 100 or 150 year storm. Insurance companies are assessed an amount for damages over and above what the Beach Plan has available to pay claims. This is done in "layers". Therefore, the insurance companies have to pay their share of the costs of which they say will be passed on to their policyholders statewide. The various insurance companies writing coverage in NC each have reinsurance coverage to assist in paying for assessments. When there is a loss, the loss is not recouped in just one year - it is spread out over a period of years. One insurance agent told me that in the past twenty years, there may have only been one assessment to the insurance companies.

• The Beach Plan was created in 1969 and interestingly enough - has yet to request an IRS ruling to determine if surplus funds - those over and above mandated reserves - are tax exempt. Typically, any funds seen as profit - the surplus - is viewed as taxable income to the IRS. The Beach Plan is an Association - not an "insurance company" - and so without ever determining the answer, the surplus has been distributed to the member companies. What?? So for years, with no major storms and assessment - monies have been distributed from the Beach Plan, thus perhaps creating the so-called problem that the Beach Plan does not have enough money in reserves or in reinsurance to cover the big one.

• The Beach Plan was originally intended to provide "essential property insurance" on the coastal barriers islands. It provided coverage for fire and extended coverage for wind, smoke, hail, aircraft, riot and civil commotion, and vehicle damage.  In 1998, the Beach plan was expanded to the eighteen coastal counties for wind only coverage and that is when companies began excluding wind from their policies and dumping the wind exposure into the Beach Plan wind pool. The Beach Plan was expanded again in 2003 to provide homeowner's coverage in the eighteen coastal counties. Why homeowners coverage in the beach plan? Because most companies were not willing to write here even with the ability to exclude wind. Why weren't they willing to write here with wind excluded? The reason was and is the theory of concurrent causation. (example – you might have a fire at the same time you have a storm therefore the loss is paid as fire rather than windstorm.)  Even in the recent past courts have made insurers pay flood claims as wind damage. The insurance companies are upset that the exposure has grown from about $17.3 billion in 2003 to about $74 billion in 2009. The risk of assessments from a major hurricane is real with this exposure and so few dollars in reserves, reinsurance (about $2.7 billion). Insurance companies are saying that there should be at least $6 - $6.5 billion in reserves for the Beach Plan to be solvent in the event that a major hurricane hits the coast. This amount is needed to reduce the risk of huge assessments to smaller companies, which could cause them to go out of business. There are fourteen members of the Beach Plan Board - 7 Insurance Company reps, 4 Insurance Agents and 3 public reps. Well, how did the Beach Plan exposure grow so large and who allowed this to happen?

• In response to Hurricane Katrina in 2005, the Beach Plan member companies agreed not to touch the surplus and allow the fund to grow. The Beach Plan board decided last year to increase the reserve fund from $750,000 to $1.1 Billion. Included in their report to the General Assembly, the Joint Select Study Committee on the Impact of Hurricanes on the Insurance Industry recommended amending Beach Plan legislation to not allow any distributions of the surplus to members companies and to only use surplus fund for claims, expenses and reinsurance. This one move will go a long way to address the Beach Plan solvency issue and member assessments!

• We pay more for coverage because of the threat of hurricanes. We have a huge deductible because of the threat of hurricanes. Statewide actual loss data, wind claims data has been requested but has yet to be provided by the Department of Insurance. On Tuesday, the newly formed organization NC 20 sponsored a Coastal Insurance Symposium in New Bern. Here's historical hurricane data that was provided: Out of the 15 most costly hurricanes (does not include flood damage) to hit the United States, eight of them impacted North Carolina. Out of the eight, six hit Central and Western North Carolina! Hurricanes are not just a coastal problem! A hurricane deductible should apply stat wide!

• Other info from NC 20 - We are always compared to Floridawhen discussing the threat of hurricanes. Floridahas about 1225 miles of coastline where it only 138 miles wide and is densely populated along the coast.  Over a 153 year period (1851 - 2004) 19 hurricanes category 3 or above hit Florida- three were category 5 and six were category 4. During the same 153 time period, 6 hurricanes category 3 or above hit NC - there were ZERO category 5 storms and only ONE category 6 storm.

• Dare County and other coastal towns/counties have legally challenged the surcharge increases and deductible changes to the Beach and Fair Plan approved by the former Insurance Commissioner Jim Long. Two bills - one in the House and one in the Senate have been introduced in the General Assembly regarding the homeowner's insurance rate changes and Beach Plan/Fair Plan changes. Work is continuing on these items. Due to the length of this report - You'll get an update on the progress in the legal/legislative arena next week with info on the Joint Select Study Committee Report.

• With the nationwide hot topic of discussion being economic stimulus and "how to help people avoid foreclosure", this is the worst time to implement any increases to the cost of owning a home! These rate increases and deductible changes will have an impact on the ability to reduce the inventory of approximately 2,600 homes on the market from Corolla to Hatteras - not including Currituck or Dare mainland. They will have an impact on financing, refinancing, selling a home and KEEPING A HOME! These changes will have a huge impact on our small businesses, especially since a 2% deductible is calculated on each policy item: 2% on each building, 2% on contents, etc.

 WHAT YOU NEED TO DO:

The only way we can a make a difference is if we all get involved! Your legislative committee will do the "heavy lifting" but your support is necessary!

o     Contact your insurance agent and ask how these changes are going to affect you.

o     Contact Representative Tim Spear at 919-733-3029, tims@ncleg.net;  Representative Bill Owens at 919-733-0010, Bill.Owens@ncleg.net; and Senator Marc Basnight at 919-733-6854, marcb@ncleg.net.

o     If you are involved in property management, contact your owners and request that they contact their insurance agent. If owners live in other parts of NC, tell them they need to contact their local legislators and express their concerns.

o     Email me the amount of coverage you have on your home-structure only and the total you are paying for coverage! THANKS to those that have emailed me a summary of their total coverage or scanned their policies and sent them. We need to show to legislators just what it costs for insurance on the coast!

o     The current Insurance Commissioner Wayne Goodwin has the power to freeze the May 1 rate increase effective date and also stop the Beach Plan/Fair Plan changes. CALL THE INSURANCE COMMISSIONER'S OFFICE AT 919-733-3058 and express that these changes are not fair and are discriminatory to the coast. Share how much your coverage costs have changed over the past several years and how this extra cost will impact you! ASK THAT HE TAKE ACTION! Then request a written confirmation of the call!

o     Email me at willokelly@gmail.com and let me know of your progress in these areas!

o     Mark your calendars and attend the Coastal Insurance Forum, sponsored by the League of Women Voters, on Thursday, March 5^th at 7:30 p.m. at the KDH Town Hall!

o     We are working diligently with NC 20 on this issue; NC 20 is a coalition of public and private interests in the twenty coastal CAMA counties. For more information, check out www.nc-20.com. Review NC 20's position statement below:

NC 20 Position Statement

                                       North Carolina Homeowners Insurance

 NC 20 supports fair and accessible homeowner's insurance rates across the state.

NC 20 supports a stay of the effective date until May of 2011 on the changes made to the Beach Plan and Fair Plan approved by the Department of Insurance Commissioner on November 21, 2008.

NC 20 supports a stay on the effective date until May 2011 on the homeowners insurance rates ordered December 18, 2008 by the Department of Insurance Commissioner.

NC 20 encourages the legislature to appoint a study committee to comprehensively review the NC Insurance System which includes the Rate Bureau, Department of Insurance, NCJUA, and NCIUA.

NC 20 supports the creation of an Insurance Commission similar to the model of the Utilities Commission.

NC 20 supports transparency, accountability and verifiability of the North Carolina

insurance system for a higher level of consumer protection.

NC 20 supports the use of actuarial data over modeling.

NC 20 supports statewide rate equity for HO-3 homeowner's policies.

NC 20 supports the current maximum coverage limit of $1.5 million under the Beach Plan.

NC 20 supports statewide wind deductibles triggered by named hurricanes and capped at 1% statewide.

NC 20 supports incentive programs and credits for wind damage mitigation

NC 20 does not support a cap on insurer assessments.

ANOTHER GREAT OUTER BANKS EVENT!

Saturday, October 25^th, is the Second Annual PIGSTEIN BBQ & BEER FEST.  Last year’s event was a good time for all with fine music and great North Carolina BBQ and an extensive sampling of some of the finest Breweries in the world.

  

“Pigstein is a full scale beer festival with breweries from around the world pouring more than 100 beers. It is a celebration of beer, barbeque and the Outer Banks” – to quote the website for the ongoing annual event.

 

October is a beautiful time to enjoy our Outer Banks with mild weather and no summer bustle! There will be a full day of live music, comedy and fun activities for the whole family – and the proceeds go to support the Dare Home Health and Hospice.

 

Representatives from the many breweries will be here to answer questions and serve samples (of course) beginning at 2:00 PM on through 6:00 PM. BBQ pit masters from around North Carolina will start their roasting to be prepared for the judges who begin at 11:00 on Saturday.

 

Tickets for the event are $30 for the General Session from 2:00 – 6:00 PM. If you want the finer approach – a VIP Tasting Session begins at 1:00 PM on through 2:00 PM. All tickets include a Collectible Pigstein tasting glass for the ability to taste 2 ounces of more than 100 beers. BBQ will be sold by the sandwich ($5) or plate ($7). Tickets are required for the Pigstein. They are not required for the BBQ which can be purchased at the event.

 

This is another example of our local business people putting together a wonderful fun event to raise funs for a great and needy cause. My compliments, to Chips Wine & Beer along with their partner -  High Cotton Barbecue for their hard work in bringing this caliber of event to ad to the Fall Schedule of Festivities celebrating the Outer Banks at its best.

 

You need to GET UP, GET OUT and JOIN IN and have some fun, taste some of the best BBQ that NC has to offer and certainly last but not least – an opportunity to learn more and enjoy some of the world’s finest brews.

 

As always, the Outer Banks will not tolerate drinking and driving – nor should they. The event is being held at the Promenade at the foot of the Wright Memorial Bridge in Kitty Hawk. Cabs are at your service and as always “friends don’t let friends drive drunk”!!

PERFECT WEATHER FOR KITE FLYING!

This weekend is the perfect opportunity for you and your family to enjoy some interesting activities at the Wright Brothers Monument.

The 22nd Annual Stunt Kite Competition is being held Saturday and Sunday, October 18-19.  There is a session in the morning where your children can make their own kits and for the more daring, how about a stunt-kit lesson in the afternoon? 

Have fun!

WHAT A GREAT WEEKEND TO COME TO THE OUTER BANKS!

The Outer Banks is truly a wonderful place to live and vacation.  In personally think we are fortunate to have such a special place to call home, whether it is full-time or a couple weeks a year.  The upcoming Columbus Day weekend is always one of the busiest of the year.  Our economy, like most areas today, is soft, but fun and enjoying activities are always here for everyone to enjoy. This weekend (October 11-13) will be alive with opportunity for you and your family and friends to enjoy the fabulous fall weather and community events for everyone! Below are highlights of some of the larger events taking place . . .  

The weekend starts early on Thursday with the annual OUTER BANKS PARADE OF HOMES.  This year there are 31 homes on the tour from million dollar + vacation homes to affordable year round or second homes.  The tour will take you from Corolla to Hatteras.  If you are thinking of building, this is a great time to meet some of our local builders and view their work.  The homes are open from 10-6 from Thursday through Sunday.  Tickets are available at each home or the Outer Banks Home Builders Association. 

Step back in time 400 years at the annual Elizabethan Tymes Country Faire.  This fun family event will take place on Saturday and Sunday, October 11-12 from 10:00 - 5:00 at the Roanoke Island Festival Park.  Tickets are $8  for adults, $5 for students 6-18 and children under 5 are free. For more information and directions to the park, visit Roanoke Island Festival Park. 

Saturday and Sunday 11 is also the 6th annual  OUTER BANKS INTERNATIONAL WINE FESTIVAL.  Held at Native Vine Vineyards just across the bridge, this year's festival features great food, live music, local artists and of course wine tasting, all in a relaxing and beautifully presented event for wine aficionados, enthusiasts and those who want to learn more about wines from around the world.  Tickets are available for $30 per person the day of the event or $25 in advance.  Visit The Native Vine for more information.   

Music Anyone?   The Town of Duck is holding its 2nd Annual JAZZ FESTIVALSecond Annual Jazz Festival on Sunday, October 12, 2008. The Duck Jazz Festival will be held on the main stage in the Duck Town Park at 1200 Duck Road from 11 a.m. to dusk. The festival is free and open to the public.  This will be an outstanding opportunity to enjoy som fine Jazz music and fellowship with the local community and visitors. 

After all that activity, you will be hungry . . . we've got that covered!  First Flight Rotary Club's 7th Annual OINK AND OYSTER ROAST is ready to feed you from 12-5 on Saturday, October 11 at the parking lot adjacent to Sunburns Restaurant in Kitty Hawk.  ALL YOU CAN EAT oysters and pulled pork barbecue!  This is the major fundraiser for the First Flight Rotary Club and always draws a large crowd of hungry folks!  The First Flight Rotary Club supports many local organizations with financial support and this year, more than any other, these groups need our help.  Tickets are just $20 for adults and $7 for children (available at the event). Visit http://www.oinkandoyster.org/ for all the details and directions.  

The Outer Banks real estate market is tight, but many are still dreaming and actively looking to find their own special place here.  What better time to come and enjoy!  Great food, great wine, fabulous food and music, and a fair for your children!  Get up, get off the couch, leave the yard work for next weekend and come on down! 

  

  

SHORT SALE??

In the current position some find themselves in The Outer Banks Real Estate Market, a "Short Sale" might be an alternative to foreclosure.  A Short Sale is when the bank agrees to accept less than the mortgage(s) balance in lieu of pressing forward with a foreclosure.  It will cause the lender to lose more money if they foreclose than accept an amount 'short' of the mortgage balance.

First, you should always initiate communications with your lender and be open and honest with them.  Second, you will have to demonstrate a "financial hardship" as well as market the property at a price the property is really worth in today's market.  Not all lenders will cooperate with a Short Sale, but if you are successful, the damage to your long term credit will be less.

To accomplish this, you will need the assistance of a Real Estate Professional who has the experience to guide you through the process and the commitment to be relentless with the lender who may have many borrowers requesting the same. 

For help with this, or any OBX real estate need, just call me.  Don't believe that foreclosure is the only solution!

ONCE IN A WHILE . . . .

Every so often, you see something that catches your eye . . .

Driving down the by-pass one day I saw a bumper sticker.  After some pondering, followed by some laughter, I realized I read it for a reason!  It said, "DON'T BELIEVE EVERYTHING YOU THINK."

Our housing issues are troublesome at best.  Prices are down, mortgages are harder to get, there are less housing starts, and work is hard to find for many.  And as always, we are inundated by the media that never ceases to report the negative. 

Real estate is selling.  People are buying.  Many are looking for that "great bargain" but the key is they are looking.  Many who were priced out of the market are back as active buyers.

Point being . . . don't let others do your thinking.  Look further and read and listen to the positive -- it is out there!  97% of the mortgages are current!

Fix it, clean it, paint it, lower the price, but make it stand out.  Be noticed.  Allow your true beliefs about your home to stand and deliver.  Don't allow your thinker to fail you.  As the sticker said . . . "DON'T BELIEVE EVERYTHING YOU THINK!"

FINALLY! SOMEONE IN THE MEDIA SPEAKS THE TRUTH ABOUT THE FORECLOSURE CRISIS

For years, real estate has been a good long term investment.  Our personal homes are just that, our home.  They are a long term wealth builder for most of us who live in them, love them, and keep them current and improved . . . which, along with the economy and apprecation, help to increase their value over time.

In these difficult times, it seems the media always seems to focus on the negative -- all day, every day.  So what else is new?  Many who are facing foreclosure have borrowed equity from their homes for various reasons.  Some are legitimate, but most are taking money they thought was equity, but really was market appreciation.  Many who are in trouble spent this money on personal choices based on their spending habits.

We are facing a correction.  This correction is an economic correction.  It happens in the stock market, in our retirement and investment funds, and now, most visibly, in the housing market. 

Dennis Kneale on his recent PARTING SHOT segment on CNBC's Business Nation, spoke about the current foreclosure crisis.   I think you need to watch -- he gives an honest, true picture of the real story behind the foreclosure / housing crisis.  It's about time someone took the initiative to do this and get more of the true picture out there.  Once you watch the video I think your perspective will change.

The Outer Banks real estate market is beginning to show signs of reaching the "bottom" so to speak.  Are we there yet? is not just a question children ask mom and dad on their way to the beach!  Our buyers are asking that question every day.  Once the bottom is reached, everyone will know and the inventory of available homes we have will shrink.  Are you watching close enough?  Is it your time?  Have you kept abreast of the many changes in the mortgage market? 

Look for upcoming posts on the new guidelines and trends in the mortgage market.

I always welcome your comments!

THE FORECLOSURE DEBATE IN DC

The reality of the foreclosure problem is hitting many here in the Outer Banks real estate market.  Little help seems to be forthcoming from our Legislature.  One of the writers for Realty Times is well known for his opinions on this subject, and I feel this one is well stated.   Although our foreclosure issues have, in many cases, been brought on by our "over spending" and "consumerism" and the lifestyle "we want to live," there are those who have been lead into this difficult path due to past lending practices.  This article speaks to the need to assist people who believe they have been misled. 

Frankly, the costs incurred by lenders and others in the disposition of foreclosures may be lessened if some help were available to folks who truly want to resolve the issues and keep their homes. 

Read the article by Peter G. Miller . . . . 

The "Fake" Foreclosure Debate in Washington.

LET YOUR VOICES BE HEARD!

There is no time like RIGHT NOW to start thinking about our choices in November.  We ALL want the current economic conditions to improve . . . most thinking "Hurry Up and Change Already!" -- kind of an Archie Bunker type of attitude. 

On the Outer Banks, as in most parts of the country, adjustment is a common word we hear as it relates to the Outer Banks real estate market.  Investment properties, building, real estate and development are a major backbone of our local economy.  Over evaluation, over leveraging, under saving, liberal spending and lifestyles have left us pretty much on par with the rest of the nation. 

Things are changing... They have changed! Our economy is beginning to point in a positive direction, or will be soon.  We continue through this adjustment period with our energies focused on doing the absolute best we can for our investor clients, local businesses, families and the communities we all share.  We need to know how our Presidential Candidates are positioned in their beliefs and policies -- we all have a duty to vote, and to make it an educated vote, in November.

Take a minute and read this article Where McCain and Obama Stand on Housing, prepared by a media arm of the National Association of Realtors.  It is a simple read and certainly one that will spark your interest in learning as much as possible as you approach your decision this Fall. 

CALL TO ACTION - SAVE HATTERAS ISLAND BEACH ACCESS!

I am writing today to inform you of an issue that has been brewing and one you ALL need to have a say in . . .

Everyone loves the Outer Banks.  No one loves it any more than those who visit here, grew up here, relocated here, or just passed through our beautiful area.  Many areas on the Outer Banks are protected in one form or another by the Federal Government.  Pea Island, Oregon Inlet, and the entire Cape Hatteras National Seashore fall under the purview of the National Park Service which has always allowed "on-beach" access to everyone, including the privilege of driving responsibly on the beach.  How many times have you driven out on one of the Hatteras Island beaches for a day of sunning, surfing, fishing or just soaking in the magnificence of this special place.  This may all come to an end soon.

In the Fall of 2007, the National Audubon Society, the Defenders of Wildlife, and the Southern Environmental Law Center filed suit in Federal Court against the United States to limit or ban access to many of the primary areas of the Cape Hatteras National Seashore including Oregon Inlet, Cape Point, and most of Ocracoke Island.  On March 13, 2008, the Department of Justice Declined to contest the lawsuit which will be heard on April 4, 2008 in Elizabeth City.  This effectively means that vehicular beach access will be closed -- think about the impact this will have on the local economy. 

We on the Outer Banks are asking for your help.  Go to SAVEHATTERAS.COM to get informed on this issue.  Join our fight and click on the "PleaCast" to send a letter to the lawmakers and politicians who can help us protect access to OUR beaches. 

IF YOU CAN'T SELL IT . . . MOVE IT!

The Outer Banks Real Estate Market is full of properties that are "For Sale."  Many are trying anything to sell them . . . price reductions, incentives, bonuses, cars, boats and even a new Hummer H3 have been attempted (The H3 worked!).   Here's a creative approach to getting rid of an older home - move it!  This home most likely left an oceanfront location to make way for a new home with all the bells and whistles. 

Nothing takes the place of a property in great condition.  This one was in a state of "demolish it" or "move it."  Obviously, someone made the choice to move it.  Homes like this one are usually free to anyone willing to take on the expense of moving it.  A licensed house mover will give you the energy needed and perform the job for a reasonable fee.  The power company will charge you plenty - this one cost $11,000 just to raise wires and other utility obstacles as it moved down the Bypass towards it's new location on the westside of Kill Devil Hills.

After arriving at it's new home, this house will be professionally renovated; brought up to current building codes and hopefully, find a new family!

To sell your home, you will need to make its appearance look the best it can . . . buyers are really critical!  If you cannot attract them from the street, you have lost the battle before you even start.  Another crucial weapon is effective marketing from your Realtor -- great photos, effective marketing campaigns, exposure on mulitple web sites, and the ability to reach a nationwide and even a worldwide audience.

OUTER BANKS REAL ESTATE MARKET - IT'S ALL ABOUT THE INTENT

What is the seller trying to do?  Sure, they are trying to sell . . . but are they facing the truth in today's market?  Is the buyer really trying to buy or are they focused only on getting a "steal?"  In today's real estate market, it is our job as Realtors to help those we are serving to recognize and understand the changes in the market.  Yes, we too have to understand and accept the change that has taken place, and we need to know that even though we are also signficantly affected, we must remain true to the principals we should always live by.

As a Realtor today, it is our job to assess the needs of a potential client.  It is further our responsibility to educate those we communicate with and help them assess and recognize their true needs and wants since change has happened and it won't ever go back to the market of the past.

To that end, we must stay true to the principals we were raised with -- honesty, integrity and character must remain as the foundation of our business methods.  If we as Realtors do not keep these core elements at the forefront in an unquestionable reality, our industry will not evolve into a respected profession that clients will use for the long term. 

Julie Escobar wrote an excellent piece for Broker Agent News this past weekend that capsulates these thoughts well . . .

IS THE IRS TARGETING REAL ESTATE AGENTS?

In this ever increasingly difficult world of Outer Banks Real Estate, and around the country, a new approach appears to be on the IRS' radar.  If it hasn't been hard enough to adjust to the change in market conditions, we apparently have another issue to look out for. 

As reported this morning by Diane Kennedy in the Realty Times, the IRS is apparently looking to find more ways to collect taxes from people who are, in their eyes, stretching the limits of a benefit we have fought to protect for years.

2007 - The 5th Best Year in History!

Although it may not seem that way here on the Outer Banks, home sales in the were the 5th best in recorded history.  The good news is that our real estate market is moving.

2007 brought us 1214 Residential home sales. There were 270 pieces of Land sold this year as well. Although this is a far cry from years in recent past, the fact is that real estate is still selling. Most professionals I know here on the Outer Banks are working with numerous serious clients who will buy real estate in the near future. There are some really nice opportunities out there.

True professionals in real estate, here on the Outer Banks and other places, have a wide array of services they offer their clients. The most important seems to be information. Knowledge of market conditions and a view of the direction things are heading are paramount. No one really can truly tell us when the bottom is here, but a professional with a long history of experience and service can make a difference in helping you realize when it is ‘your time’ to make a move.

Helping the client address priorities and goals are really the best ways to help them. Understanding the clients investment goals is a key to a successful real estate investment. A long term approach is the only way real estate works in a true investment comparison. I would suggest that 5 years is a minimum. It may be even longer than 5 years to many.

Buyers and Sellers need to be working with an experienced professional. That agent needs to be effectively marketing property throughout all areas available to them. The Web is a major area most fail to address effectively. Your needs are the only ones that matter. The professional REALTOR should stay current with all areas of marketing opportunities.

Know who you are working with and what they are doing for you.  Hold them to a higher standard. Those REALTORS who are addressing these standards are the successful ones. They are not working for a commission, they are working for you. The commissions take care of themselves when we take care of our customer’s needs.

Should you need some professional consultation about your needs and circumstances, feel free to contact me via email or direct. There is a professional waiting to help.

Our wish to you is a Healthy, Happy and Prosperous 2008! Remember tonight is Amateur’s night. Be careful and celebrate safely, and if needed, use a designated driver or a cab!

ICE SKATING ON THE OUTER BANKS? YES!

We moved to the beach to enjoy many types of things - the sun, fun, sand, nature and sometimes just a walk on the beach. When the thermostat drops and the breezes are steady the cold reminds us of the value of things during a warmer time of year. You might even find yourself complaining . . .  ‘Who Me’?  Many have moved here to leave the cold and snow, salt and cinders and the black and Yuk of a northern winter.

We fail to easily remember the fun we had on those special winter days - a fun ski trip, making a snow man with the kids, or simply a beautiful brisk snowy morning walk. Well, one thing we always enjoyed (even if from the sidelines laughing at others because we were too afraid or embarrassed) was ice skating with friends or with family.

Even though this is North Carolina and we live at a beautiful beach, you now have the opportunity to take your date, kids and family for an outing at a skating arena. One local business is taking us nostalgically back to the fun in our past lives. The Weeping Radish Brewery & Restaurant just south of Grandy in Jarvisburg, has come to the rescue.

This Friday, The Ice Haus opens for your Holiday fun.  It is an outdoor covered ice rink here for our enjoyment.  They will be having special events, Christmas hay rides, winter festive activities, pictures with Santa and public ice skating and rentals.  They have a full menu and a snack bar and might even have a beer for mom or dad while they take a break -  there is even a mini-Zamboni!

I applaud the owners of the Weeping Radish Brewery for their commitment to opportunity and for taking the chance, but most of all for providing us the opportunity for some good old fashioned fun.  Do your family, friends and loved ones a favor and find the time to enjoy the chill in the air.  Take them skating and enjoy some hot chocolate and break a smile and laugh.  We can all use a little fun and laughter in our lives.

The Ice Haus begins operation on Friday, December 21 (just in time for the Holidays) and will remain open through early March.   Enjoy!

ARE YOUR OUTER BANKS REAL ESTATE INSURANCE MATTERS IN ORDER?

Kansas, Missouri, Oklahoma ice storms, Santa Ana winds, and the wild fires, floods, and hurricanes . . . all these events across the country this year have left us all with serious questions.  Are we properly and adequately insured?  Are our papers in order?  Do we have all the papers in a safe place?  Here on the Outer Bank, we need to know our flood insurance issues are in order.

A few weeks back, one of my longtime Consulting Clients sent me a copy of his flood insurance premium for the coming year. It was a wild intro email indicating "How can they raise my premium from $352 to $1526 . . . My home is in an X zone . . . What's Up with That?" . . . I understood why he was freaking out!

FEMA monitors (and administers) the National Flood Insurance Program and has independent business firms administer the backbone of their Flood Insurance Program. They, as many entities have, evolved into using GPS mapping systems in their business model.  With FEMA, the identification system is used to locate property on a US Flood Mapping System administered by the Army Corp of Engineers.  Mortgage Lenders, appraisers and insurance companies use independent firms as an outsourcing of  flood certifications that are required as part of the mortgage lending and servicing business.

My client assumed an existing flood insurance policy from a prior owner when they bought the property back in 2003. It was not originally in a flood zone, and did not fall into a flood zone when the Army Corp of Engineers recently remapped the United States.  Dare County's new flood maps took affect in September of 2006. In a random audit of insurance policies on various properties (according to the Insurance Agent who handles the policy), FEMA's GPS system indicated my client's property's flood zone changed and it was now in an "AE" flood zone. Hence the serious increase in premium. Well . . . the GPS was wrong!  I assured my client, as I always do following a successful sale or purchase of a piece of real estate, I will help you handle this and "get it right".

Your property is "Grandfathered" based on the original elevation and building permit issuing date. This means that the house, unless the elevation or lowest level of living has changed since being built, is allowed to remain in the original "insurable flood zone status" as when originally built. This further means that FEMA cannot force the new flood zone on you, provided your home has had "Continuous Coverage" and you have evidence proving the home is as originally built. You will need an Elevation Certificate and verification of the original building permit date of record with the Town or County.

With so much change of ownership in real estate -- particularly in the Outer Banks real estate market -- many present owners were never given, or did not know to ask for, these documents when they bought their home.  Many, like my client, assumed an existing flood insurance policy. Well everything is different now.  With the losses experienced by the National Flood Insurance Program, these random audits are apparently being done. They have been occuring based on the remapping in Currituck and Dare County according to few local independent insurance agents.

When and if this happens, you will need to do your research fast!  Normally, the notice comes just a few weeks before renewal. Sometimes, unless you can find a copy of the Elevation Certificate and the original permitting date for the building project, you will need someone to do the research. If your insurance agent is like mine, they are limited to just communication of information. You need to get the information they will need to communicate to your insurance carrier. In our case, the agent was a great help in understanding a strategy and what would be needed. He also went to bat with FEMA for a manual opinion beyond an impersonal computer decision.

Better yet, why not start today and get these items together.  Keep copies readily accessible for when you need them. Documents can be saved in a PDF format or in a paper file, but the original should be kept in a safe fireproof and dry place. The difference in not having them and letting a new premium status be applied is just one bad part of this issue . . . it can contribute to a less salable property in the future! This could cost you far more than a premium increase annually.

Counties and Towns are destroying files from years back and many original files are no longer available. Being prepared is something I committed to years ago when I earned my Eagle Scout Rank. It is our motto!  Ironically, it has become a staple in life!  It is better to be prepared than to have to scramble at the last minute. Fortunately, for my client, they had me. I routinely help solve these issues for my clients and others.

As an Accredited Consultant in Real Estate, I am qualified to consult with you regarding your Outer Banks real estate needs.  Many find it is a great help to have a Consultant assist them in their decisions in business.  Why not consider the assistance of a Consultant in your Real Estate matters? It is a small investment in a good strategy; Should I sell?  Should I buy?  Should I remodel?  What Improvements should I make before I sell or after I buy?  Are my insurance policies in order?

Flood insurance is only one part of your Outer Banks real estate Insurance needs.  Now is a good time to review all your needs for your property here.  Your active involvement is critical to a successful ownership experience! 

Do you need Qualified Professional Consulting?

Bill Holt, Accredited Consultant in Real Estate- ACRE
On The Outer Banks, NC ~~ www.obxmls.com
Bill@obxmls.com ~~ 252.619.7010 - Direct