Visiting The Smoky Mountains

News about real estate in and near the Great Smoky Mountains

It is our pleasure to welcome you to the communities of the Great Smoky Mountains and Greater Knoxville! This is the perfect place to live, work, and play.

With this blog, we want to give you news of the area, provide an introduction to opportunities, and give you information on especially attractive properties.

You have come to the right place to find that perfect home, land, business or investment property! We want to help you find the perfect one!

CENTURY 21 MVP

 

May 15, 2024

Response To The NAR Settlement

If you’ve been following the latest on real estate, you may have seen the reports
regarding the National Association of Realtors recent decision to settle a lawsuit out of
court pertaining to commissions and buyer representation. So, what is the low down on
these highly publicized “real estate lawsuits” regarding commission, and what does it
really mean for future sales and purchasing? 
The lawsuit revolved around federal anti-trust laws that govern the restraining of trade.
In this case, the National Association of Realtors, as well as several real estate
corporations and agencies, were accused of stifling trade through requiring buyers’ agents’ commission rates be publicized in the multiple listing services. The fact that
many brokerages across the country charge similar commission amounts for selling and
buyer representation on a transaction led to accusations of “price fixing”, perhaps
“boycotting”, perhaps “steering,” or some type of “anti-trust” that could be restraining
free trade.
However, there have always been options for lower fees, giving alternatives to full real
estate representation. These include flat fees for services, auctions, and so called
“discount brokers” who put a listing into the MLS but do not take on any further roles or
responsibilities in the property sale process. All these alternatives provided options and
charged miscellaneous amounts. Most of these alternative models are also members of
the National Association of Realtors. It’s just that these alternatives have not been
extremely popular and therefore have not made up a large percentage of the real estate
sales approaches. My personal belief is that the lack of popularity stems from their poor
results and the fact that they do not protect sellers and buyers in the stressful
complicated process of buying and selling a home or investment property.
It is true that largely across the US, commission rates are similar for full representation.
Like the cost to have a landscaper take care of my lawn is similar whether I am in
Michigan suburb or Georgia suburb, or my general practitioner has a similar charge for
a doctor’s office visit whether I am in Nashville or Cincinnati.  The cost, in my opinion,
for a real estate commission is often close to the same because that is what it takes to
represent sellers and buyers. But it is always negotiable and there is a range of what is
offered.
The National Association of Realtors has always instructed and required that
commission be negotiable 100% of the time and that no broker should collaborate
outside of his brokerage with others to “set prices”.  Therefore, in this lawsuit, they did
not agree that they were guilty of restraining trade, but they did agree in the settlement
to no longer publish commission rates in multiple listing services. NAR also agreed to
begin requiring that buyers sign representation agreements before they go and view
property. These buyers representation agreements have been used for years, but they
were often signed when an offer was written. The reason for this change is that in the
lawsuit the complainants were concerned that buyers were not given a chance to
negotiate the fee that was being offered to their agent. They contended that the home
purchase was “covering” this buyer’s agent commission. This signing before viewing
property would give the buyer opportunity to negotiate his own commission fee. The

buyer’s representation agreement outlines a buyer agents’ duties and what their
brokerage charges for this service.
The settlement still allows the seller to pay the buyer’s agent compensation. The
change is that it will not be published in the MLS, so agents will have to communicate
what is offered directly. The second change in the lawsuit settlement is that buyers will
be required to sign an agreement with their agent prior to touring a property with that
agent. At first glance this seems extremely reasonable. Why not let the buyers negotiate
their own rate with their agent?  Why not let them pay for it themselves instead of the
seller? Again, that sounds fantastic until we start putting it into practice. The purchase of
the house needs to be set up for all parties to win.
There’s an old saying that I believe applies here. The more things change, the more
they stay the same. The needs have not changed. So with that in mind, let’s look at
how these new rules impact each side of the transaction. (Note: the final approval of
this agreement is set to happen later this year, so these changes are tentative until that
happens.)
IF YOU ARE THE SELLER:
1) Currently lenders do not allow buyers to finance a commission payment so they
will need additional cash right when interest rates are high, so they are already
stretched with what it costs today to purchase as compared to last year. Lenders
also have tightened up their requirements for down payments, property mortgage
insurance (PMI), and closing costs are higher.  So, the amount of cash needed to
purchase is higher than ever. Giving buyers the responsibility of paying for their
own representation is effectively removing many buyers’ ability to qualify or it is
limiting the amount they can purchase. Therefore, I recommend that it will be in
your best interest for you the seller to continue this powerful concession for their
buyer and offer buyer’s agent compensation with a caveat that the buyer may
waive this concession and receive a discount.
2) VA loans and many specialized loans don't even allow buyers to pay their own
agent. I imagine they will change this. But what really changes? The price of the
home contains the commission whether it is the buyer or the seller paying. So
again, to help a veteran and present your home to as many buyers as possible, I
highly recommend this concession right off – offer compensation for buyers
agents. The key to getting the best price for your property is to expose it to
as many buyers as possible. 
3) Lastly, the other good news for you as a seller is this: If you will continue to offer
a concession to pay the buyer’s agent, you will attract more buyers, thus giving
your property more exposure and proclaiming to all the buyers that you are the
kind of seller that they will find enjoyable to purchase from. Even if they have
made other arrangements to pay their agent. You are a hero, offering a discount.
You will be surprised how many people want to buy “from a friendly kind person”

and want to live in that home or buy that cabin from! Generosity and kindness
count! Buyers’ agents will love you also. This lawsuit has generated a negative
environment of distrust and lack of appreciation. The buyer’s agent will have an
attitude of gratitude towards you even if their buyer doesn’t take you up on the
concession. This spirit of cooperation can make all the difference in a successful
closing without drama and other losses.

IF YOU ARE THE BUYER: 
1) Find out on each property you are considering for purchase what the seller is
willing to cover toward your closing costs, repairs, etc. Remember that all things,
including the concessions you may need in order to purchase this home, are
negotiable.  Even if the seller is not offering to cover your agent, or concede
closing costs that you need, or repairs you desire. Be positive, that doesn’t mean
they may not reconsider and agree to your offer. You simply need to be willing to
ask and accept a no and move on. This wasn’t the right property for you. 
Remember the seller is most interested in the bottom line, so you need to take
that into account when making an offer. It’s okay to offer a higher purchase price
in order to compete with other offers that will not be asking for your concessions.
Do not get hung up on small amounts when negotiating. Keep the big picture in
mind! You will never remember if you paid $550,000 or $570,000 three years
from now.
2) Be willing to negotiate a fee for representation with an agent. The hard truth for
buyers is that in the case where the seller is not offering concessions for
commission, you might feel compelled to “go it alone” without help. There will be
many steps in the process and things you need to know that an agent
representing you can help with, such as finding out if there is a septic permit, or
having a home inspection done, or reviewing the deed and other public
information about property boundaries, public services, HOA contacts, etc. If you
are looking to buy an investment, you will want someone to help you make sure
the property can be rented in accordance with zoning regulations and subdivision
restrictions. These are only a few of the problems I have caught for my buyers
over the years. Back in the early 80’s, we came up with “buyer representation” in
Tennessee and it was a good thing for everyone.  Be willing to move on to other
property if you can’t make the numbers work including your buyer’s
representation fee.
3) Part of the settlement included a stipulation that the National Association of
Realtors agree to place in writing a new version of the buyer’s representation
agreement that Realtors will be required to have signed by a buyer before going
to view a property with them. Therefore, as a buyer, you should expect every
buyer’s agent to present you this documentation prior to scheduling the showing
of a property with you. The purpose of this document is to outline the costs
associated with purchasing a property before you view it. It’s like the requirement

that a lender give you a good faith estimate before you commit to a loan. This
representation agreement will also outline all that your agent is commits to do on
your behalf and it is your releasing them to work on your behalf and represent
you. It will also serve as the document that determines the negotiated fee
between you and the agent, defines the costs associated and the various options
of how it will be paid. It is all negotiable and can be renegotiated as well during
the process.
To recap as a seller, I recommend that you be ready to offer concessions from the sale
of your property to help buyers with representation this will give you the most exposure
for your property.

As a buyer you will need to be ready to be more flexible; setting aside cash for buyers’
representation or giving your agent the ability to negotiate on your behalf asking for
compensation if you need this concession and it is not being offered. If a property
negotiation isn’t coming together for you be ready to move on. Be willing to ask for what
you need and stay creative!

Posted in Deborah Korlin
April 23, 2024

Where Is The Win In This Market?

Winning the market

Finding the Win: Written By Deborah Korlin


If you are looking for a vacation style cabin home in the Smokies that you can make money with, you’re probably wondering, ‘Where is the win in this market?” This is always the right question! And there is always a win to be found, but what is it? The first step in finding the win is to determine what you want in a cabin in addition to its earning potential. If you aren’t having the greatest time on your own vacation staying in it, when you come to visit, no amount of income will make you feel better about what you own.
So, make your list of wants and then find the property that best fits as many of those items as possible and can be a solid source of income when you’re not using it.
Let us start with what not to do! In terms of income production, these are four things to be wary of when searching for potential properties:

1) An overpriced property where the seller purchased it at the height of Covid. They
won a bidding war but they paid too much and now want to go in another
direction, so they need to sell it for higher than it is worth. It wasn’t the right
purchase then and is not the right purchase now.
2) A fixer upper with expensive issues that don’t readily bring value or issues that cannot be understood fully until you pull off walls or start the work to figure out what all needs to be done to increase its income.
3) A property that you “fall in love with” but is has an issue that you cannot overcome, like location (you cannot move a house; you can repaint, but you cannot relocate – remember, if you’re not happy when you stay in it, no amount of income will make you feel better about it)
4) Poor quality construction! Don’t let the fancy remodel of a poorly constructed home deceive you. It is not as valuable as something in good to excellent construction. It will cost more to maintain and will wear out faster. Resale value is something you need to keep in mind, and if you have to completely remodel it again before you sell it down the road, you will have a difficult time recouping
your initial investment.

So, with those warnings in mind, let’s talk about what an investment win will have.

These are four things that are a win in this market:
1) A special property because of a feature. That could be a great view, a beautiful stream, a wonderful design, or even a pristine location. Many lenders will tell you “Date the (mortgage) rate, but marry the property,” and this is great advice! Rates will not remain high forever. Figure out the cash flow numbers, especially if
investment is your number one reason for buying. If the numbers make sense now, then this property will continue to appreciate and be a great investment for many years.
2) A fixer upper that has issues you understand and can price and has high potential for value and on the short-term rental (or long term) rental market once
refreshed.
3) An outdated cabin that is high quality, has great bones, is located well but not performing well as a rental and therefore the purchase price reflects that. (Remember, you can always offer less if you can justify the reason for the lower offer to the seller!) Once you address the décor and outdated fixtures the value is instantly apparent, both on the rental market and in resell value.
4) Any lot that is located well and has a beautiful view (even when it can’t always be seen behind the trees). In Sevier County as we have less and less land, property will become more and more valuable.
So that’s it. If you need help determining if a property can cash flow, I’m always available to help you figure that out.

Posted in Deborah Korlin
Feb. 19, 2024

Sevier County STRU Permits

   

 

In January, Sevier County implemented new Fire and Life Safety Codes, and established an

inspection program to enforce those codes. We have been expecting this for some time, but it

has been unclear as to the timing and exactly what would be covered...Read More..

Posted in Deborah Korlin
Jan. 23, 2024

HELP! I NEED A HOUSE AND I HAVE NO MONEY TO PUT DOWN!

 

...Help is on its way! You will be pleased to know that there are several options for you. The lending world is always changing. The good news right now is there are several loans that will give you the opportunity to purchase a residence with little or no money down....

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Posted in Deborah Korlin
Aug. 2, 2023

Buying vs Building

As an investor, should I build or should I buy something already built? This is a great question and one I have been asked frequently over the years! As we move through the current season of real estate, buyers I speak with continue to ask me whether building a new cabin makes more sense than buying an existing one. If you are...

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Posted in Deborah Korlin
July 6, 2023

Reasons for Great Smoky Mountain Rental Performance

There are a number of state and local government factors that contribute to how well cabins perform as rentals.  These are just wonderful for Tennesseans!  But they are also fantastic for our friends and family outside of our state that come to invest...

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Posted in Deborah Korlin
June 5, 2023

Tips for Successfully Selling a Property in this Market

“May you live in interesting times.” It’s one of those famous quotes that no one really knows for sure who said it, but we all know what it means. And for sure, the market is most interesting this year. These are challenging times, no doubt! So, all this affects real estate. In this article, we’re going to take a look at the impact of these “interesting times” on our housing market in the Great Smoky Mountains...

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Posted in Deborah Korlin
May 5, 2023

Accelerated Depreciation

I am excited to share with you one of my favorite tax benefits on our Smoky Mountain rental properties. It is called "Accelerated Depreciation." This accelerated depreciation has been allowed by the IRS for....

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Posted in Deborah Korlin
April 4, 2023

How To Get A Good Deal In This Market

amazing views

The best way to get a good deal in this market is to purchase a property that is underperforming. Of course, you must understand and analyze correctly why it has a lackluster performance. But once you analyze that, you will be able to troubleshoot the issues and correct...

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Posted in Deborah Korlin
Feb. 28, 2023

2023 - A Good Year to Invest

In the last few years, the Great Smoky Mountain area has been rated by VRBO, Trip Advisor and others who track short term rental revenues as one of the top 10 places in the United States to invest. One month we were thrilled to find...

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Posted in Deborah Korlin