Canadians looking south

Until recently, Myrtle Beach was just a vacation spot for Canadian Jennifer Boodram.

Now she can call it home.

Canadian tourists who have fallen in love with the Grand Strand for its golf and warm weather are taking advantage of the strong Canadian dollar and buying real estate.

"It's a good getaway for us from the cold here in Canada," Boodram said of herself and her husband. "In a couple of years when we decide to retire, we'll probably spend most of our winters there."

The drastic rise in the value of Canadian currency against the U.S. dollar is in large part what's fueling the movement. The Canadian dollar rose to a modern-day high in 2007, marking the first time since 1976 that it was worth more than the U.S. dollar. The loonie has since fallen to about $1.01 against the U.S. dollar.

More Canadians have been looking at local housing since the loonie's surge, real estate agents said, and some agents aim to spur even more interest by marketing in Canada.

Janet Lindsay, a Realtor with Weichert Seaside Properties in Murrells Inlet, has sent about 350 direct mailings to people in Ontario and is looking to advertise in newspapers there, too.

She said there are several things that make buying Grand Strand real estate more attractive to Canadians than ever: not only the strong loonie, but also dropping interest rates, relatively low home prices and direct flights that recent start-up Myrtle Beach Direct Air & Tours offer between Myrtle Beach and Niagara Falls.

"Canadians were reluctant because it wasn't an easy trip to get here. It was expensive. You had to go from different hubs," Lindsay said. "Now that we have this direct, it's so easy."

Agents with Century 21 The Harrelson Group have advertised in newspapers in Montreal and Toronto to lure buyers south. The company's owner, Greg Harrelson, said he plans to launch a marketing campaign there within the next few months, including newspaper advertisements and offering money to Realtors who refer them buyers.

The company has sold about seven to nine homes to Canadians over the past six months, the most it's sold to Canadians in the past five years, Harrelson said.

"They're definitely seeing the value," said real estate agent Jan Pitman. "They can't touch anything up there for the prices we have down here."

Average home prices in Canada were $317,825 in December, according to the Canadian Real Estate Association. That compared with $255,211 for single-family homes and $218,232 for condos on the Grand Strand in January.

A study conducted last year by the National Association of Realtors found that the bulk of homes Canadians bought in the United States - 46 percent - were in the South.

Many of those buyers were looking for properties they could rent out or vacation homes where they could later retire. They flocked mainly to the beaches and mountains, said Walter Molony, spokesman for the National Association of Realtors.

"When people are seeking second homes, those are the most popular destinations, by the water followed by the mountains, so you've got some attractive areas in both ends of [South Carolina]," Molony said.

Robin Scanga of Ontario has vacationed in Myrtle Beach for years and snagged her chance to buy a condo when the loonie rose.

"I always, when I was down there, said it would be nice to have something of our own to go to," Scanga said.

It'll be a spot where family and friends can stay and they'll rent it out when they're not there, she said.

Like about 28 percent of foreign home buyers, she bought the $330,000 condo with cash. She said it was too expensive to get a mortgage here.

Roy Lipman, of Toronto, also had a tough time getting financing when looking for a home along the coast. Despite his good credit rating, banks were trying to push mortgages with big down payments and high interest rates, he said.

"It was not a happy occasion," Lipman said.

He ultimately found a good offer at RBC Centura, a subsidiary of the Royal Bank of Canada, with offices in Myrtle Beach and Pawleys Island.

Unlike most U.S. banks that require a visa or passport, RBC only requires proof of Canadian citizenship, said mortgage loan manager Charlie Sides.

"We deal with a network of [Canadian] Realtors, and we get a lot of referrals from our Canadian parents. ... The phone rings a lot," Sides said.

Still, there can be additional closing costs that foreign buyers should be aware of, such as a 10 percent tax charged to foreign investors through the Foreign Investment Real Property Tax Act.

"They have to be careful and do their research to make sure they understand what their closing costs are going to be," said Tom Maeser, the Coastal Carolinas Association of Realtors market analyst.

If the loonie stays strong, experts predict continued sales to Canadian buyers, especially as Canadian baby boomers age and look for places to retire.

"There is definitely untapped potential," Lindsay said.

How to Find the Right Home

Making Pre-Purchase Decisions

Just because you may feel restricted by price ranges -- especially if this is your first or second home purchase -- don't let anybody tell you that you can't afford to be choosy when looking for a home to buy! You are unique. You have desires and needs, hopes and dreams for your new home that are different from your parent's, friend's or coworker's. OK? So let's get busy defining these homebuying parameters and writing them down.

Location & Neighborhood

• Suburbs or Country.

Pros: Generally less expensive. Often newer. Tract homes are conforming. More home for the money.
Cons: More time in traffic if driving to town for work. Further away from entertainment options cities offer.

• Urban.

Pros: Closer to many employers.

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Walking distance to theaters, restaurants, schools. Many period homes offer more distinctiveness in styles.
Cons: Often noisier. Higher crime rates. More expensive.

• Busy Streets.

Pros: Often homes on streets with more traffic are thousands of dollars cheaper. If noise doesn't bother you, don't pass up homes on busy streets. Drive by at different times of the day / week to ascertain noise levels.
Cons: These types of homes will always sell for less than others in the same area. If bedrooms are located near the front of the home, sleep may be disturbed.

• Cul de sac.

Pros: Number one choice of buyers with children.
Cons: Less privacy, neighbors know more about you.

• Corner lots.

Pros: Often larger lots. Fewer neighbors. More visibility.
Cons: More traffic noise. More vulnerable to vehicles jumping the curb. Kids might trespass at the corner. More sidewalk to shovel in winter.

Type of Home

• Single Family.

Pros: Good appreciation. Opportunity for gardens. More privacy. Quieter.
Cons: More expensive than our next category. More maintenance.

• Condos, Townhomes, Cooperatives.

Pros: Less expensive than comparable single-family homes. Generally newer so fewer repairs. Lock-n-go lifestyle. No yard or exterior maintenance.
Cons: Less privacy. Noisier. Common walls and/or floors and ceilings. Sometimes no private yard or balcony.

Number of Stories

• Single Story.

Pros: Easy wheelchair access. Some medical conditions such as bad knees make it hard for certain individuals to climb stairs. Easier to clean.
Cons: Can be noisier if stereos or televisions are located on the same floor as bedrooms. Some people feel safety is compromised if bedrooms are located at ground level. More of the lot is absorbed by living quarters.

• More than One Story.

Pros: More living space on same foundation than a ranch home. Less noise if entertaining on lower level while other family members sleep upstairs.
Cons: More trips up and down the stairs to carry stuff to bedrooms. If laundry rooms are on the second floor, washer leaks are major. Might need dual vacuum cleaners. It is difficult to maintain consistent temperatures on each level without dual heating and cooling units.

• Split Levels.

Pros: Often less expensive if purchased with lower level unfinished. Higher ceilings are appealing. Downstairs family room separates noise levels from upstairs. More square footage on same size lots as ranch homes.
Cons: Less storage space. Hassle to take trash downstairs and carry groceries upstairs or vice versa. Kitchens tend to be smaller.

Interior Specifications

• Number of Bedrooms.

Pros: Common minimum requested configurations are 3 bedrooms. Newer parents prefer bedrooms located on one level.
Cons: 2 bedrooms appeal primarily to first-time home buyers, singles or seniors. However, don't discount a two bedroom if an extra den will satisfy your space requirements.

• Number of Bathrooms.

Pros: More than one bath is preferred by most people. One bath homes are often less expensive.
Cons: Don't pass up a one bath home is there is room to add a second bath. Sometimes it costs less to put in an extra bath than it does to buy a two-bath home.

• Square Footage.

Pros: larger spaces offer more room and cost less per square foot than smaller spaces.
Cons: Don't be misled as lay-out is more important than actual square footage. Sometimes well designed smaller spaces appear larger.

• Bonus Rooms.

Pros: Extra space for media rooms, art studios, children's playrooms, gyms, den/study.
Cons: More expensive.

Garages

• Attached.

Pros: Cheaper to build. Convenient if raining or snowing.
Cons: Higher noise levels inside the home from cars. Some people feel they are an eye sore. If the garage door to the house self locks, you could get locked out at an inopportune time.

• Detached.

Pros: Can be tucked away from site lines. Quieter.
Cons: More expensive to build. Farther to walk in bad weather.

Additional Considerations

• School districts.
• Special amenities such as fireplaces, pools or spas.
• Condition of plumbing, electrical, heating & cooling units.
• Available utilities such as cable or DSL, satellite.
• Sewer, cesspool or septic connections.
• Fixers.

The Meaning of Location, Location, Location

I've seen buyers get so excited over the updates in a home that they forget about the first rule of real estate: location, location, location.

Generally, buyers will get the best return for their money if they buy the worst house in the best neighborhood. If a cosmetic fixer needs carpeting or the floors refinished, buyers might receive a discount on price. Plus, then buyers can choose carpeting or floor finishes that match their own tastes and not that of the seller. On the other hand, buyers will most certainly face a harder time selling down the road if they buy the best house in the worst neighborhood.

Yet, many buyers gravitate toward the right homes in the wrong locations. After looking at a few dozen homes, it's easy to get swept up in the excitement of finding that perfect home. That perfect home might have the right configuration and plenty of amenities but if it's in a bad location, you might want to consider passing it by. Regardless of its price . . . read more about Location, Location, Location.

My Real Estate Website Doesn't Produce Leads

This seems to be the number-one concern among real estate agents these days ... a website that doesn't produce any viable real estate leads. Or one that doesn't produce any leads at all.

Sometimes the answer is obvious. Other times, it calls for some speculation. For example, some websites have such obvious problems that you can spot them at a glance. Maybe there are no lead generation systems in place at all, or perhaps the website doesn't function properly.

In other cases, however, the website may appear to be well-designed from a lead generation standpoint, but it still does not produce any real estate leads. This is a tougher scenario to evaluate.

In the latter case, the lack of real estate leads could just be because of the market. After all, if there's not a lot of real estate activity in your area, you can't expect a steady stream of leads to pour through your real estate website. In many cities -- from Nashville to Tucson and elsewhere -- this is what we are seeing right now. And in this case, you simply have to look at your traffic stats. Are you even getting any traffic on a daily basis? If not, you have no hope of producing real estate leads from the website.

If your stats reveal a steady stream of website traffic day in and day out, but you are not getting any leads from the website, then there is something lacking from a lead generation standpoint. In such cases, these are the things I usually troubleshoot first:

Does the website offer any reason why people should contact the agent, or fill out the form, or whatever the conversion goal is? If not, this needs to be addressed first and foremost.

Are the conversion points easy to find, or is the real estate website in such a messy state that visitors can't find their way around? This is a usability issue, and one of the ways you can spot it is through high percentages of people who hit the home page only to leave right away (without clicking further into the website).

These are the things I would start with when troubleshooting a real estate website with good traffic levels but poor lead generation. Often, it's just a matter of cleaning things up and presenting something of value that people would want.

I also see a lot of those "Free Reports" offered on real estate websites, presumably for lead generation purposes. Many of the so-called reports I encounter are poorly positioned in several ways. First of all, they will consist of information the web visitor can easily find elsewhere online. For example, "Top 10 Tips for Buying a Home" is so worn out and overused that it's sad really. Without much effort, I could probably Google that phrase and find it plastered all across the Web.

So who is going to offer their email address in exchange for a generic article they can find on thousands of other websites? Consumers are web-savvy these days, and they know how to ignore useless info and find the good stuff.

So let's say you took the "free report" concept and injected it with steroids and other performance-enhancing substances ... metaphorically speaking of course. Let's say you created an actual e-booklet, in PDF format. And let's say that it was all about the local real estate scene in your area. Suddenly, the booklet becomes something that people cannot find anywhere else, thus the perceived value of the item increases.

Now let's take this further and hire a graphic designer to create a "virtual cover" for the booklet -- one that you can use to promote it on your website. People believe in what they see, so sometimes a little visual entice is all it takes to get people to starting filling out those web forms.

But we're not done yet. Let's create a press release and distribute it online to announce this insightful new guide to the real estate scene in [your town] ... jam-packed with recent sales statistics, development news, residential reports and more. A must-read for anyone planning to buy a home in [your town].

I've shared enough. You get the idea. But suffice to say these are only steps 1 through 7 of about 15 steps I would take ... if I were serious about generating leads through my real estate website. I offer these kinds of ideas and strategies all the time, but very few people implement them. And do you want to know why?

Because nobody ever said lead generation was easy!

Those who put in the extra effort will reap the extra rewards. And those who keep peddling their "Top Ten Tips for Buying a Home" will probably find another line of work at some point.

Finding Your Dream Home

Many people believe that it is impossible to find the home of their dreams unless they have very large amounts of money available to buy the home that they want. This common belief is not necessarily true, if you know the right places to look, you will be able to find your dream home and not spend a fortune on it.

If you want to invest in real estate and stop wasting your money paying rent, it is possible and you can even find a home that will cost about the same as your monthly rent payment. All you have to do is find the right resources and know how they will work together. One place that you can look is at home auctions or in areas where there have been bank foreclosures. Many of these homes will be ones that the previous owners could not pay for and the bank was forced to foreclose on them. Because there is no one paying for the house, the bank is having to pay for it and often times the bank will lower the price of the home so that they will not have to keep paying for it.

If you do not know where to look for bargain homes, you can just browse through locations and do some investigating on your own. Many times, the Internet and local real estate magazines are designed to show you the market and they will also include the lowest priced homes in their listings. If you search local resources, you will be able to compare the homes that are available and you will also be able to see the homes that are lower priced because of things such as foreclosures.

When it is time to look for the home of your dreams, you do not even have to set a foot outside. You can instead search what is available using the Internet and real estate magazines and find a home that will fit both your individual style and your budget.

Mortgage Meltdown Has More to do with Fraud than Anything Else

Recently, I was discussing the mortgage meltdown with a reporter who made the mistake of asking me who or what I believed was primarily responsible for the mortgage meltdown and housing crash of 2007. My reply consisted of a single word: “fraud.” My conservative estimates target fraud as being responsible for at least 80% of the problem, and most of this fraud was perpetrated by industry insiders (both in the Real Estate and mortgage loan industries) on the consumers.

Of course, there is plenty of blame to go around. If consumers were not so greedy, using their homes like ATM machines whenever they needed an equity fix, perhaps the problem would not be so widespread and so deep. If fiscal conservatives were in charge of running the government at federal, state, and local levels, maybe we would not have a culture built around deficit spending. If politicians hadn’t agreed to ship manufacturing jobs overseas and open our markets to free foreign competition, maybe Americans would have more money to make house payments. If we had universal healthcare coverage, people wouldn’t end up in bankruptcy whenever they needed surgery.

I could go on, but from what I have witnessed in the Real Estate and mortgage loan industry comprises a concerted effort on the part of industry professionals and insiders to fleece the consumer. Cash back at closing schemes caused a huge part of the problem. When homeowners purchased their homes, many of them would borrow in excess of the property’s true market value–sometimes hundreds of thousands or even millions of dollars more than the home was worth. They were then stuffing the proceeds in their pockets as if they had earned it.

Some might say that in this case, consumers are clearly at fault. After all, they were the ones who benefited most from the scam. However, in a huge majority of cases, professionals were advising these homeowners, telling them that this was a perfectly acceptable practice, that “everyone was doing it,” and that you were almost stupid for not doing it. The professionals would even conspire to defraud the banks, lining up appraisers who were known to appraise houses at whatever target value the buyer, seller, and agent decided. In return, the appraiser won more business, and the loan officer and real estate agent “earned” higher commissions. Everybody wins!

Another tactic that mortgage lenders used to suck in clueless buyers consisted of selling consumers on adjustable rate mortgages (ARMs) that had teaser rates. When housing prices were spiraling into the stratosphere, fewer and fewer people were able to afford to take out a conventional mortgage to purchase a home. They simply didn’t have the income and savings required to obtain loan approval at the current interest rates. Instead of denying these high-risk lenders loans, the industry simply lowered the initial interest rate, so more people could qualify. Loan officers downplayed the fact that the interest rates would probably rise significantly months or years down the road. They told the buyers that they could simply refinance if the rate was too high. Unfortunately, when credit tightened, homeowners could no longer refinance with a conventional mortgage. Foreclosure became imminent.

During the big party when housing prices were on the rise and interest rates were dropping, mortgage brokers and the loan officers who worked for them, turned away few if any applicants. If you didn’t make enough money, they would encourage you to fudge the numbers on your loan application. To boost your credit score, you could simply piggyback on someone else’s credit card (this little loophole has been fixed). In some cases, the loan officer would simply have the applicant sign a blank loan application, so the loan officer could fill in the required information later–information that would be sure to win the applicant loan approval.

And this is just the day-to-day fraud. Professional con artists are also responsible for boldfaced scams that have ripped off homeowners and lenders alike. Armed with the Internet, technology, and know-how, these fraudsters could produce forged paperwork to score millions of dollars in mortgage loans for homes they never even bought.

What we are seeing now is fraud fallout. The system has been bruised and battered for too long. The very professionals who rely on the industry to feed them and their families have caused the problem, and many of them are now nowhere to be found. They scammed the system and left hard-working Americans to pick up the tab.