Be careful in quest for lower interest rates

Friday, August 2, 2013, Vol. 37, No. 31

Home sales in the Nashville area continue to be hot despite the recent rise in interest rates. This increase has been much-anticipated and, many feel, a portent of things to come as these artificially low rates have to end at some point.

It appears Federal Reserve Chairman Ben Bernanke is weaning the nation off his goodwill, and rates will climb slowly for the next year.

Such horrific news has sent borrowers scurrying to buy homes and borrow money before interest rate Armageddon, a trend that has exacerbated the already depleted inventory.

Modern-day homebuyers wince and cringe at the thought of an interest rate of more than 5 percent and scour the countryside in search of lower rates than those offered by local lenders.

The Generation Xers and Generation Yers prefer e-mails to oral discourse and harbor a great disdain for those – lenders – who force them to grovel for their well-deserved loans.

With new regulations and requirements for more documentation from their birth to their current condition with check stubs, diplomas, letters from college landlords and parental cooperation, who could blame them? In fairness, getting a loan these days can be embarrassing.

Consequently, those of the X, Y, and Z generations often resort to obtaining financing from Internet-based companies that often send the check along with a laundry list of ‘junk” fees, often skateboarding around usury laws with the skill of a gold medal winner in the X Games.

As the contract is most often contingent upon buyer’s ability to secure financing, once financing is obtained, the buyer must buy, even if there are junk fees totaling 10 to 14 percent of the loan, scenarios formerly reserved for those with bad credit.

Let the Yer beware.

Recently, a Generation Xer spoke to a group of MLS executives and board members in an effort to explain the cross-generational behavior patterns. He referred to the parents of Baby Boomers as traditionalists and shared the following story as an example of the generations.

His grandmother (traditionalist) had a nice plastic tablecloth on her kitchen table. One morning, his younger brother (Gen Y) spilled his glass of milk onto the table cloth. The brother sat there and did nothing. The Xer sprinted for a cloth rag in order to absorb the milk in a reusable material. The Baby Boomer lunged for a paper towel, and the grandmother folded the table cloth and poured the milk back into the glass.

Listing of the Week

The listing of the week is rumored to be the sale of an upcoming week, as there appears to be significant interest in 3540 Trimble Road owned by Jared Followill of the world-famous Nashville-based band the Kings of Leon.

The 8,054-square-foot house is situated atop a 1.03-acre lot and was built by celebrity builder Rogan Allen, whose roots run deep in music.

Rogan is the son of Hoss Allen, the legendary WLAC radio personality from the 1950s through the 90s. He used the clear channel’s 50,000 watts to introduce overnight listeners from New England to the Caribbean to the likes of Muddy Waters, Sam Cooke and Aretha Franklin.

The house has five bedrooms, five full baths and two half baths. Amy Weist, the listing agent, describes the home as “Unique, modern meets rustic ... on a gated private lot, with abundant windows with views of Nashville”

There also is an infinity pool that, of course, “plays music underwater.” The Kings need to look good on stage, so there is a tanning room and a gym, wine cellar and chef’s kitchen.

The home sold in November 2009 for $1,825,000 and is offered at $3.5 million, as there have been a number of improvements to the house worthy of a rock star.

While Followill will long be remembered for his tremendous success, there are those in the community who came within an eyelash of stardom only to come in second.

Such is the case of Johnny Shea, who has logged more than 40 years as a Realtor after finishing second to none other than Pat Boone in a talent contest. Boone was a student at David Lipscomb High School, while Shea attended Father Ryan High School.

Currently a Realtor with Prudential Woodmont, Shea has devoted his career to singing at various churches and events, having entertained the congregation at the Cathedral of the Incarnation for decades.

In a poll of high school girls in 1957, Boone was a 2-to-1 favorite over Elvis Presley. Coulda been Johnny Shea. However, Pat Boone might not have been a good Realtor.

Richard Courtney is a partner with Christianson, Paterson, Courtney and Associates and can be reached at [email protected]