Real Estate From the Inside

Three Ways to Lower Your Mortgage in 2012

2012-01-09T13:35:00.000-08:00

First off, if you just purchased your home, you can file homestead exemption with your county. All counties now have the same deadline of April 1, 2012 to file for this. Since the home you purchased is your primary residence your are eligible for a discount on your property taxes. Even if you you already have a home check your drivers license. If you're over 62 (especially over 65) there are NUMEROUS discounts that you could be eligible for! If you're not eligible yet, I'm sure someone you know is so inform them.

Second, you can dispute your current tax assessed value with your county. If you haven't been mailed a new tax value in the last year or so, this is crucial since it's likely that your tax assessed value is not reflecting your home's current market value! In some cases, the local municipalities have raised the millage rate (Millage is the tax rate used to calculate your ad valorem taxes) to offset the slew of homeowners successfully lowering their tax assessed value by tens of thousands of dollars.

Third, contact your mortgage company and see if they collected more for property taxes than they paid out with the mortgage payments you made. Most mortgage payments have escrows which divide your tax/insurance bills over 12 months and pay them annually so you don't have to come up with a chunk of money when the bill is due. The problem is that if your insurance premium or tax bill goes down, your mortgage payment remains the same and now there is extra money being collected! When you contact your mortgage company and discover an overage, they'll give you an option to mail you the difference or apply to the next year's taxes--I'll let you decide what to do with that. This will also in turn lower your overall mortgage payment since the previous year's payment is based on collecting more in escrows.

Notice I did not recommend a loan modification. That is a new blog all by itself! Loan modifications have become THE most frustrating and sometimes demeaning processes next to doing a short sale on your own. Don't attempt a loan modification on your own use a third-party housing counselor (NACA is my favorite). Only used HUD approved housing counselors and NEVER pay anyone to do a loan modification for you.

Do a Short Sale or Apply For a Loan Modification?

2011-12-06T11:26:00.000-08:00

A short sale is when your lender allows you to sell your property for the current market value (or a price agreeable to all parties) that is less than your current mortgage balance. The difference is usually split between the lender and borrower (percentages vary) via a 1099, promissory note, or with cash contribution from the borrower. A short sale is only a viable option if you are looking to move out of the property. But what if you want to stay but you cannot afford the current mortgage? That's when the dreaded loan modification is your only hope.
Loan modifications--a new way to elevate your blood pressure. More than half of the clients who hire me to assist them with facilitating a short sale have tried to modify their loan with their current lender--often to no avail. They borrower is forced to provide tons of paperwork, wait for months on end only to get declined or they receive an unreasonable proposal. The proposals given to consumers from their lenders range from a small reduction in payment to an increase in the payment!!! The truth is banks do not make it easy to do a loan modification and seem to only be interested in meeting federal guidelines of providing clients with a proposal or a decline to meet the requirement that they have to do one or the other, whether it makes sense or not, within a certain time frame. The phone conversations with condescending customer service representatives are enough to make anyone irate. The best option is to use third party companies like NACA to successfully get an affordable payment option. The process is simple, but not a fast one. On average it takes 6-12 months, but in some cases the lender will suspend foreclosure attempts while a borrower is in the loan modification process. I have personally used NACA for a loan modification, represented one of their borrowers in purchase and another in a short sale. There are other outfits that assist with short sales, however, any that require money to begin the process are a SCAM! Use only a HUD approved counseling agency. This way you can be sure the company is legitimate.
Some lenders will require that you contact one prior to allowing you to do a loan modification.

Flopping. The new method of flipping in the housing market

2011-09-05T08:00:00.000-07:00

So you've heard about and seen shows about 'flipping' houses. Buying distressed homes at a steep discount below market value, fixing them up, and then re-selling them for a profit. This is common and easy to do in a home market where values are stable and increasing. While it can be good to get rid of properties that are eyesores and make a transitional, 'up-and-coming' area desirable, it opens the door to fraud. Fraudulent appraisals and inflated home values cause over saturation of properties and are followed by a steep decrease in property values (reference the 2008 real estate market) which causes a 'down' market. Since we are currently in a market where values are declining and slightly stable in some affluent areas (Sandy Springs, Johns Creek), the opportunity to flip remains, but if you're not an investor with cash on hand, the competition is stiff and the loan products available are not as favorable as they once were with 15%-20% down payments. You also have most homeowners owing more on their homes than they are worth and some in the process of losing their homes so short sales are all the rage. This has opened up an opportunity for investors to 'flop' properties.

Flopping is when an investor purchases a home from a homeowner through a short sale and then turns around and sells it for a profit. Sounds like an okay deal right? Well in some cases, investors are purchasing the homes and then re-selling them the same or the next day without even doing anything to them and not disclosing this to the seller's lender or the new buyer. That is where you have fraud.

I personally had a transaction on a Snellville home where the short sale was advertised as being investor owned. We submitted an offer, negotiated the price, went under contract, and completed the home inspection. When the title was ran, it showed that the owner of the property was a different person than the seller on our contract. We discovered that this investor (with help from the listing agent) had the home under contract with the bank at a short sale price ($80,000) negotiated with the REAL seller. The agent then marketed the property at $10,000 below market value and got a contract with my buyer at $115,000 ($15,000 below market value). My client's lender would not lend on a property that had not been owned by the seller for at least 91 days. We terminated the contract when we discovered the shady dealings of this agent.

Understand this, flopping cannot happen without a third-party facilitating the process with the seller's lender. In most cases, it is the listing agent who is in collusion with the investor. Even if the agent discloses that the investor is 'flopping' the property, it is an illegal practice because the listing agent's duty should be to sell the property to the investor ONLY. Once the investor purchases the property, they are free to do with it as they please (unless a deed restriction is in place)---even use the same agent to re-sell the property at a profit. The problem is when the agent is mis-representing the sale as being a short sale for a distressed homeowner, when it is really a 'flop' to an investor who usually pays the agent a kickback or percentage of the profit made. Also, no lender would co-operate with a short sale if it is disclosed that the purchaser is intending to immediately re-sell the property for a profit. In this case, the listing real estate agent has to be aware of the investors intent in order to facilitate a short sale like this so it's flat out wrong. Things to look out for are any extra addendums or documents required for you to sign that outline a legal entity (S-corp,trust,llc.) as the seller or a name difference of the name on title and the seller of a contract you have in place. There was a recent article of house flopping on MSN News. The biggest dangers to home buyers are the risks of losing earnest money if their loan cannot progress due to the title issue, the time wasted pursuing a property that would not work in the first place, and being accused as an accessory to real estate fraud if the original seller's lender discovers that all parties involved were aware of the 'flop'. Real estate fraud is a hot topic and sensationalized on the news so I'd rather my 5-minutes of fame on a more positive topic. Thank you.

Strategic Foreclosure

2011-06-21T12:42:00.000-07:00

Strategic foreclosure has become a HOT topic as of late. With property tax assessments coming out (forcing homeowners to see the neighborhood values), property values still dropping in some areas (3 years before we see any bottom in my opinion), interest rates under 4.5% (WOW!), and aggressively priced, rehabbed foreclosures looking good (Fannie Mae is setting the trend) it makes a homeowner wonder, "Should I just let my home foreclose instead of dumping payments into a black hole?"

The reality is that some of us (yes I'm in that group too!) may NEVER see our current loan balances match our property values in the next 7-10 years. Those who purchased in 2006-2007 with 100% financing have the extra pain of buying at the peak of the market so they are even more upside down. Once you get over the anger of the values dropping, get through the anguish of thinking of 'wasting' money on a depreciating asset, and get a grip on what you need to do next, you need to figure out what you want to do and what you are able to do. Let's look at some popular options:

1. Allow the home to foreclose and down-size to rental for 5-7 years.
2. File a bankruptcy including the home and purchase another home in 2 years.
3. Buy a new property and let the old property foreclose.

Any route you go, you need to know what it takes to cover yourself from any deficiency judgements from your current lender. Also, if you plan to buy again, to know exactly what you need to do following the foreclosure. I've always felt that you should look at it as a business would look at an asset and take all of the emotions out of play. Here is the best synopsis I found about strategic foreclosure:

"Society has put a stigma on foreclosure. If you foreclose on your house, that means you are a deadbeat loser who won't pay their bills. Society has turned what is in essence a business and financial decision into a black mark against the character of the person themselves. It is important to understand that having a foreclosure is not an indication of your character as a person. Life can happen. Medical bills and emergencies arise. Step back from the emotional aspect and look at the situation from a business perspective. No one wants to foreclose on their house. Sometimes, it is unavoidable." (link to full article)

Want more house for the money? Retail & Real Estate

2011-05-17T05:22:00.000-07:00

Outside of school districts, retail is a very close second to what drives property values in metro Atlanta's suburbs. Once you get past that your commute will suck no matter where you live (sad but true), how you much time you spend driving to do errands will become the lesser of two evils.

Alpharetta started the trend when Northpoint mall was created. This mall anchored out parcels and blocks of retail which turned into streets of bustling retail. The housing market around it benefited and still does to this day. It lessens the blow of how GA-400 is the only way in & out of Alpharetta because there isn't much you need to leave the city for outside of a museum or the fox theater. Gwinnett piggy backed on that idea by adding 2 malls (Discover mills & the behemoth Mall of Georgia) to compliment Gwinnett Place mall. Gwinnett took it a step further adding the Gwinnett arena, Braves minor league stadium and the Park of Suwanee which rivals Centennial Olympic Park. This retail growth has brought both counties other big box retailers (best buy, WalMart, home depot, etc.) that add to the surrounding retail.

Douglas & Clayton counties never quite grasped that idea. In the boom of 2000-2004 a lot of new construction went up in these counties. Lower prices & property taxes began to lure potential home buyers as values began to rise in the competing counties. The problem came when the buyers flocked to Clayton, Henry, & Douglas county, they soon discovered a simple Saturday of running errands involved a lot more driving than they were used to. Coupling that with buyers noticing that they were shopping where the moved away from!

With gas not being your wallets best friend right now, it's definitely a factor to consider when thinking about moving to a certain county to get more for your money. You could be giving that money back in gas and patience with every trip to the store!

Tips on finding a good deal---that REALLY work!!!

2011-03-24T07:29:00.000-07:00

In a buyer's market, finding a good deal is what every buyer entering the market demands. With a glut of foreclosures entering the market monthly (roughly 11,000 homes monthly), lingering short sales, and stale re-sales, it actually makes it more difficult to find one because you have so many choices. If you are unable to filter through properties you can end up wasting precious time on homes that aren't worth your energy and missing out on real deals. So after reading my last blog on how to spot a good deal, now you just have to know how to FIND one.

NARROW YOUR SEARCH

You need to have a target in mind as broad as a zip code and as specific as a subdivision. This will enable you to keep a sharp eye on new listings as they enter the market. If your search is too broad, you will likely miss out on deals because you're busy looking in other areas. People wonder how a house can be on the market only a few days and already be under contract; that usually happens when buyers have been scouting an area and notice a sign go in the yard and they inquire (and even make offers) immediately. Some agents will post a sign prior to a home being listed on the MLS.

LOOK OFF THE BEATEN PATH

The very popular communities usually have the lowest possibility of finding a 'steal' because EVERYONE is looking there. These sellers know this so they will either have higher entry level prices or under price a home to create a bidding war (yes, even in a buyers market multiple offer situations are all too common). Some surrounding areas with less traffic will usually yield better prices, less competition, and still have the same location benefits/perks.

FIND A GOOD AGENT

Locating a good agent can be the difference in locating and successfully purchasing a phenomenal deal. Some agents specialize in certain neighborhoods, areas, & even school districts so not only do they know all of the current inventory, but they also may have insight to homes entering the market. Even if the agent doesn't specialize in a certain area, with the right amount of internet savvy (imperative for today's market) they can set up custom searches that locate these hot properties the second they enter the market.

Using these tips will definitely land you a good deal in any market. But remember this, with values so depressed now, whatever you purchase is still a good deal in the long term as values will eventually stabilize and increase. Maybe not to the 2007 values, but at least 30% than where we currently stand in this current market.

A GOOD DEAL. Would you know one if you saw one?

2011-03-03T20:43:00.000-08:00

Chances are if you are currently looking for a home, or know someone who is, everyone is looking for a steal of a deal. In this market, there more deals than ever before and some purchasers are finding once in a lifetime opportunities. But what about you? Chances are, you wouldn't know a good deal if it fell in your lap! Here's how you know when you have a golden opportunity on your hands and it's time to make a move.
First, DO YOUR HOMEWORK!
Homework consists of knowing what has recently sold, what's currently on the market, and what the history of the area is. It could be a particular subdivision or an entire school district. Whatever the case, know the area. Just like shopping for a car, if you don't research BEFORE buying, you'll pay too much---even in this market. You won't be able to identify a good deal if you don't know market value. Too many times people will see a property that is way under-priced and will waste time trying to get it even lower when they should be offering full price before other offers roll in. Some banks & even HUD list properties aggressively knowing that the demand will net them bids over the asking price.
Second, KNOW YOUR LEVERAGE!
If you are financing a property, know the pros and cons that a SELLER sees when looking at your offer. If you have an FHA loan, and the house needs repairs, chances are the seller would rather a buyer who has a conventional loan or is paying cash rather than deal with FHA repair requirements. If you are paying cash, know the market and use your ability to close faster than a buyer with financing contingencies to get a deeper discount.
Third, BE READY TO DO SOME WORK!
Very few of the GREAT deals are move-in condition. The truth is that the discount on the price is usually taking into consideration an issue with the home whether it's the condition of the property, extensive repairs, title issues, the surrounding area, or seller's need to sell. No matter what it is, expecting to find a home with $20K+ in equity that needs no work is not realistic at all. Know your thresholds of repairs and work within those means.
Four, CASH IS KING!
We all know that an all cash offer is always the most attractive to a seller, however, they are usually the lowest offers a seller will see. If you are using financing to purchase, having the ability to pay your own closing costs in exchange for a better sales price, buying a home AS-IS, or even putting down more to use conventional financing are all to your advantage because a seller will feel less pressure and in turn will come down substantially on price and not feel offended as they would with low-ball cash offers. You must paint the picture for the seller and make them feel as if they are getting something---even if they aren't!!!

Getting Pre-Qualified BEFORE searching for a house

2011-02-15T17:33:00.000-08:00

The purchasing a home can be an exciting experience. Finding new neighborhoods, driving around new parts of town, & meeting neighbors & getting the skinny on the pros/cons of the neighborhood can be fun. Even peeking into a vacant home (there are a lot of them nowadays!) or dare I say 'breaking' into one that's open can really make the Sunday search enjoyable. The biggest way to put a damper on all of that is to find a home that you are in love with only to discover that you either that you can't afford it, your loan program won't finance it or worse, you can't qualify for a loan at all! A common occurrence is potential home buyers searching online, driving around to look at homes, and even calling agents to inquire or even view a home without getting pre-qualified first. Just like with buying a car, any radio talk show will tell you that you need to figure out your buying power first before even stepping foot into a dealership and I'm here to tell you that purchasing a house is no different. Here are the top reasons why you need to get pre-qualified FIRST before looking at homes.

Know how much you qualify for!
Without knowing your price ceiling, you will more than likely begin looking at homes that are above your price point. Some people have champagne taste and beer money so you want to be sure you have a realistic expectation on what you can get in a home. With today's market you can definitely get more (size,aesthetics,better areas) that you could just 4 years ago.

Determine your type of financing
There are two basic types of loans available, conventional and FHA loans. With FHA loans there are numerous guidelines that a property must meet in order for a your lender to allow you to secure a loan for it. For single family homes it must pass an FHA appraisal and cannot have more than $5,000 in repairs. More recently, a condo is a much more difficult buy using an FHA loan with new requirements in place for the COMMUNITY that the condo is located in. If the community is not FHA approved, you won't be able to buy in that complex.

Maybe you can't qualify
If it comes to light that you cannot qualify for a loan, the earlier you discover this the better. If you have a set target date ( i.e. a lease that's up in a few months), you want to get pre-qualified early to ensure there are no items on your report that need to be removed, disputed, or accounts with balances that need to be paid down or settled. With issues like these, once you fix them, it takes time for your score to rebound. You don't want to find out at the last minute that you'll need 3-6 months to be able to qualify when you've been actively looking to move already and could have been fixing these items when you first decided to purchase.

You can contact me directly at rousereo@gmail.com for more tips and suggestions regarding this topic

2010 Homestead Exemption

2011-01-27T11:17:00.000-08:00

If you purchased a home in 2010 that you currently reside in as your primary residence, don't forget to file for your homestead exemption! You only get one chance to do it or you lose it FOREVER! You are required to file a property tax return in the county (and city, if applicable) where the property is located, even if you are not eligible for homestead exemption (owner-occupant).
DEADLINES FOR HOMESTEAD EXEMPTION & PROPERTY TAXES

COUNTY PHONE # HOMESTEAD PROPERTY
Barrow 770-307-3108 March 1, 2011 April 1, 2011
Cherokee 770-479-1953 April 1, 2011 April 1, 2011
Clayton 770-477-3311 April 1, 2011 April 1, 2011
Cobb 770-528-8600 April 1, 2011 April 1, 2011
Dekalb 404-298-4000 March 1, 2011 March 1, 2011
Forsyth 770-781-2106 April 1, 2011 April 1, 2011
Fulton 404-612-6440 April 1, 2011 April 1, 2011
Gwinnett 770-822-8808 March 1, 2011 March 1, 2011
Hall 770-531-6720 March 1, 2011 March 1, 2011
Henry 770-954-2470 April 1, 2011 April 1, 2011
Jackson 706-367-6330 March 1, 2011 April 1, 2011
Rockdale 770-929-4123 March 1, 2011 April 1, 2011
Walton 770-261-1352 March 1, 2011 April 1, 2011

Remember, if you need tips on how to file for your tax assessment dispute or you need supporting documentation, contact me at rousereo@gmail.com

Winter home searching----best time to purchase?

2010-12-23T14:28:00.000-08:00

Every year home buyers who begin their home search at the end of summer set goals to purchase before Thanksgiving or before Christmas. The goal of being settled in for the holidays becomes overwhelming with handling a house hunt, vacations, & holiday planning all bundled together. To top it off lenders are usually working with skeleton crews during the holidays so loans tend to take a bit longer to process. Even with all this in mind, Winter is the by far the best time to purchase a property, especially foreclosure property, for a number of reasons.

REASON ONE---LESS COMPETITION
Spring brings out all of the 'lookie-lou's' and the income tax refund buyers. Summertime brings out the relocating and families looking to find a new home before school starts. Fall is usually the left over crowd from summer and a few stragglers. With less buyers in the market you have less multiple offer situations and less showing activity on listings so sellers tend to get more motivated. Sellers who keep their homes on the market will see that buyers that are out in the winter are SERIOUS. They brave the elements in search of a new home and are more motivated to get things done by year end.

REASON TWO--YEAR END CLEARANCE
When it comes to short sales and foreclosures, the banks, asset managers, investors, and lenders have incentives to close out the books and every sale counts. Many lenders need to hit sales goals and will push some loans through, however, larger lenders seem to be the most affected by the holidays with shorter hours and vacations. Banks are looking to get stale assets off of their books and not carry these properties over into the new year. They can sense the slowing of the activity in the winter and don't want to hedge their bets on the next season's traffic increase.

REASON THREE--MOTIVATED SELLERS
As I mentioned earlier, sellers who still have homes on the market in the winter are not just testing the waters. They need to SELL! They too feel the pressure to close before year's end and will become more motivated as the activity decreases. All of the resales that were testing the market have taken their homes off the market for the holidays and will "see what happens in the Spring."

REASON FOUR--INDUSTRY SLOW DOWN UNCOVERS DEALS
As the housing market slows every winter, so do the home inspectors, interior designers, movers, & contractors. You can likely get discounts on these services due to the lack of work and get it done in a timely fashion!!!

REASON FIVE--INTEREST RATES
In four of the last years, interest rates have been lower in December than they were in the spring/summer months. Even with market crash of 07 and the bounce back of 2009 it has still been advantageous to purchase later in the year.

Lease Purchase / Lease Option / Rent to Own Pitfalls

2010-12-05T09:59:00.000-08:00

PITFALLS OF A LEASE PURCHASE
A lease purchase used to be a great way to secure a property when a buyer is unable to immediately qualify for a loan, but would have the ability to do so in 6-12 months. The buyer makes a non-refundable down payment that is deducted from the sales price when they purchase the home and leases the property for a length of time needed for them to improve their chances to qualify for a mortgage loan. The #1 problem that occurs is usually the buyer not having a competent loan officer to assess the length of time needed to qualify. Second problem is usually something happening to the buyer during the lease term (loss of job, decrease in income, late payment, score not increasing as expected, loan qualifications changing) that causes them not to be able to qualify at the end of the contract causing them to lose their down payment. Life style changes (job relocation, school re-zoning, divorce, neighborhood decline) that make the home not as desirable are common, causing the buyer to not want to purchase the property at the end of the term. Another problem is maintenance & cost of ownership whereas a home requiring multiple repairs or higher utilities that the buyer isn't used to which causes the buyer to rethink wanting to purchase that particular property.

PITFALLS OF A LEASE OPTION
Lease options were very popular when the real estate market was experiencing huge annual increases in value. The buyer leases a property and deposits 'option' money in order to have the right to purchase the property at the end of the lease term for a set price. The problem with lease options in this market is that the sales price agreed on is usually more than what it will be worth at the end of the agreement. Declining values hurt both sides in this scenario.

PITFALLS OF A RENT-TO-OWN
Rent-to-own homes have remained popular in any market due to the appearance that a buyer could eventually own a home without qualifying for a mortgage loan. The most common problem with these is that the potential buyer never has a legitimate contract in place to purchase the property nor are they required to put in any substantial funds to secure the property if the seller has a better offer to purchase the property outright. Any seller with a mortgage in place is not a good candidate to do a rent-to-own from. Period. Likewise, a seller who is delinquent on a mortgage is not a good candidate as they will likely foreclose while the buyer is under the assumption that the mortgage is being paid. A seller who owns a house outright is not a good candidate either (surprisingly) unless a legitimate contract is in place that determines the total paid up front, the specific payment terms, interest rate, length of payments, and the total paid for the property. Ideally, if a buyer can get added to the deed it is the ideal situation. Owner financing is the best option for buyers who can't qualify, but understand that if you do not have the adequate cash to put into the deal to make it make sense or a legitimate contract in place, you will end up getting burned.

Days on Market----Does it Matter????

2010-12-02T07:58:00.000-08:00

Buyers always want to know, "how long has that house been on the market?" Early in my career, I didn't think that it mattered, but I've learned that it depends on what type of market we're in, the type of property (resale, short sale, REO, HUD property), or the price point of a home to know the negative and adverse effects of how long a home has been on the market will affect it's sale price.

IN A SELLERS MARKET (Average of 90 days on the market or less)
- Resales tend to be priced above fair market value so a longer time on market usually means a less desirable property. This is a sign to the buyer that if the home has been on the market for a while that its either WAY overpriced or has obsolete/quirky features (see blog "What makes a home a BAD buy" ) that don't appeal to the masses.
- Foreclosures/REO's/HUD properties tend to be priced at fair market value or below and sell quickly so a newer listing will garner a lot of attention and drive the price up in some cases. Having a foreclosure with a lot of days on the market could mean numerous repairs needed that lender is unwilling to fix or a very undesirable area that not even price will lure buyers in.
- Short sales in a seller's market are usually priced very close to if not at retail and are on the market 3-6 months due to the lengthy short sale process. If a short sale is on the market over 6 months in a seller's market, this is a sign that the listing agent is not very efficient with the process or the seller's lender is being stubborn.

IN A BUYERS MARKET (180 days plus average days on market)
- Resales are usually priced at market value and above due to competition, but in our current market here in Atlanta, they are usually overpriced due to surrounding property values and the sellers owing more than what the home is currently worth. Seeing a 'stale' resale means that either the sellers are prime to explore doing a short sale, lease, or will withdraw the listing and wait until values rise.
- Foreclosures are priced VERY aggressively in a buyer's market so seeing a stale foreclosure will mean extensive repairs, title issues, or its grossly overpriced. Sometimes you may see a bank with overpriced foreclosures that will linger until the bank reduces the prices within reason. I see this quite often in the $250K+ range where lenders cannot fathom that these homes are now worth $80K-$100K less than they were originally purchased for in favorable neighborhoods.
- Short sales are pretty much priced like foreclosures in a buyer's market so seeing a stale one will either tell you that the current lender is wanting more money to satisfy the seller's loan obligation than the current market value will allow. More short sales go into foreclosure in a buyer's market because of the sticker shock from the seller's lender of the depreciated values.

LUXURY HOMES
Homes over $500K are no stranger to 180+ days on the market. Homes $1M+ are usually on the market at least a year only because the number of people that purchase these homes are in the minority of the group of home buyers in a market at any given time. Another reason these homes sit on the market longer are the aesthetics and loans available. Heavy customization make some homes EXTREMELY hard to sell (google Dean Gardens!) These discerning buyers have tastes of their own and may not want the expense of getting rid of the previous owner's bad decor. The ability/requirements to qualify also play a part in today's market as lender's require more down-payment along with the absence of attractive Jumbo Loan rates. However, the luxury home market continues to maintain steady growth due to these buyers not being as adversely affected with the current economic state and a steady influx of all cash buyers.

WHAT DOES THIS ALL MEAN?
To sum it all up,knowing the fair market value of a home cuts down to the chase as far as determining what to offer on a property. At the end of the day, no matter what a house is priced at, you should know how much is too much to pay and how low you can realistically bid and have a shot. If you (or your agent---heaven forbid!) don't have this information, you're just making guesses.

Self Employed and want to buy a home???

2010-10-12T10:00:00.000-07:00

Since the real estate shift of 2007 which caused lenders to re-examine the criteria and types of loans they offer to potential borrowers, the self-employed seemed to have gotten the short end of the stick with 'no-doc' and 'stated' loans all but vanishing for a while. With good reason, during the previous ramp up in the industry, these loans were used to inflate a borrowers' incomes to allow them to qualify for more house. The result is what we have now. While this wasn't the only cause of the meltdown, these loans were the most popular for fraud.

To obatin a loan being self-employed in this current market, documentation is the key! I polled all the loan officers on my FaceBook Page to see what their thoughts were, being on the inside and seeing the underwriter's objections and preferences on a daily basis. I'll post the results at a later date. Being an independent contractor myself, I can relate to the extra hurdles you have to go through to obtain a mortgage on personal and investment property.

Here are the best five tips that I've found online to make yourself an attractive candidate to a lender when you are self-employed:

Max Out Your Credit Score
In any type of borrowing situation, a higher credit score will make you a more attractive candidate to get the loan in the first place and to qualify for lower interest rates if you're approved.

Offer a Large Down Payment
The higher your stake in the home, the less likely you are to walk away from it in times of financial strain. Therefore, the bank will see you as less of a risk if you put lots of cash into your purchase up front.

Have Significant Cash Reserves
In addition to a large down payment, having plenty of money in reserves shows lenders that even if your business takes a nosedive, you'll be able to keep making your monthly payments.

Pay Down Your Consumer Debt
The fewer monthly debt payments you have going into the mortgage process, the easier it will be for you to make your mortgage payments. If you pay off your credit cards and car loans, you may even qualify for a higher loan amount because you'll have more cash flow.

Have an Established Track Record of Self-Employment
If you can show that you know how to play the self-employment game and win, lenders will be more willing to take a chance on you. Some advice suggests that you should have at least two years of self-employment history; other advice, however, says that when rates are low, you should try to get a mortgage as soon as you're ready, even if you don't have a long history of successful self-employment.

Be Willing to Provide Documentation
Being willing to fully document your income through previous years' tax returns, profit and loss statements, balance sheets and the like will increase your chances of qualifying for a loan.

You can contact me directly at rousereo@gmail.com to put you in contact with a loan officer to discuss what options you have to purchase a home when you are self-employed.

Gwinnett still GREAT?

2010-09-02T12:01:00.000-07:00

Even though the water towers started coming down, residents still believe that "Gwinnett is Great" and that "Success Lives Here." The AJC had a write up on the demo of the iconic towers and it made me start to wonder if just because the visible proclamation would be removed from I-85, would the ideology still remain? The answer is an astounding YES!

As a resident of Gwinnett County since 2002, the main drive for my relocation was to purchase a home in a good high school district. I knew that chasing good elementary and middle schools was not the route to go to maintain stability for my kids and sanity for myself. Being a Realtor, giving people a reason to move is something I put into action for others everyday, but I don't like doing it myself! Sure enough Gwinnett has stayed atop the ranks for public schools and Brookwood High School was ranked in Newsweek's top high schools in the nation! You can read my blog with full details on that accomplishment AND search BROOKWOOD HIGH SCHOOL REAL ESTATE. There are numerous schools (Archer High School being the most anticipated) being built as I type to accommodate the new and existing residents of Gwinnett.

The second reason I consider Gwinnett to still be one of the top counties to live in is because of the retail establishments. With 3 shopping malls and numerous retail centers like The Avenue Webb Ginn in Snellville, you don't have to venture out to get what you want to spend your money on. On top of the booming retail there are attractions that are only rivaled by Fulton County like the Gwinnett Arena (Phillips Arena), the new Gwinnett Braves Stadium (Turner Field), and Town Center Park in Suwanee (Centennial Olympic Park).

The third reason is interstate / highway expansion and road conditions. With the completion of the I-85 and SR-316 interchange two years ago being the most prominent, expansions of major roadways are combating the notorious traffic unlike other counties (who shall forever remain nameless) that have had the same issues for years. On a side note, cheers to Dekalb for finally finishing the Wesley Chapel and Memorial Drive bridges--good stuff.

The last reason is crime! According to the GBI stats from 2009, even with the second highest population of all of the counties in Georgia, Gwinnett is lower than a couple of neighboring Atlanta counties. Check out the stats for yourself!

What makes a house a BAD buy

2010-06-27T12:25:00.000-07:00

In this current real estate market the abundance of homes has left some homeowners and banks wondering why they are not getting ANY activity when the home that they have for sale is priced right for the market. The answer is simple. Certain characteristics of a home will make it unfavorable or even obsolete in comparison to other homes on the market. These hindrances don't only apply to older homes either.

A home with only one full bath room is probably the number one no-no for buyers in this current market due to the options they have with two or the more favorable 2.5 bathroom homes. Guest bathrooms are almost mandatory in buyer's minds now. The only exception to this characteristic being a problem ITP (inside the perimeter of I-285. However, even in the city, the home must be in an area is VERY exclusive, has no competition with 2 bathroom options, or in an area where 2 bath homes literally don't exist--think Cabbagetown under $200K! A home with a shared master bathroom is a HUGE obstacle as well. Even apartments have a master bathroom so buyers are used to not having to share their personal bathroom with guests. Even the 60's style homes with a shared master bath are a hard sell. Last on the bathroom list are those with only a shower in the master bathroom. This can be overcome, however, if the shower is large or has enough space to be replaced with a tub/shower combo.

No central air conditioning is the second largest hurdle on resale. Atlanta has very high levels of humidity so its not like California where a/c is optional! Just driving up to a home with A/C units in the window makes buyers quiver. Just the though of baking in a house, being at the mercy of window units, or the thought of paying for a new A/C system will definitely deter them from inquiring further.

Homes with no garage or carport are only a hurdle the further outside of the city you get. In the city, driveway or even street parking is custom so garages are golden. In the suburbs a garage is almost mandatory and with most suburb house hunters owning at least two-vehicles a one car garage is very unfavorable---but not a deal breaker. A saving grace would be a generously long driveway or the garage being enclosed to make a additional, true bedroom or game room.

If you are a buyer, these are items that you should think twice about purchasing a home like any of these because when you go to re-sell it, you may end up with a hard sell on your hands.

If you are a seller with a home with these obstacles, don't fret! You can sell your home with some aggressive pricing, good staging, great marketing, and a little bit of luck!!!

BUYING A CONDO?

2010-05-31T06:52:00.000-07:00

You've found your dream condo, and you're ready to relax under the city lights of Atlanta and kiss your commute goodbye. Hold everything. To keep from getting stuck with a lemon, you've got to do some homework. Here are the seven most important questions you need to ask before buying a condo.

1. "What's the Beef?"
Take a look at the minutes of the condo association board meetings to see what the owners have been griping about. If everyone was complaining about the faulty plumbing or the gardener's absence, you know that the complex is having management difficulties. Even if there aren't any complaints, reading the minutes will reveal the sorts of projects that are under way at the complex -- projects the seller may have neglected to mention.

2. "Who's Been Naughty and Who's Been Nice?"
Find out the delinquency rates of present owners. If people aren't paying their association dues on time, that is either a sign of discontent or an indication that the association might be underfunded.

3. "How Much Is In the Repair Fund?"
Ask if the community has done a reserve-fund review in the past five years. Lester Giese, the author of The 99 Best Residential & Recreational Communities in America, recommends the following formula: If the complex is one to 10 years old, the reserve fund should have 10% of the cost of replaceable items (roofs, roads, tennis courts, etc.). Between 10 and 20 years old, the repair fund should be at 25% to 30%. At 20 years, that amount should be 50% or above. Residents who brag that they don't pay much in maintenance may be in a complex that either is not being kept up well or is living beyond its means.

4. "Can You Cover Me?"
If you look at nothing else, get a copy of the certificate of insurance, which is a summary of the association's policy. First see if the replacement costs covered by the policy are an accurate estimate of the cost of rebuilding. Then make sure that the policy has a building-ordinance clause, which means that the insurance will cover the cost of bringing the building up to code if there is any rebuilding to be done. On older buildings, there may have been many code upgrades since the time of construction. Finally, make sure that you understand exactly what the association policy covers and what you are responsible for. The smart condo owner will insure his or her personal belongings, along with any other items within the unit that are not covered by the association's policy. If you have trouble understanding the insurance lingo, take the insurance certificate to an agent whom you trust and who understands the state laws.

5. "Does the Association Present Any Legal Problems?"
Buying a single-family home without a lawyer is no big deal for many people. But with a condo, there's so much more involved. Contact a local real estate lawyer and have him or her go over the bylaws of the association. Do they make sense? Are they consistent with the state laws? Giese, the author, once found that the association bylaws of a large garden-style condo complex had been lifted from the books of a high-rise condo, leaving confused tenants with rules about shared hallway space and the correct use of garbage chutes. Benny Kass, a Washington real estate attorney, recommends that you also have your lawyer screen the association at the local courthouse, to see if any owners have filed suit against it.

6. "Is the Complex Renter-Friendly?"
If the renter population is over 10%, there should be clear rental policies, either listed in the bylaws or tacked on as an amendment. Does the management company find renters for you? If so, do they get enough good renters? Ask other tenants about their experience. In addition, ask to see the association's rental lease, and have a real estate lawyer look it over. Keep one thing in mind, though: An association can change its bylaws to prohibit or restrict renting at any time. The more owners who rent, the less chance that will happen.

7. "Am I My Community's Keeper?"
Watch out for a condo whose owners manage the place themselves. Although many are operated efficiently, self-management can lead to more hassles for owners -- especially those who live thousands of miles away. If the complex is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners. Ask people in nearby buildings. And be sure to interview the day-to-day manager directly. If you hook up with a bad manager, you can be sure of this: Your dream condo will keep you up at night under those city lights!

• RISMEDIA, May 21, 2010

When a lowball offer TOO low???

2010-05-08T10:20:00.000-07:00

Often times in frantic real estate markets where there are more properties for sale than buyers (a.k.a a buyer's market) buyers will automatically get very aggressive on initial offers and even go as far as submitting offers on multiple properties at a time! A practice usually common among investors, is now common among all types of home buyers. The reasoning may be anticipating a desperate seller, testing the waters, or no knowledge (or clue) of the fair market value of a home. But to understand or find logic in the low ball offer you have to look at it from both sides.

On the buying side, before even presenting an offer you and your real estate agent (you thought I'd tell you to go it alone? Ha!) need to determine fair market value of the home in it's current condition. Next you need to determine the bottom line you think a seller will take for a property by taking into account numerous things (payoff, commissions, seller's anticipated profit, taxes, etc.) and then see if the number you are thinking of makes sense. One thing I've learned over the past year is not to let the seller's payoff deter you because some sellers actually have the ability to satisfy second mortgages or shortages on the primary loan in order to close WITHOUT doing a short sale. The most important thing about a 'low ball' offer is that it has to make sense and be well put together. A realtor or the seller will not take an offer seriously if they don't see the basis of your offer; especially if its incomplete, missing docs, contains misspellings, etc.

On the selling side, you should anticipate low ball offers and not be offended when you receive one. The proper response is to either reject the offer or my favorite is countering the offer at full price. Many buyers will submit low ball offers because 'they just had to try', but are still serious about purchasing. Cash buyers are usually always aggressive, but analyzing your bottom line against the offer and factoring in carrying costs, some all cash offers are not bad at all! Always be open-minded and look for ways to structure the deal to make it work. When selling a home, leave the emotions on the table and let the buyers deal with that! On the selling side it's about making the numbers work!!!

The Federal Tax Credit Deadline Has Passed--------NOW WHAT???

2010-05-02T08:09:00.000-07:00

Now that April 30th is here and gone it alleviates any questions (so far) if the tax credit will be extended. I personally think that it will be re-introduced after the housing numbers are out detailing the inevitable increase in homebuying and hopefully a slight stabilization if not slight increase in home sales. While April 30th was the deadline to be under contract, June 30th is the deadline to close to be eligible. I hope that an amendment to the program is added to include ANYONE who closed before June 30th.

To agents and to actively seeking homebuyer's credit, it was NOT the ideal market to make a deadline in. From the high number of buyers using FHA and the low number of FHA eligible homes it cause bidding wars that I haven't seen since 2006. Also with the high number of foreclosure and short sale properties, forcing a bank to understand the need to expedite the negotiation process in order to get binding contracts in time was almost futile in every way. I started April with 10 buyers 8 of which were eligible for the tax credit. Seven went under contract in time (two were ON the 30th!) After gaining more buyers, through referrals, I now start May with 10 buyers again with 4 who were unable to secure a property in time.

The market I anticipate this month is going to be more of the same. I think less than 5% of buyers who were actively looking will stop looking because of the expiration of the tax credit. Once people are emotionally invested, money becomes less of a motivator. I think that sellers will take note and still remain motivated to sell. Banks may begin to see the importance of sprucing up these foreclosures a bit to expedite the sale. I also think a positive result of the bidding wars will be better comps (comparable properties used in appraisals) to help increase property values. Which EVERYONE will be happy about.

Cash needed BEFORE closing

2010-04-12T21:50:00.000-07:00

Often times you often hear of the down payment to buy a house or the cash needed to close. However, there are expenses that require additional funds prior to closing and in addition to the funds needed to close. Here is a quick breakdown:

Earnest Money
While your earnest money is technically credited back to you at closing, you will often need to deposit certified funds into the escrow account of either the brokers involved or the closing attorney. While this is deducted from your cash to close, you will need these funds available prior to closing. Earnest money is typically $1,000 for every $100K being purchased. On all cash offers, this can be as much as 10% of the sales price. I'll be creating a blog strictly about earnest money as there are a TON of misconceptions about what it is and how it works.

Home Inspection
A home inspection is optional but recommended on any home you purchase even if it's new construction! The cost of the inspection is usually based on the sales price and size of the home. They can range from $250 to $500 on homes under $500K. With inspetions you definitely get what you pay for so don't skimp here, get someone that is every thorough with a detailed inspection report. It can only help you!!!

Termite Inspection
Termite inspections are also optional and also recommended on any home you buy even if it is 4-sided brick. They usually cost $45-$75. Termites are very common in the southeast so having an active infestation is not the end of the world. As long as the termites haven't penetrated the home into the studs, a treatment can run under $1,000 on a home under $500K.

Appraisal
This is a mandatory part of a purchase requiring a loan to purchase. The only exception are HUD homes in which your lender will use HUD's appraisal saving your some cash! In the past some lenders would include your appraisal in what they called an application fee or even rolled the cost into the closing costs; however with recent federal guideline changes, the appraisal is paid outside of closing by the buyer. An appraisal can range from $350-$450.

Architectural Styles-EXTERIOR

2010-03-25T09:09:00.000-07:00

A buyer often has a picture in mind when they start the search for a new home. And while they might not be able to articulate the differences between a European style versus a French Provincial style home, or a Bungalow versus a Craftsman, it’s a time-saver when their agent can pinpoint the style they want.

TO SEE ALL OF THE DIFFERENT EXTERIOR ARCHITECTURAL STYLES CLICK HERE!

Architectural Features-ROOF

2010-03-25T07:49:00.000-07:00

A roof is a key structural and protective element of a house, but it also contributes significantly to the house’s style.

Gable: A Gable roof is one of the most common roof styles, and features two sloped planes that meet at an elevated point. The gable is the triangular area beneath the sloped roof that follows the roofline. A Front Gable roof has the front door positioned beneath this triangular area, and a Side Gable Roof has the front door beneath one of the sloping roof sides. Gable roofs are common to Center Hall Colonial homes (the 5-4-and-a-Door style common in 1970-1990 construction).

Cross Gable: When two or more gable rooflines come together, the resulting style is Cross Gable. When a home maintains a solely rectangular shape, the gable roofline will be a single gable. With an addition or exterior protrusion (such as a porch or deck) from this rectangular shape is present, the result is usually a Cross Gable roof.

Gambrel: The Gambrel roof is the distinguishing characteristic of a Dutch Colonial home; this sectioned, sloping roof style is often common in barns.

Hipped: Hipped roofs have four sloping panes, and are common to French Provincial style homes. They are also used as a differentiating feature on Center Hall Colonial homes (the 5-4-and-a-Door style common in 1970-1990 construction).

Mansard: Mansard roofs have a flat, rectangular top section flanked by four deeply sloping sides. Mansard roofs sometimes encase not only the attic area of a home, but the deeply sloping sides of some Mansard roofs serve as the actual exterior of the second floor, with windows installed into the Mansard roof just as they would be installed into an exterior wall.

Pavilion-Hipped: Similar to the actual point and sloping sides of a canopy top, a Pavilion-Hipped roof features four deeply sloping sides that meet at a distinct point at the top of the roofline. They are commonly used on smaller sreuctures outside a home, such as a detached garage, pool house, or shed.

Saltbox: A Saltbox roofline is a gabled roof that tops a colonial home that is two-stories high at the front of the house, and one-story high at the rear. Due to the different heights of the front and rear of the home, the two roof planes have different angles and different lengths.

This article is based on research from numerous sources, including but not limited to: REALTOR.org®, WindowAndDoor.com, JackieCraven.com, Architecture.About.com, CalFinder.com, Roof101.com, RealtorBenefitsProgram.org, GuideToColumns.com, bhg.com.

See all of the architectural features on my website.

Architectural Features-WINDOWS

2010-03-25T07:42:00.000-07:00

A home’s windows provide not just ventilation, insulation, and protection from the elements, a window actually frames your view of the world outside. Look over the list below, and you’ll never confuse a bow and a box bay window again.

Bay: Bay windows extend out from the side of a house, and typically feature 2 angled windows flanking a center window that’s parallel to the exterior wall of the house. A Bay window visually extends the space of a room and the elevated nook created at the base of the Bay window is often used as a window seat, adding to the charm and functionality of a room.

Bow: Similar to Bay windows, a Bow window extends from the side of a house but in a curved shape, different from the angular shape of a Bay window. The elevated nook of a Bow window is often used as a window seat, similar to a Bay window, but the costs of a Bow window are typically higher than that of a Bay window, due to the additional work required to create the curved shape.

Box Bay: Box Bay windows extend out from the side of a house, but are a square or rectangular shape with all 90 degree angles. These windows are often used above a kitchen sink, or anywhere an additional surface would be useful.

Casement: Casement windows are mainstays of both contemporary and traditional homes. Casement windows are hinged on one side of the window frame and open from that hinged side, similar to a door. In a traditional home a casement window typically features a multi-grid pane, and in a contemporary home a casement will typically have no grids.

Double-Hung and Single-Hung: These are the most common windows, with two separate window sashes that divide the window horizontally. They open up-and-down and while the Double-Hung window features two movable sashes, a Single-Hung window has only one movable sash (usually the bottom sash). Grids are sometimes used in these windows.

Oriel: You’re not likely to run into an Oriel window unless you deal with older homes. Oriel windows were used in Victorian and Tudor homes, and are located only on the second or third floors of a home. They are smaller in scale than the Bay window, and the brackets and supports underneath the window are worked into the style.

Paired: Paired windows are two separate windows set together so the two windows make one larger window opening. They are frequently topped with a larger arched (or Palladian) window to further the feel of one larger window. Paired windows are frequently called double windows.

Palladian: Palladian windows are a mainstay of traditional homes, where they are used to provide a focal point and a feeling of grandeur. They are often used in 2-story foyers or other high-ceilinged spaces. Palladian windows are named after Andrea Palladio, the 16th century Italian architect who used this window design extensively.

Ribbon: Ribbon windows are a series of identical windows installed together in a single run. They frequently called triple or quad windows, depending on the number of windows in the run, and are popular in new construction. Ribbon windows often are used to bring more light to a room, or highlight an expansive view. When Ribbon windows are installed near a ceiling – usually in a high-ceilinged space – they are called Clerestory windows.

This article is based on research from numerous sources, including but not limited to: REALTOR.org®, WindowAndDoor.com, JackieCraven.com, Architecture.About.com, CalFinder.com, Roof101.com, RealtorBenefitsProgram.org, GuideToColumns.com, bhg.com.

See my entire list of architectural featurs on my website.

Architectural Features-COLUMNS

2010-03-25T07:32:00.000-07:00

Columns were first used as a necessary structural element, and eventually evolved into a decorative accent as well. Today, columns are used on interiors and exteriors, and their purpose is often decorative. A column is divided into three section, the base (bottom), shaft (middle), and capital (top). The decorative characteristics of these three sections determine the style of the column.

Corinthian: Corinthian columns were commonly used by the ancient Romans, and are often present in a large-scale, grandiose interior or exterior. The capital of the column features two rows of acanthus leaves, which are topped by four spirals over the leaves.

Doric: Doric columns are much simpler in style than Corinthian columns, with a simple, curved shape on the capital. The main ornamentation on a Doric column is the fluted shaft. Doric columns were favored by the ancient Greeks.

Ionic: Ionic columns have capitals with two distinct spirals. This style was used by both the ancient Greeks and ancient Romans, with the Greeks preferring a fluted shaft and the Romans preferring a smooth one.

Romanesque: Romanesque columns are also known as Norman columns, and feature a very simple curved capital, and a smooth shaft that is the same width at the top of the column as at the bottom. These columns are typically used in exteriors, especially in a garden/landscape setting.

This article is based on research from numerous sources, including but not limited to: REALTOR.org®, WindowAndDoor.com, JackieCraven.com, Architecture.About.com, CalFinder.com, Roof101.com, RealtorBenefitsProgram.org, GuideToColumns.com, bhg.com.

See my entire list of architectural features on my website.

What drives property values in Metro Atlanta

2010-03-19T20:45:00.001-07:00

Different things drive property values in an extremely populated city it may be parking, on the coast it may be water access, and in the mountains it may be views. But what about Atlanta? It has none of these characteristics, but has been a popular relocation since the 1996 Summer Olympics. Cost of living has played a huge part, but what are some of the key items that drive values here? Let's take a look:

Location, Location, Location
Inside the Perimeter of I-285 (ITP as its commonly called) is where you will find some very pricey real estate. Outside of the perimeter prices as a whole tend to drop the further away you travel from the city. Commute times in Georgia are some of the worst in the country so shaving minutes off the commute (and adding them to your life!) is definitely a reason to pay a premium.

Retail
An abundance or lack thereof can skew property values in the surrounding suburbs. Areas like Douglas and Clayton County, that enjoyed an increase of new construction when in-town prices started to rise in early 2002, found themselves stagnant when no substantial retail was added to cater to all of the new residents who found themselves traveling back from whence they came to shop and be entertained. Cities like Alpharetta, Lawrenceville, and Marietta offered it's new residents plenty (and still growing) of retail establishments like The Avenues that made it easier to stay put for what they wanted.

School Systems
While Georgia ranks low on the national scale for academics, when families look to relocate here school districts are priority #1. However, even if you don't have kids and you're looking to move to an Atlanta suburb, I suggest locating a property in one of the top school districts. The property values there have sustained since I've been in the business and always will due to the amount of tax dollars poured into the infrastructure surrounding them.

Inventory
Lack of supply of homes in an area will correlate to a high demand and therefore high price. Some affluent areas like Buckhead, outside of their popularity, are able to sustain values there because there is never a glut of homes on the market. So when they become available, they can command and often get top dollar. This also holds true to suburban areas as well.

Magazine Articles
Suwanee saw it's property values stay somewhat stable after the values began to decline in late 2006 when it was named #10 of the top 100 places to live in Money Magazine in 2007. Sandy Springs is up next after being identified as one of the most affluent communities in the US in 2010.

Demographics
While most counties are fairly ethnically diverse, similar income brackets tend to populate the same areas. With that being said buyers, like to seek neighborhoods with neighbors that are either in their income bracket or above. Age plays a big role as seniors tend to prefer more established areas like Virginia Highlands, Dunwoody,and North Atlanta. 30 somethings tend to split between family friendly areas and up & coming / revitalized / progressive areas like midtown, City of Decatur, Grant Park, and Washington Park. Here's a video tour of the latest of 3 listings I've had in Washington Park listing I have in Washington Park.

Myths about short sales

2010-03-19T19:54:00.000-07:00

The term short sale has become a term that has almost become a household name. There are a ton of questions and myths about short sales from the buyers side of whether or not to purchase one. On the seller's side they range from why you should and why you cannot do a short sale. I'll address the most common myths I come across when buyers and sellers inquire more about the infamous short sale.

FROM THE BUYER'S SIDE
"Short sales can't close quickly, they can take months to close!"
This is a true statement on an unapproved short sale. If the seller's lender hasn't approved a short sale then there are numerous steps and paperwork that must be completed before selling the home at the short sale price is even possible. However, once the short sale has been approved, the transaction can be closed in 7-45 days. If you're under a time constraint only pursue APPROVED short sales.

"Banks will forgive the difference."
I have personally yet to see this happen. Most banks will want some form of repayment or some form of distributing the loss that they agree to take. One popular method is giving the seller a 1099 for the loss whereas the seller would have to claim the loss as income the following year and pay taxes on it. You should definitely consult a CPA on how to make this a viable option.

"Banks will come after you for the difference"
Within the last few months this is becoming a more true statement. Banks do not file judgments on borrowers as they did in the past. What they are doing is installing lingo in the short sale approval that allows them to collect the difference. This practice is frowned upon by the government and as of February 2010, there have been moves to abolish this practice.

"You have to be late on your mortgage to be considered for a short sale"
Untrue until recently. I have personally closed short sales when the mortgage was not delinquent. In these cases there MUST be a current or upcoming financial hardship along with a decrease in property value to prove to the bank that a short sale is the best option. Some banks that service your loan do have investors that will not consider the short sale if you are current.

FROM THE SELLER'S SIDE
"I can do a short sale on my own"
Even your lender will advise against this. Most lenders want your home to be marketed up to 90 days and even an offer to purchase the home prior to reviewing the file for short sale consideration. Lenders even require activity reports, market research on sales in the area, and other information that only a realtor would have instant access to.

"Buyers don't want to buy a short sale"
Untrue. If buyers see value, they will want to buy the home. The exception is if the short sale is not approved yet and cannot close within 60 days. Most buyers actively looking at homes are looking to close anywhere from 2 weeks to 45 days. The problem usually lies within their real estate agent (did I just say that?) Most agents see the reduced commission and the uncertainty of when the deal will close as an automatic red flag. But to their credit, you do have many unskilled agents attempting to perform a short sale on the sellers behalf causing drawn out and sometimes failed transactions. If this is indeed the case, a buyer's agent would not lead a buyer into such an uncertain situation.

Myths about buying foreclosures

2010-03-19T19:42:00.000-07:00

Now more than ever it is hard to look for a home in any area or price point and not come across a foreclosure. These REO (real estate owned) properties are everywhere and ready to be purchased. Just like any other type of home for sale, some of them are over priced, some of them are deals, and others are steals! However, as more owner-occupants purchase these homes some of the myths surrounding them are beginning to wane. Here are the myths I hear the most frequently:

Banks don't pay closing costs
Only when you are paying cash will you run into a bank that may be unwilling to pay any of your closing costs. But if you're paying cash $500-$1,700 is chump change right! Banks will pay up to 3% towards a buyers closing costs and some Fannie Mae properties will contribute up to 6% on FHA loans.

Banks don't do repairs
Foreclosures are sold "AS-IS." Banks usually will not do any repairs that are the result of a home inspection. However, banks may consider repairs that are required by your lender such as FHA repairs. Banks will do these because they know that any buyer that is interested will need these repairs done because their lender will require them. You may even be able to get a bank to do a termite treatment if active termite infestation is discovered by the inspector or appraiser.

Banks won't pay for home warranties
Untrue! Banks will usually pay up to $500 for a home warranty. Just because it says no warranties doesn't mean you can't get an after-market warranty.
Properties are sold with no EXISTING warranties on what is currently in the property.

All foreclosures are run-down and need repairs
All foreclosures are not alike! You do have more that need cosmetic work at the minimum, however, it is not uncommon to find an REO property that was well maintained. Some lenders now spruce up the property before listing it, installing new carpet, flooring, paint, and light fixtures to command a higher asking price.

Investors get the best deals
Cash buyers will always get the best deals because the though of closing in 4-7 days versus 30-45 days is appealing to any seller--bank or human. However, some foreclosures (like HUD homes) require a 2-week period where owner-occupants are given the opportunity to vie for the property. If no acceptable bids are submitted the seller will then review the investor offers. This is why it's important to run the numbers and know the value and not low-ball with unrealistic offers.

Landlord Do's and Dont's

2010-03-19T19:11:00.000-07:00

With the housing market finally seeing the end of plummeting prices, the window of opportunity is wide open for those who have restrained from buying during the dive (i.e. cash investors)to now establish themselves as property kings if they want to flip and become property kingpins if they buy and hold. There is a better long term opportunity to secure solid, profitable rental property and then sell it in 5-7 years when property values eventually increase. But what if you don't have all cash or even 20% to put down on an investment property? You can still take your shot at property profits by utilizing your current home. Here are some viable candidates:

* Leasing your vacant home that you can't sell right now
* Leasing your current home and moving into the city
* Leasing your current home and moving into the suburbs(who does that?)
* Leasing your house out-of-state home and relocating (to Metro Atlanta I hope!)

HERE ARE THE DO'S
Advertise your property on any listing website you can get your property on for free. However, in my experience the yard signs and directional signs will generate the most calls on rental properties.

To begin utilize a realtor or property management company to procure the tenant. Any prospective tenant who's chosen representation to locate a place is usually more dependable.

Use a thorough rental application AND VERIFY THE INFORMATION. You cannot take the first person that comes along with a security deposit because you are desperate! I personally like citicredit.net. However, I still recommend verifying the employment personally if you aren't using representation.

Charge an application fee to cover the rental application. Apartment complexes do this and so should you. Again, this will weed out a lot of bad tenants.

Get names and ages of all intended occupants and run background checks on anyone over 18 years old. An old game is for a grandmother to rent a house, have a son or daughter, or grandchild (grandmothers aren't as old as they used to be!) on the lease as an occupant and never actually move-in. So now the individual has free reign, they're listed on lease, but no liability. Also, you may have a home full of adults in which case EVERYONE needs to be on the lease and you definitely want to increase accordingly and within your states landlord tenant laws.

I personally recommend interviewing the prospective tenant after they pass the application process and getting a gut-feeling if you think they are genuine. Now if you're utilizing a property management company this will be unnecessary, but if you will be the point of contact, this is a MANDATORY step.

HERE ARE THE DONT'S
Rent to someone you know closely. In my opinion, it's easier to be a firm landlord with someone you have no emotional ties to. You will hear every story in the book and you have to be immune to it to not breed bad tenant habits. Tenants will only try what they think you will let them get away with.

Entertain any offers online that solicit you offering more than asking price, renting to anyone outside of the US, or offering to send you funds to deposit. THESE ARE ALL SCAMS!!!

Include any personal items outside of appliances in the lease unless you are holding a separate deposit.

The biggest don't for any landlord is to lease your property without a sufficient security deposit. 99% of the time it will come back and burn you.

In-Town vs. The Suburbs

2010-03-19T14:37:00.000-07:00

I have clients from out of state and current residents that are split down the middle about going ITP (inside the perimeter of I-285 for all non-Georgia dwellers) versus moving out to the suburbs due to the decrease in home prices making it possible to live in the city. Here is my hit (or miss) guide for deciding where you should move to:

If public schools are a concern you should move to the suburbs. Mainly Gwinnett (where I reside) and Cobb County. Private schools and Montessori's vary in either area. Even surrounding counties like Henry have some noteworthy school districts.

If you want to have great retail establishments it's a toss up. Gwinnett has a ton of newer retail along with three malls Discover Mills, Gwinnett Place, and the Mall of Georgia. In-town gives you Lenox Mall, North Dekalb Mall, and Atlantic Station which is sort of a mall with more of a feel of shopping in downtown Chicago or Washington D.C.

Sporting Events by far are more plentiful in the city. While Gwinnett has the Gwinnett Arena and the Gwinnett Braves stadium they cannot compare to the GA Dome, Phillips Arena and Turner Field. But if it's racing you crave then the suburbs will call you-offering Atlanta Motor Speedway in Clayton County and Road Atanta in Gwinnett County.

Commuting is definitely a win in-town because of the use of Marta and surface street traffic not as bad as any of the major interstates. But if you're self employed or you can tele-work then this wouldn't be as much of a factor.

Nightlife is BARELY a win for in-town only because more and more night clubs are finding their way outside of the perimeter for various reasons. But still if you like pubs, tapas spots, salsa dancing, and lounges.....it's the city hands-down.

Crime is a concern throughout the metro Atlanta area, but more so in the city because of the mix of housing. It is very likely to have a street of $500K+ homes on same block or a street over from abandon homes and drug houses. Old Fourth Ward is probably the best example I can think of off the top of my head. Violent crimes are higher in-town, but home invasions and undercover drug houses and brothels are very prevalent in the suburbs.

When it comes to cost of living-mainly gas prices, groceries, and property TAXES, the suburbs win again. The City of Decatur has the highest property taxes in the state followed by Fulton County and Dekalb County--all located (mostly) inside the perimeter.

Ultimately, you have to assess your personal needs and plans to decide which is best, but in today's current real estate market your wallet will not affect your decision as much!!!

Flip that house?

2010-03-18T16:34:00.000-07:00

With the new changes in guidelines of sellers needing to own a property for 90 days before FHA will finance has investors looking to get back to the days of flipping rather than holding. Flipping is always attractive because of the quick income. HGTV made numerous shows based on people buying, renovating, and selling homes for a profit!!! I've represented numerous investors who buy beat up homes, make them beautiful, and they re-sell them at a tidy profit--preferrably within 2-4 months. I posted the most recent flip here done in Washington Park on a duplex-- we're in negotiations to buy another on the same street. But knowing how to use the right contractors and lose your shirt is an art within itself! You can eat into most if not all of your profits if you are not careful!!!

Buying and holding was always my personal preference for the tax write off, but not everyone is cut out to be a landlord! Even with property management companies in place, not buying the right home at the right price can cause you to hemmorage money monthly. But in this market, there are alot of unsaleable homes being leased and with the interest rates low, fair market rent is in the toilet! So you may get a good rental property, but you'll need to get it at a GREAT price to compensate for the rents that you'll be able to reasonably collect.

The same pitfalls of flipping from years past are still the same. A nationwide change is that now if you're financing an investment property you're going to need a minimum of 20-25% to put down. Gone are the days of 100% non-owner occupied properties!!! The big change in the Metro Atlanta area is theivery of the copper plumbing, light fixtures, appliances, and the infamous A/C units!!! Even when caged these units can be stripped for the interior metals or some theives just remove the cage!!! I honestly think rouge contractors are stealing these as there is no why the 'common theif' has the tools to pull this off! Vandalism is at a fever pitch on vacant homes. My listing in 30314 has a VPS system installed to deter anyone even thinking of getting in this house!

I'd definitely recommend buying and holding for novice investors, because it allows you time to heal your wounds if you over pay or under estimate costs of repairs. In this market it's hard to overpay but it happens everyday!!!