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

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

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

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?

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

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????

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???

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.