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Wednesday, December 12, 2012

Should a Seller Disclose a Landfill or Railroad Track?

Should a Seller disclose a landfill near or adjacent to the property to potential buyers?  What about an active railroad track near the property?  What about a murder, a suicide?  YIKES!
 
What Does Georgia Law Say Regarding Disclosure?
Georgia Law requires sellers to disclose material information about a property to prospective buyers or tenants.   Generally, the courts have held that whatever is material to the buyer or tenant is, in fact, material. Licensed real estate agents in Georgia must disclose anything that would affect the buyer's desire to purchase the property or how much they are willing to pay for it.  That said, Fair Housing Laws would not permit any illegal disclosures as to race, color, religion, sex, or national origin, but also based on familial status and handicap.
 
What if a Rape, Murder or Suicide was Committed on the Property?
If such a terrible act were committed on a property, the seller is not required to disclose these facts- unless asked directly.  Then, the seller must disclose the information to a potential buyer.  Properties with such a grisly history are considered "psychologically impacted". 
 
What if Someone Died in the Property?
If someone died in the property from AIDS, then the seller or agent is not allowed to disclose-even if asked directly.  The appropriate response if asked would be "I am unable to answer this question, by law".  The reason for this is that AIDS was deemed by the courts to be classified under the protected handicap status and thus  protected under Fair Housing Laws which make discrimination illegal.
 
What if the House is Haunted?
I know, this would have been a good Halloween article, but maybe I will "revive" it again later, but the answer is MAYBE.  I have heard of a Seller in New York losing a lawsuit over non-disclosure to the buyer of his house that it was haunted.  The plaintiff didn't have to prove the house was haunted, he proved that the Seller had told all the neighbors the house was haunted to the point of publishing an article about the hauntings, which proved the Seller believed the house to be haunted- thus diminishing it's value to prospective future buyers. 
 
Does GA Law Require Purchase Contracts to Include a Seller's Property Disclosure Form?
No, a Seller does not have to attach the GAR form Seller's Property Disclosure Form, however, it is a great form that will help jog a Seller's memory in great detail to provide necessary disclosures to all prospective buyers.  It is a CYA at it's finest.  And it's important to be truthful and forthcoming to protect yourself legally after the transaction.
 
Are Disclosures Provided to Buyers Purchasing Short Sales or Foreclosures?
Yes in a short sale and usually no in a foreclosure.  If a Buyer is buying a short sale, the property is still owned by the Seller who is required to make disclosures.  In a foreclosure, the BANK owns the property and is completely unfamiliar with the history of the house, so they generally make NO disclosures.  Buyer Beware!
 
Apply the Golden Rule
I believe you should disclose anything that you would want to be disclosed to you.  If you do that, you're usually covered pretty good.  And it generates good Karma, because as you sell one house, you're usually buying another, and you would want to know if there is an active railroad track on the back of the property.  (But do yourself a favor and do a LOT of homework and your own investigation during your due diligence period of buying the hosue....just in case).

Monday, November 26, 2012

Add Custom Built-In Shelves to Add Interest, Value to Your Home

Living Room after adding custom built-ins
Living Room before adding custom built-ins

Adding bookshelves to a room can add functionality, depth, interest, texture and value.  With real estate prices beginning to rise again, folks are interested in sprucing up their homes with all kinds of upgrades.  Adding built-in bookshelves and cabinets are one way to add architectural interest that can really transform a space. 
 
When considering installing bookshelves and cabinetry, you must consider your budget.  Contractors can vary greatly in pricing out finish carpentry like built-ins.  To save money, you might consider having a contractor build and install your custom built-ins and you paint them yourself.  (Note: it's really NOT fun to paint bookshelves). 
 
Other considerations to think about is the room height, scale of bookshelves, and finish.  For custom built-ins, I like the finish to match existing trim work and I like the style to be in keeping with the architectural style of the house.  An exception to this might be a modern architectural style home.  These built-ins may be wood or painted lacquer that contrasts with the trim.  Maybe the trim is stark white, but the shelves are dark espresso finished wood for a sharp contrast. Will the built-ins go all the way to the ceiling?  How will they integrate with existing crown molding or other trim?  How many shelves will they have and how are they spaced?  Will there be closed cabinetry for the base to house things like electronics, games and other storage?  These are all things to consider when designing your built-ins. 
 
If you're budget conscious, non-committal or both, Ikea might be a good source for creating a built-in look at a lower price and less commitment.  Still, planning is KEY to a successful install.  Ikea and other "big box" stores can help you plan your project using their components and your imagination. 
 
Another fun thing about adding bookshelves is the opportunity to bring in a color to the room.  Consider using a bright or bold paint color to the back of the bookshelves.  A grass cloth wallpaper added to the back of the shelves is a great way to add texture and interest to a room without having to wallpaper the entire room.  If you do add a color to textured paper to the back of the shelves, keep the things on the shelf fairly neutral and make sure all the items displayed are balanced in volume, color and style. 
 

Note that in the photo above, the ceiling height is ten foot, so the bookshelves don't go all the way up to the ceiling so that they don't overwhelm the space.  The background color of these shelves is a dark teal which adds a lot of color for an otherwise very neutral room.  If you do have bookshelves in your  room already,  consider freshening them up with paint and a new background color.  Take a critical look at them and determine if you should edit the items on the shelves.  Does it look cluttered?  If so, start removing items and play around with the way items are displayed giving each item or set of books some "breathing room".   Done properly, bookshelves and built-in cabinetry are a great way to add interest and value to your home.

Thursday, October 18, 2012

5 Signs that the Atlanta Housing Market is Recovering!

 
 
 
The market is ACTIVE.  Buyers are BUYING!  Sellers are SELLING!  Woo-hoo!!  I am seeing multiple offers on many properties for sale these days in Atlanta.  We have turned around from an Extreme Buyer's Market to a Seller's Market in the last year in almost every price range.  We are in the golden sweet spot of the market right now.  Home prices are rising again, buyers have gained confidence in the market and investors are clamoring to gobble up deals while they still can as rent prices continue to skyrocket.
 
Here are 5 signs that I see pointing to what I'm calling "The Great Market Recovery of 2012". 
 
1.  Atlanta's Luxury Home Market gains great momentum.
FMLS (first multiple listing service) reports that there was a 27% increase in sales of homes over $1 million from the 3rd Quarter of 2011 to the 3rd Quarter of 2012.  121 homes sold in 3rd Qtr 2012 compared to 95 homes over $1 million in same period 2011.   In 3rd Quarter of 2012, Sellers averaged 95.18% of asking price in this price category compared to 84.79% of asking price in 3rd Quarter 2011.  In case you're not a numbers person: THIS IS GOOD.
 
2.  Case-Shiller Home Price Index Showed Atlanta increase in Home Prices by 2.6%
from June 2012 to July 2012.  This rise was one of the largest rises in the nation.  The median price has also shown an increase in the median home price, and most intown neighborhoods in Atlanta have seen steady, yet small price gains.
 
3.  Housing Starts and Building Permits Rise Sharply Nationwide
They're baaa-ack.  New homes, that is.  I'm seeing new construction everywhere.  US Department of Housing and Urban Development reports that building permits were up nationwide in September by 45% compared to September 2011.  They reported that housing starts were up by 34.8% this September over September 2011.
 
4.  Interest Rates are CRAZY-GOOD!
I feel a little like a broken record (or maybe a digitally scratched MP-3) to keep proclaiming how damn good interest rates are.  But I will say now in the words of Tony the Tiger, "They'rrrrre Great!".  (If you got the Tony the Tiger reference, you'll know what a broken record sounds like).  According to Michel Gonzales, of Southern Capital Mortgage Group,  “there are plenty of lenders eager to lend. Interest rates remain at historically low levels and it is predicted that  as our economy continues to improve, home loan rates will rise.” 
 
5.  Atlanta's Condo Market is Balancing Supply and Demand.
According to Anne Schwall who wrote an article for Atlanta Business Chronicle, "New construction high-rise towers that have dominated the Atlanta skyline such as Gallery, Luxe and Viewpoint are celebrating sold out status, and Twelve Centennial Park, Brookwood and Astoria are more than 75 percent sold. Dwindling supply can even be seen in the luxury sector where projects such as Sovereign that boasts an average sales price over 1.3 million is currently 50 percent sold."  Dwindling supply of condos along with rising rental prices and very low mortgage rates have created a balance of supply and demand.
 
I've been selling real estate in Atlanta for over 18 years and the "great recession" and "housing bust" has been challenging- I've never seen anything like it.  But we've persevered and we have survived.  In many ways, we've thrived. 
 
So the real estate "bubble" may have popped, but so many good things came from it.   For me, it has made me re-evaluate my priorities.  It has brought a new dimension of purpose for me to be able to help people with buying and selling their home in what has been a stressful time for everyone.  It has made me deeply appreciate my clients and every transaction, more than ever before!  It has caused my industry to dig deep and improve the level of service and professionalism that we bring to the table.  So during this season of Thanksgiving, I say Thank You for reading my blog, Thank You for your support, and Thank You for allowing me to be a source you trust with information to help you make your best decisions about real estate.

Tuesday, September 25, 2012

Brookhaven, Georgia- Bright Shiny New City!


Brookhaven is Georgia's shiny, new city!  On July 31, 2012, 55% of voters voted to incorporate Brookhaven as Dekalb County's largest city with over 50,000 residents (Dunwoody is the second largest city in Dekalb).
 
Where is the new city?? 
The borders of Brookhaven are Sandy Springs, Dunwoody, Chamblee and I-85.  Click here for a map.  Historic Brookhaven (Capital City Country Club) is mostly in Fulton County/ City of Atlanta and is primarily not in the City of Brookhaven.
 
What is the effect of being in the City of Brookhaven for its residents?
Proponents of the city incorporation say that it will lower the taxes for its residents. One way it will achieve this is to lower the millage rate from 6.39 mills to 3.35 mills where the rate is capped.  The millage rate can only be raised by the taxpayers through referendum- so elected officials do not get to decide. 
 
It also would increase the applicable homestead exemption from $10,000 to $20,000. The HOST credit that you see on your tax bill does not apply to city taxes. It only applies to county taxes, so it needs to be added back into your property taxes in order to arrive at the final amount you would pay.
 
The result is that all property owners will receive a property tax cut. For homestead property (your primary home), this tax cut could be slight or it could be significant, depending upon how efficiently the city council operates the city.

Dunwoody now enjoys the lowest property tax burden anywhere in DeKalb, lower than the unincorporated area. It is anticipated the City of Brookhaven would enjoy the second lowest property tax burden in DeKalb County, also lower than the unincorporated area.

Another reason voters wanted Brookhaven to be a city is to have a smaller, more cost efficient government with improved services.

What schools are in Brookhaven?
The schools are Dekalb County Schools and will not change. Public elementary schools serving the community include Dresden Elementary, Montgomery Elementary, Montclair Elementary, Ashford Park Elementary, and Woodward Elementary. The public secondary school is Cross Keys High School. Private schools include Our Lady of the Assumption Catholic School, St. Martin in the Fields Episcopal School, and Marist School. From its opening in 1990 until 2003, the Seigakuin Atlanta International School was located on the property of Oglethorpe University.
 
What parks are there in Brookhaven?
Another benefit of the area becoming a city is that city residents will be able to maintain and improve city parks.  Brookhaven's largest park is Briarwood Park.  Dekalb county has reportedly neglected this park while citizens have formed an organization to revitalize and upgrade this park.  Other parks include
  • Ashford Park, 2980 Redding Rd. 3-acre (1.2 ha) DeKalb County park with basketball & tennis courts, as well as a playground.
  • Blackburn Park, 3493 Ashford-Dunwoody Rd. Includes the Blackburn Tennis Center, this 49.5-acre (20.0 ha) DeKalb County park has tennis and basketball courts, soccer fields, picnic areas and trails.
  • Briarwood Park, 2235 Briarwood Way, 18-acre (7.3 ha) Dekalb County park with swimming pool, tennis courts, recreation center and playground
  • Brookhaven Park, 4158 Peachtree Rd. 9-acre (3.6 ha) DeKalb County park with multi-use courts, playground, picnic area and trails.
  • Lynwood Park, 3360 Osborne Rd NE, (17 acres) DeKalb County park with basketball & tennis courts, as well as a playground.
  • Murphey Candler Park, 1551 W Nancy Creek Dr. 135-acre (55 ha) DeKalb County park known primarily for baseball and football, but it also has a pool and lake.
  • Skyland Park, 2600 Skyland Dr., 11-acre (4.5 ha) DeKalb County park known primarily for baseball, soccer and tennis.
  • Parkside Park, Dresden Drive, 2-acre (0.81 ha)
  • Fernwood Park
  • Georgian Hills Park, 2800 Georgian Drive, 7-acre (2.8 ha)
  • Clack's Corner, 1410 Cartecay Drive, 0.2-acre (0.081 ha)

  • What neighborhoods make up Brookhaven?
    Historic Brookhaven (the Dekalb part).  This high dollar neighborhood is one of Atlanta's finest neighborhoods and is on the National Register of Historic Places.  This neighborhood is north of Buckhead and west of Peachtree Road.  Home prices are $1 million +.
    Brookhaven Heights is just north of Buckhead and west of North Druid Hills Road.  Many new homes and older homes mingle in this wonderfully eclectic neighborhood.  Prices for single family detached homes range from $300,000-850,000.
    Brookhaven Fields is just north of Buckhead and east of North Druid Hills Road.  Also an eclectic neighborhood that originally featured modest, post war homes that boomed in the 1990s and now features a range of newer more expensive homes.  Prices for detached homes range from $250,000- 750,000+.
    Ashford Park is located just north of Brookhaven Fields and borders Peachtree Road, Chamblee and Buford Highway.  This neighborhood has also realized a transformation from modest post-war homes to new much larger luxury homes.  Prices range from $200,000-700,000+.

    All of these neighborhoods are great locations as they have easy and quick access to I-85, Buford Highway, GA-400, Buckhead, Midtown, Perimeter.  The Brookhaven Marta station features parking and is super convenient for downtown events, midtown events and airport.
     
    What is Shopping and Dining like in Brookhaven?
    Village Place on Dresden Drive features restaurants like Verde Taqueria, Kaleidoscope and fine interior design shops like The Mercantile.
    Brookhaven Park Village is right across the street and features the wonderful restaurant Haven.
    Town Brookhaven is a large multi-use shopping/residential development which includes an LA Fitness, Costco, Movie Theatre, and a Keller Williams Realty office.

    Plus, world class shopping at Phipps Plaza and Lenox Mall are very close by in Buckhead.

    There is a Brookhaven Arts Festival coming up in October and the Brookhaven Chili Cookoff just happened in September.
     
    Brookhaven is awesome.  Congrats to all you lucky Brookhaven residents!  Brookhaven is one of my very favorite areas of Atlanta due to it's warm, community spirit, charming neighborhoods, gorgeous homes, and fantastic location in Atlanta.  If you are thinking of buying a home in Brookhaven or would like more information, contact me.

    Tuesday, August 21, 2012

    Atlanta Home Sales Up in 2nd Quarter of 2012

    Hey Y'all.  Good news!  Good news for Home Sellers!  Good news for Home Buyers!  Good news for Realtors!  Good news for the economy!  Good news for us all!  GOOD NEWS! 

    For those of you who are really not all that analytical, I will give it to you in quick little bites- it's all good!  For those who love numbers and percentages, keep reading.

    Atlanta home sales increased year to date June 2012 by +13.1% higher than 2011 (and +19% higher than in 2010).  The median sales price went up by +5.9% in the second quarter 2012 vs second quarter of 2011.  The number of days on the market it took to sell a home went down 27.3% to 80 days on the market.  The Median Sale price rose by +5.9%.   Sellers are getting closer to the asking price (and many sellers got multiple offers bidding the price OVER the asking price).  19.9% of all sales in the second quarter were at or above asking price.  Inventory of homes continues to shrink by -42% (that's not a typo) from June 2011 to 4.0 months of supply in June 2012. (A balanced market is considered 5-6 months of supply-meaning that with no new listings, it would take 5-6 months to sell all the inventory of homes).  Anything under 5 months of supply is considered a Seller's Market.  We have moved from an Extreme Buyer's market to a Seller's Market since last year.

    Ready for more good news??  Have you heard of "shadow inventory"?  This term describes the next wave of foreclosures expected, due to folks who are seriously behind or not paying their mortgages, but have not been foreclosed on.  The good news is that investors are forming hedge funds which are buying up much of this inventory as it hits and before it hits the market.  This is great news.  It means investors are investing in real estate and it means that many of these distressed properties will never hit the market, allowing the market to self-correct more quickly.

    Another good sign is that distressed sales (short sales and foreclosures) as a percentage of total sales went down by 6.5% in the second quarter of 2012 vs same period of 2011 and down 15.2% from the first quarter of 2012.  Distressed sales made up 44.7% of all sales in the second quarter of 2012 (that's still a LOT- but we're headed in the right direction). 

    By comparison, in Buckhead, only 11.3% of sales were distressed- of those only 2.9% of sales were foreclosures.  So if you're a buyer looking for a foreclosure in Buckhead, good luck!  The median sale price in Buckhead is $570,000 (compared to $150,900 for Metro area). 

    The good news for home Buyers is that even though inventory is low and prices are rising, there are still some great houses that are coming on the market.  Smart buyers are ready to pounce on new listings that are correctly priced and in good condition, so it pays to know what you want and where you want to be.  I have programs that will auto-alert buyers as soon as any new listing that meets their criteria hits the market.  Prices are still substantially lower than they were 5 years ago, and interest rates continue to be at historic lows. It's like shopping at a fantastic clearance sale, but the best bargains are going quickly.

    How is the market doing in your neighborhood??  The market conditions vary greatly by neighborhood and by price range, so please contact me for more detailed information about your neighborhood and how those conditions will affect you.

    Thank you for reading my blog, and thank you for your referrals!




    Thursday, July 19, 2012

    Buying New Construction in Atlanta




    Ahhh, the smell of fresh lumber, carpet fumes, and polyurethane.  What could be more intoxicating than inhaling these delicious v.o.c.s (maybe a new car, or a new baby's head, but that's about it)?  I get so excited when I show new homes (new construction) to buyers.  Everybody likes new.  You're not buying someone else's history or questionable past, it's a fresh new start for your own memories for the making.

    There are some things to look out for when buying a new home.  Timing is important to a lot of people, because if you're building a custom home, it may take longer than planned due to weather, materials availability, sub-contractors scheduling, etc..  You may get closer to exactly what you want when you build a new house, but be ready to make a LOT of decisions.  What kind of tile for the master bath, guest bath, hall bath, downstairs bath, backsplash, kitchen floor, basement bath, etc., and that's just tile.  What about all the paint colors, carpeting, hardwood flooring stain, shiny or matte polyurethane, appliances, granite countertops, shingle color, brick color, siding choice... a  seemingly endless barrage of choices.  Be prepared to spend a lot of time and thought if you are building from the ground up. 

    Also, be aware that in new construction, most large production builders have their own contracts.  Be sure to read it and understand it fully before you sign.  Many times, a builder (particularly if they are building a custom or semi-custom home for you) will require a substantial Earnest Money deposit which may be held in their operating capital account.  If so, know that your money is at risk.  What if the builder goes belly-up prior to completion?   What if the builder is the subject of a lawsuit with assets frozen during the construction of your house?  What if the builder disappears? (Sh) It happens.  Your best bet to build a new home is to use a reputable builder with references checked before you sign anything or give anybody any money.

    If you are buying a spec home (a new home built by a builder that is speculative) you might be able to negotiate a better deal.  Builders get construction loans and get a draw from the loan in different phases of construction.   The further along the house is, the more interest the builder is paying on the construction loan and the longer a finished house sits, the more it costs the builder, so he becomes motivated to sell.  Many times if the new spec home is already completed (or mostly completed) you may be able to have the Earnest Money kept in your broker's escrow account where it is much safer.  Plus, there's little risk of the house not being finished since it is finished (or almost finished). 

    Still, let's say you want to make a few upgrades in the new spec home like upgrading appliances, installing a privacy fence or adding wiring for surround sound, or finishing a basement.  The builder will likely require these upgrades paid for up front as non-refundable.  Before you give non-refundable money to the builder, make sure that your loan is approved!   This includes having the appraisal done on the house.  Otherwise, if you get denied for the loan or the appraisal is lower than the purchase price, you will most likely lose money and not get the house.

    New construction is up 26% over last year.  This is a very good sign of the housing market recovery.  And finally, after a few years with very few new homes to choose from, you can buy a beautiful new house for a great deal.  I know for sure because Chad and I are closing on a brand new house tomorrow!  Woo Hoo!!

    To find your dream home check out my website.

    Wednesday, June 13, 2012

    Flipper: Making Money Investing in Atlanta Real Estate

    "They call him Flipper, Flipper, faster than lightning,
    no-one you see, is smarter than he"


    Do you think it's still possible to make money flipping houses in Atlanta?  The answer is YES!  Now is a great time for investors.  In fact, investors have been fueling the Atlanta market during this recession gobbling up unprecedented deals and unprecedented low finance rates.  There are a few important things to know about investing in real estate, and I have outlined a few for you here. 

    According to local investor expert,  Peter Pasternack of "Flip this House" on A&E and previously on HGTV, there are several points for an investor to consider when looking for investment properties.  Peter and his business partner Brian Trow own the successful design/renovate/build firm, Foundations LLC.

    What is the investment strategy?  There are two strategies.. buy and hold or renovate and flip.  If you want to buy and hold, you would spend on average a maximum of $10,000-15,000 for cosmetic updates (paint, flooring, lighting).  The bones of the investment property must be good, footprint of the house must be good and positive cash flow must be realized upon renting.  Right now the rental market in Atlanta is HOT.  Last year, Atlanta became the number one city in the U.S. where it is more expensive to lease than to own.  The trend is expected to continue for the forseeable future.
     
    For a renovate and flip strategy, Peter says that a great model to follow is to look in transitional neighborhoods where there are older homes, newer homes and renovations.  This is important to find good deals and opportunities to add value without overimproving for the neighborhood.  A good model is to find a two bedroom, one bath home - add 400 square feet to create a three bedroom, two bath home.  Open up walls to create a larger, more updated feel inside.  Fence in the backyard with a nice privacy fence (imperative for intown buyers).

    As an investor, you need to know your buyer demographic and who your competition is.  What are buyers expecting in terms of finish quality, appliance package, lighting package, architectural style, etc., in the neighborhood?  A qualified Realtor who works with investors can be an important part of your team.  Also, look for the ability to add a garage.  It costs approximately $12,000-15,000 to build a one car garage and it will add $17,000-18,000 worth of value to the house.  If there is not a deck or other outdoor living space, create one.  Creating outdoor living space is not only cheap, but highly desirable in our wonderful climate.

    Structural Considerations
    An investor should consider the exterior integrity of a house- what is the condition of the roof, siding, windows?  Are there any foundation issues such as sagging, sinking or tilting?  Is there or has there been any water damage such as previous flooding, mold, etc.?  If there is a basement and the investor does not intend on finishing or renovating the basement to add value, but there are water intrusion issues, the investor should not buy the house.  What is the interior integrity of the house?  Check out the walls, floors, bathroom, door frames, cracks, etc..

    Lead Based Paint
    In April, 2010, new legislation from the EPA was inacted that requires contractors to test and remediate for lead based paint for any part of a home (built prior to 1978) that is being renovated.  Testing for lead paint might be an important part of your inspection/due diligence phase of purchasing an investment home to avoid very costly surprises!

    Mechanical Systems
    Look for expensive repairs from HVAC, plumbing and electrical systems in the house.  It is best to buy a sound ugly house that is "cosmetically challenged" for greatest return-lowest risk.  Eliminate all the buyer red flags that might slow or prohibit the re-sale of the house.  Make all the repairs, handle all potential buyer objections before a buyer has a chance to object.

    Return on Investment
    As an investor, you should have a goal in mind of what your return on your investment will be.  Most investors have a minimum dollar amount they need to capture, but they will strive for 20% profit. 

    Example:  After Repair Value (ARV)                           $200,000
                      Less Expenses
                      *Holding costs/ Realtor commission             $20,000
                      Repairs                                                           $75,000
                      Cost to acquire property                                 $65,000
      
                       Total Expenses                                           ($160,000)
                       Total Profit                                                    $40,000

                      *assume 10% total of ARV

    If you are an investor, want to be an investor, or know someone who wants to invest in Atlanta Real Estate, please contact me and I will be happy to help you.  There are still fantastic bargains to be had in the market, and I know of some great areas that investors should consider now.

    Wednesday, May 9, 2012

    Atlanta Real Estate Market Conditons: !st Quarter 2012 Resuts

    And the winner is... Outside the Perimeter under $200,000!  If you were a home seller in Atlanta who sold in the first quarter of 2012 and your house was priced under $200,000, you may have actually had a bidding war on your hands from frantic buyers who were knashing their teeth and throwing money around.  19.6% of  total sales under $200,000 sold for more than their asking price.  But then again, if this is your profile, chances are your house was in foreclosure and you didn't give a shrt.

    The Atlanta market continues to improve with an increase of 17.1% in total sales in the first quarter of 2012 compared to the same period last year.  Sales were up 23.3% compared to 1st quarter of 2010.  Moving in the right direction.  I likey.  Most of these sales came from investors and first time buyers who were gobbling up the unbelievably good deals of homes under $100,000.  You can buy a house in Atlanta cheaper than a lot of cars.  Crazy talk. 

    As a result of so many of the sales being so cheap, our median price dropped -9.2% compared to 1st quarter 2011 to $122,000.  Distressed sales made up 42.5% of the total sales in the 1st quarter 2012.  Foreclosures were down, but short sales were up- indicating that the banks are getting tooled up to deal more effectively with short sales and try to do short sales to avoid foreclosures.

    Listing inventory is way down.  As a result of low inventory, the market has now shifted from an Extreme Buyers Market to a Seller's Market (for the overall market- but not in every area and every price range).  A balanced market is indicated if there are 6-7 months of inventory.  This means that if no new listings came on the market, it would take 6-7 months to sell all the inventory.   Anything under 6 months of inventory is considered a Seller's Market.  Take a look at the chart below to see which price categories are a Seller's Market and which are still a Buyer's Market.

    One of the most interesting facts about the 1st quarter sales is that 16.7% of all sales sold for more than asking price!  The lower the house price, the greater the incidence of selling above asking price occurred, but even in the $500,000-799K price range, 7.5% of sellers got higher than asking price.

    Even though the greater metro area has so many distressed properties, that doesn't really indicate what's happening throughout the market.  For example, if you wanted to buy a foreclosure in Buckhead- good luck.  Only 3.8% of sales in Buckhead (area 21) were foreclosures.  And knowing that the median sale price is only $122,000 doesn't carry much weight in Buckhead where the median sale price is $584,125. 

    You really have to break it down by neighborhood and price range to know how the market is affecting you.  The overall picture is this.. we've passed the bottom of the market.  The market is improving.  It's still a fantastic time to buy.  There are still fantastic deals out there, but as a buyer, you have to know when a fantastic deal means paying full price (or more) for a house- even in this market.  Information is power.  Rock on.

    Wednesday, April 4, 2012

    Can I Refinance My Home if I am Underwater on My Mortgage?

    The answer is (drumroll please)...... MAYBE.  Introducing HARP 2.0.  Yes, it's a new and improved version of the Home Affordable Refinance Program (HARP) which has been around with limited success since March, 2009.  HARP 2.0 was rolled out in March 2012 and now allows more homeowners to refinance their property that's "underwater" (meaning you owe more than your home is currently valued) due to two significant changes in the program.

    The first change removed the loan-to-value (LTV) restriction, meaning it no longer matters how much the home appraises for (the previous restriction capped the LTV at 125%).  The second change allows for any required mortgage insurance (PMI) policy on your current loan to transfer to the new loan at the same rate.  PMI is the insurance required by your lender to obtain if you have less than 20% down of your own money compared to the home's value. 

    These two changes are good news for homeowners so that they can take advantage of the INCREDIBLY LOW interest rates (which by the way, are moving up.. so hurry and buy or re-fi).

    DETAILS:



    • To be eligible for program:
      • Current loan must have been originated prior to May 31, 2009
      • Current loan must be owned by either Fannie Mae or Freddie Mac
        • Three ways to find out if current loan owned by Fanie Mae or Freddie Mac:


    • 1-Unit Primary Residence properties only (no Condos, 2nd Homes, or Investment Properties allowed- townhomes ok).
    • No 30+ day mortgage late payments allowed over the last 6 months, and only one 30+ day mortgage late payment allowed over last 12 months
    • 620 minimum credit score
    • 45% max debt ratio
    • No pre-payment penalty
    • If no mortgage insurance required on original loan, then no mortgage insurance required on new loan regardless of LTV
    • Appraisal required unless automated approval system grants a “waiver”
    • New loan can be either 20 Year or 30 Year term (if current loan owned by Fannie Mae, then 15 Year term,  5 Year ARM, and 7 Year ARM options also available but only up to 105% LTV)
    • Only a limited number of lenders are actively participating in program, which has been extended through December 2013

    Does this work for you?   I am all about spreading good news (and good cheer) and I hope this information can save you money!  To find out more about this program and to see how much money you will save every month, please contact my friend Joanne Rotella at joanne.rotella@fairfieldmortgage or call her at 404-290-4800.  Just think of Joanne as an angel, playing beautiful music from a HARP.

    Thursday, February 16, 2012

    Should You Walk Away from Your Underwater Mortgage?

    Following is an article written by Chris Taylor, Reuters that I think everyone who owns a home and is "underwater" (you owe more than it's worth) should read.  If you are underwater, please know that you may have options that you aren't aware of.  Please contact me to see what strategy might work best for you. 



    "It was just last summer that Charlotte Perkins made the hardest decision of her life as she and her husband Jim were caught in the vise of the housing bust.

    Wanting to downsize their lives as they headed toward retirement, they bought a new house in Mesa, Arizona, before they sold the old one, also in Mesa. Their previous home had been appraised at nearly $400,000 at the height of the market, but as the housing crisis ravaged Arizona, they were told they'd be lucky to get $200,000 for it.

    They were carrying a loan of $260,000 on their original home alone, meaning they were well 'underwater,' owing much more than it was worth. Combined with the mortgage on the new house, their housing payments had become an "anchor around our necks," she says, threatening to gobble up all their retirement savings and leave them with nothing.

    The couple made a difficult call: They would do a 'strategic default,' and simply stop paying the old mortgage. "We really had to wrestle with it," said Perkins, 60. "We had worked all of our lives to build good strong credit, and we're proud people. But it came down to, 'Can we keep doing this?' We had to say 'No.'"

    As the housing bust drags on, many homeowners are thinking like Perkins. Almost 11 million homes are now underwater, says financial information provider CoreLogic. Around 3.5 million homeowners are behind in their payments and another 1.5 million homes are already in the foreclosure process, according to online marketplace RealtyTrac.

    As banks start to work through their backlog of distressed properties, the New York Federal Reserve estimates that 3.6 million foreclosures will take place during the next couple of years.

    So, the question is: Does it make sense to keep paying a massive mortgage, knowing that it might be decades before a home regains its prior value? Or is that akin to - as columnist James Surowiecki recently wrote in the New Yorker - "setting a pile of money on fire every month"?

    "I constantly get the saddest e-mails from people saying, 'I've exhausted all my life savings, my retirement is gone, and now I have to default,'" said Jon Maddux, CEO of YouWalkAway.com,

    a foreclosure agency that helps clients with strategic default (and charges a fee for it). "But if they had seen the writing on the wall a couple of years earlier, stopped paying the mortgage and stayed in the home throughout the whole process, they would be in a much better financial position."

    Moral Quandary

    There's a moral component to that decision, of course. People naturally feel embarrassed about breaking a contract and not paying their bills; no one wants to be branded a deadbeat. But remember that companies default on their obligations when it makes financial sense for them to do so, via the bankruptcy process. Even the Mortgage Bankers Association itself, in a flourish of irony, arranged for a short sale of its Washington headquarters.

    It's not personal; it's business. So think of strategic default as a business decision, and do a cold-eyed cost-benefit analysis of whether it makes sense for you, advises Carl Archer, an attorney with Maselli Warren in Princeton, New Jersey.

    [Also see:
    Small Money Missteps That Can Cost You Big]

    "People think it reflects on their integrity, and say 'I wasn't raised this way,'" said Archer. "But the more businesslike attitude is to say that there's a contract, there are penalties for violating that contract, and sometimes it just makes financial sense to break it."

    The penalties largely revolve around your credit record, which admittedly gets blown up in the near-term. For a few years you can likely forget about qualifying for a mortgage or a car loan. When lenders are ready to take a chance on you again, you'll have to pay for the privilege, with stiff interest rates due to your default history.

    What Happens to Scores

    Charlotte Perkins watched her credit score go from a pristine 800 to 685, dropping every time she missed a payment. Credit-scoring firm FICO estimates that someone with a 680 score would see that number sink between 85-100 points after a strategic default, and someone with 780 could crater 140-160 points.

    Not desirable, of course, but not the end of the world either. For Perkins, for instance, she already had a loan on her Ford Escape, and the mortgage on her new house, before she even started the default process. She hasn't seen any changes on her credit cards since, in terms of limits or interest

    rates.

    Now that the previous home was auctioned off in December, she can start slowly rebuilding her credit, a process that should take about seven years.

    Strategic default isn't a decision to be taken lightly, of course. If everyone did it, the housing market -- and the banks -- would be in much worse shape than they already are.

    The following are some of the issues to keep in mind:

    1. Look to it as a last resort, not a first option. Your financial troubles could be alleviated with a simple refinancing, especially since 30-year mortgage rates are near record lows of below 4 percent. If the banks are hesitant to rework your loan, look into the number of government programs designed to keep you in your home, which can be researched at MakingHomeAffordable.gov.

    2. Location, location, location. Each state has its own rules and regulations regarding foreclosures, which affect both the length of the process and what you could be liable for in the end. In so-called 'non-recourse' states like Arizona, California and Texas, a lender cannot come after you for any deficiency (for instance, if your mortgage was $300,000 and they're only able to sell the property for $200,000). In other states they can pursue the difference, in theory - which is why some homeowners opt to file for bankruptcy, to free themselves from those potential obligations as well.

    3. Use the interim to save like a demon. If you're in a state like New York or Florida, which require a judicial review of every foreclosure, it might be a couple of years before you actually have to pack up. In the meantime, be extremely disciplined about stockpiling cash. That will help you with a down payment for a rental, to pay for a car in cash if you need to, or to clear up other debts you might have. "Save money as if you were still paying the mortgage," says Archer. "If you don't, then you'll run out of both time and money, and then you'll be in a real tough spot."

    4. Know the tax implications. Historically, if you have a debt that's forgiven, the canceled amount is considered taxable by the IRS. In the wake of the housing bust, though, the Mortgage Forgiveness Debt Relief Act was drafted to spare you those taxes. That legislation expires at the end of 2012, though - so if it's not extended, you could potentially face a tax bill for the difference.

    5. Talk to a professional. A bankruptcy or real-estate attorney can help you through a very tricky process. The National Association of Consumer Bankruptcy Attorneys, for instance, has a searchable database of lawyers at www.nacba.org.

    "Strategic default is not an easy decision, and there's a cost either way," said Gerri Detweiler, director of consumer education for Credit.com. "Would you rather be $200,000 underwater, or would you rather have seven years of damage to your credit report? It depends whether you're finally at the point where enough is enough."

    By Chris Taylor | Reuters





















    Thursday, February 2, 2012

    The Property Tax Appeals Process: Lower Your Taxes

    Last year, I wrote an article about the process of appealing your property taxes.  This is a follow up to that story.  I did appeal my property taxes last year.  I live in Fulton County and the deadline for appealing is April 1 of a calendar year.  So last winter I did a little research and found the correct link to use to start the process.  I filled out the form and mailed it in well before the April 1 deadline.

    I found lots of comparable sales that justified my asking to lower my tax value assessment and sent them in with the form and a letter to appeal to the senses of the powers that be in Fulton County.  Late last fall, I received a letter from the county that they had reviewed the information I sent in and that the request to reassess my property was denied. 

    Then, last month I received a letter from the Fulton County Board of Equalization Office stating that my request for a hearing before the Board of Equalization had been received and I would have a hearing on February 1 at 2:30 pm.  How exciting!  The letter went on to explain that I would need to bring documentation to support my statement of value.  As a realtor, I can document the bejesus out of real estate.  So I did.  I made 4 copies of my report (as was suggested by the letter I received) that included a photo of my property and surrounding properties on my street, a section of active and pending listings (which would demonstrate a further declining trend in values) and a detailed report of all the sold listings in my townhome complex which sold in the year 2010 including all properties square feet, average sold price, average square footage of the solds, and information to show how my property compares to the sold properties.  My research showed that the current value of my property was $67,000+ less than the Fair Market Value used to assess my property for taxes.

    I arrived promptly at 2:15 and headed into the downtown building on Pryor Street.  I brought my Kindle Fire thinking I would be waiting forever to be seen and purchased the maximum 2 hours on the meter for street parking.  I was impressed and surprised that they called me in the room right away.  The room consisted of three members of the Board of Equalization who are property owners in Fulton County that are selected and appointed by the Grand Jury and sworn in by a Superior Court Judge.  These people have the power to change a property tax assessment.  Also present was a man who represented the County.  The board members were very nice and respectful and listened first to the County Representative who showed the comps the County used to assess value and then they listened to me. 

    The big surprise was that the County Rep had comps from 2010.  (If you are reading this article in the future, I am writing this as of Feb 1, 2012.)  All of my comps were from 2011, which were lower than 2010 sales.  The Board explained to me that I was appealing the taxes for 2011 and that the comps should be prior to the date of January 1, of the tax year in question.  HUH?  Well, I screwed up, but that wasn't made clear to me in the letter.  The Board reviewed my information as well as the County's information and decided to go with the County's value of assessment.  The good news is that the County had revisited the comps from 2010 because of my appeal and had lowered my tax assessment.  They hadn't lowered it to what I thought it should be, but hey, they lowered it. 

    Next Step:  I can appeal the Board's decision by filing another appeal- this time to the Grand Jury.  The Board explained that if I did make an appeal to the Grand Jury, I should probably have an attorney, as the County would have an attorney represent them.  They also told me that I can appeal next year, and that next year (I guess when they say next year they mean 2011, which was last year and I would have to appeal this year) I will already have the information ready that I need to appeal using the 2011 sold information I had brought.  The simple truth is the county is behind.  This should be no surprise to anyone.  Bottom line:  values are declining, and it's a pretty simple process to appeal- even if it is a little confusing as to which year you're appealing, but definitely worth the time and effort.

    Tuesday, January 17, 2012

    What Stays with the Property When I Buy a House?

    Q:  I just sold my house and we've moved out.  After we got settled into our new place, my son reminded me that we forgot a subwoofer that we accidentally left in the lower left cabinet of the movie room in the basement.  Can we go back and get it?

    A:  Maybe.  It depends on a few things.  Is the subwoofer attached?  In Georgia, fixtures stay with the property.  A fixture is anything that is part of the property which is determined by the method of attachment.  If it is screwed, glued or nailed, then it is usually considered real property and would automatically convey with the property upon a sale.

    In Georgia, we generally have a Seller fill out a Seller's Property Disclosure Statement which is a questionairre that the Seller fills out prior to selling in order to prompt the Seller to disclose any known defects of the property.  It also has a place that the seller checks off items that stay with the propety and a place to disclose what, if any, fixtures do not remain with the property.  If an item on the checklist is not listed and the Seller forgets to disclose if  said item (like a subwoofer) remains or doesn't, the method of attachment would determine if it's real property (stays) or personal property (goes with the Seller).

    One item that frequently trips buyers up is the refrigerator.  The fridge doesn't usually convey.  After all, it's just plugged in like the TV or the alarm clock.  You wouldn't expect an alarm clock to stay with the house, would you?  But maybe the refrigerator is a fancy SubZero built-in refrigerator with custom cabinetry panels on the front.  It stays.  You don't even have to write it in the contract.  But if you want a regular plugged-in refrigerator, or washer and dryer, you would need to write it into the offer that those appliances convey with the property (unless the Seller's disclosure provided states that they remain with the property).

    What about bathroom mirrors?  If they are hanging on the wall like a picture, they do not stay.  If they are screwed, glued or nailed in place, you got it.. they stay. 

    So what about that subwoofer?  You left it behind by accident.  If it's screwed, so are you.

    Wednesday, January 11, 2012

    If Your Basement Doesn't Leak Now, It will Eventually

    It is said "there are two types of basements.. those that leak and those that are gonna leak".

    Homes with water problems sell for up to 30% less than other homes (if they sell at all).

    Water enters into a homes basement three ways...
    1. Over the foundation wall
    2. Through the foundation wall
    3. Under the foundation wall
    In a poured basement (which is most of newer construction), the floor is not structural.  The concrete foundation wall, footer and slab are all poured separately which means that there must be a moisture barrier applied to seal the foundation.   Sometimes a builder will skimp on this as it will not be seen by a buyer.  A footer drain exit (corrugated pipe) should be visible on the daylight side at the exterior of the home.  In lieu of this necessary drain, a "strip drain" (a flexible drain system that wraps the foundation) can be used.  These drainage systems can be easily damaged when the soil is back-filled at construction.

    When the foundation hole of a home under construction is back-filled, the dirt around the foundation is not compacted as much as the surrounding soil, so rainwater flows easily through the soil near the foundation.  After a period of time, the footer drain (which sometimes isn't even present) can become clogged with silt.  For this reason, footer drains always fail- sooner or later.

    Another way water finds its way into a basement is if the landscaped area at the edge of the house has dirt that comes above the poured foundation wall, the water can enter over the top of the wall. 

    Many times, moisture intrudes through the corner of the basement due to the downspouts which are located at the home's corners.  Improperly channelled roof water is the number one cause of basement and crawlspace leakage.  All downspouts should be piped off 8-10 feet away from the house.

    Some common yet ineffective water intrusion repair methods are
    1. Negative Waterproofing (sealing water out).  This is achieved by applying a topical product on the foundation basement walls from the inside.  This is a bandaid fix at best and does not usually provide a permanent solution.
    2. Exterior Excavation.  This method removes the existing landscape, patio or decking around the perimeter of the house to install/repair appropriate drainage.  This method is very expensive and is no longer being done by reputable waterproofing companies.
    3. Interior Footing Drains-  a pipe and gravel drain system in stalled inside the basement which sometimes will feature a metal flange.  These systems will usually fail as the metal can corrode and fail.
    4. Waterguard- from Basement Systems International is a system engineered for permanent basement waterproofing installed around interior perimeter of basement.  This innovative system features a drain that is rust proof and won't break down or decay and won't clog-ever.  This type of system offers a lifetime warranty (life of the structure) which is transferrable to buyers.  This system averages about $6000.00 and requires 3-4 days to install.
    In any case, if you're a homeowner and have a leaky basement, you really need to get it fixed.. the sooner the better.  It is pretty much a must if you're planning to sell.  If your buying a home with a basement (or crawl space), it's very important to be informed. 

    If you need a list of reliable contractors (for any type of work associated with your home) please check my website.

    Thursday, January 5, 2012

    What is the Difference between a Condo and a Co-op??

    This is a question I've been bombarded with ever since I listed a fantastic property in a co-op recently.  Atlanta doesn't have many co-ops (cooperatives), so most folks around here do not know what a co-op is. 

    Unlike a condo, in a co-op, you don't really own property.  You own a share value in a corporation and the corporation owns the property.  You still have exclusive right to use the individual unit that you are purchasing in much the same way you would have the right to use/own the individual unit you would purchase in a condo, but the ownership is different.  In a condo, you along with all other owners, own all the buildings, grounds and improvements together.  Your individual ownership is the paint on the walls and the interior space of your unit (unless the by-laws of the condominium state differently).  In a co-op, you have the exclusive right to live in and improve/renovate, etc.  a unit, but your ownership is in a stock share and a corporation owns the real estate.  You and the other share owners own the corporation.

    Here are 5 ways a Co-op purchase is different from a Condo purchase.

    1.  You do not use a GAR (Georgia Association of Realtors) Purchase and Sale Agreement.  Instead, the cooperative will usually provide a Purchase Agreement form.  This is because you are buying a share (like a share of stock) instead of actual real estate.
    2.   A buyer would usually go before the co-op board to be approved to live in the co-op.  Different co-ops can have different guidelines for the approval process.  We've all seen movies where the buyer of a co-op has to be approved by a bunch of snippy old bitties and the buyer is trying to make a good impression because they can get such a great deal in Manhattan, but they have some big dirty secret to hide....So it is a bit like that with out all the Hollywood dramatization. The upside of this is that you could potentially have a say as an owner of who gets to be a neighbor.
    3.  A co-op price is usually way less than a comparable unit that is a condo, but the co-op fees are usually much higher than condo fees.  The reason the monthly fees are higher for  a co-op is that the corporation which owns the co-op may have a blanket mortgage on the co-op.  The mortgage has to be paid back by the share-owners.  Part of the monthly fee is the individual share-owner's portion of the mortgage that is amortized and divided among the share-owners.  Also, the entire co-op community is taxed as one parcel.  The entire property tax amount is divided among the share-owners and is charged out to each individual share-owner which is included in the monthly HOA fee.  Additionally, many times some of the utilities, insurance, HVAC maintenance and repair, etc. may be included in the monthly HOA fee.
    4.  It is somewhat difficult to get a mortgage to buy a co-op.  The reason is that the corporation which owns the co-op may already have a mortgage on the entire complex.  Since a buyer is purchasing stock and not actual real estate, they may not be able to get a "second mortgage".  Usually, the cooperative will provide some financing to assist buyers.  One of the advantages of this is that a buyer would not be subjected to strict underwriting guidelines as they would for applying for a traditional mortgage.  This is especially helpful to self-employed people, buyers with credit issues such as a foreclosure or short sale in their history, buyers without a lot of established credit, etc..  The downside is that many times the financing provided by the cooperative may not be competitive with regular mortgage rates and loan terms.
    5.  The value of a co-op is not as subject to swings in the real estate market as a condo.   The reason for this is that typically the purchase price of a co-op unit is considerably less than a condo as mentioned previously.  Since you are buying a share value in a corporation, valuations are not as closely tied to what's happening in the real estate market.  When purchasing a co-op, you are purchasing the share value plus whatever the market will bear for the improvment or condition of the unit that the owner is asking for.   Also, unlike a condo, sales are not dependent on an appraisal based upon most recent sales (since these appraisals for condos are used to obtain a mortgage, and a mortgage is not used to purchase a co-op unit).

    It's imporant to note that a co-op owner may be able to deduct mortgage interest paid from their taxes as you would in deducting mortgage interest on your primary home of a condo or single family house.  If the corporation has a mortgage on the property, they will send out statements to each share-owner at the end of the year stating what portion of interest that share-owner has paid.

    While buying a co-op is not for everyone, there are several distinct advantages for buyers.  For more information about some of the co-ops right here in Atlanta visit atlanta cooperatives.  To see the co-op I have listed (it's really quite fablous and only $100,000 in the Buckhead/Midtown area) click here.