Atlanta Housing Source

This article written by Jennifer Karel, Sr. Managing Attorney with Morris|Hardwick|Schneider is a great reminder of why buyers should purchase an Enhanced Title Policy when they purchase their home.

How pound wise may be penny foolish!

The current economy has everyone looking for ways to cut cost.  This means that your buyers may be looking for ways to save money at closing.  One of the few “optional” items on the settlement statement is the owner’s title insurance premium.

Most buyers understand that title insurance protects them from a loss caused by a title defect.  Buyers may not always realize the shortcomings of the title examination.  Title exams are performed by human beings who are capable of error.  The title exam is a review of documents filed and indexed by human beings, also capable of inaccuracy.

Even in the absence of a mistake, a title examination cannot insure that title is clear as of the time of closing.  It is a look back in time of 4 – 6 weeks, depending upon the county involved.  The time period between the effective date of the records and the time that it is examined is called “the gap.”

No one knows what may come up in that period of time.  The following are some examples: (1) equity lines taken out by the seller who needs cash, (2) materialman liens for recent work for which the payment was not made, (3) a lien resulting from a lawsuit by credit card companies or other companies for unpaid debts, (4) federal tax liens, (5) Georgia Department of Revenue liens, (6) lis pendens filed by disgruntled spouses/ex-spouses.

Buyers are cost sensitive but that has to be balanced against the risks of loss.  Owner’s title insurance is always important.  In a time when sellers are under financial stress, it is absolutely vital.  Make sure your buyers protect themselves.

Mark Lackey with Atlanta Housing Source at Solid Source Realty, Inc. explains about closing costs and prepaids. A lot of buyers don’t know what closing costs are or how much they can be. So in this short video, he shares everything you need to know.

If you are interested in a free buyers guide or searching for your dream home – visit our website at http://www.AtlantaHousingSource.com.

Mark Lackey with Atlanta Housing Source shares more about the home buying process. In this video, he discusses how long it takes to purchase a home.

Mark Lackey with Atlanta Housing Source shares insight on how you can narrow down your home search.  With thousands of homes to choose from, this advice will help you determine how to select the best property for you.

To search for homes, visit – www.AtlantaHousingSource.com. You can search for free and even get the newest listings that match your criteria via e-mail.

In this video, Mark Lackey shares with you about down payment assistance and how you may be able to qualify.

I have seen far more activity as the credit come to an end as I did when the last credit came to an end in November 2009.  At that point last November we had 5 pending closing and as of today we have 10 pending closings.

Has the credit made a difference?  Yes.  Would those individuals have purchased anyway, most likely.  What the credit has done was created a since of urgency and lowered the inventory levels quickly.

I have had a few buyers that have not gotten under contract to qualify for the credit and the clock is ticking.  Most of them early on made the choice to find a home that they love no matter how long it takes to find it rather than rush just to get the $8,000 credit.  These are the wise buyers.

The buyers trying to get under contract have been involved in multiple offer deals where there has been intense competition.  Banks and individuals have been holding firm on their offer price.  The ones that have won the bids have offered full list price or more.

Think about it, just months ago you could get a bank or individual to negotiate, and now they are holding strong.  I think this will continue until April 30, when demand will drop off.  At that point, then they will be more agreeable to negotiate.

Is the $8,000 credit held prices artificially high? I believe that sellers felt that could get $8,000 more for their home with the credit. Those who didn’t sell will see the reduced demand equate into price reductions.

I am glad that the credit was not considered for another extension so the market can get around to self correcting.  Selfishly I want a normal market, not artificially stimulated.   Myself and many of my colleagues agree that letting the free market find its balance will be the quickest way to get back to normal.

New buyers after April 30 will be in short supply, but we will be busy getting all the homes to closing by June 30.  During this time we will have to work hard since any issues found during inspections that could kill the deal may cost the buyer $8,000. Expect sellers to be tough about making repairs or concessions since they know every issue after April 30 is a $8,000 issue.

Keep focused on keeping the relationship of protecting your clients during the next two challenging months.  Remember, our partners are getting ready to get real busy. Our inspectors, lender, appraisers and closing attorneys all need our support and patience.

FHA has announced sweeping changes that range from increased down payment requirement from 3.5% to 10% in certain cases, increased Mortgage Insurance Premiums (MIP) by half a percent and cutting allowed sellers contributions by half.

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                                          Washington Post Article

So you’ve decided the time has come to purchase a home. With the real estate market in decline, this can be an opportune time to purchase a property at a price well below market value. However, you will still need to make sure your credit is in order, so you can obtain a home at the best rate possible.

Your credit score will determine whether you can qualify to purchase a home, and will have a substantial impact on the interest rate you can obtain for a mortgage loan. A low credit score may mean that you will be charged high a interest rate on your loan, and in some circumstances, it may even disqualify you from buying a house altogether.

Before you even begin shopping for a home, it is a good idea to obtain your credit report from the three main reporting agencies: Experian; Equifax; and TransUnion. Lenders may use one or all of these agencies when determining if you qualify for a loan, so it’s important to know what the information is being provided by all three agencies.

You will also want to obtain your credit score from all three agencies. This score is not always included with credit reports, so you may have to purchase this information separately. Credit scores range from 300 to 800 – generally, mortgage lenders will want to see a minimum score of 650 before they will consider a loan applicant; most prefer a score of 700 or above.

If your credit score is lower than you expected, look through your credit reports for negative items, such as late payments and charge offs. If any of these items are present, make sure that they are accurate. If not, you will need to contact the reporting agencies to file explanations stating that these items are inaccurate.

If the negative items are accurate, only time and diligence will raise your credit score. In some cases, if an extraordinary event caused you to be late on credit card or installment loan payments, the lender will accept a letter of explanation detailing why these negative events occurred. However, this is the exception rather than the rule, so don’t expect the lender to be terribly willing to accept such an explanation.

Barring an explanation letter, you will simply need to re-establish a positive credit history to raise your credit score. The older a negative item is, the less it will impact your score, so paying bills on time and keeping loans current will help you raise your score relatively quickly.

If possible, you should wait until you have raised your credit score before you seriously begin looking for a home to purchase. Although there are lenders that will provide mortgage loans to applicants with poor credit, they will charge substantially higher interest rates, which can cost you thousands of dollars over the life of the loan.

At Atlanta Housing Source, we work with a mortgage company that can provide a “what if” scenario. What if I pay this balance off? What if I rearrange my balances more equally among all my credit lines? Etc. This allows our clients to know what to work on first and how long it will take them to qualify for the loan.

As a buyer in today’s market, you are most likely looking for opportunities where you can purchase a home with substantial equity. In recent years, short sales have emerged as an attractive option for savvy buyers. However, you should be aware of both the rewards and risks of purchasing a short sale.

The main advantage of a short sale is that you can purchase a property for quite a bit less than market value. Home owners who are behind on their mortgage payments will often consider a short sale as an alternative to property foreclosure. This means that you have the opportunity to negotiate a low purchase price with the lender, so you can benefit from the reduced price when you resale the home in the future.

One of the main difficulties with a short sale is that you may experience resistance from the lender when making a purchase offer. By definition, you will offer less than the home owner owes on the mortgage, so the lender will incur a loss on the short sale. However, many times, a short sale represents a smaller financial loss than a foreclosure, so the lender may be willing to entertain your offer with a bit of persuasion.

The other big disadvantage to a short sale is the amount of time it takes for the lender to agree to a short sale. Therefore, if you are in a hurry to purchase, you are on a strict timeframe, you should really consider this before you move forward. We have seen short sales take 2-3 months to close. There are also other considerations like inspections, repairs, and seller contributions that would need to be discussed with your real estate agent for clarification if this is a good strategy for you.

Overall, a short sale poses fewer risks than other types of foreclosure or pre foreclosure sales. If you have the time and patience to devote to contacting sellers and lenders to arrange short sales, this can be a valuable and profitable investment.

As a real estate agent, we help both buyers and sellers navigate the short sale process.  

For a Guide on Selling your Home – Click here. 

For a Guide to Buying a Home – Click here.

We have help hundreds of people buy homes in Gwinnett, North Fulton, Cobb, & Forsyth counties. We offer a free information about credit and what can be done to improve your credit as well as explain the home buying process. Join us at The Holiday Inn Express on Shackleford Road in Duluth. Go to www.AtlantaHousingSource.com for more details.