Atlanta Housing Source

We just got the banks acceptance of a short sale offer, which had been at the bank awaiting approval for four months.  My buyer is ecstatic. Think about it, four months to get approval and then we spend another 30 days with financing, appraisals and getting to the closing table.  Five months total.

Its almost the first of March and if you write an offer on a short sale home tomorrow, March 1 and it takes the four to five months to get  closed as we just experienced, if you are lucky, you are closing on the last allowable day, June 30, to get the $8,000 first time homebuyer credit from the federal government.  Miss that by one day and you miss the $8,000.

Now I’m not a gambling man and don’t know if you are, but, I wouldn’t risk the chance of losing $8,000 waiting on the bank.  There are thousands of homes out there for sale that only need the owner, Mr. and Mrs. Homeowner to sign and then you can close in less than 45 days from offer to move-in.

I am advising my first time home buyer clients to beware of short sales if they want to get to the finish line and collect $8,000.  While I know this news disturbs all the agents with short sale listings, the main reason is many agents don’t understand the short sale process and have not done the work to get the front end work done to speed up the process.

Likewise I have a couple of buyers looking to secure the $6,500 second home buyers credit and I am advising them likewise to beware of writing a contract for a new home that has not been started, up out of the ground.  With all the rain we have been experiencing there is a good chance of delays when digging a foundation, pouring concrete slabs and framing up a home.

Bottom line, there are risks with short sales where you can’t control the banks and new construction where you can’t control the weather.  To be sure to qualify for the first time homebuyer $8,000 and second home $6,500 write a contract that has a great chance of closing in time and don’t ride a deal down to the end only to run past June 30.

When I meet with a homeowner that is considering selling, what real estate agents call a listing appointment, it is important to understand any challenges that there may be to selling their home.  Some you can plan for, Inherited and some you have to react to, Developed.

The Inherited challenges are like what has been so common lately, falling behind in payments and headed for foreclosure as well as needing to sell as the result of a divorce.  This situation is brought about by job loss, illness or other negative event in their life.  They didn’t choose the situation but are affected by the events.

Everyday I speak to a homeowner that needs to sell because they are behind in payments and they owe more that the home will sell for. These folks are ideal candidates for a short sale, and preparing them for the process is something I am trained for and can do quite effectively.

Developed challenges are like what happened just recently where the appraisal came in slightly below the offer price.  In this case you react by getting the parties to agree on the lower sale price.  Sometimes easier said than done, but with preplanning and writing the proper contract upfront I develop a scenario to deal with the chance of that happening.

Proper planning helps eliminate or lessen the impact of the types of challenges that develop as the sales transaction is in process.  I see numerous questions posted on the public real estate sites where a buyer or seller has had an issue develop and don’t know how to deal with it.

That is where hiring a great agent would have eliminated a lot of the questions and the grief that come along with it.  Proper contracts, negotiating and planning out of the transaction came make the sale or purchase a dream, not the nightmare some folks encounter.  If I can help guide you through the confusion of selling a home please contact me at mark@AtlantaHousingSource.com

Atlanta is still growing, in spite of the lagging economy and rising unemployment figures throughout the country.  By 2020, Atlanta is expected to be the sixth-largest metro area in the country.

There are many opportunities for businesses and attractions throughout the Metro Atlanta Area.  Forbes magazine ranked Atlanta as top among the “Most Wired Cities,” and “Best Cities for Singles.”  Kiplinger magazine placed the city in the No. 1 spot for “Best Cities for Married with Kids.”

The cost of living in Atlanta continues to be a draw.  Lower costs for major expenses such as housing, food, clothing and gasoline help keep the region’s cost of living below the U.S. average.  Housing remains more affordable here than in other metro areas, and property tax rates range from 1 percent to 2 percent of home value.

High-tech employment in metro Atlanta is credited for 5.2 percent of total employment, which is more than 130,000 workers.  Top technology employers include heavies like IBM Corp., Cox Enterprises Inc., AT&T Inc., and General Electric Co.  There is also the Centers for Disease Control and Prevention that employs more than 6,500 scientists and staff.

A few years ago we bought a new home and every Saturday and Sunday when we wanted to sleep in we were awoken with the rhythmic music of the tapping of hammers. Well that music of tapping hammers died a couple of years ago, when new home construction came to a near halt.

Like the line in the Don McLean song American Pie “some thing touched me deep inside the day the music died”, we were all touched when the tapping of hammers almost came to a stop in the last few years. Well I’m here to tell you that the music has resumed as I witnessed it with my own ears this week.

While searching the MLS for a home for transferee I found those listings we use to find, ones without a picture and only a sketch or rendering of what the home would look like. Well, my buyer and I ventured to see the development where the four sketches were being built.

Like music to our ears we arrived in a beehive of activity and red mud. There was raw dirt just recently exposed for multiple basements and the heavy equipment was parked on an empty lot down the hill. Trucks full of concrete were there with their loads spinning, waiting to pour down the chute to the carefully prepared forms.

There were vans and trucks of all shapes and colors parked along one side of the road. Back when we moved into the new subdivision I remember the traffic jams all the construction vehicles would cause and remembered complaining when they parked on both sides of the road totally blocking access. Now instead of complaints of traffic jams we welcome the confusion and congestion because it represents recovery for us all.

I just stood back and took it all in. Twelve homes under construction in one subdivision and five in another. There must have been at least sixty construction workers of some sort there. Think of it, sixty jobs when we are a country starved for jobs. And think of the other jobs the construction was creating through the ripple down to suppliers and subsequent trades to be on site during the building process.

Here was a ‘manned’ sales office with an agent on duty. When was the last time you heard that one. The builder was in his office, managing schedules of labor and materials. Everyone had mud on their shoes. It was great!

How sweet the memories that this experience conjured up, with the smell of freshly turned dirt, sawdust and diesel, Memories from years ago during the housing boom. It is amazing what once was an inconvenience is now music to my ears.

Folks, the music has resumed! The music of the engine that turns our world, housing and the jobs it creates. So listen in the distance for that heavy equipment moving dirt, the sound of trucks loaded with construction supplies rumbling down our road, the buzz of saws and that rhythmic tapping out of the hammers. The music is not dead, and it is touching each and every one of you.

In Gwinnett county and others around the metro Atlanta area, most of us have suffered a loss in home value from the real estate peak in 2005 & 2006. So we were not surprised to find out the White House has been effected too.   You will be surprised to read just how much Zillow valued the White House. Seems like no one is immune!

Read the full article: 

                                               CNBC Article - Value of White House Drops by More Than $15 Million 

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.

Read More:

                                          Washington Post Article

 “We just won’t sell my home for that amount; it would be giving it away.”  

That is what the sellers says when the appraisal come in lower than the agreed upon contract selling price.  We have a willing buyer and willing seller but the appraiser holds down home values and won’t let the transaction go forward at the contract price.  How are we ever going to get out of this economic mess if this continues to occur?  How can home building start back with this narrow minded thinking? 

As an example, a half completed development was selling in the low $200s. The builder can’t pay his loan payment and looses all the remaining 12 homes to foreclosure.  The bank takes over and does a fire sale to dump them quickly.  The same home, same builder is selling 2 miles away in the $180s in the depressed market. 

So what does the bank do, they unload them in the $140s to sell quickly, and quickly they sell-  all under contract in a matter of days.  It makes sense, a lot of supply lowers price.  Then comes my seller and he is the only one for sale in the same complex as the bank sales were in. 

Now the supply is down to one home and a buyer writes an offer in the $150s.  So what does the appraiser do, well he continues to hold down prices by appraising our listing at the average price of the fire sale that took place. He forgets the supply is now limited and demand is up. 

If it were cars in demand and short supply the dealer marks them up over the manufacturers recommended price.  Collectables go up in value when the supply is small and down when the supply is large.  It’s basic Economics 101. 

So we have a chance to start to have home values increase when the willing buyer and willing seller agreed on a price, but the appraiser holds values down.  If this trend continues we will never have a rising market and home values will never change unless someone wants another fire sale and they go down. 

How can we get the government to stop the regulation that is stifling the home market recovery?  Here is the coming dilemma we are going to have to deal with.  At some point there will be a shortage of homes for sale, in the next few years. 

When we suddenly find that we haven’t built enough homes to meet demand and a builder goes into that community to build new homes he will have second thoughts.  The cost to acquire the land and build the same home as there now is in the $180s to $190s, but an appraiser will tell him he can’t sell for more than the $140s.  Who will build with a planned $40,000 to $50,000 loss? 

The builder will just walk away and not build.  So then when demand is screaming for more homes inventory to buy, will the values go up to the $190s over night.

We received the latest list of advertised foreclosures in the Barrow, Forsyth, Fulton, Gwinnett, Hall & Walton counties only. There were over 6,100 advertised foreclosures and that did not include the other 5 metro counties like Cobb, Paulding, Cherokee, Douglas, & Dekalb. We reported back in August what we thought was a record which was close to 5,000, so this month’s numbers are very shocking. 

What we found when we look at the list this month was a lot more commercial properties which is also unusual.  Even properties that are highly desirable and have tenants are being foreclosed. We read about the new shopping center in Norcross – The Forum, narrowly escaping foreclosure last month. In that article, it forecasted that there would be additional commercial up for foreclosure, but I had no idea that the amount of foreclosures would be this high. 

So what is going to happen with this additional inventory coming onto the market? You probably remember your economics 101 class – more supply, less demand equals lower prices. Just when you think it can’t get even lower, we find that there is a near 20% increase into an already bulging market. 

While this is a great opportunity for some, it is creating additional challenges for those who need to sell. Someone recently shared with me the concept that sellers are under “house arrest” because there is nothing that they can do to liquidate their home without taking a large loss in equity. Most homeowners are counting on their homes’ equity for retirement and with prices falling at an alarming rate, it is going to take a long time to recover from this loss. 

So what is the upside in this? The only thing we can share is that if you are in the market to purchase, there is no better time to buy. If you can put up with the challenges of working with banks, there is great money to be made. Banks are realizing that there are not enough qualified buyers for their homes, so relatively reasonable offers are being considered and whether you are purchasing to occupy or put into rental service, the discounts are amazing.

If you want to take advantage of this great market, make sure that you are working with an expert real estate agent that understands how to work with the banks to get your deal accepted. Also, because the market is shifting, you want to make sure that you are getting the best information possible about a home and area to make sure that you are able to make the best buying decision.

Want to be alerted to the newest foreclosures on the market? Contact us or complete a short form and we will send you the newest homes on the market.

The number of advertised foreclosures this month is 4957 for Hall County, Barrow County, Forsyth County, Fulton County, Gwinnett County, Hall County, and Walton County. This number does not even include Cobb County, Dekalb County, Paulding County, Cherokee County and Douglas County.

In July there were 4415 advertised foreclosures in those same counties that were scheduled for sale on August 4, 2009. Just how many actually foreclosed is yet to be determined. This month, however, we see that there is a 10% increase.

We have been tracking the foreclosure rates for those counties for years and never have we seen these kinds of numbers. Georgia is a non-judicial foreclosure state which basically means that after 4 weeks of advertising, the lender can foreclose on the property through a sale on the courthouse steps.

So what is going to happen with all of these homes that are now owned by the bank? They are going to try and sell them at greatly reduced prices. This can be good news or bad news depending on your situation. If you are a buyer, there has never been a better time to purchase a home. The incentives for first time homebuyers are really phenomenal. Have you heard about the $8,000 Federal and up to $1,800 State credits available? Learn more details.

However, if you are an existing home owner, you are seeing your property values drop like never before. Most people who bought in the past 10 years purchased houses with a first and a second mortgage. When the bank forecloses all junior liens are wiped out. Therefore the bank that performed the foreclosure has a house that already costs significantly less that other homes in the neighborhood that were bought around the same time.

For example a house that normally would cost $100,000 has a first mortgage of $80,000 and a second mortgage of $15,000. Typically the owner would have paid $5,000 for the down payment. So let’s say the owner has lived in the property for 3 years and now can’t make the payment. The first mortgage would foreclose and purchase the property at the steps for roughly $78,000. Let’s say it costs them $4,000 to actually foreclose. They then list the home for sale at $85,000. So the other homeowners in the neighborhood who need to sell are competing with the banks selling what would normally be a $100,000 house for $85,000. So they have lost $15,000 in equity.

In addition banks are now competing with each other since there are so many of them on the market these days, that they are lowering their prices even further just to move the house off their books and to take the loss.

So my point is that there is going to be even more choices for people who want to get some great deals and we can help you find a great deal. If you want to know more about the home buying process, come to one of seminars. If you want to search through the thousands of foreclosures in Atlanta, you can search for free. If you want us to search for a home for you to narrow down the search, you can speak with us directly by contacting us or calling 404.886.8789.

We appreciate the opportunity to serve you!

As a real estate agent serving Gwinnett, North Fulton, Forsyth and Cobb counties, I have a wide area of expertise. While everyone knows we have to conserve energy, the challenge is how to get started and what is the value in “going green” with your home?

Let me being by speaking of the value. In the Atlanta area, while a few people may pay more for a more efficient home, most will use that as a swaying feature between 2 comparable homes and the green home will sell faster. I wanted to share with you some ideas that we recommend if you wanted to go green and discuss the resale value of each option.

HVAC:  Replace A/C systems with a 13 SEER (Seasonal Energy Efficiency Rating) or greater unit. Update furnaces to high AFUE (Annual Fuel Utilization Efficiency) system of 80 or greater.  These will have a tremendous impact on your utility bills while you own the property, and is a great selling point. Also, when the prospective buyer looks at the property, knowing it is a relatively new system will be a big plus.

Install programmable thermostat(s).  Not only will this help you be more comfortable when you arrive home, it will save energy as well.

Replace kitchen appliances with ENERGY STAR rated appliances.  Everyone loves newer appliances. We all know that kitchens help sell homes, so make yours more attractive with this feature.
 

Replace plumbing fixtures & toilets with water conserving fixtures & low flow toilets.  In Georgia, as well as many other areas of the country, we are experiencing major issues with water shortages.  In some metro counties, this is actually a requirement before a seller can sell. We expect that more and more counties will enact similar legislation, so this might be a way to get your house prepared in advance.

Improve insulation. We find that the home’s insulation gets packed down over the years, so refreshing insulation in the attic or adding insulation in the walls will certainly reduce your energy cost as well as provide a great selling feature. It will make the house much more comfortable.

Replace old single-pane windows with Low-emissivity (Low-E) rated windows.  A Low-E coating is a microscopically thin, virtually invisible, metal or metallic oxide layer deposited directly on the surface of one or more of the panes of glass. Old windows are drafty, but the new windows are great for keeping the outside temperatures from affecting the interior temperature of the home.  This is an expensive but very effective alteration.  When we priced out new windows for our home, we were amazed at the pricing, but feel that it will allow us to be more comfortable and save us money in the long run.

While there are other options to consider, we don’t feel that they are as practical, but we thought we would list them for you to think about:

Solar technologies for heating, and active systems for power generation to supplement the grid. 

Grey-water recycling system.  

 
Rainwater retention systems. 
 

Ventilation systems that replace indoor air with fresh outdoor air. 

A whole-house and reverse osmosis water filtering systems.  Provides better tasting water and also reduces the waste of bottled water.

Even if you do only a couple of these items, you will find that you have increased the comfort and value of your home for years to come. If you have any further questions about going green, feel free to contact us – www.AtlantaHousingSource.com or call 404.886.8789.