AFTER THE INSPECTION – WHAT NOW?

NOW that we are through the inspection period, what happens now?  Here’s what you need to do:

§  Keep in contact with your lender – make sure that they have ALL documents they need from you.  Remember that they may come BACK and ask for more, different documents, depending what the underwriting department asks for.  Don’t worry – that’s normal.  Just get them any documents they ask for as soon as you can.  Email the lender to tell them you are THROUGH the inspection period and want to make sure they have all the documents that they need.

§  Let your agent know what TIME of day you’d like to close so that they (I) can get you on the closing attorney’s calendar and make sure that the time is all right with the seller.

§  Your agent will get you UTILITY INFORMATION.  But it’s probably best to wait until the week before closing to make the calls and arrange the transfer.  Sometimes companies won’t take your call until AFTER the seller has called to have the utilities taken OUT of their name (in other words, the seller must first call to have electricity turned OFF as of the day of closing – then you call to have it turned ON.  In truth, the utility company never actually disconnects – they just change the name on the account.

§  WATER is a special deal.  The City will require a copy of the signed SETTLEMENT STATEMENT before they will switch water to your name.  Go ahead and print out the application from online, fill it out and bring it with you to closing.  The closing attorney will fax it along with the settlement statement to the water department FOR you from the closing table.

§  PACK if you haven’t already.  Arrange a moving company.  Your agent can get you names/numbers if you want/need them.

§  If the seller has agreed to make repairs as a result of your inspection, you will want to check to make sure those repairs are done.  Hopefully you have requested that the seller provide receipts for any and all repairs either at closing, or preferably prior to closing.  If they are major repairs and you feel more comfortable doing so, you can pay your inspector to come back and inspect the repairs.

§  FINAL WALKTHROUGH – you will want to do one last walkthrough prior to closing.  This can be done on your way to closing, or the day/evening before.  You will be checking to be sure there has been no damage to the property and that all is in order.  IF there is something amiss, the seller is given the opportunity to correct it.  Obviously, if you do not discover it until right before closing, there’s not time for that.  You can either delay closing or ask the seller to put some amount of money aside as surety until the problem is fixed.

CONGRATULATIONS ON YOUR NEW HOME!!!

WE ARE UNDER CONTRACT!

So, you’ve made an offer, the seller has countered, you’ve countered the counter… and after one exchange or many, you have agreed upon the terms of the contract.  What happens now?  First, you need to schedule an INSPECTION.  

An inspection will cost between $350 and $600, depending upon the size and complexity of the home.   You want an inspector who is ASHI (American Society of Home Inspectors) certified.

My favorite inspector is Bryan Dilworth of Cornerstone Inspection Group.  Their website is http://www.atlantahomeinspector.com/ or you can call 770.436.2667 to schedule.  Chuck LeCraw, also an inspector, owns the company and he is great also.  They don’t charge you until the inspection is DONE, so you can schedule without worry (if you are calling before the contract is finalized, something happens and you do NOT get under contract, you won’t have to pay).

Your inspection company will ask if you want a RADON TEST. Radon is an odorless substance which emanates from natural stone in the ground.  It has been shown to cause lung cancer.   The main place we worry about radon is in a BASEMENT – and even if you do have a basement, if it is unfinished and you are not planning to finish it, it is not as crucial.  In fact, the radon testing protocol is that the radon is placed on the lowest FINISHED level, so they would put your radon test on the main floor if your basement it unfinished, where it is highly unlikely that there is any radon.  But if you have a FINISHED basement, I would absolutely order a radon test.

The only areas of town I’ve personally seen radon tests come back POSITIVE are near Chastain (just North of Chastain Park) and Tucker.  Both tests were done in finished basements.  I hear the closer you get to Stone Mountain, the more likely they’ll find radon (it’s released from the granite).    What happens if they FIND radon?!?!  Well, you REMEDIATE it, which consists of plugging up any cracks and bare ground and in some cases, putting in a ventilation system.  It can cost 2,000 or so.  Not cheap.  If you discover radon during the inspection period, it is the seller’s job to pay for it.

Once you have your inspection, your inspector will issue a written report detailing everything he has found that is wrong with the property.  The average inspection report is 26 to 30 pages long, so don’t panic if yours is lengthy.  A lot of it will consist of general information and pictures. With me, your agent, you will decide what to ask the seller to fix, replace or repair – and thus the second big negotiation begins.  You must finish these negotiations within the due diligence period or EXTEND the due diligence period.

The seller can either agree to fix, replace or repair the inspection items themselves prior to closing, or can give you a monetary concession in lieu of repairs.  That monetary concession will have to pass muster with your lender.  Oftentimes a lender will NOT allow a check made out to a third party vendor at closing – instead you’ll have to negotiate more seller-paid closing costs or a reduction in the purchase price.

If the seller agrees to make repair, specify that receipts for those repairs will be provided at least three days prior to closing so that you can be sure that they are done and check to make sure that they are done correctly.

MAKING THE OFFER

Okay, so you’ve looked and looked – and you’ve found the place that you want to buy!  What happens next?  First, have your agents pull COMPS.  COMPS are comparable properties that have sold in the area recently that will help you determine the value of the home that you want to buy.  Typically we start with homes that have sold in the last three months that are within a half mile radius that are “comparable”.  If there aren’t at least three comparable properties within those parameters, we expand the search – going out to a mile and back six months…. And so on.  Your agent can be an invaluable help in determining a fair price for the home and what you should offer.

Once you’ve determined what you’d like to offer, it’s time to put TOGETHER the offer.  We do this by filling out the GAR (Georgia Association of Realtors) Form – there’s one for single family homes, and a different one for condos.  Here are the elements of the offer:

• Purchase price you’re offering;
• Amount of earnest money you’re putting up – standard in Georgia is to put up at least one percent of the purchase price, so for a $500,000 property you’d put up $5,000 in earnest money);
• Amount of closing costs you’re asking the seller to pay:
• This must be a SPECIFIC amount.  You can’t just ask the seller to pay “all” closing costs, or 50% of closing costs – you have to ask for a specific amount
• Make sure the amount you are asking the seller to pay is not MORE than your actual closing costs.  Your lender can help you determine this
• What DATE you want to close.  Typically you’ll need at least three weeks from making the offer if you are getting a loan (not paying cash) for the lender to underwrite your loan;
• Due diligence period – this should be seven to ten days, unless there is a good reason to ask for more (say there’s evidence of structural problems, that sort of thing).  During the due diligence period you can terminate for any reason or no reason at all, and still get your earnest money refunded;
• The closing attorneys you’d like to use; your Realtor can make recommendations for this – it needs to be an attorney who regularly does closings and who in on your Lender’s approved list;

In the stipulations, here are some things (among many) you may ask for (BUT keep in mind, that you might not want to clutter up your offer with lots of ancillary requests, particularly if the offer is a lowball offer):

• Seller to provide a one year termite bond for Buyer
• Seller to provide a one year home warranty for Buyer
• Seller to provide a survey of the property for Buyer
• Seller to have the property professionally cleaned prior to closing
• There may be certain items in the property that aren’t listed on the Seller’s Disclosure as staying with the property, but which you want to remain with the property, such as:
• A porch swing
• A gas grill
• A piece of furniture that is custom fit to a certain spot
• Chandeliers, if not already being left; etc.

In addition, there are often EXHIBITS to the contract that are necessary:

• Financing contingency – if you are paying for the property with a LOAN, you want to be sure that you can obtain financing
• Appraisal contingency – this assures that the property must appraise for the amount you are paying, or you are able to get out of the contract
• Lead Based Paint exhibit – if the property was built prior to 1978, you need an exhibit explaining that there may be lead based paint in the property
• Plumbing disclosure – in some counties, like Dekalb, the county requires that you have LOW FLOW fixtures in order to obtain water service.  In those counties, there should be a plumbing disclosure attached to the contract
• Seller’s Property Disclosure – this is attached to and becomes a part of the contract
• Condominium Disclosure Exhibit – sets forth the monthly fees for the condo, etc.

Your Realtor will need your signature on the offer and exhibits, will need the earnest money check IN HAND (the Broker will deposit the check when you’ve reached binding agreement – otherwise, it will be torn up or returned to you) and a prequalification from your lender.

Now, the game begins!  Unless you’ve made a very good offer, chances are that the Seller will counteroffer, and the counteroffers will go back and forth until the parties reach agreement.  At this point, it is INSPECTION TIME – the subject for another blog post in the near future!!!

The Home Search

A previous blog post was on how much money you’ll need before you search for a home – basically going through the down payment you’ll need, the money for an inspection or inspections, earnest money, closing costs and the like.  So, you’ve saved the money you need.  What happens now?

First, if you aren’t prequalified already, meet with a Lender and get prequalified.  This will let you know how much you can afford to pay for a home.  Even IF you don’t want to spend the entire amount you can qualify for, you’ll know how high you can go.  The other calculation, then, is at what price point you’ll be comfortable.  Consult mortgage payment tables, which calculate principal and interest at given interest rates, then remember to add in a sum for taxes and insurance.  The four elements of your monthly mortgage payment will be that: PITI, or principal, interest, taxes and insurance.

It’s definitely a good idea to figure this out BEFORE you start looking for homes.  There’s nothing more frustrating than looking at homes way above your price range and then discovering you have to settle for something much less.  Plus, when you do get ready to make an offer you’ll need a prequalification letter.  If you’ve already spoken to a lender, you’ll be able to get one of those quickly when the time comes.

Price often dictates neighborhood – and property type.  If you are in a lower price range, but set on living in Buckhead, for instance, you’ll need to look for a condo or townhome.  Your agent can help you identify, in your range, where it is possible for you to live.  We can then set up a property search accordingly.

We have lots of cool tools these days for that – I can set my buyers up on automatic notification, so that when a new home meeting their criteria comes on the market, they know immediately.  But of course, I also look at the new listings every day, and quiz other buyers about unlisted properties, to determine whether there’s something “new” out there for one of my buyers.

So, you search – and if you have targeted correctly, you might be able to find your dream home relatively quickly.  At that point, it is time to MAKE AN OFFER – which will be the subject of a future blog post… so STAY TUNED!!!

What’s Up? WOODSTOCK!

So, my newest property listing is in WOODSTOCK, Georgia – just 24 miles outside of Atlanta in Cherokee County.  Woodstock is truly the all American city.  http://www.woodstockga.gov  The Towne Lake neighborhoods are especially impressive, AND there’s a country club one can join that is both affordable, available (no long waiting list) and which has an award winning golf course http://www.townelakehillsgc.com !  Downtown Woodstock is very charming and has some original buildings still standing.  This is definitely a place for you to consider if you are looking for a home!

Let me tell you just a few fascinating facts about WOODSTOCK:

·         Woodstock was first settled in 1830, when Georgia was still part of the Cherokee Indian Territory (in 1838, the Cherokees were forced into Oklahoma and the area became part of the State of Georgia)

·         Cotton MADE Woodstock, as it did many Georgia cities

·         The railroad depot in downtown Woodstock (pictured here) was built in 1912 and is on the National Register of Historic Places

·         By that time, Woodstock has a thriving downtown business district.  Many of the old buildings remain, including the Dean Drug Store, which is now the Woodstock Visitor’s Center (where I met a very helpful Kyle Bennett (thank you, Kyle!) who helped me with all this information)

·         As the decades rolled on, Woodstock became what it is today – a great place to live combining history with modern day convenience

·         The city has an amazing Greenprints Trail system – 60 miles of trails in development – much of which is already walkable

·         For those who prefer two wheels, self motored, there’s the Taylor Randahl  Mountain Bike Trail, widely acclaimed among mountain bikers and a great way to spend a Saturday http://www.singletracks.com/bike-trails/taylor-randahl-memorial-mountain-bike-trails-at-olde-rope-mill-park.html

·         There are brand new homes and townhomes by John Weiland going up near downtown and a  new 6500 seat amphitheater will open in 2012; Woodstock is growing, even in this economy!

My new listing is in an area called Towne Lake, a master planned community about 2 miles due west of downtown Woodstock, in an area known as the “Thousand Acre Woods”.  There is no actual Towne Lake – but there’s lots of nearby water recreation available in the form of Lake Allatoona, one of metro Atlanta’s popular lakes.  Towne Lake is well known for its golf courses and for being a great place to  live!  Here are some pictures of my  new listing ON THE GOLF COURSE, 316 Ironhill Trace, listed for $350,000.  Let me know if you or someone you know might be interested in this wonderful home!

“THE MONEY YOU NEED TO BUY A HOUSE- PART TWO”

So, what other money  do you need on hand prior to closing?  Although you pay the down payment at closing, you will need to show a seller that your offer is in earnest by offering an earnest money check at the time the offer is made.  In Georgia, the typical earnest money offered  is one percent of the purchase price.  That money is held by your agent’s Broker, and then is credited to you at closing.  If you terminate within the due diligence period (the subject of another blog post!) you get your earnest money refunded.  If you do not terminate within that period, and fail to close, the earnest money is at stake, and could be claimed by the Seller.

The other costs involved in purchasing a home are the INSPECTION, which varies according to how big the property is and how high the purchase price, but which cost $350 and up.  Some buyers choose to also test for RADON – which will run $150 and up.  Radon is an odorless gas that is emitted from the ground and which has been shown to be a factor in some illnesses, such as cancer.  In my experience, most radon tests in Georgia come up negative for radon, although there appear to be pocket areas where radon IS found – around and near Chastain Park, and on the east end of town (towards Stone Mountain).  If the radon is found to be above EPA recommended levels, then it should be remediated – and the Buyer will usually ask the SELLER to pay for that.

Your lender may require you pay for the credit check, appraisal, that sort of thing prior to closing to be sure you are actually going to close with them.  I’d budget $500-$1,000 for that.   If you pay for those prior to closing, but they will reduce your closing costs AT closing.

SO, this gets us to the final costs – closing costs.  One lender gave me the formula 1.7 percent of the loan amount plus $1700 in fixed costs.  That’s a VERY rough estimate of what your closing costs will be.  Obviously, the closing costs will vary depending on many factors.  You *can* (and many buyers do) ask the Seller to pay all or a portion of your closing costs.  The loan you have will determine HOW MUCH of your closing costs the Seller can pay – they will often be limited to three percent of the loan amount, and you’ll need to pay the rest.

I hope this helps!!!  If you need more specific guidance, please do not hesitate to contact me and let me know how I can help you!!!

HOW MUCH MONEY DO I NEED BEFORE I BEGIN LOOKING FOR A HOUSE?

I try to find some fun, interesting topics for blog posts – this one is a little dry, but important!  I will sneak in a few of these here and there, just for variety – and because, like vegetables, they’re good for us. 

I find that new homebuyers are confused about how much money they should have in hand BEFORE they begin looking for their dream home.  A quick answer is – call your lender !  They can give you a good idea of what price home you can buy, and how much in reserve you should have before you begin looking.  My favorite mortgage lender – the one I use most often and who will do my loan when I purchase a home – is Carlisle Dent of Fidelity Bank Mortgage.  Tell him I told you to call and he’ll be happy to discuss it with you. 

But if you’re just “thinking about it” at this point,  or just want a general idea, here we go:

Generally, the largest chunk of dough you should have in advance is your DOWN PAYMENT.  The down payment varies depending on the type of financing you are using, your monthly payment and the price of the home you are purchasing.   It is a percentage of the purchase price, and that percentage depends on the financing you receive. It is possible to pay as little as 5% down, but in a more traditional situation, you would be putting about 20% down.  Government loans require a smaller down payment – I have seen (even in this tough lending environment!) no money down (from the buyer) loans.  But since the mortgage meltdown, those are very few and far between.  The more you put down, the more lenient your lender can be on underwriting issues.  Plan on no more than twenty percent of the purchase price – but most of my buyers these days put twenty percent down.

Saving enough money for a down payment can seem like an unreachable goal for some. Remember though, if you already own a house, you can use your home equity toward a down payment on a new house. If you are a first time home buyer, start a savings program if you have not already. Also, a lot of first time home buyers receive help from parents and relatives for the purchase of their first time. Consider asking!  It’s a good, effective mode of wealth transfer at a time when you most need it.  If you DO go this route, know that there are special rules relating to when that money needs to come to you.  Some loans will require that the funds are in YOUR account for a certain amount of time.  Check into that FIRST if this is your plan, so that you know you are conforming to those rules.

Also, some builders of new homes will consider “sweat equity” in their selling price. This means that they will reduce the price and let you do some of the work (like painting) yourself.  There are even more strategies to get your down payment lower, such as using a co-borrower or seller take-backs.

The Most “Artistic” Home in Atlanta

All right, so it’s not a home anyone actually LIVES in, but it’s immediately recognizable.  This house sits on the grounds of the High Art Museum.   The High Art Museum, of course, is one of Atlanta’s great treasures, and the sculpture is “House III” by Roy Lichtenstein (1997), the famous pop artist who also constructed such classics as Crying Girl (1964), seen here (and brought to life in the film Night at the Museum). 

House III looks like an ordinary home, but as you walk past it, and look at it, it appears to move as you move – sort of like the eyes in a portrait following a character in an old-time horror film.  I really ought to post a video, shouldn’t I?  Or maybe this will inspire you to go see for yourself.  It’s really quite amazing.  The house appears to undulate and move with you, and the optical illusion also has the perspective fooling your eye - like an Escher sketch.  The sculpture was completed in 1997, the same year that Lichtenstein died, so I presume that it was one of his last works (he died in September of that year).

Being a Realtor, I love that one of the major attractions one sees in the outdoor pavilion at the High is a *house*.  The piece has me reflect on the thought that many operate under the illusion that home never changes – when, in fact, whatever you call home is constantly in flux, and it is rarely how you remember it.   

I must also mention that the exhibit currently at the High, Picasso to Warhol, the Modern Masters, is AMAZING.  I had high expectations and it exceeded them all.  The exhibit runs through April of 2012, so you have plenty of time to see it (and marvel at the most artistic home in Atlanta on your way in).

CHEAPER TO BUY THAN RENT

I just placed an offer for a client who told me that he’ll be SAVING $450 a month by purchasing the condo we found for him.  He is actually SAVING money by purchasing rather than renting.  Really?  I asked him.  Does your calculation INCLUDE the monthly HOA (homeowner’s association) dues on the condo?  He assured me that it did – and that yes, he’ll save $450 a month.  Not to mention the money he’ll save on his income taxes.  Interest he pays on his mortgage is TAX DEDUCTIBLE, and in the early years of a mortgage, much of what you pay is interest rather than principal.  So he’ll see more savings add up when he files his income taxes with the I.R.S.

It’s unbelievable, isn’t it?  Why are so many people still renting?  My client assures me he’s going to spread the word to his neighbors in the apartment complex, and I hope to see more clients from there!  But why aren’t more people automatically following his lead, with interest rates as low as they are, and home prices bottoming out?  As long as my client holds on to his condo for a few years, chances are he’s making a heck of an investment – and saving money in the interim to boot!

One reason more renters aren’t purchasing, of course, is that many of them have been foreclosed upon or have had to short sale their properties (a short sale is when the seller sells the home for less than is owed on it, and the mortgage holder agrees to accept a reduced payoff).  If you’ve been through a foreclosure or short sale, you won’t be able to purchase a new home for some period of time.  (Typically, lenders tell me, a foreclosure will prevent you from purchasing for seven years, and short sale for at least three years, although these time periods can vary).  Then there’s another group of potential buyers who have relocated to Atlanta, but who cannot afford to buy a new home until their home in the former state sells.  And of course, it’s much harder to sell a home these days – you’re competing with all the foreclosures and short sales.

But if you haven’t had a foreclosure, short sale or bankruptcy recently, if you have steady employment and enough money for a down payment, it seems crazy NOT to buy.  The client in this example is buying a one bedroom condo in a great part of Buckhead for less than $50,000.  Just two years ago the same condo was selling for double that.  I have other clients who are looking at homes $200,000 and below – and we are finding LOTS of homes in that price range that they like.  They are having difficulty deciding upon which they like best.  Home prices are just incredibly affordable right now.

If you are currently renting, you owe it to yourself to explore whether or not purchasing a home makes sense for you.  Interest rates are again at record lows and who knows HOW LONG these low home prices will last – so please, call or email me or your other favorite Realtor – we’d love to help!

Flood Pain – I mean Flood Plain



(Picture from the Austell, Georgia website – image of the 500 year flooding in September of 2009)



I am showing buyers moving to Atlanta from Massachusetts homes in Austell, Georgia.  After a day of looking, their favorite home was chosen – a nice, sturdy, all brick ranch of larger proportions than most; clearly, in their minds, superior to the other homes we had seen that day.



As is my custom, I called the agent and asked for a seller’s disclosure, since it was their favorite of the day.  A section in the Georgia seller’s disclosure asks if the property is in flood plain.  The seller answered “do not know”.  The seller’s disclosure also asks if there has been standing water on the property after a heavy rain.  The answer?  Again, you guessed it – “do not know”.  HOW does a seller NOT know this?  Even if it is a rental property, surely if the property floods they are told by the tenant, or check often enough to know if there is a water problem.

Answering “do not know” to this question raises all sorts of red flags.  Sellers, if you truly DO NOT KNOW if your property is in flood plain, CHECK IT OUT.  It’s easy enough to do.  Go to http://www.fema.gov/, and click on “flood maps” – then enter your address. 



And, importantly, ANSWER the question about whether or not water stays on your property after a heavy rain.  Answer as honestly and completely as you can.  Answering “I don’t know” only hurts – much more than it helps.  With the Austell home, we had to presume the worst.  The sellers finally did come back and answer the question completely – there HAD been water in the crawlspace, and they described how much water had been there – but of course, by this time, we weren’t comfortable with the seller’s veracity.  They had answered a question on the disclosure “don’t know” when they really DID know – what else were they not completely truthful about?

The moral of this story is to ALWAYS ANSWER QUESTIONS ON THE SELLER’S DISCLOSURE HONESTLY AND THOROUGHLY.  It will come back to bite you if you do not.  While buyers are particularly sensitive to flooding issues since the huge flood of September 2009, trying to cover up or not answer questions about water problems will NOT help you sell your home.  The only way to go is absolute and complete honesty. 



Marriage and Divorce

Recently I wrote a blog post – “A House Divided – Selling a Home While Getting a Divorce”.  It’s now been published in the Atlanta Journal Constitution (in the Homefinder Section, Sunday, Sept. 11, 2011) and in the Atlanta Bar Association’s Family Law Newsletter.  If you missed it, you can find it in my blog archives, and I hope that you will!

Realtors are often consulted during the “turning points” of people’s lives – marriage, divorce, relocation.  Thus a Realtor’s interpersonal skills are paramount, and sometimes we feel more like therapists than real estate professionals – but that’s PART of the profession, and to many of us a rewarding part.  We are able to guide folks through change – sometimes wonderful, sometimes turbulent, but always exciting – and help with transitions.

My husband mentioned to me that in short order, I need to follow up with a piece on Buying a Home Together When Getting Married – which I will definitely do!  I enjoy helping people get through the turbulent waters of a divorce and back on their feet, but I love even more helping young couples find their first home – or helping folks getting married later in life find their dream nest together.  So that piece will be coming soon!!

Charleston Style Architecture in Atlanta

Charleston, South Carolina – the name evokes a vision, usually, of the famed Battery and the row of majestic mansions facing out to sea.  These homes welcome the sea breezes with a style of architecture unique in time and place.  The architecture and its unique style is one of the many appeals of the charming city. 

One style uniquely Charleston is the “single house”.  Along the southwest face of the house is a full-length columned porch, or piazza, which is entered by a door on the street, and from the piazza, another door leads into the house. This construction was intended to keep the house cool, as prevailing southwest winds would sweep the house end-to-end, while the piazza roof would shade windows from the sun.

This charming and unique style has been copied elsewhere, notably in this home found on Rilman Road near the Governor’s Mansion and Pace Academy in the toney Buckhead neighborhood of my city, Atlanta.  In this home, the piazza is actually on the northern side of the house, but here it serves a different architectural purpose.  The front of the home is a classic hardcoat stucco construction with symmetrical windows.  Stucco is also a classic Charleston construction – in Charleston, it was common to place ornamental stucco over brick to help shield the brick from absorbing the excess moisture and humidity.

          

On Rilman, the driveway gracefully sweeps around this home to the garage in the back, so as not to disturb the front classic elevation.  As you step through the front door, you enter the piazza – which in this home has been glassed in and has become part of the main living area.  This was by design – in other words, this piazza was never a “porch” as one sees in Charleston, although on the second level the same space comprises a screened in porch which runs not only off the master bedroom but is also accessible from the other bedrooms on that floor.

 

The Rilman house in Atlanta has cleverly and beautifully adapted this charming and classic form of architecture for use on this gracious southern street.  There are other unique elements reminiscent of Charleston – the side bricked courtyard, for instance, which opens from French doors off the dining room and which offers an additional outdoor area for entertaining.

 

It is so refreshing when architects break away from the cookie-cutter pattern of building and adapt a style unique to the site and to the place.  In this location near the Governor’s Mansion and old genteel Atlanta, the Charleston-style design blends beautifully but also offers a unique and special home to this Atlanta family.  The home is currently on the market, offered for $1,195,000, and is available for viewing by qualified buyers by appointment.

HOME SWEET GNOME

How far will a seller go to sell a house?

            Would you bludgeon your neighbor with a garden gnome in order to sell your home?  In a recent episode of the television show The Closer, it happened.  Here’s how it went down: Seller is having a tough time selling in this market.  Discovers that potential buyers are put off by the fact that a registered sex offender lives in the house behind the home that is being sold.   (Sex offenders are required to register – you can find where they live in Georgia at http://www.gbi.ga.gov/).  Seller knows that if the sexual offender dies, they are taken OFF the registry.  So Seller kills the offender with a large, heavy garden gnome, thus creating a fascinating hour long episode as The Closer attempts to figure it all out, and locates the dead body (the dead body must be found, you see, so that the registry is cleared).

            It is a tough market to sell a home, true, but for the record, we do not recommend such drastic measures (especially since that seller won’t be moving anywhere except to  the hoosegow anytime soon).  But here are some tips that are safer, legal, and better calculated to actually help sell your home:

GET RID OF THE GNOMES.  Seriously.  They are evil.  Ok, maybe they are not evil, but buyers generally do not think kitsch is cute.  You want buyers to envision themselves living in your home, and if they don’t like gnomes (really, does anyone really LIKE gnomes?) then it’s a turnoff. 

EVEN THE TINY GNOMES.  Seriously.  Those little tschoktes you have everywhere aren’t helping the sale of your home in the least.  Small items have another name – clutter – and you need to get rid of it in order to sell your home.  Most buyers are going to see your home online before they ever step in the door – and they will make the determination from an online review as to whether they even WANT to come in.  What seems “normal” to you while viewing a home looks cluttered on a smaller computer screen.  Just say NO to gnomes AND to nic-naks.

            We have many more tips for selling your home.  But wanted to get the word out right away about the gnomes – remove them before someone gets hurt.  And call us when you’re ready to sell!

Seller Financing in a Buyer’s Market

It’s a buyer’s market in real estate, but the poor buyer may find it VERY difficult to get a loan.  Banks are simply not lending the way that they used to.   A savvy seller with financial wherewithal can turn the second fact into an advantage in this market by offering seller financing.  The potential benefits for the seller is that they can often negotiate an interest rate that’s more favorable than it would be from other investments.  They might also command a higher selling price because they are offering the added benefit of financing, since the buyer who chooses seller financing is presumably unable to qualify for a conventional mortgage loan.  Seller financing may be the ONLY way that type of buyer can purchase a home.  There could also be tax benefit if the transaction is structured as an installment sale, which allows the seller to spread out recognition of capital gain.

Of course, the big downside for the seller is the possibility that the buyer will default.  After all, by definition the buyer is somewhat of a risk – for whatever reason, presumably subpar credit, a traditional mortgage lender was unwilling to lend to him or her; that is why the seller is financing the transaction in the first place.

Here are ways to help minimize the risk for the seller: always thoroughly investigate the buyer (this should go without saying).  Get a credit report, but also a criminal background check.  Make sure that the buyer is not presenting you with false identification (identity theft).  Make sure that you get personal, professional, and credit references – and talk personally with them all.

Secure a large nonrefundable down payment, as much as you can negotiate.  The down payment can go towards the buyer’s purchase at payoff, but should remain the property of the seller should the buyer default.  The larger the down payment, the less the risk for the seller.

Structure the transaction carefully, providing creative enforcement remedies.  Often in such transactions, foreclosure is the seller’s only option should the buyer default.  Draft intermediate remedies to the extent possible – remedies for late payments, for instance, might have a strict penalty to discourage tardiness.

Seller financing is not for every seller – but those who can offer this additional benefit may find that the potential benefits outweigh the risks.

A House Divided - Selling Your Home While Getting a Divorce

It’s no secret that this real estate market is very difficult for sellers.   Home prices are lower than they’ve been since 1990, and prices are still falling.  Therefore, many homeowners are “holding on” – deciding not to sell in this strong buyer’s market.  Those who are selling generally fall into one of two categories: (1) those who have to sell (sellers who can no longer pay the mortgage or they are relocating a new city) or (2) those who want to move “up” and figure they’ll make up what they lose in selling their current home by getting a great deal on the move-up home.

And then there are divorcing couples.  Multiply the stress of divorce with the current economy and tough house-selling environment, and it adds up to a very difficult time.  Sometimes divorcing couples fall into category (1) – but oftentimes they don’t have to sell, but they want to sell in order to move on with their lives.  The house is often one of the largest, if not the largest, marital asset.  If one party decides to buy the other out, the party who is being bought out is getting short shrift – the current appraised value is certain to be low compared to what the home was worth before the 2008 housing crash – and also low compared to what the home WILL be worth when the housing market recovers.

In a relocation situation, Realtors often recommend that a seller consider renting out the home in lieu of selling, at least until the market improves.  Divorcing couples generally do not wish to explore that option, and of course it is often not in the divorcing couples’ best interest for the parties to continue to have to deal with one another in finding a tenant, maintaining the home, etc.    The divorcing party’s desire usually is to make a clean break and start a new life.  So, for divorcing couples who decide that they must sell together in order to fairly divide the marital housing asset, here are some thoughts and guidelines to make the process easier:

IF POSSIBLE, BOTH PARTIES SHOULD VACATE THE HOUSE.  Key to selling a home is making it as accessible as possible for agents and their buyers.  If your home cannot be shown, it won’t be sold.  If one or both parties are living there, it’s more difficult to show and since the two divorcing parties are often not speaking with one another, it makes it even harder to arrange showings.  It only makes sense that it is not a good idea for both parties to live in the house while it is being marketed and sold.  There is already enough stress in the relationship.

BEWARE THE “DIVORCE HOUSE” LOOK.  If only one member of the couple is living in the house, the home tends to look barren and sad with half the furniture gone. Agents can tell when it’s a divorce house, and buyers can too.  Since purchasing a home is often an emotional decision, a half-empty house is a big turnoff, even though much of the prejudice may be subliminal.  Buyers may not know WHY, they only know that the house feels sad, and they won’t want to buy it.  You are much better off selling a vacant house (totally vacant, cleaned, fresh paint) or one that has been staged nicely with furniture.   Another problem with one party remaining in the home is that it often causes disagreement between the divorcing parties as to whether the seller remaining in the home is “thwarting” the sale in any way.

IF ONE PARTY MUST STAY IN THE HOUSE, stage it.  It does not have to be “full” but it should look as if there has been time and effort put into making the house presentable for buyers.  In other words, no folding chairs and bridge tables in the dining room, and no blow up mattress serving as the bed.

CHOOSE A REAL ESTATE AGENT TOGETHER.  Both parties must trust and feel comfortable with the agent who is chosen.   Neither party should feel that the agent favors one seller over the other, communicates better with one seller over the other, or is otherwise prejudiced against one of the parties.  That said, we often represent couples when an agent on our team has been friends with one or both of them and it seems to work out fine as long as there is good communication between all three – the two sellers and the agent.  It often helps to have an agent who knows the parties, is empathetic, and fully understands the situation.  If there is any conflict or uneasy feelings during the course of the representation, be sure the let the agent know your feelings about this and give them a chance to rectify or adjust. 

COME UP WITH A PLAN OF COMMUNICATION.  We will often find that divorcing couples are not communicating well with each other.  This is not surprising, of course.  In that instance, having a plan whereby the agent communicates with both parties at once through email is often the key.  Otherwise, the agent has to choose “who to call first” and that can cause problems, UNLESS both sellers agree that the agent’s primary contact is with one particular seller.  If email is to be the primary source of communication, be sure that both sellers have ready, easy access to email and check it regularly.  Remember that DELAY – in responding to a request for a showing, or to an offer – can be deadly to a sale.  Buyers will move on quickly in this era of many, many homes on the market.

PRICE RIGHT FROM THE BEGINNING.  Divorce always takes an emotional toll, regardless of the circumstance, so you want to limit the damage as much as possible.  Better to get the house sold that to have it sit on the market forever while the parties wait – and wait – and wait – to fully move on with their lives.  Time and time again we find that the longer a house stays on the market, the less the seller ultimately gets for it, so this would seem to be a no-brainer.  Price right from the beginning!  In this strong buyer’s market, that is likely to be less than you thought or hoped you would get for it, but mitigate the damage by pricing well from the start.  Believe me, ultimately it’s better – and more lucrative – that way for all parties.

Our team has helped many divorcing couples through the process of selling a home, and we’re happy to help you as well.  Please do not hesitate to contact us at mwalser@kw.com or 404-272-3527.

WHAT’S UP WITH THE DOWN STOCK MARKET AND THE US CREDIT RATING?

Last week, the Dow Jones industrial average plunged to its lowest level since the low in 2008… S&P lowered its credit rating of the US …. what does this mean for real estate (since, of course, it’s all about real estate for a Realtor)?  While I’m not an economist, I thought I would share my perspective and the latest home sales statistics for the Atlanta, Georgia market (my home).

When the stock market goes down precipitously, many homebuyers panic and think it’s a bad time to BUY a home – of course, it’s the exact opposite.  When the economy is down, THAT is the time to purchase.  We’ve seen opportunities never seen before in the real estate market in current years.  These are the times when fortunes are made in real estate – buy LOW (that’s now) and sell HIGH (and “high” times WILL come again – they always do!)

I’m not sure what, if any effect, the events will have on mortgage interest rates.  In addition to lowering the US Debt Credit rating, S&P also lowered the rating of Freddie Mac and Fannie Mae.  These two entities buy most of the mortgages issued in this country, allowing banks to finance more home sales.  But what I understand is that since mortgage rates are tied to long-term Treasury yields, and Treasuries are considered a safe investment in uncertain times, mortgage rates are unlikely to rise because Treasuries will continue to do well.

I work in the Buckhead Market Center of Keller Williams Realty – part of the Rawls Group.  Each quarter the Rawls group commissions an in-depth survey of the home buying/selling activity in Metro Atlanta for the preceding quarter.  The findings for the 2^nd quarter of 2011 show some interesting trends.  Sales were actually HIGHER – up 3 percent as compared to the 2^nd quarter of 2010, but distressed properties still represent a large percentage of total sales – 40.9%, which is providing a downward pressure on pricing.

Here’s chart showing the home sales trends for the past three years in Metro Atlanta:

RELEVANCE FOR SELLERS: Current buyer price resistance is still very high due to the availability of low priced distressed properties.  Among all levels of listings, most (more than eighty percent) required a price reduction prior to sale, meaning that sellers are overpricing their homes intially.  Overall the LISTING INVENTORY is lower, but we still have 7 months of listing inventory, indicating that we are still in a strong buyer’s market.  (7 months of listing inventory means that if NO OTHER properties came on the market, it would take 7 months to sell the inventory currently in play).

RELEVANCE FOR BUYERS: there is an unusual opportunity, as noted above, for GREAT VALUE in purchasing a home.  Prices are still declining, there are many listings available, and a great number of anxious sellers.

Here’s a chart showing the percentage of sales that are DISTRESSED property sales:

With the fall in the stock market, even more opportunity is open to buyers savvy enough to know that NOW is the time to buy.  For sellers, there will be continued downward pressure on pricing until the market stabilizes.   We will be VERY interested to see what effect recent events have on our stats NEXT quarter!