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!!