Let's Sell Your Home this Spring

We have had one of our busiest winters ever in the Atlanta real estate market.  With prices rising, many sellers realized that they again had equity in their homes and were ABLE to sell.  So those who had waited through the depressed housing years (since 2008) were suddenly in a position to be able to move.  Buyers were eager to purchase before home prices rose even more.   As a result, we had record home sales.  Demand in many areas of Atlanta exceed inventory, so some sellers who didn’t want to turn down  a great offer for their home even moved into a rental when they couldn’t find the “right” place to move into.  So there’s much pent up demand for homes to purchase this Spring.

If you are thinking of selling your home, there’s no time like the present.  The sooner the better, for many sellers wait until the Spring to sell – and as the season proceeds, you’ll have more and more competition.  We have a lot of “shadow inventory” poised to hit the market in late Spring and Summer; you’d like to avoid as much of that extra competition as you can.

Even with the buyer demand high, no one wants to overpay for a home so pricing is KEY.  We see competing offers for some homes, but those that are priced too high are receiving no offers at all and actually eventually net LESS.  The longer a home sits on the market, the less it is worth in the eyes of a buyer.  We can work with you to determine the ideal initial list price to bring you the highest return.

To prepare for listing, remember that first impressions are key.  A buyer will often decide from the street that they love or dislike a particular home; in fact, they will often tell us to “keep driving” if they don’t like the curb appeal.  So trim your trees and bushes and pressure wash your driveway, front walk, house, and deck or patio.  Clean and even repaint your front door and make sure the key works easily.  Have a nice, fresh welcome mat.  Buyers will linger with us at the front door while we open the lockbox for access, and they have extra time to notice these details.

Do your Spring cleaning NOW if you haven’t already.  And declutter, declutter, declutter.  Go through all your furniture, decorative items, and closets with a ruthless eye.  We have stagers and declutterers who help us prepare your home for sale – but start with the initial sweep immediately.  The savvy seller will remove half of all items in a closet and have nothing on the floor, for instance.  It sounds drastic, but it works.  Pack up everything you want to keep and take it to a storage unit or call in a company that will deliver a storage pod and then take it offsite for you.

Repaint to freshen up where needed; if you have any carpeting, get it cleaned.  If you know that a home inspector is going to find anything that needs to be fixed – go ahead and fix it now.  We have great contractor references if you need them.  It makes more sense to do the repairs first – a buyer may end up asking you to spend $300 on a repair you can do now for $100.

CALL US NOW if you are thinking of selling your home.  We can help you through the preparations and price your home correctly to sell at top dollar – it’s what we do!  And we’d love to hear from you.

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

2015 Contract Changes

Changes to the 2015 Georgia Realtor Forms

Did you know that the real estate contracts used by most agents in Georgia change every year?  Sometimes there are big changes, sometimes small changes – but every year without fail there are changes.  So if you purchased a home five years ago, say, the process now is a bit different than it was then.  The biggest change in recent years was the change from an “inspection period” to a “due diligence” period.  With an inspection period, the buyer had to find a “material defect” in the property that the seller would not fix in order to get out of the contract.  As you might imagine, that resulted in a lot of legal wrangling over what constituted a “material defect”.  So the Georgia Association of Realtors forms committee changed the contracts so that the “norm” now is the due diligence period, also called a “free look” provision.  During that period (typically anywhere from 7 to 14 calendar days) the buyer can terminate for any reason or no reason at all and get their earnest money back.

This year the changes were not quite as sweeping as that recent change, but there are changes; if you are selling or buying a house this year, you’ll want to know about them.  In the basic purchase and sale provision, GAR added a “special circumstances” provision that alerts the buyer that the seller must get third party approval before they are able to convey the property.  The categories of prior approval include: (1) approval by a bankruptcy court; (2) approval by a judge in a divorce proceeding; (3) approval by a lender in a short sale proceeding (when the sale of the property will not generate sufficient proceeds to pay all mortgages and liens against the property); and (4) other instances when the seller does not yet have title to the property, such as in an estate situation.

There are consumer brochures Realtors are encouraged to share with clients and which are mentioned in the Brokerage agreements, designed so that consumers are getting pertinent warning information.  If you are not provided them, you will want to ask for them: Protect Yourself When Selling a House, Protect Yourself When Buying a House, and Protect Yourself When Buying a Home to be Constructed.  There are brochures covering the hazards of lead based paint and of mold, and about purchasing a home in flood plain or a short sale or distressed property.  Finally, there are two new brochures: What to Consider When Buying a Home in a Condominium and What to Consider When Buying a Home in a Community with a HOA (homeowners’ association).

Bruce Jenner would be happy to know that in the various agreements that address potential discrimination, “gender identity” has been added to the list.  Previously, the “protected category” list consisted of race, color, religion, national origin, sex, familial status, disability, and sexual orientation.    What this means is that brokers, agents, and owners of properties are prohibited from discriminating against potential purchasers on the basis of any of these categories – which now include gender identity. 

There are numerous other small changes.  One particularly interesting tidbit is that there is now “stated consideration” for the due diligence period.  In previous years, attorneys argued that the purchase and sale agreement’s due diligence provision did not create an enforceable contract because there was no consideration paid by the buyer for the privilege of holding the property under contract for a period of time with no obligation to buy.  The contract now states that the Buyer will pay the seller ten dollars for this “option” period.  In practice, the ten dollars NEVER CHANGES HANDS, but the recitation makes the provision enforceable. 

You won’t be surprised that I recommend you consult a licensed Realtor (like myself) for a full explanation of the changes and intricacies in the GAR forms.  While I am of the opinion our state’s forms and contracts are some of the best and user friendly in the nation, you should always have expert professional advice in your home purchasing and selling decisions.

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

SO YOU WANT TO BUY AN INVESTMENT PROPERTY

My home buying guide is geared towards those buying a principal residence, but of course a good portion of our business are buyers who wish to buy an additional home or an investment property.  Here are some considerations unique to that scenario.

First, it’s important for us to know WHY you are buying another property.  Do you plan to renovate and flip it?  Or do you plan to rent it out for income?  The considerations are quite different for each – in this article we’ll address purchasing a rental.

If you are planning to RENT IT OUT for some period of time, be aware that it is probably NOT advisable to purchase a condo or townhome, because chances are you will NOT be able to rent it out.  The reason is this: virtually every condominium ownership complex in Atlanta has a 24% or more rule under which no more than 24% of the units can be rented out at any given time.  Since 2008 when the real estate market took a huge dive, that limit is reached in most complexes with a long, long waiting list of owners wishing to rent out their units.  While things are loosening up now that the market has gotten better, it can still be very difficult in most complexes.  In addition, many complexes have a rule that you must live in the condo or townhome for some period of time (typically a year or more) before you are even eligible to get a rental permit.

The purpose of the rental limits are to preserve future buyer’s ability to get a loan to purchase in the complex.  Underwriting guidelines usually specify that a certain percentage of units must be OWNER OCCUPIED in order for the lender to underwrite a loan for a purchaser.  If there are no rental limits, then, the units must be purchased with cash or alternative financing, making those units much less marketable and therefore less valuable.  Note that some townhomes are “fee simple” rather than condominium ownership, and you WOULD be able to rent out a fee simple townhome.  The difference is that in condominium ownership, you own everything within your walls but not the exterior of the home or the ground it sits on – those are owned in concert with everyone else who owns in the complex.  In fee simple townhome ownership, generally speaking you own your home, the roof, and the ground it sits on but you are simply attached to other homes.  With fee simple ownership, there is rarely any restrictions on the owner being able to rent out a unit.  But condominium ownership is much more common than fee simple.

Another important consideration is whether you are going to ACTIVELY MANAGE or hire a professional property management company to handle renting it out for you.  If you are serving as the direct landlord, you want a property that is CLOSE TO WHERE YOU LIVE.  But if you are hiring someone else to do that for you, where the property is in relation to where you live becomes less important.

Early on, narrow down the neighborhoods or areas you are interested in.  Be sure to consider convenience, schools, crime, and overall appreciation potential (this is where your Realtor comes in very handy).  We will pull homes like the homes you are looking out so you will know about what rent you’ll be able to command for a given property.  Compare the rent you’ll get with your monthly mortgage payment and expenses (a good rule of thumb is a 10% monthly management fee if a company is managing for you; and another 10% for repairs and other expenses).  Keep in mind that there may be gaps in between tenants when you will have no income from the property.

If you pick carefully and choose a home in an area that appreciates, you can make a great return on rental property.  Just be prepared for the risks involved.  No matter how careful your background checks, tenants can go “bad”.  They can tear up your house and refuse to pay rent.  Then you must pay to fix the house and pay legal fees to throw them out.  Rental properties are not for the faint of heart.  But they can also be a great way to diversify your portfolio and make a great return!

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

The RIGHT WRONG Things

When my husband and I walked into our current home the first time, it was a sad sight to see.  Shag carpeting, dark wood paneling, old formica countertops.  And yet we knew it was “the” house for us.  How?  It was UGLY.  And yet the right things were wrong with it.  The carpeting we could tear out.  The dark wood paneling could be taken out or painted over.  Walls could be moved and removed.  Countertops could be replaced.  The home’s flaws allowed us to put our signature on the home and make it our own.  We loved the soaring ceilings, floor to ceiling glass, and huge acre lot with tons of trees.

But another home we looked at was much prettier.  Already renovated in a style we liked.  We could have moved right into that home.  But the WRONG things were wrong with that home.  The driveway was steep.  There was no garage, and due to the topography (steep drop-offs beside the home) no easy way to put one in.  Not enough guest parking – and guests would have to climb up that mountainous driveway.  So while it was beautiful – and we went back to it several times – it was *not* the home for a couple who love to entertain and really want a garage.

This was our experience in the doctrine of the “right wrong things”.

Now, the right wrong things for us would have been just the “wrong things” for some other buyer.  Say, one who didn’t want to have to do ANY renovation.  Or a buyer who couldn’t see past ALL the work that needed to be done (and there was a lot!)  The things that were “RIGHT” for us would have been wrong for someone else.  Not everyone wants a large lot to care for, and not everyone appreciates the 1970s aesthetic.

When YOU are looking for a home, don’t expect to find the house that is exactly right in every aspect.  It doesn’t exist!  Look for the home that has the “right things wrong with it.”

First, determine whether you are willing to do any renovation at all.  If so, the following might be the right wrong things:  old carpeting, Formica countertops, loud paint colors you don’t like.  These are things that are easily changed (of course, if you don’t want to do any work at all, these are just “wrong” things).

Other right wrong things might be a yard that is in disarray but with a little landscaping could be great; or a carport that  could be converted to a garage (if that’s a “right” thing for you).  It’s also important to know, however, the WRONG wrong things.  Maybe a quiet street is important to you.  If the home you’re seeing is on a BUSY street, that’s the “wrong” wrong thing – something that CANNOT be changed, no matter how hard you try.  Put together your list of the WRONG wrong things, and do NOT GO SEE A HOME that has those things.  You’ll save yourself a lot of time and frustration.  Other “wrong” wrong things might be: a home in the wrong school district.  A home without a fireplace if you’ve always dreamed of having one.  A home in a bad n’hood if safety is paramount to you.  You see – the “wrong” wrong thing is something that cannot be changed.

So, before you go to look at houses, put together a quick list.  What are the RIGHT WRONG THINGS?  And what are the “wrong” things that you cannot abide – let’s eliminate those houses before we start, but let’s NOT eliminate those that have the RIGHT wrong things.   Determining your right wrong things could be the way to get a deal on a house – and to have the flexibility to make it your own!

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

WE HAVE AN OFFER! NOW WHAT?

Prices are rising rapidly in Metro Atlanta and we do not have enough homes to sell.  Buyers are frustrated by the lack of inventory and how quickly the good homes get snatched up. Let’s say we have put your home on the market (and I’d love to do that).  Say you’ve priced your home to sell.  You’ve painted the walls a pleasing neutral color and staged perfectly.  You’ve made it readily available for agents to show.  In this fast moving market, we should have an offer within days or a few weeks.  If there’s no offer within a few weeks, they we must re-evaluate why – a subject for another article.  But presuming we’ve gotten it right, offers should be coming in!  How do we respond?

If we get an offer immediately upon listing, we may have a very hot property (one indicator is that we also have a lot of showings right away).  This is happening a LOT currently.  If we’re getting multiple offers, lucky you!  We could have a bidding war.  One way to handle this is to say that we’ll be responding to all offers at some point in the near future.  It’s best to give a date certain.  Say we list on a Wednesday, and it’s clear we’re going to get more than one offer.  I can say “seller will respond to all offers by Tuesday at 5pm”.  This allows the weekend for showings to more potential buyers and allows the open house to pull in more potential buyers (if we’re holding open houses at your home).   If an offer comes in the first day and you respond to it, you don’t give other potential buyers the chance to bid up the price.  That said, if the first offer is excellent and solid and one you just can’t refuse, at times the best thing to do is to move quickly on that first offer and enter a solid contract.

But if we are soliciting multiple bids and get them, once they are all in we review them carefully, comparing all terms.  The “best” offer may not be the “highest” price.  You’re looking for a buyer who will not ask for excessive concessions during the inspection period and who will surely make it to the closing table with no financial difficulty.  Thus, a cash offer (with proof of funds, of course) is typically a better offer than an offer contingent on a loan.  An “as is” offer (indicating that the buyer will not be asking for repairs) is better than one with the right to ask for inspection repairs.  An offer contingent on the sale of another home is not as desirable as one that is not.  We take all of these things into account in deciding which offer is the “best” and the one you want to respond to.  Unless one bid is so strong you want to nail the contract down and sign it as it is written, you will have the opportunity in the counteroffer to counter any terms you do not like, including price.

Now, in contrast to the multiple bid situation, if yours is a home that is not receiving immediate multiple bids, then I typically recommend responding VERY quickly to a bid on the property.  Strike while the iron is hot!  Buyers who must wait a day or two for the seller to respond sometimes lose their enthusiasm and start having second thoughts.  It’s smart to respond quickly to a good offer to keep the momentum going if your home has been on the market for a while or we don’t believe that a bidding war is possible or probable.

We’ve been concentrating on good offers and how to respond – but it’s important to note that you should respond to every offer that comes in, good or bad.  Some inexperienced buyers and even some seasoned veteran buyers just feel that they have to “try” a lowball offer.  Don’t be offended.  Answer it anyway, unless it is just truly ridiculously outside the realm of possibility.  I’ve seen unreasonable buyers get very reasonable in the end and jump to a high number that made my seller very happy.  And everyone’s idea of what IS a “low” offer differs.  Even if you respond at list price, respond.  Play ball.  Having an offer , even if you only have one, is a wonderful thing.  If it’s not going to work out, you should know within very short order and it so it’s not a big time waster.  If fact, if the initial offer is too low, we can respond verbally until the buyer gets to a more reasonable number.

Our Atlanta market has been sizzling hot this summer; well priced properties sell quickly and with multiple bids.  If you price right and stage well, your home will be one of the “hot” properties.  How to respond to offers, single or multiple, is an art as well as a science; with a little forethought and help from a licensed Realtor, you will be SOLD in no time.  Call me today if you or someone you know has been thinking about selling!

Mary Anne Walser is a licensed attorney and full-time REALTOR, serving buyers and sellers in all areas of Metro Atlanta. Her knowledge of residential real estate and her legal expertise allow her to offer great value to her clients. Mary Anne serves on the Committee that drafts and reviews the contracts utilized by all REALTORS in the State of Georgia. In addition, she is a member of the Atlanta Board of Realtors, the Georgia Association of Realtors, the State Bar of Georgia and the Georgia Association of Women Lawyers. Contact Mary Anne at 404-277-3527, or via email: maryannesellshomes@gmail.com.

The Real Estate Times they are A'Changing...

The Real Estate Times, they are A’Changing

Does the real estate market’s positive shift this Fall signal more great times ahead?  Or is this a temporary positive blip?  I believe that the recovery will continue into next year, and that the bust is over. 

In fact, the third quarter of 2013 gave us lots of positive momentum that has and should continue.  While December is typically a slow month we are still seeing the best properties sell quickly with multiple offers.

The best strategy for sellers now and for the year to come is to choose an initial listing price that is aggressive enough to compare very favorably with competing listings.  A home needs to be the best option in the price range in order to sell quickly.  Strategizing in this way brings into play the “scarcity fear” – meaning buyers will see the home as a scarce commodity in the price range and will move quickly and be willing to pay more.  Buyers, in other words, will be afraid that someone else will snatch up the home first.  This is exactly what a seller should want.  A seller who overprices in the beginning loses that buyer urgency.  The longer a home sits on the market, the less a buyer thinks it is worth.  Therefore, paradoxically, a seller who prices less from the beginning will net more than the seller who starts out high and has to price reduce thereafter. 

The good market for sellers that we are seeing now is due to the fact that the downward price pressure from distressed properties has alleviated.  For several years, the number of foreclosures and short sales have brought all prices down.  Now, however, we are seeing much fewer distressed properties on the market and overall lower inventory, so this is the best time to sell that we have seen in years.    While the market may be even better in the Spring, sellers who list NOW have the added advantage of the low inventory of homes available over the holidays.  If a seller waits until the Spring, they will be competing with many more homes.  A buyer looking right now has little to choose from, and this can mean a higher price for a seller who acts strategically.  The following chart shows the severe decline in listing inventory.

Even though there are fewer properties in general, and significantly fewer distressed properties on the market currently, they still have an impact on a sellers’ ability to get top dollar.  When setting an initial list price, take into account how many distress properties you will be competing with.  This can vary greatly from area to area, so it is hard to provide generalized advice about the impact on pricing.   The following chart shows the decline in the number of distressed properties for sale; but note that there ARE still a number of distressed properties out there.

For Buyers, it is important to understand that the supply/demand relationship has shifted to the seller’s advantage. Now, fast action and realistic offers will be necessary for buyers to capitalize on still-low prices for many available properties. Low-ball offers on properties that are already well priced will result in missing out on a great opportunity.  In other words, our low inventory of homes for sale and the fact that prices are still low in a historic sense reduces the buyer’s advantage in contract negotiations.   Making realistic offers is a must for desirable houses.

Overall, the good news is that prices are still historically low and interest rates are too, but inventory is ALSO low and prices and interest rates are rising.  This Spring will see an uptick in activity, with rising inventory, prices, and probably also interest rates.  

A HOUSE DIVIDED: The Family Home in a Divorce

“When we divorced we split the house 50/50 – she got the inside and I got the outside.”

“Have you seen the new “Divorcing Barbie” doll? She comes with Ken’s house.”

            Joking aside, the family home is sometimes the greatest asset to divide in a divorce – so let’s look at how to handle this crucial asset.

It is advisable to call a Realtor early on, when you’re analyzing what assets you have and don’t have.  I often get called in to look at the home and give an assessment of its value in today’s market.  It makes sense to call a Realtor at this point – we typically are more familiar with the neighborhood and have been in the homes that are for sale and have sold, and are accustomed to pricing properties for sale.

             There are online tools you can use as well – zillow.com, for instance, which gives you a “zestimate” of what your home is worth, or trulia.com.  However, these services have obviously not been inside your home or the other homes – so they are very general and cannot necessarily be relied upon.  Tax records are also notoriously unreliable.

            A crucial consideration at this point may be whether or not the couple is “underwater”; that is, whether you owe more on the property than the property is worth.   If so, to sell the home you would have to bring money to the table.  In other words, in some instances it may not be possible to sell the home.

            Also consider early on whether or not you want to fight to keep the home.  Can you afford the monthly carrying costs?  It might not be worth fighting for if it’s something you cannot keep up.

            If one party does end up staying in and keeping the home, however, that party may be buying the other party out.  In that instance, professional appraisals are probably in order – each side getting their own appraisal and then perhaps a third appraisal if the two vary widely.  Know that appraisals are an ART as well as a science – while appraisers are bound by the Uniform Appraisal Guidelines and professional dictates, there is some subjectivity in the process.  When you hire an appraiser, you might wish to share with them the comparable sales that you think are most applicable and why they should be used.  Most appraisers are happy to consider the information, although of course they are not bound to use it.

            But say the decision is that the home needs to be SOLD.  It’s great if you can both agree on a Realtor.  That actually happens much more often than you might think.  Maybe you both liked the Realtor who sold you the home.  Or know a Realtor jointly who you respect.  Another tactic is to interview three Realtors and see if there’s a clear front runner who you can agree upon.  If not, one way this is sometimes handled is that one party will choose the Realtor for a specified period of time and the other party will choose for the next period – be it 3 months or 6 months.

            Several considerations arise here.  Keep in mind that there are various expenses involved in getting the home ready for sale and keeping it maintained while it is on the market.  How those expenses are handled should be decided upon in advance.  You might also want to decide in advance how much the list price will be decreased and when – and what offers should be acceptable (i.e., you can agree that any offer within five percent of list price must be accepted, that sort of thing).

            Then there are some very practical showing considerations.  An example will illustrate this point.  We had one client where the wife left with all the nice furniture.  We were left showing a home with very little furniture and a “divorce feel.”  Try to agree to keep enough nice things in the home to make it show well.  Like it or not, buyers are swayed by these things.  Most buyers choose emotionally and THEN justify the purchase logically.  If they walk in and the home feels forlorn and empty, they will not feel great about the home – or may think the seller is in desperate circumstances and thus make a lower offer.  It pays off to have the home nice for showings.  If nothing else, the parties can agree to borrow or rent furniture or to have the home staged for showings.

             The home must also be AVAILABLE for showings.  This becomes an issue when the person staying in the home doesn’t necessarily want the home to sell.  Perhaps the other party is paying the bills, and so once the home sells the occupying party loses that support AND must move to a lesser home.

            When an offer comes in, keep in mind that your net is less the Broker’s commissions, the mortgage payoff(s) and any repairs that will be necessitated during the inspection period.  Your Realtor can help you figure your net from a given offer.  Again, it is sometimes helpful here to have agreed what amount and type of offer should be acceptable.

            A note here if one party stays in the home.  Be aware of title issues.  When you sell the home, a title search is performed.  If there are any liens against the property, these must be paid off before closing.  Even if you do not sell the home, if you are the one keeping the home you want to have a title search before all is finalized.  That way you can be sure the departing spouse didn’t borrow money against the house or otherwise create liens that you will be responsible for when you sell the house and which effect its value.

            The final issue – housing options once you leave the family home.  This is for you and your Realtor to decide, but just a few things to keep in mind: do you need to stay in the same school district for the kids?  Do you need to stay close to the other spouse for the children’s sake?  Even the priciest zip codes have affordable options that your Realtor can help you find.  And keep in mind that emotionally you may want to stay in a familiar area; the one you’ve lived in or an area with friends and family near.