Real Estate Wisdom

Wednesday, October 28, 2015

THE WEATHER COOLS, BUT THESE ATLANTA NEIGHBORHOODS ARE HOT!

Atlanta has SO many great neighborhoods! But here’s a quick take on what are some of our hottest (of the moment) neighborhoods and those that are HOT VALUE neighborhoods NOW, this Fall, 2015, in Atlanta. Note the distinction. When a neighborhood is “HOT” – i.e., very popular at the moment, oftentimes prices will rise rapidly as buyers bid against each other in their rush to move in. A HOT VALUE neighborhood is one that is not yet “RED HOT” but which WILL be hot in the coming years, and so there are still bargains to be had. Now, if you’re bidding in a HOT neighborhood and prices are rising, there is no need to fear overpaying as long as it’s a neighborhood that is likely to hold or increase in value in the coming years. Usually a neighborhood is HOT either because of location, schools, or both; the location isn’t going to change and if the schools are good, residents always fight to KEEP them that way.

Don’t be concerned that I am leaving out your favorite HOT neighborhood – know that I’m not addressing CLASSICALLY HOT neighborhoods… I’m not addressing them in this particular blog post because they are always hot. This would include Decatur zip 30030, Midtown, Va/Hi, Morningside, and many northern suburbs such as Alpharetta, Roswell, Johns Creek, and East Cobb in its great school districts.

And also know that there’s no way to address all the “hot” areas in one blog post – I’ll just touch on a few to whet your appetite, and I’ll cover different areas of town.

Let’s start in Ashford Park, just east of Peachtree Road – Ashford Park is HOT. The elementary school is awesome and there’s lots of new construction. While several years ago one could get a pretty decent home for $300,000 here, I just sold a teardown LOT for $500,000 with multiple offers in one day.

HOT VALUE near there is CHAMBLEE. While Montgomery Elementary is not yet par with Ashford Park, it’s getting there, and the City of Chamblee is making great strides in developing retail areas. THE ASSEMBLY huge mixed use development is going in where the old GM Plant used to be and that’s exciting. Because it’s up and coming, there are still values to be had.

NOW, let’s go to the Beltline, which is of course driving values everywhere it touches. We’ll start with Old Fourth Ward, O4W in local parlance, and its neighbors, Inman Park and Poncey Highland. HOT because of the Beltline (and that’s a continuing theme – the Beltline has made many Atlanta neighborhoods “HOT” so it is important to know where the Beltline IS, where it will be, and where it’s going…. ). Quick aside = the Beltline is a 22 mile bike/walk/run path being built in a huge Atlanta circle. Only parts of it are complete, other parts are underway, and some sections may be years in the making. But the O4W portion is complete and with it O4W Park, Ponce City Market, Krog Street Market – the list of “cool” things that have come with it are legion.

HOT VALUE is south of there, in Reynoldstown, Edgewood, and East Atlanta. There’s also Ormewood Park, nestled between Grant Park and E Atlanta on the Southside (Grant Park has been and continues to be a “hot” area). The beltline goes right through this great neighborhood of old bungalows and great diversity. There is section 8 housing a block from $700,000 homes. There are still a lot of values to be had – I just sold a $250,000 adorable house one block from the Beltline. The Beltline here is not yet finished, so prices haven’t risen SO high SO fast.

For more hot values, seek out Capitol View Manor, Mechanicsville, and Adair Park – neighborhoods to the west of the afore-mentioned neighborhoods. These are nestled in west of I-75/85 and south of I-20, and the Beltline goes right beside and through them.

Let’s leave the Beltline for a minute and head down towards to the Airport to stop at The Manchester Arms in College Park for a meal. Marvel at what College Park is becoming. Because Woodward Academy is down there, some northern suburb dwellers have built weekday homes for one spouse and the kids to live in before they go back to the northern burbs for the weekend. PORSCHE moving into the airport has meant even more wealth moving into the area. College Park is hot; East Point just to the north of it is still a hot value neighborhood.

Back on the Beltline and moving North; HOT is BRANDON SCHOOL DISTRICT = you’ll pay a premium for great public schools in Atlanta, and Brandon is a good indicator of that. One of my favorite neighborhoods is CHANNING VALLEY, where prices have risen 22% over PRE recession prices; it’s a small friendly diverse neighborhood in a great convenient spot.

HOT VALUE is West Midtown = Howell Station is an example. It’s near BELLWOOD QUARRY, which saw thousands of zombies in the season premiere of Walking Dead. Now that the zombies are gone, that park will be the crown jewel of the Beltline. Because that area is still very industrial and the Atlanta Jail is nearby, prices are still low, but demand is rising.

And finally, up North to just outside the Perimeter. Smyrna west of 285, just outside Vinings, the area nicknamed “Smynings” is hot but there are also still a lot of value priced properties. With the new Braves Stadium going in, it’s becoming even more desirable as a place that will be close to the action and the new development; and yet far enough west that residents can still get places without running too much into Braves traffic.

Again, these are just a FEW of the “hot” areas that I am seeing. Please email me YOUR favorites so that I can feature them in a future blogpost!

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.

Friday, October 16, 2015

No Need to Cork the Bubbly - Let's Celebrate the Recovery

After the dismal housing recession in Atlanta (and everywhere) that hit in 2008 and sent housing prices on a sharp decline, prices finally started to stabilize in late 2014 and have risen ever since. Having just emerged from the doldrums to a rapid rise in pricing, some experts are declaring a new “housing bubble”; but reports of the imminent death of the rising residential market are greatly exaggerated.

In Atlanta, we took longer to sink during the recession and have been slower to rise in the recovery. Right now we have a shortage of inventory but our prices still are not rising as quickly as they are in many cities. This measured response to the national trends bodes well for us; as does the fact that so many companies are bringing headquarters and employees to Atlanta. We have more buyers moving here, which will naturally put upward pressure on pricing, but which will serve to continue to support that pricing in the coming years as they continue to live and work in Atlanta.

In addition, as more sellers receive the news that housing prices are rising and that they ARE able to sell and make a profit, more are putting their homes on the market. This additional inventory is helping to reduce the number of competitive bid situations and to stabilize the rapid rise in pricing.

Further, it was a very loose mortgage lending environment that contributed to the original housing bubble. It was far too easy to get a mortgage at that time. That loose mortgage environment ground to a screeching halt in 2009 and it is still difficult today to secure a mortgage. The strict underwriting guidelines that were implemented following the “mortgage meltdown” are still in place, meaning that the torrent of unqualified buyers that precipitated the initial crisis are nowhere to be found and are, hopefully, never to return. Banks are lending only to qualified buyers with good credit scores who are less likely to default on their mortgage loans. Interest rates are still low right now, but are likely to rise, which will create yet another governor on the ability of buyers to purchase and the ability of sellers to ask ever increasing prices.

After fifteen years in the business, I have seen a lot of ups and downs in the housing market. This particular recovery, while fast, has not spun out of control and is unlikely to do so. While it’s always prudent for a buyer to carefully review the sales of comparable properties and to research the neighborhood and factors contributing to that neighborhood’s potential before agreeing on price, and although that price is going to be higher than it was three to five years ago, there’s no need to panic or to cork the bubbly over a housing “bubble”. Rather, we should continue to celebrate the housing recovery.

Friday, August 7, 2015

Chicken Little Goes to Closing

The sky is falling! To hear lenders and closing attorneys tell it, the world as we know it comes to an end on October 3^rd. That’s the day new regulations come into effect that govern the mortgage lending and closing process. Whether or not there’s mass bedlam, there are certainly changes that buyers and sellers of property should be aware of and prepared for, so this article will summarize them.

To understand how things are changing, it is important to know how the world works now. Today, sometimes the loan and closing statement will change the day of closing or even while parties are sitting at the closing table. Starting in October, that cannot and will not be possible anymore, at least as to every mortgage application received October 3, 2015 or later. The new rules require that a new document, the Loan Estimate, must be provided to the borrower within three days after loan application, and another new document, the Closing Disclosure, must be provided to the borrower at least three business days prior to closing. These apply to any mortgage loans with no exceptions. If there are changes to the deal, a new disclosure must be provided and the three-day waiting period starts all over. While previously the settlement statement was provided by the closing attorney and often at the last minute, with the new regulations the lenders themselves will likely be providing the statement directly to the borrower and they must confirm and document receipt by the consumer.

You can see how this can potentially cause big problems. “Stacked closings” are common now, in which the seller of one property uses those proceeds to purchase a new property in the next hour from a seller who may the following hour be buying a new property of their own. These back-to-back closings dependent upon one another for consummation are already tenuous at times. Imagine what the new three-day waiting requirement may do! So in practical effect and application, we Realtors must advise our clients of the following:

Delays are much more likely, particularly in the early days of implementation of the new regulations.
A seller will want to negotiate possession some number of days AFTER closing. While this has always been the case for a seller still living in the property they are selling, now it becomes even more crucial.
A buyer will want to commit to a lender as soon as possible in order to attempt to limit any delays. A buyer will want to be sure they choose a lender fully conversant with the new regulations and a lender who has a system in place to comply.
While some lenders can get a loan through underwriting and closed quickly, every loan is going to take longer with these new requirements, particularly at first. A cushion of 45 days between contract and close is advisable.
From a Realtor’s standpoint, any and all provisions of the contract should be tied up as early as possible. In particular, if there are monetary concessions during the due diligence period, those should be provided to the lender as soon and as early as possible. Even changes in the Realtor’s commission are part of the disclosure process and should be wrapped up as early in the process as possible.
While lenders are the primary front line, closing attorneys must also be in line with the new regulations. It is advisable to look for a closing attorney who does residential real estate closings regularly, has systems in place, and preferably is ALTA (American Land Title Association) best practices certified.

The new disclosures are designed to help consumers better understand the terms and costs of their mortgage loan; however, in one aspect the new disclosures are more confusing. The new rule prohibits lenders from disclosing a reduction that is commonly offered by the title insurance companies when a lender’s title policy and the borrower’s title policy are issued at the same time. Instead, there’s one lump sum disclosed; at closing the cost will actually be *less*. While that might result in a pleasant surprise for some at closing, those borrowers who are watching closely will likely be more confused about what, exactly, the title insurance is actually going to cost them at closing.

The home sale and purchase process can be confusing enough. If you are planning to make a move this year, be sure you plan for these new regulations and have trusted advisors guiding you through the process.

Tuesday, June 9, 2015

Buyer's Remorse

We don’t talk about it a lot, but it is real: buyer’s remorse. That sinking feeling that you rushed too quickly into your home purchase and that it is all a big mistake. If remorse comes during the due diligence period (during which the buyer can terminate for any reason or no reason at all), you can still terminate your contract; if it comes after that period, you cannot terminate without facing potential legal penalty.

Buyer’s remorse is not just a problem for buyers – it’s a HUGE problem for a seller. If a home is on the market, goes under contract, and then comes BACK on the market, there is a stigma attached to the property, whether or not the contract termination was called for by any logical reason. This stigmatizing effect is why sellers want to be as certain as possible that the buyer is NOT likely to back out. For instance, many sellers would never accept an offer from a buyer who has not yet seen the property. Why, you ask, would any buyer MAKE an offer without seeing the house? Well, in these days of low inventory and few houses to choose from, buyers sometimes HAVE to make an offer without seeing it. I recently helped buyers moving back to Atlanta from Sweden; with their three children, they didn’t want to move into a rental only to then move again when they purchased a home. They had lived in Atlanta previously, and knew the area in which they wanted to live – so they trusted me, working with their parents, to decide on a home and get it under contract for them. Whether or not they’ll have remorse is yet to be determined.

But buyer’s remorse may be more rampant in these times of buyers rushing into purchases because there is such low inventory. The first advice I give is to remember that almost EVERY buyer has remorse at some stage of the process. Despite my vast experience with the phenomenon, I myself had buyer’s remorse with the purchase of my current home. I went through with the sale – at the urging of my husband – and it’s the absolute best home for us that I could ever find or ever imagine. So working THROUGH the buyer’s remorse and soldiering onward to closing is sometimes the answer.

And I also suggest to buyers feeling a bit of remorse that we examine if the remorse is illusory and fleeting or based on fact and true potential pitfalls. For that, we take the buyer’s initial wants and needs list. Does the home they chose fit what they said they were looking for? Is there likely to be another home in their price range that would fit those needs and wants better? Looking at the inspection – are there problems with the home that are not fixable, or has the buyer just been spooked by routine home repair items that aren’t a big deal?

There are several scenarios where buyer’s remorse seems to fester that usually IS fleeting and should be worked through: when the negotiations with the seller have been contentious and the buyer is left not having good feelings about the seller; when the buyer keeps looking at homes online and considering other homes; and when family and co-workers plant doubt. Remember that the seller is LEAVING the home and it will be yours; remember from our search that homes can be and usually are much different in person than they are online; and remember that the family and co-workers did not engage in the search with you and don’t know all that went into the decision (it’s typically more realistic to consult with friends who have been with you through the process).

With a careful selection process, a great inspector and a great real estate agent guiding your way, any buyer’s remorse may be a typical and passing phenomenon. Sometimes knowing that it’s common is all a buyer needs to know to get through it. For the seller faced with a terminating buyer, it is a good practice to let future purchasers know if the termination was based on “cold feet” rather than a true problem with the house. Always let us know your current thoughts and concerns – armed with all information, buyers can avoid remorse, and sellers avoid a lost buyer.

Monday, March 23, 2015

Settling Into Your New Home

The papers are signed and you are moving in – congratulations! And welcome to your new home. Here are some things you should know about as a new homeowner. First, you will get lots of coupons and offers in the mail. Marketing companies watch the county records for new homeowners and your “change of address” form with the post office is also a trigger telling companies “Hey! I’ve moved! I am going to buy stuff!” Chances are you held off purchasing new furniture, etc. until after closing. But keep in mind that even if you want to buy things ahead of closing, it doesn’t hurt to ask the merchant if they have a discount for new homebuyers. Many do, particularly furniture companies, and sometimes they’ll give you the discount even before you close.

Keep in mind also that you will notice things about your home that you did not notice before closing. Perhaps a ding on the countertop, scratches on the floor, chipped paint, that sort of thing. This is regular and normal for the most part. Sometimes it isn’t. For instance, recently I helped a purchaser buy an awesome condo. After closing, when she moved in her toilet was leaking. We didn’t notice it before; it didn’t come up in the inspection and we didn’t notice it in the walkthrough. So guess what her housewarming gift from me was? You guessed it. I do have toilet visiting privileges now, and since it’s near Piedmont Park that might come in handy. But here’s the point – there may be things wrong with the home you didn’t know about or your inspector didn’t catch. Maybe the problem developed after the inspection and wasn’t noticeable during your walkthrough. Know that this is normal. Things like this are rarely worth suing over unless you think there’s been fraud. The best approach is to be as diligent as you can and budget for some unforeseen circumstances – and above all, remember that “perfection” doesn’t exist (although some homes come close….)

Perhaps at the closing table you exchanged contact information with the home seller. If both parties are open to it, then the information is exchanged; if not, the Realtors can help facilitate communication after closing if necessary. Perhaps you as a buyer finds something the seller left behind, or have received mail that needs to be forwarded, or have questions about those things you did not notice prior to closing. But there’s another reason you might wish to contact the seller. At the closing table the attorney likely told you that if the property tax bill changed after closing such that the proration on the statement was inaccurate, then the parties should arrange a re-accounting amongst themselves if appropriate. Personally I’ve never seen that happen, but it could; know that if the tax bill you receive is significantly higher than a previous proration on the closing statement, that it is appropriate to contact the seller for a re-accounting. Know as a practical matter the seller is not likely to be excited about paying out more property tax money on a home that they no longer own (and of course rarely would a buyer contact a seller to REFUND prorated funds if the tax bill gets smaller, but that happens too).

Now here is a tip that we often forget to tell buyers – but it’s important. You’ll get solicitations from companies that offer to send you a copy of your deed for a price – (prices I’ve seen range everywhere from $25 to $75). These solicitations look “official” and give the impression that the only way you can get a copy of your deed is to pay that company to send you a copy – NOT SO. The county will send you a stamped-filed deed after your closing for FREE and your Realtor can always pull your deed from the on-line records and send it to you at no cost. There is no need to pay a third party company to send you a copy of your deed – hang on, it is coming your way for free.

But that is not the worst “official looking” correspondence you will get. You may also get letters asking you to pay to file a homestead exemption form; again, you don’t have to pay. The forms are free on the county websites and you can file for free. (The homestead exemption gives you a break in property taxes if you live in and occupy your home). You may also get correspondence from companies that want to split your mortgage payments into payments every two weeks rather than monthly. If you want to prepay your mortgage, you can do that without the help of a third party who wants to charge you to help. If you get a notification that your loan has been sold and you should send your payments to a new lender CALL your current lender before believing a document sent by mail. The name of your mortgage company is easily available in public records, so a scammer can write you an “official looking” notice purporting to be from your lender that is in no way official.

So, keeping in mind these tips, reminders, and warnings, enjoy your new home!

Wednesday, February 25, 2015

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.

Wednesday, February 11, 2015

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.