Do Builder Incentive Affect Value?

It’s a common question and an even more common problem in today’s real estate market.  Competing with the builder to sell your home.  Knowing the builder’s position and promotions will give you a lot of information on how you should approach the sell of your home.

First things first, let’s do the short answer:

Do Builder Incentives Affect Value? SHORT ANSWER:

They do not affect Value directly, instead they tend to drive the price negotiated down on resales only in the neighborhood and do not typically affect surrounding neighborhoods.

Having a professional Realtor is the key to success and there is one thing to remember.  Above all else, price is king.

Some keys to success when competing with a builder are:

• Know the Market - Like any professional Realtor should know, you need to know what you are competing with.  Will the "Biltmore" take 8 months to build, and you have one that is move in ready?  Does your lot allow for the only 3 car garage?
• Know the promotions - You can do two things, you can attempt to match the promotion or show value elsewhere.
• Accentuate the Differences - Make sure that buyers know why they’d want your home over the builder’s.  Maybe you’ve finished some additional bedrooms, added a pool, or perhaps you "worked out the kinks."
• Work the Community - Most sales from new neighborhoods in more rural areas are referrals from the neighborhood.  Take advantage of it.
• Remind the Buyers - THEY CAN MOVE IN TO YOURS QUICKER.  They can get an inspection and have a real person to deal with.  Most builders have rigid contracts and are not really interested in lots of negotiations.  They’re simply less agile than a home owner is.

Be sure to hire a professional Realtor to help you with this trying process.  It doesn’t have to be an agent that lives in or near the neighborhood, in fact, hiring an outsider could be a good play, since their "sphere" might be people who would want to relocate to your neigborhood.

Tax Credit FAQ - Part 2

If you’ve talked me at all, you’ve probably heard about the $7,500 Tax Credit that first time home buyers get.  I posted a pretty good FAQ on it earlier (Tax Credit Will You Get It) , but I’ve come across 2 additional questions I thought it would be worth sharing.  Keep in mind all of this should be verified with a CPA for your individual situation.

1. Can I use the $7,500 for my down payment?

   The short answer is no.  Basically, since it’s from the IRS/Government, it would bring the IRS into the HUD statement. [soap box] Basically, the Government is too big to be bogged down by your transaction, instead they would rather focus on taking your money at gun point for other projects.[/soap box]

2. So I can’t get the $7,500 until I file my 2008 Tax Return?

   Short answer.. Yep, you have to wait. The best suggestion would be consult with CPA then adjust your income tax witholding or adjust quarterly estimated tax payments.

Steve Doesn’t Get It

It happens more often than I care to repeat, but there are people out there that I really don’t want to work with.  I’m sure those of you who are reading this article are not part of this bunch, but if you are no worries.  My Christian natures pretty much require that I love you as a brother or sister, but I don’t have to work with you, nor you me, for that matter.

I’m all for being blunt and honest and frankly I’ve lost a few clients that way.  I’m not eloquent.   However, what I am talking about today is a guy named Steve.  He could be named Joe, Bob, or even Samuel, but we’ll call him Steve.

Steve Doesn’t Get It.

Here’s the scenario: Steve calls last minute and would like me to show him some homes.  He’s going to buy a home for his daughter, he may want one for himself, and he even has other "family" thinking of moving.  He’s sounds like a nice guy and I’m sure he is.  He certainly doesn’t want to put me out, but he’ll really only be available tomorrow.  He’d like to see something tomorrow and come back and BUY something a little later.

Bare with me it gets better.

I inform Steve that I COULD cancel or move appointments for him , but if I am going to do that, that I would require a Buyer Brokerage, or a Fiduciary Agreement with him so that I could be his Realtor of choice .

NOPE! Out of the question.  Steve says he knows Real Estate and whoever shows him the home wins and if he finds it on his own, the listing agent wins.. big time. I ask him more about his situation, but people like this are all the same.  It’s not that they are just plain stupid, I just think they don’t use their brains.

Let me get this straight…

You are turning down:

1. A Free Service
2. A Service that will save you more then you could possibly save by yourself
3. A Service that will save you time and hassle and protect your earnest money (deposit)
4. A Service that may very well save you from litigation

Basically, he doesn’t see the value in the service that is provided, he just wants someone to let him in the homes.

That’s a smart plan, Steve.  Good luck with that one.  I prefer to work with and for clients who want to work with me and understand that my job was never to find or show them a home.  ANYONE CAN SHOW A HOME.  I get paid to negotiate.

If I (or should I say my Seller) get really lucky, Steve will buy one of my listings in Alpharetta or Gwinnett County and I will be able to demonstrate this skill to Steve up close and personal.

For Sellers out there in Alpharetta. If you want someone who can take advantage of people like Steve, please give me a call, he should be buying in 3 to 6 months.

Do You Network?

Many of you know that I have the honor to be the President of the Chateau Elan Networking Elites BNI group that features 40 top CEOs from the North Gwinnett, Hall, Jackson and Barrow County Region.  I’ve enjoyed my group and networking so much, that I must share with you something that will blow you away.

BlitzTime is a new service that allows you to network with people in a "speed networking" (taken from speed dating) format.  You call in and after a brief introduction you will be taken to 1 on 1 sessions over the phone with your networkers.  BlitzTime takes the best of open networking in groups like BNI or PowerCore and puts it all in the power of your phone.  Meaning you don’t have to drive 30 minutes for a 2 hour event and pay for lunch. No, you get to call in, in your pajamas if you want and build business connections.

I’m hosting an event for Atlanta, and if you are reading this and have a business, I’d love for you to join me.

Atlanta Speed Networking Event on January 6th @ 1PM

How Do I Avoid Foreclosure?

I get this question more than you might think.  There simply isn’t a ton of State specific information on avoiding Foreclosure in Georgia other than, "pay your bill."  If you are facing foreclosure you might have other options.

• Loan Modification - There’s a lot of scams out there, but there are people who can help you modify your loan assuming your situation is "right" for it.
• Short Sale - if that doesn’t work, then you can do a short sale most likely.  If Foreclosure is imminent, then Short sale may be the way to go.
• Bankruptcy - Please consult your attorney on this one, but a Bankruptcy can usually halt the foreclosure proceedings.

Please contact me at 770-374-4667, should you be facing foreclosure and want to find out if there are other options.

Why Short Sale? Short Sale VS Foreclosure

It’s come full circle, I’m loving short sales from a seller representative standpoint due to the fact that it helps get them out of a situation that could devastating to them financially.  For a long time I’ve not enjoyed showing short sales to my buyers, simply due to the hassle.  Having closed several this year, I’ve got a new look on short sales.

So Why Should A Seller Short Sale?

First of all, you need to know what a short sale is.  GO here to read about what a short sale is .

So assuming you are a seller or home owner and have some sort of hardship and do not want to stay in your home, you can short sale.  But what is the difference between just giving the home back to the bank (Foreclosure) and a short sale.

• Foreclosures Stay with you for 7 years
• A foreclosure on your credit report will cause you to pay significantly higher rates for your next home, but also cars, credit cards, even insurance.
• A foreclosure on your credit report will require you to put more money down on your next home, but also cars and some apartments.
• Once the notice is given, the home owner will only be so for 30 days (in Georgia) and could face eviction as soon as 30 days.

A short sale on the other hand,

• A short sale stays on your credit for only 2 years
• Does not devastate your credit score as much.
• Can allow the home owner to stay in the home for up to 6 months in some cases without a payment.

So if you or someone you know is in financial distress, please call me at 770-374-4667.  If I cannot help you directly I can direct you to someone who can.

NOTE: Please consult with an attorney or accountant regarding your own financial matters.

Short sales are listed on the MLS, and you can search for all the homes in Georgia by going here.

How Can I Improve The Quality of Our Community?

I recently had a question from a seller in a neighborhood with a lot of foreclosures on how to help improve the situation. I thought would share the response with you:

Communities that have high involvement of neighbors tend to have a slightly lower rate of foreclosure.  Get organized and get involved with the HOA.  You can get the word out that there are other options.

CNN recently stated that every foreclosures is 1% hit on your property’s value.  So you have incentive to help out.

You can direct them to good connected Realtors who might refer them to loan modification programs, or short sales (which hurt everyone but not as bad as a vacant foreclosures).

Some things are inevitable, but keeping up your home and helping others is a great way to build your community.

You can search for all the foreclosures in Georgia at my website.

NY Times - Best Time to Buy a Home….EVER?

I’ve been in Real Estate for 6 years. It’s not a long time for most at a job, but for the world of ACTUAL PROFESSIONAL REAL ESTATE, it’s an eternity.  Most of the top agents I work with have that many years, most of the ones that have gone back to their old jobs, did not.

I tell you that to say, none of us can remember being so motivated to almost call potential clients a name if they didn’t think it was time to buy.  Seriously, if you are paying $800 a month or more and have not been late on your bills and you have a job, you NEED to buy a home.

Don’t take my word for it, here’s what the NY Times says:

Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.

That moment is certainly getting closer. Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.

Meanwhile, first-time home buyers have the same advantage they have always had, which is that they do not have to sell their old place before buying a new one. That is an added advantage in areas where many available houses simply are not moving, because the people trying to sell them will not be bidding against you.

If you’re hoping for a recovery in the housing market, you ought to be cheering on the first-time home buyers. When they purchase homes, their sellers are free to move on or move up, stimulating further sales.

They finish up the article with some good advice:

Still, for anyone feeling the urge to buy, a number of practical considerations have changed in the last year or two. The basics are back, like spending no more than 28 percent of your pretax income on mortgage payments, taxes and insurance. Even if a lender does not hold you to this when you go in for preapproval, you should hold yourself to it.

Christmas WILL be Coming This Year!

With Rates in the low 5% and mid 4’s% (for some), buyers are back in a big way.  Great Deals used to sell in 2 weeks or less are going the moment they are listed.  Good Deals are now moving much quicker and homes are getting showings.

So Christmas will be coming THIS year as more people find homes and sellers start to see more offers… at least my clients.

Before you get too excited about a small shift in the market place, it’s still a great time to be buyer and it’s still a buyer’s market (but for how long) but it’s also a great time as a seller to put your home on the market because:

• Interest Rates are super low (making your home more affordable)
• There is less foreclosure inventory on the market (Equals Less Inventory)
• Banks are more reluctant to do short sales since they might be able to do a modified loan to keep the person in the home (Equals Less Inventory)
• Builders are not building at all anymore but the ones that have home standing are selling at highly reduced rates (less inventory)
• Now is a great time to MOVE UP! (if you lose 3% on $100,000 that is $3,000, if the next seller loses 3% on $300,000 that is $9,000 making it a $6,000 gain)

Why it’s great to use the Jarvis Team at Keller Williams!

1. Winner of the 2008 Consumer Choice Award
2. Winner of the JD Power Award for Consumer Satisfaction
3. Number 1 Office in Gwinnett County. Our market share continues to grow while other’s decline.
4. We can put your home on the first page of Google, Yahoo, and MSN.

As Buyer’s Jump The Fence, CNBC puts them back on it…

If you watched CNBC today you likely heard "Bond Guru" Bill Gross comment on interest rates.  His prediction is that rates will continue to fall, likely as low as 4%’s.  1% reduction in rate is the equivalent of a $10,000 reduction in price.  So homes will be slightly more affordable.  The big question is whether buyers who are taking advantage of the market will wait after hearing this news.

The bottomline should require you to ask these questions:

1. Why am I moving?
2. What is my motivation for moving? (yes ask it again)
3. Why do I NEED to buy?

If you are buying investment property then there might be a reason to pause.  If you are renting, you should have already bought something.

Here’s more from the interview:

"The mortgage rate will come down another 50 to 100 basis points," Pimco’s founder and chief investment officer said. "That’s basically what the government needs. They need a 4 1/2 percent to 5 percent 30-year rate in order to support home prices and, yes, to encourage refinancing and the process of reliquification within the economy. "

His advice: "[OWNERS] Don’t refinance yet. "

Purchasers on the other hand should move forward, especially, first time home buyers who should take advantage of the $7,500 Tax Credit while it lasts.

Some time next year, he sees stabilization coming to the economy, and lower mortgage rates are an essential part of that process.