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.

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.

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.

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.

One of the most important steps in the home-buying process is being pre-approved for a home loan. Many buyers apply for a loan and receive approval from a lender BEFORE searching for a home. This is called “pre-approval.”Why is pre-approval important at the beginning of the home-buying process?

• Pre-approval can cut days or even weeks off the closing, because the lender has already conducted its credit analysis and approved you for a mortgage.
• Pre-approval strengthens your offer and negotiating position. A home seller will often choose to accept an offer from a buyer who is pre-approved for a mortgage over one whose financial picture is still in question.
• Pre-approval will determine your price range and narrow your search parameters. Based on your down payment and that pre-approved mortgage amount, you will know how much you can afford before you even start looking for a house.

There is also a significant difference between buyers who are merely “pre-qualified” and those who are pre-approved.

Pre-Qualified Buyers - are those whose lenders have determined how much they can borrow based only on information the buyer has provided to the lender. Nothing has been verified to determine the buyer’s true creditworthiness. The buyer still must fill out a loan application and go through the lender’s approval process.

For buyers who have been pre-approved, the lender has already done a credit check along with verification of employment and deposit. The lender’s pre-approval is a commitment to loan the buyer up to a certain predetermined amount. The only piece missing is the lender’s appraisal of the home to confirm its value.

Contact me when you are ready to purchase your next home. And let me know if I can provide any additional information about pre-approval or financing options.

When a buyer is looking for a new construction home, the question always comes up, "Is This A Good Builder?"  It’s a loaded question to say the least.  Although, the Real Estate Commission will be upset about this, most agents DO have opinions about the builders.  The bottomline however, is that an agent’s answers are based purely on their perceptions of a builder or their direct experience.  Keep in mind that even the most successful agents whose team closes 600 transactions or more a year, may only have a few transactions with a builder.

Still, the question remains.  So should you buy from a builder or not? There are some key things worth mention and I’m also a firm believer in bringing in the inspector early on.  Having the inspector there early on will "catch" many of the issues.

See, the truth is that most builders are not inherently bad.  Instead it’s the people they hire that make the difference.

For example, you could have a fine, upstanding builder who hires an equally qualified general contractor to manage his subdivision.  He in turn hires excellent framers, concrete people, electricians, plumbers, drywallers, painters, carpet people, lighting, landscape and fixture folks and of course, "punch out" people to finish up.  There may even be designers, realtors, and other people who have some input.  Last but not least, let’s not forget that the county will likely want to inspect and of course they have their own people in on the deal.

If one or two of these "hires" or contractors has a bad day, bad employee … bad "run" then you’ll end up with 5 to 10 homes that all have a leaky shower for instance.

Building a bunch a homes very quickly isn’t always a bad thing, but it gives the builder a smaller margin of error.  One wrong move and it’s going to effect 10 homes or more in some cases.  Whereas a smaller builder may only be building 1 to 4 homes at a given time.

So how do you find out if a builder is "good" or not?  Try to inspect the finished product, try to inspect the product as it’s being built.  Then you’ll know the work of the contractors.

Real Estate is Local, so is building.  One subdivision does not a builder’s reputation make.

As many of you know the real estate market is flooded with foreclosures.  However, there seems to be some misconceptions about what a foreclosures is.  Some mistakenly think that all foreclosures are HUD homes.

HUD homes are not the only foreclosed homes out there. Foreclosed homes are often mis-categorized. There’s Pre-Foreclosure, Auction and Post-Foreclosure homes that all get thrown into the mess. 99.9% of all post foreclosure homes are actually listed on most MLS’s.

Post foreclosure homes are bank owned, corporate owned, HUD homes, and some estate property. These are properties that did not sell at the auction or were bought back by the bank.  In the case of HUD homes, these are properties where the seller had an FHA loan on the property and the insurance (our tax dollars) kicked in.

The county usually holds an  auction for CASH for ACTUAL foreclosures, these are listed in the local paper for the area.

Pre-Foreclosures are also called Short Sales in some cases. Most of these will be listed as well.  Short sales can be a great deal and opportunity but do require patience and a easy living arrangement in case the deal falls through. Not all pre-foreclosures are short sales, but most will be.

Unless you’ve had your head in the sand all week, then you know that there’s talk of an economic bailout that should cost you and I about $10,000 a piece. It got me thinking about accountability .

Whatever happened to personal responsibility?

As I finished my workout today I passed someone having a conversation about that very topic.  Apparently this person’s child had stolen something and didn’t think much of it.  The distressed parent did not know what to do.  Her ultimate method of "accountability" was to let the child know that if it happpened again and he got caught, then she would let the authorities deal with it.

What’s somewhat funny about this story is this is exactly what has happened to our economy.  Re-read that story above and let’s replace some words:

[Our Country's ] ultimate method of "accountability" was to let the [Industry ] know that if it happpened again and they got caught, then they would let the [Government ] deal with it.

Sorry, but that’s not really what I want.  I doubt you want the Government to take your money at gunpoint [TAXES] and bail out these financial districts either, when the solution is a simple, time tested word, ACCOUNTABILITY.

In Real Estate, there is no accountability.  There’s almost no barrier to entry for the mortgage industry or to be a real estate agent.  The public puts absolutely no weight in these professions.  Realtors are often compared to used car salesmen and when it comes to selling a home, most home owners would rather have a colonoscopy than think of paying a Realtor for their services….

Mortgage Broker and Real Estate Professionals are responsible for handling, for most, what is the biggest investment of their entire life. In the case of Real Estate Agents, in some states they have a fiduciary responsibility to look out for their client — this is the same responsibility that an attorney has! It’s hard to believe then that the state and the industry know the value of a Real Estate Agent but the public and the agent themselves don’t take the responsibility seriously… and WHY?  Because there is no accountability.

Mortgage Broker gives you a loan that on paper looks ridiculous but still clears underwriting.  What can you do?  At best, file bankruptcy.

An Realtor suggests a price to win your listing and is not honest about the market.  You are happy in the short term but in a declining market, you’ve just signed your foreclosure papers.

Now I’m done with my rant, but I’d much rather see accountability and standards added to the Real Estate industry as a whole than see these bailout plans.

Unless you live in a cave, you’ve likely heard the news about Lehman Brothers.  Other famous names are being thrown around as well in, as Truliablog put it, “a sad game of who’s next.”

Well what’s it mean to metro Atlanta.  Truth be told, it’s way too early to tell but if there’s any indication here’s some thoughts on it. 

MORE SALES FOR GEORGIA

New York, one of the big three of places that have people relocating to Georgia, will see an increase in listing inventory.  New York’s market, especially the higher end market, is one that has been, well, bullish.  For a niche of America, it’s a big one.  However, with 10,000 jobs going away, people will be looking to regroup and maybe relocate.  Atlanta is on their list.  Not only can they find employment, but they will likely not have to give up their lifestyle that they are accustomed to in New York.  So this is a bad thing for them but a good thing for us. Assuming this happens. 

It’s like my Grandma says, “It’s a backward blessin’” for those folks.  They’ll get a lower cost of living and a new start out of something that’s pretty devastating.   Of course, this is from my perspective that Georgia is the best place to live.

The impact will send some shockwaves, but my personal opinion, much like the stock market, is that it’s overall impact will be minimal.  The real estate market is already seeing the light at the end of the tunnel so it’s not too hard to imagine a few more shoes dropping before we pull back out. 

Better get in on the good deals while you can.

With the current market conditions it’s likely that if your home has been on the market, you might have had a price reduction.  What’s interesting is where you end up.  Look at the prices, are you Wal-mart priced?

What’s Wal-Mart pricing?  We all know that the tried and true method to get us to buy something is to price it at what the seller wants, say $5 then knock a penny off, to $4.99.  Our mind says, “Aha, $4!” when we just paid $5 for the item.

Well some agents and home owners have the funny misconception that Wal-mart pricing is the way to go with homes.  The fact is that Walmart pricing absolutely works for home buyers too.  It works, against you because of one key difference…

AT WALMART, YOU DON’T NEGOTIATE.

So buyers see your price at $399,900 and they think, “Great it’s $399K.”  At a bare minimum, you’ll be getting an offer less $900.00.

It actually goes much further then that.  This is not simply some idea that I’ve come up with (although I would not fault you if you thought that).  No, this concept has actually been backed up by Cornell University.

Using data from 27,000 real estate transactions in two U.S. markets, they found that buyers paid higher prices when asking prices were more exact [like rounded numbers].

People learn to associate precision with smaller magnitudes, wrote the resarch team led by Manoj Thomas. 

Furthermore, with this new generation of home buyers using the internet, it makes absolutely no sense to ever list your home at a price that does not take advantage of this. 

A home priced at $324,900 will only appear for hom buyers searching $325K and down.  However, if the home were correctly priced at $325K, home buyers from $350K (in a search from $350 to $325K) and under would see this home.  The reason for this is that most internet search engines use 10’s and 25’s, not 99’s. 

So next time you get ready to put your home on the Atlanta Real Estate market, be sure not to price it like good ole’ Sam Walton would.