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.

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.

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.

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.

In this month’s Georgia Association of Realtors magazine there was a nice reprint of RetlyTrac’s statistical information.  I thought it was well worth sharing!

8 is the Rank of Georgia out of 50 states for foreclosures.10 is the average number of years that it will take for a home’s value to double in Georgia. 

34 is the average age of a first time home buyer. 

60 is the PERCENTAGE of the average home owner’s wealth that comes from their Georgia Home’s equity. 

112 is the percent increase in foreclosures from 2nd quarter 2007 to 2nd quarter 2008

5 is the rank of 2007 in terms of existing home sales

171,000 is the average net worth in dollars of a home owner.  

36 The number of times a home owner’s net worth is more than a renter’s (almost).  (The average renter’s networth is only $4,800)

I was particularly intrigued to see the networth number. We all have probably sat down and worked those numbers out and I’m as jaded as the next person when it comes to the seemingly astronomical figure that comes out of it (my car does not add to my net worth in my opinion). The fact remains that a home is like a forced savings account and holding real estate long term is a proven piece to your financial success.

I’ve gotten several questions from new buyers and other from my previous blog post about short sales that I’d thought I’d right a little something about Short Sales.

A short sale is what happens when the bank takes less then what they are owed.   For example,  a buyer buys a home for $150,000 in 2007.  Unfortunately, they lose their job in early 2008 and cannot pay their bills.  They try to work something out with the bank on their late payments and their account rep suggests a short sale (not usual).  From there they put the home on the market with a Realtor and get and negotiate a sale for $125,000.  They avoid foreclosure, eviction notices and investors knocking on the door at all hours… well maybe.

The real world isn’t so clean.

What has to happen in order for a bank to consider a short sale:

• Some sort of hardship - job loss, death in the family, medical bills (KEY: MUST BE DOCUMENTED HARDSHIP)
• Must be "upside down" and owe more than the home is worth when sold through a Realtor

Some things that will absolutely help you if you are in this situation:

• Go look and get approved for an apartment or rental immediately
• Keep all documents for eveything as soon you know you’re falling into foreclosure
• Don’t be fooled, filing bankruptcy can help you stay in the home longer but won’t stop the foreclosure process.

Benefits of a short sale to owner

1. Get to stay in the home a little longer with no payments.
2. Some lenders look at it as slightly better than a foreclosure when purchasing another home.
3. Some banks will NOT make you sign a promissory note!
4. Avoid foreclosure process.

If you have any questions, feel free to comment or e-mail me.