Tuesday, March 27, 2012

Buying vs. Renting? Which is More Affordable?

It's More Affordable to Buy in 98% of Major Markets!!!

Last week, Trulia released their Winter 2012 Rent vs. Buy Index. In the index, they report that:

"After years of home price declines and tightening rental markets, home ownership is now more affordable than renting in all but two of the 100 largest metros – even in expensive real estate markets such as New York, Los Angeles and Boston."

The two metros where renting was more affordable were Honolulu and San Francisco. However, Trulia explains that, even in these markets, buying a home:

"...might make sense for people who plan to stay in their next home for at least five years and can benefit from the mortgage-interest tax deduction."

This rent/buy ratio favors buying more so then at almost any time in history. In a recent article, Forbes Magazine quotes Jed Kolko, Trulia's chief economist:

"Certainly prices have continued to fall nationally, but rents have been rising so this would be the lowest price-to-rent ratio that we've seen."

Bottom Line

It might be time to talk to talk to us about buying a home! We realize that the economy has been tough in the last few years and that many people have had mishaps with their credit, etc. There are some loans for people with less than perfect credit, but you may have to put more money down (it's all based on circumstances, etc). If you need help cleaning up your credit, we have a wonderful connection with a lender and credit restoration company that can work with you over the next year or two to get you ready to buy.

YOU DON'T WANT TO MISS THIS OPPORTUNITY TO BUY A HOME! All good things must come to an end and we don't want to see anyone miss the boat on the best time to buy a home in history (our humble opinion)!

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Source: KCM Blog - Steve Harney

Wednesday, March 21, 2012

Four Foreclosure Myths for 2012

Carl Medford, a Realtor with Prudential California Realty, recently wrote a blog addressing myths and rumors about foreclosures and bank owned properties. I love what he had to say and thought it was great information to pass along. Here are four myths regarding foreclosures:

1. You can go directly to a bank to buy a foreclosure.

Every few weeks I’m asked how to buy foreclosures direct from a bank. Someone knows a friend being foreclosed on and they want to step in and grab the house before it hits the market. Don’t we all? In reality, banks have a simple system – they first offer properties on the courthouse steps. The rest they assign to asset mangers who then hire local real estate agents to put them on the market along with all the other homes. Want an REO? Pay cash at the courthouse steps or get in line witheveryone else when they hit the local MLS (Multiple Listing Service).

2. You can get a killer deal by submitting lowball offers on foreclosures.

You would think this myth would be dead by now. Unfortunately, like Elvis sightings, it just won’t go away. Here’s the truth: Banks want REOs sold in 30 days or less, so they typically appear on the market priced slightly under comparable properties. If the property doesn’t sell quickly, the bank will lower the price after about 30 days. Lowball offers are ignored and are, quite frankly, a waste of everyone’s time and effort. You might get a deal by offering a lower price on a foreclosure that’s been sitting on the market for more than 90 days, but remember that there are good reasons it’s gone unsold for so long. And even if you have cash, your lowball offer won’t be accepted —seriously.

3. You can’t use foreclosures when doing an appraisal.

Or short sales, for that matter. That is no longer true. In fact, in many neighborhoods, that’s all that’s there. Therefore, foreclosed or distressed sales represent the actual value of homes in the area and HAVE to be used to appraise other properties. Don’t like it? Get over it. Times have changed and the ways neighborhoods are valued have changed as well.

4. Foreclosures are only affecting the bottom end of the market.

This used to be true. However, while foreclosure rates on the lower end of the market have actually decreased, they’re actually increasing on the upper end. According to Daren Blomquist, vice president of RealtyTrac, the market share of foreclosed homes under $1 million is shrinking, but those among properties valued over $1 million are rising – up 115% since 2007. And foreclosures on properties valued upwards of $2 million have increased by 273%. While some well-known jet-setters have melted down and lost everything, others are choosing to strategically default. They see it like liquidating a poorly performing portfolio – they have enough resources to cut their losses and move on. Historically, banks have been reticent to foreclose high-end homes and absorb a large loss, but defaulters are now forcing their hands and mansion foreclosure rates are moving on up.

Myths control behavior, and this has never been truer than in the housing market. Savvy agents will work hard to educate their clients, debunk myths, explain market trends, educate with solid facts – and actually close transactions

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Thursday, March 15, 2012

Homestead Exemption Georgia - Henry, Coweta, Fayette, Clayton

Homestead Exemption Crunch Time!

If you purchased a home last year and are eligible for homestead exemption but haven't filed as of yet, you better get busy!!! The deadline for most of the southern crescent counties is April 1st! Homestead is a valuable exemption that may reduce the amount of property taxes that you owe provided that you owned and occupied the property as a primary residence as of January 1st. Here are some helpful links and information that you may want to view:
When applying for homestead you will need a copy of your warranty deed that was mailed to you after closing by the attorney's office. If you do not have this and need it to file, please let us know and we'll be happy to obtain a copy for you! It is highly recommended that you call the local tax office prior to filing to make sure that you have everything that you need as each county may have different procedures and/or requirements.

If you miss the deadline, don't fret. You can actually file for homestead at any point during the calendar year but it won't applied until the following year. Have questions? Please don't hesitate to call or email us (but remember, we're not CPAs or Attorneys!)

Warning!!! If the homestead exemption was applied to your property when you purchased it (due to the previous owner's filing), it will vanish if you don't apply for yourself. This will then cause the property taxes to increase!! Once you apply for homestead, it applies for the lifetime that you own the property so long as the exemption exists! Don't miss out -- file asap!

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Tuesday, March 13, 2012

Is the Housing Market Actually Recovering?

Everyone wants to know if the housing market is truly showing signs of a recovery. There are conflicting headlines every day. One day, we hear sales are up. The next day it is reported that prices are down. Is the real estate market coming back? The answer is 'yes' and 'no'.
There are two aspects that must be evaluated: house sales and house prices. They will not recover at the same time. Sales are already increasing rather nicely while prices will still soften in many markets through 2012.

Home Sales

The National Association of Realtors (NAR) issues a Pending Home Sales Report each month. We can see by the graph below that sales have been increasing nicely over the last twelve months. Real estate professionals across the country are reporting that activity has increased compared to last year. The sales side of the recovery is starting to show great promise.

Home Prices

Many price indices have shown that national home prices are continuing to stumble. Even with demand increasing, we must look at where the supply of housing stock stands. Though 'visible' inventory (homes currently on the market) is shrinking, there is still a large overhang of 'shadow' inventory (foreclosures about to come to market as a result of the National Mortgage Settlement). This increase in inventory will outpace the increase in demand and thereby cause prices to continue to soften in many parts of the country.

Bottom Line

Housing is coming back. However, sales will come back before prices. We will not see prices appreciate until we work through the oversupply of homes on the market.

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Source: KMC Blog - Steve Harney

Monday, March 12, 2012

Short Sale Success: What is an Acceptable Hardship?

A short sale, in most instances, is a complex transaction. However, there are two very simplistic characteristics that every qualified short sale possesses:

1.The house must be valued at less than the homeowner owes on their mortgage debt obligation. In other words, the home must be "underwater".

2.The homeowner must have a qualified hardship.

It is the second characteristic that we would like to touch upon in this blog post.

One question that we answer frequently is "My house is underwater. Is this an acceptable hardship?" Unfortunately, the answer is always "No."

The simple fact that a homeowners mortgage obligation is in access of their house value is not an acceptable hardship. A Short Selling bank will entertain a short sale when and only when there is a hardship that will, now or in the future, affect the borrower's ability to pay their mortgage.

The following is a list of acceptable hardships that may be used when submitting a short sale package:

■ Mortgage Rate Adjustments

■ Loss of Employment or Reduction in Wages

■ Business Failure

■ Medical Hardship

■ Death in the Family

■ Divorce/Separation

■ Military Service

■ Overwhelming Debt Obligations

■ Job Relocation

As always, should you have questions as to the acceptability of a hardship scenario, feel free to call or email us. We've successfully completed short sale transactions numerous times. You truly need a professional helping guide the way if you're considering a short sale.

If you'd like to read more about short sales, click this link http://stephensandstephens.blogspot.com/2011/12/complete-short-sale-package.html for another blog post that's more in depth.

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Saturday, March 10, 2012

Negative Equity in the US

Graphic courtesy of KCM Blog, Steve Harney

Being in a negative equity situation is all too common for a lot of our sellers. As you can see from above, GA has a 33% negative equity percentage and we're in the top five states for negative equity. In some pockets in GA, it's much more than that.  It's a very tough position to be in.....heck, if we tried to sell our personal homes we'd be in the same boat. We can provide the information that will help you make a sound decision if you are in this situation. Please don't hesitate to call if you need to sell, but feel stuck. We can help!

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Friday, March 2, 2012

FHA Upfront Mortgage Insurance

The cost of obtaining an FHA loan just got higher... FHA announced on February 27th that the FHA upfront mortgage insurance rate will be increased from 1% to 1.75% for new loans as of April 1st, 2012. In addition to the increased upfront rate, the monthly mortgage insurance fee will also go up 10%. While it seems natural to complain about the increase, FHA advises that the increase to the upfront premium will cost new borrowers an average of approximately $5/month. This isn't too much to ask considering that FHA has paid $37 billion in claims related to defaulted mortgages since 2008. How can you get around this increase? Pursue an FHA loan and have a case number assigned prior to March 30th, 2012! Call us if we can help you find the perfect property or if you would like lender recommendations!

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Homes are Selling!!! Will you be one of them?

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