Difference Between a "White Lie" and "Lying"

When Rebekah & I were growing up our parents instilled in us the value of telling the truth. We were told the story of "The Boy Who Cried Wolf" over and over and I (Melissa) share that with my children now. Our parents had no tolerance for lying. With that said, there was always this gray area of "white lies." According to our friends and even some teachers, it was ok to tell a "white lie" so long as no one got hurt. It was hard to discern why that was ok, but plain out "lying" wasn't (a lie is a lie right)? Now that I'm older, I think I understand now.


If a husband or wife asks if it is okay to invite their parents over for dinner, the spouse would probably say 'sure' even if it wasn't 100% the truth. That was a 'white lie'. If a young boy dresses up as a monster on Halloween and asks his father if he looks 'really scary', it was okay for his dad to say 'YES'! That was a 'white lie'.

In both cases, the person telling the 'white lie' was saying what the other person wanted to hear. In both cases, there was no harm in not telling the 100% truth. In both cases, it was a 'white lie'. However, if we are not telling the 100% truth in order to save someone's feelings AND IT HURTS THEM, we are lying.

Why am I bringing this up in today's blog?

I believe there are still some in the real estate industry more worried about a homeowner's feelings than they are about telling the truth about the current value of their home. These agents are not necessarily malicious. They just realize they may disappoint a seller at a listing appointment by telling the truth about what the house will sell for. They find it difficult to deliver tough news. To make sellers feel better, they lie and sometimes they do it just to get the listing!

Good agents can deliver good news. Great agents know how to deliver tough news.

In today's real estate market, YOU NEED A GREAT AGENT. You need an agent that will tell you the truth, even when you don't want to hear it. You need an agent more worried about your family than they are about your feelings. You need an agent who can get the house sold! That's us. We have disappointed people by telling the truth. We have hurt people in their pockets by telling the truth. At the same time, we've helped dozens of families by telling the truth and we've moved them to the next chapter in life by telling the truth. It is always the right thing to do in our eyes. In the end, they always understand why we did what we did, even if they didn't like it.

What this means to you

If you are interviewing potential listing agents, demand they tell you the truth. Don't hire the agent that tells you what you want to hear. Hire the agent that tells you what you need to know. Reward their honesty.


 
 
 
 
 
 
 
A portion of this material was taken from: KCM Blog

Why Are Housing Prices Still Falling?

In the past few days, three separate pricing reports showed that national house prices have begun to soften. Altos Research shows that prices fell 3.1% over the last three months. Clear Capital's Home Data Index Market Report shows that prices have fallen 5% in the last quarter. The Zillow Real Estate Market Report shows a 1.2% quarterly decline and a 4.3% yearly decline. Anyone selling a house should understand what is currently happening in the market and what impact certain factors will have on prices over the next six months. Let's look at those factors.


The Expiration of the Homebuyers' Tax Credit

The tax credit was introduced by the administration to stabilize house prices. The TARP Report spells this out quite clearly. The thinking was, if they rewarded purchasers to buy, they could lower the months' supply of housing inventory. By increasing demand and decreasing supply, prices would level off. And they did originally.

However, when they extended and expanded the tax credit earlier this year, the opposite occurred. When buyers came out, more property owners (individual homeowners who had previously held off putting their home on the market and banks with an ever increasing supply of foreclosures) decided that was the time to put their houses up for sale. Instead of lowering supply, it actually increased the supply of homes on the market. Inventory rose and demand faded with the expiration of the tax credit. Larger supplies and less demand will cause prices to fall.

Distressed Properties

Foreclosures and short sales have dramatically affected prices in almost every section of the country. Zillow has reported that 20.1% of all homes sold in September were foreclosures and an additional 27.3% were short sales. A foreclosure, on average, sells for 65% of full value and short sales sell for 85% of full value. Obviously, as more distressed properties sell the more the average sales price falls.

Distressed properties also have a major impact on appraisals. Even if a non-distressed property sells, the appraiser may use distressed properties to determine value in that neighborhood. We can see that distressed properties therefore impact prices even on the non-distressed properties sold.

We will be dealing with this issue for some time while banks clear the inventory of foreclosures they currently own. It was just reported that there is over 40 months of supply we must work through. Increased supply causes prices to soften.

Lack of Consumer Confidence

Many economists believe that the housing recovery depends on resurgence in job growth. It will be difficult for the buying public to have the confidence to make big ticket purchasers (including housing) until they are confident that they can stay employed. Demand will continue to be weak until the economy recovers. Weak demand causes prices to fall.

Bottom Line

Pricing of any item is determined by the ratio of supply and demand. Demand for housing will remain soft until the economy recovers. The months' supply of housing inventory continues to remain too high and is increasingly being made up of distressed properties which are sold at a discounted price. That means that nationally home prices will continue to fall.

Please call or email a Realtor  (preferably us HAHA) to determine how the above issues will impact prices in your area. Make sure they tell you the truth not just what you might want to hear. Only by knowing the truth can you pick the best option for you and your family.


 
 
 
 
 
 
 
 
 
Content Taken from KCM Blog

Real Estate in Numbers: Clayton County, Fayette County, Henry County

We previously posted a blog that shows the first quarter numbers versus the second quarter for Clayton County, Fayette County and Henry County. We're a month late, but here's how the third quarter compared:


Notice how in each county listed above, the second quarter numbers are better than the first and third. Wonder why? ...the home buyer tax credit. In order qualify for the credit, buyers had to be under contract by April 30th and closed by June 30th (the close date deadline ended up being extended later on, but originally it was June 30th). With more sales and a higher average sales price, I would say it worked; however, now that it's gone, we're seeing the true colors of the 2010 real estate market. Over to the right of each table, I've included the 3rd quarter numbers for 2009. Remember Melissa's post about waiting until next spring to list your home? This is a clear example as to why that might not be such a bright idea. For the folks who considered putting their home on the market in the 3rd quarter of 2009 but waited until early spring, look at the price differences:

Clayton County 3Q2009 VS 3Q2010: 12.13% decrease in value
Fayette County 3Q2009 VS 3Q2010: 3.15% decrease in value
Henry County 3Q2009 vs 3Q2010: 2% decrease in value

The numbers are clear... values are still declining! So if you're thinking of selling, unless you can afford to wait a few years, now might be the best time to sell. In a few months, the numbers will likely still be declining as our market hasn't hit rock bottom yet.

We can't wait until the day that we can post a blog about the increasing value and appreciation we're seeing across the southern crescent of Atlanta, but until then, we're calling it like we see it!

Will Your House be Worth More in the Spring?



This is a question anyone thinking about selling must ask. Should they sell now or should they wait for the spring? Most years that would be an interesting question. There is a belief that many buyers come out in the spring and, with that increase in demand for housing, prices may appreciate. This year is unlike any year in recent memory. Most experts believe there will be continuing depreciation of home values throughout the next 18 months.


As we posted on recently, there may be a window of opportunity throughout the rest of 2010 as the banks try to straighten out the paperwork on thousands of foreclosures. Once that paperwork is corrected, the flow of distressed properties coming to the market at discounted prices will begin again.

This was mentioned in the latest Home Price Expectation Survey. Robert Shiller, MacroMarkets co-founder and chief economist said this:

 "Over the past month, the average projection for 2010 nationwide home price performance improved slightly among our experts, but for each year thereafter it deteriorated. One plausible explanation for this month's more negative overall sentiment is recent news concerning foreclosure processing questions and the related possibility of extending the supply pipeline."

Other experts are also reporting that prices will soften next year

In October's RPX Monthly Housing Market Report, CEO Michael Feder commented:

"We are at a flex point in housing valuation. With record supply, already paltry demand and systemic threats to a possible correction, we remain terribly concerned about forward home prices.”

The very next day, in a special release, Clear Capital reported a "sudden and dramatic" drop in U.S. home prices:

"Most recent data shows a two-month 5.9% price decline representing a magnitude and speed of decline not seen since March 2009; similar declines for September and October expected to appear in other industry indices in coming months."

Bottom Line
If you plan to sell within the next year, you shouldn't wait for the spring market. Price the home at a compelling price to make sure it sells in the next sixty days.

Contract Chatter: Protect Yourself with Due Diligence

 Contract Chatter: Protect Yourself with a Due Diligence Period (Home Inspection)

We see all kinds of contracts come through - some are written perfectly, some are kind of sloppy, and some are just plain rediculous. Just because an agent successfully obtained their real estate license through the state of Georgia, doesn't always mean that they know the best ways to protect their clients. In fact, you don't really learn that through your licensing classes, it comes from experience. Here's one great tip to help protect you when purchasing a home- There is a section of the contract titled "Property Sold Subject to Due Diligence or 'As-Is'" (see above) on page 3 of the Georgia Contract, paragraph 11. This is one of the most important aspects of the contract. There are two options to this section: 1) Property Sold Subject to Due Diligence or 2) Sold As-Is. Be sure that you have a due diligence (inspection) period - Check that box! (yelling "check - that -box" kind of like they yell "move-that-bus!" on Extreme Home Makeover) There are many miconceptions about bank owned properties being sold as-is and so therefore, agents check the "as-is box" which is a huge mistake. Yes, it's true - many of them will make no repairs (but a great agent knows that sometimes they will - even if they say they won't. Be sure to have a good, aggressive agent working for you!). Even if a property is being sold as-is and without repairs, a buyer still has the right to have an inspection and terminate the contract with no penalties or risks should they uncover something they're not satisfied with. The due diligence period actually offers even more than the right to have an inspection. It offers the right to terminate the contract for any reason so long as you do so during the negotiated time frame, normally 7-10 days. By checking that awesome little box, you're creating an option contract until the due diligence period expires. After the expiration of the due diligence period, you risk losing your earnest money if you terminate and because the contract is a legally binding document, the seller could kindly request to see you in court for breech of contract.

We never recommend that our buyers pass up the due diligence period. We see a ton of offers/contracts come through with the as-is box checked and it always makes me wonder - why would you do that to your buyer? Although a buyer can still have an inspection when the "as-is" box is checked, they will lose their earnest money if the inspector found some major issues. Not fair, huh? Be sure to have an experienced agent representing you so that you're fully protected! A great agent will also be very detailed in helping you manage all of the important deadlines associated with contracts (due diligence period, financing contingency period, appraisal contingency period, etc).

Now on the flip side, understand the seller's perspective - it's not appealing to the seller to enter into a contract in which the buyer request a lengthy due diligence period. The purpose of this time frame is to give you enough time to inspect the house and feel comfortable with the condition - not for you to have a permanent out all the way up to the closing date. Asking for 25 days of due diligence will definitely put a bad taste in the seller's mouth and lead them to believe that you're not serious. A quick note to sellers -- denying a due diligence is a sure fire way to scare the buyer off. They'll be gone quicker than you can say "no due diligence." If you deny the right to an inspection it will seem as if you're hiding something. It's perfectly normal and acceptable to allow at least 5-10 days for due diligence.

If you have questions about the due diligence period or any other contract questions, give us a call or email us. Although we're not attorneys and can't offer legal advice, we can still help you understand the documents that we deal with on a daily basis!

 

Your South Side Source for Real Estate! Serving South Metro Atlanta: Clayton County (Jonesboro, Rex, Riverdale, Conley, Forest Park, Ellenwood), Henry County (McDonough, Hampton, Stockbridge, Locust Grove), Fayette County (Peachtree City, Fayetteville, Brooks, Tyrone), Spalding County, Pike County, Rockdale County, Butts County (Jackson Lake), etc.

Best Time to Buy AND Sell?



If you know a great real estate professional (AHEM.......Us), you might be questioning them right now. They may tell a friend of yours in the afternoon that this is a great time to buy a home and in the evening tell another friend that they have to lower their price in order to sell their home. Wait a minute. How can it be a great time to buy if prices are falling? Is the real estate agent just saying this to make a sale? Actually, the agent is 100% correct. Perhaps for the first time in American real estate history, you must buy now and you must sell now. How can this be? Because what is important to the buyer is different than what is important to the seller. Let us explain.

The most important thing to the seller: PRICE

Every seller is most concerned with trying to get the best price possible for their home. In order to do that, they must sell now. Banks repossessed the highest number of foreclosed homes in history last month. These houses will come to market at dramatically discounted prices. This is the main reason analysts are calling for another dip in prices over the next eighteen months. The best advice a seller can receive is to sell their home now before these foreclosures come to market.

The most important thing to the buyer: COST

Price plays a part in the buyer’s decision. However, the most important thing to most buyers is the cost – the mortgage payment they must pay every month. That payment is determined by the price of the home AND THE INTEREST RATE ON THE MORTGAGE. Rates are artificially low because of government intervention. That will not last forever.

The National Association of Realtors (NAR) has projected that rates will rise over the next seven quarters. What will that do to the cost? Here are NAR’s projections and what impact it will have on a $100,000 mortgage:

As we can see, the interest rate has a major impact on the COST of the home. Even if prices continue to fall, the cost may not go down if interest rates increase.


Bottom Line
Your real estate agent is trying to give the best advice they can to every family they work with – even if that advice seems to be counter intuitive.










KCM Crew, October 26, 2010

5 Reasons You Should Sell Your Home Now!

Selling your house in today's market can be extremely difficult. It is for that reason that every seller should take advantage of each and every opportunity that appears. Each fall, such an opportunity presents itself. This fall, that opportunity may be just too good to pass up.

Below are five reasons you should consider pricing your house to sell in the next 90 days. Meet with your real estate agent and mortgage professional today and see whether it is the right move for you and your family.

1. Entering this time of year, the buyers are more serious.

We all realize that buyers are not quick to pull the trigger on the purchase of a home today. There is no sense of urgency with the supply of eligible properties at all time highs. However, at this time of year, the 'lookers' are at the stores doing their holiday shopping. The home buyers left in the market are serious and are more apt to make a purchasing decision. Less showings – but to more motivated purchasers.

2. If you are moving up, you can save thousands.

The Chicago Tribune stated in an article last week that sellers who want to 'trade up' should act now:

It could be a bigger house, different neighborhood or a better school district, but it comes with a higher price tag. Do the math; this might be the right time.

A home that was once worth $300,000 may now be worth $240,000 in a market where prices have fallen 20 percent. Wow, you think, the seller is taking a bath. But that seller may also be a prospective buyer who wants a house that once was valued at $400,000. With an equivalent market drop and a realistic listing price, that house may now sell for $320,000. So, in effect, the person is losing $60,000 on the sale of one home but coming out ahead $20,000 on the purchase of another.

Keep in mind the spread may be even greater. There’s a smaller pool of potential buyers for more expensive homes, so sellers may be more willing to cut their price to get a deal done.

3. Interest rates just fell again – to 4.19%.

Professor Karl E. Case, the founder of the Case Shiller Pricing Index in an article in the New York Times last month actually did the math for us:

Four years ago, the monthly payment on a $300,000 house with 20 percent down and a mortgage rate of about 6.6 percent was $1,533. Today that $300,000 house would sell for $213,000 and a 30-year fixed-rate mortgage with 20 percent down would carry a rate of about 4.2 percent and a monthly payment of $833 ... housing has perhaps never been a better bargain.

4. You beat the rush of inventory that is coming next year.

Every year there is an increase of inventory which comes to market from January through April as homeowners put their houses up for sale in preparation for the spring market. As an example, here is the number of listings available for sale in each of those months in 2010.

January – 3,277,000

February – 3,531,000

March – 3,626,000

April – 4,029,000

You won't have to worry about this increasing competition if you sell now.

5. You have less 'discounted' inventory with which to compete.

This year, sellers of non-distressed properties have been given an early holiday present. With banks declaring a suspension on the sale of many distressed properties (foreclosures), there has been a large supply of discounted properties removed from competition. No one knows how long this self imposed moratorium will last. However, while it does, every homeowner has a better chance of selling their property.

Bottom Line

If you are looking to sell in the near future, there may not be a more opportune time than this fall. Serious buyers, great move-up deals and less competition from foreclosures creates the perfect selling situation. Don't miss it!










Courtesy of KCM Blog

 If HE Says It Is Time To Buy a Home, BUY A HOME!

"If you don't own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one."

– John Paulson 9/27/2010

WOW! That's a powerful statement.
There is no question that John Paulson is a bull when it comes to residential real estate right now. Should we care what Mr. Paulson thinks? Should we listen to him? The answer to both questions is a resounding 'YES'. Here are several reasons why.

Who is John Paulson?
Paulson is the person who made a fortune betting that the subprime mortgage mess would cause the the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?

According to Forbes John Paulson is:
"a multibillionaire hedge fund operator and the investment genius who made a killing going short subprime mortgages a few years ago."

According to the Wall Street Journal Paulson is:
"a hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were."

What did other financial players think of his statement?
The Wall Street Journal agrees with Paulson:

"Ignore the critics. The odds have to be on his side...It isn’t just that home prices have fallen a long way. It’s also that, if you can get a mortgage, you are basically taking a reverse bet on the bond market. You could be a long-term borrower at fixed rates, instead of a long-term lender. Right now you can borrow for 30 years at around 4.3%. After the mortgage tax deduction, for some people the net effective interest rate is nearer to 3%. That’s going to prove an awesome deal if we see inflation again."

And Forbes said:
"As this is the best time in 50 years to buy homes, Paulson advised his listeners to take 30 year mortgages to buy a home as "your debt and interest payments get locked in at record lows, while the price of your home will rise."

Are others also saying now is the time to buy?
Just last week, we posted that there is a growing number of people saying that NOW is the time to buy, including:

The Wall Street Journal

Professor Karl Case, founder of the Case Shiller House Pricing Index

The wealthiest families in the country and

70% of everyone else in America

Bottom Line
Thinking of buying a home? Are you taking advice from a friend or family member telling you that now is not the time? It may be time to listen to people who better understand the opportunities that exist in real estate today.