Sell Your Home Today - Part 3 of 3

Part III - New Construction will Soon be Your Competition  

 Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. As an example, the National Association of Realtors revealed, relative to last year, year-to-date new home sales are up 19%.

These ‘shiny’ new homes will again become competition as they can be an attractive alternative to many of today’s home purchasers.

Here are the numbers regarding new construction about to come to market from the Census Bureau:

BUILDING PERMITS

·         Single-family authorizations in February were at a rate of 600,000.

                This is 25.5% above February 2012.

HOUSING UNDER CONSTRUCTION

·         Single-family housing starts in February were at a rate of 618,000.

                 This is 18.5% above February 2012.

HOUSING COMPLETIONS

·         Single-family housing completions in February were at a rate of 574,000.

                 This is 32.9% above February 2012.

As we mentioned, new construction can be strong competition to a seller of an existing home. It may make sense to list your home before this new inventory makes its way to market.

The Stephens & Stephens Recap: This three part series posted over the last three days was written by the KCM Group & Steve Harney, our trusted advisors to the real estate market that we follow religiously. We posted this series because it is exactly what we are experiencing in the Metro Atlanta market: strong buyer demand for housing, low inventory levels, and new construction on the rise. These three things have created an interesting market over the last three months. Basically, we are in the middle of a "frenzy" as Rebekah & I call it.

When a home hits the market, if it's priced well and shows well, we are typically seeing it go "under contract" within the first 30 days on the market (our last two listings have gone under contract within the first 48 hours). 

With inventory levels low, meaning there aren't enough homes on the market for buyers to choose from, many homes end up with multiple offers on them. This creates a great situation for the seller; more than one offer to choose from and typically a great sales price. 

For the buyers, it can be frustrating and upsetting when competing with other offers. Because there are multiple offers being made, many buyers choose to increase their offer price, even going above the list price at times (see our post from last week "Should I Increase My Offer"). This creates a fabulous sales price for the seller. In addition, the increased prices buyers are offering is creating appreciation in many communities. Some communities are seeing $10,000-$15,000 appreciation rates in just 30 days when just one or two homes sell at higher prices. 

Bottom line, it's a great time to try to sell your home! All three factors discussed in this series are reasons why we believe now is the time to sell! Buyer demand is strong, inventory levels are low, and new construction is on the rise. Call or email today if you'd like to discuss placing your home on the market or if you have questions. Thanks for reading!

 

Sell Your Home Now - Part 2 of 3

Part II - Inventory Levels are Low

A seller’s ability to sell their home in today’s real estate market will be determined by both the supply of homes for sale and the demand for that housing. In real estate, supply is represented by the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month).

While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline:

·         1-4 months’ supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed.

·         5-6 months’ supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation.

·         7-8 months’ supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows.

What is happening across the country right now?

In most parts of the country, supply is dropping like a rock. According to the National Association of Realtors, total housing inventory is below a five months’ supply. This is almost 20% below inventory numbers of just a year ago and at levels we haven’t seen since 2005.

Based on the table above, we can see that the supply/demand ratio is showing a sellers’ market where prices appreciate. This has created positive movement in housing values in most parts of the country.

Sellers have a great opportunity right now. Historically, inventory increases dramatically as we approach summer. Selling now while demand is high and supply is low may garner you your best price.

Tomorrow, we will look at the competition new construction will create. New construction is your competition of the future.

The above article was written by KCM Group - Steve Harney

Sell Your Home Now - Part 1 of 3

 

Today's post is part of a three series article as to why you should sell your home now. We couldn't agree more! In fact, every home we have listed in the last two months has gone under contract within the first 30 days of being on the market. Our latest listing was listed last Thursday and under contract on Friday morning. The market is doing something phenomenal now and I'm going to venture out on a limb and say that it appears our market is headed towards recovery...not a quick and fast recovery to the market of the mid 2000's, but a much better market than we've seen!

Now, we're not trying to fill you full of false hope if you have a home to sell. If you need to sell, you'll need to be priced competitively and your home will need to show well. If you can make these two things happen, combined with our marketing power and knowledge, we're sure you'll be able to sell your home. We'd love to help you!

Part I - Demand for Real Estate is Much Stronger This Year!

When selling anything, owners can only hope there is a strong demand for that which they are selling. The great news for today’s home sellers is that the current housing market is experiencing a stronger demand than we have seen in some time.

The spring housing market of 2013 is projected to be one of the best in years.

Home Sales

The National Association of Realtors (NAR) reports monthly on both pending sales (houses going into contract) and existing home sales (actual closed sales).

In the first quarter of 2013, pending sales have consistently outperformed the numbers reported in 2012. Contract activity has been above year-ago levels for the past 22 months. Before this year, the last time the index showed a higher reading was in April 2010, shortly before the deadline for the home buyer tax credit.

NAR also revealed that closed home sales have been above year-ago levels for 20 consecutive months and sales are at the highest level since the tax credit period of 2009-2010.

Impact on Sellers

This increase in demand has created bidding wars for properly priced homes across the country. This has resulted in two favorable changes for home sellers:

1. They are receiving offers closer to (if not greater than) the list price.
2. The average days it takes to sell a home has dropped by over 20% from last year.

If you are thinking about selling your home, don’t miss out on the strong demand that exists in the current spring market.

Tomorrow, we will look at the supply of housing inventory that is available. 

5 Reasons to Sell Your Home Now!

Many sellers feel that the Spring is the best time to place their home on the market as buyer demand increases at that time of year. However, the Fall and Winter have their own advantages. Here are five reasons to to sell now.

Only Serious Buyers Are Out

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers’. The lookers are at the mall or online doing their holiday shopping.

There Is Far Less Competition

Housing supply always shrinks dramatically at this time of year. This year will be a little different as some of the distressed properties being liquidated by the banks (in the form of foreclosures & short sales) will enter the market. However, for those buyers looking for a non-distressed property, the choices will be limited. Don’t wait until the spring when all the other potential sellers in your market will put their homes up for sale.

The Process Will Be Quicker

One of the biggest challenges of the 2012 housing market has been the length of time it takes from contract to closing. Banks have been inundated with both purchase and refinancing loan requests. Both of these will slow in the winter cutting timelines and the frustration these delays cause both buyers and sellers.

There Will Never Be a Better Time to Move-Up

If you are moving up to a larger, more expensive home, consider doing it now. Prices are projected to appreciate by over 15% from now to 2016. If you are moving to a higher priced home, it will wind-up costing you more in raw dollars (both in down payment and mortgage payment) if you wait. You can also lock-in your 30 year housing expense with historically low interest rates right now. There is no guarantee rates will remain at these levels in years to come.

It’s Time to Move On with Your Life

Look at the reason you decided to sell in the first place and decide whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of the situation by pricing your home to guarantee it sells. The time has come for you and your family to move on and start living the life you desire. That is what is truly important.

We're here to help! Call or email for a no pressure consultation.





Blog Source: KCM Blog, Steve Harney

Is Real Estate Better Off Than 4 Years Ago?

These are national sales averages, however, the story it depicts definitely applies to our market!

BUY YOUR NEXT HOME NOW!  We repeat............BUY YOUR NEXT HOME NOW!

Ways to Avoid Foreclosure

We came across this interesting piece that discusses options to avoid foreclosure. It's a great summary of your options when faced with the hardship of foreclosure. If a short sale is an option you'd like to explore, please don't hesitate to call or email. We've completed many successful short sales and are more than happy to try to help you!

Source: ELocal.com

Should I Rent My House If I Can't Sell It?

About one out of every five potential sellers we meet with asks the question...."Should I rent my house if I can't sell it?" We're not at liberty to tell anyone what they should and shouldn't do, but below are some questions you should consider before making your decision.

10 Questions to Ask BEFORE Renting Your Home

1.) How will you respond if your tenant says they can’t afford to pay the rent this month because of more pressing obligations? (This happens most often during holiday season and back-to-school time when families with children have extra expenses).

2.) Because of the economy, over ten percent of homeowners can no longer make their mortgage payment. What percent of tenants do you think can no longer afford to pay their rent?

3.) Have you interviewed a few experienced eviction attorneys in case a challenge does arise?

4.) Have you talked to your insurance company about a possible increase in premiums as liability is greater in a non-owner occupied home?

5.) Will you allow pets? Cats? Dogs? How big a dog?

6.) How will you actually collect the rent? By mail? In person?

7.) Repairs are part of being a landlord. Who will take tenant calls when necessary repairs arise?

8.) Do you have a list of craftspeople readily available to handle these repairs?

9.) How often will you do a physical inspection of the property?

10.) Will you alert your current neighbors that you are renting the house?

The above questions were part of an article from Steve Harney and the KCM blog. They're great questions and we encourage anyone considering renting to think long and hard about them before making a decision.

Fabulous Foreclosure Deals!

Incredible Foreclosure Deals!

This market is something crazy! Sometimes I come across deals that absolutely blow my mind! I'm not sure whether to be more suprised by today's market or the crazy market that existed prior to the bubble burst in 2007. Take the house above for example:

355 Vista Creek Drive in Monarch Village (Stockbridge, GA) - it is approximately 2413 square feet with 4 bedrooms and 2 full bathrooms. It has a spacious kitchen with breakfast area, formal dining room, family room, plus a sunroom and a privacy fenced backyard! It previously sold for:

• 2002: $191,900
• 2005: $189,999
• 2007: $197,500

It is now on the market as a Fannie Mae foreclosure for $106,900! Now, I know your first thought would be that it's a foreclosure and probably in horrible condition - but it's not. I've shown the home and from what the naked eye can see, it needs a good cleaning, paint and carpet. Here are some interior photos:

If you're looking for a fabulous foreclosure at a great price, let us help you! This isn't the only great deal out there -- there's plenty. You just need a great agent to help you locate them!

Real Estate in Numbers: 2nd Quarter - Butts County, Clayton County, Fayette County, Henry County


Pulling statistics from the MLS quarterly is one of my favorite things to do! Call me a real estate geek, but I get excited to see where the market is heading! If you have questions about your local market or a specific subdivision/neighborhood/community, please contact us and we'll be happy to provide a detailed market analysis and other market data!

Can We Sell Your Home?

These four things have a direct impact on whether or not we can sell your home:

ACCESS:
A seller should be willing to give almost unlimited access to potential purchasers if they are looking to sell. Any restrictions to showing the home will result in fewer buyers which could result in a lower price, a longer time on market or both.

CONDITION:

Condition goes a long way in determining whether or not a house sells. Bringing in a professional stager is the ultimate answer. If that is not possible, the seller should at least be willing to remove all the clutter and 'throw on' a fresh coat of paint where necessary.

MORTGAGE OPTIONS:

Very few owners are willing to give a first mortgage to a potential buyer. However, there are other mortgage options they perhaps should consider. Allowing FHA financing is an example. Perhaps, they would be willing to help the buyer out with a seller's concession. The easier it is for a purchaser to finance the home, the greater the chance more buyers will be interested.

PRICE:

Every house must be sold twice: to the buyer and to the bank if a mortgage is involved. To get a home sold the price has to be right. There are studies that have shown that listing a house at a price greater than the market warrants results in that home taking a longer time to sell and also selling for less money.



Source: KCM Blog - Steve Harney

Short Sale Assistance for Military Families

Military families have just been given help to sell their homes when forced to move because of their service. Permanent Change of Station (PCS) orders often require quick moves and can create hardship for military homeowners who are underwater on their mortgages and therefore cannot sell their home without taking a loss. Homeowners who receive (PCS) orders now will be eligible to sell their homes in a short sale even if they are current on their mortgage. Previously, many service members felt their only option was either to maintain financial obligations on two residences or to default on their mortgage.


Under the new policy, Fannie Mae and Freddie Mac will not pursue a deficiency judgment or any cash contribution or promissory note from members of the military with a change in duty station for any property purchased on or before June 30, 2012.

Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA) explained:
"It is in everyone's interest for the men and women serving in our armed forces to focus on the important job they are doing defending our country, rather than worry about the maintenance and leasing of a property in another jurisdiction."

The full news release with eligibility requirements can be found here:
http://www.fhfa.gov/Default.aspx/webfiles/429/Amended%20Technical%20Appendix/webfiles/24026/CFPBFinalwFS.pdf

We are well educated in short sales and are happy to extend this knowledge to our nation's military. Please don't hesitate to call, email, or text if you need our assistance.

Getting the Listing Price Right from the Beginning is Critical

Harmful Effects from Changing the Listing Price?
The Research


Are there any negative effects from changing the listing price of a property? This question haunts Brokers/Agents as well as sellers of property every day. At present, there does not seem to be a consensus answer to this question within the professional real estate community. Fortunately, this question was scientifically investigated by John R. Knight. Unfortunately, few know the results of Professor Knight's research.

In Knight, the impact of changing a property's listing price is investigated. Additionally, the types of property that are most likely to experience a price change are also estimated. The findings from this research indicate that, on average, properties which experience a listing price change take longer to sell and suffer a price discount greater than similar properties. Furthermore, bigger price changes are found to experience even longer marketing times and greater price discounts. Finally, as for which properties are most likely to experience a price change, Knight finds that the greater the initial markup; the higher the likelihood that any given property will experience a listing price change.

Implications for Practice

Sellers as well as Brokers/Agents should therefore be aware of the critical necessity of getting the price correct from the start. Sellers wanting to over list will ultimately take longer to sell and will sell their property for less, on average, according to Knight. Brokers/Agents' desire to take a listing and get the price right later will ultimately lead to their working harder according to Knight, and they are not doing their sellers any favors. Thus, an initial and detailed analysis of the proper price is much more critical than many originally thought.

Interestingly, I have found in my own research that the direction (up or down) of the listing price change does not matter. A listing price increase and decrease both lead to similar results found in Knight's work – longer marketing times and lower prices. Therefore, get the price right from the beginning. It is best for all.

Endnotes
--------------------------------------------------------------------------------
[1] Knight, John, R. (2002). Listing Price, Time on Market, and Ultimate Selling Price: Causes and Effects of Listing Price Changes. Real Estate Economics. 30:2, 213-237.

Source: KCM Blog, Steve Harney

AJC Reports "Home Sales Up as Prices Plummet"



I must admit, I'm not really a newspaper reader. In fact, I rarely purchase the paper and if you do catch me reading it, I'm probably looking at the sales ads! I was standing in line at the grocery store on Sunday when I noticed that the front page of the Atlanta Journal-Constitution had a real estate related article as the cover story! The title, as you can see from my high quality iPhone photo above, was "Home Sales Up as Prices Plummet!" So naturally, I threw it in my cart and brought it home to read (along with the latest Target sales ad).

There are a gazillion different reports, studies, and opinions as to what the state of the real estate market is. If you get your news from a national source, you may hear that the market has bottomed out and prices are on the rise; however, being that the Metro Atlanta area was one of the hardest hit in the nation, that doesn't quite apply to us just yet. In fact, Melissa and I include graphs in our listing presentations that show just what this article is saying... the inventory level is down, the number of foreclosures is down, pending sales are up, and sold transactions are up which seems like the make up of a wonderful real estate market; however, the catch is that the average sales price is still down. So...the GOOD news: things are moving and selling! The bad news: they're still selling at lower prices.

Here are some interesting facts from the article:

• The number of overall home sales picked up by 11% across the metro Atlanta counties even though the median price dropped by nearly 15%. In most counties, the market was driven by resales, with the number of new-home sales either flat or declining. 
• The ZIP codes with the most home sales were in Lawrenceville (30044 and 30043) and Cumming (30040 and 30041). The Lawrenceville ZIP 30046 also saw the greatest increase in home sales, at 125%.
• The biggest declines in number of homes sold could be found in the Cherokee community of Waleska (30183) and the Southwest Atlanta area of 30310.
• The cheapest homes can be found in the West Atlanta area of 30314, where the median home sale was just over $15,000, slightly down from where it was last year.
  The Biggest Gain: 30294, Ellenwood: This part of Henry County had the biggest gains in 2011, up 22%; however, the median price was $56,500: that's still a 68.9% drop since the height of the market in 2007.
• The Biggest Loss: 30337, College Park: This city in south Fulton had the biggest price drop: down 45.7% since 2010. The median price was $57,000, a 69.2% fall from 2007

To view additional information from this article or to see statistics provided by the AJC, click on the following link: http://projects.ajchomefinder.com/atlanta-home-sales-report/

Short Sale vs. Foreclosure - 10 Myths Busted

It's likely you've heard the term "short sale" thrown around quite a bit. But what, exactly, is a short sale?


A short sale is when a bank agrees to accept less than the total amount owed on a mortgage to avoid having to foreclose on the property. This is not a new practice; banks have been doing short sales for years. Only recently, due to the current state of the housing market and economy, has this process become a part of the public consciousness.

To be eligible for a short sale you first have to qualify!

To qualify for a short sale:

■ Your house must be worth less than you owe on it.

■ You must be able to prove that you are the victim of a true financial hardship, such as a decrease in wages, job loss, or medical condition that has altered your ability to make the same income as when the loan was originated. Divorce, estate situations, etc... also qualify.

Now that you have a basic understanding of what a short sale is, there are some huge misconceptions when it comes to a short sale vs. a foreclosure. We take the most common myths surrounding both short sales and foreclosures and give a brief explanation. LET'S BUST SOME MYTHS!!

1.) If you let your home go to foreclosure you are done with the situation and you can walk away with a clean slate. The reality is that this couldn't be any farther from the truth in most situations. You could end up with an IRS tax liability and still owing the bank money. Let me explain. Please keep in mind that if your property does go into foreclosure you may be liable for the difference of what is owed on the property versus what is sells for at auction, in the form of a deficiency balance! Please note this is state specific and in most states you will be liable for the shortfall, but in some states the bank may not always be able to pursue the debt. Check your state law as it varies widely from state to state.

Here is an example of how a deficiency balance works

If you owe $200,000 on the property and it sells at auction for $150,000, you could be liable for the $50,000 difference if your state law allows it.

Not only could you be liable for the difference to the bank, but in some situations you could also be liable to the IRS! Although there are exemptions (mostly for principle residences) under the Mortgage Debt Forgiveness Act, there are times when you could be taxed on both a short sale and a foreclosure, even in a principle residence situation. Since the tax code on this is a little complicated and I am not a CPA, I advise always talking to a CPA when in this situation as you are weighing your options. Hard to believe? Well, believe it or not, the IRS counts the difference between the sale and the charged off debt as a “gain” on your taxes. That’s right-you lost money and it’s counted as a gain! (I didn’t make that rule, that's a wonderful brainchild of the IRS). Banks and the IRS can go as far as attaching your wages. Not to mention if you let your home go to foreclosure you will have that on your credit, as well.

Guess What? A short sale can alleviate your liability to the bank, in most situations. There are also exceptions to this, but in most cases banks are releasing homeowners from the deficiency balance on a short sale.

2.) There are no options to avoid foreclosure. Now more than ever, there are options to avoid foreclosure. Besides a short sale, loan modifications along with deed in lieu are also examples of the many options. In most cases (but not all) a short sale is the best option. Either way, there are more options today than there have ever been to avoid foreclosure.

3.) Banks do not want to participate in a short sale, or, it is too hard to qualify for a short sale. Banks would rather perform a short sale than a foreclosure any day. A foreclosure takes a long time and creates a huge expense for the banks; a short sale saves both time and money. Banks have more foreclosure inventory than ever before, and certainly do not want any more. Banks more than ever welcome short sales. Qualifying for a short sale is easier than you think, you need to have a true financial hardship, or a change in your finances and your house has to be worth less than what you owe on it. Not only do consumers, but banks also now have government incentive to participate in short sales.

4.) Short sales are not that common. At this present time, short sales range from 10-50 % of sales in various markets and it is predicted that in 2012 we will have more short sales than any other year, to date. Due to economic changes in the last few years, this is something that is affecting millions of Americans. Short sales are in every market, and are not just limited to any particular income class. This has affected everyone from all facets of life. A short sale should be looked at as a helpful tool, not a negative stigma. That is why the government is offering programs that actually pay consumers to participate in short sales. It is not just affecting one community; it is affecting communities and consumers across the nation.

5.) The short sale process is too difficult and they often get denied. Though the short sale process is time consuming; it is not as difficult as the media would have you believe. The problem is that most short sales are denied because of a misunderstanding of the process. It is true that if the short sale process is not followed correctly there is a good chance of getting denied. An experienced agent knows how to avoid this. Short sales require a lot of experience, and a special skill set. If you are looking to go the option of a short sale make sure your agent is skilled and experienced in this area.

6.) Short sales will cost me money out of pocket. A short sale should not cost you any out of pocket money. In fact, you could get between $3000-up to $30,000 to participate in a short sale. In many ways, a short sale may put you in a better financial position than prior to the short sale. Almost every short sale program now has some type of financial incentive for the home owner, as long as it is a principle residence, and we are even seeing relocation money being paid on some investment/second homes. As a seller of a property you should never have to pay for any short sale cost upfront to any professional service. Realtors charge a commission that is paid for by the bank. In most communities there are also non-profits and HUD counselors who can help you with foreclosure prevention options for free. The only potential cost you could incur is if the bank would not release you from a deficiency balance in the short sale, which is happening less and less now.

7.) If I am behind on my payments, I can perform a short sale any time. The farther you get behind on your payments, the harder it is to get a short sale approved. The closer a property gets to a foreclosure the harder it is to convince the bank to perform a short sale. As they get closer to a foreclosure sale more money is spent, thus deterring them from doing a short sale. If you think you need to perform a short sale, time is of the essence; the sooner you start the process, the better. Waiting too long can trigger the ramifications of a foreclosure, losing the ability to do a short sale as a viable option.

8.) I have already been sent a foreclosure notice so I can't perform a short sale. For the most part just because you received a foreclosure notice or notice of default it does not mean that you do not have time to perform a short sale. The timeline and specifics do vary from state to state, but having done short sales all over the country, I have seen banks postpone a foreclosure to work a short sale option as close as 30 days prior to the scheduled foreclosure auction, but the longer you wait the less chance you have. If you have received a legal foreclosure notice, please reach out to a professional right away. The longer you wait, and the closer you get to foreclosure, the fewer options you have. If you have received a notice to foreclose this means the bank is filing paperwork and starting the process to take legal action to repossess the house. You still have time at this point to prevent foreclosure, but do not hesitate! The closer you get to the foreclosure date the harder it becomes to negotiate with the bank for whichever option you choose.

9.) I was denied for a loan modification, so I know I will get denied for a short sale. Short sales and loan modifications are handled by two separate departments at the bank. These processes are totally different in approval and denial. If you got denied for a modification you can still apply for a short sale; in some cases you can get a short sale approved faster than a loan modification, as some loan modifications are denied because they cannot reduce the loan low enough based on the consumers income.

10.) If I go through a short sale I cannot buy another house for a long time. The time to buy another house depends on your entire credit picture and can vary from 12-24 months. There are even a few FHA programs that allow for a purchase sooner than that. I have worked with clients who went through a short sale and bought another house in less than 12 months.

These are just a few of the common myths surrounding short sales and foreclosure. With the options available today, no homeowner should ever have to go through foreclosure, and hopefully this information can help a few more homeowners think twice before walking away from their home not realizing the possible long term ramifications a foreclosure can have.

Rebekah and I understand short sales and foreclosures. If you need personal guidance, or you're looking into buying either a foreclosure or short sale, don't hesitate to call, email, or text to discuss your options.



Source: KCM Blog - Steve Harney

Are You a Buyer Looking to Purchase a Short Sale?

It seems that there is a significant amount of confusion when it comes to purchasing a short sale. There are many misconceptions when it comes to this type of transaction, so below I have provided some information to potential buyers of short sales. If you are looking to purchase a short sale, understand that it is not the same as a normal sale and the approach is very different. There could be several parties involved and issues that are unknown to the buyer and buyer's agent that can affect the transaction. If you are looking to purchase a short sale here is some helpful information.


1. On average, to get a short sale approval, it can take 60-90 days.
There could be mortgage insurance and an end investor on the loan as well as the servicer, which means it has to go through three different processes. Bank of America could be the servicer on the loan but they do not actually own the loan, so, the short sale has to pass their guidelines, then go to the mortgage insurer if there is one, then to the end investor like Fannie Mae and Freddie Mac. If you are a buyer and can't wait at least 60-90 days for an approval and then another 30 days to go to closing, then you need to look at other houses. The worst thing you can do is tie up a house that is in a short sale with no intention of being patient while waiting for a short sale approval. Approvals can come sooner than 60 days, but industry standard is at least 60 days to get an approval or denial.

2. There is a general assumption that you can purchase a short sale for 40-50% under its listed price. In a short sale the bank comes out and does a valuation of the property and will expect a slight discount, but will not accept a huge amount under the market value.
Hopefully, if the agent who is handling the sale is experienced, they will have already gotten an approved list price from the bank by the time you are interested in making an offer. The bank will usually be willing to negotiate on that price, but will not, in almost every case, take 40-50% off of that price. To that point, you may be able to get a reasonable deal on a short sale, though it will not be, in most cases, as much of a deal as you may be able to get on an REO (foreclosed property). Also to that point, most short sales will be in better condition than an REO. When you look at the potential repairs a comparable REO needs and the time and expense it can take to do those improvements vs. a short sale being sold at a slight market discount with improvements already made, the investment could even out. There are REO properties that can be picked up for a huge discount, but require massive repairs that a comparable short sale may not require.

3. Short sales are a very difficult process and it takes a qualified person to handle this type of transaction.
With this type of transaction it takes a very experienced agent on the listing side as well as the buying side. Make sure before you move forward on the transaction that the listing agent has ample experience dealing with these types of transactions, or you could be tied up in a contract for months that never goes to settlement. There are several different types of short sale processes and each bank's process is somewhat different; it takes a professional who has had experience with all of these different types of short sales to help facilitate a successful transaction.

4. In most short sale transactions the properties are sold "as-is" and no repairs will be made.
Although there are some exceptions to this rule, speaking in general, short sales are sold "as-is" and no repairs will be made even if they are found during a home inspection. In most short sale transactions the bank will require both the buyer and the seller to sign an addendum that states the property is being sold "As-is" and no repairs will be made.

These are just a few short pointers for buyers who are looking to purchase a short sale as they are a reality in every market, and if you have the patience you may be able to get the home you are looking for at a discount!

Source: KCM Blog - Steve Harney 

As you can see, Georgia is #4 in the nation for short sales!

If you're a buyer, there's a lot you need to know and understand before placing an offer on a short sale. If you're a seller, there's also a big process for completing a succesful short sale transaction. If you're in the market to buy or sell real estate, you'll encounter the term short sale in some capacity. We're happy to talk with you about it. Don't hesitate to call, email, or text for more info.



Graphic courtesy of KCM Blog - Steve Harney

Where Did All of the Houses Go!?!?

What happened to all of the houses for sale?! Just a few months ago we had more properties than we could possibly sell. Now, we're scrambling to find good inventory for our buyers who are anxious to find a home and tired of looking at the leftovers - you know, the stale inventory... the properties that are still available for a reason (overpriced, horrible condition, etc).

When a good property hits the market it seems as if it instantly goes to a multiple offer situation/"highest and best." In the past two months, I've had one buyer who has participated in three multiple offer situations, offered much more than the asking price ($15k, $30k, etc) and still wasn't the best offer. The competition is crazy out there right now and can be very discouraging for buyers.

Realtor.com just released statistics that show that the Atlanta market is #8 in the country in terms of metro markets that have experienced the greatest drop in "for sale" inventory and boy does it show! Here's the complete list:

1. Oakland, CA
2. Bakersfield, CA
3. Phoenix-Mesa, AZ
4. Fresno, CA
5. Miami, FL
6. Fort Lauderdale, FL
7. Seattle-Bellevue-Everett, WA
8. Atlanta, GA (-39.62% decline)
9. Orlando, FL
10. Portland-Vancouver, OR-WA

So what does this mean? Hopefully it's a positive sign for an improving market. If you're thinking of selling your property, now might just be the time. Buyer's have less to choose from so if you get your house in tip-top shape and price it aggressively, chances are, you're going to be successful in selling it! If you're a buyer, it means that you better be aggressive with your home search. If a house hits the market and you think you might be interested, don't wait a week to go check it out. By the time you go view it, it will likely be under contract! If you fall in love with a house that just hit the market, there's probably 4 other buyers who love it just as much. If you'd be heartbroken if you missed it, then it's probably not the time to lowball!

If you're looking to buy or sell in this crazy market, please call or email us! We would love help you!

How to Increase Curb Appeal!

The weather was absolutely beautiful here in Atlanta this weekend!! It was so beautiful that it made me want to do some "spring cleaning" projects outside so that I could soak up some sunshine! While my husband prepped our yard for spring landscaping, I took on a project that I never completed last summer .... I gave our front door and trim a facelift. It was in need of a good scrubbing and a fresh coat of paint! We always recommend that anyone looking to sell their home take on these simple projects to increase curb appeal before putting the home on the market. I'm not looking to sell my home anytime soon, but as I sang along with my iPod (my poor neighbors!!) and worked away, I realized what a suprisingly easy task this was and it made such a difference! Check out the following examples of before and after photos to see what a few hours can do in terms of increasing curb appeal which is oh, so important!!!!

Inspired? I hope so! Sprucing up the entry way can be a very easy and low cost job. Remember that buyers' form opinions about properties before they ever go inside. We've pulled up to some houses in which the buyers didn't even want to go inside of based on what they saw on the outside. Give buyers something to get excited about!!

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

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.