5 Reasons to Sell Your Home Now!

The conventional wisdom when selling a home has always been to wait until the ‘Spring Buying Season’. Over the years, that has seemed to make sense and is now accepted as a good strategy for those who want to sell their house and receive the best possible price. This real estate market has shattered many previously held beliefs. The wisdom of waiting for a spring market is another belief that is about to fall. Here are five reasons why?


1.) Interest Rates Are On the Rise

Interest rates have spiked up rather dramatically over the last ninety days and are now over 5%. Initially, an increase in rates has a positive effect on the market as it forces buyers off the fence. However, it also eats into a buyer’s purchasing power. As rates increase, the mortgage amount a buyer qualifies for decreases. This will eventually have a negative impact on prices.

2.) Your Dream Home Will Never Be Cheaper

If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.

3.) Buyers Are Out Early

There is mounting evidence that buyers are coming out earlier this year. A belief that now is a good time to buy coupled with the increase in interest rates has started the buying season early.

Pete Flint, CEO of Trulia:  We’re seeing a national resurgence of buyer and seller activity on Trulia.com. In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth. We've are now experiencing 100,000 property views per minute."

The National Association of Realtors just reported that the number of house sales increased 12.9% over last month.

4.) Inventory Increases Every Spring

Every year there is an increase of inventory which comes to market as we approach the spring. Here is the number of listings available for sale in 2010.

■February – 3,531,000

■March – 3,626,000

■April – 4,029,000

We believe there will be an increase in these numbers in 2011 as there is a pent-up selling demand created by the weak market of the last few years. You won't have to worry about this increasing competition if you sell now.

5.) We Are in the Eye of the Foreclosure Storm

While banks are trying to rectify their foreclosure procedures, there is a large supply of discounted properties which has been delayed coming to market. This inventory will be released sometime in the next few months. Foreclosures sell on average at a 41% discount. When released they will be competing with your house for the buyers in the marketplace. If you are looking to sell in 2011, you want to sell before this inventory becomes your competition.

CNN Money quoted the leadership Of RealtyTrac on this issue: “We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000,” said James Saccacio, CEO of RealtyTrac.


“Unfortunately,” he added, “This is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”

“We expect a spike in the first quarter,” said Rick Sharga, a RealtyTrac spokesman.

Bottom Line

These are five strong reasons to sell now instead of waiting until later in the year. Feel free to call or email us with any questions or to schedule a time to sit down and talk about your home.

Short Sales & Foreclosures: Mortgage Forgiveness Relief Act

 We just had a past client email us and ask us about a 1099 that they received in the mail from their mortgage company - their question was "what is this for and why?" We thought that given the amount of foreclosures and short sales that are taking place these days, this question may apply to many so why not post the answer right here on our blog...

Our past clients received a 1099 because sadly, their home was foreclosed on in 2010. Anytime you owe a debt to someone else (whether it be a mortgage, credit card company, etc) and they cancel or forgive that debt, the discharged amount may be taxable. When this happens, they will issue a 1099-C for the discharged amount; however, the Mortgage Foregiveness Relief Act was rolled out in 2007 and in some cases, it forgives certain types of cancellation of debt. Those who have sold via short sale or who were foreclosed on since 2007 may be eligible for this forgiveness. For more information, visit: http://www.irs.gov/individuals/article/0,,id=179414,00.html

This provision applies until 2012. If your debt cancellation does fall in the guidelines to be forgiven, it still has to be reported to the IRS. Now for the disclaimer: We're not tax professionals/experts or legal advisors, so we can't advise you on the best way to file, etc. We just want you to be aware of the Mortgage Foregiveness Relief Act so that if you think it may help you, you can be sure to talk to your CPA about it.

Our Expert on Fox Business!

Rebekah and I attend a meeting once a month with an elite group of Realtors and market advisors to keep abreast of the market, the changes, the expectations for the future, etc. We've always known the information is great. It's our way of staying on top of the market so that we can provide the best service and accurate information to our clients.

Well......Fox Business must have thought the information we receive is good too. Steve Harney is the ring leader of our group. We listen to him via webinar once a month and meet with him in person usually twice a year. He has his own website, http://www.keepingcurrentmatters.com/ and Fox Business just interviewed him.
Click on the link below to watch his segment on Fox Business. It's only 3.58 minutes long, but it says the things we are always telling you!  Now.....we consider ourselves your experts. We truly feel we know the market better than most agents, but if our word isn't good enough, listen to Steve!

Click Here:  http://vimeo.com/18865192

Real Estate Auctions

We're seeing more and more homes go to auction these days and thought it might be helpful to put together a list of things to know. Auctions can be tricky, especially if you're going in blind without doing your research first. Melissa and I attended an auction with a client a few months ago. Before we jump into things to know here's a quick video that we took that day: 



1. Before bidding on an auction property,do your homework! When purchasing auction properties, they typically don't allow an inspection or due diligence period. Do any necessary inspecitons prior to bidding on the property. If you don't win the bid, you're out of the money spent on the inspections, but better safe than sorry. If you don't have an inspection first and bid on a property only to find a major issue later down the road and try to back out, you will lose your earnest money and/or any deposits which will hurt the pocket more than the inspection fee).

2. Auctions typically charge a "buyer's premium" that is added on to the sales price. It's normally between 5-10% of the sales price. So if you're the winning bidder at $100,000, they will add 5% to that, to make the total amount $105,000. Keep this in mind when bidding. If you're prequalified to $100,000, then you wouldn't want to bid anymore than $95,000 if there's a 5% premium.

3. Auction properties normally call for more earnest money than the area standard. For example, REDC Auctions call for 5% in earnest money (15% for every additional property purchased). So if you put an auction property under contract for $210,000 ($200k purchase price + $10,000 premium), you're looking at earnest money of $10,500! What a huge amount to risk losing if for some reason you don't close!

4. Closings must typically take place within 30 days of the auction. No excuses! If you don't close by the deadline, then you risk losing your big chunk of earnest money! Doesn't matter if it's the lender's fault or if you only need 3 more days to get it closed. 30 days... that's it.

5. They don't offer financing contingency periods so be sure that you're 130% confident in your lender and make sure the lender knows they only have 30 days to prepare the loan and have it ready to close.

6. Some auction companies require a loan commitment letter from the lender with no conditions if the buyer is obtaining financing to purchase the property. If your lender can't offer a commitment letter with NO conditions, then they require that you use their on site lender.

7. All winning bids must still be approved by the seller. If you're the winning bidder, don't get too excited until you know the bid has been approved. This is where the deal sometimes dies and the property comes back on the market.

8. We've seen some auction companies open the auction back up "one last time" online after they had a winning bid on a property. Seems like they're trying one last time to sell the property at a higher price than what you bid. Not fair, huh?

9. They do allow agents to represent buyers, but you must register your agent when you register. If you don't, then you have to navigate through the auctioin process by yourself. Yikes!

Of course the rules are different depending upon which auction company you're dealing with, but the above mentioned tips are things to look for because they're common amongst the big auction companies in this area! Have questions? Please feel free to email us!

 

 

An Honest Realtor

Realtors are often laughed at for the terms that they use to describe homes... you know, we sometimes, sugar coat some of the worst features. You've probably seen some of the following phrases before:

Adorable, Cozy, Cottage Like, Dollhouse --- look for a small house, probably less than 1200 sq.ft.

Lots of Potential, Needs TLC, Handyman Special --- look for a house that needs a ton of work

Beautiful View, Lake View, Water View, etc --- look for a house with a view.... if you lean over to a 45 degree angle, hold a mirror up, and squint you might just be able to see some water.

You get the point. So it's quite refreshing when you come across a Realtor who doesn't throw a little sugar in the mix. A straight shooter who wants you to know what you're walking into. Take this "cute" house for example:

It's a 2 bedroom/1 bath home in San Francisco with a whopping 875 square feet. Do we dare call this charming? I think not. So here's what the Realtor used to describe the home. Yes, folks, this was actually input into MLS system:

Needs everything, not just TLC... but everything! Not to be even concidered unless you are a contractor. Still want to see it? Be prepared to walk lightly because you may fall through the floor. Nice roof just a few years old,at least something is good on the thing.

Want to know the craziest part of all? This baby sold for $335,000 (was listed at $350,000). Wow, God bless those buying real estate in San Fran! Come on out to the East Coast and Melissa and I will show you what $300k can buy you here! :)

Average Sales Prices in Clayton, Henry & Fayette Counties

Now that 2010 is officially over, it's a good point to review the last 10 years of real estate in the Metro Atlanta area. The following are charts that we have created that show what the average sales price trend looks like for the past decade in Clayton, Henry and Fayette Counties. Hopefully within the next week or so, I'll find time to get in the MLS system and pull trends for other counties such as Coweta, Spalding, and Butts. But for now... check out these charts and see if you can tell when the bottom fell out of the real estate market here on the southside of Atlanta! :)

2010.....A Market Overview

This past year has been very challenging for real estate. The market was defined by outside intervention. This intervention tugged at historic trends. Government involvment caused market fundamentals to be distorted beyond recognition. Unpredictability was the only thing we could predict.


Modifications

The administration's announced goal of the modification program was to save 3-4 million families from losing their homes. The actual number of homeowners assisted will come in at less than one million. Most consider the program a failure.

However, we believe that there was a secondary unannounced goal of the modification program: to slow the flow of foreclosed homes to the market. Putting homes through the modification process prevented banks from moving forward with the repossession process as quickly as they normally would.

Limiting supply was one of the ways the administration used to help stabilize home prices. However, the administration has recently slowed the modification process. Going into 2011, a larger number of foreclosed properties will enter the market.

Interest Rates

The administration began to control rates back in 2009 with the purchase of mortgage-backed-securities. When it was announced that the government would back off the purchases in the spring of 2010, everyone (including us) believed that mortgage rates would climb back to historic norms (6-7%) by the end of the year. The exact opposite took place. Rates fell to almost 4% on 30-year mortgages before jumping back to the 4.5 – 5% range at the end of the year.

The most amazing part was that the lower interest rates did not seem to spur buyer activity as sales softened while rates continued to fall through the year. Interest rates, at best, helped in maintaining demand in 2010.

Home Buyers' Tax Credit

Again, the administration's goal was to stabilize home values. The tax credit was supposed to drive housing demand. And it did – for the first four months of the year. However, it now appears that the tax credit did not increase overall demand, but instead, just pulled that demand forward.

Bottom Line

By decreasing supply (mortgage modifications limited the number and impacted the speed of foreclosures entering the market) and increasing demand (lowering interest rates and issuing a tax credit), the administration tried to stabilize the housing market. They accomplished some of their goals in a limited way.

We will not see this magnitude of government intervention in 2011 however. What will that mean to housing next year? We will give our thoughts on that in tomorrow's blog.

5 Reasons You Should Sell Right 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 chance that appears. There is a fantastic opportunity available right now.

Here are five reasons you should consider selling in the first 90 days of 2011

1. Interest rates have spiked up.

Rates have jumped over 1/2 point in the last several weeks. The short term result of increasing rates is a surge of buyers jumping off the fence to purchase in fear that rates may continue climbing upward. This is a short window of opportunity. If rates fall again, buyers will jump back on the fence. If rates continue to rise, it limits the number of buyers who can qualify at each price point. Now is the best time to sell your house.

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

If your family goal is to sell your current house and take advantage of the fabulous selection of properties currently available to buy the home of your dreams a at bargain basement price, DO IT NOW! Prices will continue to soften in most markets. However, if you are buying, COST should be more important than PRICE. Cost can be dramatically impacted by rising mortgage interest rates. Do the math and decide if now is the time.

3. During the winter months, the buyers are 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 either staying warm (in the North) or just busy with other priorities. The home buyers left in the market are serious and are more apt to buy. Less showings – but to more motivated purchasers.

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. Here is the number of listings available for sale in 2010.

■January – 3,277,000

■February – 3,531,000

■March – 3,626,000

■April – 4,029,000

We believe there is a pent-up selling demand (homeowners who have held off selling over the last year) that will lead to an increase in these numbers this spring. 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 trying to rectify their foreclosure procedures, there has been a large supply of discounted properties removed from competition. No one knows how long it will take banks to return to the normal flow of foreclosed properties to the market. However, until they do, every homeowner has a better chance of selling their property.

Bottom Line

If you are looking to sell in 2011, there may not be a more opportune time than this right now. Serious buyers, great move-up deals and less competition from super-motivated sellers and foreclosures creates the perfect selling situation. Don't miss it!