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Archive for February, 2009

Running Through Buckhead’s Neighborhoods

Sunday, February 22nd, 2009

New this year,  the AJC Peachtree Road Race is opening online registration.  AJC Peachtree Road Race participants will be able to register for the 2009 event online. Registration opens at 7 a.m. EST on Sunday, March 15 at www.ajc.com/peachtree.

The first 45,000 applicants (out 55,000 total entries) will be accepted through online registration. If it is anything like previous race registrations, the field will fill out quickly, probably within minutes.

To register online for the AJC Peachtree Road Race:

  1. Go to www.ajc.com/peachtree after 7 a.m. EST on March 15;
  2. Click REGISTER NOW;
  3. Fill out all the required fields on the online registration form including Time Group Placement information (if applicable), payment information and the race waiver prior to clicking “SUBMIT”
  4. Click “SUBMIT”;
  5. Print a copy of your race confirmation page for your records. You will also receive an e-mail confirming your race entry within 24 hours after successfully registering.

Peachtree Applications will also be available in the AJC on March 22, 2009. However, only 10,000 runners will be able to get into the race through this “old” method.

Running through Buckhead and Mid-town neighborhoods is fun, but you must be trained and ready to do it. The race is always scheduled for early morning July 4: the humidity level is as high as the excitement level!

First-time Homebuyers’ Credit

Wednesday, February 18th, 2009

This is what we are hearing about the tax credit that Congress passed, as part of the Stimulus Bill:

Q:
 I’m hearing about an $8,000 first-time home buyer credit that doesn’t need to be repaid – is it too good to be true?
 
A:
It’s true. For eligible first-time home buyers who purchased a home after Jan. 1, 2009 and before Dec. 1, 2009, the stimulus bill provides for a refundable credit equal to 10% of the purchase price of the home, up to $8,000.

And, yes, unlike the credit provided last year, this first-time home buyer credit does NOT have to be repaid, unless you sell the home or it no longer is your principal residence within 36 months of purchase.

The Tax Institute has asked the IRS for guidance on how the credit should be claimed on a 2008 tax return until the IRS can update Form 5405 to reflect
the increased credit. 
 
Q: 
 Are there income phaseouts with this first-time home buyer credit?
 
A:
 Yes. The new $8,000 credit begins to phase out for individuals with incomes over $75,000 or married couples with incomes over $150,000 filing jointly.
 
Q:
 But what about those of us who purchased a home in early 2009 and took advantage of the $7,500 credit when we filed on our 2008 federal tax return – are we just out of luck?
 
A:
 No, you can still take advantage of the $8,000 credit if you purchased your home in 2009, but you will have to file an amended return to claim the additional credit, up to $500, to which you’re entitled.

You must have purchased your home in 2009, however, to be eligible for the up to $8,000 credit. Homes purchased in 2008 do not qualify. 
 
Q: 
 I purchased my home in 2008 and was eligible for the $7,500 first-time home buyers’ credit, will I still have to repay it?
 
A:
 Unfortunately, yes. Those who purchased homes in 2008 and received the first-time home buyers’ credit are still required to repay the credit over a 15-year period, or sooner if they do not continue to live in the home as their principal residence for the full 15 years.

Need help finding the right home? Call us and Experience True Experience!

Help for Atlanta’s Real Estate: Will the $15,000 Tax Credit be Passed?

Saturday, February 14th, 2009

Johnny-Isacson-Harry-NormanThe $15,000 tax credit for home buyers has struck a cord across the country. It was dropped in the stimulus bill that is winding it’s way through Congress, but in the long term it may not be dead.

Georgia’s own  Senator Johnny Isakson, a former Atlanta real estate broker, is the sponsor of the bill and is looking to get the $15,000 dollar tax credit through the Congress before the end of the year.

With real estate down so much over the past two years and many buyers on the sidelines, this could help the industry get it’s footing.

The one thing everyone seems to be asking, is that it be retroactive to the first of the year. I hope he mentions it in every speech that he gives on the tax credit. “Quite frankly there is so much outward support for what we did … that I wouldn’t at all be surprised if you didn’t see it come back in some form with a Democrat’s name on it,” he said.

Isakson said he has heard from consumers who have already put contracts on houses in hopes that the credit will be enacted one way or another this year.  “Just the fact that it was being anticipated was starting to drive the market,” Isakson said.

A survey released earlier this week by Fix Housing First, a coalition led by housing industry companies, found that the majority of Americans support the idea. According to supporters of the bill, it would have quickly helped create tens of thousands of jobs and pumped millions of dollars into the economy.

US Congress Helps Atlanta Home Prices

Sunday, February 8th, 2009

WAHOOO – CONGRESS FINALLY  HELPS  THE AVERAGE JOE and JOANN!

This past Wednesday, the US Senate unanimously approved an amendment (by our own Senator Johnny Isakson)  to the economic stimulus bill, that gives a $15,000 tax credit to anyone who buys a home in the next year. Isakson’s amendment would provide a direct tax credit to any homebuyer who buys a home.  The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent  misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of  enactment.

“It is rare that we have a road map to success in times of difficulty, but this country has once before realized a housing crisis every bit as bad as the one we have today and economic troubles every bit as dangerous,” Isakson said. “We have a pervasive housing problem, and we have a historical precedent that works. I am proud this Senate has joined together, learned from history and repeated a method that worked by adopting this amendment.”

In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson said he believes the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Are Investors Coming Back to Atlanta’s Homes for Sale Market?

Friday, February 6th, 2009

In August of 2008, Fannie Mae announced the implementation of a restriction on loans for rental property. Known as Fannie Mae Letter 08-22, the letter stated that investors would be cut off after their credit report revealed four or more “financed properties”. Lenders stopped taking applications from investors almost immediately after that announcement. Prior to this change, Fannie had in place a “ten financed property” rule, but the lending industry often provided ways around that limit by offering portfolio loans that were underwritten to Fannie Mae standards. These portfolio loans vanished simultaneously with FNMA’s August 2008 announcement.

The devastating effect of this change has been to sideline almost all veteran home-investors at a time when the nation’s supply of bank-owned homes is strangling our real estate market. In Atlanta alone, there are thousands of bank owned homes clogging the market, making it impossible for the market to begin any type of recovery.

Editors at the Georgia Real Estate Report have learned that internal meetings at Fannie Mae have revealed that FNMA intends to eliminate the “four financed properties” restriction on lenders and revert to the “ten property limit”. According to this same source, the change will be announced “within a few weeks”. This information was revealed Thursday, February 5, but could not be confirmed by FNMA spokespersons in Atlanta. If this change occurs, and it appears that it will, this could indeed be the “bottoming out” that we have all been waiting for and the end of the abysmal performance of real estate during the current economic environment.

It is unknown whether or not lenders may once again offer “portfolio” loans that are underwritten to Fannie guidelines once this change occurs, but it seems logical that they will. Investor loans have always carried some premium, both in rate and points, making them more attractive to lenders than traditional loans. It stands to reason that if these investor loans are “full doc” and require a reasonable down payment, they can be as safe as an owner-occupant loan.

Do you need help looking for an investment property? Call us — we can help. Experience True Experience!

Building New Homes for Sale or Maintaining Liquidity?

Thursday, February 5th, 2009

This afternoon, I went to the shareholders’ meeting for a publicly-traded, new-homes company. The chairman’s opening remarks were that the board and the officers of the company were focused on maintaining and managing the company’s liquidity.

When the chairman opened up the floor for comments and questions, I raised my hand and expressed concern that one of the company’s major priorities should also be closing homes! I questioned their internet “specials” of $100 in “Green” incentives for every $10,000 spent in upgrades and their version of low interest rates (market interest rates are lower than this company’s “special” rates). Another stockholder questioned why the Board approved executive bonuses when the stock has plummeted. In response to that question, the chairman said the bonuses were justified.

My initial shock at seeing these out-of-touch incentives and responses has grown into disbelief. How can this company be so unrealistic and uncomprehending of today’s market conditions?

In today’s real estate market, homebuilders must be pro-active and realize that it is a “buyers’ market”. This particular company’s stand is that they will negoitate, once a buyer becomes interested. But, if the buyer eliminates a homebuilder by visiting the builder’s website, how can a home builder expect in-person visitors? Or closings?

Does this homebuilder just not get it?

Foreclosed Homes, Inspections and You!

Wednesday, February 4th, 2009

Many real estate agents will recommend that a seller obtain inspections on their home prior to listing the home for sale.  “Why should I get an inspection? Once we know what needs to be repaired we will have to fix it.”  Well, that is one way to look at it. There are other things to think about.   

First, knowing the repairs before listing it and then completing the repairs, places your home in the best possible position to earn top dollar.  Well-maintained homes are more likely to receive a higher price, as compared to homes where maintenence has been avoided. 

Second, if you, as the seller, accepted a low offer and then have to negotiate repairs mid-stream, it can be costly and discouraging.  If you, as the buyer, offered a high price and then find out mid-stream the seller does not want to negotiate the cost of repairs, the deal can become frustrating very quickly.  A well-maintained home can prevent these issues and the stress of the contract is reduced.

So what happens when you are looking at a foreclosed property for sale?  Short sales, REOs, “bank owned” and “corporate owned” properties rarely have inspections available for the buyer to review.  As a buyer, many agents will say you are “on your own” to obtain inspections.  Distressed homes are sold “AS-IS”.  This means that the seller does not intend to make any repairs and therefore the buyer should make the offer subject to the property’s current condition.

Inspections can be costly.  Once a buyer has written checks for a home inspection ($300-$500), roof inspection ($125-$150), chimney inspection ($125-$150) or pest inspection ($150-$175), it is hard to turn back on the deal.  If you cancel the contract due to repairs, you are out the inspection money.  If you move forward with the contract, you may be able to have your agent negotiate a credit; however, most distressed properties’ contract addenda have redundant paragraphs indicating the buyer agrees to an “AS IS” condition.

As a buyer, you might ask, “Do I need all these inspections?”.  Only if you are sure a foreclosed home presents the right deal at the right time.  Remember, most private sellers (not bank owned or-corporate-owned) will negotiate repairs and sometimes (particularly in a “buyer’s market”), they are willing to share the cost of inspections. The foreclosure has to be a very good deal for this to all work out well.

Third, a home inspector can help shed the light on suspicious areas requiring further investigation by specific professionals.  For example, damp crawl spaces with effervescense can imply a foundation inspection or a mold test is needed.  Missing roof tiles or damaged shingles can indicate the need for a roof inspection.  Cracks noted in the chimney suggest a complete chimney inspection would be a good idea. I always recommend my clients be there for inspections.  You can ask questions and learn a great deal.

Finally, your real estate agent has looked at a lot of houses and should have a good eye for suspicious items.  I am not an inspector but I can certainly point out areas that stick out as potential issues.  I always recommend, at a minimum, a home inspection and pest inspection on any home I represent.  In my opinion $300 -$500 is well worth a client’s peace of mind.

If you would like to discuss strategies to minimize your inspection costs or would like recommendations for inspectors and/or repair professionals, contact me. Expanding your knowledge is the best investment on any home purchase.

 

 

 

 

 

 

 

 

 

Atlanta’s Home Sales

Sunday, February 1st, 2009

The numbers are in and in certain cases, they aren’t as bad as you might think. Intown Atlanta’s homes’ prices fell by 11.7% from 2007 to 2008. Phoenix, AZ saw the largest drop in the country: down almost 33% ; Dallas, TX slipped only 3.3%.

Here is some data for Atlanta’s homes for-sale, both good and bad:

  1. While the numbers were off from 2006 and 2007, there were 33,856  home sales (closed transactions) in Atlanta in 2008;
  2. Atlanta’s median days-on-market, was up by 18%, rising to 84 days;
  3. Foreclosures more than doubled from 2007 to 2008 (11% vs. 23.6%). For buyers, this could mean that banks are ready to deal on their properties;
  4. 73.1% of all homes listed for sale in Atlanta, did not sell; a too-high listing price is blamed as the  reason;
  5. One of every two homes sold in 2008, or 50% of all homes listed and sold, required a price reduction before actually selling. Again, this means that Atlanta’s home sellers are not properly pricing their homes;
  6.  The supply of homes for sale, dipped to 14 months of supply in December vs. 19 months of supply in November, 2008.

If you would like more information how to properly price and sell your current home or buy a new one, call or email us. Nancy & Company would love to help – Experience True Experience!