SITTING ON THE HOME BUYING FENCE? BUY NOW & SAVE ‘REAL’ MONEY!

FHA Gives Home Buyers One-Month Window

September 1, 2010–The Federal Housing Administration (FHA) is giving homeowners and buyers until October 4 to lock in a low monthly insurance premium, according to Gibran Nicholas, chairman of the CMPS Institute, an organization that trains and certifies mortgage bankers and brokers. “After October 4, the monthly insurance premiums on FHA loans will increase by over 63%.”

What does this mean for home buyers?
A home buyer purchasing a $200,000 home using a $193,000 FHA mortgage before October 4 would pay an insurance premium of $88.46 per month. If the same home buyer waits until after October 4, the insurance premium would jump to $148.01.

“In this example, the home buyer would lose $59.55 per month, or $7,146 over a 10-year timeframe,” Nicholas said. “Although the upfront mortgage insurance premium is going down after October 4, the real impact to the home buyer is actually a net increase in their out of pocket costs because the monthly premium is going up by 63%. Remember, sellers can pay the upfront premium or it can be financed into the loan amount, so homebuyers rarely pay the upfront premium out of pocket. On the other hand, the increase in the monthly premiums will be paid right out of the home buyer’s pocket with their mortgage payment each month.”

Ironically, home buyers who plan to be in the mortgage for less than three years and decide to pay the upfront fee themselves (instead of having the seller pay it for them), may actually save money by waiting until after October 4 to apply for an FHA loan.

“Home buyers with a short term time horizon may actually benefit from this change because the upfront premium will be reduced to 1% from 2.25%,” Nicholas said. This change will impact over 30% of the home buyers in today’s market who use FHA-insured financing. Home buyers considering an FHA loan should find and contact a CMPS professional in their area to discuss their options and what this means for their situation.

Taken from an article in the Daily Real Estate News.

WHAT’S BEHIND DOOR #1?: LOOKING FOR A HOME IN ATLANTA^

 

One of the most interesting aspects to my job as a Realtor is “showing property”.  After the buyer consultation, I go back to my office, sit in front of my computer and search our Multiple Listing Service (better known as MLS) for properties matching the buyers needs and wants. I usually go right down the list – area of town, number of bedrooms and baths, age of home, subdivision, etc. until I have compiled a number of possibilities. I will then call the “listing” agents to make sure that these houses are available to show to my buyer and that there are no offers or conditions that I need to know about. The list is then e-mailed to the buyer for review and we then settle on the homes to see.

One point to make about showing homes; I usually work in 3-hour intervals with a buyer and will show 7-10 homes at one time. It is very difficult to keep track of more than 10 homes and eventually the details start to overlap. I have incorporated two practices in my buyer showings that seem to work well. First, I have the buyer write down the positives and negatives about each home while we are still in the house. I ask very specific questions about each house so that I know what is important, not so important and a “deal” breaker. Sometimes it is difficult for a buyer to know what they like and dislike until they see it in a home – especially first time homebuyers.

Second, I play a game of “Naming Each House” so that we can remember it. There has been the deck house, cat house, music, boyfriend house and so on. I can call past buyers a year later and they will remember a home by the name we used. The name can be positive or negative but it will always set off a trigger in our minds about a particular home.

But what truly makes my job interesting and exciting is the feeling I get when I first open the door! Have I just opened the door to someone’s new home? This may sound corny but it is true.

Often I am disappointed. Sometimes the on-line pictures look so good and I am familiar with the community; then I open the door and …. nothing. I can take it when I am disappointed but I hate it when the buyers were excited and then let down. On average an agent shows 10-12 homes before the buyer selects one. This number can increase in a “buyer’s market” because buyers want to feel like they have seen everything before they make the big decision.

However, there is nothing better than opening the door to a buyer’s dream home. When I can see it in their eyes that “THIS IS IT!”!  It is that look, the fast heart beat, the writing of the offer, the acceptance of the offer and the closing day that makes my job special. When I am able to hand over the keys to a buyer’s “dream home” – it is worth it all!

NAVIGATING THE MAZE of PURCHASING A HOME IN ATLANTA^ – PART IV: The Buyer Brokerage Agreement

 

I am not a lawyer nor do I play one on TV but I will take a few minutes to discuss the Buyer’s Brokerage Agreement. First of all, the state law in Georgia prohibits a Broker from representing a buyer as a client without first entering into a wrtitten agreement with the buyer. The key word here is “client”.  A Realtor can only work with a buyer in two ways – as a ‘client’ or as a ‘customer’. There are significant differences between the two.

When a Realtor works with a buyer as a “customer”, they are limited to performing what are called “ministerial acts”.  For example, an agent can identify property for sale, show the buyer the property, provide pre-printed real estate contracts, complete the forms at the direction of the buyer, and assist the buyer in completing the purchase process. The Realtor, however, can not provide any advice in purchasing a home, make any recommendations or offer counsel in any way. The Realtor-Customer relationship is very difficult for all but the most savvy buyers because the Realtor can not offer any advice at all.

In most cases, the Realtor works with the buyer as a “client” which means that they can not only provide the above services but make recommendations, suggestions and offer advice.  The buyer is still required to do their own due dillengence meaning that they have to get the home inspected, make the best choice of a lender and check out the neighborhood and surrounding areas however, the Realtor is not limited in the amount of information they can provide.

When a buyer chooses to work with a Realtor as a “client” they are required to sign a Buyer Brokerage Agreement. The roles and responsibilities for the agent and the buyer are laid out in this agreement. The agent is responsible for finding the buyer an acceptable property and working within all of the state laws and guidelines to assist the buyer in purchasing this property. The buyer is required to do seven things once this agreement is signed:

1. To work exclusively with this Realtor throughout the contract term. The buyer can terminate this agreement but must do so in writing.
2. To be available to see properties
3. To respond to all communication in a timely manner
4. To provide the agent with accurate financial information
5. To inspect the property and become familiar with surrounding areas
6. To become familiar with the Purchase and Sale agreement and all other documents which they are required to sign.

In Part V of Navigating the Maze, I will discuss the other issues in the Buyer Brokerage Agreement and make sure that you are aware of the right questions to ask your agent.

NAVIGATING THE MAZE of PURCHASING A HOME IN ATLANTA – PART III: Buying a Condo

 

I know I promised to continue this series with ‘Understanding the Buyer Brokerage’ agreement but I have to pause and address another issue.  I have had several people ask me about the rules of buying condos and townhomes and I wanted to make sure I spoke to this issue quickly. Buying a condo or townhouse in Atlanta is very different than purchasing a single family home. The financing rules are different unless you are purchasing with all cash. Most buyers right now are using the government backed FHA loan program because the down payment is 3.5% versus the 10% or greater with conventional financing. Because most buyers are going FHA, they are subject to the governments’ rules regarding condo purchases.

First of all, not all condos will qualifiy for FHA financing. There is a section of the HUD website that you can plug in the condo name, city and state and find out if you can purchase your particular unit with FHA financing.  The link is https://entp.hud.gov/idapp/html/condlook.cfm   Why does the government care about the condo or townhome unit that you purchase? There are four main reasons:

1. Lack of Occupancy – There are quite a few developments in the Metro Atlanta area that were started and not completed. The occupancy rate may be under 50% with a lot of vacant units or sections that have to be finished. In this current housing environment, many builders have gone out of business and the timeframe to complete these developments and get them sold is uncertain. The government is not willing to take the chance on financing in this situation.
2. The Financial Position of the Homeowners Association – A strong condo association is what drives any community. The board is responsible for managing the upkeep on the property, ensuring that the residents follow the covenants and maintaining the overall welfare of the community.  Any weakness in the financial position of the board can create an instability in the community and again the government weighs this before backing the loans.
3. The Rate of Foreclosure in the Community – A high foreclosure rate causes instability in the condo community and again is one of the areas that the government examines prior to approving the condo for FHA financing.
4. The Number of Rentals in the Community – A high number of rentals is a red flag for the government because it also signals a lack of stability. Renters come and go but homeowners are committed for the long haul.

Again, if you are considering the purchase of a condo, visit the HUD website and plug in your particulars. Find out before your commit money, time and energy only to find out later that you can not purchase the unit with FHA financing.

In Part IV, I will discuss the Buyer Brokerage Agreement and what it means to you.

NAVIGATING THE MAZE of PURCHASING A HOME IN ATLANTA – PART II: The Buyer Consultation

 

So you have decided to buy a home and you have selected a Realtor. Now what … what are the next steps?  Remember, not all realtors are the same but here is what I normally do next with a buyer. Step one - on the phone, I usually get the following general information:

• The area of town the buyer is interested in
• Type of home desired; singe family, townhome, condo, etc.
• Size of home – bedrooms, baths, etc
• Price range as well as desired monthly payment
• Timeframe for moving
• Age of home (Year built)

Step Two: I like to e-mail a Buyer  Consultation Form to the buyer. It is a fairly lengthy form (about 5 pages) but it makes the buyer think of all the items that are important in the home purchase. It also helps me understand the buyers’ motivation when they tell me that they need certain items. For example, a buyer may ask for a bedroom on the main level; this is very important if their 80 year old mother is living with them. The bedroom then becomes a real need not just a want.  I ask the buyer to complete the consultation form and have it ready for our first face to face meeting. (A copy of this form can be downloaded from the “Buyer Documents” box below)

Step Three: I schedule an appointment with the buyer, usually in my office. All parties involved in the purchase should be at this appointment so that we start off on the same page.  This meeting normally takes about an hour and we cover the basic items such as:

• The buyer’s needs and wants in a home based on the completed Buyer Consultation form
• Timeframe for moving; any obstacles in making this happen
• The entire homebuying process from A-Z including shopping for home, inspections, appraisals, etc.
• Understanding the complexities of buying a foreclosure, pre-foreclosure (short sale) a traditional resale or HUD home. Each type of purchase comes with its’ own set of rules that the buyer needs to be made aware of prior to beginning the search
• The upfront cost of buying a home – loan application fees, inspections, earnest money, etc.
• Finances – loan programs, down payment assistance, etc.
• The Buyer Brokerage Agreement

Sandwiched in between step two and step three is normally having the buyer contact a lender for a preliminary discussion of their ability to purchase. The lender will want to pull your credit in order to give an accurate answer as to buyers’ ability to buy now, how much and approximate monthly payment. The lender will also be able to discuss any first time homebuyer programs that fit the buyers’ profile.

Once we complete the initial meeting, we can schedule a time to begin viewing property.

Next Blog: Navigating the Maze: Part III – Understanding the Buyer Brokerage Agreement

NAVIGATING THE MAZE of PURCHASING A HOME IN ATLANTA – PART I: Selecting a Realtor

 

I spend a great deal of my time working with first time homebuyers which means alot of hand holding. No problem – that’s my job. Buying a home can be an overwhelming endeavor and scary in some respects. It certainly will be the most expensive purchase you will ever make and therefore, it requires thought, deliberation, questions and prayer. I am often asked about the process from beginning to end and I have become an expert at explaining it well. Again, no problem – that’s my job. My task here is to give you insight into the buying process and hopefully answer your questions in the process. This will take time so make it a plan to walk with me for a while.

Imagine that you have decided to move out of your apartment and would like to purchase a home. What is the first thing that you would do? Who is the first person you would call? Lender, Realtor, friend…?  There are usually three ways that potential buyers find realtors – on-line, referral from a friend or randoming calling them from signs in yards. No matter how you find your realtor, here are three issues that you need to consider.

1. While it is great to know how long a realtor has been in the business, what you really want to know is their level of expertise.  A new agent that has hit the ground running and has sold 10 houses in 4 months is a good agent.  Ask about recent sales, past clients, etc.
2. Try to find an agent that is knowledgeable about the area that you are considering moving to. This is really important as you explore schools, accessibility, travel times and home values.
3. Find an agent that you are compatible with. You don’t have to be best friends with the agent but this is a long process and you need to feel comfortable talking with them. The chemistry has to be right.

Next blog:  In Navigating The Maze – Part II I will discuss what happens in the initial meeting with the agent.

Teachers Can Get Down Payment Assistance to Buy A Home in Metro Atlanta

 

I just attended a seminar hosted by the DeKalb Association of Realtors in partnership with Georgia Department of Community Affairs. As a realtor, it is my job to stay abreast of all of the changes in the housing industry and the financing available to potential home buyers. This seminar reminded me of a great program, Georgia Dream, that has served the homebuying community well for many years.

In addition to the traditional homebuyer first mortgage loan, Georgia Dream offers a special prgram for Protectors (firefighters, police officers, etc.) Educators (teachers, administrators, etc.) and Nurses. For individuals in these professions, there is a $7,500 down payment assistance program that can be used to purchase a home. There are several steps that the buyer has to go through – including completing a homebuyer education class and using an approved lender.

There are considerable funds available for first time homebuyers. Georgia Dream offers down payment assistance, the U.S. government is offering a homebuyer tax credit, and many of the Metro Atlanta counties are also offering various down payment assistance programs. Now is the time to find out what is available and get in the game!

By the way, Georgia Dream is not limited to Protectors, Educators, and Nurses; there are funds available for others – usually $5,000. Ask for details regarding income and sales price limits.

An Awesome Bungalow just outside Atlanta. Great Price & Get Tax Credit!

    This  is a great little home about 10 miles from downtown Atlanta. It is 3 bedrooms and 2 baths; perfect for the first time homebuyer or someone downsizing. Enjoy a private yard in a very quaint part of town.

Posted via email from Amazing Homes

Snow in ^Atlanta – This is rare but beautiful

Atlanta in February. We rarely get snow here but when we do, it is beautiful. Provides just enough of a taste of winter for our northern residents.

Posted via email from Amazing Homes

Newly remodeled home in ^Atlanta