Down Payment Assistance in Atlanta
May 13, 2008 | Leave a Comment
The Nehemiah Program
This morning I had the privilege of attending a seminar about down payment assistance and how it can benefit both buyers and sellers in the greater Atlanta market. The seminar was taught by Leslie Kane, Area Manager, of The Nehemiah Program. The Nehemiah Program is charitable organization that has helped over 40,000 families in Georgia achieve their dream of home ownership.
The Nehemiah Program began in Sacramento, California in 1994 and was designed to help a particular community become more stable. The program gets its name, Nehemiah, from a biblical figure that helped rebuild the walls of Jerusalem and since the program was being utilized to help rebuild a community it just seemed to fit.
How Down Payment Assistance Works
If a buyer is qualified to purchase a home using FHA financing then they are automatically qualified to purchase a home using the Nehemiah Program. The home being purchased must be owner occupied and can be single family, duplex, triplex, quadraplex or a FHA approved a condo. With FHA loans the buyer is required to make a minimum down payment of 3% of the loan amount. By utilizing the Nehemiah Program the seller contributes the down payment for the buyer. At the time of entering into a contract with a buyer for the purchase of the home, the seller agrees to contribute the down payment and a small processing fee to the program. This is accomplished using the Participating Home Agreement form from Nehemiah. The program in turn contributes the down payment for the buyer. The buyer completes a Gift Letter form detailing where the gift funds came from and what address they will be used for purchasing. This type program can only be performed by a charitable organization. (Sellers are only committed to pay the contribution and fee if a buyer utilizes The Nehemiah Program to purchase the home.)
Who Benefits From a Down Payment Assistance Program?
The Nehemiah Program is helping both buyers and sellers in the greater Atlanta market. Obviously buyers benefit by being able to purchase homes with little or no money out of pocket. Generally speaking this type program would be for buyers with credit that is good enough for them to be able to purchase a home but they lack having the funds for a down payment. Typically prospective buyers who are currently renting or living at home are good candidates for this type program.
Sellers are also benefiting from this program. With the recent increase in FHA loan limits to $346,250 in the metro Atlanta area and $271,000 in outlying areas, more home sellers find themselves in a position to participate in this type program.
Who Qualifies For Down Payment Assistance?
As was stated earlier, if a buyer is qualified to purchase utilizing a FHA loan then they are automatically qualified to participate in this down payment assistance program. To find out if you qualify for FHA financing and down payment assistance Contact Mack.
How to Find a Good Builder
April 30, 2008 | Leave a Comment
So you have decided to build your new dream home. How do you find the right builder? Are you just going to leave it to chance? I hope not. You are preparing to make what is possibly the largest purchase you will ever make. As a buyer you owe it to yourself to practice your due diligence and find a builder who is qualified to build your dream home as well as being someone that you can communicate with about your wishes and desires in your home.
In the Atlanta Real Estate market, the most common ways for a buyer to find prospective builders are via the internet, their REALTOR, word of mouth from their family and friends or from the local Home Builders Association. Once the candidates have been identified the buyer and their buyer’s agent should begin the due diligence period by asking questions to determine the best fit. Here is a list of possible questions to ask:
- How long have you been building homes? (You are looking for 3+ years)
- Is your primary source of income derived by homebuilding?
- What insurance coverage’s do you carry? (You are looking for general liability, workman’s comp, and builder’s risk.)
- What is your primary source of information regarding changes in building codes? (You are looking for trade associations such as the home builder’s association or various continuing education classes)
- What is your written warranty on the homes you build and can I have a copy of it to review?
- What is your policy on home inspections? (You must be allowed to use a code certified inspector)
- Will you provide me with references from your homeowners?
- Due to today’s economic time and the state of the real estate market, would you be willing to share your financial information with us?
- Why should we select you to build our home?
While these may not include every question that you may need to ask, it should provide a good start. Even if the home you are looking to purchase is already started and at some stage of completion you should still ask questions of the builder. After all you are interviewing as an employer. You are hiring someone to build your home.
Atlanta Real Estate Market Update
February 24, 2008 | 2 Comments
It’s A Buyers Market
If you didn’t know it before, you certainly will know it now by way of the most current stats for real estate in the Atlanta Market. Unfortunately for sellers 2008 has started much in the same fashion that 2007 ended, with a market that continues to decline. Inventory continues to increase and the average days on the market for single family homes is at it’s highest level in 10 years at over 101 days on the market.
Available Inventory Increasing
Here are some of the facts comparing months supply of available homes 1-2006 vs 1-2008:
New Single Family Homes up over 81%
Resale Single Family Homes up over 91%
New Condos and Townhomes up over 125%
Resale Condos and Townhomes up over 26%
Additional Good News for Buyers
The other factor that generally goes hand in hand with increasing days on the market and additional inventory is an overall average price decline of sold properties. The situation at this time confirms this factor. The average sale price for both single family residences and condo/townhomes declined in January.
Even More Good News
If you take the abundance of inventory to choose from and the lower average prices then add to it the notoriously low interest rates, you now have all the components of a full fledged buyers market in Atlanta. Sellers are saying bring all offers. Why don’t we get together and help them sell their home at a deep discount?
Interest Rates in Atlanta
January 24, 2008 | Leave a Comment
The Atlanta Mortgage Market
The mortgage market in Atlanta, along with most other markets, has been extremely volatile over the last few days. Lenders have been publishing rate sheets then retracting them, adjusting interest rates up then down and even preventing brokers from locking loans for borrowers. Typically loan officers get rate sheets from the lenders mid morning each weekday. Since Tuesday rate sheets along with revisions have been coming several times each day. Hopefully some of the volatility has eased from the market.
Fed Cuts Short Term Rates
When the Fed announced on Tuesday that they were cutting the Federal Funds Rate by .75 percentage points the phones began ringing off the hook. What must be understood is that this rate cut is for the interest rates that banks charge to each other. This is for "Short Term" loans and a mortgage is considered a long term loan.
Is It Time To Refinance
In the mortgage business one of the most often asked questions is, Is it time for me to refinance? The short answer to this question is maybe. The better question would be, Is it time to meet with a qualified loan officer to discuss my options? The easy answer to that question is YES. Several documents that you need to have with you so that you can obtain the best advise are your most recent statement from your mortgage lender and your warranty deed.
If you are currently in an Adjustable Rate Mortgage (ARM) also provide the loan officer with the information about when you adjustment periods are along with the amount of the adjustment.
A Big Win For The Little Guys
Much of the recent news regarding foreclosures has centered around how the borrowers entered into Adjustable Rate Mortgages and when they began adjusting upwards the borrowers just could not afford them anymore. With the current rates being in the 5.375% range for a 30 year fixed rate mortgage, it makes perfect sense for any borrower in an ARM to seriously consider refinancing now.
Atlanta Real Estate Expert
January 20, 2008 | Leave a Comment
Now more than ever it is increasingly important for Atlanta consumers to be represented by an Atlanta Real Estate Expert. The landscape of the real estate market in Atlanta is rapidly changing and having an agent that is educated and understands the nature of the market can represent substantial savings both financially and emotionally.
Georgia Real Estate Contracts Change
The Georgia Association of REALTORS has just released the 2008 version of the forms that Georgia REALTORS utilize. And yes there are changes. The major changes came on the Purchase and Sale Agreement, better known as the contract. The legal description can now be attached as an exhibit which would apply to a meets and bounds description or the full legal description for platted subdivisions can be incorporated into the contract. Now for the biggy, the method of payment shall be all cash at closing! Does this mean that you can not finance a home in Georgia anymore, of course not. To protect a buyer with a financing contingency an agent must complete additional documents. While time frames have always been important, knowing how to use them to protect a client especially with the financing and appraisal contingencies now puts them at a premium. The inspection portion of the contract is now the "Due Diligence Period" and also includes the statement that it is the duty of the buyer to inspect the neighborhood.
The News Media Failed
The uncertainty in the mortgage market has gotten most of the attention recently from the news media. One thing the news has failed to cover is the fantastic opportunities available to buyers in this market. Whether new construction or resale it doesn’t matter, it’s a buyers market in Atlanta and consumers need an agent that understands how to do business in this enviornment.
Atlanta Real Estate Advocate
January 13, 2008 | Leave a Comment
When thinking of the term advocate and applying it to the real estate market you would think that it would probably have something to do with being a consumer advocate. I would tend to think so also. There can be two different types of real estate advocates. There would be the buyer’s advocate whose sole intent is to protect the buyer’s interest and a seller’s advocate whose purpose would be to protect the seller. Let’s examine each type.
Purchasing a home is typically the most expensive purchase any of us will ever make. Not only should a buyer enlist the services of a qualified Atlanta Buyer’s Agent but also an individual that would be considered an Atlanta Real Estate Advocate. To be a good buyer’s advocate an agent should have a complete understanding of not only the legal requirements in representing a buyer as called for by Georgia law but also have a good working knowledge of construction techniques, current mortgage information, school information (both public and private) and most of all put the buyer’s interest above all others. For Atlanta First Time Buyers make certain that you get a complete understanding of the process of buying a home. Attending a buyer seminar or workshop is an excellent way to increase you knowledge and after all, knowledge is power especially in a real estate transaction.
Selling a home is also an enormous financial transaction. Rarely would any of us be involved in transactions for hundreds of thousands of dollars except with our homes. Doesn’t it make sense to put your trust someone who understands what is required in Selling a Home in Atlanta. The days of just putting a sign in the yard and answering the calls are gone. Having a solid marketing plan detailing the steps to be taken to properly market a home is the foundation for a successful transaction. To get a home sold in today’s market it is of utmost importance to have the home on multiple websites in order to obtain maximum exposure. One way to accomplish this is through an Internet Data Exchange (IDX) that makes your home available on every agent and broker website in the entire Atlanta Market and really helps when a buyer is searching for Atlanta Homes for Sale.
Having experience in assisting both buyers and sellers has helped me be able to understand the needs and wants of both buyers and sellers. Understanding what each wants pays off when a contract is being negotiated.
The nice part of all of this is that working with a real estate expert in Atlanta who will protect your interest doesn’t cost any more than working with a less experienced agent who may not be as qualified. It is impossible for one agent to be able to cover the entire Greater Atlanta Market effectively. Feel free to contact me for assistance with finding qualified REALTORS throughout Metro Atlanta to help with your real estate needs.
Atlanta’s Golden Triangle
January 9, 2008 | Leave a Comment
Smart Numbers
When it comes time to talk about statistics in the Atlanta Real Estate market the person you talk to is Steve Palm of Smart Numbers. For years Mr. Palm has been providing builders, developers and even the listing services in the Metro Atlanta area with statistical data and accurate forecasts.
Atlanta Real Estate Sales Heading Up
I had the privilege of attending a meeting yesterday were Mr. Palm was the featured speaker. He pointed out some interesting statistics about the Atlanta market. For the entire Atlanta market the last 2 months have shown an upturn in residential sales. This upturn has been fueled primarily by the resale segment of the market. Mr. Palm anticipates a quicker recovery from the resale segment than from the new construction side of the market. He bases this forecast on the fact that there are approximately 14 months of inventory for new construction versus approximately 10 months of inventory in the resale segment. In addition to the inventory status, due primarily to land prices and building materials escalating, the pricing structure of new construction has far exceeded the price appreciation in the resale market.
Atlanta’s Golden Triangle
One area that was pointed out in his talk as being a prime real estate area in the Atlanta Market is the area he referred to as "The Golden Triangle". I really liked hearing this information as this is my primary service area. This area encompasses parts of Gwinnett County, Fulton County and Forsyth County. The primary reason this area is so highly thought of in Mr. Palm’s eyes is due to the transportation arteries. The Golden Triangle, as it is referred to, is outside of Interstate 285 and is between US Highway 78 and Ga. Highway 400. What separates this area from other segments, and makes it so special, are the 7 major arteries for the area; Highway 78, Ronald Regan Parkway, I-85, Highway 316, I-985, Peachtree Industrial Blvd. and Highway 400.
I have to say that I agree with Mr. Palm’s assessment of the area. For those of us that live in the area we can tell you that not only are we fortunate to have these transportation arteries, but we also have some of the best schools in the entire Greater Atlanta area.
Atlanta Real Estate Market Summary 2007
December 27, 2007 | 2 Comments
What The Experts Say
Long recognized as one of the industry leaders in the following and reporting of home prices in the United States, Standard & Poors Case-Schiller Home Price Index sheds an interesting light on the Atlanta Real Estate market. The Index, while showing statistics back to January of 1987, has each of it’s 20 metropolitan areas on a level playing field in January of 2000 with an index rating of 100.
As of January 2007 the Atlanta index was at 133.45 and with the October report, which was released on December 26, 2007, the Atlanta index was 133.79. While the increase is small, the indication is that real estate in Atlanta continues increasing in value.
The Office of Federal Housing Enterprise Oversight latest quarterly report also shows some positive results for the Atlanta Real Estate Market. This report shows a 2.61% increase in value over the last year, a decrease of 0.56% for the quarter and a 20.18% increase in value over the last 5 years.
Why Is Atlanta Better Off?
Some will ask why is this the situation in Atlanta while other metropolitan markets have suffered so greatly? Just as an appraisal is a reflection of the value of a home in a specific location, values for an area are based on that area not what is happening in another area of the country. I guess you would have to base Atlanta’s ability to maintain even minimal growth on the fact that the region’s housing prices are fueled by relocation and job growth rather than speculative buying as happened in some areas of the country.
Additional databases that lend information to the overall real estate landscape in Atlanta is from our local listing services. One of the important statistics currently shows that the inventory in the Greater Atlanta Market is shrinking. As inventory is reduced, pricing should continue to increase.
What Does It All Mean?
So what does all of this mean? Simply stated, prices will probably not be going down in the Atlanta Real Estate Market. Couple this with the fact that interest rates are very favorable right now and you have a great time to buy a home in Atlanta.
New Home Buyer Beware
December 14, 2007 | 4 Comments
Recently I attended a meeting where part of the discussion was about a study done by The National Association of REALTORS®. This particular study is titled "2007 Profile of Home Buyers and Sellers" and contains one set of statistics that quite frankly is scary. I hate to think how much money buyers have lost nationally just by not implementing one simple strategy when purchasing new construction.
For years now consumers have heard that it is in their best interest to use the services of a REALTOR® when purchasing a home. This still remains the best practice for a buyer to follow. According to the study 88% of all buyers purchasing pre-owned homes utilized the services of a REALTOR®. Here is where the scary part comes in. 50% of all buyers purchasing new homes were not represented by an agent. That’s right 50% of new home buyers bought their home utilizing the services of the agent that represented the builder. WOW!
Perhaps the REALTOR® community has done better job promoting the attributes of our services for buyers purchasing resale properties as opposed to new construction. Personally I don’t believe that this is the case. I think buyers perceive that the services of a REALTOR® are needed more for the purchase of a resale home. After all, there are the inspections to deal with, coordinating the moves and of course warranty concerns. Well guess what folks; you have just as many concerns on new construction. You still need to have an inspection, you still need to coordinate the move, you still have warranty items that arise within the first year of ownership and the list goes on.
Let’s examine some of the reasons why a buyer would want representation in purchasing new construction:
- Making certain that you, as the buyer, obtain the right home, at the right terms and conditions is the goal of your REALTOR®
- Not having representation to provide relevant sales data before making an offer, including how much the builders have been contributing to closing costs and handling the negotiations for the entire transaction can be expensive for a buyer
- The buyer’s agent does not cost the buyer anything, the seller pays the commission. So the thought that you can save money by not utilizing the service of a buyer’s agent may in turn cost you money.
- Understanding the contract and it’s time frames so the buyers interests are protected
- Handling the inspections and preparing any amendments to remove the inspection contingencies
- An educated buyers agent in Atlanta can compare relative data from various subdivisions and neighborhoods to provide buyers with the best comparisons to use in their decision making process, including detailed school information.
By law in the State of Georgia a buyer is entitled to representation. The law is called the Brokerage Relations in Real Estate Transactions Act. Georgia was one of the first states to enact legislation to protect consumers in real estate transactions. As the buyer of a new home in the Atlanta Real Estate Market, make certain that you are properly represented and that you have all the comparable data that you are entitled to so that you can make a truly informed decision. After all knowledge is power and you want to deal from a position of strength.
Mack Perry is an Accredited Buyers Representative, ABR, and represents buyers of both new construction and resale properties in the Atlanta Real Estate Market. For a confidential meeting to discuss your real estate needs and the exact criteria for your next homecontact Mack today.
Bank of America Mortgage Fees
December 6, 2007 | 2 Comments
At the end of October the was an article published in a San Diego Real Estate Blog about Bank of America doing away with their wholesale mortgage division. The article quoted officials at Bank of America saying that they would be concentrating on direct-to-consumer lending. The article went on to state that Bank of America had introduced it’s no fee mortgage program which would eliminate several hundred to a few thousand dollars in costs associated with closing a home loan.
At the time it was written, I stated that I have seen many instances in which a mortgage broker was able to offer better terms to a buyer than a Bank of America branch office. Guess what, this holds true today. Yesterday afternoon I went into a local Bank of America branch and saw on their bulletin board that they were offering 5.5% 30 year fixed rate mortgages. Wonderful, I thought. Here comes the kicker, the buyer had to pay 1.835 points to get the loan. Now what would that equate to on an average home? Let’s assume that the sale price of the home is $250,000 and the buyer is putting 20% down, that would leave a loan amount of $200,000. Now with 1.835 points (or 1.835%) the buyer would be charged $3,670.
A 5.5% interest rate on a 30 year fixed rate mortgage can be obtained through a morgage broker with out having to pay points. So the question is, why not utilize the services of a mortgage broker who shops various lenders every day in order to provide clients with the best possible terms available in the market.
