Category Archives: real estate

MAKING THE OFFER – when should I ask to close?

13 Monday Feb 2012

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Typically buyers placing an offer do so 1-2 months before they want to actually move.  So the “normal” time for a closing would be one to two months from the date the offer is placed.  In terms of WHEN during a month you should ask to close, if you close at the END of the month, you bring less money to closing – so most buyers want to close at the END of the month.  How it works is like this: unlike RENT, your mortgage payment is paid IN ARREARS.  If you close at the end of March, your first payment isn’t due until the first of MAY – you pay the first of May for the month of April (for rent, as you know, you pay at the first of the month for the month following – for example, rent is due April 1 for all of April).

Another consideration is this: when you own and occupy your home, you qualify for what is called “homestead exemption”.  It’s a partial exemption from property tax for your principal residence.  But in every metro county, you must own and occupy the home as of January 1st in order to qualify for the homestead exemption.  Therefore, if you are looking for a home in the fall or winter, you want to be sure to close prior the end of the year in order to qualify for the exemption.  My husband and I closed on our home at the end of December for this very reason.

Other than that, there really is no “right” time to close.  It’s entirely up to you.  Most sellers are not going to want to accept a contract to close for too long after the contract date, though, because it ties up the property and makes it unavailable to other potential buyers.  You can always try, but know that the seller is probably going to counter with a closing date closer in time.  Their thinking is – what if the property is tied up for those months, and then you, Buyer, fail to close?  During the time they were under contract, they might have found another buyer for the property.

Be aware, also, that if you are making an offer on a short sale OR on a foreclosure, all bets are off, time-wise.  Short sales can take months and months to be approved (if they are approved at all), so even if you ask for a fast close date, it’s not likely to happen.  You will make an offer and then, usually, wait – and wait- and wait.  Foreclosures can sometimes close quickly, but at other times also take some time.  The seller must be sure that the foreclosure deed is recorded and in the chain of title and that other liens have been cleared before they can sell the property to you. (While many liens are extinguished by the foreclosure, some liens, such as tax liens, survive foreclosure and must be dealt with by the seller before they can give you clear title).

WHAT I LEARNED FROM BUYING A HOME – STUFF

01 Wednesday Feb 2012

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So, I have sold hundreds of homes in my real estate career.  And each and every time I give my clients checklists of things to do.  But until I recently purchased another home (fifteen years after purchasing my first) I did not fully appreciate everything that must be done prior to move-in.  This first lesson can begin even before you find your dream home and get it under contract.

First, Goodwill is your friend.  Start putting aside items to take to Goodwill NOW.  A good rule of thumb is anything you have not used for two years – goes to Goodwill.  I am loathe to increase our landfill load, but I feel no qualms about giving to Goodwill, where I know the items will go to good use and the money to a great organization.  Start culling through your stuff now!  And while you are at it, start packing up off season clothes and other things you do not use on a regular basis.

While you are doing this – and this may be the most important piece of advice I give – mark each and every box with as much detail about the contents as you can muster.  Have thick masking tape you can write on handy for this purpose, particularly if some of the boxes you are using are from the grocery or liquor store and have no clear space for writing.  Label each box on the top and on two sides, so that no matter where or how you are storing things, a label can be visible.  For your box packing, you will want to have on hand a thick black marker, wide masking tape, scissors, a cutting knife, and clear box tape.

For boxes, many find the clear storage boxes from your local discount store to be a great help, particularly if you may be storing things even temporarily in a garage, carport or storage unit.  I love liquor boxes.  I do not drink.  But the boxes are substantial, and small – perfect for carting books, and the liquor store has a fresh and large supply every day.  Go to your local store (liquor or other) and ask when the best time to pick up boxes might be.  And of course you can always BUY boxes, but that always seems wasteful to me.

And be prepared for the emotional impact of this entire packing up process.  My husband keeps more “stuff” than I do.  But then, he has three children, now grown – but there is plenty of “stuff” that we want to keep for them, and for good reason.  So, you cannot rid yourself of everything that you do not use regularly when you are keeping things for others – and that’s just part of the process.

I must say, even with the many things we do not use and yet have kept for others, culling through what we have and ridding ourselves of so much “stuff” feels incredibly wonderful and freeing.  One of the best parts of moving is that feeling of freedom – of starting afresh.

WHAT I LEARNED FROM BUYING A HOME – GETTING A MORTGAGE LOAN

20 Friday Jan 2012

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I vaguely recall getting a loan when I purchased my first home.  And what I remember is that it did not seem all that difficult, but that the closing was a nightmare.  The loan officer did not show up for closing, there were charges on the closing statement that hadn’t been revealed to me previously, and the loan officer was nowhere to be found.  As a result, the closing was much more arduous and took a lot longer than it should have.

And while I work with clients every day who are getting a loan to purchase their homes, most of my clients work with my favorite lender.  He makes the process appear seamless to me as a Realtor.  He is patient, explains everything carefully to them, and always answers the phone or returns calls promptly.  So in recent years I have been less aware of what getting a loan is really like.

So when I convinced my husband that buying another home was a great idea, I was not really sure exactly what to expect.  I called my favorite loan officer.  And even though he made the process as easy as possible for me – I had forgotten all the information you need to provide for the loan – recent pay stubs, W-2 statements, tax returns for the last few years.  You will need to get with your lender and fill out forms, provide the documents, and then provide more documents as issues come up.  For instance, my husband was divorced from his first wife, but continued to pay alimony for a period of time after the divorce.  The lending underwriter needed to see the divorce settlement to determine when those obligations ended.  Why, I am not really sure.  But that is how it goes in the lending world these days.  The best advice I can give is to get all your important tax, account and legal papers together and organized and have them ready.  Some documents you may not even know that you need until the very last minute, when the loan goes through final underwriting.  Luckily, although the call came for that divorce document at the last minute and while my husband was overseas, I was able to locate it quickly in his organized files.

So, lesson one – have all important papers ready and handy and make sure that you have filed your income taxes regularly, particularly for the most current year.  I already knew not to make any large purchases between applying for the loan and closing.  Lenders do not like to see large sums of money going OUT of your account(s) during that time.  Now, lots of buyers purchase appliances, furniture, that sort of thing – if it is a large purchase, just run it by your loan officer before you do it.

The other part of this lesson is something I already knew: HAVE A LOAN OFFICER WHO IS ACCESSIBLE, AVAILABLE, AND RETURNS YOUR PHONE CALLS PROMPTLY.  Loans are more difficult these days.  You want someone who can guide you through the process and make sure everything goes great at closing.  Have what I had the second time – a seamless, efficient closing with no surprises that was over in less than an hour.  Do not have a closing like my first one – and you can avoid that by finding the right lender.

A REALTOR BUYS A HOUSE

12 Thursday Jan 2012

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I have been a real estate agent for almost a decade.  But until recent, I lived in the home I owned I purchased PRIOR to becoming an agent, back when the process was more mysterious to me than it is now.  In the past few years, it is no secret that home prices in Atlanta have tanked, crashed, bottomed out.  SO, I decided to take the advice I give my clients – buy a home NOW!  Interest rates are incredibly low, so are home prices – buying a home has never been more affordable and has never made more sense.

First I had to convince my husband that this was a good idea.  We love our home in a charming little neighborhood called ChanningValley, where the neighbors know one another, kids play in the quaint neighborhood park, and there are active garden and book clubs.  Our home is a ‘50s ranch that I renovated into a cute little cottage that is the perfect size for two people.  So why would we move?  Well, I told my husband, we can rent out our home in Channing Valley, make money every month from it – and use that money to leverage ourselves into a home that is even better for us.

Once I showed him what we could purchase in today’s market, and once we found an architect’s dream home – he was convinced.  And it has been the best process in the world for me.  I have a much clearer idea of EXACTLY what my clients go through in the home buying process.

First, there is the difficulty in deciding which neighborhood to live in.  I have a better idea of all the “neighborhoods” in Atlanta and their individual characteristics than my clients do, of course – unless you are a Realtor, you do not intimately know a large number of neighborhoods.  Part of my job is to help a client decide which neighborhood is best for them.  My husband and I knew this much: that we did not want to move more than five miles from his work.  (He works right across from the High Museum of Art).  Since as a Realtor my work is all over the metro area (as far North as Forsyth County, as far South as Peachtree City, as far East as Stone Mountain, and as far West as Douglasville), location was not as key to me.  My office is my car and it goes everywhere.

But even with that focus on my husband’s place of business, it was much more difficult to decide on a neighborhood than I imagined – there are so many that we love (Virginia Highland, Morningside, Ansley Park, Garden Hills… the list goes on, but all closer in).  And the number of available properties is staggering.  While with clients, I can generally know in very short order which home would be perfect for them by listening to their needs, wants, likes, dislikes, when it is a personal decision it is a lot more difficult.

This definitely helped me become more aware of my value in guiding clients in choosing a neighborhood.  A third party unbiased view is very helpful.  Ultimately, of course, it can be and must be the client’s choice, but a good Realtor familiar with the neighborhoods can be an invaluable asset.

What I learned from my own experience with this also, however, is that the “right” home might not be in your favorite neighborhood.  The home my husband and I ended up buying is farther out than we thought we’d be willing to move, and not in the “historical” intown neighborhoods that we so love.  We initially thought we had to live inAnsleyPark.  But when we got down to considering practicalities and our budget, a larger home a little farther out on a larger lot made a lot more sense for our lifestyle.

So, keep your mind open!  But also keep in mind that you cannot look “everywhere”.  It’s very important to be limited in geographic scope.  Consider traffic patterns – if you work downtown, you probably don’t want to spend an hour and a half every day in traffic.  Look for something closer in.  But if your Realtor suggests a neighborhood you did not think of, consider it!  If the home you love is in a neighborhood you were not considering, consider it!  It may be the perfect neighborhood for you.

AFTER THE INSPECTION – WHAT NOW?

15 Thursday Dec 2011

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NOW that we are through the inspection period, what happens now?  Here’s what you need to do:

  • Keep in contact with your lender – make sure that they have ALL documents they need from you.  Remember that they may come BACK and ask for more, different documents, depending what the underwriting department asks for.  Don’t worry – that’s normal.  Just get them any documents they ask for as soon as you can.  Email the lender to tell them you are THROUGH the inspection period and want to make sure they have all the documents that they need.
  • Let your agent know what TIME of day you’d like to close so that they (I) can get you on the closing attorney’s calendar and make sure that the time is all right with the seller.
  • Your agent will get you UTILITY INFORMATION.  But it’s probably best to wait until the week before closing to make the calls and arrange the transfer.  Sometimes companies won’t take your call until AFTER the seller has called to have the utilities taken OUT of their name (in other words, the seller must first call to have electricity turned OFF as of the day of closing – then you call to have it turned ON.  In truth, the utility company never actually disconnects – they just change the name on the account.
  • WATER is a special deal.  The City will require a copy of the signed SETTLEMENT STATEMENT before they will switch water to your name.  Go ahead and print out the application from online, fill it out and bring it with you to closing.  The closing attorney will fax it along with the settlement statement to the water department FOR you from the closing table.
  • PACK if you haven’t already.  Arrange a moving company.  Your agent can get you names/numbers if you want/need them.
  • If the seller has agreed to make repairs as a result of your inspection, you will want to check to make sure those repairs are done.  Hopefully you have requested that the seller provide receipts for any and all repairs either at closing, or preferably prior to closing.  If they are major repairs and you feel more comfortable doing so, you can pay your inspector to come back and inspect the repairs.
  • FINAL WALKTHROUGH – you will want to do one last walkthrough prior to closing.  This can be done on your way to closing, or the day/evening before.  You will be checking to be sure there has been no damage to the property and that all is in order.  IF there is something amiss, the seller is given the opportunity to correct it.  Obviously, if you do not discover it until right before closing, there’s not time for that.  You can either delay closing or ask the seller to put some amount of money aside as surety until the problem is fixed.

CONGRATULATIONS ON YOUR NEW HOME!!!

WE ARE UNDER CONTRACT!

12 Monday Dec 2011

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So, you’ve made an offer, the seller has countered, you’ve countered the counter… and after one exchange or many, you have agreed upon the terms of the contract.  What happens now?  First, you need to schedule an INSPECTION.

An inspection will cost between $350 and $600, depending upon the size and complexity of the home.   You want an inspector who is ASHI (American Society of Home Inspectors) certified.

My favorite inspector is Bryan Dilworth of Cornerstone Inspection Group.  Their website is http://www.atlantahomeinspector.com/ or you can call 770.436.2667 to schedule.  Chuck LeCraw, also an inspector, owns the company and he is great also.  They don’t charge you until the inspection is DONE, so you can schedule without worry (if you are calling before the contract is finalized, something happens and you do NOT get under contract, you won’t have to pay).

Your inspection company will ask if you want a RADON TEST. Radon is an odorless substance which emanates from natural stone in the ground.  It has been shown to cause lung cancer.   The main place we worry about radon is in a BASEMENT – and even if you do have a basement, if it is unfinished and you are not planning to finish it, it is not as crucial.  In fact, the radon testing protocol is that the radon is placed on the lowest FINISHED level, so they would put your radon test on the main floor if your basement it unfinished, where it is highly unlikely that there is any radon.  But if you have a FINISHED basement, I would absolutely order a radon test.

The only areas of town I’ve personally seen radon tests come back POSITIVE are near Chastain (just North of Chastain Park) and Tucker.  Both tests were done in finished basements.  I hear the closer you get toStone Mountain, the more likely they’ll find radon (it’s released from the granite).    What happens if they FIND radon?!?!  Well, you REMEDIATE it, which consists of plugging up any cracks and bare ground and in some cases, putting in a ventilation system.  It can cost 2,000 or so.  Not cheap.  If you discover radon during the inspection period, it is the seller’s job to pay for it.

Once you have your inspection, your inspector will issue a written report detailing everything he has found that is wrong with the property.  The average inspection report is 26 to 30 pages long, so don’t panic if yours is lengthy.  A lot of it will consist of general information and pictures. With me, your agent, you will decide what to ask the seller to fix, replace or repair – and thus the second big negotiation begins.  You must finish these negotiations within the due diligence period or EXTEND the due diligence period.

The seller can either agree to fix, replace or repair the inspection items themselves prior to closing, or can give you a monetary concession in lieu of repairs.  That monetary concession will have to pass muster with your lender.  Oftentimes a lender will NOT allow a check made out to a third party vendor at closing – instead you’ll have to negotiate more seller-paid closing costs or a reduction in the purchase price.

If the seller agrees to make repair, specify that receipts for those repairs will be provided at least three days prior to closing so that you can be sure that they are done and check to make sure that they are done correctly.

MAKING THE OFFER

21 Monday Nov 2011

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Okay, so you’ve looked and looked – and you’ve found the place that you want to buy!  What happens next?  First, have your agents pull COMPS.  COMPS are comparable properties that have sold in the area recently that will help you determine the value of the home that you want to buy.  Typically we start with homes that have sold in the last three months that are within a half mile radius that are “comparable”.  If there aren’t at least three comparable properties within those parameters, we expand the search – going out to a mile and back six months…. And so on.  Your agent can be an invaluable help in determining a fair price for the home and what you should offer.

Once you’ve determined what you’d like to offer, it’s time to put TOGETHER the offer.  We do this by filling out the GAR (Georgia Association of Realtors) Form – there’s one for single family homes, and a different one for condos.  Here are the elements of the offer: 

  • Purchase price you’re offering;
  • Amount of earnest money you’re putting up – standard in Georgia is to put up at least one percent of the purchase price, so for a $500,000 property you’d put up $5,000 in earnest money);
  • Amount of closing costs you’re asking the seller to pay:
    • This must be a SPECIFIC amount.  You can’t just ask the seller to pay “all” closing costs, or 50% of closing costs – you have to ask for a specific amount
    • Make sure the amount you are asking the seller to pay is not MORE than your actual closing costs.  Your lender can help you determine this
  • What DATE you want to close.  Typically you’ll need at least three weeks from making the offer if you are getting a loan (not paying cash) for the lender to underwrite your loan;
  • Due diligence period – this should be seven to ten days, unless there is a good reason to ask for more (say there’s evidence of structural problems, that sort of thing).  During the due diligence period you can terminate for any reason or no reason at all, and still get your earnest money refunded;
  • The closing attorneys you’d like to use; your Realtor can make recommendations for this – it needs to be an attorney who regularly does closings and who in on your Lender’s approved list;

In the stipulations, here are some things (among many) you may ask for (BUT keep in mind, that you might not want to clutter up your offer with lots of ancillary requests, particularly if the offer is a lowball offer):

  • Seller to provide a one year termite bond for Buyer
  • Seller to provide a one year home warranty for Buyer
  • Seller to provide a survey of the property for Buyer
  • Seller to have the property professionally cleaned prior to closing
  • There may be certain items in the property that aren’t listed on the Seller’s Disclosure as staying with the property, but which you want to remain with the property, such as:
    • A porch swing
    • A gas grill
    • A piece of furniture that is custom fit to a certain spot
    • Chandeliers, if not already being left; etc. 

In addition, there are often EXHIBITS to the contract that are necessary: 

  • Financing contingency – if you are paying for the property with a LOAN, you want to be sure that you can obtain financing
  • Appraisal contingency – this assures that the property must appraise for the amount you are paying, or you are able to get out of the contract
  • Lead Based Paint exhibit – if the property was built prior to 1978, you need an exhibit explaining that there may be lead based paint in the property
  • Plumbing disclosure – in some counties, like Dekalb, the county requires that you have LOW FLOW fixtures in order to obtain water service.  In those counties, there should be a plumbing disclosure attached to the contract
  • Seller’s Property Disclosure – this is attached to and becomes a part of the contract
  • Condominium Disclosure Exhibit – sets forth the monthly fees for the condo, etc.

Your Realtor will need your signature on the offer and exhibits, will need the earnest money check IN HAND (the Broker will deposit the check when you’ve reached binding agreement – otherwise, it will be torn up or returned to you) and a prequalification from your lender.

Now, the game begins!  Unless you’ve made a very good offer, chances are that the Seller will counteroffer, and the counteroffers will go back and forth until the parties reach agreement.  At this point, it is INSPECTION TIME – the subject for another blog post in the near future!!!

The Home Search

11 Friday Nov 2011

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A previous blog post was on how much money you’ll need before you search for a home – basically going through the down payment you’ll need, the money for an inspection or inspections, earnest money, closing costs and the like.  So, you’ve saved the money you need.  What happens now?

First, if you aren’t prequalified already, meet with a Lender and get prequalified.  This will let you know how much you can afford to pay for a home.  Even IF you don’t want to spend the entire amount you can qualify for, you’ll know how high you can go.  The other calculation, then, is at what price point you’ll be comfortable.  Consult mortgage payment tables, which calculate principal and interest at given interest rates, then remember to add in a sum for taxes and insurance.  The four elements of your monthly mortgage payment will be that: PITI, or principal, interest, taxes and insurance.

It’s definitely a good idea to figure this out BEFORE you start looking for homes.  There’s nothing more frustrating than looking at homes way above your price range and then discovering you have to settle for something much less.  Plus, when you do get ready to make an offer you’ll need a prequalification letter.  If you’ve already spoken to a lender, you’ll be able to get one of those quickly when the time comes.

Price often dictates neighborhood – and property type.  If you are in a lower price range, but set on living in Buckhead, for instance, you’ll need to look for a condo or townhome.  Your agent can help you identify, in your range, where it is possible for you to live.  We can then set up a property search accordingly.

We have lots of cool tools these days for that – I can set my buyers up on automatic notification, so that when a new home meeting their criteria comes on the market, they know immediately.  But of course, I also look at the new listings every day, and quiz other buyers about unlisted properties, to determine whether there’s something “new” out there for one of my buyers.

So, you search – and if you have targeted correctly, you might be able to find your dream home relatively quickly.  At that point, it is time to MAKE AN OFFER – which will be the subject of a future blog post… so STAY TUNED!!!

What’s Up? WOODSTOCK!

02 Wednesday Nov 2011

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So, my newest property listing is in WOODSTOCK, Georgia– just 24 miles outside of Atlantain Cherokee County. Woodstock is truly the all American city.  http://www.woodstockga.gov  The Towne Lake neighborhoods are especially impressive, AND there’s a country club one can join that is both affordable, available (no long waiting list) and which has an award winning golf course http://www.townelakehillsgc.com !  Downtown Woodstock is very charming and has some original buildings still standing.  This is definitely a place for you to consider if you are looking for a home!

Let me tell you just a few fascinating facts about WOODSTOCK:

    • Woodstock was first settled in 1830, when Georgia was still part of the Cherokee Indian Territory (in 1838, the Cherokees were forced into Oklahoma and the area became part of the State ofGeorgia)
    • Cotton MADE Woodstock, as it did many Georgia cities
    • The railroad depot in downtown Woodstock (pictured here) was built in 1912 and is on the National Register of Historic Places
    • By that time,Woodstock has a thriving downtown business district.  Many of the old buildings remain, including the Dean Drug Store, which is now the Woodstock Visitor’s Center (where I met a very helpful Kyle Bennett (thank you, Kyle!) who helped me with all this information)
    • As the decades rolled on, Woodstock became what it is today – a great place to live combining history with modern day convenience
    • The city has an amazing Greenprints Trail system – 60 miles of trails in development – much of which is already walkable
    • For those who prefer two wheels, self motored, there’s the Taylor Randahl  Mountain Bike Trail, widely acclaimed among mountain bikers and a great way to spend a Saturday http://www.singletracks.com/bike-trails/taylor-randahl-memorial-mountain-bike-trails-at-olde-rope-mill-park.html
    • There are brand new homes and townhomes by John Weiland going up near downtown and a  new 6500 seat amphitheater will open in 2012; Woodstock is growing, even in this economy!

My new listing is in an area called TowneLake, a master planned community about 2 miles due west of downtown Woodstock, in an area known as the “Thousand Acre Woods”.  There is no actual Towne Lake– but there’s lots of nearby water recreation available in the form of Lake Allatoona, one of metro Atlanta’s popular lakes.  Towne Lake is well known for its golf courses and for being a great place to  live!  Here are some pictures of my  new listing ON THE GOLF COURSE, 316 Ironhill Trace, listed for $350,000.  Let me know if you or someone you know might be interested in this wonderful home!

“THE MONEY YOU NEED TO BUY A HOUSE- PART TWO”

21 Friday Oct 2011

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So, what other money  do you need on hand prior to closing?  Although you pay the down payment at closing, you will need to show a seller that your offer is in earnest by offering an earnest money check at the time the offer is made.  In Georgia, the typical earnest money offered  is one percent of the purchase price.  That money is held by your agent’s Broker, and then is credited to you at closing.  If you terminate within the due diligence period (the subject of another blog post!) you get your earnest money refunded.  If you do not terminate within that period, and fail to close, the earnest money is at stake, and could be claimed by the Seller.

The other costs involved in purchasing a home are the INSPECTION, which varies according to how big the property is and how high the purchase price, but which cost $350 and up.  Some buyers choose to also test for RADON – which will run $150 and up.  Radon is an odorless gas that is emitted from the ground and which has been shown to be a factor in some illnesses, such as cancer.  In my experience, most radon tests in Georgia come up negative for radon, although there appear to be pocket areas where radon IS found – around and near Chastain Park, and on the east end of town (towards Stone Mountain).  If the radon is found to be above EPA recommended levels, then it should be remediated – and the Buyer will usually ask the SELLER to pay for that.

Your lender may require you pay for the credit check, appraisal, that sort of thing prior to closing to be sure you are actually going to close with them.  I’d budget $500-$1,000 for that.   If you pay for those prior to closing, but they will reduce your closing costs AT closing.

SO, this gets us to the final costs – closing costs.  One lender gave me the formula 1.7 percent of the loan amount plus $1700 in fixed costs.  That’s a VERY rough estimate of what your closing costs will be.  Obviously, the closing costs will vary depending on many factors.  You *can* (and many buyers do) ask the Seller to pay all or a portion of your closing costs.  The loan you have will determine HOW MUCH of your closing costs the Seller can pay – they will often be limited to three percent of the loan amount, and you’ll need to pay the rest.

I hope this helps!!!  If you need more specific guidance, please do not hesitate to contact me and let me know how I can help you!!!