Tag Archives: foreclosure

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).

CHEAPER TO BUY THAN RENT

26 Monday Sep 2011

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I just placed an offer for a client who told me that he’ll be SAVING $450 a month by purchasing the condo we found for him.  He is actually SAVING money by purchasing rather than renting.  Really?  I asked him.  Does your calculation INCLUDE the monthly HOA (homeowner’s association) dues on the condo?  He assured me that it did – and that yes, he’ll save $450 a month.  Not to mention the money he’ll save on his income taxes.  Interest he pays on his mortgage is TAX DEDUCTIBLE, and in the early years of a mortgage, much of what you pay is interest rather than principal.  So he’ll see more savings add up when he files his income taxes with the I.R.S.

It’s unbelievable, isn’t it?  Why are so many people still renting?  My client assures me he’s going to spread the word to his neighbors in the apartment complex, and I hope to see more clients from there!  But why aren’t more people automatically following his lead, with interest rates as low as they are, and home prices bottoming out?  As long as my client holds on to his condo for a few years, chances are he’s making a heck of an investment – and saving money in the interim to boot!

One reason more renters aren’t purchasing, of course, is that many of them have been foreclosed upon or have had to short sale their properties (a short sale is when the seller sells the home for less than is owed on it, and the mortgage holder agrees to accept a reduced payoff).  If you’ve been through a foreclosure or short sale, you won’t be able to purchase a new home for some period of time.  (Typically, lenders tell me, a foreclosure will prevent you from purchasing for seven years, and short sale for at least three years, although these time periods can vary).  Then there’s another group of potential buyers who have relocated toAtlanta, but who cannot afford to buy a new home until their home in the former state sells.  And of course, it’s much harder to sell a home these days – you’re competing with all the foreclosures and short sales.

But if you haven’t had a foreclosure, short sale or bankruptcy recently, if you have steady employment and enough money for a down payment, it seems crazy NOT to buy.  The client in this example is buying a one bedroom condo in a great part of Buckhead for less than $50,000.  Just two years ago the same condo was selling for double that.  I have other clients who are looking at homes $200,000 and below – and we are finding LOTS of homes in that price range that they like.  They are having difficulty deciding upon which they like best.  Home prices are just incredibly affordable right now.

If you are currently renting, you owe it to yourself to explore whether or not purchasing a home makes sense for you.  Interest rates are again at record lows and who knows HOW LONG these low home prices will last – so please, call or email me or your other favorite Realtor – we’d love to help!