They all say buy now. 

As is typical, Keller Williams is leading the charge with more valuable statistics and views on our real estate market.  This is a great short and sweet 6-minute update one what’s going on.  You should see this.

In another sign that the government is going to do whatever it takes to get us out of this mess, the Fed rate was cut again last week, which has created another dip in mortgage interest rates.  Despite tighter lending requirements, this market is going to make a lot of smart people a lot of smart money.  Smart money is already starting to move in.  Our phones are buzzing over these historically low rates, depressed home values and inflated inventory levels.  If you have been considering buying a home, now is without a doubt the time to explore it further.  If you have been considering buying a second home, now is the time to explore it further.  If you have been considering selling and moving up, now is the time to explore it further.  If you have been considering refinancing, now is definitely the time to consider it.   We are very skilled at interpreting the market, getting homes sold quickly, and finding amazing opportunities for our clients.  Let us show you how to maximize this market.

Considering what’s going on in the real estate market, you have a tremendous opportunity.  This opportunity requires you to make a decision though!  You have to decide if you are going to be a pioneer or a settler.  No, you’re not playing a game of Oregon Trail so calm down you children of the 80’s.  So what’s the difference and what are you?

pi⋅o⋅neer   [pahy-uh-neer] - one who is first or among the earliest in any field of inquiry, enterprise, or progress: pioneers in cancer research.

set⋅tler  [set-ler, -l-er] - one who establishes himself in a new region.

A pioneer in this real estate market is quite honestly a smart buyer, keeping in mind that the money to be made in real estate is not in the up time.  It’s all about buying low and selling high in those up times.  If you’re one of the few who is buying a primary residence with no other strings attached (such as, not owning another home somewhere else and/or having the good fortune of selling your previous home), words can’t describe the opportunity before you.  You can be a pioneer by simply buying smart.  Many homebuyers are sitting on the sidelines waiting to see just how low things can go.  I believe at the end of the day those folks will be very sorry considering inventories are high (although falling and showing promise of a turnaround) and rates are in the low 5% range (and sure to rise). 

If you already have a home which you are bound to for various reasons or maybe you have no desire to move, you can be a pioneer too.  Investment property, which I have talked about previously, is a golden opportunity for you to actually experience a return on investment RIGHT NOW.  Have you looked at your 401(k) or securities accounts lately?  Returns?  What’s that?  Learn the value of cash flow, buy an investment property, build equity, and sleep well at night Mr. Pioneer.

The alternative is to be a settler, the person that follows the market and the crowd.  When it’s just about to crest, you are buying and following those clever pioneers.  The bad news is that crest soon turns into a valley, and there goes your profit, your equity, or even worse your property.  Sure, you can make money as a settler, but literally every day you wait costs you money. 

As your real estate consultants, our job is to advise you and keep your home search or home sale “between the ditches,” as my grandfather used to say, teaching me to drive his old truck on dirt roads in south Georgia.  Simply put, we win when you win, and that includes finding values, negotiating values, and facilitating a smooth transaction.  The moral of the story is, as in all of life, you have a decision to make.  If you can afford to do so, be a pioneer.  Your long term wealth will thank you for it later.

As always, we’d love to be your home base for all your pioneering needs.

If you get the Metro Atlanta Real Estate Update from us then you have already received a peek at the falling mortgage rates.  If you are not getting the Metro Atlanta Real Estate Update, first of all WHY?  Second of all, there’s always time to get signed up.  Email me at andy@thepeterscomany.com for the weekly email update on all things relating to our market.

The Fed was looking for a way to expand lending, and the expanded rescue has done just that.  Mortgage rates tumbled as much as a half of a percent on Tuesday and are the lowest they have been all year.  The Peters Company has been calling this for months, and it couldn’t have come at a better time.  People are swarming to refinance as the volatility leaves everyoe worried that this is a small blip and that the rates will surely jump back up.  I wouldn’t play around if you are considering refinancing.  Sure, the rates could go lower, and they probably will slowly.  However, I’m not willing to take the chance given where we are in the low 5% range.

So, what does this opportunity to refinance mean for the economy?  Well, perhaps the best thing is that it potentially frees up more money for consumer spending, which is something very much on the minds of all of us churning towards the holidays.  The auto industry could use a little bit of that money I believe, but perhaps the best thing that could come of this is to fight off continued talk of a recession.  On this eve of Thanksgiving, lets all be thankful that our government is being proactive in its attempts to navigate the financial storm.  As always, we will come out of this stronger, and hopefully wiser.  Hold on to your seat.  Don’t get too high, and don’t get too low.  Keep thinking like a buyer, and Happy Thanksgiving.

For more information on the good news, click here for more from the Wall Street Journal, and go lock some rates if you are floating!

As one real estate agent or a team of real estate agents or even as a company of real estate agents, there’s certainly things we can do to impact this market.  I think the most important thing is that we have a positive attitude and remain opportunistic, work harder and smarter to ensure that our clients are receiving the highest level of service possible in a time when there’s a lot of finger pointing and shoulder shrugging.  Perhaps one of the best things we can do as real estate agents is pool our voice and become better advocates for our industry, an industry that affects virtually every family in the nation.  One of the benefits of being a part of the National Association of REALTORS® is that as one we are rather quiet, but as a group of REALTORS®, we have a tremendous voice.  As further evidence of the NAR’s committment to furthering our industry, the organization has put forth a 4 Point Plan aimed at “tweaking” the previously passed Emergency Economic Stabilization Act.  I believe that Act was monumental at a time when we all needed stability, but as time passes, there appears to be weaknesses that might miss the mark in truly impacting in the areas originally intended.  Lesley and I support the National Association of REALTORS®’ plea for more.  NAR has urged Congress to include the following provisions in any future legislation as part of this 4 Point Plan:

1. Make the $7500 tax credit available to all purchasers and eliminate the repayment requirement.  The credit’s limited availability and required repayment terms have severely limited the credit’s appeal to potential homebuyers.  As a result, the credit has not been widely used or proven effective at stimulating sales. 
2. Make the 2008 FHA, Fannie Mae and Freddie Mac loan limits permanent.  New rules for 2009 would significantly reduce the FHA, Fannie Mae and Freddie Mac loan limit from their 2008 levels. Now is not the time to limit the availability of affordable mortgages. 
3. Get the Emergency Treasury bank relief program back on track by targeting more funds to mortgage relief efforts and increasing efforts to mitigate foreclosures.  Don’t just give the banks unrestricted cash. Make the program work to improve mortgage and housing markets as it was originally intended.
4. Permanently bar banks and banking conglomerates from engaging in real estate brokerage and management.  The banks have proven they have enough to do to simply properly manage their current lines of business.  Do we really want them to manage the home buying process?  Imagine what could have been the situation now if they already had the added ability to engage in real estate sales.

The economic turnaround is, of course, complicated, but there is little doubt that stabilizing the real estate market by shoring up the lending market and finding ways to get money moving in and out is a neccessity.  Stay tuned for updates on how these changes are being accepted and more importantly implemented.

Sometimes real estate agents actually have time to look at real estate for themselves.  It’s true.  Believe it or not.  We just closed our 20th transaction of 2008 last week, and we had a day to exhale.  So what did we do with our couple hours of solace?  Lesley and I perused rental property, of course.  And why not?  Rates are pushing towards 5.5%.  Inventory is still high at over 12 months’ worth.  The winter months are upon us when everyone is expecting slower activity.  I honestly believe that lower offers will be considered during this time because the likely alternative for sellers is waiting until the spring when the wave of buyers wakes up and hops in the car with agents.  I expect the Spring to be a different market for the better in our industry, which leaves us in a deep valley through the cold winter.

Do we need a second home?  Do we need a rental property?  Of course not.  Real estate investing takes a lot more time than traditional investment paths.  However, when you consider dumping your money in the topsy turvy stock market or hiding it in a low yielding money market account, real estate investing looks more and more favorable.  Right this minute you can buy with as little as 5% down and cash flow a property on a rental.  Are we all crazy for not considering it?   The valley won’t last.

So, what does a good rental property look like?  How do you find them?  Thanks to a recent article in AJC from John Adams.  Here’s an exceprt that gives a great roadmap:

Prime candidates for a rental program would be houses that were less than 10 years old and have recently been through the foreclosure process. Because of the slow-selling market and the bad loan on the house, it now is being marketed as a “bank-owned” home. Most lenders require that buyers accept their foreclosures in “as-is” condition, and that the lender not be required to disclose any defects or problem areas. Because these preconditions are unacceptable to today’s picky retail buyers, the banks have been forced to lower their prices on many of these houses.

Today’s ideal rental house would have three bedrooms and two baths, would be purchased for well under $100,000, would require less than $10,000 in repairs, and would be located in a neighborhood of primarily owner-occupants. Proximity to a major employer would be icing on the cake. Such a house could be purchased and repaired, then placed in service with rent approaching $1,000 per month. Then the investor could recoup his total investment in a new fixed-rate loan, and still end up with a monthly profit of $200 or more.

Unfortunately, recent Fannie Mae restrictions have prevented the majority of experienced investors from participating in this activity. These restrictions have slowed the absorption of foreclosed homes in the Atlanta residential market. Specifically, no applicant for a rental property mortgage can be approved if the applicant already shows four or more home loans on his credit report.

The moral of the story?  Don’t have more than 3 rental properties.  Just kidding.  The moral of the story is make sure you purchase a home that cash flows.  There are plenty of avenues for consumers to find these opportunities.  A great place to start is our Home Page > Find a Home > Search.  For a more detailed search, Lesley or myself would be happy to set you up using one of our tools called “Client Gateway.”  Client Gateway is an automated search using criteria you determine where the lastest listings that meet the need are automatically emailed to you.  We find this tool to be incredibly helpful for clients who are specific in their search and need to drill down a little bit more than the typical web searches.

Don’t be afraid to at least look at what’s out there.  I can assure you that the real estate investor community is looking, and that includes these real estate agents.  Happy hunting, and let us know how we can help.

I read a lot of blogs.  I get a lot of new updates.  I sift through a lot of stuff to bring you what I hope to be valuable content.  I found a great update on the foreclosure situation including statistics suggesting foreclosures are up 25% from October 2007 but only up 5% from September of this year.  Is the carnage beginning to slow down?  Are the government programs starting to help?

Here’s a great video from The Wall Street Journal and Delores Conroy, a real estate economist from the University of Southern California.

http://online.wsj.com/video/programs-helping-slow-foreclosures/E822DF82-B800-4BEF-9BCD-01144D141D80.html

Keller Williams produces and distributes very useful information.  The video included below is a nice review of the national market for the month of October including statistics and in depth analysis.  I encourage you to take a look if you are interested in the macro view of the real estate market.  Keep in mind that our goal is to ALWAYS keep you up to date with the micro view in the metro Atlanta area.  You will see local statistics scattered between here, our mailings, our email updates, our Facebook update group, and our Active Rain blog.

Perhaps one of the greatest statistics:  If interest rates go up 1% that represents a 10% increase in the purchase price.  Interest rates are incredibly low and fell again last week.  Don’t wait too long to take advantage of this prime opportunity to buy your first home, your first investment property, or move up.

The Peters Company is very fortunate to have outstanding relationships with some of the nation’s most reputable lenders, with no strings attached I might add.  One of the benefits of these type relationships is great updates on the market and relevant consumer information.  I must take this opportunity to say that we, The Peters Company, do not gain financially from recommending anyone from lenders to inspectors, vendors, etc.  We gain only piece of mind when we know that our clients are receiving exceptional service from lenders and vendors we know and trust.

Those of us who have bought a home before know that trying to decide on a mortgage lender can be a stressful process that can leave you wondering whether or not you are getting the best “deal” possible.  I find the need to negotiate everything.  It drives Lesley crazy, but it’s the truth.  I love to negotiate.  I always looked at the selection of my mortgage lender to be an opportunity for me to exercise my negotiation skills.  I love this article by our friends at Countrywide Home Loans because it really helps you understand what you should be looking for and what is just “smoke and mirrors” sales jargon.  Today I feel a little differently about selecting a mortgage lender.  I think first and foremost that it’s important to find a lender that you are comfortable with, someone who you like and trust.  Much like the real estate buying and selling process, the lending process has its fare share of ups and downs.  You want to make sure that the lender you select is there for you and someone that gives you honest, well founded guidance.

From Countrywide Home Loans, courtesy of Scott Meldrum, Robert Gilbreath and Kim Nehiley:

Many, probably most, consumers will talk with more than one mortgage lender when applying for a home loan.  They will want to get the “lowest” rate, or the “best” terms, or something along these lines.  If consumers are going to be shopping an industry that they are not familiar with, I believe it becomes our job to make sure that they are an “informed consumer”.  So let’s look briefly out how to correctly shop for a mortgage.

If It Seems Too Good To Be True, It Probably Is…

Yep, no big surprise there.  Most realtors and lenders have heard a client say, “Well, Mortgage Company X said they can do my loan at a 5% interest rate, no money down, and they’ll pay all my closing costs!”  Here’s the deal, while some mortgage companies may portfolio very specific types of loans for very specific types of borrowers, allowing them to offer better terms or rates, generally speaking, all lenders get their money from the same places.  Thus, all lenders, on most loans, should be closely aligned in terms of interest rate and programs offered.  So, if it seems too good to be true, you’d better start finding out where the hook is.

Make Accurate Comparisons…

Lender fees to Lender fees.  That’s it. Don’t compare one lender’s bottom line to another lender’s bottom line.  Lenders are responsible for quoting estimations on third-party fees, but they DO NOT control them.  And some might under-quote those fees to make their bottom line seem smaller.  Always and only, lender fees to lender fees.   And no matter what a lender says their APR is, get a Good Faith Estimate from them to verify fees.

Rates Change Daily, Sometimes Hourly…

Recognize that mortgages are instruments of investment, like stocks, and therefore change their accompanying interest rate on a daily, sometimes hourly, basis.  It is completely pointless to get a quote from Lender A on Tuesday and then get a quote from Lender B on Friday. This would not be an accurate comparison and you’ll just end up driving yourself crazy trying to figure it out!  If you’re going get quotes, figure out what lenders you want to talk to, sit down on the phone, and call them one after another, receiving not just an interest rate quote, but a full list of the terms that go with it (discount points, prepayment penalties, etc.).  For example, make sure that one comparison isn’t using higher fees to get a lower rate, or conversely, using a higher rate to quote lower fees.

No matter your political views, the resolution of the election means good things for our economic condition.  The whole financial world, including the real estate market, can finally take a deep breathe and stop saying, “Let’s wait till after the election.”  That day has come, and I think everyone is looking for some stability.  I believe either candidate would have provided this stability, but the most important thing is action and quickly.  The President is no savior.  In fact, it’s the advisors that President elect Obama appoints that we should probably be taking a closer look at when he announces them. 

The election elated some and dissappointed others, but no one can discount the fact that there is energy after the election.  Perhaps that’s all we needed.  As mentioned here before, I feel like the Atlanta real estate market is already feeling the bottom and well positioned to recover.  I feel confident in proclaiming that it can only get better from here.  Gas prices have come back to earth.  Interest rates are caving.  In fact, now they are back under 6%.  Inventory is coming down, and prices are stabilizing.  If you can’t see the neon “Buy Now” sign, then you might want to schedule an appointment with your optometrist.

President elect Obama’s policies will build on plans already set in motion to improve our industry.  The bailout is helping to get more money moving in and out of the real estate market with increased liquidity amongst lending institutions.  The Fed has cut the rate helping make money less expensive to borrow.  This will help us attract more buyers in the form of lower borrowing and mortgage rates as the dust continues to settle, and the bailout will help generate increased competition in the market from lenders.  We still need further protection from mounting foreclosures in the real estate market, and I expect we’ll see more money moving in that direction in the form of loans and guarantees to the larger institutional lenders.  It’s not just the banks that need help though.  What about the homeowners left holding the bag forced to file for bankruptcy due to adjusting adjustable rate mortgages and risky creative financing during the boom years?  It would be real easy to say, “Sorry,” and continue the tsunami of foreclosures.  We will see more programs designed to help homeowners refinance on the cheap to avoid foreclosure and save their homes.  The new President has to address the lender and consumer side of the ball if he wants to fix this housing situation, and I think he will out of neccessity. 

 So, no matter your political views, we all need to take advantage of this new energy, and take advantage of our opportunities because it doesn’t take incredibly long for a valley to be a peak.  This economy will be back.  This housing market will be back.  As always, we will be here finding deals for buyers and securing the best for our sellers, no matter the market and no matter the President.