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!

Lesley and I had the pleasure of working with Ravi and Satya as they sought a new home in the Sarah Smith school district in Buckhead after relocating from Chicago earlier in the year.  We closed earlier today.  Ravi and Satya were referrals from past clients, Eric and Joyce, and we loved working with them. 

We were able to find Ravi and Satya a beautiful home in the Wieuca Trace neighborhood at a great price, and I think Lesley and I are just as excited as they are about the find.  Thank you again to Ravi and Satya for giving us an opportunity to help!  We are looking forward to the house warming party!

Lesley and I both are  proud members of the Atlanta Board of REALTORS®  I had the pleasure of attending a recent Atlanta Board event.  One of the topics was “What is a REALTOR®?”  Before I became a real estate agent, I just assumed that everyone was considered a REALTOR® if they were in the business.  I would also sometimes refer to these people as Real-a-tors.  It wasn’t until I became a REALTOR® that I really realized what this designation means to me and to the people who utilize my services.  I quickly learned that real-tor is the correct pronunciation, that it is spelled in all caps, always had that circled “R” symbol, and that actually being a REALTOR® was different than being just a real estate agent. 

All real estate brokerage houses don’t require the membership of its agents in a Board of REALTORS®.  Our Keller Williams offices require it with no questions asked.  Now, why would they be so insistant on its affiliates joining? 

1 - Code of Ethics - the REALTOR® Code of Ethics is at the forefront of the REALTOR® designation, and it provides an important difference to consumers.  All real estate agents are required to understand and operate under state mandated licensing laws, but only REALTORS® are held to a higher standard.

2 - Accountability - The Atlanta Board of REALTORS® mitigates disagreements and conflict between its members.  A violation of the code of ethics and a member finds themselves facing harsh consequences such as fines, suspension of Board membership, suspension of MLS access, etc.  This sort of accountability amongst the members creates a self policing that makes all of its members better.

3 - Community - the Board has a long-standing history of supporting the local community. In the past several years, the Atlanta Board of REALTORS® has sponsored building several Habitat for Humanity homes through the Atlanta Chapter.

4 - Awareness - membership in the Atlanta Board of REALTORS® places an agent in one of the most powerful and influential grassroots lobbying efforts in the country related to real estate issues affecting the industry.

5 - Networking and Exposure - by being a member, your listings appear on one of the heaviest searched site for homebuyers in the nation, www.realtor.com.  In addition, through various networking and educational opportunities members are able to promote their business and listings to their colleagues in a professional manner.

These are the top 5 benefits of being a REALTOR® as I see it, and why every agent should seek this designation.  It kind of makes you wonder about those who aren’t members, doesn’t it?  The more pressing question is always, “What’s in it for ME?”  I understand that everything I do and say should probably be followed with a “So what?” 

Here’s what’s in it for you and why you should use a REALTOR®:

Educated students of real estate law who understand the law and work to ensure you have the safest transaction possible.

Ethical leaders who understand and are willing to do the right thing even though it may mean more work on their part.

Community minded people who understand that a home is more than a place to live.

Politically active advocates for the real estate industry, helping to protect all of our investments.

Well connected professionals always searching to expose you to more than the average agent.

Lesley and I would love to show you the benefits of having a REALTOR® on your side first hand.  We want to be the difference maker in your real estate transaction.

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.

Simple Math:

Amazingly Low Rates + Depressed Home Values + Vast Inventory

= First Time Homebuyer Heaven

If you are a first time homebuyer sitting on the sidelines, your amazing opportunity window may be shortening as the home market is poised to rebound.  For months we have been proclaiming the dubious position that first time homebuyers are finding themselves in.  We have been fortunate to work with more than a handful of first time homebuyers this year, and I’m always blown away at what is out there waiting for them. 

Great Mortgage Interest Rates!  I heard my dad and my father-in-law for the last few years tell me about how high rates were “back in the day” of the 1970’s and 1980’s.  10-12% interest rates were not only common, they were pretty darn good.  We have really been spoiled here recently.  In fact, rates dipped below 6% again this morning, and they appear to be going lower according to our friends at Countrywide Home Loans.  If you are floating in the short term, waiting for interest rates to drop further, I encourage you to lock those rates.  With the volatility we are seeing in all the financial markets, anything could happen.  You may lose a little on your rate by locking, but you could also look like a hero on these sudden spikes we’ve seen in the last couple of weeks.  Adjustable rate mortgages may be tempting, but with rates this low and if you can afford to do so, lock your rate for 30 years and forget about it.  You’ll be glad you did.

Home Values are Down!   The Median YTD September 2008 sales price was down 10.3% versus the same period in 2007.  Foreclosures represented over 23% of the overall sales in the 3rd Quarter.  As mentioned before, you can’t always consider a foreclosure a good “deal”, but you sure have to look at them in this market.  It’s an equity cash grab if you find the right one.  Sellers received 93% of their list price in the 3rd Quarter, which is 3.5% worse than the same time last year.  The sellers are finally starting to accept the market, which is even further good news for the homebuyer. 

Inventory is Still High!  There is a 12.3 month home supply in the market right now, which is 20% higher than the same time last year.  However, it’s important to note that the home supply has dropped each of the last two months as this market attempts to correct itself.  A 6 month supply of homes is a good balanced market to give you a point of reference.

Other great benefits in this market for first time homebuyers include the fact that 75% of all home sales included seller paid closing costs!  FHA loans are available with 3% down, which can be in the form of a gift.  The other good news is that we are entering the winter months when home sales typically slow down, making an offer even more attractive for a seller. 

If you are considering buying a home for the first time or for the fiftieth time, there truly could be no better time than right now.  We have received high praise from our clients for our consultative approach, making the homebuying process a simple and enjoyable experience.   We would love to help you.

All statistics are cited from Chartmaster, 3rd Quarter 2008 Metro Atlanta Profile: Single Family Detached Residences.

The Peters Company believes in the power of information, and we are constantly updating our clients with news and views on all things real estate through a variety of media including electronic and print.  If you’d like to be added to the mailing list via email and/or regular mail, simply contact us at andy@thepeterscompany.com.  We would love to keep you posted!

When a home goes on the market that is overpriced, the market rejects it and it fails.  A failed listing can come as a withdrawal from the market or an expired listing.  Either one is not good if your goal is to sell your house.  Most of the time a “re-list” is accompanied by a price reduction, more time on the market, and further frustration. 

Here are the ChartMaster statistics showing failed listings in Metro Atlanta over the last three years:

3rd Quarter 2006 - 47.8% of listings failed

3rd Quarter 2007 - 62.5% of listings failed

3rd Quarter 2008 - 66.9% of listings failed

With the trend going up, it’s a black eye for our industry.  It shows that more and more people are pricing their homes too high.  Maybe its caused by denial.  Maybe its caused by greed.  Maybe its caused by real estate agents who don’t know the statistics.  I think it’s a little of all three.  We all need a good dose of reality.  As mentioned before, you can’t play to the possibilities in this market.  You have to play the percentages.  Selling homes in this market is not difficult, although it’s more difficult than before.  People are still buying homes, but you have to be well priced to attract buyers and you have to be “best dressed.” 

Now more than ever you need a realtor to sell homes, and you need that realtor to be realistic and proactive.  The Peters Company has built a reputation for selling homes in the least amount of time (30 day average days on market in 2008) for the most amount of money (96.6% of sales/list price in 2008).  How do we do this?  It takes the right statistics and the right reaction to those statistics along with a dedication to overservicing and overdelivering.  We tell all of our clients when they have chosen to do business with us that it’s always “us” against the market.  If we can beat the market, it’s a win for our clients and it’s a win for us.  Let us show you how we do it.

The Peters Company has moved into 2nd Place amongst teams in the Keller Williams Realty Peachtree Road office!  We want to thank all of our wonderful clients that have helped us prove you can succeed in this industry, no matter the market.  We are relentless in our pursuit because we are so passionate about this business and the opportunities that it presents you and all of our clients.  Don’t forget to check us out on Kudzu.com where our past clients have rated and reviewed our services.  Thank you again!

Liquidity is a term being thrown around a lot right now as banks clamor to secure deposits so they can in turn lend money.  The long and short of it is that there is still a lot of money out there, but a lot of people have pulled money out and are sitting on the sidelines waiting for this mess to settle down.  These giant peaks and valleys we have seen in the market are a perfect example of that “sideline” money jumping into the market and then dumping.  Don’t expect that trend to end any time soon.

This liquidity challenge has changed things in the lending industry.  It’s a little harder to secure a loan these days, but there are still plenty of loans being made.  Don’t panic!  Lenders were destined to become more cautious with their loans, because they were so greedy reckless during the boom of 2003 through the beginning of 2007. Their carelessness has created the newspaper headlines we see today describing delinquencies and foreclosures, made worse by falling home values.  Here’s some things you should expect in the wake of the recent financial greed party situation.

You will need more documentation to secure a loan.  This simply means that lenders are doing more than the quick check of credit to preapprove buyers.  Expect lenders to request W-2s, tax returns and bank statements more times than not.

Private Mortgage Insurance standards have tightened.  When a buyer doesn’t put down at least 20% down on the purchase of a home, most lenders require private mortgage insurance (PMI), which is to insure the lender upon your default.  By the way, the buyer foots the bill for the monthly premium payments.  Some mortgage insurers are refusing to insure properties that fall into a declining market category as determined by their independent research.  This leaves buyers scrambling to hold deals together.  The fine folks at the FHA have stepped in to help in these cases with the only downside being you’ll have to use a lender that has FHA certification.

Fannie and Freddie are passing along fees.  Before the government took over Fannie Mae and Freddie Mac, the two entities started adding fees onto mortgages for consumers or passing along through increased an interest rate.  These are often times referred to as “loan level adjustments.”  These fees are being reevaluated currently as they are seen as an obstacle in supporting affordable housing.

Jumbo loans are tough.  Jumbo  loans are issued for mortgages of $417,000 or more, and these jumbo loan rates are higher than rates on conforming loans considering theres’ more at stake for the lender.  Many lenders are requiring as much as 12 months’ worth of house payments in readily available savings in order to secure their jumbo loans.  With higher jumbo rates, many borrowers are turning to 5/1 adjustable rate mortgages to help bridge the gap. 

On a positive note, rates have been falling here recently on an apparent reaction to the Fed’s rate cut on the 8th of October.  Despite challenges on the documentation and qualification side, money is inexpensive to borrow, and my contacts in the industry suggest that the mortgage rates will continue to fall.  Today’s 30-year fixed rate was at 5.625, and I almost fell out thinking about it going lower.  If you have good credit, there’s absolutely nothing to worry about.  The developments mentioned above shouldn’t affect those with good credit much, if at all.  The first time home buyer really will not know much of a difference, but just be prepared if this is not your first home purchase.  A little bit has changed recently.  Nonetheless, it’s still an amazing opportunity to buy, and you will be rewarded for your inconveniences with an excellent interest rate. 

Lesley and I work with some wonderful lenders that, like us, simplify things for you.  You can click on “Vendors” under the “Resources” tab on www.thepeterscompany.com to see some of our recommendations.