As if first time homebuyers needed another reason to buy a home besides historically low interest rates, depressed home values, and escalated inventories, the federal government has sweetened the deal.  Currently under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately.  Buyers can claim the credit either on their taxes or in some cases apply it directly at closing.

Here’s how it works:

* The $8000 Tax Credit CAN be used toward additional down payment (above the 3.5% required by FHA), closing costs and prepaids in any situation.

* The $8000 Tax Credit CAN be applied by amending the 2008 tax returns for a 2009 purchase.  The refund will have to be processed and then returned to the customer to be applied for down payment.  See www.irs.gov/newsroom/article/0,,id=205416,00.html

* The $8000 Tax Credit CAN be applied to the required minimum investment of 3.5% down payment if the credit is delivered through a Government – FHA Approved Non-profit.  Since HUD is not overseeing the process of repayment, no non-profits to date have agreed to advance the money as they are unsure how they will be able to guarantee their re-payment.  A list of FHA non-profits has been attached for your review here.

NOTE: PLEASE be very cautious with the companies that are claiming to monetize the tax return as there are several companies offering this service at exorbitant rates.  Make sure you talk with your lender before you become a potential victim of fraud.

With the opportunities available to today’s first time homebuyer, it is important that you have a real estate agent who’s on your side.  You need an agent that will help you make the best investment for your future while meeting your short and long term needs and goals.  Andy and Lesley Peters with The Peters Company at Keller Williams Realty are proud to represent buyers in the metro Atlanta including Downtown Atlanta, Midtown Atlanta, Brookwood, Buckhead, Brookhaven, Decatur, Sandy Springs, Chamblee, Dunwoody, Norcross, Smyrna, Kennesaw, Marietta, Roswell, Alpharetta, Cumming, Duluth, as well as other surrounding metro Atlanta areas.  As homeowners and agents, we have lived and worked inside and outside the perimeter, and we appreciate the benefits of both locations.  For more information about The Peters Company, visit our website at www.thepeterscompany.com. You’ll also find us on Kudzu.com under “The Peters Company” where we have received well over 40 5-star reviews and are ranked as Atlanta’s highest rated real estate team. Give us a call today at 770-634-2782. Whether buying or selling, it would be our pleasure to help you maximize your opportunity and take advantage of this real estate market!

Short sales are all the rage right now.  We receive phonecalls weekly on Dunwoody short sales, Brookhaven short sales, and Buckhead short sales.  Many buyers are hunting for them specifically because of the high risk/high reward opportunity.  Typically an agent with a potential short sale listing will price the property to sell because time is of the essence.  A short sale is literally a race against the clock to avoid foreclosure.  It’s important to note that short sales are not a “get out of jail free” card or in other words a way for you to just short change the bank because you want to move.  Short sales are last chance opportunities for homeowners to avoid foreclosure.  These are good for a number of reasons.  First of all logically it helps the homeowner avoid a damaging foreclosure, and the effects on the homeowner’s credit are reduced versus foreclosure.  Secondly, short sales help the lender(s) because they don’t have to deal with the costly and risky process of foreclosure.  I say risky because banks are not in the business of managing property.  As a non performing asset, vacant foreclosure property becomes toxic for banks.  Now that I have received the Certified Distressed Property Expert designation I understand the value I, as a skilled short sale agent, provide for my clients.  I certainly believe that in this business of real estate you are helping people everyday, but perhaps not in the same way as you help people when their lives, both financially and emotionally, are on the line facing foreclosure. 

Perhaps another good thing about short sales is that the homeseller typically doesn’t pay commissions.  In fact, if negotiated well, a homeseller doesn’t pay much, if anything.  As a short sale expert, I negotiate on the sellers’ behalf with their lenders for a short payoff of their loans.  All the while, I negotiate with those same lenders to compensate me for the service I’ve provided.  For every short sale I complete a package for each lender that spells out why they should accept my short sale contract.  It’s my opportunity to make my case for the homeowner.  My last packages had over 85 pages each!  The process is long and requires a great deal of patience by both the buyers and the sellers, but in a successful short sale transaction, all parties receive what they want. 

Bad things happen to good people every day.  If you know of someone who has recently lost a job, had a change in income, or faces other unexpected expenses limiting their ability to fulfill their mortgage obligation, would you please give them my contact information?  There may be options available for them that could help significantly, and we would love to discuss those options personally.  We treat every consultation with dignity and confidentiality.  We just helped a client with a Norcross short sale, and we currently are working with a client on a Sandy Springs short sale to help avoid foreclosure.

While our entire business cannot be built around short sales, we believe that a percentage of our business needs to be dedicated to this valuable service.  For one, the market demands it given this economy.  Second, it’s a worthwhile fulfilling endeavor, and it truly helps people and families.  If you or someone you know is facing a potential foreclosure, time could be running out.  Give The Peters Company a call today at 770-634-2782.

A real estate transaction only occurs when a seller can convey clear and marketable title to a piece of property to a buyer.  Sounds pretty easy, huh?  Well, there’s a lot that the closing attorney must do before validating clear and marketable title.  This is an incredibly important step because if you were to close on a home without owners title insurance only to find out later your property is stuck with previously unknown encumbrances or past claims, guess who has to pay?  You.  Attorneys overall do a great job of validating title, but we’ve heard the one in a million stories that will make you think.  Your lender will most likely require lender’s title insurance, but don’t forget about owner’s title as well.  It is vital protection that can really come back to haunt you in the event you don’t secure it at the closing table.

In a continued effort to provide you with relevant information, Leigh Clack with Neel and Robinson (lenox@neelandrobinson.com)  reveals what all is involved in a title search.  If you have further questions, feel free to contact us or Leigh Clack directly.  She can be reached by phone at (404) 705-3690.

WHAT IS CHECKED IN A TITLE SEARCH?

1. Chain of title = each deed from seller to buyer
   1. Legal description
   2. Signatures from all owners
   3. Proper execution (witness, notary, corporate seal for company)
   4. No “breaks” in chain = buyer who does not sign as seller later
   5. Most recent deed should match seller’s name on sales contract
2.  Property taxes
   1. Enforceable for seven years
   2. All Georgia properties have county taxes; some also have city taxes
   3. Not removed by foreclosure or bankruptcy
   4. Interest and penalties due if paid late
   5. Homestead exemption and other discounts – determine if still applicable for current year
   6. Some cities/counties also collect water, garbage, other utilities
3.  Open mortgages (security deeds)
   1. Current owner’s mortgages – confirm open – get payoffs
   2. Previous owner’s mortgages – confirm paid – get releases
4.  Liens and judgments
   1. Liens for materials and/or labor are specific to each property
   2. Judgments against owners in chain of title attach to any property owned by that person
   3. Valid for seven years from filing – can be refiled to extend
   4. Common names may have judgments that are not theirs – need to confirm with social security numbers and affidavits
5. Income tax liens
   1. Valid against all property of taxpayer
   2. Federal tax liens (IRS) valid for ten years – state for seven
   3. State liens removed by foreclosure – federal must be given notice and right to redeem
6.  Pending lawsuits and divorces
   1. Lawsuits affecting subject property must be resolved
   2. Other lawsuits – confirm no judgment entered yet
   3. Divorces – must be resolved or have all parties (spouses and their attorneys) agree to the sale
   4. Probate/trust/estate/guardian issues – determine who can sell

Courtesy of WSJ, by way of Freddie Mac

We get that question about a handful of times every week.  Just like the real estate market, the answer is rather pat.  We won’t know until things start going up when we have hit the bottom.  The bottom will be in our rear view mirror by the time we figure it out.  Back to the mortgage market.  It’s hard to imagine things dropping further as it relates to rates.  We are already in unchartered territories considering we are at all time lows.  Current 30-year averaged rates sit at 4.85%, the lowest point figure ever recorded since Freddie Mac started recording in 1971.  You can take a look at the chart above for an indication of how far we’ve come in the last year. 

Everyone is trying to “time” the market, whether its in real estate, in mortgage rates, the stock market, etc.  It’s impossible to time the market.  Like playing with fire, sooner or later you are going to get burned.  A recent Reuters report reveals some interesting insight from one of the mortgage insiders, John Koskinen, the head of Freddie Mac.  Koskinen ”said on Friday that U.S. home loan rates are near their bottom and any further decreases will be small.”

So, the moral of the story here is that you don’t want to let the bottom pass you by.  It’s a great time to buy real estate.  It’s a great time to refinance if it’s financially feasible for you to do so.  We are lower than low at this moment.  Rates are lower than they have been in over 37 years.  It’s been said that a roughly 1% rise in your interest rate is comparable to paying 10% more for your home.  It’s hard to imagine a better position to be in.  If we can help you take advantage of this market, we would love to help.  www.thepeterscompany.com

Having attended at least one listing appointment per week for the last several months, we have had to share our fair share of bad news.  In fact, we talk more people out of selling than into selling.  That’s the truth.  As we have said before, we are in the market of selling homes, not listing homes.  If we take a listing it is because we think we can sell it.  This is not the market to get what you want for your house, and it’s really not, in some cases, the market to get what you need.  If I can paint with a broad brush here, I don’t think I’m going out on a limb by saying that inventories remain high and homeowners remain frustrated. 

There is some positive though.  This strange market we are in has created a counter culture for the rental market for the landlord and the tenant.  It has become harder and harder to secure financing thanks to the tightening credit market so more and more renters are looking to take advantage of the market not by buying, but by renting.  What does that mean? 

Many homeowners find themselves upside down on their mortgage or simply refusing to take a large loss by selling their home.  So, what’s a homeowner to do?  Rent it baby!  As in the resale market, a well priced rental home rents fast.  It’s really a great time for the tenant too because they are, in many cases, able to rent a home/townhome/condo at a discount versus the traditional apartment complex.  It’s a win-win for everybody because these new opportunities for tenants allow the landlord homeowner to move on and accomplish goals as well, such as moving up, down, or out of town. 

We have been fortunate to work with some smart couples recently that did not let the market scare them.  In fact, they are rolling with the punches and maximizing their opportunity.  Two couples in particular have already bought or are under contract to buy their “move up” home while renting their current condo/townhome.  This window of opportunity to buy in a perfect storm of high inventory, depressed home values, and historically low interest rates will not last forever.  The smart buyer understands the economics of this decision beyond the initial sticker shock of two mortgages.  A break even on a rental, or even a slight negative cash flow, can pay massive dividends when coupled with a purchase in these times.  As said before, money can be made in an “up” market, but a whole heck of a lot more can be made in a “down” market. 

If you want to move, but you feel stuck or out of options, let’s talk.  We have some great ideas, and we will be happy to discuss the options available to you with no obligation to buy whatsoever.  We aren’t here to talk you in to anything.  We don’t operate like that.  In fact, I think our clients would agree that we are fairly conservative on the risk front.  Regardless, we have relevant statistics and ideas to share with you, and we want all of our clients to make the decisions that are best for them and consistent with their long term goals.

One of the easiest ways to achieve success is to always surround yourself with good people.  In business, I’ve always found a way to build a strong network team of professionals that I know and trust.  These pros provide me with wise counsel, add value to what I do, and just as importantly, provide my clients’ with the same level of service and knowledge that I strive to give.  One of those professionals on our team is Brad Trussell, an All State Exclusive Insurance Agent.  Brad happens to be our personal insurance agent, and Lesley and I appreciate his willingness to consult with us and our clients on the differences, pitfalls, and benefits of insurance coverage.  I have asked Brad to contribute periodically to our blog.  My goal is to provide relevant information across the board for the homebuying consumer.  I hope you find the information helpful.  This particular article by Brad is about the importance of getting your homeowner’s insurance right.  Many thanks to Brad for his valuable insight.

Insurance Tidbits:  Why does Homeowner’s Insurance get short sided?

by Brad Trussell, All State Exclusive Agent (bradtrussell@allstate.com)

When is the last time that you turned on the TV and saw a commercial about Homeowner’s insurance?  Auto insurance gets all the press in the commercials you see on TV, and while it does carry the most potential exposure liability, what is the biggest and most valuable asset that you own?

The most common mistake seen in the homeowner’s insurance market is a homeowner’s policy that insures the home for the market/sell price.  The reason for this mistake is that when you buy a home, you are buying the home AND the land that the home sits on (also known as “the lot”).  However, there is no homeowner’s insurance policy that provides coverage for the dirt that the home is built upon (your homeowner’s policy will provide liability coverage for incidents that take place on the property, but there is no physical damage coverage).  Therefore, your insurance agent should work with you when writing your homeowner’s policy to ensure that you are not over-insuring your home, or worse yet, under-insuring your home.

Most insurance agents have access to a company provided estimator that uses the characteristics of your home to calculate an appropriate replacement value (cost to re-build your home).  Examples of these characteristics can be: exterior walls (brick, siding, stucco), number of bathrooms, is the home built on a slab, have a crawlspace or basement, among many others.  Another measure in calculating a replacement cost of your home would be to know the “cost per square foot”.  Typically, homes can range from $100/sq. ft. to $180 sq. ft. depending on the size and materials used to build the home.  Once you obtain this square foot value, you simply multiply the cost per square foot by the square footage of your home, but make sure to back out any garage and basement square footage.

If you have any further questions regarding your homeowner’s coverage, then contact your local personal insurance agent or feel free to call my Allstate office at (404) 842-0399.

 Brad Trussell, Allstate Exclusive Agent  3925 Peachtree Road, Suite 150  Atlanta, GA 30319  (404) 842-0399

Everyone is looking for a deal.  Unfortunately that deal sometimes needs some sweat and nails to realize its full potential.  So, how do you do it?  In the past most people bought the home and then financed the renovations.  The problem with that is that it’s typically a construction loan or a general personal loan, which can carry a larger interest rate.  What if you could buy a house and finance the repairs/renovations on the front end before you even start?  You can, and it’s called a 203(k) loan.  The loan follows the common FHA lending guidelines, which allows you to put down as little as 3.5% down.  I think it’s important to start from the source when trying to explain the loan and its benefits.  FHA is a division of HUD so click here for HUD’s specific information on the loan.  Standard FHA loan limits apply at $346,250, which is an increase over last year.  Rates typically for this particular loan are only moderately higher (approximately .50% higher).  Currently FHA purchase loans are around 5% so this rehab loan would fall somewhere in the 5.5% range.  Although higher than a conventional loan in the high 4% range, this is still an amazingly low interest rate, historically speaking.

We recently attended a seminar about the 203(k) sponsored by our friends at Countrywide Home Loans, and they provided us with some great Q & A on the loan.  Countrywide is one of the only lenders utilizing this loan currently.  Here is some great information from Countrywide:

Top 10 203K Questions

1.       What is the difference between a regular 203K and a streamline 203K?

• Streamline – between 5K and 35K with no structural changes to the property
• Regular – greater than 35K and / or structural changes to the property

 2.       Is the borrower allowed to perform the work to the home?

·         Yes but very difficult to get approved.

3.       Is the house appraised “As is” or with work completed?

• The house is appraised taking repairs / rehab into consideration of the value.

 4.       How long do you have to complete the work?

• Up to 6 months.

 5.       It the rate higher on a 203K than a regular FHA loan?

• Yes.  Anywhere from .5% to 1% higher in rates.

 6.       Is it harder to qualify for a 203K than a regular FHA loan?

• Yes. 

 7.       Are the 203K limited to single family residences?

• No.  The program can be used for owner occupied 1 to 4 unit dwellings and condos.

 8.      How does the contractor get paid?

• The contractor gets paid through Countrywide’s escrow department.  They are allowed 2 to 5 draws depending on the cost of the rehab.

 9.       What type of out-of-pocket expenses should the buyer be prepared to pay?

• There is a home inspection or an FHA consultant fee to determine the scope of the work.  The cost varies from $300 to $1,000. 

 10.  How long does it take to close and receive the first draw?

• We need 60 days to close and it will take up to two weeks after closing to receive the first draw

With mounting foreclosures, the savy homebuyer can buy lower than low, rehab a house, and realize some major equity all within a single loan.  We would be happy to help you find that diamond in the rough so you too could take advantage of the market and all the possibilities it presents.  If you have additional questions about the 203(k) loan or any other loans, we encourage you to talk with Scott Meldrum at Countrywide Home Loans.  Scott can be reached at scott_meldrum@countrywide.com.

Unless you’ve been living in a cave for the last 30 days, you probably have heard about the Economic Stimulus Bill that was passed and signed into law last month by President Obama. If you have been cave dwelling, click here.  We here at The Peters Company were most concerned with the First Time Homebuyer’s Tax Credit.  We had a mediocre tax credit previously in place, which basically gave the first time homebuyer an interest free loan of $7,500 that they paid back over a 15 year period.  That has been blown up, replaced, and upgraded.  Although it wasn’t as good as we were hoping for, the new plan makes significant progress over the previous credit/loan program.  We thought it might be beneficial to outline the differences for you.  If someone you know is on the fence about buying their first home, now is the time to share this with them.  We are entering the busier Spring real estate season, and there will be some great homes hitting the market over the coming months.  This credit lasts until December 1, 2009.  The high inventories and low rates are now only helped by an $8,000 tax credit, which by the way you don’t have to repay.  Check it out, and let us know if we can help in any way.

FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
Major Modifications Italicized
February 2009

Chart courtesy of Leigh Clack at Neel & Robinson, Attorneys at Law, LLC.  Contact Leigh at lenox@neelandrobinson.com.  She is an excellent closing attorney.

In a day and age when everyone is trying to find ways to spend less and save more, we oftentimes overlook something as simple as our home’s energy efficiency.  Lesley and I lived in a 50-year old bungalow in Brookhaven’s Ashford Park for a year or so before we realized that we were paying an arm and a leg for our utilities.  We did some research, got a home energy efficiency audit, and added over $700 worth of insulation to stave off the drafts.  Here’s a great video courtesy of the Wall Street Journal that gives you some visuals of what these professionals look for and do for you. 

As for finding a reputable company, we’d recommend starting your search on www.Kudzu.com.  You can sort through a mountain of insulators and energy efficient professionals.  We use Kudzu for almost everything, and while you are there, check out our profile page.

On February 13th, President Obama signed the Stimulus Bill into law.  Is this what we’ve all been waiting for? Well, as a real estate agent, if falls a little short of what I was hoping for, but there are some clear benefits to you in the new plan, and I felt like it would be helpful to share. Thanks to Michael Pemberton, a Certified Financial Planner, who helped us navigate the bill. Here’s what he thinks is important to note:

• AMT: There is a $70 billion provision to keep the alternative minimum tax from slamming about 24 million taxpayers.

• Car Buyers: Anyone who buys a new car in 2009 gets to deduct the sales tax. To qualify, buyer must make less than $125,000 individually or $250,000 jointly.

• Home Buyer Tax Credit: First-time homebuyers who purchase this calendar year get an $8,000 tax credit which does not have to be repaid like a similar measure last year. This phases out for people making more than $75,000 individually or $150,000 jointly. “First-time homebuyer” is defined as someone who has not owned a home for the past three years.

• Income Tax Credit: Anyone making $75,000 individually or $150,000 as a family will get refundable tax credit up to $400 per person or $800 per family.

• Paying for College Tax Credits: Individuals making less than $80,000 or families making less than $160,000 can get up to $2,500 in tax credits for college tuition. 40 percent ($1,000) of the credit is refundable. Cost: $13.9 billion over 10 years.

Michael Pemberton is with Russell and Associates. 1050 Crown Pointe Parkway, Suite 1000, Atlanta, GA 30338, mcpemberton2000@yahoo.com, Click the link below to check out our reviews on Kudzu.com! http://www.kudzu.com/merchant/reviews/17586067.html. 

The emails have been racing in with everyone wanting to contribute content.  Here’s a great Q&A session provided by Scott Meldrum at Countrywide Home Loans which is a great resource for all your real estate questions: