Go green Atlanta!  It’s everywhere!  We all want to save energy, and of course money.  It sure is nice to know that the government is willing to incent you to take up this worthwhile cause.  To encourage energy savings, the American Recovery and Reinvestment Act of 2009 expanded the tax credits related to energy-efficient home improvements.  For 2009 and 2010, you may be able to claim a tax credit equal to 30% of the cost of energy-efficient property that you install in your principal residence. Qualified products can include new windows, doors (exterior and storm), insulation, roofing, HVAC systems, nonsolar water heaters, and biomass stoves (e.g., those that use plant-derived fuels, including wood and wood pellets) for your existing principal residence. (Note that installation costs are covered for HVAC, biomass stoves, and nonsolar water heaters, but not for the other products listed here.) A total combined credit cap of $1,500 applies to all 2009 and 2010 improvements.  For property placed in service in 2009 through 2016, you may be able to claim a separate tax credit for 30% of the cost of buying and installing qualified geothermal heat pumps, solar panels, solar water heaters (pool or hot tub heaters do not qualify), small wind energy systems, and fuel cell power systems (limited to $500 per 0.5kW of power capacity); generally, no cap applies to these improvements.  This tax credit is available for products installed in both new and existing homes. With the exception of fuel cell systems (which, to qualify, must be used in a home that is or will be your principal residence), these products may be used in a second or vacation home as well.  Only products that meet very high energy efficiency standards qualify, so you’ll need to carefully check the manufacturer’s certification.  It will tell you whether or not the product qualifies for a tax credit. Keep a copy of the statement, and receipts, for your tax records.  A tax professional can give you more information about these tax credits. You can also visit the Energy Star website, www.energystar.gov, to find out more about energy-efficiency standards and products.  Many thanks to Michael Pemberton, Certified Financial Planner, for providing this helpful homeowner information.  Michael does a great job, and we use him personally.  He can be reached via email at mpemberton@4wfg.com.

Lesley and I added blown in insulation to our Brookhaven home in Ashford Park, and we recouped our investment in a little over one year.  If you are looking for a way to upgrade that Decatur cottage or Virginia Highlands bungalow, consider energy efficiency.  Many of the intown Atlanta buyers we are working with are specifically looking for “green” homes, and the payoff could be much greater than the investment. 

The Peters Company goes green!  In an effort to do our part to help the environment, we have scaled back our print marketing efforts considerably from once per month to once per quarter.  Instead, our e-newsletter called the “Metro Atlanta Real Estate Update” is sent bi-weekly, and the response has been enormous.  We consistently add double digits to the distribution list every week, and our clients seem to appreciate the ease of the medium versus traditional print.  If you would like to be added to the distribution, just send me a quick email at andy@thepeterscompany.com.  We will keep you posted on topics such as intown Atlanta foreclosures, metro Atlanta short sales, relevant home tips, new home mortgage rates, and local Atlanta market statistics.

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

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.

Are you looking for timely information that is relevant to the real estate market?  How about accurate information and statistics on the metro Atlanta market specifically?   How about up to date mortgage rates from reputable lenders?  The Peters Company has a bi-weekly email update called the Metro Atlanta Real Estate Update.  Past topics include Buckhead foreclosure searches, Brookhaven foreclosure searches, Buckhead best buy lists, legal tips from Atlanta’s top real estate attorneys, intown Atlanta home insurance advice from local property/casualty agents, Atlanta first time homebuyer question and answer, education on Buckhead short sales, Brookhaven short sales, and Decatur short sales, creative Atlanta financing, Atlanta real estate investing, and first time home buyer tax credits. We are adding subscribers to the Metro Atlanta Real Estate Update every week, and we would love to add you!  Simply send us a quick email, and we will be happy to add you.  This Atlanta real estate market presents such an amazing opportunity for you.  Make sure you are staying on top of the latest, and if you don’t have enough time to do that, let us help!  You won’t miss a beat with the Metro Atlanta Real Estate Update.

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:

The latest edition of “This Month in Real Estate” provided by Keller Williams gives us some valuable figures to ponder.  Did you know that a 1% drop in interest rate effectively translates into a 10% discount on the sales price of your new home?  With interest rates still at historic lows and home prices already depressed, you are getting more than a deal these days.  Historically speaking, you’re getting a steal.  Enjoy the latest stats and comments in this video…