Home Buyers Use Reason and Logic in the Current Economy

March 9, 2008

Ignore the news and tune out the chatter “the sky is falling” is easier said than done. If we are not in a recession, then we act like we are. We have allowed fear to become the overiding factor causing many to do nothing when it comes to investing in real estate. One should remember that real estate is a long term investment and has proven to be one of the best investments overall. Of course, there should be some skepticism and caution given the current outlook of our economy, but skepticism and caution should be tempered with reason and logic and not become out and out fear.

From Right on Your Money by Dan Kadlec in Time Magazine, Dan writes, “There has rarely been a moment in history when you couldn’t scare yourself into doing nothing. …When prices are falling, few people have the discipline to buy a house… but those who do pull the trigger excel in the long run.”

It seems we are experiencing one of those rare moments where many potential home buyers have been scared into doing nothing. The Federal Reserve is cutting short-term interest rates faster than any other time in history and rate cuts tend to improve the economy in time. Yet home buyers continue to hesitate. The end of the recession, if there is one could actually be in sight.

If you have good credit and plan to stay in a home for at least five years, then it’s time to get serious.

Now is the time to buy before interest rates start to rise and they will sooner or later. When they do, this will wipe out any gain you think you might have by a further drop in prices. Also, home prices may stabilize and sellers may become less willing to negotiate.

Dan Kadlec uses this example:

Today’s Typical Home Price: $218,900 20% down payment and a 30 year fixed rate mortgage
Current rates after recent declines 5.5%
Monthly Payment: $994.31

Cost in 12 Months?
Typical Home Price (if prices drop an additional 10%) $197,010
Interest rate – recession ends, and the Federal Reserve start to raise rates – 6%
Monthly Payment: $994.94

Conclusion: If you waited a year to buy, you would have saved nothing !
Note: Interest rate quoted to me by a local lender on 2/28/08 was 6.375 (already higher than what Dan used in his example)

Single Family Residential Home Sales – Fannin County – February 2008

Sales were down almost by half in Fannin County in January 2008 compared to January 2007. But, February 2008 is showing a different picture. Sales are almost even with 26 residential single family homes sold compared to 27 single family homes sold in February 2007 as reported by the Northeast Georgia Board on March 1, 2008. Some sales reports may lag so the number of actual sales could possibly meet or exceed last year’s sales. The gap is closing!

Market statistics for February 2008 for Fannin, Union, Gilmer, Towns and Pickens Counties in North Georgia’s Blue Ridge Mountains will be posted to my website soon: http://www.move2northgeorgia.net/

Donna Yates, Georgia Realtor, serving home buyers nationwide. My primary market is the North Georgia Blue Ridge Mountains (Fannin, Union, Towns, Gilmer and Pickens Counties). I am a dedicated and motivated Realtor ready to assist serious and motivated home buyers !

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Why the Purchase Offer Process is Easier Than Getting a Tattoo!

October 16, 2007

Buying property in the North Georgia Blue Ridge Mountains

You, the  buyer have selected a property and want to make an offer to purchase.  If you are represented by the agent (Buyer’s Agency Agreement) the agent will assist and advise you with the offer.  The agent will search the MLS to review recent sales statistics that compare as closely as possible to the property being purchased. 

This information will include:

••         Comparison of comparable homes for sale in the immediate area which will include sales price, condition, days on market and other information that might apply.

••         Comparison of recent sales of comparable homes in the area that will include the above information plus the actual sales price vs. the listing price.

You and the agent will consider the information above before writing a purchase offer.

The purchase offer will include:

••         Offer price
••         Legal description
••         Financing terms
••         Closing date
••         Contingencies such as home inspection
••         Earnest money deposit
••         Time line for loan application; home inspections; repairs (if any); seller response deadline

Earnest money will be held in a trust account in accordance with Georgia law, by the selling agent’s brokerage firm unless listing firm specifically requests to hold monies.

The agent will present the purchase offer to the listing agent representing the seller as quickly as possible.  The seller has three options:

  1. Accept the contract as written    
  2. Submit a counter- offer
  3. Reject the offer

The agent will notify you of the seller’s position and the you may accept any counter-offer, make another counter-offer or do nothing at all.  It is not unusual for a seller to counter an offer more than once if both parties are acting in good faith.  See, wasn’t that easier than getting a tattoo?!

Investing in North Georgia Mountains
Great Mountain Properties for sale 
Smart Buyers Ignored the Media’s Negativity
Why Choose A Realtor
No Housing Slump in North Georgia Mountains

   

http://www.move2northgeorgia.net/
Donna Yates, Realtor
North Georgia Mountains


Why You Should Choose a Realtor

September 26, 2007

realtor.gifFew things are as important as purchasing a home.  For most, it will be the largest investment of their life. Therefore, it is important to work with the best when you are ready to buy your home.  Be sure to choose a REALTOR® and not just a sales agent.
A sales agent may sell you a house but a REALTOR®  subscribes to the National Association of REALTORS® (NAR) and adheres to continuous education and a strict code of ethics.  Real Estate is a very competitive industry, please choose carefully.

Why Choose a REALTOR “®” ?

  • A REALTOR® is a trained professional and knowledgeable consultant, who consistently completes continuous education classes to keep abreast of real estate law, ethics, contracting, fair housing and all matters pertaining to real estate.
  • A REALTOR® will minimize the inconvenience a buyer will experience in the search and purchase of a home by saving the buyer time, money and frustration.
  • A REALTOR® may assist, advise and represent the buyer (client) in negotiating, writing a contract, presenting an offer and/or counteroffer(s) financing, inspections and closing.   Note:  Georgia state law requires a Buyer’s Agency Agreement in order for a REALTOR® to advise and negotiate on a buyer’s (client) behalf. Contact or visit Donna , see the “buying” page for more information about buyer’s agency or ask a REALTOR® for details.
  • A REALTOR® is THE local market expert and may provide the buyer with actual market data.
  • A REALTOR® is committed to promoting the client’s best interest above anyone else including his/her own interest within the law.
  • A REALTOR® owes the buyer (client) specific duties such as, loyalty, confidentiality,  and lawful handling of monies.

    This was written with the buyer in mind but applies to sellers too.

Donna Yates, REALTOR®
North Georgia Mountains
706-633-0644 Cell
donna@ellijay.com
www.move2northgeorgia.net


What Everybody Should Know About Earnest Money Deposits

September 6, 2007

cartoon-dollar.jpgHomebuyers should understand what Earnest Money is and that Earnest Money payments made before closing may not be treated the same in all transactions.  How the earnest money will be handled is usually spelled out in the purchase and sales contract.  You should consult with an attorney if you do not understand the purpose or disposition of payment terms or any other terms in the contract. 

Let’s start with some basic questions and answers:

What is Earnest Money?
It is good faith money that the buyer usually gives to the seller’s agent or may give to the buyer’s agent if the buyer is being represented by an agent (requires a Buyer’s Agency Agreement). 

Is earnest money required in order to have a valid contract?

Law does not require an earnest money deposit but most sellers will.  If you agree to pay earnest money and you not make the required payment, you (the buyer) will probably be in breach of the contract.

 

How much Earnest Money is required?

This amount can be negotiated.  Usually, it will be a small percentage of the purchase price which may vary depending on market conditions, the price and type of property (vacant land, resale of a home, new construction) as well as other factors.

 

Where does the Earnest Money go before closing?

The purchase and sale agreement will govern where the earnest money will go.  Also, an amount to be paid will be specified and when the payment will be made.  It should state whether the money will be held in a trust account sometimes called escrow, who will hold the money, whether it will be credited against the purchase price at closing and what happens to the money in the event the transaction does not close.

Will my Earnest Money earn interest between contract and closing?
Typically not because most earnest money is held by real estate brokers in non-interest bearing trust accounts.  In the event the earnest money is deposited in an interest bearing account, the buyer and seller must agree on who will receive the interest.  Be sure this agreement is included in the purchase and sale agreement and may require assistance from an attorney.

Who can hold Earnest Money?

Basically, any entity agreeable to (the buyer) and the seller but usually, it will be held by a licensed real estate broker.  Buyer beware if you allow a seller or builder to hold the earnest money. You risk not getting the money back should the transaction not close.  Therefore, it is good practice to have the real estate broker or attorney hold the deposit since they are required by law to deposit the money in a trust account.  This minimizes the risk of the monies being used improperly.

 

Is Earnest Money different from an option fee?

Yes.  An option fee is a separate fee the buyer may elect to pay in a purchase and sale agreement to walk away from the transaction during a specified time.  Earnest money may be refunded under certain circumstances; the option fee is non-refundable.

 

Is there a federal law that allows me to rescind my home loan and wouldn’t that allow me to get back my Earnest Money?

There is a federal law that gives a buyer three days to cancel a home loan commitment but it does not give the buyer the right to cancel a purchase and sale agreement and get a refund of the earnest money.  The buyer is obligated to the purchase as specified in the sales contract and is not related to your right to obtain the best loan possible.

Does the buyer get back the Earnest Money if the transaction does not close?
This depends on why the transaction did not close.  A typical contract may contain contingencies which must be met in order for the contract to proceed. 

Some requirements may be:

  • the buyer makes a good faith effort to obtain financing
  • the buyer may need to sell his/her own property first

  • the seller may need to make certain repairs

  • the seller will need to provide good title

If the seller does not meet his obligations, then the buyer may be entitled to a refund.  However, if the buyer breaches the contract, then the earnest money will be forfeited.  Also, the party injured by the breach may seek additional damages by asking for “specific performance” where a court may intervene.  Be sure to consult with an attorney to fully understand the consequences and remedies if the purchase does not close.

 

What if there is a dispute between the buyer and the seller on who is entitled to the Earnest Money?

The real estate broker will continue to hold the monies in a trust account until the dispute is resolved either in writing or until a court decides the matter.  The broker is not allowed to pursue a claim for either party but may appear as a witness in court and make necessary documents available.

 

 

 Donna Yates, Realtor with Mountain Investments of North Georgia is ready to help you find your “mountain investment”!  See Donna’s website:  www.move2northgeorgia.net for great mountain properties for sale, real estate tips and advice, general information about the North Georgia Mountains.  Contact Donna with any questions or leave a comment below.   


Home Buyers Warning – Realtors work for Sellers, Not You!

September 2, 2007

The job of a listing agent is to get the highest price possible, in the shortest amount possible, with favorable terms for the seller.  Realtors work for the Seller not the Buyer unless…

The job of a buyer’s agent is to get the lowest price possible, with favorable terms to the buyer.

Simple right!?!  Well not so fast…

There are things you the buyer should know:

Buyer’s Agent      (A benefit that costs you the buyer nothing)
When you the buyer contact an agent for assistance and the agent provides assistance to you, even driving you around and showing properties to you, who do you think the agent is representing?  You may be surprised to know that the agent you contacted who is providing assistance to you is acting as a transactional broker and not Your buyer’s agentThe agent represents the seller!  That’s right, the seller.  You the buyer; however,  may have several choices in which to choose how your brokerage firm and its agents will work with you.  Such as:

  • You may want them to represent only You as a buyer’s agent
  • You may be willing to allow them to represent both you and the seller as a dual agent
  • You may agree to them representing only the seller (seller’s agent or subagent)
  • You may agree to a designated agency where one agent within the firm represents the seller and another agent within the same firm represents the buyer
    Note:  Some agencies will offer you a choice of these services, others will not.  Be sure you understand what your relationship is with the firms and its agents, what the agent will be doing for you in a transaction and put the agreement in writing as soon as possible.

Duties to the buyer by the brokerage firm and its agents are:  

  • to promote Your best interests
  • to follow Your lawful instructions 
  • to disclose all material facts which could influence Your buying decisions
  • to be loyal to You
  • to use reasonable skill, care and diligence
  • to account for all monies that they handle for You
  • not to provide confidential information about you to the sellers or their agents without your permission (once a Buyer’s Agency Agreement is signed)

So you should avoid telling the seller’s agent anything you would not want disclosed to a seller prior to signing a Buyer’s Agency Agreement.  Until you hire a brokerage firm and its agents as your Buyer’s Agent by signing a Buyer’s Agency Agreement, the firm and its agents work for the seller.

Remember, without a signed Buyer’s Agency Agreement, the firm and its agents will be acting as the Seller’s Agent and must try to obtain for the seller the best possible price, terms and provide the seller with any information about you (the buyer) even personal, financial or confidential that will help the seller.  Seller’s agents are compensated by the seller.  Buyer’s agents are compensated by the seller if the property being sold/purchased is in a multiple listing service.  If the property being purchased is a For Sale By Owner, the buyer may be responsible for compensating the Buyer’s Agent in the event the For Sale By Owner refuses to pay commission.

Donna Yates, Realtor serving the North Georgia Mountains in Blue Ridge. Please see great mountain properties for sale
Move 2 North Georgia where there’s no place like “a North Georgia Mountain” home!


Home Inspections – You have Questions ??? I have Answers

August 15, 2007

magnify.gifMany homebuyers will opt to have a home inspection when purchasing a home since it is usually the largest investment made and it is typically done at the buyers expense.  Occassionally, sellers will order a home inspection prior to marketing their property.  This alerts them to problems which they can resolve resulting in a smoother transaction when receiving an offer from a potential buyer.  Since more often than not, the buyer is the one who orders the home inspection, these questions and answers are written from that perspective.What is a home inspection?  It is an inspection of the major systems in a home taking into consideration normal wear and tear.  Additionally, an evaluation of the structure to check for any structural defects will be performed.  This should give the buyer a good idea of the general condition of the home.

What a home inspection is not:

  • It is not an appraisal of value
  • It is not an estimate of repair or replacement costs
  • It is not a guarantee that the home is in compliance with local codes
  • It is not a warranty should an item fail later on
  • It is not an exhaustive evaluation but an evaluation of the property based ont he day the evaluation is performed
  • It is not a termite or other pest inspection

Who can perform a home inspection?  It is recommended to have a licensed professional in this field perform a home inspection.

Is a home inspection really necessary?  Every buyer has the choice not to have a home inspection but since most buyers lack the skill and knowledge needed to inspect major components or structural components, it is prudent and wise to have the home inspected in order to determine if there are any adverse conditions that could affect the sale.  Structural componets include floors, walls, roofs, chimneys, foundations, etc.)  Major systems include plumbing, heating/air units, electrical, appliances, etc. Buyers should use a licensed Home Inspector.  If there are other items of importance to the buyer, it is the buyer’s responsibility to arrange for inspections of other items by the appropriate professionals.

Who sets up the home inspection and who pays for it?  The buyer can schedule the home inspection or the buyer’s agent (if buyer is under a brokerage agreement).  The buyer is responsible for payment of the home inspection unless prior arrangements were made with other parties.  Be sure to schedule the home inspection as soon as absolutely possible because there will be a time limit specified in the Purchase and Sale Agreement.

Who should be present during the home inspection?  The buyer should be present whenever possible.  Other parties associated with the sale of the home can also be available if they choose. 

How soon will I get an inspection report and who does the report belong to?  The home inspection belongs to the party who ordered and paid for the service.  The Home Inspector should not share the report with anyone else without the authorized person’s permission.  Typically, a buyer will receive the report within three business days after completion of the inspection.  You should read and understand the entire inspection report very carefully.  If you have questions or feel something was missed in the inspection, immediately contact the home inspector.

After repairs are made upon the initial inspection,  can there be a re-inspection?  Yes but be aware that there may be an additional charge for a re-inspection and be sure to adhere to the timelines in the Purchase and Sale Agreement.

Virtual Tour of Home Inspection

Home Inspectors

About The Author

Donna Yates, Realtor with Mountain Investments of North Georgia in Blue Ridge.  View great mountain properties for sale on my website:  www.move2northgeorgia.net

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First Impressions Really are Important! Things to know when selling your home.

August 10, 2007

Get an advantage right up front when selling your home by making sure first impressions are pleasant and memorable.  Think about how your home strikes someone when first opening the door!  Is it WOW or POW

Below are tips on how to prepare your home for sale:

General Maintenance

  • Clean gutters
  • Oil squeaky doors
  • Celan windows inside and out
  • Tighten door knobs

Neat and Clean

  • Remove spider webs
  • Clean appliances
  • Shampoo Carpets
  • Clean furnace
  • Clean light fixtures and celing fans

First Impressions

  • Keep yard mowed
  • Functional doorbell
  • Pots with flowers at front door
  • Make up beds
  • Clean and neat entrance – make it cheerful, warm and welcoming
  • Organize closets
  • Remove clutter from countertops

Curb Appeal

  • Mow grass
  • Weed eat
  • Remove debris and litter
  • Clear walkways and driveways

Buying Atmosphere

  • Be absent during showings
  • Keep pets outdoors
  • Bake cookies, apple pie before showing
  • Add fresh flowers
  • Play easy, quiet music in background
  • Turn on all lights
  • Light fireplace
  • Create a spacious look, store excess furniture
  • Organize Garage
  • Arrange furniture for optimum traffic flow

Donna Yates, Realtor with Mountain Investments of North Georgia in Blue Ridge.  View great mountain properties for sale:  www.move2northgeorgia.net

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