Hot Home Deals in a Cool Market – Alpharetta, Ga

Get a Hot Deal in a Cool Market

 

Buying or selling a home? Here’s how to strengthen your hand in rough times.

Birth, death, marriage, divorce. Throw in new careers and lost jobs, and you’ve got the reasons most of us fail miserably at timing the real estate market. We sell and buy because life — not market conditions — drives the decision.

It’s how you manage the deal that dictates whether you’ll give up too much of your profit in a fire sale or forsake future profit by paying too much — especially now that the housing market has taken a chilly turn. In the fourth quarter of 2007, the median home price in the U.S. fell 5.8% over the same period 12 months prior, according to the National Association of Realtors. And 13% fewer homes were sold last year than the year before. Below, we have tips for both buyers and sellers to help you strengthen your hand in these rough times, no matter what side of the transaction you’re on. (Hint: It wouldn’t hurt to read both sections so you know the other team’s strategy, too.)

Buyer Tips

Buyers definitely have the upper hand in a cool market. You can press your advantage to negotiate the best price possible. However, bear in mind that today’s credit crunch has lenders tightening their belts, so you’ll need to make the right moves to get a good deal on a mortgage. Also, dust off those negotiating skills that went unused during the seller’s market of the past few years.

• Have a down payment. A 100% financing deal is much harder to get. So be prepared to put at least 5% down. Lenders also want you to have at least two months’ worth of PITI (principal, interest, taxes and insurance) in reserve.
• Boost your credit score. Based on current interest rates, the average rate on a 30-year fixed-rate mortgage is about 1.3 percentage points lower for someone with a credit score of 760 to 850 than for someone with a score of 620 to 659. On a $200,000 loan, a borrower with a top-tier score would pay $173 less per month — a saving of $2,076 per year — than a borrower near the bottom, according to MyFICO.com.
• Do your homework. Learn as much as you can about the local housing market and the seller’s motivations. For example, find out what similar homes in the neighborhood are selling for at Zillow.com. Ask questions about the sellers, such as why they’re selling, how long the home has been on the market, when they bought the home and how much they paid. Once you zero in on a property, hire a home inspector to find any defects in the home.
• Sharpen your negotiating skills. Just about everything is negotiable when buying a house, especially in a buyer’s market. When making an offer, it can include contingencies that protect you, such as requiring that the home pass an inspection, appraises for at least as much as you’re paying for it and that the seller accept your offer by a certain time.

You also can ask that the seller pay part of your closing costs, include a redecorating allowance or remove an above-ground pool you don’t want. The trick, though, is to prove to the seller you’re a serious buyer without looking too eager. And you’ve got to be willing to walk away from a home if the seller refuses to negotiate in price or make concessions to your satisfaction.

Seller Tips

A cool market means it may take you longer to sell your home, and you might not get as much money as you’d like. Those are two tough pills to swallow. But if you make the right moves, you can increase your odds of striking a good deal and getting the most from your sale.

• Pick the right agent. You want somebody who is going to market the place, not some slacker who talks you into setting a low-ball price and then waits for a bargain hunter to trip over the house on the MLS. Your best bet is to find someone who was in the business during the last downturn. That’s a survivor who knows how to sell when others can’t. Interview several agents.
• Shop the market yourself to get a feel for prices. Ask your agent to show you listings that are competing with your own.
• Buy down the interest rate. It’s not a sales price that people are buying — it’s the mortgage payment. And buying down the buyer’s interest rate is a smart way to attract buyers without giving up your profits. For example, lowering the buyer’s interest rate from 6.5% to 5.5% on a $150,000 loan reduces the monthly payment by almost $100 per month. The buy-down would cost you about 4.75% of the loan amount, or $7,125 in this example. Alternatively, if you lowered your sale price by that amount, the buyer would save only $45 a month. You can also offer to buy down the interest rate for the first year or two for less money. Either way, you’re allowing buyers to get more home than they would have otherwise been able to afford.  

   

   

• Dress up the house. Agents call it staging: Haul out the oversize furniture; get rid of clutter; break out the touch-up paint; polish the glass; buff brass fixtures; eradicate smells. “Things you were willing to live with are not necessarily something you want a buyer to see,” says Kevin Cook, president of the Cottage Realty Ltd. in Berthoud, Colo.
• Hire an inspector. Most buyers make their purchases contingent on a home inspection. But hiring your own inspector before placing your house on the market can help you identify things to fix ahead of time and make your home more attractive to the buyer. For example, you’ll find out if your roof needs replacement or if any electrical or plumbing work should be done.

Copyrighted, Kiplinger Washington Editors, Inc.

 

Would you like more information on homes for sale in your area? Call me at 678-575-6735 or search the Georgia MLS. CLICK HERE to be directed to the Georgia MLS

 

Bargains for home buyers

Consumer Reports
Recession’s bright side? Bargains for brave consumers

Lets say you have some cash on hand, your job (or other source of income) is secure, and you love a good bargain. What opportunities might a recession bring?

First a disclaimer: Nobody, including us, knows whats ahead for this economy or, indeed, precisely whats happening now. (Recessions are officially determined after the fact by the National Bureau of Economic Research.)

However, the battle-scarred veterans of our Money team have seen our share of recessions, and some of us even took notes. Based on our collective judgment, here are some of the possible buying opportunities that consumers with cashand the guts to spend itmay find:

Homes. Home prices are already down in many parts of the U.S. Where they go from here is anybodys guess, but few of us would expect them to rise at a steep pace anytime soon. So if youre in the market for a home, now could be a good time to start looking and get a baseline feel for the marketeven if you decide to hold off buying for a while.

Mortgages. Interest rates are already relatively low, averaging 5.42 percent for a 30-year fixed-rate mortgage as we write this. Credit standards have been tightening, though, so expect higher hurdles in getting the very best rates.

Stocks. Some are sure to become bargains, but unless youre a stellar stock picker, consider a no-load stock index fund and hope to benefit from an overall rise in the market. Keep in mind that stock prices will often start upward well before a recession ends, as investors look ahead to better times.

Credit cards. Our resident credit expert thinks people with good credit scores should have a golden opportunity to negotiate for lower rates. Issuers will want to hold onto creditworthy customers more than ever.

Cars. If demand continues to drop (sales for 2007 were down compared to 2006), carmakers and dealers will have to do something to move their wares.

Appliances and electronics. Ditto.

Luxury goods. Sales are already slowing, we hear, so high-end goods may carry less-high prices.

EBay stuff. People eager to raise cash may be auctioning off knickknacks and whatnots in record numbers. So that Pee-wee Herman doll or first edition of Proust youve long wanted could be yours for the clicking.

Home remodeling. Lower demand should mean more room to bargain and, possibly, less wait to get the work started. If you need to finance your home improvement, you might also find favorable borrowing terms if your credit score is high. ? ? Travel. Our travel expert says to expect fare cuts from the airlines, but beware of the carrier going bankrupt before you can use your ticket. Hotels and rental cars should see cuts too.

Other services. If its something consumers can put off until the economic clouds clear (cosmetic dentistry vs. an aching tooth, for example), demand should drop and prices along with it. And it rarely hurts to haggleeven in the best of times.

Copyright © 2004-2008 Consumers Union of U.S., Inc

Home Buying Opportunities on the Rise – Alpharetta, Ga.

Lower Fed Rate Means Opportunities on the Rise:

For the first time in more than four years, the Federal Reserve cut its Fed Funds Rate, which directly impacts millions of American borrowers. And while this important decision has many implications, there’s still some debate among experts about what this means to the economy as a whole.

The Federal Reserve meets again in six weeks, and no one is certain how market volatility and inflation concerns will affect their future policy and decision-making. Bottom line: Take advantage of this opportunity while you still can.

Call me right away.

If you’re looking to capture a lower interest rate for refinancing or buying a home, this could be your best opportunity to do so. If you have an Adjustable Rate Mortgage, while this rate cut might help to improve your situation, now is the time to refinance into a fixed-rate loan.

If you have a Home Equity Line of Credit (HELOC) or credit cards tied to the Prime Rate, the Fed’s cut in the Fed Funds Rate just put a little money in your pocket.

Borrowers waiting for a lower fixed-rate mortgage may be waiting for a long time. The chart below clearly shows how Fed Funds Rate cuts do not translate into cuts in fixed-rate mortgages. In January 2001, the Fed Funds Rate was at 6% and 30-year fixed rates averaged 7.03%. By December 2001, following 4.25% in cuts throughout the year, home loan rates were actually up to 7.07%.

For information about Alpharetta Real Estate, Market Trends, Events and Happenings in and around Alpharetta, please call Traci at 678-575-6735 or send an e mail to
huntforhouses@yahoo.com

HOUSES STACK UP AS MARKET SOFTENS ALPHARETTA, GA

Houses stack up as market softens
By JULIE B. HAIRSTON: Atlanta Journal-Constitution: 07/01/07

Lela Hinson put her Campbellton Road house on the market last fall just as the U.S. real estate market plunged into its deepest sales slump in years.

Working without an agent, Hinson only managed to draw a few lookers and no takers. Month after “stressful” month, her house languished on the market.

“I did get a few calls, but mostly people just wanting to look at the house and who were not prequalified,” said Hinson, 28, a paralegal. “Nobody was really interested.”

Throughout metro Atlanta, agents and brokers are reporting slowed sales and rising inventories of unsold houses, even as national reports indicate month after month of falling sales and prices now projected to last well into 2008.

Harvard’s Joint Center for Housing Studies reports that the current national oversupply of unsold houses would take two years to sell off.

We work closely with sellers now to negotiate the tricky choices the soft market imposes.

“Are you willing to list your home slightly below the market value in order to make the sale?” she asks them. “Some sellers are not willing to do that and some are.”

From May 2006 to May 2007, inventories of unsold houses in metro Atlanta soared in every county, climbing between 18 percent and 70 percent in just one year, depending on the area.

Cobb County seems to have struck the best balance in the softening market, holding its inventory to less than an eight-month supply, an increase of just over 21 percent from the year before.

Hardest hit were Rockdale County, where inventory increased more than 70 percent to more than one year’s supply, and south Fulton, where a 53 percent increase pushed supply to almost 13 months.

The marketing director for a local RE company said Atlanta’s market slowdown began last spring and “the bottom fell out at the end of the year.”
“South Fulton,” Carver said, “a few years ago was the talk of the town. Everybody was flocking there. Then, the months supply [of unsold homes] just rocketed up.”

Soft-market strategies
After mulling her options, Hinson, whose home was in that tough south Fulton market, decided to call in an expert. She had met an agent this year when Wilson stopped by to look over the property.

When Hinson decided to hire the agent, the agent made a careful analysis of the property’s value. Impressed with the 1-acre lot and attractive interior features, the agent actually advised Hinson to raise her asking price to $130,500 from $120,000 based on sales of comparable properties in her area.
Potential buyers sometimes suspect a hidden flaw or legal entanglements when a house is priced below its market value.

Two weeks later, Hinson and her agent had a firm offer. The property is set to close at a price of $129,500 on Tuesday — more than six months after she first began her efforts to sell.

“It’s just taking longer to sell. Buyers have so much to choose from,” she said. “A home might be out there 60, 90, even 120 days now.”

Cancellations rise
Greg Duriez, division president for KB Home, the national builder that debuted the popular Martha Stewart line of homes last year, said the slowdown is showing up in more ways than one.

“Net sales are slower than they were last year, and not only are sales slower but [contract] cancellations are up,” Duriez said. Hampton Oaks in south Fulton County was the second Martha Stewart community in the country. The company has since launched Windchase in Cherokee County, also a Martha Stewart community.

KB Home is reporting about 30 percent of its contracts for new homes in metro Atlanta are being canceled before closing. In 2004 and 2005, he said cancellation rates averaged in the 15 percent to 20 percent range.
In part, Duriez blamed tighter mortgage lending standards for the high cancellation rate as a growing rate of default on risky, subprime loans sweeps the nation. He said he expects the effect to fade as buyers become more accustomed to the new standards.

David Tufts, president of the Marketing Directors, a national marketing firm for new condominium developments, said the real estate slowdown has affected metro Atlanta sales, but he expects the area to be spared its worst effects.
“There really is a lull in the market, but it’s not for any economic reason in Georgia,” Tufts said. “Atlanta in particular is not a ‘bubble market’ and never has been.”

Cities like San Diego and Miami are prototypical of the so-called bubble markets. In those cities, real estate prices experienced double-digit increases for several years running as speculators bought and sold property for quick profits. Such areas have been especially hard hit as investors withdraw and overbuilt, speculative projects sit unsold.

Atlanta, by contrast, has seen smaller but steady gains in the 3 percent to 5 percent per year range, and growth projections for the metro area continue to buoy developers’ optimism that currently high inventory levels will be absorbed quickly in the recovery.

“Once the national market improves, [Atlanta] is really going to pop,” said Metro Brokers’ Carver. “We’re going to see a huge pent-up demand.”
Duriez shares Carver’s perspective.

Metro Atlanta, which is gaining some 500 new residents every day according to the U.S. Bureau of Census, is expected to gain 1 million more people by 2030.
“It’s still a healthy market,” Duriez said.

Intown, luxury hold up
While average prices nationwide have recently experienced their steepest decline in 16 years, Atlanta’s median home price continues to increase at about 5 percent a year, reaching $191,587 from $182,500 in 2005. Fayette County on metro Atlanta’s Southside posted the highest median price for a new home at $370,187, while north metro’s Forsyth County posted the highest median resale price at $252,000.

With empty nesters and traffic-weary suburbanites repopulating the city’s core, prices and inventories in the city of Atlanta are faring better than many other areas, according to Carver.

And outside the Perimeter, Douglas County and north Fulton are faring well in the luxury house price categories starting around $1 million, Carver added.
“Right now, the high end in certain areas is holding up well,” Carver said.
But metro Atlanta is unquestionably a buyer’s market, with developers sweetening their incentive packages and sellers showing great flexibility in price negotiations.

“Don’t be afraid to ask for things now,” Carver said.
Having fared well as a seller, Hinson and her architect husband, Antonio, ended up in good position as buyers of a new College Park house, where the builder upgraded their new home’s accessory package while they were waiting for the contract on the Campbellton Road house to close.

Lower Fed Rates Means Home Buying Opportunitis on the Rise

Lower Fed Rate Means Opportunities on the Rise

For the first time in more than four years, the Federal Reserve cut its Fed Funds Rate, which directly impacts millions of American borrowers. And while this important decision has many implications, there’s still some debate among experts about what this means to the economy as a whole.

The Federal Reserve meets again in six weeks, and no one is certain how market volatility and inflation concerns will affect their future policy and decision-making. Bottom line: Take advantage of this opportunity while you still can. Call me right away.

If you’re looking to capture a lower interest rate for refinancing or buying a home, this could be your best opportunity to do so. If you have an Adjustable Rate Mortgage, while this rate cut might help to improve your situation, now is the time to refinance into a fixed-rate loan.

If you have a Home Equity Line of Credit (HELOC) or credit cards tied to the Prime Rate, the Fed’s cut in the Fed Funds Rate just put a little money in your pocket.

Borrowers waiting for a lower fixed-rate mortgage may be waiting for a long time. The chart below clearly shows how Fed Funds Rate cuts do not translate into cuts in fixed-rate mortgages. In January 2001, the Fed Funds Rate was at 6% and 30-year fixed rates averaged 7.03%. By December 2001, following 4.25% in cuts throughout the year, home loan rates were actually up to 7.07%.