It's the Worst of Times...It's the Best of Times

It's the worst of times (sellers). It's the best of times (buyers).

But, one thing is for sure. It will not be like this forever.

Buyers! Did you know the buyer tax credit for a potential of $8000 runs out in April? You must be under contract to purchase a home by then, and then it must close by 6/30/2010. Did you know interest rates are still at historicial lows, usually around 5%?

Sellers ask me "why should I even try to sell right now? Shouldn't I wait till Summer? Maybe the market will pick up then".

Well, let's take a look at that.

Elyce Glink, host of "Expert Real Estate Tips," an Internet video show, and many other real estate experts expect foreclosures to flood the market in the near future as interest rates adjust. Believe it or not, housing inventory  is down considerably, compared to this time last year. Why wait to be competitive with the many foreclosures expected to enter the market this year? If you have a home that has been well maintained and shows well, buyers are thirsting to see "nice homes", not just foreclosures.

And, Sellers, it's not just "first time home buyers" who may qualify for a tax credit. If you have been in your home for five of the last eight years, you may qualify for up to $6500 tax credit too. Again, the interest rates are phenomenal. Purchasing a home this time next year could quite possible be 2-3 points higher as inflation sets in, as many economic experts predict.  

With "motivated buyers" on the prowl, lower inventory for buyers to choose from, and outstanding interest rates, it looks like a perfect time to sell. It may be as good as it gets for the Seller of 2010. Don't miss this opportunity!  

The Appraisal Bear has Struck Again!

Once again, an appraisal has halted a closing! It came in 12K below contract price. Reason? Even though this sale is a "normal" sale, the appraiser must use comps that were short sales or foreclosures, so that affects the value of a "normal" sale too. Stay tuned for how we work it out.....

FHA to Allow Flip Sales?

Rumor has it....FHA will now allow flip sales. Is this true?

Here is the response from prominent closing attorneys, Weissman, Nowack, Curry and Wilco:

As a matter of fact, yes, subject to some restrictions. Up until now, FHA would not insure a loan if the sales contract was dated within 90 days of the seller's purchase of the property. In other words, to qualify for FHA financing, the seller had to have owned the property for longer than 90 days. However, by memorandum dated January 15, 2010, David H. Stevens, Assistant Secretary for Housing - Federal Housing Commissioner, issued a one year wavier (effective February 1, 2010 through January 31, 2011) from this. Starting February 1, 2010, FHA will insure a loan even though the seller owned the property for less than 90 days.


The following conditions apply: (1) the transactions must all be arms-length with no identify of interest between buyer and seller or other parties to the transaction; (2) if the price is increasing 20% or more (i.e., seller buys at $100,000 and, within 90 days contracts to sell at $120,000 or more) then the lender must justify the increased value by maintaining a 2nd appraisal or other evidence of renovations, repairs, etc. and order a property inspection. The inspection does not need to be FHA approved, but can have no interest in the property or relationship with the seller. The inspector must be hired, and paid, by the lender, although the lender can pass this expense along to the buyer. This wavier does not apply to reverse mortgages.

Investors are going to love this.....

Something Every Buyer in GA Wants

What has every Buyer I've worked with since 1994 wanted (besides a good deal)? That's easy - Square footage provided on the listing!!

In the past, the multiple list services in Georgia did not allow ANY reference to square footage on listings. This policy was due to past lawsuits that involved discrepanies in the square footage number advertised in the mls and the actual square footage. So, long ago, the policy was set: Restrict any reference to square footage. And believe me, they did. We weren't even allowed to use a reference like: Nearly 3000 SF, almost 3000 SF, over 3000 SF...you get the picture. And, buyers from all over the country hated it!!

That was then. This is now. First Multiple List Service has finally kicked through all the legal mumbo jumbo and will now allow agents to advertise square footage on the listing. We will just need to reference the source of the number, like tax record, appraisal, etc. Finally!!!

New School of Pharmacy Opens this Year in Suwanee

The Philadelphia College of Osteopathic Medicine has a branch campus in Suwanee. And they are opening a new School of Pharmacy in August 2010. Wow!

2009, THE YEAR IN REVIEW

Highlights:

• Our new Prudential Georgia Realty office opened at Suwanee Town Center in January
• Valentine's Day Open House to thank past clients
• Buyers had incredible Buying Power, interest rates are low and $8000 Buyer tax credit
• Suwanee City Hall was completed, as well as rest of retail buildings
• Spectacular Spring...not too much rain, just right temps
• My Army son completed his Associate Degree and didn't deploy overseas this year
• My teenage son got his driver's license in August (see lowlights too)
• Sugar and Spice (my puppies) continue to add joy and love
• Seller tax credit added in October
• Extended buying season lasts into November, due to Buyer tax credit 
• Much less inventory on the market...good for sellers

Lowlights:

• Short sales are the most dreaded transaction, for agents, buyers and sellers
• Average sales price down about 17% from same time last year (Suwanee, Single Family)
• My teenage son got his driver's license in August
• Bank owned properties are often good deals for buyers, but must navigate thru the "our way or no way bank mentality"
• Unprecedented flooding in the Fall wreaks havoc
• Appraisal values continue to be nail biters (many appraisers not familiar with area due to new government rules) 
• Slower than normal summer buying season
• Conventional loans harder to get
• Much less inventory on the market by the end of the year...less choice for buyers, precursor for sellers market

Words to live by in 2010:

Life isn't fair, but it's still good.

Don't take yourself so seriously, no one else does.

However good a bad situation is, it will change.

Frame every so called "disaster" with these words: In five years, will this matter?

      

Lions and Tigers and Appraisals - OH MY!

Appraisals are a real Bear these days.

Take our most recent experience (please).

Beverly's buyer was under contract to purchase for 230K. The appraisal (to the surprise of all) came in at 209K. Wow, a $21,000 difference!

The problem:

The comps used by the appraiser were valid, but it just so happens that most comps were foreclosures, which the appraiser is obligated to use in the analysis, particularly since there weren't any "traditional non stress comps". So, the seller has a choice - either adjust the price to the appraisal price so the buyer can get the loan, or just not sell to this buyer. Keep in mind, the next buyer may have an appraisal that comes in even lower. And, one more little known secret. IF the first appraisal was for a FHA loan, this FHA appraisal will be assigned to follow the property address for six months. The Seller would then have to sell to a conventional loan buyer in order to generate the new appraisal process. Do you know how many conventional loan buyers are out there? A conventional loan buyer must put 10-20% down vs the FHA buyer who puts 3.5% down. FHA buyers far outweigh the conventional buyer in this market and price range under about 350K.

Here's how we worked it out:

The investor seller agreed to adjust his sales price to 213K, which is still higher than the appraisal price but still allows a profit. The buyer agreed to pay all the closing costs, relieving the seller of the $4K obligation previously agreed and will pay the difference of appraisal price and sales price of 4K. The buyer has a net increase of $4200 after adjustments are made for difference in down payment amount, but will buy the home for 17K less than expected.

Win/Win for everyone. The neighborhood value is helped. The buyer will have a home. The seller/investor will move on to another investment. The lender, closing attorney, realtors, carpet company, granite installers, appliance company, general contractor, HVAC company and countless other related entities will all get paid. Don't try this with everyone. Reasonable buyers and sellers are required. (And a little BEE power!)