Cost vs. Value: Remodeling Projects that Pay

Remodeling magazine’s 2008 "Cost vs. Value Report," done in cooperation with REALTOR® Magazine, has just been released. If you have been on the fence about whether to tackle that kitchen remodel or bathroom addition, be sure to check this out! The report shows that maintenance-related projects and moderately priced upgrades are providing stable paybacks, even in a slower market. Despite home price drops in many cities, remodeling projects are holding their own as a way for owners to add value.

Top 10 Project Paybacks

Once again, exterior remodeling projects lead the way for recovery on dollars spent in this year’s Cost vs. Value survey. When you compare the national averages, replacement projects that boost curb appeal—siding, windows, and decks—give you the greatest chance of recouping your money. Inside, only kitchen remodels can compare, at least on a national level.

1. Upscale fiber cement siding (86.7%) ***
2. Midrange wood deck (81.8%)
3. Midrange vinyl siding (80.7%) ***
4. Upscale foam-backed vinyl (80.4%) ***
5. Midrange minor kitchen remodel (79.5%)
6. Upscale vinyl window replacement (79.2%) ***
7. Midrange wood window replacement (77.7%) ***
8. Midrange vinyl window replacement (77.2%) ***
9. Upscale wood window replacement (76.5%) ***
10. Midrange major kitchen remodel (76.0%)

On the local front, Atlanta homeowners can see even better returns!

Additions (midrange/upscale)

Bathroom - 66.1% / 68.9%
Deck (composite) - 75.9% / 65.9%
Deck (wood) -
83.9%
Garage - 70.1% / 66.8%
Master Suite - 71.4% / 65.3%

Remodels (midrange/upscale)

Basement - 78.1%
Bathroom - 75.5% / 72.2%
Kitchen (major) - 79.1% / 73.3%
Kitchen (minor) - 79.9%

Replacements (midrange/upscale)

Roofing - 72.5% / 69.2%
Vinyl Siding - 82.6% / 84% ***
Fiber Cement Siding - --/ 91% ***
Vinyl Window - 79.4% / 82.4% ***
Wood Window - 78.9% / 77.5% ***

*** A quick note on these items. In older homes, particularly in Atlanta's intown neighborhoods where the historic character of the homes are highly valued and sought after, I would NEVER recommend replacing the original doors and windows if you can help it. If they must be replaced, make sure to use high-quality solid wood options that mimic the original detailing as closely as possible. Similarly, while vinyl siding is inexpensive and very low-maintenance, it will actually DECREASE your home's value in these areas. If siding must be replaced, fiber cement siding (often called Hardi Plank) is only marginally more expensive than vinyl but it gives the appearance of traditional wood siding. In more suburban areas where the homes have been built in the last 20 years you will start to see a greater return for using vinyl windows & siding, but in most cases in metro Atlanta it is always smarter to go with wood.


Why Renovation Pays

Why are renovations holding their value better than home prices today? "When housing slows down, people stay put and renovate their house to make it more livable," says Paul Zuch, president of Capital Improvements, a designing, building, and remodeling company in Dallas. And by renovating before they sell, home owners get to enjoy the new space themselves, not just make the home more appealing to buyers. "It just makes sense," says Zuch.

Recent renovations also make buyers’ lives easier. "Home owners who remodel their home are providing a service to future buyers," says Eileen Nelis, a broker at Savvy and Co. in Charlotte, N.C. "When buyers purchase, they don’t want to do all that painting and remodeling, and they don’t want that price tag. They may be willing to make improvements down the line, but when they purchase, they want to open the door and have everything complete. It reduces their stress."

Making home improvements can also reduce sellers’ stress by heading off that time-honored negotiating technique—pecking away at the sales price by pointing out imperfections. "If sellers have done some improvements and dressed up their property, the improvements will help sell it," says Bernard Fallon, broker at Fallon Associates Realty in Rochester, N.Y. "If sellers don’t want to improve their property, buyers will tick off the repairs and try to take them off the price."

That doesn’t mean that every home owner should do every renovation, even in a more stable real estate market. Take Tulsa, Okla., where median home prices actually edged up slightly more than 2 percent in 2008, according to NAR. REALTORS® in Tulsa reported that, of the 30 remodeling projects surveyed, only 16 netted home owners at least 80 percent of the cost.

"Not every neighborhood will support the additional work," says Jim Hemphill, a sales associate at Coldwell Banker Select in Tulsa, "but in older, more established neighborhoods, if you redo a kitchen or bathroom or add a master bath or bedroom, you’ll get your money out."

Despite the value, the weak economy is likely to slow seller spending on remodeling, at least in the short term, predicts the most recent Leading Indicator of Remodeling Activity computed by the Joint Center for Housing Studies at Harvard University.

The LIRA for the third quarter of this year estimated that owners’ spending on home improvements will decline at an annual rate of 12 percent by the second quarter of 2009, continuing a two-year downward trend. Spending is unlikely to recover until the housing market turns around, according to the Center.

Yet, despite declines in overall remodeling dollars spent and a still shaky housing market, "people’s homes are still one of their best, most solid investments," notes Zuch. "Even though the markets have gone through some adjustments, it’s still smart to invest in your home."

Financial Housekeeping Tips for the end-of-the-year

December can be one of the busiest times of the year. Between decorating for the holidays, shopping for the kids, traveling to see the relatives and enjoying the festivities, this month can fly by like no other. Taking just a few minutes to make sure your financial house is in order before the year wraps up is time very well spent. Here are a few simple suggestions to help you prioritize your financial housekeeping over the next few weeks:

1. Review your Benefits. If your company holds "open enrollment" for benefits at this time of year, make sure you review all of the options available--as opposed to simply taking on the same choices as last year. This is especially important, if your spouse also receives benefits through an employer. That's because your situation or benefits may have changed over the year, and it may make more sense for you to switch coverage from one spouse's plan to the other's. And make sure that you take full advantage of pre-tax spending accounts, such as the ability to pay daycare and medical in pre-tax dollars! Pre-tax spending accounts are use-it or lose-it plans and many companies end their benefit plan year on December 31. Be sure to check with your plan provider.
   
2. Asset Allocation. Year-end is an ideal time to open up your 401k statement to examine how your individual funds have performed. We all know that the financial markets have been up and down quite a bit over the past couple of months, so don't be too surprised if your accounts aren't progressing the way you might have hoped. But rather than get discouraged or simply ignore your accounts, take the time now to meet with your financial advisor and discuss if you should re-allocate from the better performing sectors back to the under-performers. This concept is called "asset allocation" and has been around for several decades. Its value cannot be overstated. Most financial planners believe that proper asset allocation can be one of the most important factors in your overall return. So take this year-end opportunity to review your plans with your financial planner to see what, if any, adjustments you should make.
   
3. Automate your New Years Resolution. Many people make financial resolutions to save more or pay down debt. In today's economy, it's a safe bet more consumers than ever will be making those kinds of resolutions. The good news is that with online banking, it's never been easier to keep that resolution. Simply hop online to your financial institution's website. Chances are, with a few clicks of the mouse, you can establish an automated savings account that allows you to send a certain amount of money to a savings account on a regular basis. Most online banking websites also allow you to easily set up automatic payments to a loan or credit card. Automating your financial decisions dramatically increases the likelihood that you will follow through on your plan
   
4. Ask Santa for a Budgeting Program. These days, we all seem to be on some kind of a budget. The problem is, most of us have trouble calculating where we're spending too much or even where all the money goes each month. That's where a budgeting program can come in handy... and this holiday season may be the best time to ask for one. Granted, opening a copy of Money or Quicken for your holiday present is probably not what you dreamed about as a child, but these types of budgeting and household finance programs may be the best gift you will receive this year. With a couple of hours work, you can download your various balances and accounts directly into these programs, and set them up to automatically update on a daily or weekly basis. Once you have a few months of transactions in these programs, they can quickly provide you a summary of what your real budget actually looks like. The results may surprise you!
   
5. Analyze your Debt. Make sure you know what rates you are paying on all your outstanding debts. If you have trouble figuring this information out, just give me a call or send me an email. I can help you determine what rates are being paid and if your current overall debt structure makes sense. Working together, we may be able to make changes that will put more money in your wallet or help you achieve other important financial goals.
   
6. Give. December is prime time for giving to charities, for both tax reasons as well as holiday spirit. For example, Toys for Tots is a great program that helps deliver toys to children for the holidays. Or, you can give to a local food shelf or soup kitchen that helps prepare meals for those who would not otherwise enjoy the holidays. Giving will put a glow in your heart this holiday season...and a glow in your wallet come mid-April.

By following these suggestions, you'll be better prepared for a happy New Year in 2009! If you have any questions about specific steps or need some help, please call or email any time. Have a great holiday season!

10 Real Estate Myths Debunked

RISMEDIA, Oct. 29, 2008-

With mortgage meltdowns, plummeting home prices and soaring foreclosure rates constantly in the news, it’s no wonder people are wary of the housing market these days. But contrary to popular belief, things are not as dismal as they seem, according to Lawrence Yun, chief economist of the National Association of Realtors. Yun debunks 10 commonly held beliefs about the current housing market, and FrontDoor.com offers 10 related tips.

1. Peak-to-trough home price declines to date have been about 20%. Wrong. Measurements of home price declines can be skewed depending on which homes in which markets are being measured. For instance, the Case-Shiller Index, which indicates that home prices are down 20%, is heavily skewed towards homes with subprime loans and other distressed home sales. These troubled homes have experienced a steeper decline than home prices in general, says Yun, adding that both government data based on loans backed by Fannie Mae and Freddie Mac and data from the National Association of Realtors suggest much more modest price declines.

TIP: If you’re selling your home, the best thing to do is price your home right.

2. The much smaller number of new homes now under construction indicates the dismal outlook for the housing market. Wrong. The inventory of homes on the market is very high, so the last thing we need now is more new homes being built. Home builders have cut back sharply on production, which will help lower inventories and stabilize prices. The builders have done exactly what market forces are dictating under current conditions, Yun says.

TIP: With many new homes completed but not sold, you can find great opportunities.

3. Even when the housing market recovers, home price growth will be only 4 to 6% per year — much less than historical average returns for the stock market. Not true, especially with how the stock market is currently performing. Most buyers put less than 20% of their own money into a home purchase; this borrowing power can translate to a greater rate of return. This is how Yun explains it: Home price appreciation historically has been about 1 to 2 percentage points higher than consumer price inflation, which translates into about 4 to 6% per year. But this growth rate cannot be viewed as a rate of return like the stock market. The reason is that most people do not buy a home for all cash, instead making a cash down payment and borrowing the rest. The leverage this borrowing creates can magnify returns — and losses. If price growth returns to historic norm, the price growth of 4% can easily turn into 20 to 30% rate of return if the home buyer makes a down payment of 10 or 20%.

TIP: Get the fundamentals right when investing in real estate.

4. Impending baby boomer retirements and moves to small homes will cause a glut of homes on the market. Wrong. The first edge of the baby boomers has reached 60 years of age and the massive bulk of that generation will soon go into retirement, but far from trading down, many of these older homeowners are keeping their homes or moving to ones of comparable size. And even if more boomers do sell their larger homes in the years ahead, Yun points out, the rapidly growing U.S. population should absorb the inventory of existing homes on the market.

TIP: Active seniors can find a retirement community that caters to their needs and interests.

5. The federal government takeover of secondary mortgage companies Fannie Mae and Freddie Mac is a bailout that will cost taxpayers bundles. Too soon to tell, says Yun. It’s conceivable that taxpayers may have to cover some losses. It’s also possible that the government takeover will result in no loss of taxpayer dollars. Even if taxpayer funds are used, the bailout would be preferable to the global economic problems that would have occurred if Fannie and Freddie had gone belly up.

TIP: Uncle Sam is “bailing out” homeowners facing foreclosure. Find out more about the Hope for Homeowners plan.

6. The Federal Reserve controls mortgage rates. Wrong. Yun explains: The Fed’s activities influence mortgage rates but don’t directly control them. What the Fed sets is a very short-term interest rate called the Federal Funds Rate. Mortgage rates are determined by global savings as well as credit spreads and inflationary pressures. Over the past two years, the Fed has raised the Fed Funds Rate to 5.5%, and then cut it deeply to around 2%. All the while, the 30-year mortgage rate has averaged in the 6 to 6.5% range.

TIP: Today’s rates don’t look bad compared to the 10% we saw in the early ’90s and 17% in the ’80s.

7. It’s the wrong time to buy. Wrong. All real estate is local. For those who are financially and mentally ready to buy, there has never been a better time to be a buyer in many markets. An abundant selection of homes and historically low interest rates give buyers an edge over sellers. The recently passed $7,500 federal tax credit for first-time home buyers creates an added incentive. For someone with a long-time horizon, Yun says, there is very little worry about home values since homes have historically provided a solid foundation for wealth accumulation.

TIP: Compare the pros and cons of renting vs. buying to see what makes sense for you.

8. It’s the right time for everyone to buy. Not neccessarily. All real estate is local, and everyone is unique. Someone who is not emotionally or financially ready should not be forced or induced to join the rank of homeowners, even when a market presents good buying opportunities. Potential homeowners clearly need to understand that the decision to move up to ownership requires sacrifices, like saving up for down payment and elevating their credit scores. Homeowners who lose their home to foreclosure serve no one’s interest, Yun adds.

TIP: Take a good hard look at your financial status and create a homeowner’s budget to see if you’re ready to buy a home.

9. It’s a terrible time to sell. Wrong. In markets where home sales are picking up strongly, a seller can easily get an offer if the property is priced correctly. Also, Yun says, for those looking to trade-up, selling low on an existing home is more than offset by buying the new move-up home at a lower price. When the market recovers, home price appreciation on the traded-up home will bring bigger bang for the buck.

TIP: Homebuyers want bargains in this market. If you price your home much lower than your competition, you might end up with a bidding war.

10. With the advent of the Internet, more and more homes are being sold by owners (FSBOs), and real estate practitioners are becoming obsolete. Nope. According to Yun, the share of home sellers who choose to go it alone when selling their home has actually decreased from about 20% in the late 1980s to about 12% today. Even after these sellers successfully complete a transaction, only 4 in 10 say they would sell their next home without the assistance of a real estate professional.

TIP: You don’t have to sign a listing contract to talk to a Realtor. Ask family and friends for referrals and interview a few. You might even get some free advice.

Are rates dropping to 4.5% ?

I have gotten a lot of questions about this in the past week after news came out that the Fed would buy mortgage debt at a rate that would allow lenders to offer buyers a 4.5% interest rate on a 30 year fixed rate mortgage. On December 4th, the Wall Street Journal reported:

The Treasury Department is considering a plan to revitalize the U.S. home market that would push down interest rates for loans to purchase a home, according to people familiar with the matter.

The plan, which is in the development stage, would temporarily use the clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks to lend at rates as low as 4.5%, more than a full point lower than prevailing rates for standard 30-year fixed-rate mortgages.

Several people have asked me if now is the time to refinance. Here is the deal.... this was proposed by a lobbyist and at this point is simply that: a proposal. The lenders I have spoken with do not seem to think it will actually happen, but you never know! In the meantime, 30 year fixed rates are in the mid 5% range for people with top notch credit so if you are planning on being in your home for more than 2 years and your rate is higher (or you have an ARM that is about to end), it may make sense to refinance. If you want more information, let me know and I will be happy to put you in touch with one of the very capable lenders I work with. And don't worry, if the Fed does decide to move forward with this 4.5% plan, I will be sure to let you know!

Agent of the Month.....AGAIN!

I just heard that I was awarded the November Agent of the Month award as well!!! Very exciting and a nice way to end the year! I couldn't have done it without all my fabulous clients, so a big THANK YOU to them!!!!

Forbes Magazine Predicts Atlanta Housing Market Recovery to Begin in 2009

Posted by Carol M. Flammer, GAR
11/4/2008

Forbes Magazine made some good predictions for Atlanta homebuilders and residents last week. While other cities, like Las Vegas and Phoenix are expected to see home prices decrease by up to 50%, Atlanta is predicted to see significant increases as early as 2009. (This reiterates that NOW is the time to buy Atlanta Real Estate. Discounts on current new home inventory are available now. They won’t last forever!)

Although Forbes mentions the number of Atlanta foreclosures in early 2008, our continued steady job growth rate promises an end to our housing slump. In fact, next year home prices are expected to jump up by 32.5% for single family homes around the metro Atlanta area. Multi-family home prices are expected to rise by as much as 18.4% and job growth will remain around the steady 2% yearly increase that has kept Atlanta afloat and the envy of the nation. We are placed at number nine in the group of ten “lucky cities” that are predicted to experience long term recovery that will begin next year. So while times may seem tough now, if we can just hold out for a little while longer, things should be looking up for the economy and the Atlanta housing market once again!

A VERY Happy Thanksgiving!!!!

Ok, I admit it, this is not real estate related, I won't even try to pretend that it is. I want to give a HUGE shout-out to my Georgia Tech Yellow Jackets for their huge win over U(sic)GA this past weekend!!!!! We have not beat them since I graduated from Tech, so this was a long time coming! It was especially sweet since U(sic)GA started the season ranked #1 and was still highly ranked when we beat them...and of course, we beat them between the hedges! Congrats to Coach Paul Johnson for winning the most important game of the season his very first year out.

GO JACKETS!!!!!!!

Immaculate 4/2.5 Home For Lease in Charleston, SC!

True rocking chair front porch in one of Charleston's most desirable neighborhoods! I'On offers the quaint home-town feel and historic character of the penninsula without the expense & hassle. This home backs up to the Rookery so is very private and quiet, but is an easy 5 minute walk to the shops & dining in the town square! Steps away you can enjoy the many fabulous events that take place at the Ampitheater, and of course the extensive walking trails throughout the community are immediately accessible. I'On also boasts a private boat launch, swim & tennis facilities, numerous playgrounds, and a multitude of fabulous community events throughout the year for the whole family!

This immaculate 2500sf 4 bedroom/2.5 bath home offers a large master on the main floor with huge walk-in closet, master bath with dual vanities & garden tub, and natural light galore. The kitchen has tons of storage, solid-surface counters, breakfast bar, and upgraded appliances. Opens to living and dining area with a spacious feel which is perfect for entertaining! Enjoy a fabulous fireplace in the living room as well as gleaming heart pine floors & custom trim work throughout this beautiful home. The 3 upstairs bedrooms are a great size with ample closet space and walk-in storage in the hall...in fact, there is tons of extra storage space throughout! Nice two-car garage and plenty of extra parking available in the driveway. Great floor plan for roommates or a family! No smokers please.

$2500/month

Agent of the Month!

I was incredibly pleased to find out last week that I am the Agent of the Month in my office for October! Usually that award goes to one of the many agents in my office who have been in the business for many many many years, so I was really proud to get it barely a year after I started my real estate career. Hope this is a great sign of things to come!

Happy Clients: Dana

"After searching for over three years for the perfect piece of property, Alix helped me make my dream a reality. A home on 15 acres for horses only 11 miles from downtown Atlanta! Talk about acheiving the impossible!!!"

- Dana M.

My housewarming gift to Dana

I met Dana two years ago when I started back riding horses, a lifelong hobby that had taken a back-burner after college due to time constraints. I leased Dana's horse Vic from her for a year and she quickly morphed from my trainer into a great friend!

In early Fall 2007, Dana approached me about helping her find her dream property: acreage that she could have horses on as close to downtown Atlanta as possible. Not an easy feat on a budget! I knew because of zoning restraints, this was going to be a tough one and that I was going to have to think outside the box. The trick with finding property that is appropriate for horses is finding something with enough cleared acreage for pastures to support them which is also zoned to allow them. The trick to making it affordable is to look at property that is not currently being used/sold as horse property, as that typically comes with a premium price tag. This involved some digging on my part to make sure I really understood the various zoning restrictions and building codes, while also juggling the specific needs Dana personally had for the property.

After quite a bit of digging and several phone calls, we located what seemed like the perfect piece of property: a 5 bedroom home in Stone Mountain sitting on 15 acres of land, 14.75 of which were in a flood plain. This was ideal because the property was not valuable to a developer since it was in a flood plain, therefore keeping the price down. We went to see the property and were very pleasantly surprised! Over half the land had already been cleared and it was nice and flat; there were several existing outbuildings that could be easily converted into shelters for the horses and storage for their food & equipment; and the house was a great size and literally 15 minutes from downtown Atlanta. It was perfect!

The Atlanta Jump Club enjoys the new farm!

Unfortunately, it was also already under contract to someone else. I spoke with the listing agent and found out that the current buyers were having problems with their financing, so we submitted a very strong back-up contract and I spent the next 2 weeks calling the other agent every day trying to find out what was going on and if there was anything we could do to get our contract in first position. This property was just too perfect for what Dana needed to let it slip away. There finally came a point where the buyers were asking for another extension due to financing problems. I took that opportunity to give the other agent my hard-sell about why my client and our offer were the better option and was able to convince him and his clients not to agree to the extension and instead put ours into first place. Hallelujah!!!

Pounding in the fence posts for the new pasture!

After a scary delay due to some fairly serious title problems with the property, the attorney finally got it worked out and we closed in November '07. Dana now happily lives at "Jump Club Acres" with several horses and her dog Ripple and has made many improvements to the property including building a barn, fencing 4 pastures, and creating a riding arena. My own two dogs love to go out and visit her and run around with Ripple while Dana and I enjoy watching the horses graze from her back deck. CONGRATS DANA!!!

Well-selected Residential Real Estate Will Always Go Up In Value

According to the most recent report (2nd quarter, 2008) from the Office of Federal Housing Enterprise Oversight, home prices/values in Georgia continue to rise. There has not been a 12-month period in which home values have declined in Georgia. Click here for that report.

The Consumer Bailout That Nobody Knows About

RISMEDIA, Oct. 1, 2008-

As congress considers various bailout proposals for the financial system, there is a little known ‘bailout’ for home owners that has already been enacted into law, according to Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. Section 1403 of the new housing bill that was signed into law on July 30, 2008 (HR 3221) requires mortgage servicers to modify loans for homeowners and help them avoid foreclosure as long as three requirements are met:

1. Default on the mortgage either has already happened or is “reasonably foreseeable”
2. The home owner is living in the property as his or her primary residence
3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure

“The fact is that this law is effective immediately, and most distressed home owners are simply not aware that they have this option,” Nicholas said. Borrowers make their monthly payments to mortgage servicers, and servicers keep a portion of the payment as their profit while sending the rest to the Wall Street investors who actually own the mortgage. “This law requires servicers to act in the best interest of all their investors and obligates them to modify your loan if you can afford the modified loan terms and if they are likely to recover more for their investors by working with you than by going all the way through the foreclosure process,” Nicholas said.

When negotiating a loan modification with your mortgage lender, it is advisable to follow this four step process:

1. Make sure you are dealing with your lender’s loss mitigation and/or work out department.
2. Write a hardship letter demonstrating job loss, serious medical condition, balloon payment coming due, adjustable rate reset or some other financial calamity that will make it impossible for you to continue making your mortgage payments as scheduled. Unless you are in imminent danger of default as required by this new law, lenders are not likely to work with you.
3. Send the lender your financial statements, employment records, tax returns and bank statements demonstrating how you would be able to afford the modified loan terms under your present financial circumstances
4. Send the lender a current appraisal of your home or some documentation on recent comparable sales in your neighborhood demonstrating the current value of your home.“The key is to demonstrate how the lender is likely to recover less money through foreclosure than they would by working with you in your proposed loan modification plan,” Nicholas said.

Here is a sample letter that you can use during your renegotiation.

It may be advisable to consult with an attorney - especially if you qualify for a loan modification under the law and your lender still refuses to work with you.

For more information, visit www.CMPSInstitute.org or call 888.608.9800.

12 tips for hiring a remodeling contractor

My husband and I are in the beginning stages of a remodel so I thought I would share our experience and any tips or useful information I come across along the way. Right now we are just coming up with an idea of what we want done and are starting to get quotes from contractors. My background in architecture has been (and will continue to be) very helpful in this process, but the below list (taken from Realtor Magazine) has a lot of good tips which I can say from experience will come in handy!

1. Get at least three written estimates.
2. Check references. If possible, view earlier jobs the contractor completed.
3. Check with the local Chamber of Commerce or Better Business Bureau for complaints.
4. Be sure the contract states exactly what is to be done and how change orders will be handled.
5. Make as small of a down payment as possible so you won’t lose a lot if the contractor fails to complete the job.
6. Be sure that the contractor has the necessary permits, licenses, and insurance.
7. Check that the contract states when the work will be completed and what recourse you have if it isn’t. Also, remember that in many instances you can cancel a contract within three business days of signing it.
8. Ask if the contractor’s workers will do the entire job or whether subcontractors will be involved too.
9. Get the contractor to indemnify you if work does not meet any local building codes or regulations.
10. Be sure that the contract specifies the contractor will clean up after the job and be responsible for any damage.
11. Guarantee that the materials that will be used meet your specifications.
12. Don’t make the final payment until you’re satisfied with the work.

Of course, something I am asked quite a bit (and something that is at the forefront of my own mind as we get ready to embark on this remodel) is what will this do for re-sale value of the house down the road. Remodeling Magazine, in conjunction with Realtor Magazine, does an annual "Cost vs. Value" report that provides some good insight on this very subject!

Available Affordable Housing Initiatives & Programs In Metro Atlanta

Atlanta

Homebuyer Programs – through local nonprofit organizations. 404/330-6390.

Mortgage Assistance Program – available for all borrowers in Atlanta who qualify for a loan under the Home Atlanta program. Downpayment and closing cost assistance up to 5% of the purchase price. 404/614-8320.

Atlanta Empowerment Zone Program – mortgage assistance grant of $4,000 - $20,000, deferred loan recorded as subordinate lien. Minimum tenancy ten years. 404/330-6390.

Homebuyer education programs:

• Community Housing Resource Center: 404/624-1111
• Atlanta Center for Homeownership: 404/588-3700
• Fulton Atlanta Community Action Authority: 404/810-0090
• Atlanta Urban League: 404/659-1150
• Consumer Credit Counseling Service, Atlanta: 404/527-7630

________________________________________

Clayton County

First Time Homebuyers Down Payment Assistance Program - 770/478-7282.
________________________________________

Cobb County

First Home Program – a “soft” second mortgage, $7,500 maximum. 770/528-4630.

Homebuyer education program: Cobb Housing, Inc. – 770/429-4400
________________________________________

Dekalb County

Downpayment Assistance Program – provides 50% of downpayment up to $2,525 from CDBG Program funds. 404/286-3308.

Single Family Affordable Housing Program – partnership with Dekalb Housing Authority and/or CHDO. 404/286-3308.

Homebuyer education programs:

• Dekalb/Fulton Housing Counseling Center – 404/659-6744

_______________________________________

Fulton County

Home Ownership Assistance Program (HOAP) – for first time homebuyers. Up to $5,000 for downpayment assistance with low or deferred monthly payment, and $2,500 grant for closing cost assistance. 404/730-8083

American Dream Downpayment Initiative (ADDI) – upfront downpayment and closing cost assistance compliments HOAP program. 404/730-8083
________________________________________

Gwinnett County

HOME Stretch Loan Program – first time homebuyers provided with downpayment, closing costs and prepaid assistance funds. 678/808-4477

Homebuyer education program:

• Gwinnett Housing Resource Partnership – 770/448-0702

________________________________________

Other (Georgia)

The Georgia Dream Homeownership Program makes purchasing a home more affordable for low-to-moderate income families and individuals by offering fixed, low-interest rate first and second mortgages loans and down payment assistance. This program is administered by the Georgia Department of Community Affairs. 404/679-4847

United Way: Individual Development Accounts (IDA) – allows accumulated savings/down payment funds, matching 4 to 1. 404/614-1000.

Emergency Mortgage Assistance – these resources help homeowners facing a temporary financial hardship to make their mortgage payment. Given that funds are limited and the need is great, these organizations may offer referrals when unable to provide direct financial assistance.

• Clayton County Community Service Authority – 404/363-0575
• Dekalb Economic Opportunity Authority – 404/929-2500
• Decatur Co-op Ministry – 404/377-5365
• Fulton Atlanta Community Action Authority – 404/810-0090
• Rockdale Economic Opportunity Authority – 770/760-8750
• Gwinnett Economic Opportunity Authority – 770/822-2860
• Norcross Co-op Ministry (Gwinnett County) – 770/263-8268
  

Buy a HUD home with only $100 down!

This is a little known program that can work well for qualified buyers....check it out!

HOPE FOR HOMEOWNERSHIP: HUD CONTINUES TO OFFER

DOWN PAYMENT ‘ASSISTANCE’

ATLANTA, Ga. – In a real estate market plagued by setback after setback -- and most recently, the termination of most down payment assistance programs -- the U.S. Department of Housing and Urban Development (HUD) in Georgia offers hope for homeownership, continuing to offer homes for sale with an option of a $100 down payment.

Amidst the collapse of other down payment programs, the “$100 Down Incentive,” which HUD unveiled in October 2007 as a means to promote and increase homeownership, remains available to owner-occupant buyers who purchase a HUD-owned home with FHA financing.

There are currently more than 2,000 HUD-owned homes for sale in Georgia, varying the gamut when it comes to price, location and condition. Any of these homes which are eligible for FHA financing are eligible for the $100 down program incentive. In such sales, the $100 down payment takes the place of the standard 3% down payment required by FHA.

Anyone who is able to obtain financing is able to purchase a HUD-owned home by having a HUD-registered agent submit an offer via HUD’s electronic bidding system. The only buyer-requirement for those who wish to take advantage of the incentive is that the buyer must live in the home purchased as his/her primary residence for at least one year.

For more information about the HUD Homes Sales Process, the $100 down payment incentive or to search for HUD-owned homes currently available for sale, visit www.hud.gov or www.hudpemco.com.

Happy Clients: Liz

I have been meaning to do this series for a while now and have been woefully behind. My Happy Clients series is meant to highlight the various fabulous people I have worked with thus far and tell a little of their story. For the first in this series, I thought it would be most appropriate to highlight my very first client, Liz.

Liz & I at her housewarming party

Liz was a young first-time buyer that was referred to me through my horseback riding trainer. She is a very cool chic with a great, spunky personality. She is also incredibly responsible and mature financially speaking for her age. Often times my younger clients have mounds of credit card debt and a car they cannot really afford that they bought when they got their first real job out of college. As common as that scenario is, it also unfortunately can make it difficult to purchase a home. However, Liz was a very refreshing breath of fresh air and had followed the advice her parents instilled in her to a T....don't buy something you can't afford. Novel, I know!

Liz was looking for a condo or townhome in the Sandy Springs area, close to her social circle but also an easy drive to her job. With the traffic in Atlanta, that second part was key. Also, being the fiscally responsible person that she is, we had a very definite price range to work within. We looked at several condo developments and two townhome developments and quickly narrowed it down to one condo and two townhomes. I walked her through the pros & cons of each, created a spreadsheet showing recent comparables, tallied up the difference in monthly payments due to things like taxes and HOA fees, did some analysis on resale values, and talked through any concerns she had.

At the end she decided to go with a condo in the Laurel Grove complex, a Frank Lloyd Wright inspired development that offers very unique & spacious units that are flooded with natural light. I helped her understand how, in the condo market in Atlanta, it was SO important to have something unique to offer with regards to re-sale values. There are so many apartment conversions on the market now that they are incredibly difficult to sell and the chances of doing much more than breaking even are pretty slim, so her choice of going with something that will stand out from the crowd when she goes to sell it was critical.

Liz has been in her new place for about a year now and loves it! We go to lunch together every month and she has continued to enjoy not only her unit, but the amenities like the pool and location as well. I love helping people to find that special home, and Liz is no exception....and it always means a lot to me to make a good friend in the process!

When I decided that I wanted to finally stop renting and buy my first place I knew

absolutely nothing about how to go about it. Alix took me through it step by step and explained everything in ways that made me understand what was going on as well as why. Her commitment was to find the best place for my needs as well as my budget, while still making sure I was investing wisely and thinking about long term as opposed to the right now. Her attention to detail and customer focus was what made it easy to put my full trust in her opinion and guidance throughout the entire process. I trusted her with helping me find my first home, and she delivered 110%, not only did I find a great place I also have a great friend. - Liz B.

Down Payment Assistance may have new life

I have had a big surge of business in the past few weeks as people rush to try to close on a home before DPA goes away on October 1st. That has been great (for me) but not-so-great for the many buyers out there who could really benefit from a DPA program, particularly first time buyers. I am happy to report that it looks like their may be a ressurection of some sort of DPA in the near future! So if you were hoping to take advantage of such a program but were not able to get in under the October 1st deadline, don't despair! There may be hope yet!

Daily Briefing for September 17, 2008 From National Mortgage News.

House Panel Okays DPA Bill

The House Financial Services Committee has approved a bill that would allow nonprofit housing groups to continue to arrange downpayment assistance on Federal Housing Administration loans and give the FHA some latitude in pricing mortgage insurance premiums based on risk.

BILL H.R. 6694 passed committee hearing yesterday – on its way to the house floor for a final vote – could be this Friday. If approved, risk based pricing will be attached to new guidelines.

SOLD!!!!

I sold this great house in 42 days and for 101% of the asking price!!!!!

How did I do it? Great staging and excellent, premium marketing. I actually had another agent take the time to let me know that, after 30+ years in the business, he thought my marketing for this home was by far the best he had ever seen. That meant a lot to me and reaffirmed my own belief in my marketing system. Of course, it also helps that I had excellent clients that really listened to my suggestions for how to stage the house and what price point we needed to be at. Makes all the difference!

JUST LISTED!!! Beautiful newer construction in Alpharetta!

OPEN HOUSE THIS SUNDAY, 8/24 FROM 1-4!!!!

This beautiful, well maintained newer construction is located in the desirable Avensong neighborhood. This 3 bedroom, 2.5 bath house boasts fresh paint, designer fixtures, and tons of storage! The fabulous open floor plan is ideal for entertaining, and soaring cathedral ceilings with tons of natural light make this an airy, open home. With the two car attached garage and beautiful fenced backyard complete this wonderful home!

A great location within the Avensong neighborhod at the end of a dead-end street makes this home very quiet with tons of privacy. The neighborhood offers a beautiful pool, clubhouse, playground, and tennis, basketball, & sand volleyball courts. Located within great Alpharetta school districts and minutes from GA400, this house has it all!

For lots more pictures & information, please CLICK HERE!

First-time buyers can earn up to $7500!

The recently passed Housing and Economic Recovery Act of 2008 provides a $7,500 tax credit for qualified first-time home buyers. Here is some helpful information on the tax credit:

First-Time Home Buyer Tax Credit at a Glance:

• The tax credit is available for first-time home buyers only.
• The maximum credit amount is $7,500.
• The credit is available for homes purchased on or after April 9, 2008 and beforeJuly 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
• The tax credit works like an interest-free loan and must be repaid over a 15-year period.

Frequently Asked Questions About the First-Time Home Buyer Tax Credit:

1. Who is eligible to claim the $7,500 tax credit? First time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after April 9, 2008 and before July 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs.
2. What is the definition of a first-time home buyer? The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
3. What types of homes will qualify for the tax credit? Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence and the buyer has not owned a home in the previous three years. This includes single-family detached homes, attached homes like townhouses, and condominiums.
4. Instead of buying a new home from a home builder, I have hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit? Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after April 9, 2008 and before July 1, 2009. In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
5. What is "modified adjusted gross income"? Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains.To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit? Possibly. It depends on your income. Partial credits of less than $7,500 are available for some taxpayers whose MAGI exceeds the phaseout limits. The credit becomes totally unavailable for individual taxpayers with a modified adjusted gross income of more than $95,000 and for married taxpayers filing joint returns with an AGI of more than $170,000.
7. Can you give me an example of how the partial tax credit is determined? Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $7,500 by 0.5. The result is $3,750.Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $7,500 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,625. Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
8. Does the credit amount differ based on tax filing status? No. The credit is in general equal to $7,500 for a qualified home purchase, whether the home buyer files taxes as a single or married taxpayer. However, if a household files their taxes as "married filing separately" (in effect, filing two returns), then the credit of $7,500 is claimed as a $3,750 credit on each of the two returns.
9. Are there any circumstances for which buyers whose incomes are at or below the $75,000 limit for singles or the $150,000 limit for married taxpayers might not be able to claim the full $7,500 tax credit? In general, the tax credit is equal to 10% of the qualified home purchase price, but the credit amount is capped or limited at $7,500. For most first-time home buyers, this means the credit will equal $7,500. For home buyers purchasing a home priced less than $75,000, the credit will equal 10% of the purchase price.
10. I heard that the tax credit is refundable. What does that mean? The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that taxpayer qualified for the $7,500 home buyer tax credit. As a result, the taxpayer would receive a check for $6,500 ($7,500 minus the $1,000 owed).
11. What is the difference between a tax credit and a tax deduction? A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $7,500 in income taxes and who receives a $7,500 tax credit would owe nothing to the IRS.A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $7,500 in income taxes. If the taxpayer receives a $7,500 deduction, the taxpayer’s tax liability would be reduced by $1,125 (15 percent of $7,500), or lowered from $7,500 to $6,375.
12. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program? No. The tax credit cannot be combined with the MRB home buyer program.
13. I am not a U.S. citizen. Can I claim the tax credit? Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
14. Does the credit have to be paid back to the government? If so, what are the payback provisions? Yes, the tax credit must be repaid. Home buyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house, if there is sufficient capital gain from the sale. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. The home owner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the home owner sold the home, then the remaining credit amount would be due from the profit on the home sale. If there was insufficient profit, then the remaining credit payback would be forgiven.
15. Why must the money be repaid? Congress’s intent was to provide as large a financial resource as possible for home buyers in the year that they purchase a home. In addition to helping first-time home buyers, this will maximize the stimulus for the housing market and the economy, will help stabilize home prices, and will increase home sales. The repayment requirement reduces the effect on the Federal Treasury and assumes that home buyers will benefit from stabilized and, eventually, increasing future housing prices.
16. Because the money must be repaid, isn’t the first-time home buyer program really a zero-interest loan rather than a traditional tax credit? Yes. Because the tax credit must be repaid, it operates like a zero-interest loan. Assuming an interest rate of 7%, that means the home owner saves up to $4,200 in interest payments over the 15-year repayment period. Compared to $7,500 financed through a 30-year mortgage with a 7% interest rate, the home buyer tax credit saves home buyers over $8,100 in interest payments. The program is called a tax credit because it operates through the tax code and is administered by the IRS. Also like a tax credit, it provides a reduction in tax liability in the year it is claimed.
17. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return? Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount.
18. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest? Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.
    

The above information was posted on and obtained from the National Association of Homebuilders website: http://www.federalhousingtaxcredit.com/index.html

SELLERS: Here are some things you can do to make your house stand out

By John Adams, AJC Contributor
Published on: 07/27/08

This summer is a tough time to sell your home. But it's important to recognize that some homes are, in fact, selling. The National Association of Realtors is estimating that more than 5 million homes will change hands this year, and yours can be one of them.

One of the ways to make your home more appealing is to dress it up a little bit. Last week we talked about the importance of your home's condition in the selling process. This week I want to give you some quick and easy ways to make your home stand out from the rest:

• Buy a couple of pots of blooming yellow daisies and place a pot on each side of your front door.
• Paint your handrails and entire front door area to give your entry a fresh, clean look.
• Install a bright brass kick plate at the base of your front door, and attach large brass house numbers to the door or entry area. Also, clean and polish door hardware, or replace, if needed.
• Trim back shrubbery to well below the base of your window frames. It looks better from the street and lets more light into the house.
• Clean out gutters. Make sure gutters drain away from the house by installing splash blocks if needed
• Edge your lawn deeply all the way around. That includes the driveway, street curb, sidewalk and walkway to your front door. It gives your yard a manicured look.
• Seal or repair any cracks in your drive or walkways. If your drive is concrete, have it pressure-washed. If it is asphalt, apply a "black top" preservative coating.
• Upgrade your mailbox and post. Replace what you've got with a 6-inch-by-6-inch cross-post and an oversize new shiny black mailbox. Add shiny brass numbers to the post.
• Make sure the front yard is free of old newspapers and debris, and keep kids' Big Wheels and bicycles out of view of visitors.

Here are some quick improvements for inside your home:

• Walk through every room in your house and see what furniture you can do away with to make that room feel less crowded.
• Store furniture and belongings that you can live without in a storage facility. Empty your closets of everything except the bare essentials for you to live there. Closet floors and shelves should be visible and largely empty.
• Avoid the trap of moving your excess and oversize furniture from your house into your garage. Your garage should be clear of storage items and should not have cars parked in it. An occupied garage looks and feels much smaller than it really is.
• Consider painting the garage floor with floor enamel. Also, look at the new two-step garage flooring kits that create a durable and attractive epoxy finish with a minimum of cost and effort. They are available at home improvement stores.
• If you have any sort of basement, it should be very well lit and smell fresh and dry. Again, remove unnecessary boxes and stored items so the area appears as large as possible. Install plastic sheeting over any exposed dirt to minimize moisture gain, and add a timed exhaust fan.
• De-personalize your house by removing any decorations or items that might generate a negative response from a visitor. I once showed a house where the owner had taken part in the liberation of a town during WWII. Appropriately proud of his service, this owner had the captured Nazi flag displayed on his den wall. Unfortunately, my buyers were put off, and chose to look elsewhere.
• Make sure every light bulb in your house is the maximum safe wattage for that fixture. It is important that your home appear bright and well illuminated.
• In the bath, buy a new shower curtain. And if you have a small mirror over a medicine chest, replace it with a large wall mirror, maybe 36 by 48 inches. It will make the bath look and feel much larger.

These are some of the least expensive ideas that have worked for me over the years. You probably won't want to implement every one of these tips, but just a few can make a positive impact on your potential buyer's experience.

Congress is Set to Limit Down-Payment Assistance

-- Washington Post Washington Post, By Dina El Boghdady
July 22, 2008

Mortgage programs that helped nearly 79,000 people buy homes using government-insured loans last year would be eliminated as part of a broader housing package that Congress expects to pass this week, key lawmakers said. Under these programs, nonprofit groups provide buyers with money for down payments. Home sellers then reimburse the organizations and pay an administrative fee. More than half a million people -- including many first-time home buyers, minorities and single mothers -- have bought homes this way in the past decade using loans insured by the Federal Housing Administration.

But the FHA said seller-funded down payments present the single biggest challenge to its solvency. Borrowers who take part in these arrangements go to foreclosure at nearly three times the rate of borrowers who put their own money down, according to the agency. The fate of these seller-funded down-payment-assistance programs has been in limbo for weeks. The Senate version of the housing bill would have banned them. The House version would not.

Negotiators crafting a compromise bill have agreed to the Senate's position, which also is supported by the Bush administration. "We're going to yield to the Senate on that," said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee and a supporter of the programs. "There are a lot of trade-offs in the bill."

The administration is not getting all it wants on the FHA front. While the compromise bill would get rid of seller assistance, Frank said, it also would wipe out a new FHA initiative under which the agency charges borrowers insurance premiums based on credit risk, instead of one flat rate.
It's unclear how quickly the new policy would kick in if it's enacted. Supporters of seller financing, including members of the Congressional Black Caucus and the Congressional Hispanic Caucus, said they will push to revive it, perhaps under another administration. "The Bush administration does not have a lock on history," said Rep. Al Green (D-Tex.), a member of the black caucus. "They only have a lock on the moment."

The administration has tried for years to end the programs but failed to overcome legal challenges. "No insurance company can sustain that amount of additional costs year after year and still survive," Brian D. Montgomery, the FHA commissioner, said in a recent speech. But supporters of this kind of assistance said it meshes with the FHA's mission to serve low- to moderate-income people.

While the system may have its problems, they say, it should be fixed, not abandoned, so that people like Tanika Warrior are not shut out of the market. Warrior and her husband, Jimmy Hicks, suffered housing sticker shock when they moved to the Washington area from Arkansas a few years ago. The couple, recent college graduates, had depleted their savings on tuition and care for their newborn son. But they had steady jobs and did not want to keep sinking money into rent, Warrior said. They also did not want to put off buying a home because they were not convinced that their finances would be stronger in a few years. "We don't want to throw money in a hole," said Warrior, 24, a federal patent examiner. "My thing is, we pay our rent every month and we've never been late, not once in five years. If we can pay our rent every month, we can pay our mortgage every month."

The couple worked with Nehemiah, the nation's largest down-payment-assistance charity. Nehemiah provided the 3 percent down payment the FHA requires. The couple secured a 30-year, fixed-rate loan for a townhouse in Herndon through First Savings Mortgage. Their monthly mortgage payment is now about $400 more than what they paid in rent, with taxes and insurance included, Warrior said.

Scott Syphax, president and chief executive of Nehemiah, which is based in California, has been in Washington pushing to save the programs. After he got word yesterday of the agreement to ban seller-funded down payments, he said he was "angry and saddened" about the fallout for "families and communities who obviously did not get a seat the table as these harmful policies were conceived."

Syphax and the FHA disagree about the most basic statistics on these loans. Syphax maintains that the agency's assessment is skewed. He said it has undercounted the number of loans made while properly capturing the number of foreclosures it has had to pay for -- thus inflating the percentage of bad loans.

The FHA strongly denies that. It also maintains that programs backed by Nehemiah and other nonprofit groups aim to skirt its policies that prohibit a seller from directly financing a buyer's down payment. Seller assistance distorts "the fundamental economics of a mortgage agreement," Steven Preston, secretary of housing and urban development, said in a letter to Congress.

Sellers who reimburse the cost of a down payment and shell out related fees of $400 or more try to recoup that money by raising prices on the homes they're selling, government officials said. Those higher prices result in larger mortgage loans, making it more difficult for buyers to keep up with their payments, they said. The inflated prices also make it tough for buyers to refinance or sell if they lose their jobs, get ill or face some other financial setback -- hence the high foreclosure rates. "While the seller and lender are able to close a transaction, it is the home buyer and general taxpayer who ultimately bear the long-term risk," Preston said in his letter.

House in so-so condition unlikely to attract big-money offers

By John Adams,

Published on: 07/20/08

Last week we talked about the three reasons a house won't sell. They are condition, marketing and pricing. This week we look more closely at the importance of your home's condition.

Begin by looking at things from the buyer's perspective. Many buyers today believe that prices are falling and that interest rates are likely to decline. And because they are in no hurry, buyers won't even consider making an offer on your house unless it is in excellent condition.

The reality is this: If your home is on the market and needs maintenance or even updates to modern standards, it will likely draw only low-ball offers.

So if you hope to get near maximum market value for your home, it needs to be in excellent condition.

How do I define excellent condition? Yours needs to be a house ready to move into with no upgrades needed, no repairs to be done and no home improvement projects looming.

For example, all the systems of your house need to be brought up to modern standards. The wiring needs to be safe and adequate. The plumbing needs to work properly and with good pressure. The heating and air-conditioning system needs to be in good operating condition and at least have a few years of life remaining. Your roof needs to be relatively new and look good from the street.

The best way to make sure these systems are in sellable condition is to have a comprehensive home inspection performed by a professional home inspector. Remember that your purchaser, if you are lucky enough to attract one, is going to have their own inspector come through later, so you might as well face the music now.

And don't try to justify failure to offer good condition by saying, "Instead of replacing the plumbing now, I'll just lower the asking price by the amount it will cost." Because there are so many homes on the market that are already in great shape, your break-even offer of a slightly lowered price doesn't make sense.

Next, your home must feature a modern kitchen and bath. But there is a trap here that you need to avoid. First, you should know that improvements in these areas tend to be quite expensive. In an older home, a comprehensive kitchen makeover could involve not only new countertops and cabinets, but also flooring, electrical, plumbing, ceramic tiling, lighting and appliances.

My advice is to make sure before you start that you will be able to finish the job. A partially completed renovation looks worse than no renovation at all. Second, it is really easy to overspend in these areas. Why install a new kitchen faucet with only hot and cold water when you can buy one with six different spray heads and a built in cellphone with GPS? It's only money, and the salesman will assure you that buyers will love it.

The cure to this temptation is to know the competition. Know what price range your house will likely bring once it is in good condition, then see what other homes in that same price range have to offer.

Your job is not to offer perfection, but simply to beat the competition in your neighborhood and price bracket.

Finally, a word about getting your home ready to show. Today, the buzzword in the real estate industry is "staging," or the art of decorating and presenting a home to its best visual advantage. While rookie agents think that proper staging is a new science, the successful real estate veteran has been "staging" houses since we all lived in caves. Staging is nothing more than removing the clutter of everyday living and painting a vision of blissful homeownership — whatever that means.

Ask some agents to tour your home and make recommendations. Rank their suggestions based on your own experience looking at homes already on the market. Remember the ideas that offer big bang for the buck. For example, for a relatively small investment, you can often get a big return with newer and brighter light fixtures.

One final consideration is market timing. You may be better off waiting to sell until the market improves. If you are simply unable or unwilling to put your home into excellent condition prior to selling, you might be better off postponing your sale or leasing your home until the buyer's advantage diminishes over time.

Three reasons why your house is still on the market

By John Adams

Published on: 07/13/08

If you've been trying to sell your house, you already know this is one of the most challenging markets we have seen in years.

First, you are fighting a serious excess inventory of new homes. Builders simply overbuilt, and we are many months away from a complete absorption of those homes. In addition, many builders have expensive construction loans and are highly motivated to make a sale.

Next, there is a shortage of ready, willing and able buyers in today's marketplace. I guess a lot of people are simply nervous about the economic future, and when someone is nervous, they tend to postpone major purchases. The truth is that a lot of prospective buyers are waiting to see what will happen.

To make matters worse, a flood of houses for sale is being added to the market by banks and lenders who have foreclosed against borrowers who should never have purchased in the first place. Many of these loans were made to borrowers with questionable credit and unstable incomes. Add that to an adjustable rate loan with little or no down payment, and it spells foreclosure as often as not. These distressed home sales are poisoning the resale environment.

Finally, hovering over everything, there is an air of uncertainty about our future. This lack of consumer confidence is driven home every time we fill up our gas tanks. All these things (and more) have ganged up to make this a challenging summer for the sale of your house.

Even so, it is likely that about 5 million existing homes will be resold this calendar year. If 5 million other people can find a way to sell their houses, surely you can as well.

Here are three key areas to address to make sure you are giving your home every chance for an acceptable offer:

CONDITION: In the world of real estate, there are two markets — retail and wholesale. In order to achieve retail price, the house must be in excellent condition. Anything below "excellent" will drop your home into the wholesale pricing category, and your dollars drop significantly. So don't even try to sell today unless your home is in excellent condition.

Buyers today are not willing to take on a renovation project. There is so much inventory on the market that they simply don't have to. I consider this advice so important that I would make this statement: If you are unable to put your home into excellent condition prior to selling, you might be better off postponing your sale or leasing your home until the market improves.

MARKETING: I know what you are thinking. You are sort of hoping that, because the market is so tight and because of the Internet and everything, you can just put a sign in the yard and your house will sell without an agent, right? Well, it's also possible that the tooth fairy will deliver a full-priced offer under your pillow tonight while you sleep, but it's highly unlikely. The reality is that, today more than ever, you will need professional marketing assistance to get your home sold. And the Internet is not the one-stop solution to all real estate problems that some thought it might become.

The truth is, buyers are looking in a variety of places for your home, and yes, the Internet is one of those places. But the sign in the yard and the flier at the school may prove just as effective as anything else when it comes to getting buyer attention.

If information about the features and benefits of your particular house is not reaching the prospects you hope to attract, then whatever you are doing is ineffective, and you will very likely need professional help. Failing to obtain it is usually penny wise and pound foolish.

PRICING: The price you ask for your home is critically important. In today's real estate market, there are huge numbers of so-called sellers who are simply testing the waters. Today that attitude almost guarantees an expired listing. Instead, buyers today are engaged in an exercise of comparison shopping. No one cares what it may have been worth then. Let's determine what it's worth today. And the only way to do that is to look at comparable homes that have sold recently.

Condition, marketing and price. These three factors, more than anything else, will impact your ability to sell your home. And over the next three weeks, we will look at each in more detail.

Is America's suburban dream collapsing into a nightmare?

Below are two very interesting articles predicting in years to come McMansion suburbs becoming low-income, tenement-type communities. Very interesting and supports my longtime belief that the multitude of suburban, cul-de-sac neighborhoods that have surrounded Atlanta in the last 20 years are NOT a smart investment. (also supports my opinion of new construction, but that’s a different debate)

http://www.cnn.com/2008/TECH/06/16/suburb.city/index.html

http://www.theatlantic.com/doc/200803/subprime/3

Some highlights:

“The experience of cities during the 1950s through the ’80s suggests that the fate of many single-family homes on the metropolitan fringes will be resale, at rock-bottom prices, to lower-income families—and in all likelihood, eventual conversion to apartments.

This future is not likely to wear well on suburban housing. Many of the inner-city neighborhoods that began their decline in the 1960s consisted of sturdily built, turn-of-the-century row houses, tough enough to withstand being broken up into apartments, and requiring relatively little upkeep. By comparison, modern suburban houses, even high-end McMansions, are cheaply built. Hollow doors and wallboard are less durable than solid-oak doors and lath-and-plaster walls. The plywood floors that lurk under wood veneers or carpeting tend to break up and warp as the glue that holds the wood together dries out; asphalt-shingle roofs typically need replacing after 10 years. Many recently built houses take what structural integrity they have from drywall—their thin wooden frames are too flimsy to hold the houses up.

As the residents of inner-city neighborhoods did before them, suburban homeowners will surely try to prevent the division of neighborhood houses into rental units, which would herald the arrival of the poor. And many will likely succeed, for a time. But eventually, the owners of these fringe houses will have to sell to someone, and they’re not likely to find many buyers; offers from would-be landlords will start to look better, and neighborhood restrictions will relax. Stopping a fundamental market shift by legislation or regulation is generally impossible.”

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“The decline of places like Windy Ridge and Franklin Reserve is usually attributed to the subprime-mortgage crisis, with its wave of foreclosures. And the crisis has indeed catalyzed or intensified social problems in many communities. But the story of vacant suburban homes and declining suburban neighborhoods did not begin with the crisis, and will not end with it. A structural change is under way in the housing market—a major shift in the way many Americans want to live and work. It has shaped the current downturn, steering some of the worst problems away from the cities and toward the suburban fringes. And its effects will be felt more strongly, and more broadly, as the years pass. Its ultimate impact on the suburbs, and the cities, will be profound.

Arthur C. Nelson, director of the Metropolitan Institute at Virginia Tech, has looked carefully at trends in American demographics, construction, house prices, and consumer preferences. In 2006, using recent consumer research, housing supply data, and population growth rates, he modeled future demand for various types of housing. The results were bracing: Nelson forecasts a likely surplus of 22 million large-lot homes (houses built on a sixth of an acre or more) by 2025—that’s roughly 40 percent of the large-lot homes in existence today.

For 60 years, Americans have pushed steadily into the suburbs, transforming the landscape and (until recently) leaving cities behind. But today the pendulum is swinging back toward urban living, and there are many reasons to believe this swing will continue. As it does, many low-density suburbs and McMansion subdivisions, including some that are lovely and affluent today, may become what inner cities became in the 1960s and ’70s—slums characterized by poverty, crime, and decay.”

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“While the foreclosure epidemic has left communities across the United States overrun with unoccupied houses and overgrown grass, underneath the chaos another trend is quietly emerging that, over the next several decades, could change the face of suburban American life as we know it.

This trend, according to Christopher Leinberger, an urban planning professor at the University of Michigan and visiting fellow at the Brookings Institution, stems not only from changing demographics but also from a major shift in the way an increasing number of Americans -- especially younger generations -- want to live and work.

"The American dream is absolutely changing," he told CNN.

This change can be witnessed in places like Atlanta, Georgia, Detroit, Michigan, and Dallas, Texas, said Leinberger, where once rundown downtowns are being revitalized by well-educated, young professionals who have no desire to live in a detached single family home typical of a suburbia where life is often centered around long commutes and cars.

Instead, they are looking for what Leinberger calls "walkable urbanism" -- both small communities and big cities characterized by efficient mass transit systems and high density developments enabling residents to walk virtually everywhere for everything -- from home to work to restaurants to movie theaters.”

I sold this townhome in 34 days!!!!!

From the day I listed it to the day we had it under binding contract, this townhome was on the market for less than 35 days!!!!!! This just goes to show that with an experienced and hardworking agent, today's "down market" is not a hinderance! How did I do it? Here are just a few of the services I provide that made the difference:

• Carefully stage the property with an eye to detail in order to present the best first impression to the potential buyes
• Agressively and creatively market the property through direct mailers, premium online advertising, professional & eye-catching promotional materials, and community-wide open houses & caravans
• Provide a packet of information for potential buyers which includes items like the Seller's Disclosure, estimated utilities, complex & community amenities, HOA information, and plenty of pofessional-grade photographs of the property

I sold this poperty in almost a third of the time other properties in this complex have sold for in the past 6 months, and we got over 97% of our asking price!

Media Is Wrong About Housing Slump

Realty Times feature article by Blanche Evans

Why buy a house now? You've been getting bad information. Here's why.

The financial press is worried that they might have gone too far - paralyzing the nation into recession by piling on housing. So they're finally beginning to question the indexes where they get their data, and whether the news is really as bad as it seems. Slowly but surely, headlines are changing from Don't Buy A Home Now to Is It Time To Buy?

We said it here first on Realty Times - that consumers aren't getting the full story. Indexes can be misleading because of the locations, prices, types of housing, and rates of increase they track.

In late April, Robert Shiller, founder of the Case-Shiller Index, announced that there was a good chance housing prices would fall further than the 30 percent drop during the Great Depression.
Shiller has plenty of reason to be negative - he makes money when people buy housing hedge funds, licensed with data obtained through his company Macromarkets LLC.
Now, finally, one brave journalist is writing that Case-Shiller is flawed.

In his story "Home-price data has its flaws," Chris Plummer of MarketWatch slammed both Shiller's Index and the Associated Press for being "grim reapers."

For the first time, S&P Index Committee Chairman David Blitzer "acknowledged his organization's overall and metro-market readings paint an incomplete picture."

No kidding. The index covers only 20 markets, heavily weighted to the most volatile metros in the nation. Plummer also lampooned the AP for writing that "despite that index's limited seven-year history, home prices plunged by a record percentage at their fastest rate ever." He also notes, "The glaring discrepancy in this case is that 17 of the 20 metro areas posted record annual declines, and yet 78 percent of the 330 metropolitan regions that the NAR tracks reported price increases ... ."

Bravo, Plummer. But the rest of the financial press still has a long way to go.

When Shiller says home prices are going to fall 30 percent, not one reporter who covered the story asked this simple follow-up question: "Bob, during the worst part of the Great Depression, one in four people were out of work. Our unemployment rate is a little over 5 percent. So what's going to drive home prices that low?"

Instead, no one did even the minimum Wikipedia search to find out what conditions were really like 75 years ago.

What that means is not only are the indexes misleading - the reporting is worse.

Right now we have mortgage interest rates three points below historical norms. We have housing inventories five months greater than balanced markets. Combine that with unemployment that is a half percent lower than the recession of 2003, and you have excellent homebuying conditions.

Stop listening to the media. Go buy a home.