Why invest in HUD home ?

The increased demand for a HUD home drives up the price and new investors tend to get anxious and will buy based on emotion instead of logic because they “just want to get their first deal”. If you pay too much for a property, you will lose your shirt on the deal. That’s why it is important to not overpay for the property because you make your money on a property on the day you buy, not the day you sell.

This is why it’s important to have the right real estate investment training so you know how to spot the good deals from the bad and not overpay for a property, as well as using a real estate agent that specializes in HUD properties. Your first deal can bankrupt you if you don’t structure it the right way. People that don’t take the time to invest in their education are soon out of business because they try and figure it out on their own and fail.

Short Sales are a great way to guarantee that you won’t overpay for properties. If you are wondering “what is a short sale “or are wondering what the “definition of a short sale is“here you go. A Short Sale is when the lender accepts less than what is owed on a mortgage on home foreclosures.

  • We don’t give the sellers any money when we get the deed to their house.
  • The only thing you have to pay when you get a deal is the cost of the notary and recording fee when you record your deed.
  • You don’t need good credit to do short sale deals, depending on your financing.

Pre-foreclosures and Short Sales are extremely easy to find right now, as they are frequently categorized as such in MLS listings.
There aren’t enough investors out there to handle all of the deals in the market.

You may here some real estate speakers say to stay away from foreclosures because there is too much competition. Well that was then and this is now. They are teaching old information because they are not currently practicing what they preach. Short sales and foreclosures can take time to be approved by the bank, but if you are willing to wait, you can usually make a good investment.

Banks are in the money business. They’re not in the ral estate business. They don’t want to own any properties. Their only interest is making interest on their money. Foreclosing on homes is a hassle they have to deal with because it’s a cost of doing business for them. The sooner you understand this the sooner you will realize how huge this opportunity is for you right now.

When banks lend out money – they have to keep a multiple of 5 times the amount of money they lend out in reserves. When a loan goes bad, it’s now considered a non-performing asset and that limits the amount of money they can lend out.

It costs a bank thousands of dollars to foreclose on a home. They would rather take a discount on the mortgage and get that bad debt off their books so they can lend out more money. You are the solution for them. Banks need you to help them liquidate their houses so they can get rid of their bad debt. You are doing them a great service.

Best House Color to Sell | Homes for Sale in Acworth

When you go to social events, do you make an effort to snazzy yourself up? Of course you do. The simply fact is attraction is a key factor in forming relationships and the same applies to your house. When you put the house on the market, you need to make it look good for the dates with potential buyers. The color of your house can make all the difference. Drive through our neighborhoods and look at homes for sale in Acworth.

First, there is no absolutely correct answer to the best color. Instead, the decision depends on the makeup of your home and the surrounding landscape. Let’s take a look at some issues:

Colors of homes for sale in Acworth

  1. Whatever color you choose, make sure it doesn’t clash with the other homes in the neighborhood. An otherwise appropriate color could end up making your house an eye-sore.
  2. The Roof. What color is the roof on your home? If it is a red tile roof, off-whites are probably going to be the best choice. Dark green will not. Unless you are going to invest money in a new roof, make sure the paint color doesn’t clash with it.
  3. Highlights. If there is a particular part of your house that should be emphasized, used light colored paint around it to draw attention.
  4. Even if your home is brick or stone, consider the colors of shutters, garage doors, and trim.
  5. Hide It! Conversely, if there are parts of the house that are mundane, use darker colors to draw attention away from them.
  6. On large flat surfaces, such as the side of a garage, keep in mind the color you choose will have a washed out appearance.

Now we get to the fun part. After considering the above issues, make a preliminary list of colors and buy small cans of each color. In a private area of the house, start applying samples strokes a couple feet long and a foot or so wide. Try to paint examples in both shaded areas and those exposed to the sun.

Do not immediately judge the results of your experiments. Instead, wait a few hours for the paint to dry and then start comparing. Dry paint takes on a very different appearance than wet paint.

Once the paint is dry, take a long look at each sample. You will typically find the colors look much different than you thought they would. You may find one color is perfect or you may find something a little different would be best. Either way, you’ll have come up with the best house color to sell your home. Keep in mind that location can sometimes dictate color, so if you are looking at homes for sale in Acworth, a subdivision may determine the permitted colors, and if the home is historic, that would be dictated as well.  As you drive through subdivisions in our area like Bentwater and Brookstone Golf & Country Club, you will probably find that home exteriors are more subtle using paint colors that compliment the exterior of the homes, which might include stonework or brick.

If you are interested in looking at homes for sale in Acworth, please let us know and we would be happy to help you.  Contact us today.

 

Buying A Home – Rain, Sun, and Weather Issues

 

When buying a home, it can be easy to overlook year-around weather issues. You may think you are purchasing a home in a sunny area, but come to find there is always a heavy cloud cover. This is just one of a number of weather issues to consider when selecting your dream home.

Clouds…Rain…Floods

If you must have a sun deck as part of your new home, you better make sure it is going to be sunny! Just because a general geographic area has a lot of sun doesn’t mean your home will. Things to look for include fog and heavy cloud cover for a home in a valley. If the home is located on the side of a hill or valley, make sure you know when it will get sun and shade. Temperatures can be radically different depending upon the amount of sun you get.

When it rains, it really pours! One potential nasty surprise for new homeowners can be the condition of a neighborhood after it rains. Make sure you stop by a gas station or local store to ask about flooding problems in the area. Look at the grading of the lawn on a rainy day.

I have been known to enjoy a good boating trip and perhaps you have as well. I am pretty sure neither of us would enjoy it in our house. Still, millions of people a year buy homes in flood plains without even knowing it. Eventually, this can lead to a disaster when heavy rains come and you find out the reason they call it a flood plain.

Unlike streets with bad drainage, floods are much more damaging. When a river overflows, flood levels are typically measured in feet. Can you image the effect on your home of a flood that reaches five feet in depth? Well, you probably always wanted to renovate the first floor of your home.

Mother nature has a way of doing whatever she wants. Make sure you avoid her grumpy spells by looking into the effect of weather on your prospective dream home.

Why Would a Lender Do a Short Sale?

 

There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a “short sale.”
When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.
If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers:

  • Obtain legal advice from a competent real estate lawyer
  • Call an accountant to discuss short sale tax ramifications

As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the IRS will consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.

Call the Lender

You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the “real estate short sale” or “work out” department, you want the supervisor’s name, the name of the individual capable of making a decision.

Submit Letter of Authorization

Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:

  • Property Address
  • Loan Reference Number
  • Your Name
  • The Date
  • Your Agent’s Name & Contact Information

Preliminary Net Sheet

This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.

Hardship Letter

The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.

Proof of Income and Assets

It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.

Copies of Bank Statements

If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it’s probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.

Comparative Market Analysis

Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:

  • Active on the market
  • Pending sales
  • Solds from the past six months

Purchase Agreement & Listing Agreement

When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to allow payment of certain items such as home protection plans or termite inspections.

Budget for Closing Costs – Loan Origination Fees and PMI

Closing costs are fees associated with miscellaneous events associated with a home purchase, things such as property inspections. Even if you are purchasing a home for the first time, you are probably aware there are closing costs that have to be paid. Rarely, however, are you aware of just home much and how fast the can accumulate. If you have not budgeted for them, they can put a kink in the closing or even cause you to lose the home.

A couple of closing costs to keep in mind are origination fees for home loans and private mortgage insurance. The mortgage related costs are only a small part of the overall closing costs you can face, but deserve a closer look.

Origination fees for home loans can be a shock to first time buyers. Few realize they are going to have to pay such things. Origination fees are costs charged by a lender for services used to determine if the lender should give you a loan in the first place. For example, a lender will charge you fees for obtaining a copy of your credit report, having an appraisal done for the property. Infuriatingly, the lender will also charge you fees for processing the loan and preparing the loan documents. You may also have to pay points, which represent a percentage of the total loan, often one or two percent. On a $300,000 loan, the origination fees can quickly add up to thousands of dollars.

Private mortgage insurance, often called PMI, can also be a nasty little surprise. The magic number when considering PMI is 20 percent. If you make a down payment on the home that is less than this amount, you are almost certainly going to have to pay PMI. PMI is simply insurance that protects the lender should you default on the loan. The cost can add up to hundreds of dollars, so make sure you know what is expected of you.

Closing costs are aggravating, particularly when you feel like you are being nickel and dimed to death. Budget for them up front, and you will feel less aggravation.

Home Inspection & Title Fees | Acworth GA Real Estate

Purchasing a home is a euphoric event. Once escrow begins, the euphoria can change to frustration, particularly if you are not ready for the closing costs that quickly accumulate.

Budget for Closing Costs – Home Inspection and Title Fees

Acworth GA real estate, like any area, involves costs beyond the price of the home which include home inspection and title fees. These closing costs simply refer to the fees associated with various things associated with the escrow process in a real estate transaction. In the excitement of having an offer accepted for your dream home, you can easily lose track of the fact you are going to need to have some serious cash on hand to pay them. Many people make the mistake of only assuming they need the down payment money, and have to rush around town trying to come up with money for the closing fees.

If you are buying a home, you need to get a professional home inspection. Doing so can reveal potential problems with the home that you wouldn’t otherwise notice. Problems can include things such as rot, termites, water leaks and a bevy of other issues. Homes in Acworth GA can be near the lake, and this can present issues as well. The time to do this is during escrow. Of course, that means you are also going to have to pay for the inspection. Depending on the size of the property, home inspections can run a few hundred dollars up to a few thousand. Make sure you have money set aside for the fees, and read our checklist on questions to ask your home inspector.

Title insurance is something you absolutely must purchase when you buy any real property, a home, building, land or whatever. Title insurance protects both you and your lender. Title insurance is just what it sounds like. A title company will research the title of the home and essentially guarantee that the title is good. This means the seller actually owns the title and has the right to sell it to you. The title company will also make sure there aren’t any liens on the homes or other things that will cause you problems, jst think about Acworth GA real estate on Lake Allatoona and lakefront title issues. Depending on the price of the home, title insurance can run you a couple of hundred dollars or up into the thousands. Again, it is important to find out the cost and budget for it. We also offer a checklist on 5 things to know about title insurance.

Title insurance and a home inspection are two things you should absolutely have when purchasing a home. Just make sure you budget for them. As a real estate agent in Acworth GA, we work with you on the many steps involved in closing on your home and understanding the costs involved. Let us know how we can help you.

5 Ground Rules for Home Buying Success in Neighborhoods of Dallas and Acworth GA

There are few purchases in life that carry the financial and psychological weight of buying a home in the neighborhoods of Dallas and Acworth GA. Whether you are buying your first home, moving up to your dream home, or downsizing your home and your life after the kids have gone, it is important to understand the ground rules for success in the world of buying a home.

Making the wrong decision in buying a home can have devastating and long lasting effects, while making a wise decision in home buying can greatly enhance the overall value of the investment. It is necessary to learn all you can about the world of home buying and mortgages before setting out to purchase the home of your dreams.

While there are plenty of websites designed to help first time homeowners learn all they can, most financial experts say that there is no substitute for the good old one-on-one learning. Fortunately, most mortgage lenders, home inspectors and real estate agents will be able to provide this kind of one-on-one learning.

When buying a home it is often best to use a systematic approach as this is often the best way to be sure that all decisions are based on information and reason, not on impulse or emotion. Buying a home can be an emotional process, nevertheless it is imperative to keep your emotions under control and not let them cloud your judgment.

There are five basic ground rules when it comes to buying a home and shopping smart, and they are:

#1 – Get your financing before you get your home

There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding. While the desire to get out there are search for that great home is understandable, it is vital to line up the financing you will need before you start shopping for a home.

Getting the financing ahead of time has a number of important advantages, including knowing how much you can buy and gaining more respect from the listing agents. By knowing how much home you can afford before you shop you will avoid wasting your time looking at unaffordable properties, and the listing agent will be more than willing to show you the homes in your price range.

It is also important to take a good look at the various types of mortgage on the market before getting started in the home buying process. These days, mortgages come in far more choices than the typical 15 or 30 year. For that reason, potential home buyers need to understand how each type of mortgage works, and to gauge which mortgage is the best choice for their needs.

#2 – Look at the community, not just the home

It is a good idea to look at the entire community, instead of focusing on a single home. This can be a particularly important thing to consider for those moving to a new metropolitan area, as these buyers will be unfamiliar with the local climate and lifestyle. It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and local shopping opportunities.

We have all heard that location is the key consideration when it comes to real estate, and that is certainly the case. Buying a house in the wrong area can be a big mistake, and it is important to choose the location as well as the home. Potential buyers can learn a great deal about the nature of the various neighborhoods simply by driving around town, as well as by talking to other residents.

#3 – Be fair with your first offer

Trying to lowball a seller on the first offer can backfire, as can paying too much. It is important to carefully evaluate the local market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for.

Comparing the sales of comparable homes, what are known as “comps” in the industry, is one of the best ways to determine what is fair, and to make sure that you neither overpay or underbid on the property.

#4 – Always get a home inspection

Always investigate the home for any possible defects before making an offer. Compared to the cost of the average home, the price of a quality home inspection is virtually negligible. Hence, get a good home inspection done before you buy.

To find the best home inspector, it is a good idea to seek out word of mouth referrals as many of the best home inspectors rely on word of mouth advertising.

#5 – Do not alienate the sellers of the home

Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller. It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale.

Keeping the good will of the seller will help the transaction go smoothly, and it will provide the best environment for seller and buyer alike.

Ignore Trends In Real Estate | Homes for Sale in Acworth GA

You can learn just about anything on a particular subject through the internet. While access to information is usually a positive development, things can get a bit crazy if you get overloaded with it. Look long enough and you can find two pieces of information offering exactly the opposite views on a subject. Obviously, that doesn’t really help you make a choice.

In real estate, the information offered in the media is usually uniform. As a potential buyer or seller, how should you evaluate the information being produce in the media? The simple answer is you should ignore it. The problem with these reports is not the accuracy. Instead, the problem is they are reporting national trends in real estate. They don’t know about the growth in our area and how that impacts homes for sale in Acworth GA.

National trends are great and all, but they have little or no application to your specific area. Statewide numbers can even be inaccurate.  And the source of the information can be inaccurate also. For example, a nationally syndicated real estate site reports that Atlanta real estate home prices went up 16% in 2013, when they actually went up a median value of 36%! The latter statistics are from the Atlanta MLS which has the actual figures.¹ The only real estate trends that matter are those in your local markets, i.e., Acworth. Never rely on national data.

If you are considering buying, you have to be very careful when considering real estate trends. If it looks like a seller’s market in your area, you may make the mistake of not buying. Even in a seller’s market, buying a home is better than renting. Every day you are in the home is a day you are growing your personal wealth through equity accumulation. Don’t stay out of the market simply because you feel it isn’t the right time. As you look around the area, you see new homes being built. New home construction can impact the pricing of resales. New businesses coming in increase the demand for home inventory, and our area is seeing tremendous growth which in turn means it might be a great time to sell your home in Acworth.

It is easy to get caught up in real estate trends since they are plastered in front of your face on a daily basis. In truth, they really should not play much of a role in your decision making process.

 

Your Condo View – Enjoy it While You Can

Downtown condo living, complete with easy access to transit, shopping, a short walk to work, no maintenance yard and best of all, the view. It was the birds-eye view of the city, the mountains, and the breathtaking sunset that sold you on the place – no one mentioned it was only temporary.  Just consider how the Atlanta skyline has changed.

What happens when the view that came along with your 33 story condominium disappears because a neighboring building is built only 18 feet away? That is what happens to many condo owners.

Other condos may be slated for nearby developments, but at the time of construction, the height restrictions limited the number of floors of an adjacent building. Then imagine the rules are changed and a 34 story condo was constructed right next door, eliminating your view, sunlight and privacy. Whose responsibility was it to inform the new tenants that the city regulations had changed? According to some city requirements, the developer and the adjacent property owners should be notified; however, future tenants are on their own to discover these new developments.

A new construction project does not automatically assume the condo owner will lose their view. Different areas of the city have different separation requirements based on density. Some areas require no separation where as others mandate a minimum 60 to 200 feet.

Potential buyers cannot depend solely on their real estate agent or developer for zoning information. A bit of research before purchasing their property may save some nasty surprises down the road. Here are some areas to consider:

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  • Get as much information as possible from the developers regarding nearby proposals for developments, zoning restrictions and whether they have invested in air rights for the surrounding real estate to protect views.
  • Visit the city planning office and look up the zoning laws for the nearby sites.
  • Look up the addresses for any project applications and add your name and email address to the notification list for changes or new developments.
  • Speak to the city planners about possible changes to the existing zoning laws.
  • Let your comments be heard at design review hearings about future projects.
  • Spend the extra money to hire a land-use lawyer to complete this due diligence on your behalf.

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“Renting Back” After You Sell Your Home in Dallas GA

Sometimes it’s helpful to sell your home in Dallas GA or anywhere, before you really want to move, and then renting back. This often happens when you are having a new home built, but aren’t sure of the completion date. Is there any way you can sell your home so you’re sure of the funds available for the new purchase, but continue to live in your old home until construction of the new one is complete. Yes, there is with the renting back strategy.

Enter the Lease-Back or Rent-Back Agreement

The particulars of this strategy vary from state to state, but in the strong seller’s market we’re experiencing, buyers will often agree to let the seller stay in the home for a period of time as long as rent is paid. In a competitive situation, the buyer willing to do this will often have the winning bid even though there is another offer as high as his.

The agreement covering the situation states the length of time the seller will remain. It can be done with a specific date named or wording that allows the seller to remain up to a specific date with the possibility of her moving sooner. The amount can be a fixed figure paid out of the proceeds of settlement or a monthly amount, or a daily amount. It is usually, but not always, tied to the amount of the mortgage payment under the buyer’s new loan. Sometimes there is a deposit against damage, sometimes not. There is usually a clause saying the seller will hold the buyer harmless for any damage to himself or his property which occurs after the sale is consummated and before the seller moves.

The attorney who draws up your contract offer can create such an agreement. If you’re using online forms, you should be able to find one for this situation. If you’re working with a real estate broker, he or she can handle it for you.

An Example

An elderly widow contracted to have a one level condo unit built in a new community which provides all exterior maintenance. She had had hip replacement surgery and wanted to get away from the drawbacks of the home in which she’d reared her children. The home was large, had stairs and was located on a large, partially wooded lot with many mature perennials and shrubs. Both the home and garden were beautiful, but high maintenance.

Her contract to purchase required a series of deposits and a firm indication as to her source of funds well before settlement on her new condo. The widow put her home on the market. A young couple with two sons was very anxious to buy it. The situation was competitive. They made the widow an offer. She countered their original offer. She did not raise their offer price, which was slightly below her asking price. She did not believe the young couple would qualify for a larger loan. Instead, she did something rather creative.

The widow countered with a proposal that she “rent back” for a period of “up to” a certain date (a date beyond her scheduled competition date on the condo) in exchange for a modest flat sum to be paid to the buyer at settlement. The total rent back period was less than two months. The flat fee was less than the amount of the new mortgage payment for the buyers. However, since they made no payment on their new mortgage the first month, it wasn’t too far out of line. The couple really wanted the home, so they accepted the counter offer.

Another win, win situation was created. The widow only had to move one time and the young couple got a house they probably wouldn’t have in a straight bidding war. If you find yourself in a situation similar to either the widow or the young couple, perhaps you can work out a similar solution.