Whitney Barnes's Blog

Short Sales – Do you have the stomach for them?

Whitney Barnes (Solid Source Realty GA) — Tue, 12 May 2009 17:00:05 -0700

With the continued influx of foreclosed properties in the Atlanta real estate market, buyers can find great deals and pay thousands of dollars below the appraised home value. Luckily, foreclosures are not the only hot deals out there today. According to the Mortgage Bankers Association, when a bank takes back ownership of the house through the foreclosure process, the bank will end up losing around $35,000 by the time they get the house sold. Because of the cost the bank sustains from going through the foreclosure process, more banks are beginning to take a look at the short sale option.

A short sale is when the bank accepts a discounted payoff on a home loan because a borrower or seller is facing foreclosure. A few reasons a borrower could be facing foreclosure are recent job loss, divorce, health issues, etc. The borrower has to prove that they have a financial hardship and can no longer make their loan payments. Here is simplified version of how the short sale process works:

The owner of a home facing foreclosure attempts to sell their home, but is now aware that they owe more than the property will sell for. The owner contacts the bank to ask for assistance. The lender will require documentation to prove that the borrower is actually in a "hardship" situation and is in danger of foreclosure.
The lender contacts an independent appraiser or broker to assess the home's value in today's market. This allows the lender to understand how much they would be willing to sell the home for if they have to foreclose on the property.
Once the bank approves the short sale, the home is marketed by a real estate agent, at a reduced price to attract buyers to make an offer. At this point, the owner of the home has agreed to receive nothing for the sale of the house in exchange for having no financial liability.
A prospective buyer makes a formal offer on the property. The offer is typically way below the current balance on the home's existing loan.
The lender's loss mitigation department processes the requested short sale and attempts to close on the sale before the lender's collection department gets the foreclosure sale completed. At this point in the short sale process is when most of the frustration begins. It can take anywhere from 7 to 60 days before the bank responds to the prospective buyer's offer, and if the property is foreclosed on during that period, the buyer must start the home search process over again.
The lender will try to determine how much of a loss is likely if they have to take the house back and compare it to the offer on the table from the prospective buyer. The lender's main goal is to lose as little money as possible, so they will likely counter the offer on the table to get additional funds to pay off the existing loan.
If the lender accepts the borrower's hardship explanation, then a deal is struck and the buyer's offer is negotiated and accepted. Approval to close is given and the buyer usually gets a great deal on the house. Unfortunately, this entire process can take up to 6 months to complete and success is not guaranteed.

So, if you have up to 6 months before you need to move, have the patience to wait weeks on responses from the bank, and to keep emotions out of the purchase since the short sale is not guaranteed and the property could foreclose, then you have the stomach for short sales! As a buyer you can get a bargain on the home of your dreams and the seller can get out of the financial responsibility of the home, but be aware of the potential issues.

Want to receive a FREE daily e-mail message of the newest short sales and foreclosures that meet your home search criteria? Click the link below to sign up!

Home | Houses | Real Estate Sale - Canton, Marietta, Roswell, Woodstock, East Cobb, Cherokee County

First Time Home Buyers – Understanding the Process

Whitney Barnes (Solid Source Realty GA) — Mon, 06 Apr 2009 10:44:06 -0700

First time home buyers are making up the bulk of home sales activity this year because of the incredible deals and low mortgage interest rates. It is a great time to buy! A recent survey by the National Association of Realtors reported that 41% of buyers in 2008 were first time home buyers and that 76% of home buyers purchased their home through a real estate agent. Whether you decide to use a real estate agent to represent you or not, it is important to understand the home buying process and the costs you will incur to make the process smooth and painless.

Pre-Approval: Contact a mortgage lender or broker and get pre-approved for a loan. In this shifting market, it has never been more important to speak with a lender before searching for a home. This will allow you to understand financing options and requirements, and keep you from being disappointed if you find out you are looking at homes out of your price range. You will also need to ask for a pre-approval letter from the lender to keep in your files. For a list of professional and accommodating mortgage brokers, please visit my website at www.jeanetteandwhitney.com.
Wants & Needs: Decide what features are important to you in your future home. Make a list of features that are non-negotiable and others that are ideal, but are not a requirement. This could include the number of bedrooms, style of kitchen, lot size, and location. This will allow you to understand your needs and narrow your search down to minimize the time you spend looking.
Home Search: Contact a real estate agent to set you up on a daily email system where you will only receive listings that meet your specific criteria or use online search engines such as Realtor.com, AJChomefinder.com, trulia.com, and many others to look for homes. Schedule showings on homes that you find appealing. If using an agent, they will do this for you!
Offer & Negotiations: Once you find a home that you love, it is time to make an offer. Remember that you will need to put down earnest money in order to show the seller that you are truly interested in the property and make the contract binding. The earnest money amount varies, but is typically around 0.5% to 1% of the purchase price. So, for a $150,000 home, you could put down anywhere from $750 to $1,500 as earnest money. Then it is time to negotiate the contract including purchase price, seller's contribution towards closing costs, closing date, due diligence period, special stipulations, financing and appraisal contingencies, and other negotiable factors. An agent can help you to navigate through the purchase agreement and look out for your best interests.
Inspections: Once the contract is binding, you will want to have an inspection done on the property to inform you of any potential issues with the home. If you decide to purchase a foreclosure or short sale, these homes are typically sold "as-is," which means that the bank or seller is typically not going to make repairs, but you still have the right to the inspection. You should use a certified home inspector and this will cost you around $300-400. You may also want to consider having other types of inspections done as well, such as radon testing, termite inspection, survey, septic tank, and well inspections. Any inspection you perform will be upfront out of pocket expenses for the buyer. Once the inspection report is completed, you will want to negotiate items that you want repaired before closing. Once all parties agree, you now move towards closing.
Closing: You will want to set up the closing with a closing attorney. The attorney will run the title search to find out if there are any liens or restrictions on the property so there are no surprises at the closing table. The closing attorney and the lender will need a complete copy of the contract. You will want to constantly stay in touch with your lender and closing attorney and promptly provide any documentation they request. The lender and closing attorney charge fees that you will need to pay at closing, but you can negotiate with the seller to pick up some of these costs. Once closing is complete, you are now officially a homeowner! Congratulations!

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Home | Houses | Real Estate Sale - Canton, Marietta, Roswell, Woodstock, East Cobb, Cherokee Countyfirs

A Perfect Community in Towne Lake – Eagle Watch Subdivision

Whitney Barnes (Solid Source Realty GA) — Mon, 23 Mar 2009 19:26:13 -0700

As buyers, we want it all! We want the perfect house with a great lot and it must be located within a fabulous community for a great price! In this market, many immaculate homes are available that meet this criteria, but how do you narrow down the choices? How do you know that you will love the neighborhood as much as the house?

If you are looking for homes in the Towne Lake area of Woodstock, you are going to want to visit Eagle Watch subdivision. Eagle Watch, located off of Towne Lake Parkway, is a beautiful community planned by Arvida back in the late 1980s and early 1990s. Arvida is known for their exceptional ability to plan large communities. The subdivision consists of nearly 1,300 homes. Multiple builders constructed the homes allowing each of the homes to have their own unique characteristics. Few homes in the subdivision look just alike and have the same floor plan. The lots in the neighborhood are larger than lots in most new subdivisions. Many of those lots back up to Corp. of Engineers property, woods, or the golf course. Homes are available to meet any buyers' needs. Many have been updated, but if you are a buyer who enjoys renovating and updating homes, then there are plenty available for you as well. Currently, 50 homes are available for sale with prices ranging from $169,900 for a 3 bedroom, 3 bath home to $640,000 for a 6 bedroom, 5.5 bath home.

In addition to the pristine homes, Eagle Watch is full of amenities and activities. The focal point of the community is the Arnold Palmer-designed golf course. This course is a private course owned and managed by Canongate Golf. There's an inviting clubhouse with a golf shop and dining facilities. Eagle Watch is also a swim/tennis community. There are two family size pools and one adult lap pool. Organized swimming activities are available for both children and adults. Fourteen tennis courts are available for recreational use or organized tennis activities. In addition to swim and tennis, Eagle Watch is home to 2 playgrounds, basketball courts, a weight room, and planned activities year round.

Once you experience the community at Eagle Watch, you won't want to live anywhere else. It is not uncommon for families to upsize or downsize to another home in the neighborhood. Doesn't this sound like a place you might want to live?

Looking for a home in Eagle Watch? Contact me today to receive a list of properties that meet your needs.

Home | Houses | Real Estate Sale - Canton, Marietta, Roswell, Woodstock, East Cobb, Cherokee County

Why ALL Buyers Should Use a Real Estate Agent!

Whitney Barnes (Solid Source Realty GA) — Sat, 07 Mar 2009 10:32:41 -0800

Since home prices are dropping and mortgage rates are low, it is a great time to buy your first home, but you do not have to go it alone! With short sales and foreclosures becoming more common, you want a savvy real estate agent who can help you navigate the waters. So, why should you use a real estate agent?

IT COSTS YOU NOTHING! As a buyer, you are at a great advantage because you can have a professional real estate agent help you navigate the ins and outs of finding, buying, and closing on your new home and you pay them nothing! You heard right! You pay the agent nothing! The seller pays the agent a commission when the home closes and this commission is either paid to the listing agent if the buyer is not represented or split between the listing and buyer's agent. For example, if a seller is going to pay 6% commission, she will pay a total 6% commission and that number won't change with or without a buyer's agent. The split of the commission is all that changes. So if you do not have an agent representing you, then the full commission goes to the listing agent. Why would you not want someone working hard for you that you don't have to pay?
An agent typically has a network of preferred vendors that will help your home buying transaction run smoothly. Agents can help you obtain financing by introducing you to a mortgage lender and keep the transaction running smoothly by constantly staying in contact with the lender to make sure you reach the closing table with no surprises. In addition to a mortgage lender, you will need the expertise of other certified professionals through the home buying process including attorneys, inspectors, insurance providers, and others. Agents will have a network of professionals for you to choose from that do quality work at a reasonable price.
An agent has access to all properties available for sale with no lag times. When a buyer does a search online, there is typically a lag between when the home was entered into the multiple listing services and when it shows up online. A house could be under contract by the time you find it online. This could cost you a sale, especially if you are going after distressed sales that are in mint condition and highly sought after. A real estate agent has access to the listing information as soon as it is entered into the system and can be immediately emailed to the buyer.
In addition, hiring a real estate agent reduces the amount of stress and frustration that buying a home can cause. Because of their expertise, they can help you during complicated transactions such as short sales or foreclosures by walking you through the steps and by telling you what to expect. They also will negotiate on your behalf and make sure that you get the best deal for the property by pulling comparable sales and advising you on your offer.

Want advice on how to pick a good agent? Contact me today to receive a list of qualities you want to look for in an agent.

For a list of distressed sales with pictures within your specific price range and area, call 1-800-951-5093 ID #1042 for a free recorded message or click on the link below to search for homes that meet your needs.

Home | Houses | Real Estate Sale - Canton, Marietta, Roswell, Woodstock, East Cobb, Cherokee County

Calling All Buyers – Things You Should Know about the $8,000 Tax Credit

Whitney Barnes (Solid Source Realty GA) — Fri, 27 Feb 2009 11:55:02 -0800

Our federal government has been working diligently since President Obama took office to try and stimulate our economy. One of the largest contributions his administration has made to help stabilize the housing market is to offer a $8,000 tax credit to buyers, but many buyers are still on the fence about purchasing a home and are not taking advantage of this incredible opportunity. Time is running out. The tax credit is only good through the end of November 2009, so why are more buyers not acting?

Several requirements must be satisfied to be able to claim the $8,000 tax credit on your 2008 or 2009 tax return. Below is a breakdown of the requirements:

The tax credit is not for just "first time" buyers. If you have not owned a home in the past 3 years, you are also eligible.
The home purchase must be made between January 1, 2009 to November 30, 2009. Only 8 months left!
The purchaser must live in the home for 3 years; otherwise, they will be responsible for paying the credit back.
You must make less than $75,000 as a single or $150,000 as a couple to receive the full credit. Higher income purchasers can receive a partial credit.

The actual credit amount will be either $8,000 or 10% of the home's value, whichever is less. This means that if you were expecting to get a refund of $1,000 on your taxes, but you purchased a home in 2009, you would receive a refund from the federal government of $9,000!! So, what are you waiting for?

For a list of affordable homes with pictures within your specific price range and area, call 1-800-951-5093 ID #1040 for a free recorded message or click on the link below to search for homes that meet your needs.

Home | Houses | Real Estate Sale - Canton, Marietta, Roswell, Woodstock, East Cobb, Cherokee County

How will the foreclosure prevention plan help you?

Whitney Barnes (Solid Source Realty GA) — Fri, 20 Feb 2009 12:57:02 -0800

We have all been waiting for the government to step in and help the housing market. This week we finally got an inside look into how the federal government plans to help many homeowners who are struggling to make their mortgage payments and whose homes have depreciated below their loan amounts. The Obama's administration plan is broken into 3 categories:

1. Assistance for homeowners who are struggling to make payments and are at risk for default.

Homeowners who have a Fannie Mae or Freddie Mac loan would be eligible to refinance their mortgages as long as their mortgage does not exceed 105% of the home's current market value. Owners would need to have at least 20% equity. This would allow some homeowners to refinance even if their property's value has declined as long as it does not exceed 105% of the market value. What is a Fannie Mae or Freddie Mac loan? Fannie Mae and Freddie Mac create a secondary market for mortgages and buy conforming mortgages from lenders who originate your loans. Some of these loans are held as assets by Fannie Mae and Freddie Mac and others are "securitized" and sold as mortgage-backed securities to investors that Fannie Mae and Freddie Mac guarantee. To find out if your mortgage qualifies, please go to www.fanniemae.com or www.freddiemac.com.

2. Assistance for homeowners who have stopped making payments and in need of loan restructuring.

For lenders that voluntarily agree to lower a borrower's payment so that it makes up no more than 38% of the borrower's income, the government would share the cost of lowering the mortgage burden to 31% of income. Incentives are provided to lenders to participate. This would allow people who are in default on their loans to restructure the loan and provide the homeowner with a lower payment.

In addition, borrowers can receive up to $1,000 incentive to stay current on their new mortgage.

3. Additional resources to Fannie Mae and Freddie Mac.

To encourage investors to buy mortgage-backed securities, the government backstops them up to twice the current amount which was $200 million. Now the government backstops them to $400 million.

The plan does not help homeowners or investors with second homes or homeowners whose mortgages have not been purchased by Fannie Mae or Freddie Mac. This new plan is expected to help 7-9 million households. Do you think it will help you?

Source: REALTOR® Magazine Online

Is it a good time to invest in real estate?

Whitney Barnes (Solid Source Realty GA) — Thu, 12 Feb 2009 16:53:04 -0800

Is it a good time to purchase your first home or upgrade to a larger home? Yes, there has never been a better time to purchase real estate. If you believe in the adage "buy low and sell high", then now is the time to buy. Property values have declined to the lowest point in years and interest rates are still extremely low. Many buyers are still on the fence and waiting for prices to drop even further, but they run the risk of higher interest rates and larger down payment requirements. This should be reason enough to start buying up as much real estate as possible. Many people do not realize that even a slight increase in mortgage interest rates can offset a large drop in home prices. For example, in parts of Cherokee County, Georgia, the average home sales price was $216,985 in December 2008. See the chart below to see how a decrease in Cherokee County home prices and an increase in interest rates would affect your monthly payment:

Buy Now or Wait?

Scenario 1:

Home prices decrease 5%

Interest rates increase 0.5%

Scenario 2:

Home prices decrease 10%

Interest rates increase by 1%

Home Price

$216,985

Home Price

$206,137

Home Price

$195,289

Interest Rate

5.0%

Interest Rate

5.5%

Interest Rate

6.0%

Monthly Payment

$1,164.82

Monthly Payment

$1,170.42

Monthly Payment

$1,170.86

The time to buy a home is now! No one knows when home prices will begin to increase or when mortgage interest rates will rise. It could be tomorrow or next year, but do you really want to miss this unbelievable opportunity?