Yesterday afternoon we shot the piece that aired this morning on Good Morning America. 4 Hours of taping condensed into less than 2 minutes almost ensures that part of the key components hit the editor's floor...so here' the rest you should know.
While we’d all love to buy a home for under $100,000 – it’s not always that simple. The fundamental components to what I was interviewed on & aired this morning on Good Morning America was the fact that we are in an unprecedented period in time where people are capable of purchasing property with an incredibly large volume of homes on the market & with great interest rates. The combination of these components leads to an unrivaled period in modern America to purchase a home. The % of your total income that would be utilized to pay for principal, interest, tax, and insurance is a fraction of where it has been previously.
Without a doubt, people are able to cut their monthly expenses by purchasing a home in the current market rather than throwing money away as renters. Now, there are people and situations that dictate whether people should rent rather than buy, yet for those who are ready, willing, able & have explored their exit strategies….right now is an absolutely incredible time to purchase a home or homes.
Yes, that’s right – HOMES. This isn’t a secret, numerous experts & best-selling authors (Richard Kiyosaki and Gary Keller are the first 2 that come to mind) about the concept of creating passive income and long-term wealth by developing a portfolio of real estate. The current market is a prime example of the “Buy & Hold” strategy where you can rental properties that create positive cash-flow instantly while paying down the principal loan amount on recently acquired investments.
For others, it’s about the opportunity to acquire their primary residence at incredible value – possibly cutting down their monthly expenses or finally being able to move-up to the neighborhood they never thought they could afford. No matter the reason, Buyers ARE making those dreams a reality.
The home featured in the Good Morning America segment is in the “Metro Atlanta” area – it actually is in Decatur, GA 30034 – OTP (Outside The Perimeter). Depending on the distance from the heart of the city and the commercial infrastructure that was in place prior to the boom – the ripple effect following the crash could have ranged from what some would consider 5 foot waves to that of a Perfect Storm. Areas that saw rapid expansion, cookie cutter large scale developments, massive predatory lending, and limited commercial infrastructure have been impacted in a devastating manner.
Historically, all cities grow systemically out as a common practice, and if there is a period of retraction….the property on the outskirts will experience the greatest drop off in value from the peak of the market. For this reason, a home that previously sold for $180,000 – with refinances reaching well above $225,000 with supporting appraisals….can now drop as low as $50,000.
When buyers come in with their wishlist it can sometimes sound like this: “I want a 3 bedroom, 2 bath home in the heart of the Atlanta – possibly Virginia Highland or Inman Park for under $100,000 with granite counters and stainless steel appliances, can you make that happen for me?”….Rather than dismissing their dream, & trust me that request is a pipe dream for those neighborhoods where you’d be a hero for finding a quality home in the high 300’s or low 400’s that met the other initial criteria, it’s about asking “What are the key components for you? Have you looked at the recent sales/comps in these neighborhoods and those of the surrounding neighborhood? When can we conduct an initial consultation where we’ll walk you through the home-buying process scenarios in the current market & ensure you get pre-qualified for a loan if you require financing” Basically, it’s about educating the buyers and then being able to assess their situation & desires. If the key is under 100k then we’re going to look at a completely different neighborhoods in Metro Atlanta, and they won’t have the high reputations of Virginia Highland or Inman Park. If it’s about being in the heart of the city then we’re going to have to discuss price points and bed/bath count. We had a “steal of a deal” for the Morningside neighborhood with a 4 bedroom/4 bath home with the rare 2 car drive under garage for just over 500k….but it’s all relative to where the values were, locations, and surrounding circumstances.
The condition of the properties makes a huge difference in how the buyer pool will respond, as well as impact what loans they can qualify for. If a property is missing it’s hvac condensers, all built-in kitchen appliances (stove, dishwasher, refrigerator) then it more than likely won’t qualify for a very common 1st time buyer loan…the traditional FHA loan. You’ll notice I’m not saving NEVER, as HUD homes are allowed to have escrow accounts for repairs. There’s also the FHA full 203k or 203k streamline, which are renovation loans….but there are additional expenses involved with these loans beyond what the traditional FHA loan involves. Conventional loans can vary from lender to lender and there’s always the CASH Buyer, who often times in this market likes to flex his/her muscle by demonstrating the ability to close quickly and with limited/no contingencies in order to demand the lowest acquisition price possible.
Whatever the case may be, it helps tremendously to have experienced advocates on your side in the form of a great realtor & a quality lender that look for solutions to “speed bumps” rather than saying issues of a home is a complete roadblock. There’s always a solution, it’s just a matter of evaluating the time and money involved to see if it’s ultimately worth it.
If you or someone you know is in need of an Expert Realtor to best serve their interests in Buying or Selling Real Estate in the Metro-Atlanta Market, please don’t hesitate to “Call Mike For Results You’ll Like!”
Michael Neville
Real Estate Consultant
Keller Williams Realty Atlanta Midtown
#1 Individual Realtor for KW Atlanta Midtown '09
404-310-8364
www.LiveInAtlantaGA.com (website)
http://activerain.com/blogs/mpneville (blog)
Short Sale Info & Avoiding Foreclosure: www.AtlantaDignifiedSolutions.com
Comments(3)