24th July 2016

The Escalation Clause: One Option to use in a Bidding War.

Escalator Clause

If you’re considering buying a house in an area where homes are flying off the market and bidding wars are common, (such as we have had a few time in Atlanta over the last few years) a well crafted escalation clause in your offer can be an important strategy to use in multiple-offer situations.

An escalation clause allows your offer to automatically increase by a certain amount in response to a competing buyer’s higher bid, with a maximum offer price stated in the contract.

Here’s an example of how this strategy works: Say you offer $250,000 for a house. In your escalation clause, you specify your bid can automatically go up by $2,000, with a maximum offer of $268,000 for example. When another buyer bids $252,000, your lower offer doesn’t lose out right away as it normally would, because the clause automatically escalates it to $254,000.

Of course there are several important considerations to make before using an escalation clause. Will the house still be a good deal at the maximum price, and will it appraise in case your offer escalates to the maximum price in your clause? Will the seller/bank accept your offer with an escalation clause?

Above all, you’ll need to ensure your mortgage approval/pre-approval amount covers the maximum price increase listed in the clause. It’s imperative to talk this strategy over with a knowledgeable agent to make sure it is a viable option for the home in question, your situation, and the market, and then run this plan by your lender before deciding to use an escalation clause.

The Bottom Line: a lot of buyers miss out in competitive low inventory markets and trying to submit an ordinary offer in a bidding war situation is one of the ways that happens. But with the right strategy and one that makes financial sense, you may be able to win an offer on a home you really like – even in this kind of environment. The right options and strategies can give you an edge in any market – the key is having an agent who understands strategies like the escalation clause.

Contact Robert Whitfield 678-585-9691 with questions or to discuss his elite level Buyer Representation services and Wise Buyer Program™.

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4th October 2015

Metro Atlanta’s Home Affordability Index

And if you’ve been thinking about buying – why I suggest you take action now!

 

Nationwide, wage growth has lagged behind home prices, and the same is true here in Atlanta.

Young couple consider home

 

 

 

 

 

Back in April,  RealtyTrac, reported that wage growth in the Atlanta area in 2013 and 2014 lagged far behind home prices, with home prices growing at more than 10 times the rate of wages; only San Francisco saw a greater disparity.

I recall counseling many prospective buyers and actual buyer clients in 2013 and 2014 that prices were increasing and that trend had no end in sight, especially for new construction homes – fortunately most acted on my advice and got a great home at a good value. In one unfortunate case because of possible company sale and job relocation, a Buyer Client I signed on in Dec 2013 had to hold off his search for nearly a year and could not act in 2014. Fast forward to Q1 and Q2 2015 and the type home he wanted (new construction) is simply not possible in his max price and preferred market areas. It’s too bad when someone completely misses a market window of opportunity – (not because they refused to acknowledge market realities or listen to sound advice from a market expert), but simply as in my clients case because it was impossible for him to act when the opportunity was there.

I don’t see us going back to 2014 prices anytime soon, if ever, especially for new construction, but there are two good things for the market right now relative to 2014:  1. interest rates have actually come down 13% over the last four quarters (currently about 3.7% ) but count on this to increase, and, 2. while prices are still trending up in fall 2015, they are not rising at nearly the velocity they were from 2013 to early 2015.

According to RealtyTrac’s new Affordability Report, from  Q1 2014 to Q1 2015, home prices have risen beyond wages in all of Metro Atlanta’s six largest counties.

Here’s a graph of RealtyTrac’s findings:

ATL Wage and Home Price Growth

 

 

 

 

 

 

 

 

Although home prices in Cherokee and Cobb County were relatively in line with wages, they still grew at twice the rate of wages– while in DeKalb, home prices vs wages grew at an astounding 20 percent, spurred on largely by new building and some great revitalization in older neighborhoods areas around the city of Decatur and westward toward Atlanta. DeKalb home prices in most markets south of Decatur had nowhere to go but up because for many years home prices have been severely depressed in part because of excess foreclosure inventory and other factors such as high crime rates and poor schools.

Home Affordability in 2015 Improves Even as Home Price Growth Outpaces Wage Growth…But, Forces of Change Loom on the Near Horizon

According to a study conducted by RealtyTrac and Clear Capitol, which was released on October 1, 2015,  average home price appreciation outpaced average wage growth between the first quarter of 2014 and the first quarter of 2015 in 397 out of 582 (68 percent) U.S. counties analyzed for the report. In its report, RealtyTrac emphasized that since bottoming out in the first quarter of 2012, the average U.S. home price has risen 24 percent, while the average weekly wage nationwide has risen 7 percent.

As the video explains home affordability improved to a two year low in Q1 2015 even with rising home prices – and a big driver has been the current low interest rates. Between early 2014 and early 2015 the average interest rate on a 30-year fixed rate mortgage dropped 57 basis points (13 percent), from 4.34 percent in the first quarter of 2014 to 3.77 percent.  What should be of concern now, and motivate any would-be buyers into action sooner rather than later – all of the Feds recent chatter about raising the interest rates. We just escaped a planned rate increase last month, but with the economy continuing to improve a rate increase is only a matter of time – many experts believe we will see an increase by December. Any uptick in interest rates will have a corresponding negative impact on metro Atlanta’s home affordability index, impacting both the monthly payment and size of loan a buyer can qualify for.

Want more info about the current market, or to discuss some of the historic benefits of buying a home in the fall – Call me now  678-585-9691 –  Robert Whitfield

 

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14th February 2015

Homestead Exemption for Atlanta Homeowners

Atlanta Homestead Exemption 2014 Atlanta Home Buyers – be sure to file your Homestead Exemption!

If you purchased your home last year and have not already done so, file for your Homestead Exemption by the deadline (April 1 in most counties) – or you won’t get a tax break for another year! Filing a Homestead Exemption can save you thousands of dollars in property taxes! In Georgia a Homestead Exemption must be applied for by the homeowner – it is not automatic and the closing attorney does not file for you at closing. Depending on your county, this can be done online, by fax, by mail or in person – and you can file for homestead exemption year round. You only have to apply for the exemption once and the exemption remains for as long as you reside in the home as your primary residence – however, any change in the name of the homeowner requires a new filing! A Homestead Exemption provides more than just a tax break. It also provides two important protections. It prevents the forced sale of a home to meet the demands of creditors and provides the surviving spouse with shelter. Deadlines are listed below by county along with a link for a homestead application. Applications received after the deadlines will be processed the following year.

 

Filing for Homestead Exemption

The Homestead Exemption is available to legal residents of Georgia for their primary homes. You are entitled to the Homestead Exemption if you owned and occupied your home on January 1st of the year for which you apply. Senior citizens may have additional exemptions available – check with your county tax office.

Deadline Dates (in parenthesis)

Cherokee County (4/1): 2782 Marietta Highway, Suite 200, Canton 30114 678-493-6120 M-F 8am to 5pm http://www.cherokeega.com/Tax-Assessors-Office/

Cobb County (4/1): 736 Whitlock Avenue, Suite 100, Marietta, GA 30064 770-528-8600 M-F 8:30am to 5pm http://www.cobbtax.org/property/exemptions#BasicHomestead

DeKalb County (4/1): 4380 Memorial Drive, Suite 100, Decatur, GA 30032 404-298-4000 M-F 8am to 5pm http://web.co.dekalb.ga.us/TaxCommissioner/homesteadGen.html

Douglas County (4/1): Douglas County Courthouse, 8700 Hospital Drive, Douglasville, GA 30133 770-920-7272 M-F 8am to 5pm http://www.douglastaxcommissioner.com/

Forsyth County (4/1): 110 East Main Street, Suite 260, Cumming, GA 30040 770-781-2106 M-F 8:30am to 5pm http://www.qpublic.net/ga/forsyth/homestead.html

Fulton County (4/1): *North Fulton Owners – You may be able to file at one of the Northside annex centers – please check the website for location nearest you. 141 Pryor Street SW, Suite 1047, Atlanta, GA 30303 404-730-4000 M-F 8am to 5pm http://www.qpublic.net/ga/fulton/basic_homestead.html

Gwinnett County (4/1): Call for application. 75 Langley Drive, Lawrenceville, GA 30046 770-822-8800 M-F 8:30am to 5pm http://gwinnetttaxcommissioner.manatron.com/Tabs/Property/HomesteadExemption.aspx

Hall County (4/1): 2875 Browns Bridge Rd, Gainesville, GA 30504 770-531-6720 M-F 8am to 5pm http://www.hallcounty.org/depts/taxassessor/homestead_exempt_app.asp

Paulding County (4/1): 240 Constitution Boulevard, Dallas, GA 30132 770-443-7606 M-F 8am to 5pm http://www.paulding.gov/index.aspx?NID=210

Rockdale County (4/1): 969 Pine Street, Conyers, GA 30012 770-278-7600 M-F 8am to 4:30pm http://www.rockdalecounty.org/main.cfm?id=2985

Walton County (4/1): 303 South Hammond Drive, Walton County Government Building, Monroe, GA 30655 770-267-1335 M-F 8am to 5pm http://www.waltoncountytax.com/info#returns

What You Need in Order to File: A copy of the recorded warranty deed, Social Security numbers of all persons on the deed, the mortgage holder, and the amount of the mortgage. Some counties may require a copy of the closing statement (HUD 1) and proof of age for senior citizens.

If your county is not listed, please visit the Ga Dept of Revenue online at: https://etax.dor.ga.gov/ptd/county/index.aspx to find information for your county.

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13th February 2014

TBD Loan Approvals

Loan Pre ApprovalWhat is a TBD Approval? Why is it the way to go?
TBD (To Be Determined) approvals are for buyers obtaining financing who get their loan file underwritten to the furthest extent possible – without having yet identified a property to purchase. With a TBD, income, assets, credit, etc are examined leaving only the property itself to be determined. Once the purchase contract is created, the remaining needed items to fund the loan are minimal – an appraisal and title report.

Only a Bank, Credit Union or Direct Lender has this capability because they have “in-house” underwriters. The only remaining items for a “Clear-to-Close is a copy of the borrower’s purchase agreement and an appraisal on the property.

Who do they benefit? Everyone Involved.

Real estate agents know they have a solid buyer before going out looking at homes and writing up offers. A deal falling out because of a pay stub or a strange deposit on a bank statement 20 days into escrow is a huge time waste and emotional drain.

Buyers have more confidence with their offers knowing that they ‘check out’ with the underwriter before pulling out the credit card for an appraisal. More importantly – sellers have been known to accept a lower offer from a buyer who has a “Loan Approval Subject Only to Appraisal and Title”, versus a buyer who has only been pre-qualified.

Sellers have less fall out when dealing with a TBD approved buyer. If there is fallout, it would be because of the property that they are selling, not the buyer. Sellers hold TBD approved buyers in esteem somewhere between buyers who only have a ‘standard pre-qual’ and the highly coveted ‘all-cash’ buyer. There are times when sellers will actually accept lower offers from an “approved buyer” because they want or need  a firm sale date, and prefer not to risk letting a buyer who merely has a Pre-Qualification pull their property off market for 15+ days while they seek loan approval.

With a TBD Approval a lot of potential unknowns are eliminated up front, and all parties involved benefit.

posted in Home Buyers, Mortgages, New Posts | 0 Comments

10th February 2014

Atlanta No 1 Move Destination!

Atlanta Ga Number 1 move destination  Over the last four years, Penske Truck Rental has produced an annual list of its *top moving destinations in the United States. Once again, the Atlanta metro area remained No. 1 for the fourth consecutive year.

The following list of top move destinations for 2013 was compiled in January 2014, and last year’s rankings for 2012 are noted in parentheses. New to the 2013 list is Las Vegas, coming in at number10. Sarasota, FL, number 10 in 2012, was combined with the Tampa, FL metro area for this year’s list.

 

 

 

  1. Atlanta (1)
  2. Tampa, Fla./Sarasota, Fla. (new combined entry)
  3. Dallas/Fort Worth (2)
  4. Orlando, Fla. (4)
  5. Phoenix (3)
  6. Houston (6)
  7. Seattle (8)
  8. Chicago (5)
  9. Denver (7)
  10. Las Vegas (new!)

“We have seen a continued migration of Penske Truck Rental customers from the Northeast and Midwest parts of the U.S. into these areas,” said Don Mikes, Penske senior vice president of rental.

Penske created a series of infographics to complement their list of top relocation cities.  We have attached their Atlanta infographic which shows Atlanta is famous for its international sports, soft drinks and its supply of Georgia peaches. The graphic also shows Atlanta’s median household income to be $46,146, and it displays the average listing price as $448,387.

ATL Top Move Dest 4 years in a row

 

 

 

 

 

 

 

*Penske creates their annual Top 10 Moving Destinations list through an analysis of one-way consumer truck rental reservations made online, and through their central reservations call center.

posted in Atlanta Housing Market, Home Buyers, New Posts | 0 Comments

3rd February 2014

2013 Homebuyers- Be Sure To File For Your Homestead Exemption

Homestead ExemptionDid you buy a home in the Atlanta area last year?

If you purchased your home last year and have not already done so, file for your Homestead Exemption by the deadline or you won’t get a tax break for another year! Filing a Homestead Exemption can save you thousands of dollars in property taxes! Some states provide this exemption automatically, but in Georgia a homestead exemption must be applied for. Depending on your county, this can be done online, by fax, by mail or in person. You only have to apply for the exemption once and the exemption remains for as long as you reside in the home as your primary residence. A Homestead Exemption provides more than just a tax break. It also provides two important protections. It prevents the forced sale of a home to meet the demands of creditors and provides the surviving spouse with shelter. You may file for homestead exemption year round. Deadlines are listed below by county along with a link for a homestead application. Applications received after these deadlines will be processed the following year.

 Filing for Homestead Exemption

The Homestead Exemption is available to legal residents of Georgia for their primary homes. You are entitled to the Homestead exemption if you owned and occupied your home by January 1.  Senior citizens may have additional exemptions available – check with your county tax office.

Deadline Dates (in parenthesis)

Cherokee County (4/1): 2782 Marietta Highway, Suite 200, Canton 30114 678-493-6120 M-F 8am to 5pm http://www.cherokeega.com/Tax-Assessors-Office/

Cobb County (4/1): 736 Whitlock Avenue, Suite 100, Marietta, GA 30064 770-528-8600 M-F 8:30am to 5pm http://www.cobbtax.org/property/exemptions#BasicHomestead

DeKalb County (4/1): 4380 Memorial Drive, Suite 100, Decatur, GA 30032 404-298-4000 M-F 8am to 5pm http://web.co.dekalb.ga.us/TaxCommissioner/homesteadGen.html

Douglas County (4/1): Douglas County Courthouse, 8700 Hospital Drive, Douglasville, GA 30133 770-920-7272 M-F 8am to 5pm http://www.douglastaxcommissioner.com/

Forsyth County (4/1): 110 East Main Street, Suite 260, Cumming, GA 30040 770-781-2106 M-F 8:30am to 5pm http://www.qpublic.net/ga/forsyth/homestead.html

Fulton County (4/1): You may be able to file at one of the annex centers – please check the website for location nearest you. 141 Pryor Street SW, Suite 1047, Atlanta, GA 30303 404-730-4000 M-F 8am to 5pm http://www.qpublic.net/ga/fulton/basic_homestead.html

Gwinnett County (4/1): Call for application. 75 Langley Drive, Lawrenceville, GA 30046 770-822-8800 M-F 8:30am to 5pm http://gwinnetttaxcommissioner.manatron.com/Tabs/Property/HomesteadExemption.aspx

Hall County (4/1): 2875 Browns Bridge Rd, Gainesville, GA 30504 770-531-6720 M-F 8am to 5pm http://www.hallcounty.org/depts/taxassessor/homestead_exempt_app.asp

Paulding County (4/1): 240 Constitution Boulevard, Dallas, GA 30132 770-443-7606 M-F 8am to 5pm http://www.paulding.gov/index.aspx?NID=210

Rockdale County (4/1): 969 Pine Street, Conyers, GA 30012 770-278-7600 M-F 8am to 4:30pm http://www.rockdalecounty.org/main.cfm?id=2985

Walton County (4/1): 303 South Hammond Drive, Walton County Government Building, Monroe, GA 30655 770-267-1335 M-F 8am to 5pm http://www.waltoncountytax.com/info#returns

 What You Need in Order to File: A copy of the recorded warranty deed, Social Security numbers of all persons on the deed, the mortgage holder, and the amount of the mortgage. Note: Some counties may require a copy of the closing statement and proof of age for senior citizens.

If your county is not listed, please visit the Ga Dept of Revenue online at: https://etax.dor.ga.gov/ptd/county/index.aspx to find information for your county.

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20th September 2013

Fed Will Help The Housing Market Continue It’s Recovery!

Fed Chair Bernanke

The Federal Reserve’s decision to forgo a planned tapering off of bond-buying caught most by surprise yesterday. That included the Dow and the S&P. After the announcement made by Treasury Chair Ben Bernanke, both rocketed to record highs.

Most analysts had expected the Fed to implement a slow withdrawal of its bond-buying program … a program that presently sees about $85 BILLION worth of bonds being purchased each month.

If yesterday’s Fed move was meant to counteract a slowdown and re-stimulate the housing market … it worked.  Interest rates reacted quickly and moved downwards.

Pair this Fed announcement along with the report released by the Census Bureau showing new building permits and housing starts a bit lower than had been projected … and you understand why the Fed’s decision is seen as such good news by housing professionals … and those hoping to buy or refinance a home.

The rising interest rates seen over the last month or so (a direct result of the prediction that the Fed would taper its bond-buying soon) has definitely taken a toll. Besides the obvious negatives that directly affect hopeful new home buyers, homebuilders, and real estate professionals … there’s the fact that fewer housing starts stagnates the economy through the lack of job growth and spending power.

Meanwhile, local Atlanta homebuilders are still expressing confidence at levels not seen for several years. But concerns were definitely being raised over what was being seen and heard from the Treasury over the last few weeks.

The fact that the Fed recognized that their stimulus was still needed and changed course on actions to curtail bond buying (at least in the short-term) is a huge positive.

My suggestion to anyone that is sitting on the fence regarding an Atlanta home purchase … pick-up the phone and contact me – 678-585-9691. I can refer you to three of the best lenders in Atlanta – so you can take advantage of some of the best mortgage rates in history.

posted in Atlanta Housing Market, Home Buyers, Mortgages | 0 Comments

7th July 2013

Home Prices Up – Mortgage Rates Up

Trend upHome prices in East Cobb and North Fulton have increased month over month for the last four months in a row! Data through April 2013 presented by S&P   Dow Jones Indices for its S&P/Case-Shiller Home Price   Indices showed average home prices increased 11.6 percent and 12.1   percent for the 10- and 20-City Composites in the 12 months   ending in April 2013.  The   cities of Atlanta, Dallas, Detroit and Minneapolis posted their highest  annual gains since the start of their respective indices.   Atlanta, Las Vegas,   Phoenix and San Francisco posted year-over-year gains of over 20   percent in April. Mortgage rates are trending up as   well. The average 30-year fixed-rate mortgage (FRM) rose from 3.93 percent   last week to 4.46 percent this week; the highest it has been since the week   of July 28, 2011. Last year at this time, the 30-year FRM averaged 3.66   percent. This represents the largest weekly increase for the 30-year FRM   since the week ending April 17, 1987. Despite recent gains in mortgage rates,   homebuyer affordability remains which should help fuel the ongoing   housing recovery.

posted in Atlanta Housing Market, Home Buyers, Mortgages | 0 Comments

18th January 2013

Housing Industry Awaits Mortgage Rule On Down Payment Size

If you’re planning to buy a home and have not yet taken advantage of the outstanding home prices and low interest rates you should read this. Things could get a little tougher with regard to downpayment requirements in the next few months. Hopefully regulators like the CFPB won’t go overboard because that will do nothing but harm the economy and hurt the housing recovery which is already nicely underway.

>Housing Industry Awaits Mortgage Rule On Down Payment Size.

 

Need a referral to a great lender?  Give me a call.

Robert Whitfield
Broker/Owner
Advantage Realtors
678-585-9691

posted in Home Buyers, Mortgages, New Posts | 1 Comment

2nd January 2013

A Look Back At 2012 Real Estate

2012 Atlanta Real Estate

2012 will probably be considered the year that the housing market finally hit bottom and began an upward trend back to normalcy. Home prices, home sales and new home construction all increased while at the same time inventory continued to shrink, and record-low mortgage rates continued. Let’s hope the trend continues!

These are some of the major factors affecting 2012 residential real estate, which many in the industry myself included, feel will carry over into 2013:

 

Stellar Mortgage Rates

Nationwide Mortgage interest rates continued a downward slide in 2012, reaching historic lows week after week. Record low rates helped  the recovery along by attracting more buyers into the housing market and spurring millions to refinance. The question is when will rates start to increase?

Declining Home Inventory

The market continued to clear its oversupply of homes, which had swelled during the housing boom. The drop in inventory is a major reason home prices began to rise: Buyers bid up prices because they had fewer homes to choose from. October’s inventory of existing homes represented a 5.4-month supply, according to the National Association of Realtors. That was 21.9 percent lower than in October 2011 and a six-year low.

Year of the Short Sale

Short sales were the word in 2012, as lenders continued to embrace that approach to liquidation as less costly than foreclosure. A short sale allows a homeowner to sell his home for less than his mortgage (in other words to sell his home “short” of the actual payoff amount).

Short sales of homes in foreclosure are currently on pace to outnumber sales of bank-owned properties. Daren Blomquist, vice-president of online foreclosure marketplace RealtyTrac, said that short sales of properties not in foreclosure also accelerated, accounting for about 22 percent of total sales in the third quarter of 2012.

Threat of Shadow Inventory Recedes

Worries about “shadow inventory” — the supply of distressed properties held back and not released to the market — has loomed over the housing market ever since the financial crisis began. But in 2012, estimates of the size of that inventory continued to shrink, falling to 2.3 million in the second quarter of 2012 from a peak of nearly 3 million in 2010, according to analytics firm CoreLogic. Experts now think that the shadow inventory is probably not going to hinder a recovery, as banks continue to release these properties in a controlled manner over time.

Investors Continued to Snap Up Foreclosures

Investors had to endure bidding wars in 2012 to win homes selling at bargain-basement prices and convert them into rental properties. Investors purchased 20 percent of homes sold in October 2012, according to the National Association of Realtors. In Atlanta, getting twenty offers on an REO property has become the norm, and distressed property prices have been on the rise since 2009. It has become harder and hard to find (and win) really good deals, especially in the under $60K price range due to the competition at that price point.

“Low vacancy rates and rising rental rates, along with statements by Warren Buffet, helped attract both individual and institutional investors to the single family rental market,” ReatyTrac’s Blomquist said.

New Home Construction Comes Back

In most major markets, Atlanta included, new home construction all but disappeared after the market crisis of 2007, as excess inventory made building more homes pointless. But new home construction soared in 2012, and in October reached its highest level since July 2008, according to the U.S. Department of Commerce. In East Cobb alone, at least a dozen new home developments sprang up starting in early 2011, ranging in size from 10 to 20 home enclaves of higher end homes priced over $700K,  to larger 50 and 60 home communities in $500’s.

Builder confidence is way up too, suggesting that builders will continue to break ground on more homes in 2013. Experts say that declining home inventory amid rising demand from buyers is spurring the spike in construction.

“Builders across the country are reporting some of the best sales conditions they’ve seen in more than five years, with more serious buyers coming forward and a shrinking number of vacant and foreclosed properties on the market,” said National Association of Home Builders Chairman Barry Rutenberg.

Most experts believe 2013 will see the real estate market continue to improve, and prices continue to increase, but caution that a full housing recovery will depend on the employment situation improving, which is likely to take several more years.

posted in Atlanta Housing Market | 0 Comments

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