Tag Archives: foreclosure

2013 Home Sales Very Strong

According to the National Association of Realtors®; existing home sales (called re-sales) for all of 2013 were the highest since the boom year of 2006.  In all, there were over 5 million sales in 2013, which was over a 9 percent increase from 2012.

The median home price for 2013 nationally was $197,00 which was an 11.5 percent increase from 2012.  It was the strongest gain since 2005.  The percentage of short sales and foreclosures as a part of all sales dropped by half over December 2012.  The increasing median price is partly fueled by the lack of these distressed properties pulling down prices.

Lawrence Yun, NAR chief economist, said housing has experienced a healthy recovery over the past two years. “Existing-home sales have risen nearly 20 percent since 2011, with job growth, record low mortgage interest rates and a large pent-up demand driving the market,” he said. “We lost some momentum toward the end of 2013 from disappointing job growth and limited inventory, but we ended with a year that was close to normal given the size of our population.”

Top Subdivisions in Sales for 2011

I was curious about the top selling mid-range communities in Forsyth County, so I ran a search in FMLS for subdivisions in Cumming, Georgia with home sales during the 2011 calendar year, having 4+ bedrooms and selling between $200,000 and $400,000.  Here’s the top 5 (with ties):

1) Windermere – 15 Sales

2) Fieldstone (all sections) – 13 Sales

3) Polo Golf & Country Club (all sections) – 11 Sales

3) Thorngate – 11 Sales

4) Evans Farm – 10 Sales

5) Green Summers – 9 Sales

5) Jamestown – 9 Sales

Each of these communities had foreclosures and short sales as part of the volume.

First Quarter 2011 Dominated by Foreclosures

This article does a great job explaining the problem of foreclosures in the market, how they affect home prices and how long we still have to go. tinyurl.com/3tdkev8

What happens when my appraisal comes in low?

In an uncertain market, there are several reasons why this can happen.  First, banks are now required to choose appraisers somewhat blind, so they can’t necessarily use someone local who knows the market.  For instance, I had an appraiser come from Spartanburg, SC to value a property in Forsyth County, Georgia.  A 4,000 sq.ft. home in Spartanburg doesn’t cost as much as one in Cumming.  There was a natural bias for this appraiser to not understand local values.

Second, some properties are just hard to match up with sold comparables.  The comparable sold properties ideally should be in the same subdivision and have closed within the last 90 days.  Appraisers also need a minimum of three sales to compare.

This made me do a quick analysis of sales within Forsyth County from January 1, 2011 until now.  Of all the hundreds of communities within the County, there were only thirteen with three or more sales so far this year.  The highest two had seven sales and were Chattahoochee River Club and Windermere.  Olde Atlanta Club and St. Marlo had five.  Champions Run, Green Summers and Riverstone Plantation had four.  Brandon Hall, Fieldstone, High Gables, Longlake, Polo Golf & Country Club and Villas at Habersham all had three sales this year.

So, back to the question of “What happens when my appraisal comes in low?”.  The first thought is to see if the buyer can add a higher down payment to make up the difference and complete the transaction.  This may sound far-fetched, but I had exactly this situation on a $425,000 home that appraised at $400,000.  The buyer came up with an additional $20,000 and we closed the sale.  In everybody’s opinion, the appraisal was just flat wrong.

Another option is to have the seller lower the price to the appraised value so the sale can be completed.  In a lot of cases, this is exactly what happens.  The listing agent should gather some comparable properties and work through the loan officer to try and get the appraisal amended, if possible.

In another case where we had a log home with very few comparable properties, we simply had to change lenders to get things done.  Even in this case, the mortgage officer had to really fight for the buyer who incidentally had about $125,000 equity in a $375,000 property. 

The last option is to simply have everyone part ways.  It’s not the best option, because at this point everyone has time and money into making the transaction happen.  However, in some cases this is the only way to resolve the situation.

Tax Tips for 2011

Re-posted with the permission of Gary Welch

We’re about a month away from the tax deadline and if you haven’t already filed your taxes, please review these Tax Tips…it may be beneficial for you.!

As most everyone is aware, Congress and the President came to agreement on extending the Bush era tax code. The existing income tax code is basically being extended for 2 more years. This extension is perceived to be a good stimulus tool to try to help the economy continue to rebound. Time will tell as to its effectiveness.

There are several changes in the new tax law that will help most individuals going into 2011. Some of the more important are:

• reduce payroll taxes by 2% – this is an across the board cut for all taxpayers
• estates are not taxable unless they exceed $5M
• unemployment benefits extended for 13 months for the long term unemployed
• reduction or elimination of the Alternative Minimum Tax for middle income taxpayers

If you bought a home in 2008 and claimed the first time homebuyer credit ($7500) it is now time to begin to re-pay that credit. The first installment is due with your 2010 tax return and is re-paid over 15 years. The 2008 credit is different than the first time homebuyer credit that was offered in 2010. The 2010 credit does not have to be re-paid as long as you live in the house for at least 2 years.

Due to a recent tax-law change, you may be able to claim an enhanced “residential energy credit” for qualified energy-saving improvements.

While Congress discussed limiting or reducing the amount of tax benefit associated with mortgage interest the final bill made no changes. A taxpayer may deduct interest on a mortgage up to $1M on a 1st mortgage and $100,000 on a 2nd mortgage or home equity line of credit. This deduction will almost certainly be up for discussion again in 2 years.

As always, it is important to consult with your tax advisor before implementing any tax saving or tax avoidance plans.

Gary Welch
Vice President, Sun Trust Mortgage
770.888.2232 phone
gary@garywelchhomeloans.com

Where do most buyers search for homes online?

I just saw some numbers on monthly visits to home search sites that came from comScore Media Metrix. The far and away winner was Realtor.com with about 32M monthly visits. After that, it was Zillow with about 17M, Trulia with 12M, Yahoo with 10M, AOL and Homes.com with about 5M and then a few smaller sites such as Homefinder.com, Homegain.com, Hotpads.com and Listingbook.com.

Of course, most people use these sites to start looking at areas, get the lay of the land, find out about schools, what you can get for your money, etc.  Once they have settled on an area, they begin using the searches provided by the agent’s local MLS system.  In my case, I use a combination of both FMLS searches and Listingbook, depending on what my client needs and their technical ability.

It will be interesting to see what mobile search applications become dominant over the next year or so.  Keller Williams, Realtor.com, Trulia, Zillow and SmarterAgent all have applications in use now.

Are banks causing further home value degradation?

I want to state right up front that what I do not believe that what I’m about to write is the case in ALL circumstances, but I believe it to be the circumstance in some. 

Let’s say your neighbor’s home is foreclosed upon.  The bank will hire a real estate agent to perform a BPO (Broker Price Opinion) and pay them a small fee to complete the price analysis.  Once that analysis is complete, that agent, or another put the home on the market.  The listing agent is oftentimes asked to take a reduced commission by the bank.  Because of that, some of the normal services rendered in marketing a property are not completed.  For instance, let’s say the listing agent prices the home correctly, but omits that the home has a terrace level or makes a mistake on the lot size.  To buyers, the home appears overpriced or unappealing.  So, it sits on the market, unseen and unsold.  For months.  As it continues to languish, the listing agent doesn’t take new photographs to show that the season has changed from summer to fall.  The agent keeps updating the bank, and the bank, needing for the property to be removed from their books, takes the agent’s advice and reduces the price repeatedly.  Finally, the home is priced competitively for one with no terrace level and a small homesite.  Buyers show up, realize it’s a steal, and buy the home.  Meanwhile, you decide to refinance your home because interest rates are low.  Unfortunately, you can’t, because your neighbor’s home sold for $50,000 less than it’s true market value and your home won’t appraise for what you owe.

On the other side of things, when I’m working with buyers, I try and find these little hidden gems before the price becomes competitive.  I can make a case, providing comparable properties to what is listed (a home on a small lot with no terrace level), for purchasing this home at $50,000 under list price.  If the bank accepts our offer, my clients win – BIG.  That’s my job, to take care of my clients and try my best to put them in the best financial position possible after their transaction.