5 Costly Mistakes First-Time Buyers Make (Lisa Bennett)

Submitted by Lisa Bennett, Buckhead Office, REALTOR®

5 Costly Mistakes First-Time Buyers Make

Buying a first home can be a daunting experience. Here are five common and costly mistakes that novice home buyers make:

1. Ignoring the costs of having a low credit score. Lower-score borrowers pay thousands of dollars in increased interest rates over the life of the loan.
2. Muddying the waters by shopping for other things before closing. Lenders continue to check credit scores right up until the time of closing. Too much shopping could cause the lender to take back the loan.  So, hold off on putting all the new furniture you want for your new house on credit!
3. Scrimping on an inspection. Being surprised by the need for expensive repairs can be financially devastating.
4. Buying without contingencies. Buyers should give themselves an out if the inspection turns up problems or the bank raises the interest rates.
5. No money for insurance. Insurance can be surprisingly pricey. Buyers who don’t budget for it can face a nasty surprise.

Source: CNNMoney.com, Les Christie (04/19/2010)

Research key to good fit (Lisa Bennett)

Lisa Bennett, REALTOR®, Buckhead Office

By Lori Johnston of the Atlanta Journal-Constitution

Submitted by Lisa Bennett

Mike and Jasmine Jones moved from Detroit to Georgia in August 2008 for Mike’s job and rented in Newnan while looking for a home to buy.

They took time to learn about the communities in metro Atlanta, getting serious in December 2009 when the tax rebate was extended.

The Joneses worked with Lisa Bennett of Atlanta Fine Homes Sotheby’s International Realty to find a home that fit their desires.

They were used to homes with basements in Michigan and sought one for the extra recreational space. They also wanted room for a home office for Jasmine, who telecommutes in the health care industry. The couple, who are in their early 30s, also wanted closer proximity to shopping and restaurants in the city.

 Choice No. 1: Renovation with character $369,000

The home on Lamplighter Lane in Marietta’s Fox Hills neighborhood had an open floor plan. The home was built in 1972 but has been remodeled, including the kitchen and a new roof. The four-bedroom, 31/2-bath home also had a home office on the main floor. An advantage of the lot was that it sat back off the street. “It was one of those older subdivisions where they didn’t put the homes right next to each other,” Jasmine said. But the lot wasn’t level in the back, and they would have had to invest in finishing the basement.

Choice No. 2: Impressive kitchen $325,000

The home office in this residence on Brookcrest Drive in Marietta’s Millbrook Farm neighborhood overlooked its wooded lot. The five-bedroom, three-bath home built in 1980 had been expanded to include a keeping room with a fireplace in the kitchen, which had vaulted ceilings. “It would have been a very, very comfortable place to cook in and just kind of chill,” she said. But the basement didn’t have the large recreation area that Mike desired, and they preferred a more flat lot.

 Choice No. 3: A true master suite $327,500

The backyard in this home on Indian Hills Drive in Marietta’s Indian Hills Country Club had a level, fenced-in yard and a screened porch. The basement was finished, and the kitchen of this home, built in 1974, was remodeled with granite counter tops and new appliances. The master had a sitting room with a stacked stone fireplace and recessed lighting. They finished the area over the garage, she said. “You really got a bedroom and a true sitting area. It really gives you the feel of a true master suite.”

 The choice

No. 3: They waited about a week to put a contract on the Indian Hills home. In their previous purchase in Michigan, it was new construction where they were negotiating with a builder, so it was a different experience to negotiate with a seller who was emotionally invested in the home, Jasmine said.

 “When we first put the initial offer in, we really kind of researched those comps [comparative sale prices] to figure out what we really thought the house was worth,” she said. “It really makes it important for you to kind of really stop and evaluate the current market when you’re putting your offer in and doing the negotiating.”

 The seller countered twice to finalize the sales price, and they also agreed to a few small improvements before the Joneses closed on the home in February.

Treasury Department unveils new rules about ‘short sales’

Lisa Bennett, REALTOR

Submitted by Lisa Bennett, REALTOR®, Atlanta Fine Homes Sotheby’s International Realty

The change would help financially strapped homeowners

December 02, 2009, The Associated Press

The Treasury Department unveiled sweeping rules this week to help financially troubled homeowners who need to sell but can’t get a price high enough to pay off their mortgages. Homeowners will even get $1,500 to help cover their moving costs.

The plan is designed to help homeowners who don’t have the income or debt levels to qualify for a loan modification under the Obama administration’s $75 billion Making Home Affordable program. The plan establishes timelines, a standard process and documents, and cash incentives for participation.

“There’s always efficiency with uniformity,” said Vicki Vidal, associate vice president of government affairs at the Mortgage Bankers Association.

Short sales, as these deals are known, reduce the damage to the borrowers’ credit record and save the lenders the cost of foreclosure. Short sales also help neighboring property values because the sales price is usually higher than what the house would fetch in a foreclosure auction.

About one in 10 home sales this year was a short sale, or an estimated 500,000 sales, according to the National Association of Realtors.

To qualify under the new guidelines:

• The property must be the homeowner’s principal residence.
• The homeowner is delinquent on the mortgage or default looks likely.
• The loan was made before Jan. 1 this year and is less than $729,750
• The borrowers’ total monthly mortgage payment exceeds 31 percent of their before-tax income.

For more information on this topic, or for the entire article, please contact Lisa Bennett at 678.531.2996 or lisabennett@atlantafinehomes.com.

Pending Homes Sales Info from NAR

Lisa Bennett, REALTOR®

Submitted by Lisa Bennett, REALTOR®, Atlanta Fine Homes Sotheby’s International Realty.

Video with Lawrence Yun, NAR Chief Economist

NAR chief economist, said the momentum is understandable. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” he said. “Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.”

NAR estimates approximately 3 million renters are now financially well-qualified to buy a median-priced home. “As long as buyers do not overstretch and stay well within their budget, a sizable pent-up demand can be tapped among financially qualified potential buyers,” Yun said. “Although the tax credit is greatly reviving the existing home market, new-home sales may continue to struggle as home builders hold back production to drive down inventory. In addition, there remains an ongoing credit crunch for construction loans.”

The Pending Home Sales Index in the Northeast slipped 2.0 percent to 83.6 in September but remains 16.9 percent above September 2008. In the Midwest the index rose 8.1 percent to 98.2 in September and is 17.8 percent higher than a year ago. In the South, pending home sales increased 4.9 percent to an index of 109.7 and is 22.8 percent above September 2008. In the West the index jumped 10.2 percent to 143.8 and is 23.7 percent above a year ago.

Yun added that strong near-term reports should not be overstated. “We’re clearly not out of the woods because an excess of homes remains on the market despite recent improvements,” he said. “Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline. An extended and expanded tax credit would help absorb this incoming inventory.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

A forecast for housing and the economy will be released November 13 at 11 a.m. PST at the 2009 REALTORS® Conference & Expo in San Diego. Existing-home sales for October will be reported November 23 and the next Pending Home Sales Index will be on December 1; release times are 10 a.m. EST.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

Homeowners please be aware of the Georgia Foreclosure Law

Lisa Bennett, REALTOR

Submitted by Lisa Bennett, REALTOR

Source: McCurdy & Candler LLC

 

Georgia is a title theory state, In Georgia; the borrower actually gives legal title to the lender through the instrument known as a “Deed to Secure Debt” or “Security Deed”. The lender actually owns the property until the debt is paid and allows the borrower to use and possess the property. While the lender could technically demand immediate possession of the property if the borrower defaults, practically a foreclosure through a power of sale clause is the preferred method to retake possession of the property. The uniform provisions of the Deed to Secure Debt are very similar to those that you would see in a typical mortgage.

If the borrower fails to pay or commits some other non-monetary act of default the lender may move to declare the Deed to Secure Debt and Promissory Note in Default ( in Georgia most lender use the standard Fannie Mae/Freddie Mac form note). To enforce default, the lender must make a written demand upon the borrower setting forth a breach and accelerating the debt (declaring the entire debt due and payable immediately). Keep in mind that federal fair debt provisions apply and notices required under the Fair Debt Collection Practices Act and generally sent to the borrower at this time as well.

The overwhelming majority of all foreclosures in Georgia are accomplished by the use of the power of sale in the Deed to Secure Debt. This is a non-judicial sale, wherein the lender declares default, follows the statutory notice and sells the property on the courthouse steps. However, other less popular methods may also be employed in Georgia. For example, judicial foreclosure may also be accomplished, but is very rare. Judicial foreclosure involves filing a petition in Superior Court describing the case, the amount of money owed and the property and the property to be foreclosed. Upon the filing of the petition, the court will grant a “rule” directing that the unpaid principal, interest and costs be paid to the court. The rule must be published two times per month for two months. As an alternative to publication, the notice can be served on the borrower, the borrower’s agent, or the borrower’s attorney, at least 30 days before the money has to be paid in court, Judicial foreclosure would only be necessary if a lender uses some type of security other than a Deed to Secure Debt or Security Deed that does not contain a power of sale.

In non-judicial foreclosure, the lender must follow the notice requirements extremely carefully. A notice of sale must be served on the original mortgagor or current owner, by certified mail, return receipt requested. The notice must be sent to the borrowers last known address, which is the address listed on the Deed to Secure Debt or an address the borrower has subsequently designated with notice by certified mail to the lender. It is generally a best practice to provide notice, only that it be sent in compliance with the statue. The notice must be postmarked and provided to the defaulting borrower no later than 15 days prior to the date of proposed sale.

Prior to the sale taking place the lender must have published the scheduled foreclosure sale in the legal organ for the county in which the real property collateral is located for four consecutive weeks immediately preceding the first Tuesday of the month (sale day). The notice of sale must contain the date, time and place of sale along with a description of the property, the names of the mortgagee and mortgagor and a reference to the power of sale provision.

There are 159 counties in Georgia and each county has a designated legal organ (newspaper), which publish foreclosure advertisements a minimum of once per week. Each county, therefore, will have its own independent publication deadlines that must be met for a sale to occur in a particular month.

In Georgia foreclosures sales are not randomly set. They always occur on the first Tuesday in every month on the courthouse steps of the particular county. Exceptions are made for certain legal holidays that may fall on the first Tuesday. The sale must be conducted between 10:00 a.m. and 4:00 P.M. or it is an improper use of the power of sale. Sales are generally conducted by the foreclosing attorney, and the foreclosing attorney is permitted to credit bid at the sale on the lender’s behalf. Successful bidders are required to pay the full amount of their bid in cash or certified funds immediately upon the conclusion of the sale, except if foreclosing lender is the successful bidder. Should a sale be postponed, terminated or voided, the entire foreclosure process must be repeated.

Once the sale occurs, the foreclosing attorney prepares and issues to the successful purchaser (most often the lender) a Deed under Power of Sales which gets recorded in the land records of the particular county in which the property is located. Once a sale is concluded on the courthouse steps, there is no right to redeem given to the defaulting borrower? Georgia law gives a lender the ability to rescind a foreclosure sale under certain circumstances within 30 days of the sale, so long as title has not already been transferred to the successful purchaser.

A foreclosure sale will serve and extinguish any lien junior or subordinate to the one being foreclosed, with on notable exception. Foreclosure alone does not automatically extinguish a federal tax lien, which will stand as a lien against the property unless prior notice has been given to the IRS. The notice must have been given more than 25 days prior to the foreclosure sale and the IRS must fail to take any action within 120 days after the foreclosure sale to protect its interest in order to extinguish the lien with respect to the security.

In situations where the foreclosure sale does not produce enough cash to pay the loan balance in full (after deducting expenses and accrued unpaid interest). The lender may elect to obtain a personal judgment against the borrower for the unpaid balance. This deficiency is lost. This is a judicial process. As part of the confirmation process the judge will generally examine how the sale was conducted to determine whether the property was sold for its fair market value. The lender must enter a minimum bid equal to at least the fair market value of the property for the sale to be confirmed.

Please call Lisa Bennett of Atlanta Fine Homes Sotheby’s International Realty if you are facing foreclosure and need to sell your home. Call for a consultation 678-531-2996 or 404.237.5000.

Why do banks do short sales?

Lisa Bennett, REALTOR

Banks will accept short sales when the payments are late and homeowners can prove that they can no longer afford the property, some banks require the foreclosure notice to be severed while others require just a few payments to be late. No specific number of payments must be delinquent; even one payment is enough at times for most homeowners, selling for less than what they owe may not be the most preferable solution to the foreclosure.

A short sale is however, much better than going through the entire foreclosure process, through the courts and sheriff sales, and can have a positive impact on the former owner’s credit once the sale is completed.

Instead of a full foreclosure showing on the credit history, the mortgage will be reflected as having been paid off and closed but with a settlement accepted for less than the total amount, which in turn looks better to future creditors rather than a foreclosure.

A misconception that most homeowners make is when the bank forecloses they no longer owe for the debit. The bank may be able to sue the borrowers and seek a deficiency judgement against the former homeowners.

Why bankers should be willing to do short sales. 

When a bank has too many loans in default, their lending power is weak. Every defaulting loan is like a black mark on their credit report. The bank becomes a high risk for investors, and their ability to make money decreases.

One thing to remember the banks are in the loaning money business. When the banks see a loan is in default, they are happy to try to get the  non-preforming loan off their books. The only way for them to remove the loan is to consider a short sale and take less than what is actually owed.

When a bank actually has to foreclose on a homeowner according to Larry B. Litton Jr. , President and Chief Executive of Litton Loan Servicing in Houston, state on MSNBC, banks lose an average of 40 percent of the values of a loan in foreclosures and also has to pay the taxes and other expenses on the property. Litton states “The larger the loss of values and the grater the likely loss will be, the more flexible we are.”

For homeowners if you find yourself facing foreclosure you should definitely be proactive and consider a short sale.

Sitting back and thinking your house will never sell in this market is wrong. There are investors out there looking to buy properties at a discounted amount. Your home needs to be properly marketed as a short sale from someone who has the experience in dealing with the banks.

Lenders are relying on REALTORS® for their creative and innovative way to market and sell the property. Lenders look for industry reputation, experience and commitment to confidentiality. They want REALTORS® who have working knowledge on the short sale process.

I have participated in many transactions that are short sales or foreclosure situations.  I would love to help you if you are considering this route.  Please contact me for a confidential consultation.  

Lisa Bennett

Atlanta Fine Homes Sotheby’s International Realty

678.531.2996
404.835.9600
lisabennett@atlantafinehomes.com

Welcome Lisa Bennett

Lisa Bennett

Lisa Bennett is an entrepreneur at heart with a passion for the highest level of customer service. Having owned and operated several successful businesses, she has found her calling in the world of residential real estate. Lisa launched her career in real estate on the finance side as founder of Dana Capital, a net branch located in Buckhead, specializing in residential and commercial mortgages.

Lisa attended the University of Southern California and the University of Phoenix where she pursued studies in Business Management. She studied real estate at Barney Fletcher Real Estate University and obtained her Georgia real estate license. Lisa has an extensive background in sales and customer service. She consistently exceeds expectations and is highly regarded by clients and colleagues alike.

A luxury marketing specialist, Lisa is also uniquely qualified to assist investors in the purchase of foreclosures and is experienced in negotiating short sales. Her belief in trust, guidance and integrity, along with her commitment to clients throughout their home buying and selling experience, ensure her success.

678.531.2996  Cell
770.442.7300  Office
lisabennett@atlantafinehomes.com

North Atlanta Office Opens

With resounding support from many of North Atlanta’s top REALTORS®, Atlanta Fine Homes Sotheby’s International Realty announces the opening of its second office located in Alpharetta, Georgia.

Located at 555 North Point Center East, on the Fourth Floor, the office opened its doors earlier this week.  Plans are in place for a larger, more permanent office in the area in the coming months.

Nancy See, Sr. VP and Managing Broker

In addition to being the Sr. VP/Managing Broker at the established Buckhead Office, Nancy See is also the Managing Broker of the North Atlanta Office. She is a founding partner of Atlanta Fine Homes Sotheby’s International Realty.

Please contact this office at 770.442.7300, or AtlantaFineHomes.com

We are thrilled to welcome the following  North Atlanta Office Founding Members to this office:

Lisa Bennett

Suzanne Close

Barbara and Mike Durden

Reed Guthrie

Rhonda Haran

Robin Ives

David Kaufman

Bonnie Majher

Tracy Sardelli

Joe Sheahan

Mary Jo Spence

Theresa Strait

Andralyn Taylor

Laura Warren

Jody White

Maryanne Winchester

Atlanta Fine Homes Sotheby’s International Realty was founded in June 2007 by Jenny Pruitt and David Boehmig. The Buckhead Office is located on Northside Parkway (404.237.5000). The company has 100 real estate agents serving metro Atlanta and has enjoyed many market share successes since its opening two years ago.