Barry's Real Estate Blog

Homegain, a real estate related website, recently released the results of an extensive nationwide survey of Realtors on home prices and values.  The results show generally that  Realtors are of the opinion that home sellers believe their homes to be worth more than Realtors and homebuyers believe that they are worth.

A recent Zillow poll showed that sellers were no longer ‘in denial' regarding the U.S. housing slide. The latest HomeGain survey, however, underscores that while homeowners may be aware of falling home prices around the country, many believe that the slide doesn't apply to their homes. Our survey shows that homebuyers and Realtors are telling homeowners their homes are worth considerably less than homeowners think they are.  I will outline the results of the survey and provide my interpretation of the results.

1. On average, in the last year do you think your homeowner clients home values have:

NATIONAL REALTOR RESULTS

Interpretation: 90% of agents believe their clients' homes have lost value in the last year.

2. On average, what do your homeowner clients believe that their home is worth?

REALTOR NATIONAL RESULTS

Interpretation: 49% of homeowners believe there homes are worth 10%-20% more in value while 14% believed their home to be 20%-30% higher in value.  An additional 4% believed their home had gained 30% or more in value over the past year.  This totals up to 67% of homeowners believing their home increased in value in the last 12 month.  When you add an additional 14% who believe there home has not lost any value, the result is an amazing 81% of homeowners do not believe there home value has been impacted by the current market.  This is despite all of the information about excess inventory and foreclosures driving down prices and the fact that the Case-Schiller index of home prices showed an 18% drop in prices nationwide.

Here are some comments from agents who participated in the survey:

"Sellers know that prices have fallen but that somehow doesn't apply to them because they have "upgraded vinyl" or some such nonsense. In other words, their house has the golden doorknob," said a New Jersey agent.

"Sellers have got to be realistic in their expectations. An overpriced home in these times does nothing, no showings, no offers just whining from sellers that it's all someone else's fault that the home hasn't sold. Sellers need to get real."

"The neighborhood I live in and market, are $500,000 to $2,500,000, they tend to think their homes are still more than what the current market can bring."

3. How do your homebuyer clients feel homes are priced?

NATIONAL REALTOR RESULTS

Interpretation:  When agents were survey about their buyers, 59% said that their buyers felt homes were overpriced with 18% believing the home was priced fairly.  Only 22% felt that homes were under-priced to any degree.

So, 59% of buyers feel homes are overpriced while 81% of homeowners felt their homes had maintained or increased value over the same period. It's not hard to see why homes are sitting on the market and buyers are making "low ball" offers when their perceptions are so different.

More Agent Comments:

"Differences between seller and buyer are still too great - they just don't get it yet."

"Homebuyers do not have the funds to purchase homes, values for first-time buyers on average $150,000 to $200,000 with a 3.5% down, plus closing cost on average combined is about $11,000 with pre-paids."

"Our market is great for buyers looking for a deal and that's what they are getting with the foreclosures and short sales (if they close). Owner occupants cannot compete and are unwilling to list at the bank prices."

"The buyers are afraid to buy too soon."

"The homes that have been selling (aside from short sales and foreclosure/bank owned homes) are homes that are priced relatively low and have good appeal. Buyers are in now hurry and ask for everything."

"Several home buyers are waiting to purchase as they feel prices will decrease."

4. In the next six months, do you think the values of homes in your market will:

NATIONAL REALTOR RESULTS

Interpretation:  53% of agents believe home values will decrease over the next months from current levels.  I believe our market is close to the bottom in terms of price decreases but  you must be priced correctly for the current market.

Conclusion

This survey shows that we have a huge disconnect between sellers and buyers in terms of home values.  And, because of the excess amount of foreclosures and short sales, buyers have become used to seeing home prices declining.  In the north Atlanta area, I have not seen any market that has not been impacted by excess inventory and distressed sales.  I believe that sellers are going to have price very realistically in order to attract buyers and compete effectively.

This is also supported by the fact that February 2009 home sales rose 5.1% but at the expense of home prices which were down 15.5% from February 2008.   Read the article here.

See full HomeGain survey here.

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For more information or to schedule a tour of the home, please contact Barry Wolfert at 770-656-7551 or email me.

1730 Tappahannock Trail, Marietta, GA 30062

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Beautiful traditional style, Williamscraft built home with rocking chair porch.  This 5 bedroom, 4 full bathroom home features tons of space and is much bigger than it looks.  Built in 2001, this all hardiplank sided home is located in the Hamilton section of the East Park subdivision in Marietta (East Cobb).

The East Park subdivision is located off Allgood Road in Marietta and offers easy access to I-75 via Roswell Road/120 Loop or Sandy Plains Road.

Click here for a map of this home's location.

Overview of the Area:

East Park is a master planned community on 362 homesites in East Cobb with the quaint old-fashioned charm of Colonial Virginia. Homes have been designed to use the best of this rich architectural heritage. The community of East Park also revives traditional town planning concepts by including green parks and sidewalks. It's a place where brisk morning walks or relaxed evening strolls will give you the opportunity to greet your neighbors.

There's something for the everyone to enjoy at East Park including Resort Style Pool, Clubhouse, Tennis Center and gathering Gazebo.

This location is convenient to downtown Marietta and Marietta Square.

It is located just a few miles from the The Avenues of East Cobb with its pedestrian focused, village like setting that includes retail and restaurants.  The schools are Sawyer Road Elementary, Marietta Middle and Marietta High School, which has an International Baccalaureate program.

Overview of Exterior:

This home has a classic traditional style look including a rocking chair front porch. The house sits near the end of a cul-de-sac street. The backyard is private and includes a fully fenced backyard.

Overview of Main Floor:

Upon entering the house, you will find hardwood floors throughout the main level.  There is a bedroom and full bath on the main floor.  The kitchen is open and looks directly into the family room with built-in bookshelves surrounding a fireplace.  The breakfast area overlooks the backyard through a bay window. The deck is off the family room and also overlooks the private, fenced backyard.

The main level also features a separate large dining room as well as a laundry room with lots of cabinet storage.

Overview of Upper Floor:

The home has a large master located with a trey ceiling.  Off the master is large separate office or study that is currently being used as an additional bedroom.  This space can be closed off from the master bedroom using the French doors. This office/study is unique to this home and allows this house to actually offer a 6th bedroom if desired.

There are two additional large bedrooms upstairs.   One bedroom has an extra playroom as well.  There is also a full 2nd bathroom with double sink vanity.

Overview of Terrace Level:

This home offers a fully finished basement/terrace level.  There are several rooms including a bedroom, full bathroom, music room, and large open media room.  The 53" TV is also included in the sale of the home.

Price:

This home is currently being offered at $369,000.

Enjoy,

The Voice of North Atlanta Real Estate

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Back on Febrary 22, 2009, I posted my concerns regarding H.B. 261.  While good intentioned, that bill had the potential to cause more harm than good.  I applaud the Georgia Assembly for taking matters into their own hands and considering and creating a bill that will get the Georgia housing market back on track.

H.B. 261 went through some revisions and passed the House yesterday 162-4.  I believe the changes in the bill make it a much more effective stimulus tool and could re-start the stalled Georgia housing market.

The key features of the bill, as I understand them are outlined as follows:

• Applies to new or previously occupied single family homes
• Can be used by owner occupied or investment related properties
• Tax credit will be in effect for 6 months and apply to homes closed on in that period
• Credit shall equal 1.2% of the purchase price but not to exceed $3,600
• Credit shall not exceed $1,200 per calendar with any balance being applied to the following year's tax liability for a maximum of two additional years
• If tax liability is less than the credit, the balance will be forfeit

What Does This All Mean?

First of all, this tax credit is good for ALL  buyers not just first-time home buyers as is the case with the federal goverment's $8000 Tax Credit.  Also, this tax credit is a direct reduction of taxes owed which is like the federal credit.  If you are a first time buyer, you can qualify for both of these credits resulting in a maximum of $11,600 in tax credits.  That's a nice chunk of change even if you have to wait three years to get it all.

Since this credit is not limited to owner occupied homes, investors can take advantage of the tax credit and help reduce our excess inventory.  If you combine already discounted prices with historically low interest rates and this tax credit, now becomes a very compelling time to buy a home or rental property.

One of my major problems with the first draft of this bill was that it limited the purchase price of the home to $40,000 to $300,000.  Now, that restriction is gone which will help all homeowners as well as buyers.

Overall, I give a lot of credit to the sponsors of this bill: State Rep. Ron Stephens,164th, State Rep. Tom Dickson, 6th, State Rep. Cecily Hill, 180th, State Rep.Terry Barnard, 166th, State Rep.Jay Neal, 1st, and  State Rep. Butch Parrish, 156th.

I encourage you to read the bill for yourself here. It's only 1.5 pages!

As always, things can change.  The bill is before the Senate and may get altered.  Hopefully, it will be passed and signed into law quickly by Governor Perdue.  If things change, I'll be there to let you know what happens.

Write your representatives and urge them to pass this bill.  You can find your legislator here.

Related Posts:

First Time Home Buyers To Get $8000 Tax Credit On 2009 Home Purchase

Georgia House Considering It's Own Housing Tax Credit Stimulus - H.B. 261

General Information for Buyers

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ASK THE EXPERTS will be an occasional feature where I interview industry professionals and get their insight to the most commonly asked questions in their field.

This post features Brodie Brown with Browntree Inspections and Scott Berlyoung with Alpha Home Services.  I asked both of them to provide answers to these questions.  Click on read the rest of the story for the full interview.

1)      What does an inspector do?

Scott: An ASHI Residential inspector completes a visual review of the general house, lot and all systems keeping safety and health in mind. A New Home Code inspection has the added value of checking state building codes using the ICC, NEC and others as the Georgia qualification for minimum building standards.

Brodie:  He does a visual, point in time inspection of a property and then conveys the information to a home buyer or seller.  The inspection is meant to give the buyer the information they need to make a more informed purchase decision.

2)      How long does an inspection take?

Scott: Most inspections take a half day, or about 4 hours depending on house size and the number of systems to run, e.g. more than one kitchen or 3 HVAC units may require 4-6 hours. A new home framing inspection may take only 2-3 hours again depending on the size of the construction.

Brodie: The average inspection will take between 2 to 4 hours.

3)      Do you guarantee your work?

Scott: Yes, we guarantee all our work and customer satisfaction.

Brodie:  I guarantee customer satisfaction.  If a customer attends the inspection and decides that they are not satisfied, I will refund 100% of the fee they paid.  My inspection is not a guarantee on the house or items in the house.

4)      What do you inspect in a home?

Scott: The home is reviewed from outside in, top to bottom so that all plumbing and moisture concerns can be properly checked. All systems are run and normal controls are opened including electric panels, water mains, and furnace controls.

We request all buyers to accompany the inspector and learn about the home, asking questions along the way. Our camera brings pictures from roof tops and the bottom of crawl spaces where most people don't visit.

Brodie: I inspect everything that affects the normal, safe operation of the house.  i.e. structure, plumbing, electrical, HVAC, etc.

5) Should I get a Radon test?

Scott: Radon should always be considered and tested if a previous test is not available. Radon is on the property disclosure for family health and value of all Georgia property. The test is simple; we use quick turn around electronic monitors to speed the process.

Brodie: The EPA recommends that a Radon test be done on all new purchases.  You don't know if you have a Radon problem unless you test.

6) What's an ASHI certification?

Scott: ASHI, or the American Society of Home Inspectors is the leading national certification group for professional residential inspectors. An ASHI inspector has passed some of the highest qualifications and must maintain over 20 hours of yearly study to maintain membership.

Brodie: ASHI certified inspectors meet the following requirements:

1. pass a test on the ASHI code of ethics and standards
2. the inspector agrees to follow those ethics and standards
3. pass the national home inspectors exam
4. submit their reports to be review by ASHI to ensure they contain the proper information
5. submit an affidavit of at least 250 fee paid inspections
6. complete 20 hrs of continuing education per year.

7) Can you also repair any problems you find?

Scott: The standards of practice for an ASHI inspector do not allow this conflict of interest. We may not directly refer or conduct a business that is contingent on the outcome or sale of the home.

Brodie: No, that can be seen as a conflict of interest.

8) How much does an inspection cost?

Scott: An average ASHI half day inspection costs $375 and has many benefits, always well worth the time and money for an individuals largest life investment.

Brodie: It depends on the details of the house.  The average cost is around $300.00

9) Can I pay you at the closing?

Scott:  Typically, we get paid at the end of the inspection.  However, in special situations, we will retain a credit card number but get paid at the closing. In these case, we do charge a service fee in addition to the inspection fee.

Brodie: No, the inspection needs to be paid at the time of the inspection.  Paying at the closing may give the appearance that the inspector being paid depended on the closing being finalized.

10) Do I have to have an inspection?

Scott: No one is required to inspect their homes for safety and value, but it is always strongly advised for all the above reasons.

Brodie: You do not, but it is highly recommended.  You need to know what you are buying, both the good and the not so good.

Do you have more questions? Simply post your comments and questions below.

Related Posts:

10 Tips for First Time Home Buyers

10 Common Mortgage and Financing Related Questions Answered By The Experts

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287 Shaded Oaks Lane, Marietta, GA 30067

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Great location, excellent condition and an affordable price!  This is a fantastic fully updated townhome with 2 large bedrooms and 2.5 bathrooms.  Located in the Marietta section of East Cobb in the Shaded Oaks complex off Powers Ferry Road.  This community is tucked away in a quiet, tree shaded area that provides both affordability and accessibility.

Overview of the Area:

This home is convenient to the several major roadways in Cobb including Powers Ferry Road, Roswell Road/120 Loop, Delk Road, Cobb Parkway/Highway 41 and I-75.  The townhome is located in the highly sought after Cobb County school system.  The schools are Powers Ferry Elementary, East Cobb Middle and Wheeler High School which is a Magnet School for Science and Math.

Click here for a map of this home's location.

Overview of Main Floor:

As you enter the home, you'll notice the light colored wood floors throughout.  The entire townhome is painted in light pastel colors creating a bright and warm interior space.  The main floor half bath has a lovely antique styled vanity as well as tile floor.

The kitchen has been completely updated with granite countertops, tile backsplash, stainless steel appliances and newer lighting fixtures.  The kitchen has a breakfast area with a bay window that brings in lots of sunlight.

The living room is visible from the kitchen and features a large fireplace and beautiful mantel.  The main floor also has a large laundry room with extra storage.  Accessible from the living room access to the backyard with a deck and exterior storage room.

Overview of Upper Floor:

Two large bedrooms are upstairs.  Each bedroom has wood floors, their own walk-in closet and private bath making this home ideal for roommates as well as an individual or small famiy.   Both bathrooms have updated vanities, tile floors and a tub/shower combination.

Miscellaneous:

This townhome comes with two assigned parking spaces. HOA dues are $75 per month.

Price:

This townhome home is currently being offer at $134,500.  Given the upgrades and excellent condition, this home is turnkey and ready for new owners.

Enjoy,

The Voice of North Atlanta Real Estate

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The Cobb County School District is considering moving the starting date from August 10 to August 17 for the Fall 2009 school year.  Many are asking where the extra five days are going to come from.  The state mandates at least 180 days of instruction.  State school Superintendent Kathy Cox has said calendars are a local decision. A bill to require a later start date for all public schools failed in the state Legislature in 2005.

Time for standardized tests has to be factored in, along with time for state high school graduation tests. Teacher work days, Advanced Placement exams and block scheduling also must be considered.  Many districts are now off the week of Thanksgiving. In the past, schools had high rates of absenteeism on Monday and Tuesday of Thanksgiving week. Absentee rates are monitored and used with test scores to determine if public schools comply with the federal No Child Left Behind Act.  According to some board members, it's possible for the district to start school later than other metro districts and still finish the first semester before the holiday break. But a later start date could mean:

• A shorter break at Thanksgiving. Currently, students have the entire week off

• A delayed start to the holiday break. Most districts are off the entire week of Christmas, which falls on a Friday this year

In addition to the later start date, Cobb school board member John Crooks wants the school year to end before Memorial Day. And many, including Crooks, contend the first semester should be completed before the winter holidays.

"I think it's fair to students, especially high school students, that they have a winter break. A clean break," said Sanderson, Cobb's superintendent.

Paulding County plans to start on Aug. 17, but the first semester won't be completed until January, according to district spokesperson Sharon Roper.

While many metro districts will start the 2009-10 school year on the same day, the last day of school varies, based on such factors as the number of student holidays and teacher planning days. Some districts have a week off for Thanksgiving, and some have a week-long break in mid-February.

2009-2010 School Start and End Dates

District First day Last day

Atlanta                       Aug. 10       June 4
Cherokee                   Aug. 3         May 28
Clayton                      Aug. 10       May 28
DeKalb                      Aug. 10        May 21
Fayette                      Aug. 10        May 28
Forsyth                     Aug. 10         May 28
Fulton                       Aug. 10        May 21
Gwinnett                  Aug. 10        May 26
Marietta                   Aug. 10        May 21
Paulding                   Aug. 17        June 4

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Read about some upcoming events and things to do in and around Cobb County.

Commissioner Lee and Chairman Olens host town hall meeting

District 3 Commissioner Tim Lee will host a joint town hall meeting with Chairman Sam Olens 7 p.m., Thursday, March 5, at Piedmont Church, 570 Piedmont Road, Marietta. Residents are encouraged to attend this meeting and discuss progress made around the county. It is also an excellent time to express ideas and ask questions. For more information, call 770-528-3317.

Cobb libraries offer one-stop shop for job seekers

The CobbWorks Mobile Career Center, a free job resource, will be available at select Cobb County public libraries in March and April. This partnership was formed to make job searching tools accessible to the community. The portable facility is a bus filled with 12 computer stations were residents can complete an online job search, resume and cover letter. The computers have Internet access, allowing people to search from local, state and national jobs. Professional job counselors from CobbWorks will be available to help individuals plan job searches, apply for jobs, develop resumes and cover letters and answer career development questions. Visitors to the mobile career center can continue their work inside libraries where they can access newspaper classifieds, use computers and check out books on job hunting and career management. Services are free and printing is available from computers and copy machines for 10 cents per page. The career center will be available:

Tuesday, March 3, 9 a.m.-2 p.m.
South Cobb Regional Library
805 Clay Road, Mableton

Wednesday, March 4, 2-4 p.m.
Central Library
266 Roswell St., Marietta

Tuesday, March 17, 2-4 p.m.
Merchant's Walk Library
1315 Johnson Ferry Road, Marietta

Thursday, March 19, 2-4 p.m.
Merchant's Walk Library
1315 Johnson Ferry Road, Marietta

Tuesday, April 7, 9 a.m.-2 p.m.
Stratton Library
1100 Powder Springs Road, Marietta

Participants should bring a thumb drive to save their work and a notebook to take notes. Services are provided on a first-come, first-service basis and computer usage at the mobile career center is unlimited unless there is a line. Then it is limited to one hour sessions. The bus is wheelchair accessible. For more information, call CobbWorks at 770-528-4300.

Still time to order plants during annual 4-H sale

The Cobb County 4-H Club is having its annual plant sale. This year's assortment includes blackberries, blueberries, raspberries, crape myrtles, edgeworthia, helleborous, heuchera and Spring Bouquet Viburnum. Prepaid orders will be accepted through Wednesday, March 11. The order form is available at cobbextension.com or by calling 770-528-4076. Plants may be picked up at Jim Miller Park from 9 a.m. to 3 p.m., Saturday, March 21.

In addition, a free seminar on growing and caring for blueberries and blackberries will be conducted by Cobb Extension agent Steve Brady 7-8:30 p.m., Monday, March 9, at the Cobb County Water Lab, 662 South Cobb Drive, Marietta. For more information, or for free brochures outlining the care of these plants, call 770-528-4070.

Book sale offers great deals for the whole family

The Cobb County Public Library will host its semi-annual book sale March 6-8 at Jim Miller Park, 2245 Callaway Road, Marietta. The event will be 9 a.m.-5 p.m., Friday and Saturday and 1-5 p.m. Sunday. Items for sale include soft cover and hard back books, magazines, computer programs and comic books. Prices range from 10 cents to $2. Proceeds from the sale go toward purchasing new books and materials for the library system. Last year, book sales generated more than $50,000 which allowed library staff to purchase new books, CDs and DVDs. For more information, or to volunteer to assist with setting up the sale, call 770-528-2342. For more information, visit cobbcounty.org/Library.

Your opinion needed on how to Keep Cobb Beautiful

Keep Cobb Beautiful needs public input on important environmental issues. Whether it's recycling, greenspace, litter prevention or something else, KCB is seeking your thoughts and ideas. A quick online survey will help the organization serve the needs of Cobb's residents better. To participate, visit cobbcounty.org/KCB.

Public meeting planned for Bullard-Stockton property

A public input meeting for the Bullard-Stockton property master plan will be held 7-8:30 p.m., Monday, March 9, at the West Cobb Senior Center, 4915 Dallas Highway, Powder Springs. The meeting will be an open house format where residents can view various displays around the room, ask questions, provide feedback and discuss planning for future development of this passive recreation area. Representatives from Cobb County government, Cobb Parks, Recreation and Cultural Affairs department and the planning firm Lose & Associates will be available.

Commissioner Goreham hosts town hall for residents

District 1 Commissioner Helen Goreham will host a town hall meeting for her constituents 7 p.m., Thursday, March 12, at West Cobb Senior Center, 4915 Dallas Highway, Powder Springs. This is an excellent opportunity to learn about progress made in the community and share questions and thoughts with the commissioner. For more information, call 770-528-3313 or visit cobbcounty.org/boc.

Event highlights local leaders during Women's History Month

The League of Women Voters Marietta-Cobb and the YWCA of Northwest Georgia will host the first "Celebrating History Through Her Story" event 10 a.m.-noon, Saturday, March 14, at the Workforce Development and Conference Center at Chattahoochee Tech. This year's focus will be on first elected women officials in Cobb with a panel including Victoria Chastain, the first female mayor of the City of Marietta; The Honorable Dorothy Robinson, the first female elected Superior Court Judge of Cobb County Judicial Circuit; Lynda Coker, first femal state representative from Cobb; Barbara Williams, first female Cobb County commissioner; and Alisha Thomas-Morgan, first African American female state representative from Cobb. The event will be a highlight of Women's History Month and there is no charge to attend. If you would like more information or to reserve your seat because space is limited, contact Holly Comer, at 770-423-3562 or E-mail her at hcomer@ywcanwga.com.

Learn how to preserve historic properties at workshop

Cobb County, in cooperation with local partners, will host a workshop about historic properties 8:30 a.m.-3 p.m., Saturday, March 14, in the Social Sciences building of Kennesaw State University, 1000 Chastain Road, Kennesaw. The workshop will educate participants on ways to preserve and maintain Cobb's historic buildings. Topics include the National Register, local historic designation, tax benefits and standards for rehabilitation. There is a $5 fee, which includes lunch. Because of limited seating, registration is required by 5 p.m. Wednesday, March 11. For questions and registration, contact Mandy Elliott at 770-528-2010 or mandy.elliott@cobbcounty.org. For a complete workshop schedule, visit cobbcounty.org/CommunityDevelopment.

Road closure alert for Concord Road

Concord Road will be closed to thru traffic between Hurt Road and South Hurt Road through June 3. Closure is necessary to replace the bridge over Silver Comet Trail. For detour information, click here  or visit dot.cobbcountyga.gov/road_rept.htm.

Latest recreation newsletter now available online

The March edition of Recreation Cobb eNews is now available online with valuable information for the public, including details on The 2009 Hunt and other upcoming events at various facilities. The newsletter is available at prca.cobbcountyga.gov/newsletter/2009-03.htm.

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Attention first time home buyers (you know who you are, don't you?).  Now is the time to take advantage of lower house prices, low interest rates and an amazing $8000 tax credit.  But don't wait too long, the tax credit ends November 30, 2009 and interest rates and prices won't stay low forever.  For more tips, read the rest of the story.

1) Are you a first time home buyer? It may sound like an easy question but you can actually qualify to be a first time home buyer if you have not owned a home in the last 3 years.  Of course, of you've never owned a home before, you're covered.  Knowing this is important as you can take advantage of the current $8000 first-time home buyer tax credit.

2) Credit check. If it's been a while since you last saw your credit report, that is the first thing you should do.  You can go to annualcreditreport.com or myfico.com.  Most "free" credit reports will show you the accounts listed in your name and if they are late but the reports do not typically provide you with your credit score.

For a nominal fee, you can buy your credit reports with the scores.  It's good to have both since lenders will typically look at the middle and lower scores more than the high score.  In this credit market, you really need to be above a 625 to have a decent chance at a loan.

3) Make a budget. If you've been renting for a while, you may be used to having some of your utilities, cable or other services included in your rent.  When you buy, all of these expenses are yours so you need to make sure you can afford a house.

Here's a list of items renters typically forget to budget for:  homeowner's insurance; pest control; water/gas/electric/cable; trash pickup; yard maintenance; homeowner's dues; general maintenance and repairs (light bulbs to missing roof shingles).

4) What is your motivation for buying? This question is important because it determines your motivation.  Home buyers move for all kinds of reasons.  And, any reason is valid if it motivates you.  You may have to make concessions in price or location to find the right house so knowing and remembering why you're doing this is important.

5) How long will you live there? Your time frame in a house can impact whether a certain house is a good buy or a risk.  If you're moving into an area that's ready to explode with growth but you only plan to be there for a year or two, what happens if that growth doesn't occur?  Will you be stuck in a house that is losing value instead of gaining it?  If you're time frame is longer (5-7 years) the likelihood that you will gain a benefit increases.

6) Get an agent. Most home buyers don't realize that houses listed with a broker (and this represents the vast majority) will share their commission with the buyer's agent  - resulting in no cost to the buyer!   Let me repeat this.  If a house is listed with an agent, the seller is paying a commission that includes the buyer's agent.  The seller is paying for you to be represented whether you are or not.

Since we are addressing buyers who have either never bought a house or have been out of the market for at least three years, you need an agent who can guide and assist you through the process.

A buyer's agent works for the buyer.  The listing agent works for the seller.

The key knowledge you want in an agent includes: knowledge of the current market, how to negotiate an offer, how to write a contract, has relationships with suppliers and vendors such as lenders, inspectors, handymen, etc.

7) Get pre-approved by a lender. Even after you've made a budget and decided you're motivated to buy, the next step is to get pre-approved by a local lender.  The old days of a pre-qualification are over.  You need to choose a lender and get fully pre-approved before you go you looking for a house.  Your agent should be able to recommend lenders to you.

If not, I would consider changing agents.  Also, a local lender is preferred especially if you ask that they accompany you to the closing.  Should something go wrong (and it often does), you want your lender there to handle the problem immediately.  Read about 10 Common Mortgage and Financing Related Questions.

8) When should you start this process? Many renters wait until they get 2-3 months out from the end of their lease.  This is a mistake.  Should you discover an issue on your credit report or determine that you're not ready to cover all of the costs of home ownership, you need to know that now.  This way you can take care of these issues so that when your lease expires, you can make the move.

The current $8000 first time home buyer tax credit will expire on November 30, 2009.  It would a tragedy to miss this opportunity because you didn't give yourself enough time.

9) Down payments. With a good credit score and decent income, you can possibly qualify for a FHA loan which only requires 3.5% down payment - that's only $7000 on a $200,000 home.  And, if you need help getting that down payment, you can get a gift from a long-time friend or family member.

If you're a veteran and have full VA benefits, you may qualify for 100% financing with no down payment.  There are also programs through HUD which require only $100 down.

Of course, the more you can put down, the lower your mortgage payment will be and the more likely you are to be able to secure a loan at a better interest rate.

10) Taxes. What does home buying have to do with taxes?  Everything.  One reason home ownership is attractive is that you will get a tax break on the home mortgage interest you pay.  You don't get that on a car loan or almost any other type of loan.  So, instead of paying rent with after tax dollars that you never see again, your mortgage not only allows you to live in a home, you will be able to write off the interest you pay.  Check with a tax professional if you have any questions about this.

What now?  So, you've decided to take advantage of the $8000 tax credit, you're motivated, you've checked your credit, run a budget and ready to start.  My advice is to contact a real estate agent in the area you want to look.  If you're looking in the North Atlanta area, contact me here.

Regardless of who you use, this a great time to buy because prices are down and interest rates are low.  If you buy now and hold on was the market recovers, you will enjoy watching your wealth build as your home appreciates.

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ASK THE EXPERTS will be an occasional feature where I interview industry professionals and get their insight to the most commonly asked questions in their field.

This post features Michael Lappin with Stellar Mortgage, Beth Cork with Academy Residential Mortgage, Amy Tyson with Envoy Mortgage and George Sayegh with First Metropolitan Mortgage.  I asked all of them to provide answers to these questions.  Click on read the rest of the story for the full interview.

1) What types of loans are currently available for buyers?

Michael:  There are many different loan programs.  The most common is the 30 year fixed rate mortgage, but there are shorter term fixed rate loans, adjustable rate loans, interest only loans, loans with and without mortgage insurance and Home Equity Loans and Lines of Credit (HELOC).

Beth: Conventional, FHA, VA....Fixed or Adjustable, interest only.  No more Stated or No Doc loans.    Some lenders may still offer a "reduced documentation" loan but that only pertains to assets.  Income is always documented these days.  Jumbo loans are still available but at a high interest rate.

2) What's the difference between a conventional loan and FHA loan?

Michael: The biggest difference between conventional loans and FHA loans are which Government entity is backing the loan.  Both types offer fixed and adjustable rate loans with and without mortgage insurance.  The requirements differ among the different types of loan and different lenders with regard to loan size, credit score, downpayment, and income requirements.

Beth: Conventional loans are based on your standard Fannie Mae and Freddie Mac loan guidelines.  FHA loans are backed by the government with different guidelines.  FHA guidelines offer more flexibility regarding credit because they do not look at score but your entire credit situation.  FHA also offers lesser down payment requirements.

George: The big difference is that FHA requires smaller down payment on a purchase. It has increased from 3% to 3.5% but conventional loans still requires 5%. FHA also tends to have better rates when the borrower has lower credit scores.

Amy: Conventional loans include all loans under the current Fannie Mae (Federal National Mtg. Assoc.) & Freddie Mac (Federal Home Loan Mtg. Corp.) lending limits, they are not insured by FHA or guaranteed by the VA.   Down Payments range from 5 to 20% or more. The Conventional/Conforming loan limit is currently $417,000 for a single family dwelling.  A loan to value above 80% requires PMI (Private Mtg. Insurance).

FHA (Federal Housing Administration) provides a loan guarantee program in lieu of PMI (Private Mtg. Insurance). Loans are insured by the Federal Housing Administration.  FHA loans are attractive, but not limited to first time home buyers,  because they require a lower down payment of 3.5% and have a higher qualifying ratio than a conventional loan.  FHA loans have an upfront MIP (Mortgage Insurance Premium) that is financed into the loan amount and a monthly premium.

3) How much money do I need to put down?

Michael: The amount of money required to buy a house depends on different things.  There are loans that require no downpayment and some that require 25% and everything in the middle.  Most common loans are FHA and conforming loans. FHA loans require as little as 3.5% down for a primary residence and investment property on a conforming loan requires 20 to 25% down.

Beth: 5% down on conventional loans or 3.5% down on FHA loans

Amy: The minimum down payment is 3.5% for an FHA loan.  If you are a Veteran and have full eligibility you are eligible for 100% financing.

4) How do I find out my credit score and why is it important?

Michael: Credit is a large factor in determining the interest rate for your loan.  While some loans do not have a minimum credit score required, the interest rate will be higher, the lower your credit score.  You can obtain a free credit report every year from each of the three major credit reporting agencies at www.annualcreditreport.com If you want to find out your credit scores that closely represent the score that a lender will obtain, go to www.myfico.com.

Amy: You can contact any of the three repositories (Equifax, Experian & Trans Union)  and request one free credit report per year, or better yet contact
a mortgage professional to help you with the pre-qualification process.  When applying for a mortgage,  a tri-merge report from all three repositories we be used to determine your score.  The middle of the three scores is used for qualification purposes.

George: You can go on line and get a free copy which may give you scores and some general info. However any mortgage professional will need to pull a full tri-merged credit report in order to accurately determine if you qualify. Your middle score or second highest of the 3 is what lenders use to determine if you qualify and in some case to determine rate.

5) Are there any 100% financing options still available?

George: There are some programs like the HUD 100 program where you can buy a HUD repossessed home for as little as $100 down and the Rural Housing program which finances up to and sometimes over 100%. BUT programs like these are very specific to certain properties or areas.

Beth: Georgia Dream is a 100% financing program with strict income limitations.  Not all lenders are licensed to do these loans.  You can also search for local down payment assistance programs to help you with the down payment requirement for FHA although they are few and far between.  Restrictions do apply if you do find a down payment assistance program so make sure you ask about all requirements.  Finally, you can go to your local Credit Union for possible no down payment loans.

6) What if I filed for bankruptcy?  Does this mean I can't get a loan?

Amy: To purchase a home using Conventional financing  4 years seasoning (time period that must elapse before a borrower is eligible for a loan ) is required & 3 years seasoning for FHA financing.   On  a case by case basis at the lenders discretion,  the lender may consider two years as an acceptable interval for re-establishing a credit history when the derogatory information in the borrower's credit history resulted from "documented" extenuating circumstances.  Guidelines can vary based on Chapter 7 vs Chapter 13 bankruptcy.

Beth:  In order to get a mortgage, you will need to be discharged or released from the bankruptcy for 2-3 years before you can get financing.

7) If I don't have enough money for a down payment, can I borrow it from a friend or relative?

Michael: You cannot borrow money from a relative or friend for a down payment.  You can have a relative or close established friend give you the money for a downpayment.  They will have to prove that they have the funds to give you and sign a letter stating that the money is a gift and is not expected to be repaid.

Beth: Yes, FHA allows the down payment to come from a relative in the form of gift funds.  A gift letter would need to be signed along with documentation of the funds by your relative.

George: Both Fannie and FHA loans allow for gift funds from a 3rd party, usually a family member. However the borrower needs to have a certain amount of their own funds, money that they have had for 60 days, in the deal.

Amy: FHA and VA loans allow for 100% gift from a blood relative.  Conventional loans require 5% of your own funds unless you are putting down 20%.  If your putting down 20% -  100% of the funds can come from a gift.

8) What does having a co-signer do for me?

Michael: Co-signers can help depending on the loan that will work best for you.  Sometimes a co-signer with better income or assets, or stronger credit can help strengthen your application.  Because loan requirements depend on many factors, a co-signer is not always enough to allow someone to purchase a home.  An example of where a co-signer will not help is when any single borrower has a recent bankruptcy or foreclosure.  An example of where a co-signer will help is when someone has stable income but has significant current debts and their parents have strong income and no debt.  That improvement in the total debt to income ratio can help approve a loan.

Beth: A co-borrower can help you qualify for a loan if they qualify.  Usually a co-borrower is helpful if you need more income to qualify for the loan.  Both the borrower and co-borrower's credit and debts would have to qualify in order to receive financing.

9) Are ARMS bad?   Aren't they the "bad" loans that caused all of these problems?

Michael: ARMs (Adjustable Rate Mortgages) are not bad.  They work for some people and not for others.  Everyone should talk about their financing needs and make decisions based on accurate information.  Adjustable rate mortgages are not ideal for someone with a stable income that is not anticipated to increase greatly, who plans on staying in their home for a long time.  They are sometimes advantageous for someone who is early in a career that will show strong income increases that is paying down other bills in the short term.  In a typical financial market (and things have been very atypical lately) a shorter term interest rate (3, 5 or 7 year ARM) would have a lower interest rate than a 30 year fixed.  That is why many people signed up for ARMs.

Beth: Several factors lead to the problems that we are currently facing.  Adjustable rate mortgages are not the only culprit.  Irresponsible lenders and borrowers, uninformed buyers, inflated home values, mortgage fraud and several other factors can be blamed but if you know your financial situation and understand the loan product you're getting, the ARM product was once a cheaper option.  Today, ARM rates are not that much cheaper so the best option would be a fixed option.

George: Many of the "bad loans" that are out there were ARMs that originated for Sub-prime borrowers with little or no income verification and with little to no money down. Both Fannie Freddie and FHA offer ARM loans and qualify borrowers on full documentation.

Amy: ARM (Adjustable Rate Mortgages) is a mortgage loan where the interest rate on the note is  periodically adjusted based on a variety if indices.  This type of mortgage product isn't bad,  however it may be for the more financial savvy borrower.   The borrower benefits if the interest rate falls and loses if interest rates rise.

10) What are closing costs and how much are they?

Michael: Closing costs are the fees involved in obtaining a mortgage.  They are paid to the lender, attorney, appraiser, real estate agent, state and county.  It takes many people to coordinate and conduct a loan closing and everyone gets paid for doing their job.  Many of the costs vary with the amount of both the purchase price (if a purchase) and the loan amount (for both a purchase and refinance).  Some are fixed regardless of the purchase price so the percentage can vary.  We like to say that typcial borrower/purchaser closing costs range between 1% and 3% of the loan amount.  Total closing costs for both buyer and seller typically run between 3% and 6% of the sales price.

Beth: Closing costs are comprised of lenders fees, attorney fees, escrows for property taxes and insurance and state taxes.  Some fees are percentage based so your loan amount will determine your closing costs.

Amy: Closing costs are incurred at settlement by a borrower/seller in completing a loan transaction. These customary costs are above and beyond the sales price of the property that must be paid to cover the lender/title fees and transfer of ownership at closing.   At the time of application  the lender will disclose the closings costs and prepaids (cost to establish the escrow account &  pre-diem interest) to you in the form of a Good Faith Estimate.

George: Closing costs are any 3rd party fees that are associated with closing the loan. These can be fees to Broker, Attorney, Appraisers, Lender and State Taxes to mention a few. These fees vary on who it is that you are doing business with. Remember interest rate and fees are directly related. If you have no fees in your loan then you are not getting the lowest rate possible. Also you can pay additional fees called "discount points" you can get a lower rate. Most important you need to get a Good Faith Estimate from the lender or broker to see what the breakdown of fees actually is and then GFEs. Also look at APR, this is a fiqure that includes your closing costs in the rate. The APR is always higher than your actual note rate but is a good way to compare fees. You may have a rate of 4.5% but an APR of 6.0%, that means you are paying a lot of fees to get to that rate.

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Nationally, the US experienced an 18.2% price drop, year over year according to Standard & Poor's Case-Schiller Home Price Index for the 20 largest metropolitan areas. This represents the sharpest fall in prices ever recorded. Many cities that experienced record price growth were hardest hit by the drop in prices.

• #1 Phoenix, AZ - 32% drop
• # 2 Las Vegas, NV - 31.7% drop
• #3 San Francisc0, CA - 30.7% drop
• #11 Atlanta, GA - 11.2% drop

From October to November, Atlanta prices dropped 2.7%  Because Atlanta has been among the top cities in new home construction, Atlanta was still experiencing some price growth when some cities started to feel their bubble burst.  Atlanta's drop in prices came a but later than that in most cities.  The Case-Schiller index for the largest 20 markets topped out and started to slip in mid-2006 - a full year before prices crested in Atlanta.

By November 2008, Atlanta prices had dropped 14.6 percent from that peak. In contrast, the overall index is down 25 percent. Atlanta's prices are now back to levels last seen in May 2003. The overall index has returned to its level of early 2004, according to Case-Shiller.

None of the 20 cities in the Case-Shiller index posted a gain in prices from October to November, or from November 2007 to November 2008. The smallest declines in the surveyed cities came in Dallas, which dipped only 3.3 percent from last year, and Denver, where prices slipped just 4.3 percent.  To see the complete list of cities, click here

For more information on market trends and price changes in the local Atlanta market, click here.

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