Barry's Real Estate Blog

The National Association of Realtors said Wednesday said its seasonally adjusted index of pending sales for previously occupied homes rose 2.1 percent - in line with expectations - to 82.1 in February from January's record low of 80.4. An index that tracks signed contracts to purchase previously occupied homes rose in February from a record low a month earlier as buyers took advantage of deeply discounted prices and low interest rates.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future home sales. Because of falling home prices and mortgage rates, homeownership is more affordable than it's been since at least 1970, the trade group said. Hopes have been growing that home sales, while still severely depressed, may be finally showing signs of life. Sales of existing home sales rose 5.1 percent in February, the largest increase in nearly six years.

Prices, however, are expected to keep falling for at least another year. Tens of thousands of homes are tied up in the foreclosure process and not yet for sale. Plus, as the recession deepens and job losses mount, many buyers are likely to stay on the sidelines. The Realtors estimate that 45 percent of existing home sales are now foreclosures and other distressed properties. Many in the real estate industry are counting on an $8,000 tax credit for first-time homebuyers as their best hope for boosting flagging sales. That incentive was included in the economic stimulus package signed by President Barack Obama earlier this year.

"We expect home sales to gain momentum in the second half of the year with first-time buyers absorbing a lot of the excess inventory," Lawrence Yun, the trade group's chief economist, said in a statement. "Under these conditions, we should see price stabilization in most markets by the end of the year."

Reprinted from Yahoo news.  Click here to read the original post.

A real estate licensee is prohibited from preparing an "appraisal" unless he or she also holds the appropriate appraisal classification. Appraisers are regulated by the Georgia Real Estate Appraisers Board (GREAB). GREC and GREAB are two separate entities each with its own set of members. However, GREC staff also provides administrative support for the GREAB.

A licensee may provide an "Opinion of Value," so long as it is not conditioned upon some circumstance such as obtaining the listing if the value is determined to be in a certain price range. A licensee may also be paid for developing the opinion of value.  Sometimes the opinion of value is referred to as a BPO or Broker Price Opinion or Broker Property Opinion. No matter what it is called, it is merely an opinion and does not carry the weight or authenticity of an appraisal.

Although a broker or any licensee is trained to research comparable sales and be familiar with the market, a real estate licensee does not receive extensive and specialized training regarding valuing properties. A professional appraiser uses more complex valuation methods and is required to obtain experience in valuing different types of properties. An appraiser may use several approaches to value and apply a weighted average as appropriate: The most common approaches to valuation include:

1. Income Approach
2. Cost Approach
3. Comparable Sales Approach

When a licensee offers, or agrees, to provide a BPO, it is important that the licensee state very clearly that it is only his/her opinion and not an appraisal.  Before offering an opinion of value, the licensee should first determine the purpose of the BPO. The law provides that a real estate licensee, "in the ordinary course of real estate brokerage business," may offer an opinion of value "to a potential seller, purchaser, landlord, tenant, or third party as to the recommended listing, lease, rental, or purchase price of real estate or real property" [O.C.G.A. § 43-39A-24].

Although there are national organizations promoting the charging of fees for BPOs and acting as middle men to schedule BPOs, they are not regulated or monitored by any licensing agency. They are basically marketing organizations and are not familiar with local real estate laws. Each state addresses the right of the licensee to provide opinions of value. Georgia allows the licensee to perform an opinion of value provided it is merely an opinion and is not contingent upon some service. In addition to being in compliance
with license laws, the licensee must also consider the ethical question as to whether he/she is qualified or has the experience to provide such an opinion. It may be best to refer the request to a professional appraiser.

By nature, real estate agents want to be helpful especially if their assistance will insure the specific real estate transaction will close. However, an occasional review of the type of support a licensee can provide has merit. In general terms, if the services are for the client, the licensee can provide many real estate services, but must be careful to be accurate and not go beyond his/her level of expertise, exaggerate or make unfounded promises. If the services are for the customer, the licensee must be very careful to provide only ministerial services. In other words, if the license must use his/her discretion, analysis or judgment, it is not ministerial and therefore cannot be done for the customer without the potential for dual agency. Opinions are often construed as giving advice. The real estate licensee is seen as an expert in the field of real estate and must be careful when offering opinions
especially when it may be a subject beyond their level of expertise.

Reprinted from the GREC RENewsletter, Volume 5, Issue 3, March 2009.

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10 Common Appraisal Questions Answered By The Experts

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Two community wide egg hunts planned for Friday and Saturday, April 4 & 5

The Hunt 2009 at Jim Miller Park had to be canceled due to inclement weather, but the Cobb County Parks, Recreation and Cultural Affairs Department is planning two community wide hunts this weekend. Ward Recreation Center, located at 4845 Dallas Highway, Powder Springs, will host an event 5:30-7:30 p.m., Friday, April 3. For more information, call 770-528-8885. Ron Anderson Recreation Center, located in Wild Horse Creek Park at 3820 Macedonia Road, Powder Springs, will host an event 11 a.m.-2 p.m., Saturday, April 4. For more information, call 770-439-3611.

Big music stars set to perform at Mable House this summer

Music legend B.B. King is just one of the many entertainers signed up to perform at the Mable House Barnes Amphitheatre this season. Other famous acts scheduled include The B-52s, Kenny G., Montgomery Gentry, Peter Frampton, KC and the Sunshine Band, the musical "Smoke on the Mountain" and the Marshall Tucker Band.

"It's a higher level of artist than we've had before," Cobb County Cultural Affairs Director Elizabeth Weaver said. "I think this is a good representation of our ‘please bring them' list." She explained that each performer was requested in surveys of previous concertgoers.

King, who will perform Wednesday, Sept. 2, has personified blues music for more than half a century with signature hits such as "The Trill is Gone," "Payin' the Cost to Be the Boss" and "How Blue Can You Get." He has released more than 50 albums since he started recording in the 1940s. It will be the first time King has performed at the Mableton venue.

Country duo Montgomery Gentry, consisting of Eddie Montgomery and Troy Gentry, will open the season Friday, May 29. The two have spent a decade on the national stage with more than 20 charted singles and hit the top of the charts three times with "If You Ever Stop Loving Me," "Something To Be Proud Of" and "Lucky Man."

KC and the Sunshine Band, known for the classis dance song "That's the Way (I Like It)," will perform on Saturday, June 13. Smooth jazz saxophonist Kenny G. will take the stage accompanied by the Cobb Symphony Orchestra on Saturday, June 20. The Marshall Tucker Band, which hit the charts with "Heard It in a Love Song," will perform its Southern rock on Friday, June 26. New Wave rock band The B-52s, known for hits such as "Love Shack" and "Rock Lobster" will bring its trademark vocals Friday, Aug. 14. Classic rocker Peter Frampton, whose "Do You Feel Like I Do" became a charted hit in 1976 on one of the best-selling albums in history, will play Wednesday, Aug. 19. "Smoke on the Mountain," a bluegrass gospel musical, will close the season Sept. 18-20.

Season tickets will be available Monday, April 13, and individual tickets go on sale Monday, April 20. Tickets for individual shows range from $15 to $55. Four person tables in front of the stage are available for $350 per show. The Mable House Barnes Amphitheatre is located at 5239 Floyd Road, Mableton. To buy tickets, call the box office at 770-819-7765, visit the Jennie T. Anderson Theatre box office in the Cobb Civic Center or visit mablehouse.org or ticketmaster.com.

A living legend coming to Anderson Theatre

Mickey and Jan Rooney will celebrate their 29 years of marriage and his more than 80 years in show business during their "Let's Put on a Show" performance 8 p.m., Saturday, April 4. Tickets are $30. The show will be at Jennie T. Anderson, located in the Cobb Civic Center, 548 South Marietta Parkway, Marietta. Tickets are on sale now. To purchase, call 770-528-8490 or visit ticketmaster.com. For more information, visit cobbcounty.org/PRCA.

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The Georgia Senate passed a version of H.B. 261 allowing Georgia home buyers to receive a tax credit of up to $3,600 (or 1.2 percent of the purchase price, whichever is less).  The credit would not exceed $1,200 per year and any unused portion can be carried forward for two years.

The purpose of the bill is to create a stimulus for home sales, supporters say.

The bill would cost Georgia about $166.3 million, according to a letter from State Auditor Russell Hinton to the chairman of the state House Ways and Means Committee.

Opponents say the cost of the tax break is too great, and the number of sales it would generate too few, to make it worthwhile.

The House must still agree to the bill, which was amended in the Senate to allow the credit to apply to condos. It was also amended to allow taxpayers the choice of donating to the National Multiple Sclerosis Society, Georgia Chapter on their income tax forms.

If the bill makes it out of the reconciliation committee, it will go to the Governor for signature into law.

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

Related Posts:

Revised Housing Tax Credit Stimulus Bill (H.B. 261) Passes Georgia House; Senate Now Considering

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

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

General Information for Buyers

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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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