MY POCKETS ARE FULL...OF "POCKET LISTINGS"

I know that most of you have never heard this phrase from your friend or neighbor (sarcasm): "If you know somebody who is looking for a home in our neighborhood bring them to my home, I am willing to sell". Yes they are willing to sell: •If the buyer is an all cash buyer so we do not have to have an appraisal •The buyer will pay top dollar for my home including everything I have done to the home •The buyer will close when it is convenient for me •I do want to sell but under my terms My partner and I have pockets full of our neighbor's "pocket listings". We appreciate them giving us the opportunity to sell their home but we are scratching our head on why they will not list with us. Why won't they list their home? •They do not want to pay commission? •They do not want people seeing their home on the internet? •They do not want the neighbors to know they are trying to move? •They do not want to show their home too much? We are trying to wrap our hands around this to give these potential sellers the reasons why they need to list their homes with an agent. •Our neighborhood has no new construction. Buyers have seen the existing inventory and have decided not to come into our neighborhood to look further. They have no idea about these "pocket listings". •We get clients when they find our listings on the internet, or drive into our neighborhood and see our signs. If they do not see a home they like they will not contact us. Therefore we do not get the chance to meet with them and show them our additional "pocket listings". If over 90% of potential buyers start their search on the internet then there is a good chance the "pocket listing" will never be seen. To my fellow real estate agents? What do you think? Meanwhile I remember as a kid when I had army men, bubble gum, pennies, rocks, marbles, and baseball cards shoved in my pants pockets. Ultimately my mom would end washing my pants along with their contents. Unfortunately we do not have a washer big enough to wash my pants with all of these pocket listings. Have a great holiday!

BUT ITS A USED HOUSE!

Here is a trend we are seeing in the North Georgia real estate market: BUT THE HOME IS OVER 10 YEARS OLD! WHY WOULD I BUY THIS HOME WHEN THERE IS SO MUCH TO DO! I live in the only golf course/boat community on Lake Lanier. One hour north of Atlanta it is truly a resort lifestyle experience. Unfortunately there is no new construction going on in the neighborhood! Why? Because the North Georgia area is slower than closer into the city. Because the North Georgia area does not have the jobs and we are too far to commute everyday into Atlanta. We are becoming a quasi retirement area where the empty nesters move to get away from the suburbs! This means that there is not enough demand to bring builders into our neighborhood to build specs. So here comes our clients who have waited for the opportunity to move into this neighborhood. Kids gone, golf clubs in the car, they are finally ready to buy after many years of driving the neighborhood looking for their future dream home. Those houses they have seen for years have grown older. Their dreams have been wiped out because they wanted a brand new, fully updated home, at a foreclosure price! Where is this home? The home has aged. If you want the newest and greatest build a new home. They do not want to because that would cost too much! I want a new home but at a deeply discounted resale price! They drive home dejected and confused. This is not fair. I should be able to have it all at a low price. Just not fair. So they go back to their existing home, read some real estate articles, watch HGTV, decide if they want to move or upgrade their current "older" home, and wait for the next "new older home" to appear in our neighborhood for sale. The cycle then continues.

HOW MUCH IS TOO MUCH?

How much is too much? As agents we always go above and beyond. My partner and I live in a neighborhood one hour north of Atlanta. We have each lived there for 12 years and have been #1 for resales the past four years. Here is our scenario: We have a listing in our neighborhood. Our sellers had lost one contract and were anxious to sell. Homes sell here but at a slower pace. My partner receives a call from an individual who lives in Atlanta. She has one family member who lives in our neighborhood and has another family member who is moving to Atlanta from out of state. She saw our listing on the internet and thought it would be a good fit. My partner showed this individual the home a few times. Eventually the prospective buyer came in to see the home. Overall my partner was the only one who ever showed any of the family members the home. Enter the buyer’s agent. During the looking phase the individual Atlanta said that she had an agent who was going to assist her family member who was going to buy the home. Here is where it got interesting. This agent never showed his client the home. When we eventually asked him to show the home he said he did not have a lock box key, does commercial real estate, and had a bad back. Not only did he not show the home, he was not present for the inspection, appraiser, and the final walk through. He asked my partner to meet the above individuals. When it came to contracts, the buyer’s agent did not have access to residential contracts. Matter of fact my partner had to fill out parts of the purchase and sale agreemet, disclosures, amendments, and counteroffers. My partner did everything. Then there was the commission. Throughout the process the buyer’s agent claimed he was entitled to his commission. At the same time we had the following information for this listing: “If we show your buyer our listing, you receive 1%”. He did not see this because he did not access to our listing services FMLS and GAMLS. After conferring with our broker we put together a smaller commission for the buyer’s agent. Needless to say that did not go over well. At the closing the buyer’s agent used some new adjectives to describe my partner, broker, and myself. Eventually we settled the commission. So how do you handle this? We had a seller who needed to sell and we had made commitment to do this. We had a buyer, first time homebuyer, who did not know the proper protocol when it comes to working with an agent. How much is too much?

Atlanta Area Real Estate Summary

I was recently able to attend a real estate class highlighting national and local real estate trends. This is our commitment to stay as informed as possible about our industry and how it affects our clients. Our Atlanta area buyers and sellers • Have been on the sidelines • Have been shifting from higher end consumer stores to outlets • Have a consumer confidence, according to surveys, double of 2009 levels but approximately 60% of 2007 levels (national level) • Have seen an increase of 68,400 jobs in Georgia January 2012 vs. January 2011 • Are part of one of the top 25 US job growth markets in the country • Unemployment in the Georgia Mountain Region is 8.3%. Specifically 10.1% in Dawson, 8.2% in Forsyth, 10.1% in White, 9.25% in Hall, 9.2% in Gwinnett, and 10.8% in Lumpkin • Unemployment in the Atlanta Region is 9.3%. This includes Cobb, Fayette, and Rockdale Counties • Median income (2010) in Forsyth County is $95,906, Dawson $58,766, Lumpkin $46,360, White County $42,487, Hall County $56,240 and $81,904 in Gwinnett National Home Sales • 11973 homes sell every day. Of those, 8501 receive a mortgage • 25% of home sales are distressed property sales. This compares with 35% in January 2012 • Months inventory of homes for sale have gone from approximately 9 months to approximately 6.5 months, June 2012 vs. June 2011 • 30 year fixed mortgage rates started at 4.75% in January 2011. Today they are averaging between 3.75% and 4% • California is #1 for amount of homeowners who have negative equity in their homes • Total homes sales 4Q 2011 were approximately 4,300,000 units vs. 4,600,000 units in 4Q 2012 • The highest foreclosure inventory are in Nevada, Hawaii, Florida, Illinois,NY,NJ,and Maine • Florida, 11.9%, has the most foreclosures in process • NY and NJ have the most months of shadow inventory. (shadow inventory are houses owned by HUD, banks and other organizations) Atlanta area home market • Atlanta metro area is comprised of 28 counties including Dawson, Hall, and Forsyth • 65% of the growth in the last 20 years has been north of the Atlanta airport, 35% to the south • Home inventory is shrinking. In the Atlanta metro area there were approximately 42,000 homes for sale in 2010, 25,000 homes in 2011, and 22,000 homes available in 2012! • Median home price (2010) was $230,598 for Forsyth, $134,000 for Gwinnett, $124,500 for Lumpkin, $119,500 for White, $125,000 for Hall, and $156,775 for Cherokee • There are 795 new home subdivisions in the 22 county area • 48% of the building permits in the 22 county areas were for Gwinnett and Forsyth County. In the last 12 months Forsyth has had more building permits than Gwinnett. • There are 285,000 developed lots in the Atlanta area waiting for a house! • 45% of the builders in the Atlanta area are national builders a very large increase • In 2000-2007 land represented 25-43% of the total cost of a new home. That percentage will drop to 18-22% • 70% of all 2011 sales were homes priced under $149K • In the 2011 the lowest number of sales were in the $250K to $750K range! Summary The home sales in our area are a direct reflection of the above statistics. The majority of our transactions for 2012 took place in Forsyth, Gwinnett, and Fulton Counties. One home was under contract in 2 days, one in 6 days, and one in under 30 days! Pockets of Dawson County, especially the Chestatee golf/Lake Lanier community, continue to sell but at lower prices. Counties to the north of Dawson are receiving lower amounts of traffic and are under pricing pressure. This pricing pressure is a result of their median income, unemployment rate, and the high amount of second home properties available for sale. We have not seen pricing go any lower for homes. However they continue to “bump” along with no large price appreciation. Resale homes in Forsyth and North Fulton, priced well, are selling quickly near full asking price. Multiple full price offers have also happened in these areas in resale and foreclosure properties. We are telling our buyers that the conditions are not going to get any better. Interest rates are ridiculously low but cannot stay this way forever. Property prices are not going any lower and the inventory is shrinking. This is the time to buy!

Keller William #1 by JD Power and Associates

This is an excerpt from a recent article: "Several companies withstood the test of customer satisfaction-at least by the standards of 2990 evaluations and more than 2790 respondents. These included KELLER WILLIAMS, which JD Power found ranking highest in both buyer and seller categories, with lofty scores among agents and salespeople to boot" I know that the majority of my fellow real estate agents are doing their best in this incredibly challenging market. Unfortunately the survey did not rate real estate agents high overall. Buyers and sellers remain disappointed because of the market and their inability to get the price they want on their home. They take out their disappointment on us, the agent. We don't control the market! Hang in there.

460 Tribble Gap Rd

460 Tribble Gap Rd: Visual shows :: The ideal active adult community in the heart of Cumming. Close to the
post office, library, and shopping. This 2 bedroom townhome has been
completely repainted. Immaculate! 2 bedrooms, large master bath,
additonal bathroom. Decorative FP, and wide open floor plan.
Refrigerator, washer and dryer included.

Please do your research before you come see the home!

Lawyers prepare for trial, teachers prepare their lessons, pilot’s flight plan, and real estate agents just???? We are probably the only real estate agents who deal with this particular issue. What is that? The number of agents who make appointments to see our listings, actually see our listings and realize the home did not meet any of their buyer’s criteria. Specifically: “My buyer’s wanted a master on the main floor” “I thought the terrace level was finished” “My buyer’s want a basement” “My buyer’s wanted more square footage” “The price is out of my buyer’s price range”. ARE YOU KIDDING ME! We review all of our listings to make sure the information is correct. That includes attaching a seller’s disclosure. Our information includes square footage, location of master suite, terrace level or no terrace level, etc… Why do my fellow agents not take a little more time to read our information or ask us these questions when they confirm appointments? All I know is that I have very anxious sellers. They are inconvenienced to have their home ready to show. They move around their personal life and then leave the home anticipating a good showing. All I ask is that you, my fellow agent, take a little more time to know your client, research the properties they want to see, and ask the listing agent some good questions. It will save you time, work, and a discussion with an upset seller’s agent!

New Listing for The Wells Team in Alpharetta GA

Priced at $212,900 this home is located in an outstanding Fulton County school district.


http://homesite.obeo.com/739340

Is There any Pixie Dust out there?

After seven successful years in a bad real estate market, The Wells Team has a pretty good idea of what works when it comes to marketing and selling a home. What has worked for us: •Pricing the home correctly from the start •Putting some money into the home, if needed, prior to listing the home. This includes new carpet, paint, and yard work. •Having very good pictures on the internet •Being available to show a home at any time •Flyers Those are just few of the many. However we have listings that have been sitting on the market for considerable length of time. For the most part these listings are very nice homes that are show ready. There becomes a point when our clients, in the above situation, grow incredibly frustrated with us because their home is still for sale. This is where the "pixie dust" comes into play. Our clients want us to find the "pixie dust" that will make their home sell. This is what we have tried: •Bonus to the buyer's agent •Offer to pay closing cost •Decorator allowance •golf course memberships •$5000 towards a golf cart •home warranties Unfortunately we not seen any of the above make the difference. I want to know if any of you have any "pixie dust" you can share.

Welcome to Dawson County Georgia

Welcome to Dawson County Georgia: Visual shows :: Welcome to Dawson County Georgia. Located one hour north of Atlanta,
this county has approximately 20,000 inhabitants. The county boast
great shopping with the North Georgia Premium Outlet Malls. It is also
an outdoor paradise. The Applaichan Trail starts at Amlicacola Falls,
canoe on the Etowah River, boat on Lake Lanier, or hike in the Dawson
Forest Management Area. A place where you can live a slower pace
lifestyle but have access to a city.

The Proper Use of a Home Inspection

Last week I attended a CE course given by a local home inspection company. The teacher, a home inspector, is a mechanical engineer. He has had extensive experience with large engineering firms that inspect large structures. Yes very qualified! We spent a full three hours looking at pictures of homes that were “repaired” by their owners. This included garden hose used as a gas line, welcome mats used on a home for shingles, light switches in a shower, and mdf boards used to hold up a floor joist. Very creative! I have not personally had the pleasure of seeing these type of “repairs” on homes that I have listed or sold. I hope that my streak stays alive! The main part of our class was a discussion about home inspectors and their relationship with the home buyer and the real estate agent. This relationship has become strained with the home inspection becoming a source of conflict between the seller and buyer. Specifically most home inspectors are missing “the forest through the trees”. Is a squeaky gate an item that must be put on a home inspection report? Is a reminder to change out the air condition filters an item to include on the report? Is it imperative to highlight deck rails on a 1987 home that are 3 inches too short if they are compared to a 2013 building code? Heaven forbid we do not have mention of the “lack of GFCI breaker in the Kitchen” on a home built 25 years ago. (We have a standing bet on how many times the GFCI breaker would be mentioned in an inspection report. After 7 years 100%) The problem is that our home sellers (still a buyer’s market) have dropped price to rock bottom only to be confronted with a list of items that the buyer wants repaired prior to moving into the home. The issue is that this list of items that the buyer wants repaired are not items that “have” to be repaired or cause a “major structural defect” to the home. I pushed our teacher hard to ask his inspectors to be more big picture when it comes to inspections. I ask that their inspectors take the time to give an overall assessment, from a structural point of view, of the home. The inspector needs to clarify what he or she feels has to be done vs what needs to be done. The buyer needs to keep the whole deal in perspective when putting together a “laundry list” of must need items that are really more of a like to have items. The buyer needs to look at the age of the home and the present condition of the home. Homes have a lot of moving parts, are exposed to the elements, and do age over time. Any home has maintenance that must be done on a continual basis. The perfect home does not exist.

PLEASE LET US SHOW THE HOME!

Too much information can be a bad thing. There are times when less is more. When it comes to the sale of your home less can be more. We have had two of our sellers learn this point the hard way. In both cases our sellers chose to stay in their home while it was being shown by a buyer’s agent. In the first case our seller spent more than two hours with the potential buyers. She earned their trust, their friendship, and probably had some influence on the buyer’s ultimate decision. Our seller told them all of the things she had done to the home, how wonderful the neighborhood was, and how happy they would be living in this home. She also said that she would offer a lot of the furniture and the golf cart as part of the negotiations. This is where the trouble began! The buyers had been interested in this home for over two years! When it appeared on the market they were ready to go. They sent us an offer. A very good price to start but......they wanted the golf cart and a lot of the furniture for free.! (Rough estimate was $15,000 in cost). Our seller was not very pleased with this initial offer. As we talked further with her she told us that their two hour meeting was productive, they had developed a friendship, and yes she had offered a lot of the items to go with the home. What she meant was that the items were for sale! Oops! In the second case our seller let the agent show their home. As he spoke with the potential buyer he mentioned that he wanted $400,000 for the home. At this time the home was listed for $469,900. The buyer interpreted this as his bottom line. However the seller meant this amount after the commissions were taken out of sale. As we received our initial offer, the buyer's agent repeated what our seller had said:"I want $400,000 out of the home". That is not exactly what our seller mean but that is how the buyer interpreted the conversation. The only thing that needs to be said in both of these incidents is the same: Please let your agents sell your home, represent you, and do the negotiating. We politely ask that you do not do our job of selling your home. In the end it opens up a lot of potential problems. Trust your agent to market your home, sell your home, and represent in the best way possible. It will be the best decision you ever make!

2622 Hwy 136E

2622 Hwy 136E: Visual shows :: 2622 Hwy 136E

Spend Time on the Financing!

Financing has become the make or break factor for many real estate transactions. As important as it is to the overall purchase of a home we are seeing less time spent on the actual specifics of financing. Today we had a one hour class taught by one of our mortgage brokers. She wanted to review a Pre-App Worksheet, HUD form, and various funding fees for conventional, USDA, FHA, and VA mortgages. Did you know? • On an FHA loan that the maximum contribution from a seller, for closing cost, is 6% of the purchase price? • A lender can pay mortgage insurance by putting it in the loan? • On a 90% Conventional loan the maximum contribution from a seller, for closing cost, is 3% of the purchase price? • On an FHA loan the Tax Service Fee is always $83? • The lender makes their money from the origination fee and the admin fee only? The items listed above are a few of the many factors current today and for the state of Georgia. One thing is for certain: They will change! The reason I listed the above items is to emphasize how important it is for your buyer to meet with a mortgage representative prior to starting their home search. Why? Because the mortgage representative can offer a variety of mortgage products, closing cost, rates, and terms that work to the advantage of that buyer in that environment. The Wells Team has a good relationship with many lenders in the Atlanta area. As part of our customer service we require our buyers to sit down with the lender of their choosing and work together to put in place a comprehensive financial plan. The result: A successful buyer experience!

This is not your mother's negotiations!

Everything is negotiable? The traditional way to negotiate involved going back and forth until both sides agreed on the terms. It was done void of emotion with both sides trying to feel like they have won. Real estate is supposed to be no different. Or is it? For the month past few months The Wells Team has been involved in numerous negotiations. Some turned out successful and others no so successful. Here is what all of them had in common: •Emotion came into play from both buyers and sellers •Buyers would not move off of their initial offer even after receiving a solid counteroffer. •Buyers did not tell us that this was their final offer. •Small items in the home (appliance, pool table,) became the focal point of the negotiation. •Buyers and sellers were basing their price on "what they FELT the home should sell for" and not the statistics that we provide. •Both buyers and sellers were holding their grounds based on "principle" •Both buyers and sellers were determined to be the winner. There was no concept of win-win. What are we telling our sellers? Before we receive an offer on your home ask yourself the following questions: •What is my time frame for moving? •Do I need to sell now or do I want to wait for the "perfect" offer? •What is the power of money? In other words if I sell now for a little less am I better off than continuing to pay taxes, utilities, and maintenance while waiting for the bigger offer? •What items in the home am I absolutely, at any price, unwilling to leave in the home? •Do I want to negotiate in small increments or do I want to be aggressive with any counteroffer? •Am I mentally prepared a "low ball" offer? •Has my agent provided me with enough data to give me a fair assessment of my market? It is not getting any easier. Take the time to prepare your sellers and your buyers for negotiations!

We Would Like Some Respect

A couple of years ago I did a blog about the lack of respect we receive as agents. After 7 years in the business, numerous awards, and high rankings as a top producer, our team receives absolutely no respect from the majority of our clients. I say this as a point of ever deepening frustration for The Wells Team. Three weekends we received 5 offers on 5 different properties. As of today three of those offers fell through. As we presented these offers to our clients we were met with very negative, and frustrating, comments and feedback. In every case we presented our sellers a thorough analysis of the offer, the market, neighborhood statistics, and other supporting information. The results were mixed at best. One seller got very rude with us over the “horrible” offer. He was not going to closing with money. (That was not correct) We were told our negotiating skills were terrible. “Why am I paying you? All you do is write amendments and pass them back and forth.” I don’t want to look at any of your statistics. They do not apply to my home. I don’t care what has sold around me my home is different. You showed me you could get a higher percentage for my home. (If it was priced right from the start) I just had an appraisal. Why won’t they pay me what my appraisal says? And other comments that were insulting to us We deal with well educated professionals as our clients. We give them the respect that they are due. The Wells Team is made up of three professionals who are college educated, have had successful professional careers, attend classes, meetings, and seminars on a constant basis. As a result we are met with a serious lack of respect. The ironic part is that our clients who state they understand that this is a business end up becoming emotional when they receive an offer. My summary on this: I do not tell you how to do your job, I show you respect, and you hired me to market and sell your home. In return I ask for respect, I do not need to be told how to do my job, and The Wells Team will work their best to do the best that is possible for you our client.

The First Quarter of 2012 for The Wells Team

The first quarter of 2012 started more positive than this time last year. However as the year progressed we are starting to see a return to the same pattern that has “haunted” us for the last three years. A lot of lookers as spring started early in the south A group of new lookers filled with excitement Sellers who have decided to make a move As April ends we are returning to the same cycle. Buyers want updated homes at low prices Buyers do their research and learn about the market from all of the information available When it comes to offers, buyers are drawing their line in the sand. Buyers are not negotiating in the traditional way. Our sellers are frustrated because of the reasons above Foreclosures on Lake Lanier, and the higher priced golf communities, gather the most interest. We will let you know how the rest of the year progresses!

We Learn From Our Clients: The Art of Negotiations!

A great part of this job is the ability to learn from our clients.
Our last education involved the art of negotiations. The ironic thing is that as much experience as my client had in sales negotiations ultimately the deal fell through.
We received an offer from the buyer’s agent. This buyer had been in the home numerous times but had a very difficult time making a decision on whether to put an offer on the home or another property. After a lot of assistance from her family, agent, and financial planner the buyer placed an offer on the home. We were $50,000 apart 89% of asking price.
We can safely say that 95+% of our negotiations involve a counteroffer from the seller, and one possibly two additional counteroffers from the buyer to settle on the price. Our seller had planned on that strategy.
Before we presented the counteroffer the seller asked me for my opinion. This is where I “choked”. I gave a two minute speech discussing everything except my immediate opinion on the counteroffer. Finally I composed myself. I told the buyer that we represent him and wanted the best offer as possible. However based on the fact that we have the most re sales in this neighborhood, and know the local market, I said I would take the offer. Obviously he did not agree.
The counteroffer was submitted. The buyer declined the offer and would not go above her original asking price. I took the email response from the buyer’s agent and forwarded it to my seller. We were so far apart that I assumed the offer was dead.
This is where I made mistakes.
• I assumed the offer was completely dead. (We were $25,000 apart)
• I emailed the buyer’s agent response and did not follow up immediately with a phone call
• My buyer expressed his disappointment in the fact that the buyer would not negotiate.
• My buyer wanted to meet in person to discuss further options. I did not pursue that.
• I did not know my buyer’s selling ultimate goal. (Actually he had told me his goal but later the immediate goal had changed)
My seller called me. I thought he was going to fire me.
Instead he gave me some feedback, a lot of criticism, and advice on how to handle negotiations in the future. I thanked him. He then told me he had a different goal and to offer a price $10000 over the buyer’s original offer price. That was a solid counteroffer.
We presented the new and improved counteroffer with a great sense of optimism.
The buyer would not budge off of her original offer and the deal died!
Items we told our seller after this event.
• We have buyers who put in an offer and do not want to negotiate. To them it is all business and they will move on to the next property.
• This is a buyer’s market. You gamble when you are priced too high and make a counteroffer that is still too high!
• Based on the appreciation of properties in the South (1.8% according to NAR) was this deal worth losing for $10,000? Actually we had it down to $5000 apart with some concessions. A year from now your net on the home will be about the same (appreciation minus operating cost)
• We have lost offers in the past from buyers who would not continue to negotiate. We lost one sale over $9000 three years ago! This $600,000 home is currently being rented and is worth around $450,000.
• We are in the trenches on a daily basis. We give you our pricing opinion on your home based on lots of research and experience. We know the market!
• We cannot change the market!

In the end we learned how to better respond to our clients. We hope that our clients will listen to us as well. We are the ones in the trenches!

BEFORE YOU SAY NO TO A DEAL READ THIS EMAIL!

This is an email that we sent to our 5 offers. These offers were received over the weekend. After some of the less than enthusiastic responses we received we wanted to give our clients more information on how to deal with offers. Here is our email below.





Barb and I have been busy. In the last five days we have presented 5 offers.



All of you who have received these offers have something in common: You have recently had some major changes in your life. This includes divorce, the death of a loved one, health issues, or other factors.



The offers we presented to all of you have been met with great senses of disappointment, frustration, and in some cases, anger. The first point from Barb and I is this: Don’t shoot the messenger! In our opinion every offer is a starting point.



Before you counter these offers I want to offer another way to look at them. This is as a result of my recent experience with the sale of a family condo in Florida.



• A condo was purchased in Florida in 2007 by my family and my parents

• The down payment was from the profit of our previously sold condo and some inheritance money

• We purchased the condo to enjoy not as an investment

• In 5 years the price declined 50% !!!!!

• We sold the condo at the end of 2011, and went to closing with a very large amount of cash!



How did we arrive at the conclusion that we had to sell at such a large loss!

• Family-My Dad had turned 80 and did not want to continue paying monthly payments!

• Recovery of funds! There was no possible way that the property would appreciate to the point where we would recover our investment

• Cost! There is always cost with operating the property that do not go away. This includes utilities, condo fees, repairs, and possible assessments!

• Better investment choices for the money! We could take the monthly payments, condo fees, and utility money and invest in areas where we would receive a higher return.

• We had to be honest about the situation and make a hard decision.



According to the National Association of Realtors, the average home price in the South went up 1.8% over the past year (median home price is $138,100).



Take the price of the offer that was presented on your home. Now increase the value of the offer 1.8% a year. Take that value, subtract HOA dues,taxes,maintenance,and utilities. Now look at how much more money you would gain by waiting another year to sell the home.



Example: Home offer of $350,000 in our neighborhood Chestatee



Year 2013 Home is worth $356,300 (1.8% price increase)



Cost of running the home for year 2013: $1000 HOA dues, $1200 in lawn maintenance, $1200 for utilities, $378 for higher real estate commission, and??? for repairs.



Your net increase is $2522 (assuming no repairs)



I ran the same numbers on our condo. I let it go up 2.5% a year, figured in the operating cost, and came to this conclusion. Not only did I not make any of our loss, in year 4, I started to lose even more money!



There are a few things Barb and I have learned in 7 year of real estate.

• We do not control the market

• Real estate is very emotional for both the buyer and seller

• Life changes (jobs, marriage ,kids, divorce, job change, retirement) despite the market

• There are times when you have to do a thorough analysis of your situation using numbers not emotion!

Want to Build a Home: Bring Cash!

Want to build a home? Better bring cash!



We have been working on information for a client concerning a construction loan. If you have not tried to acquire a construction loan in a while you are in for a rude awakening.



For a lot and home totaling approximately $420,000 we found out the following:
•The lot has to be purchased usually for cash.
•There is no longer temp to perm loans
•Therefore two closings occur
•Requires 30% down payment
•Takes 30-45 days to close
•Buyer and bank determine draws
•Monthly interest payments are made on the draws as they compound on a daily average balance (will amount to approximately $12000)
•Need to have 10% in reserves for possible overages
•Once the home is completed the bank will proceed with making a loan on the house. Problems have occurred when the home does not appraise due to price per square footage being higher then resale properties. Some folks have had to put down additional monies down due to low appraisals.
•In order for the builder to be approved by any bank the builder needs to provide: builder's license, proof of liability insurance, and letters of reference.



We had numerous discussions with banks big and small in the Atlanta area. A lot of the institutions were no longer interested in doing construction loans. Their reasons were the same: As long as resale prices remain low, and foreclosures continue to appear, it will be difficult to get a solid appraisal on a new home.

If you are an individual debating whether to build or buy a resale do your research

The 3.8% Tax

The National Association of Realtors has put together a publication entitled: "The 3.8% Tax Real Estate Scenarios and Examples".



Some of the highlights of the publication:
•This tax will go into effect on January 1, 2013
•The tax will not be imposed on all real estate transactions
•A 3.8% tax will be imposed on some, not all, income from interest dividents, rent (less capital loss) and capital gains (less capital losses)
•The tax will be on AGI over $200,000 for a single filer and $250,000 for a couple filing jointly.



The publication has various scenarios that show what the potential, if any, tax that might be paid on a real estate transaction.



There have been a lot of rumors on this new rule. The National Assocaition or Realtors publication does a great job of laying those rumors to rest.

If you dont want to hear answer

Feedback is an important tool in the marketing and sale of a home. The Wells Team places a lot of importance in feedback as we work with our clients. We work hard to get feedback from other agents while we are very forthcoming with feedback on homes that we show buyers.

Recently we were showing higher priced Lake Lanier properties. ($450,000 to $650,000). My partner had a request to give feedback on one such property. Her answers were honest and professional based on her buyers opinion.


Comments included:
•Hand prints, from finger paint, on the garage doors
•Kitchen Counter tops with a lot of clutter


Not horrible comments but enough to have our buyer lose interest in the home. Not just any home but a lake home priced in the mid $500,000 price range.


The selling agent was very upset with the comments taking them very personally.


It is a buyers market. They expect a lot, continue to have a lot of choices, and have foreclosures as options.


Bottom line: Don't ask the question if you don't want to hear the answer.

Foreclosure Relief from The Federal Government

The US Attorney General has announced a plan to help homeowners, who are underwater on their mortgages, get relief.

Before you start doing “the wave” there are a couple of items you need to know:
• Your loan must be owned by one of five banks: Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally Financial
• You will need to be delinquent on your payments, threat of foreclosure, and mortgage is more than the home’s current value

If you qualify then this program will reduce the amount of principal on your mortgage. Numbers range from $15,000 to $20,000 in principal reduction.

Overall Freddie Mac, Fannie Mae, own approximately 46% of the nation’s mortgages (including mine!). This means that the plan will be offered to a small amount of homeowners.

In my opinion: In my neighborhood (an hour north of Atlanta) I have seen multiple foreclosures in the past few years. Matter of fact there are another four that are available at this time. The reasons for these foreclosures were varied: Loss of a job, builders losing their companies, divorces, and one neighbor convicted for federal mail fraud! While their home were in short sale, and then ultimately advertised for foreclosure, I looked at the debt acquired on their homes. The numbers, in some cases, were astonishing! Multiple mortgages in excess of 110% of the purchase of the home. One homeowner had over $1 million dollar in loans on his home (the home sold in foreclosure for approximately $390,000). My take on my local foreclosure market is this: The majority of folks I knew had a lot of debt in the good times and was always on the edge. No program would help them stay in their home. It appears that the quicker we can clean out the foreclosures in my neighborhood then the quicker we can return to some sense of a normal real estate market. $20,000 reductions on my neighbor’s loan principal will not

MOLD! A Four Letter Word

I bring up the subject of mold because we just dealt with this situation. Please read our prior blog entitled "We Know What We Are Doing".

What I have learned about mold is that the very word sounds off alarm bells with most people. Realtors have placed mold with synthetic stucco and for sale by owner as terms we hate to discuss.

Here is what I will say about mold:
•Take the time to check your homeowners insurance to see if you have mold coverage
•If you suspect mold in your home call at least three certified experts to discuss optionos.
•Do not try to treat the mold yourself.


Very simple advice but words that my partner Barb and I had to put into practice recently (again read our previous blog).

We know what we are doing!

I have had to emphasize this point for many years: THIS IS OUR PROFESSION.

My partner Barb and I have had the pleasure to work with many well educated, business savvy, experienced clients. Some of them have bought and sold more houses than I have!

However after 7 years of success in this real estate market we can say with confidence that we know what we are doing.

Recently we had a client who was dealing with a possible mold issue in a home that he was lease/purchasing. A water leak occurred in the bathroom (nail in a pipe). The homeowner sent out an insurance adjuster who made a report. The homeowner next sent out a plumber and contractor to fix some of the items but not everything in the adjuster's's report.

In the interim our client's son, who is 4, had been sick for over four months! Possible mold in the home and how it relates to their son's illness.

Once the "M" word was mentioned my partner Barb and I took this to a higher level.

We asked our clients to not talk to the current homeowner and let us discuss options. Our client, who had lease/purchased the home, wanted to work this situation out with the homeowner but nothing was being accomplished.

Reviewing our GAR contract with our broker, we looked at possible options.

After a professional mold certified inspector filed his report we were at our next step.

Barb and I then advised our client to discuss all options with an attorney.

The contract was to be terminated pending a final walk through by the current owner, our client, and my partner Barb present.

Needless to say the current owner did not welcome my partner Barb with open arms. They proceeded to make a lot of comments and accusations, some rather harsh, at her. She had to listen to these irrational comments because she represented her clients.


Moral of our story: A lot of us thinks we can do everything our self. Whether it is working on our car, our house, investing our savings, doing our taxes, buying our houses there are times when we need to use a professional.

Barb and I pride ourselves on our knowledge, integrity, and hard work. All we ask is that our clients let us "watch their backs".

Time to Move

Moving is hard. Whether it is a new job, a transfer, different home, school, or church it is hard to say goodbye.

However moving brings about a new excitement to our life.

After 6.5 years at The Norton Agency of Cumming GA, The Wells Team has made a move. We are now members of Keller Williams Community Partners.

Keller Williams is the largest real estate company in Forsyth County Georgia (North side of Atlanta). We have an office in both Cumming GA and Dawsonville GA. Both of these offices are better located for The Wells Team and our clients. We will be able to more effectively serve our clients in the North Metro Atlanta area all the way to the North Georgia Mountains.

The change also gave us the "kick" we needed to jump start our business.

Even with our new partner The Wells Team will not change its overall recipe for success: Working hard for our clients. It is a simple recipe but has been the reason why we are where we are today.

The Wells Team and Keller Williams: A great combination.

The Payroll Tax and the Increase for Mortgage Fees

Another tax is going to be implemented on real estate starting January 1st.

In order to cover the two month "payroll tax holiday" fees will be increased on government backed mortgages from Fannie Mae and Freddie Mac.

The fee will be an additional 0.1 "surcharge" paid monthly on mortgages from both government backed institutions.

A typical $200,000 mortgage will see an approximate increase of $17 per month.

The Payroll Tax is used to fund Social Security. A two month "tax holiday" will take around $33 billion dollars away from the Social Security Trust Fund.

Bottom line: There is not free ride. Regardless of your political affiliation one thing stays the same: Somebody has to pay!

GAR Contract Changes for 2012

We just completed our 2012 GAR (Georgia Association of Realtors) contract class.

Every year we go through this class as GAR continually refines our contracts. Every change helps our buyers and sellers and the amount of protection we offer them in their real estate transaction.

The biggest change to the GAR contracts is in reference to access to the actual contracts. Starting this month there some new procedures in place.

Real estate agents, who are members of the National association of Realtors and GAR, will continue to have full access to all GAR forms.

However if an agent is not a member of GAR, they will have to pay an annual subscription fee in order to access the GAR contracts.

The last option is that an agent can us non GAR contracts that will be available on both of the Atlanta area listing services FMLS and GAMLS. As this time those contracts will be available on a limited basis.

Bottom line: Real Estate agents in the state of Georgia are not required to be a member of the GAR or NAR. The Wells Team, of The Norton Agency, chooses to be members of these very important organizations. NAR provides us with a code of ethics, access to information, and training that allows us to provide the best service possible. Full access to the GAR contracts just solidifies our position a little more.

Obama Health Care Plan and Real Estate Tax

I just received an email from my Dad about a real estate tax that would be part of the Obama Health Care plan.

Beginning January 1, 2013, ObamaCare imposes a 3.8% Medicare tax on unearned income of “high-income” taxpayers which could apply to proceeds from the sale of single family homes, townhouses, co-ops, condominiums, and even rental income, depending on your individual circumstances and any capital gains tax exclusions. Importantly, the “high income” thresholds are not indexed for inflation so will reach increasing numbers of middle-class taxpayers over time.

I have attached two links to the National Association of Realtors website. One link provides details on the tax with the other providing the position of the National Association of Realtors concerning this subject.


http://www.realtor.org/small_business_health_coverage.nsf/pages/health_ref_faq_med_tax?opendocument

http://www.realtor.org/small_business_health_coverage.nsf/Pages/health_ref_faq_advocacy?OpenDocument

This provision has been discussed since late 2010 but is worth revisiting. Please familiarize yourself with this tax provision.

Bottom line: Regardless of your political views if you want to have a federal program you have to find the money to pay for it!

2012 Real Estate Predicitions? NONE!

After seven years in the real estate industry it would be safe to say that we have an idea what is going on in our local real estate market.

Instead of making bold 2012 real estate predictions I have decided to decline.

Why?

Because every other real estate agent, real estate company, and professional organization has already published theirs! My clients have read some of them but not many.

So my crystal ball stays in the closet with my ouija board, rabbits foot, and all other prognosticating devices that I own.

All I tell my clients is to be realistic and hope for a 2012 that was better than 2011.



Happy New Year to all!