BE CAREFUL WHAT YOU SAY! YOU ARE BEING RECORDED!

How many times have we said the wrong thing? I know that is a dumb question because we do it all the time. Its easy to say "I never said that" when you deny the conversation. That is unless the conversation is being taped. Let's talk home warranties. The Wells Team places warranties on our listings, ask for them in home purchases, and have our sellers include them in their sale. They give you the piece of mind in case you encounter a problem with your new purchase. Here is a brief story involving a major warranty company: •Home inspection on 5/17/13. •Final walk through on 7/12/13 •Closing on 7/12/13 •Warranty effective 7/12/13 •Buyer files claim on 7/15/13 Seems like a normal progression but: •Warranty company claims that our buyer told them "I don't know if the items ever worked". •Claim denied by the warranty company. A couple of points: •After the home inspection on 5/17/13, buyers did not go back to the home until the walk through on 7/12/13 •Home was inspected. All of the items involved in the warranty claim operated normally •Walk through on 7/12/13 did not show any problems •Claims made after warranty is in effect ALL CONVERSATIONS ARE TAPED! THAT MEANS BE EXTREMELY CAREFUL WHEN YOU MAKE ANY STATEMENT! OUR CLIENT DID NOT INTEND TO FRAUD THE WARRANTY COMPANY BUT HER ANSWERS WERE INTERPRETED AS TRYING TO DO THIS! Be careful what you say! It could come back to bite you! Check us out at www.randywellsteam.com

Crime Statistics and Home Buying

Another first after 8 years in the industry. We lost a contract on a home because of crime in the area. The home was located NE of Atlanta in a very nice neighborhood of homes priced under $200,000. The yards were neat, family activity everywhere, an active HOA, and very nice amenities. The home was a perfect fit and we went into negotiations. While we were in negotiations my buyer went to www.crimemapping.com to check local crime statistics. Even though nothing had happened in the neighborhood, there were incidents within .2 miles of the home that alarmed her. As a single mother, my buyer felt uncomfortable in this area and withdrew her offer on the home. My partner and I were surprised. Frankly we had not seen this situation before. As I talked to the buyer on the phone I sensed her opinion of me was adversarial not an advocate. I admitted that I wanted to look into this situation further before we "killed" the contract. That was not the right thing to say. The buyer had made up her mind. What have I learned: You can never know your buyers enough. Make sure you know there priorities and things that make them uncomfortable. Before I look at homes in any area, I will reference www.crimemapping.com or other crime software. That makes me more of an expert who can confidently work with a buyer. Listen, listen, listen to what your buyers say. Do not second guess your buyers. If they have made up their mind then respect their position. In this case the amount, and types, of crime were enough to deter her from buying. Other people might interpret the data differently. Keep working hard for your buyer! They will appreciate it!

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!

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.

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!

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!

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

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

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.

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!

Top Trends from The Norton Agency

We had the opportunity to attend The Norton Agency Advanced Seminar last week. Our President, Frank Norton Jr, gave us a lot of statistics, information, and trends for the national and local real estate market.



Top ten trends, for our area, as identified by The Norton Agency

Expect no upward swing (in regards to prices)
Foreclosures have run their course in Georgia
Lending is invisible (more lending alternatives)
Cash is piled up on the sidelines (folks in a holding pattern)
Value price is in
Healthcare sector is pumping
Agriculture is back (demand for small farms)
Function before glamour (in regards to a home)
Rampant uncertainity is paralyzing!
We are on the edge of a centennial investment opportunity!
With interest rates being the lowest since 1930, owning a home being cheaper than renting, and low pricing, this could very easily be the best opportunity we will have in our lifetime! Take advantage of it!

Frustration with Appraisals!

I know every agent in this country is feeling the same pain that I feel when it comes to appraisals!

At my weekly Rotary Club meeting I had a friend share his frustration. He recently had his home appraised for refinancing.

His frustration was in the fact that, in his opinion, the appraiser had no idea about the details of the home. When my friend had his home built he spared no expense. Extra insulation, upgraded hardwoods, top of the line fixtures, counter-tops, and extra energy efficiencies throughout.

In a normal market all of these upgrades would weigh on the price of the home. In this market all bets are off!

I told my friend that my home was appraised for $50,000 less than I paid for it in 2001! I have put in a new Kitchen, new Master Bathroom, and screened in the porch! My reward? $50,000 in lower value!

What I saw on my appraisal is that a home is rated excellent, good, fair, or poor. A higher rating is the most you can expect and I do not know how much that adds or subtracts to the value of the home.

Bottom line: I told my friend that I agree with him. Until the appraisers take more factors into account when appraising a home, our values will stay the same

Extension of HUD Property Flipping Exemption

A couple of points:

The FHA is extending the availability of the temporary waiver of its regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, until December 31, 2011


To use an FHA loan on a home that is being flipped: All transactions must be an arms-length transaction. The home cannot have a pattern of previous flipping activity as evidenced by multiple title transfers within the last 12 months. The property must be marketed open and fairly. If the property is being sold for more than 20% of what the seller purchased the home then an appraisal must be done. Also an inspection must be performed.


If you have a client buying or selling a foreclosure property a knowledge of this directive will help especially if an FHA mortgage is involved.

Check with your lender to verify the current rule changes.

Overall this will give you some additional options with FHA financing.

(HUD Docket No. FR-5397-N-03)

A Wasteful Effort

This recently happened to a friend of mine in the Atlanta area.

A large lending institution advertised that they would be in Atlanta to assist people in modifying, or refinancing, their existing mortgages. Part of this program was a result of the new initiatives passed at the White House.

My friend went online to make an appointment to meet with the lender. No appointments were available. My friend then went to downtown Atlanta on the day of the event to wait in line for three hours! After a long wait my friend finally met with a lender representative. This was one of approximately 7000 such meetings that would take place in one day! As my friend met with the representative, the representative said that they had only approved 3 modification/refinance request all day! A TOTAL OF 3!

Needless to say that my friend was not approved for any help even with a large decrease in home value plus a loss of employment!

After 7 total hours of wasted time my friend received a $10 dollar gift card and had their parking ticket validated!

Based on these results I do not feel very optimistic about this housing market and the chance that the foreclosure mess can be cleaned up!

Communications, Still a Real Estate Basic

Yes communications is still a basic in the real estate world!

This is another lesson learned from dealing directly with clients.

Our sellers had asked us to lower the price of their home. Months later we received our FIRST offer! After submitting this offer to our seller we were met with a less than enthusiastic response! Our seller was not coming down off of his price! Matter of fact he had a change of strategy and would be taking the home off of the market!

This was a big breakdown in communications!

Lesson learned: Before I make any changes to any of our listings, at the request of the seller, I will make sure that there is a clear understanding of the ramifications!

6 months worth of work gone!

QR Codes The New Technology

Another new technology! At least for me it is new!

The QR (Quick Response) code resembles a bar code. It was created by Denso Wave, of Japan, in 1994 and has been a popular item in Asia.

The company that does all of our virtual tours, Obeo, has introduced these QR codes on all of our virtual tours. All we have to do is save the QR code as a jpeg file and then paste on our flyers. It is that sample. When a buyer pulls a flyer they scan the QR code with their mobile phone and they are immediately connected the internet and that particular website. Another great source of inquiries!

As for the software: I did not think I could download any software on my cell phone because I have an older model. No problem. Go to the following website: http://www.mobile-barcodes.com/qr-code-software/ On this website I was able to find the correct software and download it on my phone (remember you have to have internet access on your phone to use this product).

Now just open the software on your phone point to the QR code using your camera. The software will scan the QR code and open up that site on the internet.

Love them or hate them QR codes are new wave of technology that is here to stay

At The Wells Team we are constantly trying to provide our clients with the best technology

Invest in America- A Campaign from The Norton Agency

We are at an interesting and somewhat frightening era in America. The stock market and world markets change daily and we watch our 401K’s and investments vacillate. With all this in mind, The Norton Agency has launched its new mantra – INVEST IN AMERICA – BUY REAL ESTATE. Despite the down turn in the real estate market over the past four years, it is still one of the best ways to invest your money. Interest rates are at an all time low – 3.75% for FHA and VA and as low as 3.5% for a 15 year Conventional.

We are seeing prices stabilize although there are still many short sales and foreclosures occurring. We are also hearing about more owner financing since many buyers cannot qualify for more traditional loans and seller’s receive a lot more interest than they would with CD’s or money market accounts.

The Wells Team is prepared to help both buyers and sellers make the most of the ever changing real estate market. We keep up with the latest trends, watch the daily interest rates, and change our business to reflect the most up to date real estate marketing strategies’.

Real estate is the truly buying American. Unlike automobiles, appliances and clothing, real estate is American timber, American insulation, American concrete, and American dry wall. We can make the American dream a reality. INVEST IN AMERICA - BUY REAL ESTATE!