I’ve recently heard several people tell me they were just going to walk away from their mortgage. They said they were just going to move out, give the keys back and notify the mortgage company they can have the home back. Some claimed they were given professional advice telling them to move out and just walk away from the home. Claiming letting the bank have it back would be best and really wouldn’t hurt their credit as bad as a bankruptcy and it wasn’t the same as a foreclosure. It’s amazing how wrong these folks are!!

Walkaway trends started where many homeowners found themselves upside down on their loans, owing tens of thousands more than the current market value of their homes. If they did 100% financing or have very little invested in down payments, some owners reason, continuing to make payments, even if they can afford to, may be throwing good money after bad. These people better beware its going to hurt their credit maybe worse than a bankruptcy or default foreclosure would. Why, first of all walkaway’s will have IRS tax liability. Last year federal legised that allows homeowners who negotiate loan modifications or Short Sales with lenders and have portions of their principal debt eliminated to escape tax liability for the amount forgiven. Walkaway borrows, by contrast, have nothing forgiven, and the IRS may demand taxes on the mortgage balance they never paid. This can be a substantial sum of money. In many cases filing bankruptcy or short sales may be a better route. It may have a faster turnaround time for buying another home when you have things straightened out. I’m by no means giving legal advice; I’m just letting you know you need to discuss selling your home as a Short Sale first before you consider just giving the keys back or waiting on the bank to foreclose. It could save you in a number of ways.

I want to warn people that there are a lot of people out there that are taking advantage of people’s hardships. Web sites are now advertising “I can repair your credit” for $495. Some say they will show you how to hold creditors off and avoid the due process and collection all the other broke folks go through?? Another company is offering, “Send them $995 and they will send you instructions on how to live free for a year and not pay any mortgage payments”. There is nothing legit about these magical offers. They’re rip off’s!!

The best avenue for anyone behind on their mortgage payments is to try to work something out with the lender first. An experienced professional real estate agent can help you prepare you for what the lender will require. Then there are consumer counseling services and attorney’s that can advise you on what’s best for you in the short and long run. Your goal is to make things where your credit lines come back as quick as possible.

I recently read that when applying for a new mortgage after a foreclosure, mortgage underwriters tend to be more sympathetic down the road in regards to people that faced genuine financial hardships leading to the past foreclosure or bankruptcy. Walkway

Some of you may be aware that the amount of water in your toilet has been on our local governments mind lately. That’s right, if you buy the right new low water volume toilet you’ll receive anywhere from $50 to $100 back from many metro counties. Some counties even wanted to mandate that certain age homes would be required to retro fit to the new low volume toilets.

Here’s the stat’s on the water savings published in the AJC March 7, 2008.

Average home savings 30 gallons a day!!!

Metro Atlanta would save 6 million gallons a day!!!

There’s an estimated 425,000 old toilets in the region.

Are these huge savings? Yes, but there’s a huge flaw in this equation ….. THEY TAKE MORE THAN ONE FLUSH TO WORK!!!

My good friend Chris called me this week. All I heard on the other end of my cell phone was “What’s up with these new toilets?? I just purchased a $500 toilet, and paid $100 to have it put in my new basement bath and it will not handle business”. When I told him his contractor wasn’t trying to pull something over on him he was very upset the government was in his bath room. We both agreed we may be using more water because the new toilets don’t work properly or in any fashion we’re all accustom to.

We all know water is an issue and will continue to be as Atlanta grows. I strongly feel there are a number of things the average family can do to save lots of water. Like stop washing the dishes then putting them in the dishwasher or running the shower as you’re also waiting for the iron to heat up, then ironing your cloths before entering to wash yourself. Quit letting the water run when shaving or brushing your teeth. Also quit using your toilet as a trash can. Simple things like this will conserve our water resources. I believe the media and government needs to do more in the way of education that will change some old habits,not changing out some old porcelain.

I think a new hot business could be on the horizon folks! It’s going to be in designer plungers. If there is an estimated 425,000 old toilets here then multiply that by say $9.99 to $29.99(Martha Steward deluxe model), you’re looking at possibly doing 4 to 12 million dollars in sales your first year just in Atlanta sales. I assure you the old natural wood, round stick, stuck into that odd black bell shaped rubber end just isn’t going to get it. Your going to need something attractive, quick and handy. It will become as important as the TP holder!

Some say the new campaign is like throwing money down the drain. In this case I promise you it will take 2 or 3 attempts to make the money go away if your trying to flush it!!

When people ask me what’s hot in the housing market today I would have to say Green Building or Going Green as many say. In past blogs I’ve written we’re going to have to embrace natural resources to heat, cool, recycle water and light our homes. As many of the green home technologies and products advance, prices are starting to become more affordable and cost justifiable.

I believe you really need to research and consider all Green Products when building or remodeling a home today. The demand for green energy efficient homes will be very high in just a few years.

For those of you that don’t personally know me, I’m not a tree hugger. I believe that as long as a truck fueled by diesel picks up my recyclable products then takes them to a recycling facility powered by a coal power plant isn’t saving or helping the earth’s eco system at all. And.…. many or the products after recycled aren’t suitable or in demand for use in the manufacturing of new consumer or industrial products.

When consumers or special interest groups bring things like Green Building to the forefront of America’s attention there seems to be someone that presents a different twist to the message glorifying their product and how it’s Green. To my understanding Green building should incorporate proper land use management, total energy conservation, products that were environmentally safe to make and wildlife habitat protection or replacement. All the products used in building any new Green home shouldn’t damage the environment in their manufacturing process or have waste that cannot be properly disposed of or is toxic. Say….. like vinyl siding does. Bottom line for me to consider something a Green Product it cannot harm the environment in any way when it’s manufactured, recycled or disposed of. For now we’re still going to have the diesel trucks moving these entire Green Products around the US. But the good news is they’re making diesel engines run cleaner all the time.

I just read an article with a new twist for going Green. It seems some of the hard hit vacation properties claim one way to go Green is to buy into the new fractional ownership housing now being offered at many resort properties. Fractional ownership is not a timeshare. Fractional ownership is taking a number of people; let’s say 4 families and they split the cost on a 500K beach condo. It’s easy to understand this opens the market up to a lot of people wanting second homes in expensive resort areas. But to consider this going Green is a stretch to me. David H. Schwartz, a real estate broker in Mammoth Lakes, CA was quoted in Forbes by saying. I observed, “Vacation homeowners using their home no more than one week a month. This is considered wasteful and definitely not green”. He goes on to claim fractional ownership is Green in every way. Sorry, David but I don’t buy it. The only Green involved here is the amount of Green Cash you’ll need to bring to closing table. Don’t get me wrong, fractional ownership is great, I can see myself buying one. But to claim fractional ownership is within the Green Movement is nuttier than a Snickers Bar.

If you are smart, and do your homework, buying or building a Green Home will have it’s pay offs! Both in energy and eco savings!

Trying to fight off a recession the Federal Reserve has cut the short term interest rates another .50%. This takes their benchmark rate to 3%. The Fed has now cut rates by 1.25% in just 9 days. They claim this is to moderate growth but cautions there are risk that still remains.

So what’s up with mortgage rates? Since the FED announcement mortgage rates have climbed. Nationally mortgage rates have climbed .375% since the FED cut rates 1.25%. Why?? Because the rate cut is on short term money, not long term money. It’s meant to stimulate the business sector not the housing sector. I believe the FED will have to lower mortgages rates in the next 60 days to help the housing sector out. One of the main concerns in the mortgage industry right now is the fact foreclosures have risen by 75% over the last 12 months. This causes more risk load that’s factored into current rates. I firmly believe some people looking to buy a home put way to much attention on interest rates. I’m asked several times a day what the rate is?? My standard answer is “depends”. There are still many types of mortgage programs out there. I simply have to know more about your long term goals!

Here are some facts I found interesting on 30 year mortgages that Jim Cramer (Mad Money) published. Did you know that only 28 times since 1971 have rates been below 6%? That means 28 out 444 months were under 6%. Only 2 months have ever been below 5.50%, March 2004 at 5.45%, June 2003 at 5.23%. From November 1978 to November 1990 mortgage rates were double digits nearly every month – including the high of 18.25 in October 1981. So rates shouldn’t be an issue to anyone thinking about buying a home today. If they are, then they’re misinformed or making poor excuses.
Mark my words a turnaround in is INEVITABLE! Buy now!!

I usually only write one blog a month but after writing my most recent blog about the Sub-Prime Interest lock the government is proposing I decided to research more areas surrounding Atlanta to see the ratio of foreclosures by counties.

I always hear conversations about the person that just bought a 600K home for 400K. Sounds great doesn’t it? In reality it very rarely happens! In most cases the person is quoting you the asking price vs. what he paid for it. Or the best one I hear is someone saying they got a 600K home form 400K, it needs 200K but they can get it done for 100K. There’s more to these stories than you’re ever told.

I’m contacted every week by someone looking for a deal on a foreclosure. It’s understandable that everybody wants a deal on a home, but so far it’s been pretty hard for me to find plenty of foreclosure deals. I can find foreclosures but they are not deals!

However, I did find one this month. The buyer purchased this home for 225K which was about 25% less than the average home sold in the last 2 years in that subdivision. The home needs about 13K to 16K in cosmetic improvements and stripped appliances. This client has long term plans to live in the house. Thus making this a deal compared to the current market and county which was Cobb. The transaction took over 45 days from binding agreement to close!!

After doing some research I discovered why I’m not seeing all these foreclosures the media keeps talking about. I mainly work within Cobb and North Fulton County’s and these numbers tell my why I’m not seeing all those great foreclosure deals!

Below is the foreclosure rate per households in the following counties.
Cobb County - 1 in 597
Fulton County - 1 in 122 (Majority South Fulton)
Gwinnett County – 1 in 311
Paulding County - 1 in 164
Douglas County 1 in 260
Forsyth County 1 in 553
Cherokee County 1 in 396
DeKalb County 1 – 252
Rockdale County 1 in 207
Fayette County 1 in 368

So if you’re looking for a deal you might want to start in the counties with the most foreclosures. I want to make people aware that you have to do your homework when buying a foreclosed property. It’s very tricky and I recommend you hire a seasoned real estate agent to help you negotiate with the bank. It’s takes lots of patience and time to get foreclosure homes under contract and to the closing table! Banks are simply overwhelmed by foreclosure volume in general. They don’t pay any attention to the dates you want to close, etc. Be prepared to wait on all responses from the bank every step of the way. If you do your due diligence you may end up with some instant equity. If you don’t, your deal today will be a deal for someone else tomorrow. My dad used to say “figures don’t lie, liers figure”!

Call me I would love to discuss real estate opportunities!

If you have a sub-prime mortgage on your home with a escalating interest rate then you may soon get some needed help from our government. If you’ve got one of those adjustable rate mortgages, you may qualify for a rate freeze under certain conditions. Standard fixed rate mortgages will not be affected.

The bailout is really designed for homeowners who are into trouble because their mortgage payments keep going up making it impossible for them to pay their monthly payments. If you have sufficient funds or income to pay your mortgage even if your payments have gone up then you’re not eligible for the rate freeze. You have to live in your home to qualify for the rate freeze, second homes and investment properties will not qualify for this program. You have to have taken the loan out between 2005 & 2007 with rates set to increase between 2008 & July 2010. You have to have less than 3% equity. You must be current on your mortgage payments or no later than 60 days. You have to prove you can handle the locked payment but not the higher payment. Analysts estimate this will help between 240,000 to 250,000 people out. That’s a huge number of homeowners with sub-prime mortgages. And there are many more homeowners with sub-prime mortgages that will not qualify for the rate freeze. This bailout is a half fix at best! Unfortunately many of the people that this rate freeze is trying to help out will eventually end up in foreclosure. We need a plan for other with a sub prime mortgage with diffirent curcimstances.

The current Bush administration is concerned about the fallout from the housing slump. The repercussions of the high rate of foreclosures will have a series of problems for the housing industry. Ten of thousands of American could be forced from their homes. This will slow consumer spending hurting the economy overall. All of this will cause home prices to fall even more.
This bailout deal will add some stability to the housing market, but it will not stop all the problems we face in the real estate industry right now. The same day Bush announced his plan, the Mortgage Bankers Association said that foreclosures had reached a record high in the third quarter. Mortgage foreclosures hit a record .78% up from the previous high of .65%. At the same time, delinquencies for all mortgages rose to 5.59%, from 5.12% in the second quarter. So we still have more people out there that will end up in foreclosure as time moves on. As I stated in a earlier blog, we haven’t hit bottom yet.

The Atlanta real estate market has had its share of higher than normal foreclosures this year. However it hasn’t drastically affected home prices in the North Metro Atlanta area. Supply and demand has softened our home prices more than anything else so far. It’s projected that we’ll get over million more people moving to the Atlanta area by 2011. Our job growth looks good. Atlanta will fair pretty well through this real estate downturn in the long run. The national news media wants you to think all the flood gates are open and look out below. The truth is the majority of the foreclosures are happening in three states, California, Florida and Ohio. Folks in these states will have a long journey back before they can say the word equity!! Reports claim some homeowners in these states have homes that are worth 37% to 40% less than 2006. Be glad you own a home in Atlanta. We’re actually project to have a slight increase in home values this year! But certain areas of Atlanta have been hard hit.

Keep in mind this rate freeze is really going to be a problem for the mortgage industry. Investors will think twice about backing mortgage programs that have been big money makers in the past due to uncertain returns. I don’t want to see anyone lose their house in foreclosure but Wall Street and many such firms have invested in securities that back your mortgage – there also tied into pension funds as well as mutual funds. Their clients include all sorts of people like you, teachers, fireman, policemen, etc. So……some people will have lower payments which are good……but other people will not have the kind of return on their investments which is bad for their retirement. We need much more of a fix to help the housing industry.

I’ve don’t believe the average person has any idea how many people are involved in the home buying process and the supply chain involved. The current mortgage problems are undermining what made America great! Long term financing!!

Olde Ivy is a wonderful gated community built by John Wieland Homes, located just inside I285 in Smyrna GA – Cobb County. This beautiful Vinings community is located on historic property that was s a supply point during the Civil War. Several Civil War bunkers are still located around the property. My wife and I were one of the first people to purchase a home in this community. The neighbors are wonderful and the HOA has done a great job keeping the community up. The Olde Ivy HOA is very financially secure and the monthly HOA fees are very reasonable.

There are 4 different types of maintenance free home styles in Olde Ivy. There are Court Yard Homes, Multi Level Townhomes, Lofts and Condo Flats. You’ll find very few communities that offers amenities like Olde Ivy. All residents have the security of a gated community and use of an elegant clubhouse, walk trails, large swimming pool, and professional fitness room.

This is one of the best locations in Metro Atlanta. Just minutes to the Hartsfield Jackson Airpor, Downtown, Midtown, Buckhead, umberland Mall, Perimeter Mall, Lenox Mall areas. The area is just exploding with new mixed use developments and executive housing. There’s also a major property Cobb County tax break for persons over 62 years of age. Olde Ivy is also centrally located to some of the finest private schools in metro Atlanta.

I’ve been involved in selling homes in Olde Ivy since it was on the drawing board. I know all floor plans by name and know the community well. I’ve sold more homes the Olde Ivy community than any other real estate agent to date. I have a lot of pride and confidence in the community and its future. Want to see whats for sale in Olde Ivy? Click here! If you would like to discuss Olde Ivy real estate opportunities please contact me under no obligation.

As many of you know I’ve been very optimistic as to how far home prices in Atlanta will fall and how long it will take for values to start moving up again. I still strongly feel there isn’t a bubble in Atlanta that’s just waiting to pop. Right now we’re going through a market correction. Atlanta’s population growth has us positioned for major housing needs in the very near future. But overall the US real estate market has had numerous issues and factors that’s compounding and causing some unexpected new problems that hurting the already troubled real estate industry. It’s not all because of the collapse of Sub Prime loans and that’s a fact. FHA will now finance homes up to 346K and has filled the Sub Prime void pretty well. Thursday the US government reported that new home sales hit their lowest point in seven years. Let me repeat…..seven years???

Builders are slashing new homes prices 7.5% on average in the US. With a bloated supply of new homes for sale it’s clear it’s a buyer’s market. The Atlanta Builders have clearly realized this and are making the price adjustments and concessions to try to stimulate sales. But the resale home market isn’t following this trend. Thus leaving the new home builders without many move up buyers.

I recently attended a Re/Max of Georgia Platinum Club meeting. The format was town hall, round table, questions and answers. During our time together a very successful agent made the statement “without listings your dead”. I replied “No sir, the fact is without good listings your dead”. Listings and good listings are two totally different animals.

I’ve been fortunate to have had a steady flow of business this year and I’m very thankful for people putting their trust in me. However, most of my commission checks this year have come more from buyers I represented, not sellers I’ve represented in 2007. I’ve always consistently had equal buyers to sellers in the past. But this year representing buyers has kept me alive. However, buyers are struggling to find good homes to purchase in the Marietta, Smyrna, Powder Springs, Acworth, Kennesaw, Roswell and Alpharetta areas. Over my 15 year career my average buyer looked at 17 homes before buying. If we looked at many more than 20 homes I would scheduled a meeting with the buyer to analyze what the problem was. Could it be that I’m not be listening to them? Or was it the fact their dream home didn’t exist within their limits??

Today my buyers are having too view 25 to 40 homes before finding the one they may consider buying. Nothing is knocking them over right now. Why can’t these buyers find homes? A huge percentage of the resale homes on the market have either pricing problems or neglected maintenance issues. Surprisingly most don’t have as much of a home pricing problem as they do with neglected maintenance issues. I don’t blame the sellers in regards to this situation. I fully blame Atlanta Real Estate agents for not telling the sellers the right price and the condition a home has to be in order to sell.

Regardless of what you’re selling, whether it’s a car, playground equipment, or a house, the consumer has to see the value. Something they feel good about. Something that will make them say “I’ll take it”!! Nobody pays full book value for a car with a dent in the fender and a busted tail light; nobody pays full retail for a swing set missing a sliding board. So how are you going to sell that house that needs paint and carpet?? You’re not!! If you cannot sell your home stand back and take a good look at the things you would do if you were going to stay in the home. Then do them!! Don’t wait!! Real estate agents need to be honest with their sellers and let them know buyers want move-in condition. Inside and out! We will all see a significant upturn in the market if the median priced home inventory looked better. If this price range home begins to move faster, then the dominions will start falling and higher priced homes will have buyers that sold the median priced homes. I believe one of the reasons the Atlanta real estate market has slowed is because the median priced home inventories aren’t in the best selling condition!!

The Atlanta Journal and Constitution ran an article this week: How does your home stack up? It’s very well known that the Atlanta real estate market is soft. The AJC did a great job explaining and showing charts of the 2005 -2006 housing market pertaining to different zip codes. I receive calls and e-mails’ all the time asking me if it’s a good time to sell? There isn’t a simple answer anymore?

The AJC article supports the advice I’ve been giving prospective clients for a while now. It’s all about area and price. What I’m finding in the market right now as far as pricing goes is a seller has to be prepared to price a home for not much more than the home was worth in late 2005 or early 2006. So if you bought a home in the last 2 years your goal should be to just break even if possible. I know of very few homes or areas that have appreciated any noticeable amount since early 2006.

If a seller is willing to price a home with this in mind then they stand a very good chance of selling a home in a reasonable time frame. The Atlanta market isn’t dead by a long shot. I will personally sell more homes this year than last year! In most cases what you lose in selling is offset by what you will save when buying. How?? If you take a 5% reduction on a $300,000 ($15,000) home and you purchase a $600,000 home at 5% off ($30,000) then your net gain is $15,000. Right now I’m seeing the higher end homes taking even bigger discounts, especially if you want new construction. So if you’re moving up in price the time couldn’t be better to make the move.

As I been saying and the AJC showed the numbers are very different per location and home. For instance, the Vinings 30339 zip code experienced a 54% increase in sales, but the median home price dropped more than 30%. Smyrna’s 30082 had a median price increase of 15% (mainly due to new construction) but sales are off 5%. You can throw a rock and hit both of these areas but look how different the numbers are.

I’ve been telling client’s re-sale homes are great values for a long time now. It’s finally sinking in! But the biggest problem with many of the re-sale homes is neglected maintenance. This is compounding the real estate slow down as much as anything else. If you want to list your home in today’s market it has to be in move-in condition. With the recent changes in mortgage requirements and programs, buyers now need more cash to qualify. This means the buyer has less cash to do upgrades after a purchase. Sellers have to adapt to the market demands to sell a home. Fresh paint and carpet goes a long way right now with a buyer!

Many new home communities are taking huge discounts. But buyers need to beware. You have to make sure the builder has the financial means too not only finish your new home but to also finish out the subdivision. I’ve been in this business long enough to see wonderful new developments not being finished because the builder ended up bankrupting before the project was built out. I’ve seen numerous new defunct communities where a new builder/developer comes along (eventually) and they change the style and price range of the homes that was originally built, thus messing up the continuity needed for solid appreciation. You cannot have apples and oranges in the same neighborhood. There are several other things buyers need to be cautious of when buying new right now. Contact me if you’re thinking about buying a new home. I’m willing to discuss with you some of my concerns and knowledge as it’s different for each area and builder!

People are trying everything right now to sell homes. Buyers and agents are being offered free laptops, upgrades, vacations, TV’s, cars and cash. These types of spiffs just aren’t working overal. A professional real estate agent should always have his client’s best interest when guiding the way. Not what a free gift they will receive if they can sell a home!

Bottom line….Be sure the deal today isn’t a deal for someone else later!

I’m sitting in my basement tonight with my nephew Nicholas watching a Little Feet concert on TV. Nicolas is 16 and hadn’t heard of Little Feet before and he loved them. Experiencing this really made me think of the old and the new. I thought about the good times gone and the good times to come. It was exciting turning a much younger person on to something old school to me. When I was his age I loved Little Feet. So for those of you that haven’t heard of Little Feet you should check them out! Or you will never understand the point of my closing sentences.

So what does this have to do with a real estate blog what so ever? Homebanc. Homebanc filed for bankruptcy this week and pretty much shut the doors. At one time Homebanc was the hottest mortgage company around and they dominated the Atlanta market. They bought life and energy to our market and pretty much ate every body’s lunch that tried to go toe to toe with them as far as mortgages’ went. They did business as a humble giant for years! They were a wonderful company to work with, as well as work for. I‘ve never had a better working relationship with any mortgage company. Homebanc treated my customers as royalty and gave great rates and service unmatched by anyone. I truly hate to see them go. I miss those days of quick easy approvals and on time closings.

You may ask what’s my point to this rambling blog? The older I get the more I love to see the old still being around (Little Feet)and I hate it when the old go away. I loved seeing Little Feet still kicking it. I wish Homebanc was still kicking it. As Little Feet sang “There’s a fat man in the bath tub…. I hear him moan…I hear him moan. It made me think of all my friends at Homebanc! So my friends you now have to put on your Sailing Shoes!! There’s life after Homebanc.

Good luck to all of you.