Cobb County Real Estate and Community News

Feb. 10, 2020

How and Why You Want to Improve Your Credit Score

 

How and Why You Want to Improve Your Credit Score


 

Let’s begin by looking at how different credit scores affect your interest rate and what it means to your monthly mortgage payment. Your credit score certainly isn’t the only thing that goes into how lenders determine the interest rate they will charge, but it is the biggest factor. Besides your credit score, other factors that determine your interest rate are the Federal Reserve Rate, how much you have for a down payment (loan-to-value ratio), loan type (fixed or ARM), and other considerations that go into the lender's underwriting process.

Credit Score Statistics & Why You Should Care

Statistics don’t mean everything and you are not a statistic.  You can be sure that lenders study statistics thoroughly. According to the Federal Housing Authority (FHA), this is a breakdown of the percentage of loans approved by credit score ranges:

·         Range of 500 to 619 – 11.58% of borrowers.

·         Range 620 to 639 – 15.53% of borrowers.

·         Range 640 to 679 – 39.07% of borrowers.

·         Range 680 to 719 – 21.28% of borrowers.

·         Range 720 to 850 – 12.54% of borrowers.

As you see, the vast majority (39.07% + 21.28% = 60.35%) of borrowers fall in a credit score range between 640 and 719. If your score is in that range or higher, you can feel confident of being approved for a mortgage and being given a decent interest rate.

How to Improve Your Credit Score

This is what you can do the quickest:

·         Pull your credit report and resolve any issues or errors.

·         Pay your bills on time, every time.

·         Pay down debts, particularly high-interest ones.

·         Settle or resolve any collections or overdue accounts.

Clean up your credit report! According to a 2019 study conducted by the Federal Trade Commission, one in five people has an error on at least one of their credit reports. Errors on your credit report always lower your credit score. Before you do anything else, go to AnnualCreditReport.com to get your credit report from each of the three big nationwide credit-reporting companies:

1.    Equifax

2.    Experian

3.    TransUnion

You want to learn how to read the details of the reports (especially what the codes mean) and review everything. A lot of errors are found in these reports. Anything from a different person with the same name as you being reported on your account to payments that you made not being credited to your account. Each report should tell you where to send a dispute.

Scores between 500 and 700 often see the most dramatic and fastest results – just by cleaning up account errors.

The credit score model (FICO) has five major components. Each has a different weight, meaning that improving the component with the highest weight improves your credit score faster. The components and weights are:

·         Payment history - 35%

·         Amounts owed – 30%

·         Length of credit history – 15%

·         New accounts – 10%

·         Types of credit – 10%

The “payment history” counts the most. Late payments, defaults, and bankruptcies have the biggest effect on the score.  That’s history and you can’t change it much. What you can do is obtain a copy of your credit report and review it for accuracy. You can dispute anything you don’t think is accurate. The original lender has to document the accuracy. If you dispute it and the lender can’t document it (they often can’t), the bad rating must be removed from your credit history. This improves your score.

Something you should know is that the bad stuff counts less and less as time goes by. The weight of old information counts less than new information.

The “amount owed” component fools a lot of people. Many people think that having a high balance owed and making payments on time is the best way to improve their score. The high balance does damage. The FICO model wants to see consumers borrowing a small amount of the available credit limit AND keeping payments current. That small amount is close to 30% of the available balance. Instead of one high balance, your score will benefit from two lower balances – and on-time payments. This is also better than paying a little extra on a bunch of accounts with small balances owed.

Also, pay close attention to the “length of credit history.” The longer the history of on-time payments to a particular account, the better for your score. Even if the balance was paid off years ago but you could still borrow against it today (like a line of credit or old store account). Don’t close these accounts. Leave these open. This shows a good history of repaying loans.

You want to be very careful about opening “new accounts” shortly before applying for a mortgage. Definitely don’t do it during the application period or before the loan closes. Opening new accounts send up red flags that you might be living on credit to pay your monthly expenses.

Doing these few things can be the most effective way of quickly raising your credit score to make you a happy homeowner in a few short months!

If you need more information or have questions, please call us. You can also reach us by calling at (678) 570-8123. We'll be glad to help you!

 

Posted in Buyer News
Jan. 30, 2020

Budget Tips When Saving a Down Payment

Budget Tips When Saving a Down Payment

Are you one of the many people who are tired of renting? A lot of people want to make the move from renting to owning because rents show no indication that the relentless increases will end soon. Rising rents will not make it any easier to save for homeownership in the future. Your best decision today is taking steps to save a down payment.

As a first time buyer, no one knows better than you that the biggest obstacle are the finances. Here are some budgeting tips to help you save a down payment.

Step 1: Have a clear goal of how much you need to save. This takes a little research on your part. The down payment is a big part of qualifying for a mortgage but it is only one part of the equation. Your income and the amount of debt that you have are also important parts of obtaining a mortgage.

Other information you need to know includes first-time buyer mortgage programs that lower the amount you need to save to buy your home. You also need to know how much of a mortgage you can be approved for based on your income and other debts. The size of the mortgage determines the amount of down payment needed.

Step 2: Begin an automatic transfer of funds to a special savings account. You can usually do this through your bank. The best way to do this is to have the transfer happen on paydays. When you never see the money in your general banking account, you are less likely to miss the money. Also, commit to never using the money for anything other than your down payment.  A money market savings account is usually the best type of account for saving your down payment. It doesn’t pay a lot of interest but your funds will be safe there.

Step 3: Make a budget and stick to it. This can be a difficult part because it requires some lifestyle changes. But there are ways to reduce how much you spend. It may only be the amount equal to your automatic transfer to the savings account but with determination, you can probably make it even more than that. The first thing to do is thoroughly go over your current budget. Take a close look at all of the transactions you make every month. Pull up your debit and credit card accounts and go through them line by line. Your rent, utilities, car payment, and a few others are probably fixed amounts that you can’t change much. But what about all of your discretionary spending? Here are a few things that you might be able to stop spending money on or cut back on.

·         Start packing a lunch instead of going out to eat. Only go out to dinner on special occasions.

·         Reduce your clothing budget

·         Buy less expensive and generic brands when grocery shopping.

·         Replace the premium TV cable package with the basic package.

·         Reduce entertainment spending.

·         Look for other saving opportunities. Especially impulse purchases.

Those basic savings alone add up fast. In a year, that could be a healthy addition to your down payment account.

Step 4: Taking a look at your retirement savings. If you have a 401k at work, you have three choices about how this can help with your down payment. First, you can temporally stop making contributions to put the money in your down payment account instead.  Second, you can borrow from your 401k. then pay back the loan with interest, the interest also goes into your retirement account (you’re paying interest to yourself).  Granted, you’re taking money out of your retirement account but you’re using it for the biggest and most secure investment that you’ll probably make in your life.

Step 5: Take a temporary part-time job. With unemployment is low as it is right now, employers are looking everywhere for competent employees. Having a second job for a short period of time could bring in a good chunk of money.

Step 6: Look everywhere for saving opportunities. Can you plan on a work bonus that goes directly into your down payment savings account? Maybe this year you don’t take a travel vacation or at least cut back on the vacation you do take. When you look closely at your credit and debit accounts, don’t look at just one month. Look at your spending for a full year to find seasonal opportunities to save instead of spend.

Step 7: Reduce your high interest and other debts. This one should probably be higher on this list. Lower interest charges mean smaller monthly payments. Something else to consider is transferring the balance from high-interest rate cards to lower interest rate cards or a personal bank loan. Reducing your debt has two big effects on buying a house. First, once you pay off the debt, that monthly savings can start going into your savings account. Second, when you lower your debt, your debt to income ratio goes down. The lower your debt to income ratio, the larger mortgage you can qualify for.

Step 8: A monetary gift from a relative. This isn’t an option for everyone but it could work for you. You can get a gift from a family member to help with the down payment.  It requires a couple of forms for the person who is giving the gift but that is all.

There you go, eight steps towards saving for your own home. How long it takes you to save enough is at least partly up to how diligent you go about it. It’s not unreasonable to expect you’ll have saved enough within 12 to 18 months.

If you need more information or have questions, please contact us. You can also reach us by calling us at (678) 570-8123. We'll be glad to help you!

Jan. 30, 2020

Moving? 10 Things To Do Before You Pack

 

 

Moving? 10 Things To Do Before You Pack

I doubt anyone really enjoys moving except for the thrill of living in a new home. You amp up that “newly moved-in” feeling by working through a checklist that makes sure everything gets done in a timely manner. Getting started a month or two before the move is the best way to make time for everything, make sure everything gets done, and make sure it gets done right. Here are 10 things to do before the moving truck and big day arrives.

1.   Decluttering has many advantages. All of us have stuff that we no longer need. You want to start a month or more ahead of time to find ways to lighten your load of unneeded stuff. You can sell some of it to bring in money that you’ll probably need for the move. Whatever you get rid of now won’t need to be packed, you can eliminate some packing boxes, you won’t have to load and unload it from a truck, and it won’t have to be unpacked at your new home.

Begin by sorting things into piles. A good place to begin is in closets and the garage where you’ve probably stored unused stuff. Find a place to designate for sorting. A pile to sell, a pile to give to friends and family, a pile to donate, and a pile that needs to go out with the trash. Recycle or dispose of corrosives, flammables, and poisonous items. As you work through everything, you’ll also find this to be a convenient time to start separating stuff for the move into the appropriate piles. There is no doubt that decluttering ahead of time can be a huge time, space, and money saver when moving day arrives.

2.   Start a “Moving paperwork file” to keep track of what needs to be done. This is more than just a checklist. This is a file or a binder where you keep all of the paperwork involved for your move in one place. A checklist is probably the first page but behind that, you can keep a budget of expenses, copies of final utility receipts, address change notices, and telephone numbers that you’ll need. It can include a list of quotes if you’re using a moving company and telephone numbers of handymen if you need help moving your couch and bed. It can include your work schedule if you’ll be taking time off from work. It can include the new school schedule for the kids. It includes all the paperwork you need in one convenient file. Always put it away in one location so that you don’t misplace it when everything in your house is in boxes. This is a separate folder from your home purchase paperwork.

3.   Make a plan for moving large and fragile items. If you use a moving company, make sure they are prepared to handle a grand piano, your gun collection, and grandmother’s antique china. If you move yourself, be sure you have the right packing materials and enough muscle help with the big stuff.

4.   Start collecting moving boxes. If you’re moving, about 4 or 6 weeks before the move, start stopping by restaurants, liquor stores, grocery stores, and office supply stores. If you need to store a lot of boxes, you can flatten them for now and all you’ll need to make them sturdy again with a roll of good boxing tape. Even if you move yourself, you may want to stop by a moving truck rental company to buy a few specialty boxes for your fragile items. Also, pick up a few good permanent markers so that you can clearly mark boxes when you start packing. The sooner you have boxes, the sooner you can start packing seasonal items and stuff you can go without for a few weeks.

5.   Keep other paperwork organized. Something to think about is purchasing moving insurance that covers your belongings during the move. At least check with your agent to understand what your current policy does or does not cover. You also have important paperwork that you want to keep track of as everything goes into boxes that might not be opened back up for a couple of weeks. This includes records like financial, legal, medical, dental, optical, birth certificates, and passports for the entire family. You want to keep these with you at all times. Also, be sure your pets have ID tags on their collars and request copies of vet records and get any necessary pet medication.

6.   Take care of errands in the local community. Pick up clothes from the dry cleaner. Update your voter registration. Return borrowed items from neighbors, friends, and family. Also, take care of canceling any local memberships like the gym that you won’t be using anymore.

7.   Change your address and notify utilities sooner rather than later. You can notify the post office ahead of time about your address change and tell them what day it takes effect. You can start the delivery to your new address a day or so before the move to be sure it happens. Even if you pay bills online, also submit your change of address for credit cards, banks, insurance companies, and other businesses that you regularly interact with. You probably need to order bank checks with your new address. You can also notify utilities several weeks ahead of time about when your last day will be. Utility companies may need to schedule a meter reading on your last day. Of course, you need to notify your work (HR department) of your address change. There is also your driver’s license and car registration to take care of. When you buy a house, part of the purchase transaction usually includes switching renter or homeowner insurance to the new address but remember to switch any other insurance such as the car and motorcycle.

8.   Pack smart by starting early. Pack a little every day. This helps you avoid being rushed a couple of days before the big move and helps identify where you might have problems. You can start separating out household items that can be used as packing materials like towels, blankets, t-shirts, and socks to pack glassware. You also want to take photos of the wiring for your electronic gear before you unplug it. As you disassemble furniture, you want to bag and label the hardware. Set a packing schedule to follow based on something like a number of boxes per day, closets and drawers per day, and finally finishing a room each day.

9.   Keep your essentials ready and available. You might not need more than an overnight bag to get you through one day or you might need a box with everything you need for a week. You may need one change of clothes to go to the escrow office to sign closing paperwork and another change of clothes for moving day. Of course, you need toiletries and don’t forget your phone charger. You’ll almost certainly be tired at the end of moving day so plan for that night and the next morning.

10.    Make time for other important activities. Explore your new neighborhood – local shops, supermarkets, libraries, cafés, and grocery stores. Find a restaurant in your new neighborhood where you might want to eat for a day or two while your old kitchen is packed up and until it is unpacked at your new home. Take time to say good-bye to old neighbors. Send out moving announcements. There are plenty of creative ways to share your new address.

You’re moved in! You’ve checked off everything on your moving checklist. This is the exciting time of living somewhere new and being in your new home. Start making your new place yours. Unpack, decorate, and have fun personalizing your new home. Send thank you notes to friends and family who helped you move. We hope this pre-move checklist is helpful. Let us know.  Happy moving!

If you need more information or have questions, please contact us. You can also reach us by calling at (678) 570-8123. We'll be glad to help you!

Jan. 30, 2020

5 Mistakes First Time Buyers Can Avoid

 

 

5 Mistakes First Time Buyers Can Avoid

Buying your first home should be exciting but not overwhelming. Buying a first home is a big financial responsibility that you want to accomplish in a way that you fall in love with your new home and remain within your financial comfort zone. You can have both. Here are five possible mistakes to avoid so that your first home is a blessing and not a burden.

1.    Not determining how much house you can afford. A good goal is buying the house that you want but can also comfortably afford. A rule of thumb is spending no more than 28% of their gross monthly income on housing expenses and no more than 36% on total debt. Debt includes things like student loans, car expenses, and credit card payments. Your total monthly mortgage payment includes property taxes and homeowner's insurance. These are numbers that most lenders require.

There are tools to help you understand where your home affordability finances stand today and what you may need to change to improve them. You can start on your own with one of the many online home affordability calculators. The numbers that you need come from everyone that will be applying for the loan (usually you or you and your spouse). Your income is the monthly amount that you bring in before taxes. Let’s say you bring home $2,600 a month and your spouse brings home $2,400 a month. Your total monthly take-home pay would be $5,000.

These are only income and debt ballpark numbers. Since this is your first home purchase, it’s a good idea to work with a professional loan officer after you do a little preliminary work. The 28% of your gross monthly income and 36% total debt are conservative numbers but these work well if you want to comfortably afford your home. One reason to work with loan officers is that they can help you understand how much you might stretch those numbers and still qualify for a loan if that is your decision. Loan officers can also help determine other income sources that will be considered such as bonuses and commissions. They will also tell you what documentation is needed to verify your income.

2.    Not correcting credit report errors. Your credit score both determines if you will qualify for a loan and how much your interest rate will be. The interest charge is the biggest part of your mortgage payment in the early years. You might think that reducing your debt is the only way to improve your credit score but reliable estimates are that one out of four people has errors on their credit reports that can be corrected to improve their credit score. You want to obtain copies of your credit report from the three major credit bureaus. If you find mistakes, you can dispute them online through the bureau’s website or in writing by postal mail.

Once you dispute an item, the credit bureau has 30 to 45 days to investigate. If it determines the information is an error or they can’t verify it, the bureau has to remove the information from your report. The process can take two or three months to complete, which is why you should do this sooner rather than later.

3.    Not interviewing several real estate agents. Almost every first-time homebuyer begins their search online but it shouldn’t end there. As soon as you think you are able to afford the home that you want, you need to interview several real estate agents to find an expert “buyer’s agent” to assist you in finding and securing your perfect home. The buyer agent will be your best friend throughout the entire process. He or she will be another asset to help you understand how much home you can afford as well as provide many other services such as explaining the particular markets (neighborhoods) and the price range meeting your desires and finances.

Key attributes you want to find in your agent is one that understands your financial values and will respect your budget. You also want an agent that you communicate with easily, one with a strong history of completing sales, and who has an extensive support network in your local market.

4.    Not investigating first-time homebuyer programs. A common mistake made by many first time buyers is that there are multiple programs to help first-time buyers that often range from a 0% down payment to 3.5%. There may be state programs available and there are certain federal programs available. Both your real estate agent and a loan officer can explain what is available and what the qualification requirements are. A few of the most popular programs are:

·         VA loans as low as 0%.

·         FHA loans between 3% and 3.5%.

·         USDA loans at 0% in designated rural areas.

·         In Georgia, where I live, the have the GA Dream

You also want to learn the differences between the loan types.

5.    Getting just one lender’s rate quote. This is about the down payment, closing costs, and the interest rate that you will charge. Remember that the loan interest will be the largest part of your monthly payment in the early years. Small differences in the interest rate can save you thousands of dollars each year. Get quotes from three different lenders.  You do not have to have your credit pulled to get a quote.

The Consumer Financial Protection Bureau says that almost half of borrowers don’t shop for a loan. Besides the interest rate, there are closing costs and fees that different lenders charge. Your closing costs can be as high as 3.5% to 5% of the loan costs. Different lenders have different cost structures. All of this can make a big difference in how much of your savings will be applied towards the down payment instead of towards loan costs.

These are five potential pitfalls that you want to avoid so that your first home purchase is an exciting adventure instead of the frustration of unwanted surprises. Total Atlanta Group is pleased to help you learn more about available programs and home buying opportunities in your area that best apply to your situation.

If you need more information or have questions, please contact us for a note. You can also reach us by calling at (678) 570-8123. We'll be glad to help you!

Posted in Buyer News
Jan. 30, 2020

Things No One Ever Told You About Shopping for a Home

Things No One Ever Told You About Shopping for a Home

There are basics that homebuyers hear about all of the time before shopping for a home, like knowing what is going on with your credit score and being pre-approved for a loan. And those are valid early steps in the home buying process. But there are a few things about buying a home that you don’t always hear until it’s time to deal with them. At Total Atlanta Group, we want buyers to know everything to expect so that there are no surprises and your home purchase goes smoothly.

1. This is about you and your new home. You’ll have several great professionals working on your behalf but buying a home requires some work on your part. You need to go out and look at homes. You may need to learn some new words (even legal terms). You’ll want to gather the right information to make good decisions. You’ll be writing and reading emails from your realtor and others working on your behalf as well as making telephone calls. You also need to provide information like tax records, pay stubs, and bank statements. You want to be involved. The more involved you stay, the happier you’ll be with your new home and the faster you’ll get to the closing table. You are the most important person in the home buying process.

2. You want to ask questions. Total Atlanta Group believes the more information you have, the better decisions you will make as an empowered homebuyer. That’s a big reason why we post a lot of blogs, videos, and tools to share information. But we also know that you’ll have unique questions that are specific to your situation. We don’t always know what you don’t know. And you might not even know what you don’t know. That’s why there is never a bad question. Only questions that haven’t been answered yet. Maybe your first question is who you should be asking a specific question (inspectors, lenders, HOAs, etc.). Total Atlanta Group will help you get the best answer to all of your questions. You don’t need to assume anything. If you feel that you are unclear about anything, keep asking questions until you are comfortable with the answers. One place to start asking questions is about low and no down payment mortgage programs for first-time buyers. There are a lot of opportunities and information out there that will help you buy your next or first home.

3. There is more involved than choosing a house and qualifying for a mortgage. Those are the two biggies but choosing a home inspector, insurance company, and others are also important considerations. You may have unique requirements like dealing with the technicalities of the letter that qualifies a down payment gift or a co-borrower that needs to be listed on the property deed. This is the largest investment you’ll ever make. It’s worth your time and effort to pay attention to the details.

4. Get to know your neighborhood and HOA. One of the big differences between being a renter and a homeowner is that you become at least a semi-permanent member of the community. It’s not as easy to pick up and move if you decide it isn’t the right community for you. You may have never been part of a homeowners association (HOA) before. Not all neighborhoods have an HOA but plenty does. An HOA is somewhat of a local government for your community. Some of these are very restrictive about what homeowners can and cannot do and others have a much more relaxed attitude, but most fall somewhere in between. HOAs can impose fines if you don’t follow the rules. The two best ways to learn about an HOA is by reading the governing documents (including recent meeting minutes) and talking to people who are already homeowners in the neighborhood.

5. Understand all of your future homeowner costs. There is more to owning a home than just the monthly mortgage payment. As a renter, you’ve almost certainly been paying all of the costs associated with a home but your landlord wrapped the other costs into your monthly rent. As a homeowner, you’ll become responsible for each individual cost rather than for a single monthly rent payment. Since we just discussed HOAs, you need to know that if you are in an HOA, you will have to pay HOA fees along with your mortgage. HOA fees can vary greatly from one community to another. For instance, if your new community has a swimming pool and golf course, part of your HOA fee goes to operating and maintaining these amenities. Other communities that don’t have as many amenities will have lower HOA fees. Other common homeowner costs that you want to know about are property taxes, homeowner insurance, maintenance, and private mortgage insurance. Very likely, some or all of these costs will be included in your monthly mortgage payment. This is where you could be in for a surprise if you don’t get answers to all of your questions. Tools like online mortgage calculators are a good starting point. These help you understand the basic interest rate and principal payment for your mortgage payment. But things like property taxes, HOA fees, and homeowners insurance have to be understood separate from these genetic calculators. Some costs need to be understood specific to your local neighborhood and your specific home. This is where a realtor knowledgeable about your neighborhood and home purchase becomes a very valuable asset in your home search.

6. Don’t be surprised by the home inspection report. Every home inspection will find problems with a house – even a brand new house. A home inspection will NOT give you a pass or fail report. What the home inspection tells you are the imperfections that the house has. It could be a slow draining bathtub or a bad electrical panel. You’ll want to understand everything about the imperfections including estimates of how much it could cost to make required repairs (not all repairs are required). Sometimes these become reasons for further negotiations with the seller. You have several different negotiating options that range from accepting the house “as-is” to negotiating repairs, to deciding you don’t want to buy the house. Ultimately, you need to fully understand the inspection report to make an informed decision.

You want to make the biggest investment of your life with your eyes wide open. Total Atlanta Group is here to help. We are experts in the home buying process and we know the right professionals that will provide you the detailed information you need to make the best decisions possible. We look forward to helping you find the ideal home for you and your family!

If you need more information or have questions, please send us a note. You can also reach us by calling at (678) 570-8123. We'll be glad to help you!

Posted in Buyer News
Dec. 22, 2019

What First Time Home Sellers Can Expect From the Process

 

What First Time Home Sellers Can Expect From the Process

(Seller Confidence Comes From Knowledge)


Finding a listing agent is the first major step in the home selling process. The general rule of thumb is you should interview three agents before making the decision.  I whole-heartedly support that thought. You want an agent that knows the market, the area that your house is in, and is good at marketing.

How Much is Your Home Worth?

Determining your home value on the current market is at the top of the list of questions that I’m asked. There are many elements that go into an accurate Comparable Market Analysis (CMA). The details about your specific home are at the center the analysis. This includes everything from the size of your home, to the year it was built, to the neighborhood it is located in, and much more. It will also include improvements and maintenance on the house. You can sell your house “as-is” but there are simple things that you can do to increase the value for very little cost or work on your part. One of the most important is improving the curb appeal

You want to avoid overpricing. This is one of the biggest errors that first time sellers make. It’s natural to think that by setting the price a little high, you’ll have room to negotiate and still get the full value. There are serious drawbacks to that strategy. Among the downfalls of overpricing is that it helps sell other homes in the neighborhood that are priced correctly.  It also leads to less showings and offers. When buyers see a substantial difference in the prices for similar homes, the less expensive one gets sold first.

There are actions you can take to maximize the selling price. Curb appeal excites prospective buyers about taking a look inside. Inside is where decluttering and some staging makes the next good impression. None of this needs to be costly. Decluttering is about showing spacious rooms that buyers are looking for. Painting a room or wall a more neutral color.  Changing out some light fixtures to make it more updated. All these things do not cost a lot but can add much more appeal to your home. 

Maintenance and Renovations

Next is taking care of any maintenance and repairs that might be needed. Maintenance and repairs are different from renovations. Taking care of maintenance both improves the attractiveness of your home and increases the pool of potential buyers. Although a few buyers are interested in buying a house needing some maintenance for a slightly reduced price, what most of today’s buyers want are known as “turn key” homes. Homes in good condition and ready for them to move in.

As a seller, you probably don’t want to do major renovations or improvements shortly before you sell because these aren’t always a wise investment. Sure, a newly remodeled kitchen is highly appealing but also costly. A fresh coat of paint and clean carpets can be a better investment of your time and money. Still, some renovations make more financial sense than others do. A new front door is both relatively inexpensive and adds greatly to the curb appeal. 

Inspections and Appraisals 

When you and a buyer agree on price and terms for the sale of your home, there are a few more steps in the process before the sale is completed. Two of the most important are the professional home inspection and the appraisal. A home inspection gives the buyer confidence that there are no unexpected problems with the house. A home inspection does not usually need to cause anxiety for a seller. A professional home inspector does not issue a “pass or fail” report. Every house, even brand new construction, has at least a few minor imperfections. A home inspection deals mainly with major components of the home this includes the foundation, roof, HVAC, electrical, plumbing, windows, etc. Once an inspection is complete a buyer will send you a list of repair items, they want fixed.  Then you, as the seller, decide with you agent what repairs you would do, if any. You are not obligated to do any repairs but generally the sellers do some repairs.    

The appraisal is different from the inspection. The appraisal is for the benefit of the lender that will fund the buyer’s mortgage. The lender wants a third party opinion on the value of the house to be sure they aren’t lending more than it is actually worth. In some ways, it is similar to the comparable market analysis that your agent prepares to help you determine the listing price, but an appraisal is much more formal and detailed. 

Closing Process for Sellers

This is the day and part of the process when the sale becomes final. This is the day that you collect the money from the sale. All of us want this to be a good day. The two main things that happen are signing legal documents and money changes hands. It’s important that everything be in order and prepared ahead of time. 

Activities that will already have happened include a title search to assure a clean title is being transferred to the new owner. If there are any liens, claims, or judgements involving the ownership or part of the value of the house, these have to be taken care of before the transaction can be completed. Any outstanding issues should be known several days or weeks before the closing date. 

Other things will also have already been completed. If there were any agreements or actions required from the home inspection, these need to have been completed. Also, anything else that was agreed to in the purchase agreement. For the buyer, the big one is usually having final loan approval.  The buyer may ask for a final walk through a few days before closing.

On closing day, there will be a lot of legal paperwork involved that you will need to sign. You have every right to asks questions and have an attorney present or review the paperwork before you sign it.  You usually don’t need to bring much to the closing. Typically, all you need is government-issued photo ID, the keys to the property, and any final documents that your attorney or escrow agent instructs you to bring. 

The other thing that usually needs to occur on closing day is that you have moved out of the house. Your possessions and any major appliances that are not part of the sale need to have been removed. It’s also a good courtesy to leave the house clean and in the condition you would like to find it. There can be exceptions to when you move and remove your possessions but any exception needs to be part of the sales contract. 

Of course, the money is probably the most important part of the closing process for you, as the seller. Typically, the seller does not need to bring any money to the closing process. The seller does have some costs but these are usually paid out of the proceeds from the sale (no cash required). Exactly how the money will be distributed and whom it goes to is detailed on the Settlement Statement at closing. You want to pay close attention and understand the closing paperwork, but the Settlement Statement is of extra importance because it determines how money will be distributed.

I hope you found this information useful about the basic process for selling a home.  The process can be stressful at times, that is why it is important that you have the right professionals involved.  Having the right professionals involved makes your selling experience and closing day go smoothly and is reason for you to celebrate the next phase in your life.

 

If you need more information or have questions, please contact us. You can also  reach us by calling at (678) 570-8123. We'll be glad to help you! 

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Posted in Seller News
Dec. 21, 2019

Major Parts of the Purchase Contract

 

Major Parts of the Purchase Contract 

(What you can expect in the legal paperwork)

 

A real estate purchase agreement is also known as a real estate contract. It’s a legally binding document between a buyer and seller explaining the details of the land or property purchase.

Most residential real estate contracts use a standard form that provides checkboxes and fill-in-the blanks that customize the contract to the needs of the buyer and seller. However, there can be exceptions that don’t fit neatly into the standard form. These exceptions are accommodated by adding an addendum to the original contract explaining the exception or change. An addendum is also used to record changes to the original signed contract (for instance a change in the closing date or that some personal property will also change ownership). Addendums are mostly for simple changes to the standard contract. 

Below are the major sections to the standard contract with brief descriptions of each section to give you an idea of what to expect. 

1. The parties to the contract. These are the full legal names of both the buyer and the seller that are entering into the contract along with the date the purchase offer is being made.

2. Legal description. This is the legal description of the property as it is recorded on tax records. It includes land lot, section, district, plat book and page, etc.  It is the description of where the property is located.

3. Earnest money, purchase price, and method of financing - The earnest money is similar to a deposit to assure the seller that the buyer will complete the purchase once certain conditions in other parts of the contract are met. There is no set amount that the buyer must agree to as earnest money but the seller does consider the amount as an indication of how serious the buyer is about completing the purchase. The buyer should clearly understand the conditions when the earnest money will or will not be returned to the buyer if the purchase is not completed. 

The purchase price and method of payment or financing are detailed in the contract. The purchase price is exactly that, the purchase price for everything included in the contract – this is straightforward. The method of financing can be more complicated and more important to the seller than the buyer might realize. The method of financing can be anything from an all cash offer to obtaining a mortgage. An all cash offer indicates that the buyer can complete the purchase quickly and with little or no complications. Obtaining a mortgage indicates that the buyer will be using a loan and will taking longer to close the sale because it requires the approval and funding by a lender. Other information goes into this section such as the amount of down payment, the terms of the financing, and lender information

4. Disclosures, inspections, and surveys - There are several paragraphs in the contract dealing with conditions of the property. These should be read and fully understood by all parties to the contract. The seller’s disclosure is attached as a separate document to the contract. The purpose of the disclosure is for the seller to inform the buyer about everything that he/she knows about the house.  Some of the topics include age of the roof and HVAC systems, is it part of homeowners association, has there been any insurance claims during ownership, etc. Some disclosures are mandatory such as if the house contains lead paint. 

The buyer is entitled to have a professional inspection done on the house by an independent party. The results of the professional inspection can be a reason for the buyer to not make the purchase or for parts of the contract to be changed (addendum). The buyer may also want to have a property survey done to be sure they know the property boundaries and of any easements that others (neighbors) may have onto the property. It’s important that the buyer understand all disclosures and read any attachments to the contract because after the sale is completed, the buyer is bound to all parts of the agreed upon contract.

There are several other parts to the purchase contract as well as the attachments. The main contract will include a list of all attachments that are also part of the contract. Other sections of the contract include:

  • Seller paid closing costs
  • Closing and possession date
  • Earnest money deposit.
  • Brokerage (real estate agents) relationships to the transaction.
  • Time limited of response to the offer or counteroffer 
  • Rights of the buyer, seller, and brokers if one or more party defaults on the contract.
  • Legal requirements such as electronic signatures, governing laws, duty to cooperate, and others.

A purchase contract may be one of the most important legal documents that you ever sign. Real estate brokers cannot give you legal advice although brokers can help you understand the options you have when making a purchase offer. Brokers also work closely with you to make sure both the buyer and seller portions of the paperwork are accurately and fully completed. 

 

If you need more information or have questions, please  contact us. You can also reach us by calling at (678) 570-8123. We'll be glad to help you!

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Dec. 20, 2019

Things Retired Couples Need to Consider Before Buying a Property

 

Things Retired Couples Need to Consider Before Buying a Property

(You Have Choices in Retirement)


Your choices for a home are wide open when you begin retirement. You could invest most of your money in your dream home to live happily ever after or you could downsize for more affordability to travel happily and do other things that you want to do.

Let’s get a few basics taken care of right away. Unless you have a specific reason for a two story house, a single level without stairs will work for you today and in the future whether your mobility becomes an issue or not. Picking a location can be a little more difficult.  You can choose to be in city living with all the amenities and conveniences that city living has to offer or you can choose to live in a more rural setting and have the piece and quite from all the hustle and bustle of city living. Beside where you want to live, your current and expected future health is another important consideration. You want to consider if living on your own will remain feasible for many years to come or if you should be looking at planned communities that make transitioning from full independence to assisted living easy.

Besides health, your finances are often a driving force that deserves careful consideration…  

Retirement Finances are Often at the Top of the List

Unless you are among the exceptionally well off in retirement, you have a limited amount of money and income the make the most out of your retirement. Careful planning and knowing your options is important. Aging in place is certainly an option but if it is an older family home that has to much space and will soon need expensive repairs or renovations that might not be the best choice.  Also consider that your already paid for or nearly paid for home can be your largest source of cash to finance your retirement life.

You could use all of the cash from selling the house to possibly pay cash for a smaller home or you could make a small down payment on your next home and use the cash for many other things.  Of course, you can also do anything in-between. It’s always a good idea to talk with a trusted financial planner to fully understand all of your options.

It’s not only the cost of your home that affects you financially in retirement. Without a regular paycheck, your income will be changing and you need to take a fresh look at your budget. You may want to use some cash from the house sale to pay off installment payments such as cars and credit cards. That can make it easier to live more comfortably on your retirement income. 

Budgeting also involves the unwanted but inevitable. Be sure to ask yourself the fundamental questions – what happens financially if my spouse dies? What happens if we have large medical costs? Having a solid financial plan in place is always wise.  

Mortgages and Your Retirement

Legally, lenders can’t refuse you a mortgage based on age. However, lenders will pull your credit report and take a careful look at your income sources. Your debt-to-income ratio will probably change substantially in retirement. Before you make a sell or buy decision, make sure you understand how much of a mortgage you will qualify for. 

There may be several mortgage types now available that weren’t common the last time you shopped for a mortgage. The type of mortgage that makes good sense on your retirement income might also be very different from what made sense on your pre-retirement income. 

Consider the mortgage length that makes the most sense for your situation. A 30-year mortgage will have a smaller monthly payment than a 10-year mortgage. That leaves you more money in your retirement years. On the other hand, a short-term mortgage means your available monthly income will increase in 10 years when it might be needed for higher medical expenses. Of course, a Home Equity Conversion mortgage have become a popular option that you also want to at least consider. This option does not work for everyone.  You should talk with a lender that specializes in a Home Equity Conversion Mortgage. You have plenty of choices, but these aren’t always easy choices.

Living Essentials to Consider

It’s not all about your finances. Besides considering where you want to live and how you want to spend your money, consider what else you might need going forward. Whether it’s a condo, new construction, planned community, or fully independent living, your mobility needs to be considered. This includes everything from public transportation, if you can no longer drive, to no-step showers for easy wheelchair access. This is the generation of aging baby boomers, which is again redefining our social structure. New and recent construction is now designed with wide pathways in hallways, entryways, and bathrooms. Current houses also emphasize open and spacious rooms, which makes mobility much easier.

Please check out these other resources as you work through your choices.  Also, check out these other blog posts that might interest you.

Senior Housing: There are Lots of Options

Is Now the Time for Downsizing from the Family Home?

Tips for Buying a Condo

Aging In Place: Will Your Home Work for You?

Downsizing is a Step-By-Step Approach

Space Planning When Downsizing

Top 10 Tips for Downsizing

Homestead and Senior Tax Exemptions

 

I wish you all of the best and happiness in your retirement. I encourage you to continue reading our blogs. If you need more information or have questions, please contact us. You can also  reach us by calling at (678) 570-8123. We'll be glad to help you! 

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Dec. 20, 2019

Stunning Ranch Home in Dallas, Georgia

 

Stunning raised ranch home in East Paulding. Very well maintain and cared for 3 beds, 2 baths on main, with nice hardwood floors, and open family/dining room. Spacious bedrooms with updated bath. Downstairs features an over-sized garage, with a HUGE finished bonus room, and half bath. Fenced backyard with nice deck, patio, and storage building. Convenient to schools, shopping, and just minutes to the Hwy 41.

 

Disclosures and Exhibits

Check our Latest Newsletter

Posted in Homes for Sale
Dec. 20, 2019

Spacious Townhome in Atlanta, Georgia

Location, Location, Location - Stunning spacious end unit townhome - walk into the home and see the great room with a wall of windows and stunning fireplace that leads out to a private fenced patio - hardwood floors, granite, tile, and stainless steel appliances in the kitchen- three spacious bedrooms- priced below market - excellent location - less than 5 minutes from I285, minutes from all the great restaurants and shopping on Roswell rd and Perimeter Mall.

Disclosures and Exhibits

Check our Latest Newsletter

Posted in Homes for Sale