Is a Short Sale Right for You?

Short sales are a tricky business. If a homeowner owes more money on his house than he can sell it for and is having trouble paying the mortgage, the bank will allow the house to be sold for less than is owed. That’s a short sale in theory. In the real world, banks don’t like to do them. They do everything in their power to make the process drawn out and complicated. It’s no wonder that only one in ten short sales is successfully completed.

There is help on the horizon.
The Home Affordable Alternatives Program (HAFA) has just released some new guidelines that are set to take effect in April of 2010. These new rules are designed to streamline the process and allow more delinquent homeowners to sell their homes and get on with their lives. The program is voluntary, but offers incentives for borrowers and lenders to work together to prevent foreclosure. Here is a summary of some of the points that will have the greatest impact.

• A homeowner will be able to get a short sale approval in advance. This is huge! In the past, the banks wouldn’t even look at a short sale unless there was an offer for the property. The homeowner, real estate agent and the buyer were flying blind. The new guideline allows the owner to receive a pre-approval from the bank that includes the minimum net amount it will accept.
• The banks cannot reduce the commissions of the real estate agents that are stated in the listing agreement (up to six percent).
• Provides new incentives for the borrower to complete the process. They are now given $1500 for relocation expenses. This will make the transition much easier for the homeowner.
• Mortgage servicers will also get $1000 for each completed short sale.
• Under certain circumstances the homeowner may be able to be released of all liability for the loan.

What are the qualifications?
The homeowner must be delinquent and unable to pay for their mortgage. The loan must be less than $729,750, made before January 1st of 2009, and the home must be the owner’s primary residence. The homeowners’ mortgage payment is more than 31 percent of their before-tax income.

Pendleton & Associates works with homeowners to complete short sales every day, and are experts in the process.  If you, or someone you know, are experiencing a difficulty paying your mortgage, GIVE US A CALL!  A short sale may be the answer for your family!

All out best!

Best Time To Buy?

The first quarter of 2010 will most likely be the BEST TIME EVER to purchase real estate. Here are three quick reasons why it one of the BEST times to purchase a home in 1st quarter of 2010 along with a little commentary on each reason.

Tax Credit has been extended- The Federal Government Home Buyer Tax Credit for first time home = buyers and repeat home buyers ends April 30, 2010.  An accepted contract must be in place by then with a closing by June 30, 2010.  If you are a “qualifying first-time home buyer” that means $8000 in tax credits.  For “qualifying repeat home buyers” that means $6500 in tax credits.  For more information check outwww.federalhousingtaxcredit.com.

Interest Rates are low-  Last January rates were below 5% and there was a big run on refinances.  Those low rates have returned again this January.  Currently rates are as low as they have been in 40-50 years.  Rates may tick up this spring (around April).

Home Prices Are Discounted- The last two years foreclosures have driven down prices.  This will continue in the first quarter of 2010.  Numbers suggest a 15% discount on home prices for Forsyth county on November, 2009 closed sales.  Homes are priced to sell!

In conclusion the two minute elevator speech on why to buy in Q1 of 2010-“ the government is paying buyers to purchase homes at their deepest discounts with lowest financing terms in 40 years. The stars are aligned. This is an unprecedented and newly defined “BUYERS MARKET” for the next 4 months.

Let me know if you will be one that will take advantage of this spectacular time for home buyers!

Help For Home Owners

The Treasury Department on Thursday announced two new programs to help distressed homeowners avoid foreclosure. One program will provide incentives for lenders to modify mortgage terms, and the other will streamline the short sale process, in which a lender agrees to a sale for less than the value of the homeowners’ mortgage.

Foreclosure Alternatives, one of the new programs under the administration’s Making Home Affordable effort, will make the short sale process easier for a borrower who is eligible for a Home Affordable Modification but who “does not qualify for a modification or cannot maintain payments during the trial period or modification,” according to the Treasury.

A short sale is a homeowner’s last resort before foreclosure if a loan modification is out of reach. Short sales are less damaging to homeowners’ credit and are less costly both for borrowers and lenders — one study found that loan losses average 19 percent with short sales, compared with 40 percent with foreclosures. But more than three-quarters of short sale deals fall apart, mostly because lenders drag their feet after receiving offers. And as those properties languish vacant on the market, they drag down property values for entire neighborhoods.

Great news for Atlantans facing foreclosure and not eligible for a loan modification.  Pendleton & Associates are certified distressed property specialists and handle short sale every day.  If you are in danger of losing your home, GIVE US A CALL!  WE CAN HELP!

Housing Bill Passes!

President Barack Obama inked his approval of the bill extending and expanding the homebuyer tax credit incentive Friday morning.

The housing tax break, which was initially set to expire at the end of this month, is now available to buyers who sign a contract by April 30, 2010, and close by June 30.  The credit amount is based on 10 percent of the home’s purchase price.  The maximum available to first-time buyers is $8,000. Other buyers, who’ve lived in their current residence for at least five years but want to relocate to a new primary residence can receive a credit of up to $6,500 – the incentive for these so-called “step-up” buyers will begin on December 1 of this year.  The income limits for both first-timers and step-up buyers is $125,000 for individuals and $225,000 for couples – up significantly from the current first-time buyer thresholds of $75,000 per individual and $150,000 per couple.  The tax break is only available on primary residences priced at $800,000 or less. Vacation or investment properties are not eligible. Beneficiaries who sell the home or stop using it as their primary residence within three years would be required to repay the credit.

“The rebound in the housing market was one of the big factors that contributed to the growth of the economy last quarter,” President Obama said at a national address in the White House Rose Garden Friday. “We want to give even more families the chance to own their own home.”

The expansion of the homebuyer tax benefit received widespread support from lawmakers, despite concerns over what it might cost the government in lost taxes.  The measure passed unanimously in the Senate earlier this week and cleared the House with a vote of 403 to 12.

President Obama assured the American people this morning that the homebuyer tax credit measure, which was attached to a larger bill extending unemployment benefits, would not increase the national deficit.

Federal Tax Credit

We are happy to report that the Senate skipped a step last night, did not invoke cloture but just went right to a vote on our bill – and passed it 98-0! As we have said before, things in Washington aren’t always predictable.   The bill now goes to the House, where a vote is expected today.  Keep your fingers crossed!

Burt's Pumpkin Farm

There are some things that you just have to experience yourself. One of the area’s best is the fall season at Burt’s farm in the secluded North Georgia Mountains where the only thing more beautiful than the fall foliage is the sea of orange created by thousands of Burt’s pumpkins. At Burt’s farm they have pumpkins that range from an eye popping 150 lbs. to a modest 1 lb. They grow thousands of pumpkins, so the selection is vast and the quantity is never ending. One of the most fascinating features of Burt’s farm is the impressive selection of every type of pumpkin, winter squash, gourds and fall decoration. Indian corn, cornstalks and hay bales are also in never ending supply at the farm. They also offer hayrides and fieldtrips pulled by John Deere tractors that take you through a winding trail filled with nature and beauty. Don’t forget to check the “barn” store for Burts fresh baked pumpkin pie and pumpkin roll, candied popcorn and a whole assortmen of other goodies, also shop for Burt’s farm wear and other fall decorations. Keep in mind that there are no pets allowed, so you’ll have to leave the dog road trip for another day.

Check it out! It’s FREE!

Slashing Mortgage Costs

NEW YORK (CNNMoney.com) — A plan announced today by Bank of America will be the most aggressive foreclosure prevention effort ever undertaken by a U.S. bank.

The program, scheduled to start in December, will be open to distressed borrowers who signed up with Countrywide Financial between January 1, 2004 and December 31, 2007. Countrywide was acquired by Bank of America (BAC, Fortune 500) in July.

It came in a legal settlement that the company entered into with the attorney general offices of 11 states, who had sued Countrywide over predatory lending practices, but the company stated that borrowers in all 50 states will be eligible to participate in the program.

“The Countrywide settlement is a watershed moment for loan modification programs,” said Mark Pearce, North Carolina’s Deputy Commissioner of Banks and a member of the State Foreclosure Prevention Working Group. “This is, by far, the best [program ever], even better than the FDIC program with IndyMac Bank.” As part of the initiative, Bank of America will cut monthly housing payments, including mortgage, property taxes and insurance, to no more than 34% of gross income. The move is expected to help keep as many as 400,000 troubled borrowers in their homes.

The program targets holders of subprime adjustable rate mortgage (ARMs), subprime fixed rate loans and option ARMs, but prime and Alt-A borrowers, who did not document their income, will be eligible as well.

Call Pendleton & Associates to see how we can help!

Lake Lanier at Sunset

As the warmer days of summer are upon us, I think back to last summer when all that was talked about was the lack of rain and the waining lake levels. With higher than normal temperatures this spring and early summer, we kept our fingers crossed that this summer wouldn’t turn out like last, and force severe water restrictions throughout the county.

As of this morning, the official lake level is 4.71 feet below full pool. While there has historically always been a rise and fall of the overall lake level throughout the year, the level today is significantly higher than that of 2008, and slightly higer than 2007 AND 2006. In fact, we have to look all the way back to this date in 2005 before we see higher lake levels. A great statistic in the midst of all of the negative we seem to be bombarded with. I know I and my dogs are happy about it!

All our best!

First Time Home Buyer Tax Credit

Bringing the Dream of Homeownership Within Reach!

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Home Pricing

Despite the fact that declining home prices have been grabbing headlines for several months now, it can be a challenge for any of us to let go of what we had hoped our home would sell for.

It’s often the case that, prior to listing their homes, sellers interview a few agents, with a plan to sign on with the one who agrees to list it at the highest price. With the understanding that the listing price is ultimately the decision of the seller, not the real estate agent, I’d like to explain one of the most critical dynamics that impacts the actual sales price of a home.

Whether we are in a buyer’s market or a seller’s market, the same principle applies. The most effective pricing strategy for getting top dollar for a home is to price it competitively. This might not seem to make sense at first, but study after study, as well as my own personal experience, has proven that when a competitively priced home hits the market, it generates an instant buzz. Agents begin calling their prospective buyers and lining up showings to ensure that they don’t miss out on a great buy. Bidding wars can even break out.

Let’s contrast this situation to what happens when a home is priced higher than comparable properties. Neighbors and prospective buyers take one look at the listing sheet, and dismiss it as overpriced. The home sits on the market and sits some more. Eventually “REDUCED PRICE!” signs go up. The market starts to wonder what’s wrong with the house since it hasn’t sold.

Eventually, sellers take it off the market or agree to sell it for a much lower price than they had originally hoped.

In any market, competitively priced homes sell quicker and command a higher selling price than homes that factor high hopes into the pricing equation.

As a real estate professional specializing in the Alpharetta and Cumming markets, I diligently track trends as they pertain to the pricing and demand of homes. Want to learn more about how to sell your home quickly and at the best possible price? I’d love to talk with you. Contact me any time at (678)341-7468