Many lenders that state they know the 203k renovation loan but in reality the lenders that know the program well are very limited. Ask your lender a few questions such as:

1.    Are they approved to do a full 203k and if they can’t, find one that is. Don’t settle for less when the possibilities could be so much more.

2.    Do they have full time staff dedicated to the 203k program?

Here are a few examples of some recent projects showing some of the possibles of the 203K renovation loan.

Before – One story house approx. 800 SF

After – Three story house approx. 3,000 SF

After – With a Custom Kitchen

After – Plus many Custom Features

______________________________________________________________________________________

Before – Average House

After – Average House – Nicely Painted

After – With a Built-out Basement

After – Plus a 2 Story Garage

My name is John Fendley and I have been a certified Georgia 203K Consultant for over 15 years.  When you get ready to start your Georgia 203K Renovation project, give me a call 678-957-6269.

Courtesy of MaryAnn McReynolds of Prudential Georgia Realty

Georgia REALTORS® are using new contacts and forms which were changed significantly for calendar year 2011. Few changes were made to the actual Purchase and Sale Agreement, but several new forms were created to make the practice of real estate easier for brokers and agents. Some highlights by form are found below.

1. F4, Exclusive Buyer Brokerage Agreement

This GAR form was rewritten to make buyers (who don’t expect to pay a commission) more comfortable with signing an Exclusive Buyer Brokerage Engagement Agreement (which clearly obligates them to do so in certain circumstances). The previous Agreement simply provided that the buyer paid the commission whenever the seller did not. The new approach is: a) define what commission the broker expects to be paid in the transaction; and b) provide that the seller pays the commission except in certain limited circumstances. They include a) when the buyer leases instead of buying and thus owes a leasing commission; b)when the buyer purchases a FSBO and seller does not agree to pay commission; and c) when seller defaults. In most cases only the default section will apply to most buyers.

2. F20, Purchase and Sale Agreement

a. Time Limit of the Offer Section

This section clarifies that an offer expires unless prior to time of expiration it is accepted by the person receiving the offer and delivered back to the party making the offer. Most agents assumed in the past that it had to be returned before the time limit expired, but this change now makes that clear. Fax is an acceptable method and is deemed to be delivered when sent.

b. Paragraph 17, Default

This paragraph was rewritten so in the event a broker has a broker engagement agreement with a buyer or seller the rights of the broker in the event of a default against the broker’s client are limited to those set forth in the brokerage engagement agreement rather than the purchase and sale agreement,

c. Paragraph 15, Lead Based Paint

This paragraph was modified so that if repairs are being made to a home built prior to 1978, they should be performed in accordance with EPA’s “Renovate Right” brochure. These new rules are designed to prevent lead-based paint fumes and chips from causing injury to the renovator or others.

d. Signature Block

Listing and selling brokers can now identify the Board of REALTORS®, if any, in which they are a member. Since non-REALTORS® are not required to arbitrate commission disputes with REALTORS® (unless they are required by virtue of belonging to a MLS) it  is important to know whether or not the broker you are working with is a REALTOR®.

3. F94, New Short Sale Contingency Exhibit

The Short Sale Contingency Exhibit has several important modifications. Bold face language has been added that “If the mortgage lenders and, if applicable, other lien holders, agree to take a reduced payoff, it shall be the sole responsibility of seller to verify that they are also releasing seller from further liability”. This change was made to protect REALTORS® against claims that it was the REALTOR’S® job to secure such a release.

The above are just some highlights of the recent changes, a competent REALTOR® can explain in detail other important modifications such as those made to the Seller’s Disclosure Exhibit.

For more information contact:

MaryAnn McReynolds, REALTOR®

Prudential Georgia Realty

770-891-3314

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Here are a few reminders and tips:

1.      File the homestead exemption if this property is owner-occupied; most counties have extended their filing deadline to April 1st, but confirm with your county.  If the property also has city taxes, there may be an additional homestead exemption available.  Most of the cities require a separate homestead application (except City of Atlanta), and may have a different deadline.

2.      If the property is owner-occupied by a senior citizen, disabled person, low-income owner, injured veteran or veteran’s widow, there may be additional tax exemptions and discounts available.  Some of these applications are due much earlier and may require a copy of last year’s income tax return or other supporting documentation.

3.      If the property is rental or investment property, the new owner should confirm that the correct mailing address was provided when the deed was recorded.  You can check the GSCCCA website (look at the PT-61 form filed with the Warranty deed), the county tax website, or your HUD-1 from the closing to see if the mailing address has been shown (rather than the property address).  Tax bills sent to a vacant lot or rental house rarely get forwarded or paid on time!

4.      File a real property tax return to confirm the current market value and also to confirm the mailing address.  Your 2011 assessment should reflect last year’s purchase price (under the new Georgia law), but it never hurts to provide this information.

Leigh Clack, Partner and Managing Attorney
Jane Hedgepeth, Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, Georgia 30324
Office:  404-705-3690  Fax:  404-705-3697
lenox@neelandrobinson.com

Mortgage Calculator ♦ Georgia Home Search ♦ Georgia Realtor

Reasons for the Decline

The foreclosure rates fell mainly due to the paperwork problems during the fall last year. As a result, many foreclosure proceedings were stopped. Most of the mortgage lenders were forced to reconsider their foreclosure cases. This was mostly the case in Florida. Still Florida has the second highest rate of foreclosure. Some other states that had high foreclosure levels in 2010 were Michigan, Georgia, Illinois and Colorado.

But with the advent of the New Year the rate of foreclosures dipped all the more. In Atlanta, Georgia, the foreclosure rates dropped to record lows. It is at its lowest level for the first time in 18 months. The reason is the same as discussed above. Freezes were put on most of the banks due to the problems in the paperwork.

Other than Atlanta, Cartersville showed the greatest decline in the rate of foreclosure. However, financial experts are of the opinion that this drop in foreclosures is only short lived. This is because the banks are adapting new foreclosure proceedings. It was discovered that the mortgage foreclosure was on a record level at 1.2 million in the United States before the trouble with filing the documentation was discovered late in the month of September in 2010.

Most of the banks who were on a temporary hold, have resumed their processing of foreclosures, but at a slower pace.  There are lingering after effects of the paperwork issues. In the state of Florida, the total number of homes which received warnings in relation to foreclosure dropped by around 16% in January and about 54% in December last year.

The foreclosures also lowered as the real estate market did not perform well in the last couple of years. The main reason for this is the economic downturn of the country after the recession. As a result, many banks suffered huge losses. For example, Crescent Bank & Trust, the $ 1 billion Jasper bank, which was heavily invested in the real estate market, suffered many losses due to the lows in the market. Crescent has suffered the most in Georgia.

But, as said before, though the foreclosure rates have lowered, it is expected that the proceedings will increase again. This is because most homeowners owe more than what their home is worth. Experts say that of the total prime conforming mortgage loans, about 41% of these will be “underwater” within the first quarter of the year 2011, which is up from 16% of that at the end of first quarter of 2009. About forty-six percent of the prime jumbo loans are also going to be larger than the property value and will be up from 29%.

There has also been serious drop in the home prices in the last year, which eliminates homeowner equity. This will cause many borrowers to walk away from their mortgage and the foreclosure rates unfortunately, will rise again.  As foreclosure rates increase, opportunities will arise for new buyers and investors.  There has never been a better time to buy a home.

Courtesy of Mortgagefit.com

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Courtesy of Christy Cole of Bouvette Properties

In a short sale, the homeowner NEEDS to sale their real estate, the house is worth less than what is owed on it, and the homeowner does not have the funds to make up the difference owed to the mortgage company.
Once a homeowner is to the point of the terms of a Georgia short sale approval being issued in writing, the “demand letter” will outline the acceptable terms of a purchase and sale agreement, as well as how the mortgage company will release liability.

ANOTHER PIECE OF THE PUZZLE:
After closing, a homeowner will probably receive a 1099 in the mail from the sale of the home.  Regardless if the homeowner is fully released from the debt or not, the IRS considers this unpaid debt as extra income to the homeowner.  Back in 2007, President Bush enacted the “Mortgage Debt Relief Act”, which is in place through 2012.  By meeting certain criteria, someone facing an Atlanta Short-Sale could be excused from this taxation.  Call me to find out if you might be exempt from taxation.

LITTLE KNOWN FACT:
Let’s say the short sale is granted, buyer and seller agree to the terms.  Georgia law allows mortgage companies to pursue homeowners in court for a deficiency for unpaid debt.  So even if a homeowner completes a short sale, there is the possibility of legal action in the future for the mortgage company to try for more money, if the “demand letter” includes such verbiage.  HOWEVER-if the mortgage company sends a 1099 to the homeowner after closing, they have given up the right to sue for a deficiency!!!  The mortgage company either goes for recovery of the balance through a judgment or writes off the debt and sends a 1099.

For more information Contact:

Christy Cole, Short Sale Specialist
schristycole@gmail.com
Direct 678-300-3756
If you are interested in Henry County Real Estate Click Here:  Henry County Real Estate
If you need assistance on a Henry County Short-Sale, Chick Here:  Henry County Short-Sale

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Guest Blog Courtesy of Leigh Clack with Neel & Robinson, LLC

When a foreclosed property is being resold by the lender, the buyer is usually asked and often forced to close with the law firm chosen by the seller.  Many buyers and their agents are starting to assert their wishes to close with their choice of attorneys.

Regardless of which attorney handles the closing, the buyers and their agent should always confirm the following when buying a foreclosure:
1. County and city property taxes
a.    Confirm payment on the HUD if the current bill is out.
b.    If paid prior to closing or “POC” (paid outside closing), ask for written proof.
c.    Tax prorations – check the calculations, because the seller will not adjust the prorations later.  If prorated on last year’s estimate, make sure it is reasonable and reflects any major changes such as the loss of homestead exemption.

2. Other bills not wiped out by foreclosure
a.    City/county garbage and sanitation bills
b.    Water bills on previous owners in the chain of title
c.    Demolition liens and other government bills

3. Homeowner Association
a.    Is there a mandatory HOA?  (The seller bank may not know for sure; ask the closing attorney)
b.    Has the HOA account been adjusted since the foreclosure?
c.    Make sure the closing attorney has a written status letter from the HOA – get a copy at closing.
d.    Is the seller paying the dues from the foreclosure date up to the closing date?

4. Owner’s Title Insurance
Never buy a foreclosure without title insurance – the seller does not guarantee clear title (just insurable title) and will only sign a limited warranty deed to the buyers.

Leigh Clack, Partner and Managing Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, Georgia 30324
Office:  404-705-3690  Fax:  404-705-3697
lenox@neelandrobinson.com

Guest Blog Courtesy of Tina Fountain of Tina Fountain Realtors

What can You Expect when Applying for a Georgia Home Loan?

One of the most frequently asked questions from home buyers of today is: can I get approved for a home loan? Today’s credit environment is decidedly different, with stricter guidelines than ever before. Up until 2009, home buyers could have expected easy loan approval, no-money-down loans, interest-only loans, piggyback loans and sub prime loans, just to name a few. Credit was flowing freely, and homes were ours for the taking. However, as we all know and witnessed, this credit bubble and housing bubble finally blew and left in their wake a complete fiasco, complete with foreclosures, government bailouts and new credit regulations and laws.

Subsequently, applying for a home loan today can be quite difficult for some home buyers. If you are new to the home buying game or if you simply haven’t bought a home for several years, there are some things you should know:

1. Don’t expect a loan without a down payment – Many home buyers were quite spoiled with “no down payment” loans in the past.  However, because of the tight restrictions on credit, home lenders are being more cautious about loans that they consider to be risky – and a home loan without a down payment can be quite risky for the lender.
2. Don’t expect a home loan with sub par credit – Simply put, only those home buyers who have good credit can expect to secure an Atlanta home loan. One of the best things you can do before applying for a home loan is to order a copy of your credit report. Then, take the time to clear up any discrepancies or errors. Pay close attention to your credit score, as most home lenders are looking for a credit score of 620 or higher when it comes to home loans.  In order to qualify for the best rates, your credit score will need to be over 740.
3. Don’t expect a home loan if you have a high debt-to-income ratio – One of the many problems that were discovered as a result of the home loan disaster is that lenders were loaning to individuals who were already bogged down in too much debt. As a result, lenders are now looking more closely at debt-to-income ratio, which is essentially a percentage of your debt versus your income. In other words, if you have too much debt you will likely not get approved for a home loan.

By taking the time to clean up your credit report and reduce your debt-to-income ratio, as well as save for a down payment, you can qualify for a competitive mortgage loan.

Tina Fountain is the Broker Owner of Tina Fountain Realtors. For more information visit tinafountain.com and search for all Atlanta real estate including homes for sale in Marietta and homes for sale in Cobb County.

Guest Blog Courtesy of Leigh Clack with Neel & Robinson, LLC

Georgia recently passed “The Property Tax Assessment and Appeals Reform Bill” (Senate Bill 346) on June 7, 2010.

Highlights include:
1.     Every property owner will receive an Annual Notice of Assessment and the right to appeal;
2.     Every Notice of Assessment must contain the estimated property tax (in dollars);
3.     Appeal period has been extended to 45 days;
4.     Alternative streamlined appeal option for properties valued over     $1,000,000;
5.     Automatic taxpayer victory on appeals when government fails to respond within 45 days;
6.     Requirement that all relevant sales, including distress sales, be included when determining Fair Market Value (FMV);
7.     Requirement that only “current use of property” be used in determining FMV;
8.     Taxpayer must be given access to all data used in determining FMV;
9.     Sales price establishes FMV for next tax year.

Remember that a reduction in the assessment does not always reduce the actual bill.  Other factors such as the millage rate, homestead exemption, and other exemptions will also affect the final tax bill amount.

Leigh Clack
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, Georgia 30324
Office:  404-705-3690  Fax:  404-705-3697
lenox@neelandrobinson.com

Today’s Guest Blog provided by GeorgiaHomePros.com

You’ve searched and found a home that fits your family.  Now it’s time to make sure it’s safe, sound and will stand the test of time. You need a professional inspector working with only your best interest to determine the condition of the home.  The naked eye usually only uncovers cosmetic items & minor repairs, IF it is visible to the naked eye.  Many major repairs are not fully visible and you need a professional certified inspector who knows what signs of problems to look for.  Even Georgia builders/remodelers have relied upon our, GeorgiaHomePros.com 5-star rated inspection service   Did you know that foreclosures have no sellers disclosures? And, many short sales don’t either. This is now more than half the market that you will have no history on your home.  Also, many homes are located in counties where codes were not enforced when they were built… Yes, even though you may not be in that scenario, the vast majority of homes have thousands of dollars in repairs to be made whether it be code violations, structural defects, latent defects, safety, health hazards or simple wear and tear

In a  majority of inspections, you can have the seller repair the items or you can negotiate the repair moneys off of the price. Even the homes that did enforce codes when built,…the County inspector may have only spend 5-10 minutes if you’re lucky, at the home.  How does that compare to our normal 3-5 hour inspection, 40+/- page report, w/a 500+ point checklist, summary & photos + repair cost estimates? It doesn’t.  That is why it is so smart to get inspection during your due diligence period, to be fully informed PRIOR to closing, or if at all possible it is BEST to do prior to writing an offer.  You will only pay hundreds for an inspection, but possibly save thousands and have peace of mind that your family is safe and you have not bought a money pit.

M.Scott Webb
Rated top 10% Nationwide
20+ Years Experienced Builder/Remodeler
770-893-2271
www.georgiahomepros.com

Today’s Guest Blog Courtesy of Garrett Feis a HUD Approved 203k Consultant

FHA has a little known loan program called 203K.  It is the governments answer to America’s deferred maintenance of existing housing stock.  Most lenders will only lend money on homes that are in good condition or they require the borrower to make the repairs before the closing.  Not so with FHA’s 203K.  FHA allows you to purchase the home “AS IS” and gives you the money to get the repairs done after the closing,  all in one 30 year fixed rate loan at current rates.    Best of all, you won’t need to make mortgage payments until the renovation is complete.

Here are examples of what you can do with a GA 203K loan:

• Purchase a two bedroom one bath home and get the funds to make it a three bedroom with a nice master bath.

• Purchase a foreclosure that needs carpeting, a paint job and maybe a new kitchen.

• Purchase a home that is in perfect condition and remodel the kitchen and bathrooms.

• Purchase a home that is in perfect condition and finish the basement off into an “In Law” suite.

All of this and more is possible under 203k Guidelines.  This loan program is almost limitless.  You can purchase a standard stock home and make it into the home of your dreams.

This loan has become very popular the last two years due to the increase in foreclosed properties.  These properties tend to be in pretty rough shape and usually need some help.  A Georgia 203K loan is the way to get you where you want to be.

For more information on how a 203k loan can be right for you, contact:

Garrett Feis  404-925-7163