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Rhonda Duffy's Blog

By Rhonda Duffy | Managing Broker in Atlanta, GA
  • Mortgage Loans and FICO Scores

    Posted Under: Home Buying, Financing, Credit Score  |  September 27, 2012 11:19 AM  |  72 views  |  No comments

    Most people shopping for a house will simply look at their FICO score and figure their loan potential based on that number.  Big Mistake.  Credit reporting has changed over the years so that lenders can get information specific to the type of credit they would be extending.  For example, a revolving charge card (such as a department store account) would be wanting information that reflects the borrowers propensity for paying back that type of account.  Before granting a car loan, the lender would be looking more specifically at past performance on car loans. 

     

    According to lenders we’ve talked to, mortgage companies pull information that reveals the percentage of debt to credit ratio.   Due to the recent housing crisis and economy, lenders are looking for borrowers who have a cushion of available credit to get them through a temporary setback.  The FICO score for mortgage companies will reflect this available room.

     

    Typically, the desirable number is to be using 30% or less of your available credit.  So you should pay down your charge accounts but keep the account open.  The more marginal your FICO score is on credit reports the more important it is to have available the 70% or higher cushion.

  • Termination Rights

    Posted Under: Home Buying, Home Selling, Agent2Agent  |  September 25, 2012 2:56 PM  |  109 views  |  No comments

    On any given contract all the rights of termination are with the buyer unless provisions otherwise are written into the contract.  Normally the seller’s only right to terminate is based upon the buyer being in breach of contract.

    Should the buyer be unable to secure financing, fail to deliver earnest money, or violate their Warranties specified in the contract, then the seller can initiate a termination.   The only other way for a seller to vacate a contract is if the contract is not enforceable.  For this reason it is very important when writing a contract for your buyer that everything be in order and all changes be initialed and dated.

    All future amendments and negotiations, such as reducing price, repairs or closing date extensions are not a reason for the seller to terminate.  Hopefully the parties will come to agreement and if not, the buyer can choose to terminate - but outside the protection of a contingency they may be forfeiting their earnest money.

    Anita Kummer

    Buyer Department Manager, Duffy Realty, Alpharetta GA

  • The Importance of Seller's Disclosures

    Posted Under: Home Buying in Atlanta, Home Selling in Atlanta, Property Q&A in Atlanta  |  August 29, 2012 7:58 AM  |  142 views  |  No comments

    The Importance of a Seller's Disclosure


    The importance of a Seller’s Disclosure for a buyer cannot be discounted.  Not only is it a buyer’s right to know the history of a house, but it’s their decision whether or not they are comfortable with that history.   Also, having the Seller’s Disclosure on hand during the inspection can aid the inspector. 

    The time for the buyer to have the Seller’s disclosure is before making the offer.  They need to know the history and also which fixtures listed on the disclosure are staying and which are not.   This is a negotiating point and the buyer should make additional requests for fixtures in their offer.  (Non-fixture items should go on a separate Bill of Sale).  

    For these reasons, it is important to make the Seller’s Disclosure part of the contract so that everything in it is enforceable by the courts.   Every contract that an agent writes for a buyer should list the Seller’s Disclosure as an exhibit.  The only exceptions to this are foreclosures and REO – even then you can ask if there is anything the former owners completed prior to repossession.  Since the Seller’s Disclosure is part of the contract it needs to be present for the contract to go binding.  The agent would attach the disclosure provided by the seller to the offer when presenting it to the listing agent.  If the buyer does not yet have the Seller’s Disclosure it is important to include a special stipulation that specifies when the seller has to deliver the disclosure and the courses of action available to the buyer if the disclosure is not delivered by the deadline and if information in the disclosure is not satisfactory to the buyer.  With this special stipulation in place the contract can go binding even though the disclosure is not yet included.

    The law requires that sellers be honest about all information put on the disclosure and that they disclose all knowledge they have about problems, repairs, and any material facts that could affect the buyer’s decision.  Buyers have a right to make an informed decision.  Any attempt to conceal adverse material facts could come back to haunt the owner.

    The advantage of the seller’s disclosure to the owner is that it makes very clear what fixtures remain with the house and what do not.  The seller should adhere to what’s in the disclosure when they are moving out.  Later disputes initiated by the buyer can be settled quickly by referring to the disclosure.

    Any adverse information uncovered by a buyer’s inspection must go on the seller’s disclosure once the owner becomes aware of them.  For this reason some owners do not want to see the inspection report even when the buyer is terminating the contract based upon information contained within.  Other owners want to see the inspection report so they can more intelligently negotiate repairs and keep the current contract alive.   Even without seeing the inspection report, any repairs negotiated that are not purely cosmetic now need to be added to the Seller’s Disclosure should the contract not go to closing and the house continues to be listed for sale.

    Another key point for buyers and their agents to watch for is outdated disclosures.  If any length of time has elapsed since the sellers originally signed the disclosure, an updated disclosure should be requested.  This requires that any issues associated with the property since the disclosure was first completed now are revealed to the buyer.  The greater the number of intervening days, the greater the chance that the information is no longer accurate or complete.

    Anita Kummer

    Buyer Department Mgr, Duffy Realty, Alpharetta GA

  • Buyer and Seller Market at the Same Time?

    Posted Under: Market Conditions, Home Buying, Home Selling  |  July 17, 2012 1:46 PM  |  108 views  |  No comments

    Now is both the best time to buy AND the best time to sell - simultaneously.  It's a buyers’ market because of the lowest interest rates in recorded history.   At the same time it's also a sellers’ market due to the lowest inventory of homes for sale in Atlanta in 40 years. 

    While there are a lot of buyers looking for a bargain, there are more and more people looking for their perfect house at a reasonable price and others looking for a good house at a discounted, but not bottom-of-the-barrel price.  In the last 30 days, Duffy Realty put 1/3 the same number of buyers in a new home as we did in the first 5 months of this year – so business is picking up.   

    Because of the length of time that bargain-hunters have been out there, the inventory of distressed properties is dropping.  Also dropping, slowly but surely, is the proportion of sales for distressed properties, from 43% to 42% in the last month.    The inventory of non-distressed property continues to be tight as well.   Due to the low inventory, the number of new home sales has risen from 5% to 19% over the same time span.   If inventory continues to be tight in all areas we will be seeing an increase in prices soon. 

    Anita Kummer, Buyer Department Mgr, Duffy Realty

  • Defining Value in a Home Purchase

    Posted Under: Market Conditions, Home Buying  |  July 10, 2012 11:27 AM  |  56 views  |  No comments

    Perhaps the biggest challenge Atlanta home buyers face right now is defining their idea of a good value in their next house.  Too many buyers perceive prices as too high and as a result are finding it difficult to locate their ideal home.  Finding a good value starts by realizing that your definition of that good value must vary depending on location and your personal wants and concerns.

    Most of the frustration and unrealistic expectations are in the 200K and lower price range.  You can blame this on the larger number of purchasers in this price range, competition with investment buyers, and the low inventory of quality homes.  A quality home is considered to be one where buyers do not need to do any updating – the house is current in their layout, design, and amenities.   Buyers can no longer roll the cost of doing updates into their loan and typically do not have the funds to do updates immediately after a purchase.  As you can expect, the demand for updated homes is huge – most have a lot of traffic and multiple offers. 

    Not only is the condition of the home a major concern, but also buyers want to be in the desirable areas and those that exhibit stability.  Desirability is measured by the performance of local schools, quality of local amenities, accessibility to highways, traffic patterns, and of course, safety.  Stability is seen in the occupancy rates for houses, as well as for retail and commercial space, local employment opportunities, school populations, and the proportion of distressed properties.

    This all means that the value of a house is determined by the buyer and the importance of quality, desirability and stability.   There is some proportion of all those values with which the buyer will be comfortable.  Those proportions, and how they change, determines the price the buyer is willing to pay and whether or not the price is ‘too high’.  Once the buyer understands their own values, and applies them to a location, they will be able to identify the good value they seek.

    Anita Kummer, Buyer Dept. Mgr, Duffy Realty

  • How does a Home Buyer Get a More Affordable Home?

    Posted Under: Market Conditions, Home Buying, Foreclosure  |  July 10, 2012 8:58 AM  |  82 views  |  No comments

    It's getting more difficult for non-investors to buy foreclosures.  So where do the home buyers go who are looking for a more affordable home?

    Selling at a trustee's sale or sheriff's auction gets a property off the lender's books before it becomes an REO (bank-owned property).   As a result more properties are selling at auction, where typically full payment in cash is required and where there is no pre-inspection of the property.  Since neither of these conditions is amenable to a ‘home’ buyer, most of the buyers at auctions are investors.   Investors are willing to buy at auction, because they have ready cash and can take advantage of the  opportunity to rehab a property and then turn around and either rent or sell.

    Even prior to a foreclosure, more and more distressed properties are now being short-sold.   This is where the non-investor can buy a house, with full knowledge of the condition and also the ability to finance their purchase.   A short sale occurs when a lender accepts less than what is owed on the mortgage as pay-off from the homeowner.  One short sale benefit to the lender is that the house typically doesn't sit vacant and fall into serious disrepair.  Many lenders also see the short sale as being a less costly and safer avenue for them. 

    Not only does it cost more money to foreclose and maintain the property, but the loss in sales price is greater, and there is the risk of being sued for improper foreclosure.  As a result more lenders are improving their short sale process to make it more efficient and less lengthy.

    By the numbers
    Recent statistics back these trends:

    • REO sales fell 12% in the fourth quarter of 2011, compared with the fourth quarter of 2010, according to RealtyTrac.
    • REO inventory is down 37% since the peak in September 2008 (source: CoreLogic)
    • Sales of pre-foreclosure homes were up 15% in the fourth quarter, compared with the fourth quarter of 2010, according to RealtyTrac. These are homes in default or scheduled for auction, and they are often are sold via short sale.
    • There are more short sales than REO sales in 20% of the top 100 markets that CoreLogic tracks.
  • Things are DEFINITELY Looking Up!

    Posted Under: Market Conditions, Home Buying, Home Selling  |  June 27, 2012 11:24 AM  |  85 views  |  No comments

    Something that Rhonda Duffy predicted 12-18 months ago and has been stating as a fact since late 2011 is proving to be true.   Prices are going up.  Inventory continues to be low.  It IS a seller’s market.  And, coupled with historic all –time low interest rates, buyers should be jumping in to buy now.

    This means too, that it’s an excellent time for sellers to put their house on the market.   Inventory is very low, down from the highs of 110,000 listed homes in the summer of 2007.  Buyers cannot find enough houses to view and there are multiple offers on sellable houses everywhere.

    Click here http://www.garealtor.com/Portals/0/docs/Statistics/GAR%20Stats%20May%202012.pdf to view a very telling and encouraging report from the Georgia Board of Realtors.

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