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The Wells Team's Blog

By The Wells Team | Agent in Dawsonville, GA
  • Build or Buy in North Georgia

    Posted Under: Market Conditions in Atlanta, Home Buying in Atlanta, Financing in Atlanta  |  March 2, 2013 3:44 PM  |  313 views  |  No comments

    According to everything you read in the media the housing market is booming. Prices are up and inventory is down. New home sales are also starting to see an increasing demand.

    So this must be a good time to build!!!!

    In North Georgia the jury is still out.

    Here are some considerations:

    • Price pre square foot will be higher on a custom built home over a resale
    • Lenders, for new construction, are available but not easy to find
    • Lenders have tough terms when building a new home
    • Lenders have a fear that a new home will not appraise in a neighborhood of resales
    • Price overruns are possible

    I have seen great deals on new home construction. This is in new neighborhoods built by large builders who can keep their cost competitive.

    For now I advise my clients to take a good hard look at the pros and cons of each situation.

  • Spend More Time on the Financing!

    Posted Under: Home Buying in Atlanta, Financing in Atlanta, Credit Score in Atlanta  |  May 17, 2012 3:30 PM  |  381 views  |  1 comment

    Financing has become the make or break factor for many real estate transactions.

    As important as it is to the overall purchase of a home we are seeing less time spent on the actual specifics of financing.

    Today we had a one hour class taught by one of our mortgage brokers. She wanted to review a Pre-App Worksheet, HUD form, and various funding fees for conventional, USDA, FHA, and VA mortgages.

     

    Did you know?

    · On an FHA loan that the maximum contribution from a seller, for closing cost, is 6% of the purchase price?

    · A lender can pay mortgage insurance by putting it in the loan?

    · On a 90% Conventional loan the maximum contribution from a seller, for closing cost, is 3% of the purchase price?

    · On an FHA loan the Tax Service Fee is always $83?

    · The lender makes their money from the origination fee and the admin fee only?

    The items listed above are a few of the many factors current today and for the state of Georgia. One thing is for certain: They will change!

    The reason I listed the above items is to emphasize how important it is for your buyer to meet with a mortgage representative prior to starting their home search.

    Why?

    Because the mortgage representative can offer a variety of mortgage products, closing cost, rates, and terms that work to the advantage of that buyer in that environment.

    The Wells Team has a good relationship with many lenders in the Atlanta area. As part of our customer service we require our buyers to sit down with the lender of their choosing and work together to put in place a comprehensive financial plan.

    The result: A successful buyer experience!

  • 3.8% Real Estate Tax

    Posted Under: Market Conditions in Atlanta, Home Selling in Atlanta, Financing in Atlanta  |  March 26, 2012 9:19 PM  |  402 views  |  1 comment

    The National Association of Realtors has put together a publication entitled: "The 3.8% Tax Real Estate Scenarios and Examples".

    Some of the highlights of the publication:

    • This tax will go into effect on January 1, 2013
    • The tax will not be imposed on all real estate transactions
    • A 3.8% tax will be imposed on some, not all, income from interest dividents, rent (less capital loss) and capital gains (less capital losses)
    • The tax will be on AGI over $200,000 for a single filer and $250,000 for a couple filing jointly.

    The publication has various scenarios that show what the potential, if any, tax that might be paid on a real estate transaction.

    There have been a lot of rumors on this new rule. The National Assocaition or Realtors publication does a great job of laying those rumors to rest.

  • More Mortgage Relief from the Federal Government

    Posted Under: Home Selling in Atlanta, Financing in Atlanta, Foreclosure in Atlanta  |  February 20, 2012 6:06 AM  |  508 views  |  1 comment

    The US Attorney General has announced a plan to help homeowners, who are underwater on their mortgages, get relief.

     

    Before you start doing “the wave” there are a couple of items you need to know:

    ·      Your loan must be owned by one of five banks: Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally Financial

    · You will need to be delinquent on your payments, threat of foreclosure, and mortgage is more than the home’s current value

     

    If you qualify then this program will reduce the amount of principal on your mortgage. Numbers range from $15,000 to $20,000 in principal reduction.

     

    Overall Freddie Mac, Fannie Mae, own approximately 46% of the nation’s mortgages (including mine!). This means that the plan will be offered to a small amount of homeowners.

     

    In my opinion: In my neighborhood (an hour north of Atlanta) I have seen multiple foreclosures in the past few years. Matter of fact there are another four that are available at this time. The reasons for these foreclosures were varied: Loss of a job, builders losing their companies, divorces, and one neighbor convicted for federal mail fraud! While their home were in short sale, and then ultimately advertised for foreclosure.

    , I looked at the debt acquired on their homes. The numbers, in some cases, were astonishing! Multiple mortgages in excess of 110% of the purchase of the home. One homeowner had over $1 million dollar in loans on his home (the home sold in foreclosure for approximately $390,000). My take on my local foreclosure market is this: The majority of folks I knew had a lot of debt in the good times and was always on the edge. No program would help them stay in their home. It appears that the quicker we can clean out the foreclosures in my neighborhood then the quicker we can return to some sense of a normal real estate market. $20,000 reductions on my neighbor’s loan principal will not help!

  • No Payroll Taxes Means Additional Mortgage Fees

    Posted Under: Home Selling in Atlanta, Financing in Atlanta, Agent2Agent in Atlanta  |  January 12, 2012 7:30 PM  |  833 views  |  No comments

    Another tax is going to be implemented on real estate starting January 1st.

    In order to cover the two month "payroll tax holiday" fees will be increased on government backed mortgages from Fannie Mae and Freddie Mac.

    The fee will be an additional 0.1 "surcharge" paid monthly on mortgages from both government backed institutions.

    A typical $200,000 mortgage will see an approximate increase of $17 per month.

    The Payroll Tax is used to fund Social Security. A two month "tax holiday" will take around $33 billion dollars away from the Social Security Trust Fund.

     Bottom line: There is not free ride. Regardless of your political affiliation one thing stays the same: Somebody has to pay!

  • Obama Health Care Plan and Additonal Real Estate Taxes

    Posted Under: Home Selling in Atlanta, Financing in Atlanta, Agent2Agent in Atlanta  |  January 12, 2012 7:16 PM  |  1,427 views  |  1 comment
    I just received an email from my Dad about a real estate tax that would be part of the Obama Health Care plan.

    Beginning January 1, 2013, ObamaCare imposes a 3.8% Medicare tax on unearned income of “high-income” taxpayers which could apply to proceeds from the sale of single family homes, townhouses, co-ops, condominiums, and even rental income, depending on your individual circumstances and any capital gains tax exclusions. Importantly, the “high income” thresholds are not indexed for inflation so will reach increasing numbers of middle-class taxpayers over time.

    I have attached two links to the National Association of Realtors website. One link provides details on the tax with the other providing the position of the National Association of Realtors concerning this subject.


    http://www.realtor.org/small_business_health_coverage.nsf/pages/health_ref_faq_med_tax?opendocument

    http://www.realtor.org/small_business_health_coverage.nsf/Pages/health_ref_faq_advocacy?OpenDocument

    This provision has been discussed since late 2010 but is worth revisiting. Please familiarize yourself with this tax provision.

    Bottom line: Regardless of your political views if you want to have a federal program you have to find the money to pay for it!

  • Frustration with Appraisals!

    Posted Under: Home Buying in Atlanta, Home Selling in Atlanta, Financing in Atlanta  |  November 19, 2011 2:49 PM  |  646 views  |  3 comments

    I know every agent in this country is feeling the same pain that I feel when it comes to appraisals!

    At my weekly Rotary Club meeting I had a friend share his frustration. He recently had his home appraised for refinancing.

    His frustration was in the fact that, in his opinion, the appraiser had no idea about the details of the home. When my friend had his home built he spared no expense. Extra insulation, upgraded hardwoods, top of the line fixtures, counter-tops, and extra energy efficiencies throughout.

    In a normal market all of these upgrades would weigh on the price of the home. In this market all bets are off!

    I told my friend that my home was appraised for $50,000 less than I paid for it in 2001! I have put in a new Kitchen, new Master Bathroom, and screened in the porch! My reward? $50,000 in lower value!

    What I saw on my appraisal is that a home is rated excellent, good, fair, or poor. A higher rating is the most you can expect and I do not know how much that adds or subtracts to the value of the home.

    Bottom line: I told my friend that I agree with him. Until the appraisers take more factors into account when appraising a home, our values will stay the same

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