Hi All!

This was the most viewed Trulia Voices Question of the week. Thanks for providing some wonderful feedback. We're all here to learn from each other and to help each other make better informed decisions. So lets continue to keep it positive.

http://www.truliablog.com/2008/09/22/house-rich-and-cash-poo…

Best,

Rudy
Social Media Guru at Trulia

I have pasted a link to an affordability calculator from Ginnie Mae. It will also provide some basic information on home ownership.

My advice is to think pessimistically - you know, worst case scenario on what you could afford. Even with health insurance, we racked up significant debt after my spouse was diagnosed with cancer. Not to be a downer, but you never know what the future will bring.

And when the worst doesn't happen, you can afford that 10th anniversary trip to Italy :)

I would suggest you buy at 700k house, 6 months later when you cant make the payments, then you will be forced into forclosure and my investor friends will be able to buy your property at an auction for 250k.

thats my advice and while you at it, ramp up some credit card debts, and maybe buy a new car since you seem to think 121k is alot of money. thats chicken feed.

Just this morning I was debating whether to comment on the spirit of the responses here and I further wondered if anyone else saw it the way I was reading it. I totally agree with Michael. As professionals in our real estate community and in the Atlanta market we should be focused on providing content that addresses the question only. I would say more but I'll refrain as I'm sure it will cause more of the same and that is not the purpose here.

I've lurked on Trulia for a while but haven't felt compelled to post until now. Why someone, in the course of answering a simple question, feels the need to impugn another agent's (or, in this case, agents') reputation is beyond me. This is a Q&A forum. The reason I read this board is to inform myself about real estate, not watch agents snipe at each other.

My God!!! Look what I started:-)

Sarah, are you tripping on an ITP cocktail? Can you please finish detailing all of the places you've been? Are you posting your travel resume for any particular reason? What's next, "rookie of the year" travel agent? I really appreciate all of that info - it adds so much support and credibility to your arguement.

Follow the dialogue here - you jumped at just about everyone on here once your positions were questioned. You start getting dramatic and when confronted with cogent arguements you popped smoke and went off on a tangent deriding OTP and setting up some non existant ITP/OTP duel. Your co-worker Bee did what she should do in trying to support you but she's not brought anything to support this dialogue. BTW Bee, why bother posting this if you're an agent and Andy's husband? Surely being an agent in the same office as Sarah would provide you ample experience to draw from?

Again and for the 100th time - Sarah I am not judging or busting on you - I'm simply repeating that our business mandates caution. We as agents are in large part responsible for this mess and before you advise anyone about anything, have something tangible to support your position. The John Adams link supports you how? I'm not making this personal but I'm also not going to sit idle when you continue on so far off topic.

Thanks for sharing all of the places you've been, it was fascinating. And exactly what constitutes a "high rise" in Winston Salem? I feel ripped off growing up in NYC/LI, we didn't have anything cool like what you had.

Oh - and again in response to a shot from you - I use Realtor.com for my website. I write everything but don't have that much time to do it all as I'm out selling real estate and mining data. Pick up the book - The E-Myth, it'll help you.

What does an agent's travel resume have to do with anything? I fired three agents before finding one that could support what they told me without a lot of "ummmsss" and "you knows". I expect an agent to back up what they tell me, not tell me what I want to hear just to sell me something. If you have a position then support it with a well thought out presentation, not just mindless chatter. Show me numbers, show me data and show me that you are a professional!

Sarah - TMI. TMI. TMI. Really.

Hank - you will die a death, much like that of John Wayne if you eat back to back Varsity and Chops one more time. Your colon must be turgid today.

Ya'll keep your head in the game and help people. People need help right now. More agents should be as insightful as Ty.

Andy - I meant what I said.

Oh Lee - thank goodness you hopped in. I know I can be a little bit too much a cheerleader for intown living, but Hank attacked me personally. I don't consider that very "gentleman-like" -- I'm not some hick from NC that hasn't ever travelled the world.

Atlanta is a REAL city. It's not the same as New York, or Boston, or San Fransisco. However, none of those cities exactly reflect one another either. We have a formula all our own, and you either love it or you don't.


Oh and Hank, my family moved 6 times before I was twelve. I'm originally from Cincinatti, then went to Indianapolis, then Denver, then Louisville, then Nashville, THEN my little hick town of Winston-Salem (population: 223,000, with a high-rise skyline). I've also spent time (and when I say time, I mean days or weeks, not a lay over, or "I can see it from my backyard"): Lived in Paris, France (not Texas) interning as a real estate intern at International Living Magazine for a semester, Moscow, St. Petersburg, Munich, Amesterdam, Dublin, London, Sydney, Mexico City, Toronto, Rome, Venice,... would you like me to continue with my world travel list?

Please don't assume anything about me or judge me (or my website - I build mine myself, who did you pay to build yours? ). I only attacked your age, because you attacked my knowledge and experience. You took it to extremes, and I really think you made yourself look worse, than anything I could ever write. We're all in this boat together as Realtors, no matter ITP or OTP market, and I would appreciate professionalism moving into the future.

Lee - thanks again for your encouragement & Andy - good luck! (again)

And here we all thought The Mighty Lee Tayor had foresaken us...welcome to the fray.

This all started with a rather typical question and quickly elevated into a full out cat fight....or dog fight....or human interaction...or squabble.....I want to remain PC and sensitive for my diverse ITP folks.

Bottom line here is that data is data is data, it's not perfect and it's subject to interpretation but at the end of the day it trumps unsupported opinion. From what I see I consider Sarah a good agent and God knows she likes to mix it up, but to throw blanket statements out there in this economy is just not wise. Then of course the escalation....who can resist escalation?

Ty has valid points and whether or not he uses agents is up to him - but any one of us in the biz would be hard pressed to disagree with his review of the cycles that neighborhoods go through. he is dead on and I know our agent talking points don't allow for such candor, but I take my talking points from me and selling/appraising since '89 lets me say Ty has it down. Every one of us can list at least 5 areas in Atlanta that are in the midst of this same cycle - if you say otherwise then your not being honest.

We've pummled the point - buy under your means and diversify.

OK - last point - I have two of you ITP agents telling me how busy you are - so let me share my day - I have to hit the bricks and put contracts in on 3 golf community homes, visit a new lake home for a final walk through, head your way for a skanky Varsity ratburger then meet a client tonight at Chops. Whew!

PS - Lee, which thesaurus are you using? Damn signal corps!

This is by far the greatest Trulia Voices Atlanta question ever.

Lee Adkins you are one of the great Lee's of the world. You noticed my absence. I'm touched and just because my Mother In Law is in town and I had two closings doesn't mean that I should not be present and accounted for on the great questions of the day.

Hank Miller is a True Gentlemen and a sales professional of great magnitude and prowess. All you punks need to sit at the feet of the master and soak in his ideation.

Hey Hank - I got some Alt-A Residential Mortgage Backed Securities at 70 cents on the dollar. You buyin' this weekend?

Sarah - don't let these jive talkin' suburbanoids and their utter predictability get the best of you. Just put your clients on good streets and in good school districts and we'll all be fine Intown.

Ty - you are one of the smart ones. You have "never used a realtor personally when buying or selling and have always found deals to be easier to complete without their intervention."

If you define real estate agency as intervention, then that is your definition for your unique subset of needs. You are a smart guy with the time and the fiduciary skills and ministerial abilities that enable you to be adept at handling the amount of real estate transactions that you do. Rock on. More people should be like you.

Andy - you have sparked a really fun dialogue that features personal intrigue, the fresh and the not so fresh, and you even clarified your question with nine nifty additional points - now that is Q&A! Here are your 4 best points, in my opinion:

3. I'm sure if you looked hard enough you could find much dumber questions on this site than mine. It would be more appropriate to say this is one of the dumbest questions someone could ask this audience.

4. If my wife did leave me, because I have no concept of money, she would miss out on all of my loving and wonderful personality.

5. If you read all of the answers to my question you will notice no one said to go for it and make me you Realtor.

8. Stop getting drunk and posting your harassing opinions on this forum late at night. There is no way you have seen every bit of Pornography on the internet, so go do that instead.

OK, Andy - fire your Realtor and hire me, the 46th person who cared enough to answer your question, which is: "Are we being unrealistic in our price range and asking for trouble?" Yes. Be conservative and circumspect right now. I suggest that you read two books and take a free course on a website.

Read two books - The Millionaire Next Door by Stanley and Crashproofing Your Life by Swcheich.

Take The Crash Course at http://www.chrismartenson.com/.

You will probably rethink your statement about "We are also trying to find the perfect place to live for the next 20-30 years."

Get your real estate on.

Ty is correct with his analysis; markets are in a constant state of change – that change is the only “constant”. If you want to see areas labeled “up and coming”, go ride around Kirkwood, Cabbage Town, the 4th Ward, Ormewood Park…if you believe the AJC, the developers and some cheerleader realtors then these places are going gang busters. If you take a step back and see how many flips, frauds, rentals and REO shells are in there…well then things look different. Even Grant Park…legendary Grant Park has 130 active listings ranging from 32,500 to 675,000, avg 305K. Now how large is Grant Park? Am I advising my client to drop 400K+ there? And just wait until Atlantic Station starts to fall.....

Ty is dead on with the life cycle of an area – dead on. The interesting thing (and not in a good way) is going to be watching how the areas like Brookhaven play out over the next several years. Atlanta is a wealthy city with many very wise and fiscally smart residents. Those owners should be OK, what I want to see is how well the “new” rich handle this economic nuke that hit us. All the folks that overleveraged, bet on constant appreciation and were only concerned with “how much is that per month?” My appraisers have been seeing for a good year – homes half furnished, remodeling halted and homes being sold/listed for well less than they owed. I just handled a client in Sandy Springs that lost 260K on a flip – the flip landed on her like the house on the Wizard of Oz; this after her friend the “opportunity agent” told her it was “can’t miss” – that same agent that’s now working in an HR department.

Oh, Bee – please pass along my thanks to Andy for “and Andy has already acknowledged that the economy will bounce back…” that’s a huge relief, can he give us an idea of when to expect that? No one is telling you that Brookhaven is not a solid neighborhood. The points made are clear – no one can just make blanket statements like Sarah did, this market is a series of micro markets and they can be as small as a street or two. Ty lives in Brookhaven and he’s perfectly justified in offering what is a very accurate summary of the real estate life cycle of an area. Sarah might be an expert when she gets to be my age and you might be looking for another place to live, no one knows what the future holds.

Sarah brought a pearl to the table - A house is worth what someone is willing to pay for it. When there's no easy credit for anyone fogging a mirror, where are all the quality buyers ITP going to go? Just asking because we're finding out....

"You just seem really unhappy. "
Good pickup from reading a grand total of 4 or 6 sentences; depending on if you include the ... to really be the end of the sentence.

I have really loved my Brookhaven home, and am glad I live there. I guess I expected someone to read more between the lines on that because I was more making mention that because a place has a nice upside doesn't mean it always turns out that way. I bought quite a bit of PFE (Pfizer) stock some time ago because of the impending doom of a downward economy (reason being healthcare sector generally does very well during these times), but the downside is that I've made no money off of it. It looked like it was set to boom, but it has sputtered. Real estate is no different than every other type of investment available today, except the fact that you can buy something for 100,000 for a mere $600 monthly using someone else's money.

Back to the original point, Brookhaven is a nice place to live, with easy access to Chastain, Buckhead, Fernbank, etc., but because it's a nice place to live doesn't mean appreciation is going to be better than suburbs or south Georgia. In fact, a person generally has more to lose because the land is what drives the value, not the home itself. So, while I sit here on my small lot with my multi thousand square foot home, I can only hope that the crime and low-educated people stay out. Once I see that trend, I will be happy to cash out, make my money, and move to the next venture.

The real point is that these little pocket markets, like Brookhaven, Grant Park, etc., come and go in value. Whether you've ever seen that happen, I don't know, but a town may be flying high for two decades and then turn around and be ghetto for two decades; and neither you nor I will ever know when it's going one direction or the other. If you study it long enough, you'll find that one of the fundamental reasons why that is is because when a new breed of person starts moving in, the old breed moves out. An example would be that apartments start being built in an area that's traditionally upper-class citizens, and those citizens start to pull their children out of school. Then, those places start attracting an apartment home citizen (which I was at one time, so I'm not being negative), and the education levels for those citizens is generally lower, and with lower education comes lower income and higher crime. Then, it sits like that until the other side starts moving back in. Does this sound like anywhere you know? How about the area of Brookhaven for the late 1980s through the early-mid 90s?

I do love the area, and if it was not a fad market, being the next hip place to live for higher-income folk, I would stay here for many years. When the time is right, I will say farewell to the area I enjoy, make my money, and stealing an idiom, laugh all the way to the bank.

Jeez Sara, walk over to Starbucks and get an iced latte and shiatsu massage...relax!

First of all, if in town works for you then go crazy. I was born in NYC and grew up there and on Long Island, I lived in Alexandria VA twice while in the Army...understand what city/urban living is. The problem with Atlanta is that all those wonderful things you mentioned about being able to do last for....a weekend? Atlanta is not anywhere near a major city in that regard and that's part of the problem it has. People LIVE and WORK in NYC, DC, Chicago, Boston, SF, Philly....and that dynamic fosters "in town" activity 24/7. This city is never going to be a "real" city, mainly because there's no boundary to the area but also because there's little to do. How many times can you go to the "attractions" in the city? At best it's an afternoon whenever a new exhibit rolls around - the city is a tourist magnet due to its location to highways. Coming from NC, I can see how you might be enamored by all lights, people, activity and diversity, so enjoy it.

Back to the point – my comment about the condos was for the city overall. I’ve completed hundereds of appraisal reviews on towers sitting half sold, floors undeveloped and units headed to foreclosure in the city. I wasn’t being specific to Brookhaven on that. As Ty pointed out, those great areas around Brookhaven also keep my appraiser friends busy, just Tuesday we enjoyed the surprise of a crack head falling through the ceiling as we were working through an abandoned home just a stone’s throw from Oglethorpe.

As for your experience, I appreciate that fire you have as it’s not often seen. With your “Rookie of the Year” award and multiple degrees you will undoubtedly be a guiding light for clients. My point was and remains the same, before you spout off party line pabulum about the wonderful in town market, do your homework. Your two degrees and Rookie of the Year experience can be put to use by reading the posts of Ty, Snor and Luke; when they wanted to make statements they offered something more than opinions – they explained their positions. Now, explain how you know Andy’s home will appreciate…Explain how “this is a great market” – what does that even mean?....You busted BW13’s chops and related your story about relisting your Ashford Park client at 325K in today’s market…If you want to get specific then crack a data source and bring something more than unsupported blah blah blah.

On the technology front, I’d be happy to help get your web site up to speed with a decent MLS search engine so all of the in town traffic registering on my site might try yours. Clearly you appear to know how to write, so why not try a few original articles – search engines love unique content. Again a caution; when you write ensure that your topic has a least a modicum of data supporting it. Oh, saw that you’re very connected with Gen Y clients, but my Gen Y clients refrain from using words like “diss”. TWO degrees AND Rookie of the Year????

That post from John Adams is fine; he’s typically good at hitting the high points. As an agent (and assumed expert) you’re expected to go deeper. But, let’s play with numbers and that claim you made earlier….your Ashford client paid 275K + 1.11% = 275,000 + 3,052.50 = what a minute….batteries must be screwy….Wait! Adams (another guy doing this since before you were born) said the vaunted in town (since Atlanta is only ITP as you pointed out) increased 0.02%....OK 275K + 0.02% = 275,000 + 55…55???? Must be a typo.

Last point, living OTP doesn’t preclude me from working ITP. This business is like making cookies – if you have the methodology correct and you are careful and judicious, you will be successful. I have buyer agents all over North Metro, I’m in the field everyday and work with them constantly.

I know you’re successful and I too enjoy the banter; it’s what makes the world go ‘round. I have to go….a group of minivan driving, Botox injected, hair dyed, cell phone yapping soccer moms got wind of your “dissing” and they appear to be headed your way…..

Hank

Sarcastic often? It was a take on value and appreciation I wanted to share with the group... jeeez...

Good article....I'm sure it is unbiased as well. =-)



John Adams is a broker and investor. For more real estate information or to make a comment, visit Money 99. Find previous articles by John Adams and more home buying advice on the ajchomefinder mortgage center.

http://www.ajc.com/search/content/homefinder/stories/2008/09…

A relivent article for this discussion from our very own ajc...

Back to the original question: Andy, my husband and I had a combined income of just over 100K, put 40K down, and bought a house for under 250K. We have excellent credit and no children. Two months ago, he was laid-off and luckily, we are just managing to squeeze by each month; if we were to buy anything close to your range, we would, frankly, be screwed. You can still spend less and get a great house in Brookhaven--say in the 300-400K range--and have the lifestyle you want to have...for me, lifestyle is a priority. Why would you want to buy above your means and eat ramen noodles every Friday night? If you are anything like me, childless and a lover of Intown, you will want to go out and enjoy all the great things the city has to offer. Its great that you are taking advantage of a down market and want to get a good deal, but you can spend 100k less and still find a good deal...so, yes, you are asking for trouble!

As for the string of arguments below, we can all agree on a few things: the condo market sucks, but luckily Andy is not buying a condo; Brookhaven is a promising area for someone who wants to live Intown. I am sure Andy already knows that it won't be all white picket fences like in the suburbs, but with his lifestyle and not having children, why not take advantage of all the great things the city has to offer?; and Andy has already acknowledged that the economy will bounce back, so we can probably all agree that single family intown is a good investment provided he weather the storm like the rest of us.

As for Ty, crime happens everywhere, even in the suburbs. Nobody is suggesting that Brookhaven is crime-free or some type of safe haven and as for poverty, it exists everywhere, so even if you want to move to say, Marietta, like Hank, you might have to drive by some "low-income" people. Give me a break! As for Sarah, I bet by the time you are Hank's age, in say, 20 years, you might be an "expert" in both Marietta and Brookhaven. Like you, I love Intown, so maybe Ty should give Hank a call and find him a place free of "low-income" folks somewhere far out there.

First: It sucks if you own a condo. I don't advise anyone to buy a condo in this market, unless it's an absolute lifestyle choice, or a "great deal" - there are a ton of condo foreclosures and short sales.

Second. YOU LIVE IN ATLANTA. If you want a 4,000 square foot, cookie cutter construction for under a million, you move to the 'burbs. If you like less cultural diversity, perfectly landscaped lawns, and soccer Moms then you move to the 'burbs. If you don't mind sitting in 2 hours of traffic to get home every evening, instead of the 30 minutes it takes to get to your intown home 5 miles away, then you should live in the 'burbs.

We live in an URBAN environment, that is a CHOICE that you made.

It costs more to live here, and there's more crime. Our streets do get congested, but I would take it over I-85 rush hour traffic any day. I'm perfectly happy to live in my 2 bedroom/1 bath, 1,000 square foot bungalow that I paid $250k for, if it means I can live in the midst of so many different cultures, can just pick up and go to a museum on a rainy Sunday, take the MARTA to Braves games, go drink beer at festivals all summer, and walk to our city's top restaurants (Parish, Fritti, Sotto Sotto, Shaun's). I absolutely love city living, and I probably won't ever change my mind.

It's not for everyone. Do I need to repeat that? It's not for everyone.

There are LOTS of cities out there in the world that it seems you would love living a lot more than intown Atlanta. You just seem really unhappy. Life is too short. I found my place in this world. You should go find yours.

Good luck on your journey....

"All I'm saying is that the intown market is totally different."

Not really...I live in Brookhaven currently for a little over two years now, and while it has a big upside, it also has a big downside. Take a drive down Dresden to see the low income people living there...I sometimes question my move because of the mileage proximity of about two miles. Then, with the city of Chamblee and Clairmont on the northside where crime statistics are not fabulous really is a downer too. All it would take would be for one person to cross the Norfolk Southern tracks with murder on their mind, and Brookhaven is no longer the upscale family residence it is now perceived to be.

I also have to agree with Hank that Atlanta is not the condo market that San Fran or NYC is because people are willing to drive a little farther because they can get nice sized lots and homes OTP. Is there a way for an agent to pull Terminus and Ptree Place to see how occupied they are? I would personally guess that most condo complexes in ATL are 60-70% occupied, based on my looking in the area. Also, if one checks the tax assessor records, that person would find that MANY people lose money in condos unless they bought and sold within 10 months. I was looking for a rental property at Atlantic Station about a year ago, and when I checked the assessor records, I would guess that 5-6 out of 10 sold for a loss. My experience with this has shown that it is because of two things; people get overwhelmed by taxes in these areas, and they get overwhelmed by HOA fees.

Example; A person, for $500,000, can buy a nice condo is Buckhead, where millage rates (City of ATL and Fulton Cnty) are approx 43.5, whereas if they live in Roswell, it's about 32. In this example, the first person pays $8500 in taxes, the second example pays $6500 for a difference of $167 monthly. Then, add in HOA fees, which I'll personally guess to be $500 monthly for a condo and $500 annually for a neighborhood home, and you're looking at a difference of $5500 annually, or $460 monthly. Together, $627 is the total monthly cost to live in a condo, which if rates are 6%, equates to a little more than $100,000 worth of extra house that person could buy OTP.

Hank,

All I'm saying is that the intown market is totally different. You couldn't pay me to live OTP and others seem to be agreeing with me. The movement is intown, correct? Absolutely correct! I'm not "dissing" you for living OTP - but you don't see me analyzing the Marietta market, do you? It's because it's a totally different beast. The "Greater Atlanta Metro Area" is WAY too large for us to all be experts through and through.

I showed property in Brookhaven last week. How about you?

They are selling tear-downs in Brookhaven for up to $300k. That's just how much the land is worth. We don't determine value; buyers and sellers determine value. I'm not just spitting out a lot of fluff, take a look at what has sold on FMLS. Read about the impact that new Brookhaven Station is going to have on the area. I'm in adamant opposition of my clients purchasing a condo in this market anywhere; you can look at any of my previous posts to condo questions to verify that. Truth is, is that Andy is buying a single-family home, in an appreciating area. I believe this is a very very solid real estate investment, and at what price point he chooses to buy is his choice. If he breaks down the payments, and wants to move on something that's out of his price range; then that's his call. I advise against it, but it's his money and his life.

Also, I appreciate you also pointing out that I've ONLY been in Real Estate for 2 years. Truth is, you've probably been in Real Estate since before I was born. I'm only 26, but was rookie of the year for my office last year, selling over $2 million in real estate in my first year. I hold two degrees, have a lot of experience in a lot of different fields, and an unbeatable work ethic. Also, I believe because of my age, I have an edge on you when it comes to my ability to navigate new technology and my commonality with the first-time generation Y buyers.

I'm sure you're a very knowledgeable Agent, and I appreciate your banter; however, I don't appreciate you downplaying my knowledge and my experience.

And Ty: If you want to buy a home in Marietta, I recommend Hank. If you want a Realtor who sells intown, lives intown, loves intown, and has a full understanding of what is going on in the intown market; then feel free to contact me!

Sarah

Mr. Hank Miller,

I've been reading your posts for some time, even though I recently started posting on this site, and I must say you seem to be the most levelheaded and logical realtor I've ever come across. I look forward to your insights in the future.

Save your money. Are you in a hurry to buy a house and lose money? Wait a few years, save your money, house prices are still declining. Rule of thumb, 3 x Gross income (ie 3 x 121K = 361K) is what you can reasonably afford. Be patient, that 500K house will probably be 361K in a year or two. Good Luck

@luke, its not about "trying to get him to borrow 100k less", you seem to be focused on what he was approved for and not what he can "afford". I just showed you how even a 417k mortgage could very very tight for him. I dont mean to point fingers at you but it just seems like realtors (who's job is to buy and sell homes) rarely have any clue when it comes to home affordability.

I understand why that is so, its because the bigger the purchase the bigger the commission.

You don't have to convince me - I'm trying to get him to borrow $100,000 less than he was approved for and keep a solid chunk of change in the bank. My only advice was to see how "easy/hard" a $417k mortgage is before embarking on such a lofty endeavor.

By the way Andy, we never even discussed what happens when/if you decide to start a family.

I'm just sayin'

@Andy and Luke,

THis is going to be my final post on this, it just seems like people cant calculate. So I am going to help you out here. Here is the math, since you make 121k combined, lets use that. Since you are married and have no dependents, your combined take home with no 401k, or medical or dental is $6442.62 per month.

So aprox.. $6442.62 per month. a loan for $417k @ 5.65 over 30years and property taxes of 3500 a year will give you a house payment of about $2900.87 that is almost half of your take home pay, no including any of the debts i listed below.

Plus with new house, you are going to want some new furniture.. Therefore 6442.62 - 2900.87 = $3541.75 is left to take care of the following below.

Retirement = 15% of 121k = $18,150/12 = $1512
401k
roth IRA
traditional IRA
$3541 - Amount left after mortage - Retirement $1512 = $2029

Therefore you have about $2029 left for normal expenses and savings.

Normal expenses.
- home insurance
- medical
- dental
- Car payment
- Car Insurance
- Gas for car
- food
- electricity
- Gas
- credit card
- student loan?


Long term saving for retirement..
401k.
Roth IRA
Traditional IRA

Wow, I better keep my head down as there seems to be fire coming from inside the perimeter.

Again Sarah, you know better than to say there's "record growth" for the intown areas, what exactly does that mean? Record growth in condos sitting empty? Record growth in inventory? Record growth in homes that were way overimproved for the neighborhoods and now sit foreclosed upon? Take a little time and pull deed transfer records, have a look at how many times the same home transfered at or below the original cost over the last three years. Many of the homes in Brookhaven are either tear downs or have had significant renovation; how well these will do when offered for sale in this market will be interesting. You can't tell me that owners of many of these homes in Brookhaven and other intown neighborhoods aren't worried right now.

Everyone will agree that Brookhaven is a solid area but you need to put down the agent talking points - it's OK to be honest about the market - the public isn't stupid and it's our job to advise them, not hypnotise them with agent babble.

Your two years in the intown Atlanta real estate world have given you a base, it might be wise to spend the next two thinking for yourself and doing the boring stubby pencil work and supporting what you say with data.

Also - I'll send a memo to the census folks that Atlanta is really only that area inside the perimeter, no doubt that will solve the entire Atlanta real estate crisis.

Sarah-
I can tell you that I consistenty get loan approvals for more than what borrowers tell me they want their payment to be at. Simply because someone has great credit and meets a banks "guidelines" for a loan, does not mean that they SHOULD get the loan. Everything is subjective to greater scrutiny. I am going to go out on a limb and assume that this is going to be the largest monthly debt this buyer has ever had in his life. I am also going to assume that this is either his first or second home he has purchased. Why he would not even want to try and see that a mortgage in a more reasonable range would not be more suited for him is beyond me. But when a buyer says that "He will need to make some sacrifices" that is a red flag right there because in my experience they never do. Why not just buy a home where you don't have to make a sacrifice?

Andy, you seem like a nice guy so here is my advice:
Rates are SICK right now but only on conventional products
Buy a home around $440,000 and put $23,000 down and keep $37,000 in the bank. Get a great conventional loan at a rate around 5.625%
Once you put that $60,000 into your home, you will NEVER be able to pull it back out, not for a LONG time unless you sell.
If you find affording the mortgage at $417,000 to be fairly easy then move on to bigger and better things.
That's my take - and it would still be my take if I could make triple off of your jumbo loan. This is just a matter of reason.
Good Luck!
Luke Allison
Flagstar Bank
828-777-8828
Luke.Allison@flagstar.com

This is funny. Snor's latest post actually has some useful information in it. I admit I am completely naive when it comes to a new house purchase since this will only be my second time. My wife and I are more interested in settling in the Brookhaven area because we like the area. I know the area is hot, but may not be a great idea to try to get the biggest house I can with the idea of making money from it. We are also trying to find the perfect place to live for the next 20-30 years.

The lender said we were pre approved for up to $550K but I know that is more than enough to get me in trouble. We will proceed with caution as everyone has suggested. Thanks for everyone's input.

Andy

Sarah, i agree with part of what you said, its people like him why we are in the problems we are facing now. He takes a loan for a property, he can "barely" afford. According to him of course "just need sacrifice on some things". Then he loses his job or something else happens then guess what he can no longer afford to keep the house, it goes into foreclosure or something. What is funny to me is that i know people around me, make upward of 250k and live in homes that barely cost 400 or 500k.

Andy i can see your future, you are going to become what we call "house poor". That is, nice house like the jones but have to eat sardines.. wise up. buy way below what you can afford..

Wow; The truth is, is that the mortgage market isn't in the position to back a loan that he can't afford to pay. That's what got us in the mess we're in now.

If he is pre-approved for $550k, then he can probably afford $550k, doesn't mean he should put himself in that financial situation; but that's his decision.

This is a great market to buy a single-family home in. Whoever tells you differently isn't in the Atlanta Intown market (which I don't include any of our suburbs in this category). We're experiencing record growth and the movement is toward the intown urban market.

Good luck Andy!

Andy-

Just an observation but if you got approved for $550,000 then you have a jumbo approval. I am going to go out on a limb and assume the rate is fairly high (unless you are in Greene County). I don't see why you just wouldn't take your $60,000 and put it down on a max $477,000 purchase and then get a conventional loan at no higher than $417,000. Rates on those are around 5.625% today.

Just a thought. Proceed with caution.
Luke Allison
Flagstar Bank
828-777-8828

Andy -

Go real slow when you bring anything to do with appraisals into the picture. An appraisal is merely an opinion of value based on the appraiser’s interpretation of the data. Put five appraisers through a home in Brookhaven and you’ll have five different opinions of value and likely five different versions of the home (style, condition, size, room count….). Appraisers are also like real estate agents – there are those that tell clients what they want to hear just to get business. These appraisers will push appraised value to keep getting assignments, one of the main reasons that we’re where we are right now. Look what's going on right here with opinions!

What the house is appraised for (or assessed for – two different things) and what it ultimately sells for are two different things. Just for the record, I’ve owned and operated appraisal firms here and in NY and I’ve completed several thousand appraisals and reviews. Inflated values are a continuous problem and one that we had back in 89-91 (S&L issues). The idea of federally regulating appraisers obviously did nothing to improve things as pressure from lenders to push push push squelched any regulation efforts. Bottom line is that there will always be a group within any industry that is motivated for the wrong reason – if GA would take things more serious (like NC does) and jail appraisers for fraudulent work, we’d be a lot better. I digress.

In short - buy a home to live in, not to get rich from; buy under your means; diversify your investments and use a realtor that you have carefully vetted. Not using a buyer’s agent is just plain stupid – this is what we do all day everyday and a skilled agent will save you money, aggravation and time. Remember that your representation is typically provided at no cost to you.

Snor, you are absolutely adorable! Just a few things:

1. Deal with an accountant??? Are you nuts? You think I'm made of Money?
2. Pen and paper to do a budget? Oh yeah we did that.... Since we have low debt and no kids we can make it work just need sacrifice on some things. Also, the Brookhaven area here in Georgia has appreciated a great deal in the past and there are some great deals out there. Houses that appraise for $600K are selling for $500K and under.
3. I'm sure if you looked hard enough you could find much dumber questions on this site than mine. It would be more appropriate to say this is one of the dumbest questions someone could ask this audience.
4. If my wife did leave me, because I have no concept of money, she would miss out on all of my loving and wonderful personality.
5. If you read all of the answers to my question you will notice no one said to go for it and make me you Realtor.
6. If you really are from Brooklyn why are you posting here? This question was not meant for you...
7. If my wife and I are not making $121K a year than our W2s and Turbo Tax are lying to us.
8. Stop getting drunk and posting your harassing opinions on this forum late at night. There is no way you have seen every bit of Pornography on the internet, so go do that instead.
9. Stop dressing like a woman! We can see your atom's apple so your not fooling anyone.

Respectfully,

Andy

Just felt I needed to clear something with Hank and hopefully Andy will read this as well. In recommending Agents to Andy the reason was Andy asked in an answer listed below "Anyone have an inside track on homes not yet listed between $400-$500K?", since Andy is the reason for this post and asked the question I only did what Trulia was created to provided and that is an answer. No solicitation was intended here and it is my word that I do not receive compensation for this answer.

As a real estate professional who has worked many years in the Buckhead area helping with listings and the agents who service these listings it has been my valued experience to know their work ethic. I have dozens of recommendations of agents in multiple areas of the city and I love having this opportunity to not only work with them but sing their praises. Maybe if you saw me recommending one agent all of the time anywhere in the city you could suggest that something more was going on with that relationship other then a simple recommendation but sincerely, that is not the case. I would also recommend you if I knew you and could honestly say the same thing.

As a Home Stager also note Andy is a buyer and not my customer who incidentally is a seller. I have absolutely nothing to gain with the exception of giving this buyer an answer to his question which is why we are all here. I love real estate and the opportunity to be here in this space. That is the simple truth.

Hank Miller,

That is one of the best posts I have read on this site in quite some time. I applaud you. Being home buyer myself and reading the constant cheerleading, it is truly refreshing to read that.

Although many people will probably disagree with this, most people who know a thing or two about finance will say that you should spend between 2-3x your annual income on a home. Actually, one person said you should spend about 30% of your net monthly income on a payment, which ends up being in the 2.75x range. I personally believe this to be a wee high, but that's just my opinion.

So, this means that with zero down payment, you're looking at between 242,000 - 363,000. With a 60k down payment, you're looking at 303,000 - 423,000.

Your monthly income is likely about $7000 ((121k / 12) *70%), and a mortgage of 423,000 at today's rates of approx. 6.15% would be approximately $2600 monthly (423k *.0615 / 10). P&I in this situation is 37% of take-home pay. If you have other debt including CCs, car payments, etc., you need to seriously think about a purchase this large.

This is also going to be very unpopular, but I've never used a realtor personally when buying or selling and have always found deals to be easier to complete without their intervention. The reason? Pay 3-6% of the purchase value as a seller, or have the agent have to split his/her commission with someone when using an agent to buy. 400,000 * .06 = 24,000. If a person doesn't have to pay that, they'll generally move their price down a little more and save you money.

Well I guess I'll add fuel to the simmering fire....

Sarah I know you know your biz and have repeatedly given sage advice...But...I don't necessarily agree with your opinion that you could flip that home right now for +50K. Even nine months ago the market was better; the current economy is in shambles and we are a looooooong way from getting out of this mess. I too love Brookhaven and think it's a great area, but there are many great areas and great homes that are being listed (not sold) for less than cost - listing price and selling price are two different animals. I think everything we know as realtors has to be challenged right now - this economy is going places no one has been. The idea that a home will double in value every 10 years (standard expectation) is long gone, in that respect I agree with BW13. Buy under your means and diversify – how many folks lost everything over the last few months? We as agents might need to back off the cheerleading - this country is in trouble and while we'll recover along with real estate, we need to be a lot more pragmatic. Not everyone should buy a home and not everyone can afford what they want, sometimes we have to be the ones to tell a client that.

And while I’m at it, Lisa can you give it a rest with the agent recommendations? Two answers and three agent recommendations with little on topic commentary is a bit much. Obviously your opinions are welcome and every one of us “offers” help (sure we want clients!) but your answers are little more than a solicitation. We all do it, but reading these posts yours jumps right off the screen.

Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
REMAX Greater Atlanta
678-428-8276

Bw13 although has good intentions, but knows absolutely nothing about the Atlanta Intown market.

I sold a home to my client in Ashford Park, which many consider part of the greater Brookhaven community, 9 months ago at $275k, and I would easily list it today for $325k. That's a lot of appreciation in that short amount of time. Buying a single-family home in Atlanta, in the right neighborhood, is a solid investment, that you'll see a nice return on in 3-5 years. You have to pick the right neighborhood though, and the greater Brookhaven area is up in my top 10 for sure.

Every market is different. It varies by state, by city, by neighborhood, and even by street here in Atlanta. Take that into consideration when you're reading through these comments

High 400's and low 500's would be OK as long as you already have sizable retirement accounts outside of any profit you might make from you house, as well as proper life insurance. Don't forget the cost of owning a higher end home are much higher. But as long as you don't mind living cheaply and not traveling and that sort of thing, you should be able to swing it.

As far as the economy bouncing back you are looking at a 10-15 year timeframe for the values to increase to a point where your investment would be more profitable than an average intrest money market account.

All that said a combined income in the low $100s isn't really that much money any more, especially if the main investment you have is your house. Too many people got in over their heads thinking of thier homes as a super way to make money. An average household income with a more than average mortgage could get you in trouble --FAST.

Just because you like it, doesn't mean you need it. Making wise financial decisions should just be based on one thing, like "can we make the payments." Instead you need to consider your entire financial picture and use your resourse to build wealth.

Hello Andy, glad to see your reading them all and I agree there are some great answers here. I mentioned earlier that I am not an agent and let me add I will not earn any income from this answer to your latest question. I give you these two suggestions only to help you find that perfect home for you and your wife. Personally I love Brookhaven so I'm hoping you both find what you desire. Here are two agents I know for certain work the Brookhaven community. They are both hard working great agents who really know their stuff. I've been at a closing with Deborah for a mutual client (since I home stage) and seen first hand how strongly she performs for her clients. She was even smarter then the attorney. In either case you will be more then happy with either one and I mean that sincerely.

Mikel Muffley & Associates (I know Mikel only)
404.419.3500 X3666
web | http://www.muffleyhomes.com/

Deborah Brown
Keller Williams Realty Brookhaven
404.849.0300

Okay maybe im the only one that doesnt want your business.... Its too high. Even if you have 1 child. If you have no kids then maybe it works. Whats more important the couch your sit on or the memories from a vacation. If its the couch you sit on, go ahead and buy it. It you have kids... its way too much. My opinion.

Wow what a bunch of great responses!!! Definitely some things for my wife and I to think about. We already have an excellent Realtor that we're working with. Unfortunately, we keep seeing the same houses for sale week after week with very few new ones coming onto the market.

Anyone have an inside track on homes not yet listed between $400-$500K?

Hi Andy,
Personally, I always tell my clients to go for a house than is less than they were approved for. Approved numbers are in a perfect world. I love the Brookhaven area too and think that you could probably find something pretty spectacular for lower than your pre approved amount. Hiring an agent that is an excellent negotiator will help. I just saved my client 15% off a new construction house that we closed on Monday. With that in mind, $500K could get you down to $425K. Take a good look at your budget, figure out what you spend in a month. How much higher would your payments be than they are now? Life changes, you need to be comfortable if your paycheck changes, an unexpected bill happens, etc. If you are still interviewing agents to work with you, I'd love the opportunity to speak with you.

Jennifer Bowman, e-PRO, ILHM Member (Institute for Luxury Home Marketing)
Success Realty
404-456-5024 http://www.JenBowman.com

Andy,

Wow - you've gotten some good and extensive answers... I think everyone wants your business :)

I really think it depends on your jobs and if you will be maintaining both of your current jobs at the same salary or higher through the next few years. Also, is one of your jobs salary + commission? Rely on the salary base, but not so much on the commission. If you rely too much on the commission or bonuses, you could end up house poor.

The best and most simple answer: Spend an entire month, tracking and breaking down your expenses. Basically, see where you are spending your money. See if you can maintain the kind of lifestyle your both used to (eating out, traveling, going to the movies, shopping, etc.) and what kind of money you have left over. Can you afford it? If you can't, are you willing to give up some aspects of your spending habits to make it work? You can adjust what you're willing to spend based on this.

Also, the sale price is negotiable. Make sure you have a Realtor that understands this, and will represent your best interests.

In response to Ben: Buy your home together. Unless you foresee you and your wife parting ways anytime soon; you should both be involved in the search, and purchase of your new home. I don't know what he's thinking...

If you have any additional questions or concerns, please don't hesitate to contact me personally. I would love to guide you through your home search!

Sarah Turner, Realtor
404-323-9976
sarah.turner@yourownsanctuary.com http://www.ATLUrbanSanctuary.com
Sanctuary Real Estate
make it your own
300 North Highland Avenue
Atlanta GA 30307

Hello Andy,

You took the first step into making an informed decision by asking questions. Many people step into the process of purchasing a home with their emotions and tend not to do their homework. I applaud you for taking the time to to search wisely.

Your first step would be to get pre-qualified through a reputable lender. You could shop on line for the best rate for your loan, but I would also consider asking your friends and associates for a referral. This way you can narrow it down and meet with them to discuss what they have to offer. I also recommend doing the same thing for a Realtor. Communication is a major component. You will be working with both the lender and Realtor while making one of the most major decisions of your lifetime, so it is imperative that communication lines are open.

Brookhaven is a wonderful area and there are many opportunities awaiting you. With the help of your Realtor and knowing what you actually can afford, he or she can assist you in finding the best value for your dollar. I would be leery of anyone who states your property will appreciate quickly or have instant equity. The market is unstable and no one can predict how soon we will come out from this economic messaccurately.

I agree with Hank. Life happens......there are many changes in your circumstances and the world around you that will have an impact on your life style. Be wise, create a budget and don't become house poor.

If there is any thing that I can do to assist you in this process, please don't hesitate to ask.

Aleta C. Saunders
Marquis Brokers

aleta@marquisbrokers.com

678-849-6920 Cell

Andy,

I might want to add, Congratulations to you and your wife for having "Excellent Credit"! This is something to be proud of these days..Since of course credit score can cause your monthly payments a huge increase or decrease! If your family is attracted to homes in the $400K-$500K and you have earned this lifestyle than only you can determine what "house poor" means to you..Have a lender give you hard numbers and see if your monthly lifestyle can support this type of mortgage! I don't think this is an unrealistic goal! Honestly speaking though, find your favorite neighborhoods and lets get the best deal from one of those! Still use the art of negotiation and have your agent work for you to find a great investment long term!

:) Valerie Corpora-Ellis
770-262-8480
vcellis@kw.com

You probably should think twice about buying a house on two incomes, especially in this economy.

Allow me to be the first to answer who is not currently a real estate agent but who is a real estate professional for 20 plus years, 6 of those years here in Atlanta as a Home Staging Professional.

The first thing I think we should address is this isn't a normal market so almost all "rules of thumb" no longer apply. Our country has never been in this type of economic shape and so many variables exist with an upcoming election and the capital markets condition not to mention the banking situation. The point is the 6 month of savings of monthly expenses rule is no longer enough. It was a good rule in normal conditions when the state of our economy was balancing back and forth between periods of time that were much shorter then today however, we do not presently live in those times.

The truth is Mack Perry asked some very good questions and without those answers it's not fair to give you a green or red light. I also agree with Tony Teixeira regarding his company Muffley & Associates. This team really works the Brookhaven area and are deeply involved so they will most likely be able to find deals that others are not aware. Often times there are listing not yet on the market but a team who is concentrated on a certain area could possibly have insight on those deals.

Again I'm not an agent but I do recommend finding a good one. Strategy is key here and you may be timed correctly now or you may need to iron a few things out first. I don't think you are running against a clock to find a good deal as the market is indicating we have time to find them but I will say this, a deal is a deal is a deal and if your ready after answering all those questions and a deal exists for you to begin living in the neighborhood you desire you should move on it then. There is a balance of a good deal and quality of life to consider here so waiting for the best deal is not always the right decision as your quality of life will have to be on hold until it arrives, when ever that is.

Really hope this helps and good luck.