Expiration of the Federal Housing Administration's Property Flipping Waiver

The following information comes to us via a well-known loan officer in the Henry County Market.  Her name is Debbie Miller with Heritage Bank in McDonough, GA.

Debbie Miller is an AVP, Mortgage Banker and can be reached at 770-288-3155, office or 770-630-6579, cell.

Today, the Federal Housing Administration’s (FHA) Office of Single Family Housing announced that the temporary waiver of FHA’s regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, expires on December 31, 2014.

The waiver applies to all sales contracts executed on or after February 1, 2010, until 11:59 PM, December 31, 2014. FHA deems a sales contract to be executed when all parties to the contract have signed the contract, and the contract is enforceable under the law of the state the property is located. Mortgages that are made on properties in which sales contracts have been executed after 11:59 PM, December 31, 2014, are not eligible for a waiver of the regulation prohibiting property flipping.  

FHA will not extend the waiver beyond December 31, 2014.
Section 203.37a(c) lists the sales transactions exempt from this rule.The exempt transactions include sales by HUD of real estate-owned (REO) properties under HUD’s regulations in 24 CFR part 291, sales by other federal agencies of REO properties, sales of properties by nonprofit organizations that have been approved to purchase and resell HUD REO properties, sales by state- and federally-chartered financial institutions and government sponsored enterprises (GSEs), and, upon announcement by HUD through issuance of a notice, sales of properties in areas designated by the President as federal disaster areas.  The regulation, including its exemptions, is still in effect.

Open concept homes

Traditional older home or open concept?

view FROM Kitchen

Buyers today will often choose an open concept because they have been told by decorators that it's the way to go. You can see everything! You can watch your children while you are cooking! You can all be together! You're not alone in the kitchen!

But is that really what you want?

I live in an open concept home. My sink is adjacent to a half wall in the living room. My husband's chair is just on the other side of the half wall.

He loves for me to cook, he loves my baking. I love  him to make the coffee every night for the next day.

But when I'm mixing things in my beautiful KitchenAid mixer, or he is grinding the coffe, neither of us can hear the television.

View TOWARDS Kitchen

So, when you are looking at home, try to evaluate how much should be open and how your family uses the rooms in your home. It's not all it's cracked up to be.

Take it from someone who knows.

They are going to find out!

I'm not one to use slang or to be vulgar (if I can  help it).  But a phrase that resonated with me from a political campaing had to do with putting lipstick on a pig.  Although I think this is an indelicate phrase, it gives you a a really powerful image.

Recently I had the privilege of selling a home in our area that had been a rental.  I was heartened when the homeowners announced that they were going to update some items.  They also announced that they were going to repaint some rooms and give the bathrooms a deep clean and take care of some deferred exterior maintenance.

Woohoo!  This was music to my ears.  As an agent, I didn't have to cajole and discuss the virtues of getting the house ready for market.

So, imagine my surprise when the home inspection was done and there was a laundry list of deficiencies found.  When I contacted the seller to discuss the inspection results, and was discussing one particulare repair which I was certain would be a quick fix (HA!), they said "Oh yeah, we know about that, we tried to fix it and it didn't work."

Huh? You knew about it and thought what, it would go away, they wouldn't notice?

Of course they noticed and found it as well as a myriad of other problems (which the seller also knew about) and wanted them all fixed.

After 20 years of real estate in and around McDonough, GA, this is what I know:  Buyers will always overestimate the cost of repairs.  The last thing the seller should have to worry about after they are under contract is what is going to turn up during inspection/due diligence.

When discussing the sale with sellers, I ask them, Is everything in good working order? Are you aware of any thing that is in need of repair? Is there any deferred maintenance?  We walk around the house and we discuss things they know about or that I notice.

Some folks are maintenaance fanatics and the house is in great condition. Others don't have a clue (even thought the house is falling down around them). So, I play it by ear and  try to address any issues before we go on the market.  It is always better for the seller to make needed repairs while they are not be under pressure to make a quick decision once presented with a list of repairs after the buyer has their inspection.

Please, if you are the seller, do yourself a favor and get the house in good order before you put it on the market, or price it to compensate for condition and items you don't want to deal with.  If you don't know what might come up during inspection, have your own inspection.  Disclose it as part of the listing materials and make any necessary repairs and provide receipts for the repairs.

If you do this, the buyer may very well not do an  inspection and rely on yours.  Or if they do their own, they may find nothing at all and you will be one step closer to closing.

photo credit: Mike Licht, NotionsCapital.com via photopin cc

100% Financing for Rural Buyers

Below is great information about USDA Loans shared by Debbie Miller of Heritage Bank in McDonough, GA.  

If  you have never heard of these loans, they are for people who wish to buy homes in rural areas.  The loan is a 100% loan - no down payment required.  There is a fee involved and the home has to be located in a designated area.

So, if you have questions - call Debbie Miller - her contact information is below.  Once she gives you the nuts and bolts, give me a holler!  I wold be happy to help you find a home.

With the start of USDA’s fiscal year on October 1^st, the following two important changes become effective for the Rural Housing program.

·         Increased Annual Fee

o   Effective with all new obligations as of October 1^st, 2014, the annual fee will increase from 0.40% to 0.50%.

·         Eligible Rural Housing Areas

o   Barring any further Congressional action, the changes to the eligible rural areas that were announced at the end of last year will become effective on October 1^st.

o   Please consult the USDA Income and Property Eligibility web site for details on the areas that will be affected.

§  http://eligibility.sc.egov.usda.gov – Choose the tab for “Future Eligible Areas”

o   For the state of Georgia, the major change will be the removal of Chatham County from the list of eligible areas.

o   For the current eligible areas, USDA will accept complete submitted applications through September 30^th.

Debbie Miller | AVP,Mortgage Banker

2125 Keys Ferry Court, McDonough GA 30253

o: 770.288.3155| c: 770.630.6579| efax: 404-829-1747

Apply| Email | Linkedin   nmls #588646

Unexpected Consequences - Insurance woes.

Earlier this year, I helped a very nice lady sell her home in Stockbridge.  She had lived there for 20 years.  She was devastated about the sale.  It was a very hard decision for her.  She had taken care of the home, lovingly.  It was in excellent condition.  The reason she sold – she no longer felt safe.  A new “element” had moved into the nearby apartments and into this cute little subdivision.  Now, there were numerous rentals in her sweet little subdivision and she was no longer sure of who belonged or didn’t belong in the subdivision.  She had been broken into twice – horrifying for someone who lives alone.  As anyone would, she placed two insurance claims to cover the damages and the loss of her valuables.

So, we put the home on the market and it sold almost immediately.  It was purchased by an investor; it, too was going to be a rental.  We got through the next few weeks without incident until the day of closing. 

My client had moved out of the home early, even though she had a couple of days after closing to actually move.  She had been moving a little at a time.  The day before closing, she took some things down from the attic and left them on the counter.  They were the last things that she was going to move out on the day of closing.

So, the day of closing, she went to her house for the last time and her key no longer worked. There was a mechanical (non-Realtor) lockbox on the door. The locks had been changed.  She called me in a panic. I immediately called the selling agent to see what she knew about this.  Apparently, the buyer’s staff had mistakenly gone to the house and changed the locks.  But, the most horrifying thing was that her possessions had been taken as well.  She was devastated and in tears. 

When an investor buys a home, they hire people to go in and empty the home - they call this a "trash out".  The good news is that we tracked the workers down and I insisted that they come to closing with her items with an admonition that if anything was missing, we were not going to close.  They came with everything and we closed – end of story, right?

Not so fast.

We started looking for her new house after about a month or so.  We eventually found the cutest home.  She worked with my preferred lender and everything was going along just beautifully.  Until… She started to arrange for her homeowner’s insurance. 

Typically, insurance for such a well-qualified buyer on a purchase price of just over $200,000, should have been between $750 to $1,000.  Imagine her surprise when she couldn’t get insurance from her previous company, nor the next several “big names” she tried.  Imagine her greater surprise when she was quoted $1,800!  Why, because she had had two claims in the same year.  Imagine what this cost would do to a less qualified buyer.  That additional $65 per month could have easily derailed her purchase.

Moral of the story – if you are planning to buy a home and have had recent insurance claims, you may be rendered uninsurable or may have to pay much more than the going rate. This could impact your qualification and force you to buy a smaller home.

To avoid this problem - when you get pre-qualified for your mortgage, don't wait to get a quote on your insurance.  Usually, you only have a set number of days, per your contract, to get full approval for  your mortgage.  Since the amount of your insurance will impact what you are qualified for, you should check on your insurance within your financing contingency period.  

Georgia Association of Realtors(r) Convention - February 2014

I am so fortunate to belong to this trade group.  The Georgia Association of Realtors(r) is the largest trade association in the State. February 3. 2014, was the first day of convention and we were able to go to the Capitol in Georgia to make our voices heard.

This is the Metro South Association of Realtors(r).
I am on the left in fourth row next to railing.
Altogether, there were over 750 Realtors(r).

Did you know that thanks to Realtors(r), the Association was instrumental in having  HB 872 passed that provides a mechanism to track the sale of metals?  The bill provides that if someone sells copper (or other metals) they must either have a license as an HVAC contractor or must show a receipt for a new HVAC system (thus necessitating the disposal of the old system).  There is still more work to do. We are asking our area legislators to fund the bill - we need the budget to have an appropriation for $150,000 to be able to track the sales of these metals.  Stand up and be heard. Let your legislators know this is important.

As homeowners (and owners of more than one rental property), we have had units stolen three times - that's a lot.  Who wants to go through the hastle of having a stolen hvac unit replaced?

As a Realtor(r), I have had my share of stolen pipes and hvac units to deal with on vacant homes that were vandalized.  So, get behind this measure and let your representative know how important it is to fund the bill so it can work as intended.

water heater closet smashed
to find pipes

copper pipes cut off water heater

Wall adjacent to bath damaged to get
a skinny pipe out of the wall

There is another bill coming up relating to solar panels and who has the right to install solar panels and whether someone's desire to install the panels trumps HOA covenants and ownership.  By ownership, I mean, should a tenant have the ability to install panels without the owner's consent.  The way the bill is currently written, it trumps private property rights.

It was a great day and filled with information.

We learned from the Speaker of the House that there were 218,000 jobs created last year in the private sector.  Also, the Port of Savannah will be widened and deepened allowing bigger ships to be serviced at that port.  This will definitely boost the importance of this Port in the South. Stacie Abrahms, the House Minority Leader, stated that we are a "Business Friendly State", but that we Realtors(r) make it a Family Friendly State.

Lastly, we heard from NAR's Chief Economist, Lawrence Yung, that homeownership is at an all time low. We need to get out and educate people as to the benefits of home ownership.  That was echoed by one of our representatives.  In this particular corner of Clayton County, the representative stated that many people don't know the steps to take to buy a home.  Homeownership is important for many reasons.  One fact that Mr. Yung brought out is that the net worth of homeowners vs. renters is approximately $200,000 for homeowners vs $4,000 for renters.

We also learned that of all the real estate transactions done last year (2013), 86% were done by real estate practitioners who are proud to call themselves Realtors(r).  As your South Metro Atlanta Realtor(r), I would be happy to  help you with seller and buyer representation.  Call me, I'm here to help. There are no stupid questions.  If I don't know, I will find out.

Featured Home 4th week of January, 2014 - McDonough, GA Home listed at $1.695 Million.

Wow, I guess in my next life, I can buy this house.

This $1.695 Million home is situated in Henry County's premier Golf Community, Eagles Landing.  The pictures are to die for.  The seller is represented by Atlanta Fine Homes, Sotheby.

As of this writing, it is the most expensive home in Henry County.  If you are interested in seeing this home or others, don't hesitate to contact me to schedule your private showing.

Choose the #1 company in Georgia to represent you when you are ready to buy or sell your Luxury Home. Berkshire Hathaway HomeServices Georgia Properties,

(If the link to the property does not work, that means it is no longer available. Not to fear - I have more.)

Want to search for homes as you drive through Atlanta area neighborhoods?  Download my free mobile app - it searches both MLS and FMLS!

Either 

• text BuySouthSideAtl to 678-400-6100 or 
• go to this link :  http://app.bhhsgeorgia.com/CarlaHaight

Flipping 101, Part 2

In Flipping 101, we were exploring the posibility of buying this little house to flip.

Yes, you guessed it. We are not going to buy this little house.

We could not get the numbers to work. We are just devastated.

Here is the original foot print. This is a modest, 1963 ranch with a carport and an outside entry laundry room, 1000 square feet. We were going to convert the carport to a bedroom and turn the laundry into a bath, adding 200 square feet.

Here are a few Things we did not count on:

• Rewire the house - $4-$5 per square foot - $4,800 to $6,000.
• Install an LVL- that's a beam.
• Plumbing costs- about $5,000

Add that to demolition and framing, about $12,000

That's over $20,000 and now there's

• interior painting
• exterior painting
• kitchen cabinets and counters
• some HVAC work
• bathroom tile work
• some landscaping...

We were going to do some of this ourselves, but there's still cost of materials.

We had a contractor give a preliminary estimate. He  said "Moving Plumbing is easy''. I heard  "Moving Plumbing is cheap''. ..

He gave an initial estimate of $15-18k and that morphed to - mid twenties! Then the final came in at $35,000!

So, we can't buy the house, because as a flip, the numbers don't work. If your going to live there, it would be fabulous. And actually, you may he able to buy it with an FHA 203K (not KS) loan. You can't do the 203ks because there is some structural work and that loan type does not allow for structural.

Moral of the story: insist on full, accurate figures before you buy the house. We had a due diligence period in order to check everything out and, unfortunately, had to terminate the transaction prior to the end of the due diligence because of our budget.

It would have been nice, don't you think?

The measurements are pretty accurate -just trying to give you a quick visual.

What to look for when renting a home.

This 3 bedroom, 2 bath ranch is a great example of what a tenant should be looking for when renting a property.

I handle some rentals for my company.  Berkshire Hathaway HomeServices, Georgia Properties manages the properties. I am the front-end and back-end person.  I advertise the homes, meet prospective tenants, show them the property, arrange for them to make application and when/if accepted, I execute the lease with them and collect the money due and move them in.  At the end of the lease, I do a final walk-thru with the tenant and re-secure the home for re-rental.

We always try to ensure that the home is in turn-key condition before we put it on the market.  It's really no different than selling a house.  In my experience, the better the condition, the faster it will rent. If you are the owner, you always want to make sure that there is nothing broken or breaking.  It will only get worse.  Some tenants are more careful than others with your property.  Some will not report things that need attention - for no other reason than they don't know better.

For example, the home in the featured video needed a new bathroom floor because the original floor had developed a crack.  It was just a  hairline crack, but it seemed to go right under the toilet.  Now, it didn't crack for "no reason".  Since we own this home, we decided to investigate if there was an underlying leak that contributed to the crack.  If the there was a leak, the subfloor would deteriorate and then we would have a major problem.  We checked it out and there was a minor leak, but we think the flloor cracked because of normal settling and age.  So, we pulled it out and  put in a new, modern floor. BTW, we = our contractor, Mike Waldner.

Then, we discovered that the master bath shower had some loose tiles.  With some careful repair work from our very skilled contractor, Mike Waldner, that tile is as good as new.  He carefully removed the tile, cleaned up the back, repaired the wall behind the tile and re-installed it.  The tenat should have told us about this.  Actually, that shower backs up to the other bathroom.  Some of the water from the shower could have been running toward the floor in the other room.  Left unresolved, this could have been a catastrophe and could have lead to mold, rot, unsafe, unhealthy conditions.

We like to give the home in clean, ready to move in condition. All homes need maintenance.  This one had a new roof and fresh exterior paint a few years ago.  This year it had new carpet and fresh interior paint along with the bathroom maintenance.

I have rented in the past and there is no greater turn-off than looking at someone else's dirt.  As a landlord, you cannot expect top dollar unless you give a good, quality property in good condition with everything in good working order.

As a tenant, be sure to speak up if you see something in disrepair.  Make sure any deficiencies ar written in your move-in inspection form. If you don't, any issues could be assessed against you when you create your move-out inspection form.  These forms are for your and the landlord's protection.  Check out this video again.  Good Condition Home

If the home your looking at is not spic and span like this one, you might just want to keep looking.

And, landlords:  if you are not getting a tenant quickly, you might just want to re-evaluate the condition of the property you are trying to rent.

Flipping 101, Part 1

I've watched all the rehab shows. So have you. Flipping Boston,  Flipping Las Vegas, Flip or Flop - more titles than I can remember. Hours and hours of TV- ideas, successes & major problems.

I am a real estate agent. I've been in hundreds of houses. I've been through countless inspections, I'm a major DIYer. My good friend Essie is an excellent decorator & loves "the idea" of doing a flip. We looked in earnest for a couple of months last year & couldn't find anything.

Then there it was. Another friend listed this little, old house-only 1,000 sq.ft. I looked at it for a client. It was a sad little house, my client didn't like it. It hung around. My friend had some nibbles, but no one bought it. The owners eventually lowered the price & after much thought & planning Essie and I decided to buy it.

We are being careful. She talked to her financial planner. I researched the market. I talked to an appraiser. I had a contractor look at it to see if we could make the changes the house needed & still make the numbers work. Possible sales price minus purchase price minus rehab costs, should give us SOME profit. It SHOULD work.

So, we wrote an offer. It was accepted! YEAH!

Contactor called ... he thinks he is off by $3-5K! what???

It's O.K. we got it for a good price. Had the inspection today. Went pretty well. Found out the HVAC is pretty new -YEAH! Found out we might not be able to remove some walls
without extra support, yikes!

It's O.K. still in due diligence phase.

Stay tuned. It's going to be so pretty when we're done! We're refinishing hardwood floors, new cabinets, granite counters, new windows, adding a bedroom & bath. Oh my goodness!

I really hope it works, it will be so pretty when it's done....

See Flipping 101, Part 2