Choosing a Real Estate Professional
Many people incorrectly assume that real estate agents are all basically alike and that having a real estate license is the sole qualification necessary to represent the interests of a buyer or seller. This misunderstanding has resulted in incorrect advice, unmet expectations, financial misfortunes, and broken friendships. There is a better way.
How can we serve you?
As licensed brokers, investors and general contractors we are uniquely qualified to serve you as your real estate professional.
As brokers, we perform all of the functions associated with real estate brokerage. This includes buyer and seller representation. Our goal as a broker is to represent your best interests and approach all aspects of the purchasing of your home with this as our guiding principle. Combining this principle with our 28 years of real estate experience, we become advocates for our clients’ best interests. As seasoned advocates, we deliver a host of benefits to clients: Our client’s routinely purchase homes at significantly less that they are listed, the process of buying a home becomes far more predictable, and our clients generally receive lower interest rates and closing cost on their mortgages through the lenders that we have a long term relationship with. In the end our clients save money, and experience less worry and anxiety as we negotiate on their behalf to create more desirable and predictable outcomes. Our goal as your advocate is to serve your needs and represent your best interests.
As investors, we are able to assist in the financing of your new home. We do this by structuring your offer, if needed so that the seller can provide a second mortgage. This is especially helpful since underwriting guidelines for new loans have been tightened making it more difficult to get higher loan to value loans. Additionally if the seller does not want to keep the loan we will purchase it from them, thus eliminating any reason for them not to provide a second mortgage. This may not apply to all our clients, but for many this allows for them to purchase any home they would like without regard to whether the seller would want to participate in the financing long term.
Through our affiliate general contracting firm we can coordinate any desired or required remodeling work on the home you purchase. Having purchased and renovated over 400 houses over the last 29 years; we are able to assist you with any improvements that you may want to make to your new home. Recently we have successfully negotiated for new roofs, hardwood flooring, granite counter tops, painting and carpeting, as well as provisions for room expansion and basement finishes. Many of our clients have found this a tremendous benefit to working with us. They can now consider purchasing fixer-uppers, foreclosures, and homes that have been well maintained but are in need of upgrading; at cost that saves them thousands of dollars. This way they get the home they want in the condition they want it.
How does the process begin?
Increase the likelihood that your goals will be achieved. Having an effective strategy to approach the purchase of your home will increase the likelihood that your goals will be achieved. Over the last 28 years we have found that if we take the time in advance to discuss the process it usually saves time and energy, and usually saves money.
We generally like to arrange a time where we can actually discuss what you want to accomplish with the purchase of your home. If convenient meeting at our office offers many benefits, but it can also be accomplished over the phone or at your home or office. This discussion will include family needs, both current and future. Financial issues, including affordability, financing, and investment perspectives on the purchase of your home. Additionally this is a good time to discuss the features you are looking for in your home, and to actually perform searches on the computer to see how the available inventory compares with your guidelines and needs.
Time permitting we may also want to discuss when we will look at homes, what times work best for you, and the time frame in which you hope to accomplish the purchase.
One final topic to be discussed will be the type of representation that you prefer. Because this is such an important topic; I will address it more completely in my next communication.
Should I be a client or customer?
Over the last 20 years the legal relationship that a real estate professional has with a buyer or seller has seen significant changes. Most all of us are familiar with the relationship that exists between the listing broker/agent and the seller; they sign a listing agreement and that broker/agent represents them in a way that is supposed to reflect their best interest. In years past all other brokers/agents that showed properties listed by other brokers to their customers were in fact legally representing the sellers as sub-agents of the listing broker. Needless to say this caused a lot of confusion. Buyers thought that they were represented by the broker/agent showing them homes, when in fact that agent represented the seller. Imagine that, sharing personal information with your agent who was legally obligated to provide it to the seller in order to represent the seller’s best interest.
This Has Now Changed
Today in the state of Georgia, the relationship between a broker, their licensed salespeople, and the clients they represent are modeled after the same laws of agency that apply to attorneys and accountants. This means that you should select your real estate professional in much the same way you would an attorney or accountant. If you were facing a life-defining legal issue or a financially-defining tax issue, would you want someone with little or no experience representing you or someone with a proven track record? The answer is obvious: You would want the most qualified, experienced person you could afford. By securing the most qualified person, you will increase the likelihood of achieving your desired outcome. In fact, experienced real estate professionals pay for themselves.
What Does This Mean to You?
Unlike years past where you had no choice in how you would be represented; you now have a choice. Not only must you decide on who will represent you, but also how you want to be represented. You now have the option of choosing the type of representation that sellers have always had; that of a client, or choosing to be a customer. The differences are significant.
To help you understand and evaluate your representation options we will provide you a copy of an Exclusive Buyer Brokerage Engagement as well as the Non-Exclusive Buyer Brokerage Engagement and Customer Election Exhibits.
What happens now?
After reviewing the representation options and electing to be represented as a client we are now ready to move forward with the search for your new home.
Customizing a Search Just For You
Our real estate software allows us to create very unique custom searches which can be stored on your own private web page. This will allow for us to customize our search to reflect the features you are looking for in a home, and to exclude homes that do not meet your needs. This will save you an enormous amount of time. Once saved each time a new property comes on the market that matches your criteria it will be emailed to you. This way you will know within hours of new inventory coming on the market. Just check your email and access your private web page by clicking the link provided.
Talking With Lenders
Unlike many agents that merely assume that the financing is a non-issue we consider it very important. Because of this we encourage you to have your financing in place prior to us showing you homes. This can be done in a matter of a couple of days and will result in you being fully approved for a loan, subject only to finding the right home. Again, unlike many agents we play an active role in helping you select not only the right lender, but the right loan. This has resulted in our clients saving thousands of dollars in origination cost as well as thousands in interest expense over the life of the loan. Additionally being fully approved for your loan will go along way in encouraging a seller to consider your offer; even if it is not what they had hoped for.
Things to Consider
Listed below are a few things you will need to consider as you pursue your loan.
- How long can you lock in a loan for without incurring a charge?
- Finding out what charges are involved. There are two kinds of points, pre-paid interest points which lowers your interest rate and origination points which is basically a fee to get the loan. Both can be negotiated.
- Do you want a fixed or adjustable rate (ARM)? Adjustable rates are lower than a fixed rate for the first few years but can go up whereas a fixed rate never changes.
- If you go with a fixed rate do you want a 15, 20 or 30year loan? If you can afford the higher monthly payments of a shorter-term loan then you will pay substantially less interest over life the term and you'll build up your equity faster. Our mortgage analyzer will help you compare your options
- How much do you have for a down payment? If your down payment is 20% or more of the purchase price then you may be able to avoid monthly Private Mortgage Insurance (PMI) charges.
- Documents you'll need are: latest bank statements, latest W-2s and tax returns, copy of latest pay stubs, child support or alimony records, IRA and 401k statements, investment account statements.
- If part of your down payment is a gift from a friend or relative you'll need a letter from the donor explaining that you are not obligated to repay them.
- When you apply for a loan your lender is required by law to give you the following: Truth-in-Lending Disclosure, A Home Buyer's Guide to Settlement Costs, ARM Disclosure, Your Annual
- Percentage Rate or "APR". Make sure you receive these documents and have them copy us on the email.
- When you apply for a loan the following will be done by your lender: an appraisal of the property you wish to buy, review of you credit history, employment and bank account verification.
- This may sound like a lot, but the lender will make it seem easy, and we are always here to help.
Is my move tax deductible?
The IRS does allow tax deductions for moves which were made to accommodate a job in a new location. There are, however, two tests which must be met in order to qualify for deductions.
Test 1: Distance Test
To qualify for a deduction, your new principal workplace must be at least 50 miles farther from your previous home than your old workplace was from that same home. In other words, if the commute to your old workplace was 3 miles, your commute from your previous home to your new workplace must be at least 53 miles. If you did not have a job before moving, then your new job must be at least 50 miles from the previous home.
Test 2: Time Test
You must work full time in the general area of your new workplace for at least 39 weeks during the 12 months right after you move. There are exceptions to the time test and other rules apply if you are self-employed. Check with your tax advisor or check out Form 3903 on the IRS website for details.
If you have passed both the distance and time tests you may be able to deduct:
- Costs for packing, crating and movement of your household goods
- Up to 30 days of storage and insurance for household goods
- Transportation and lodging expenses (not meals)
You may not deduct expenses that have already been reimbursed by your employer and you may not deduct sightseeing or house hunting trips. Be sure to check with your tax advisor on your specific circumstances.
How will I find the right home?
With our preliminary work out of the way we can now begin the search for the perfect home for you and/or your family.
Automated listing updates is a valuable tool which is contained here on my web site, and within the features of our multiple listing services that allows for you to be notified every time a property comes on the market that meets your criteria.
Previewing listings is something that many clients prefer. Once notified of a listing many clients enjoy riding by to take a look at the outside of the home and the neighborhood; just to make sure that the yard, neighborhood, and other exterior features meet their approval before investing extra time to see the inside. Others prefer to see the inside and outside at the same time. We are glad to accommodate either approach.
Arranging to view homes requires that we contact the listing agents to verify that the property is still available, and not under contract or off of the market. Once verified that the property is still available it is necessary to notify the sellers of an approximate time range that we will arrive. Usually a 1-2 hour time range is acceptable. If looking at homes in different areas it is usually a good idea to group them according to areas so that we do not waste your time.
Viewing the home may take just a few minutes or much longer if your find it appealing. Our objective is to assist you in examining the home in order to determine if it meets your needs. Additionally our expertise in repairs and renovations will provide you valuable insights into potential problem areas such as needed repairs or improvements, and their estimated cost. We are there to help you understand the house better.
One final thought is when viewing a home it is best not to engage the sellers. If necessary your agent will be glad to ask any questions on your behalf or to follow up afterwards with the seller’s agent. This approach insures that both yours and the seller’s interest are being represented by their individual agents.
How will I know what to offer?
Performing a thorough market analysis is an essential part of equipping you to make decisions that will affect how much you pay for a home.
Once you have decided on the home that you want to buy it is now time to determine the approximate range in value for the property. The term “market analysis” is often used to refer to a report that is instantly provided using the technology available to us. However, this approach is one that does not benefit from a thorough analysis of the data by the agent. This can result in incorrect pricing, which could lead to paying to much for a home or missing out on a good value.
Our approach is different. We begin with information provided by local listing services, local tax records and Redlink, the leading data base of appraisals, used by virtually all appraisers. Instead of allowing the analysis to be done automatically, we analyze the data ourselves much like an appraiser would. This approach is far more thorough and requires a great deal more time and experience, but it results in a far better understanding of what a home is worth. This detailed approach takes into consideration those features that other similar recent sales may or may not have in common with the one you are making an offer on, as well as the condition of the home compared to others. Once the market value range of the home is correctly determined; you will be able to make an offer knowing that you are not offering to pay too much or to little. Our appraisal-oriented approach to determining value ensures that you will get a good value on the purchase of your home. In addition, you will avoid issues associated with the home not appraising for at least the purchase price.
This market analysis also considers potential repairs and improvements as well as their affect on value and offer price. Additional cost for this service: ZERO. Value associated with this approach: PRICELESS.
How is my offer prepared?
Now that the “Market Analysis” is complete we are now ready to prepare your offer for submission to the listing agent. Our approach to this phase of the transaction has saved clients thousands of dollars in cash and monthly payments.
Communicating with the seller’s agent. One of the most important and valuable functions perform will be to develop a working relationship with the seller’s agent. Many times this is overlooked as a result of relying to heavily on technology. A dialogue with the seller’s agent will provide an opportunity to gain valuable insight into the issues that are important to the seller as well as providing an opportunity to explore various options that may serve to meet each parties needs. In short it lays the foundation for the negotiations to follow.
Reviewing the “Purchase and Sale Agreement”. Prior to submitting an offer it is necessary and helpful to go through the blank document; “Purchase and Sale Agreement” in detail. In our area the Georgia Association of Realtors in conjunction with the Georgia Real Estate Commission provides all brokers with the approved GAR “Purchase and Sale Agreement”. This document which is used by virtually all real estate firms is the core of your real estate contract.
Communicate with your lender. This is more important now than ever before. With the recent problems in the mortgage industry lenders are going out of business daily, and mortgage products and guidelines are changing just as quickly. This includes not only the small local lenders but major players in the market. As a result unless you are working with a lender that can deliver the proposed mortgage products, your efforts will be a waste. It is also at this time that we would want the lender to provide an updated “Good Faith Estimate” of the cost associated with securing the loan you have chosen. We are there to help you evaluate the various mortgage options; to insure that you get the best product available.
Prepare a purchase/loan analysis workbook. After talking with the parties involved it is now time to reduce the elements of the offer into something that is understandable and digestible. Commonly referred to as “Buyers Cash Requirements”, this is a spread sheet approach to helping you understand what your offer means to you financially. This takes into consideration all financial items associated with your purchase of a home. Additionally it can serve as a tool which will allow for you to strategize and track the negotiations. You will receive your initial spread sheet at the time we do the Market Analysis. This way we can track each phase of the negotiations from beginning to end.
Completing the offer. At this stage we are now ready to complete the offer. Decisions will be made as to price, earnest money, closing date, date of possession, and inspection approaches; as well as many other issues that may be unique to your situation. The offer will be signed and your agent will collect the earnest money on behalf of the broker.
How is my offer negotiated?
At this stage it is now time to present the offer to the seller’s agent. The seller’s agent is then responsible for presenting the offer to the seller.
Negotiating style and approach. In considering your offer it is important to remember that there are three responses to an offer. It may be accepted as presented. It may be rejected entirely, or it may countered. In most cases the buyer and seller will usually counter each others offer several times. In many cases the items being addressed are not just financial issues. Other issues may be closing dates, date of possession, and inspection procedures. It is important to be patient during this process, and not let a seller’s response to your counter offer create anxiety.
Responding to a counter offer. Once the seller has evaluated your offer; it generally results in a counter offer. It is now time to determine your response. With the aid of our Buyers Financial Worksheet we will be able to evaluate the financial impact of the terms of the sellers counter offer. This valuable tool allows us to see a side by side comparison of their offer and your counter as well as the impact that each counter has on the other party. This information is invaluable when attempting to massage numbers to create a better value in your purchase. Once we have arrived at your counter you will be emailed the Buyers Financial Worksheet so that you may monitor the negotiating process. This may occur several times before reaching an agreement.
Concluding the process. This process will continue until either party accepts without change the offer of the offering party. This is considered our acceptance date, and in many cases will also be our binding agreement date. Of which the binding agreement date will be the date that triggers many other events. In most cases a report will be turned into each broker’s office which will show that the status of the property has changed from an active listing to a pending sale or contingency sale of some type. In either case once the status is changed the property will probably not be shown to other buyers.
What does a home inspector look for?
Although architectural details, wall and floor coverings, modern conveniences and many other factors are important in the buying decision, the focus of this inspection is on the structural/mechanical/electrical condition of the property.
The inspection is designed to give the real estate agent or prospective purchaser a system to detect some of the readily accessible major flaws or deficiencies in the significant components and systems of a home. It is not designed to, nor does it profess to facilitate detection of all flaws, problems or occurrences that might exist in any given home.
An Over View of the Process
The first step in inspecting a home is to examine the big picture for the home. Notice the area the home is located in. Are there other homes of similar age and construction details relative to the home you are inspecting? A comparison will give you a general idea of the upkeep of the home. Have there been significant modifications to the exterior of the building and if so, how is the workmanship?
How do I address inspection issues?
Contained in the Georgia Association of Realtors contracts; which are used by most major brokerage firms in the state are provisions for inspecting the property, and for addressing concerns which arise out of the inspection. There are three options provided in the contract for addressing the condition of the property. Special care should be given to evaluate the motives of the parties when considering each of the inspection options.
An “AS IS” Sale. In most cases you will not see this option selected by many buyers. It is an option selected by many investors when they are making an offer. If this option is chosen by a buyer they would purchase the property with any and all defects. There are generally no warranties as to the condition of the house.
Property Sold With Right To Request Repairs. If this provision is chosen by the parties it provides the buyer a certain number of days after the binding agreement date to conduct an inspection of the property at their own expense. Additionally within the same number of days the buyer must submit a copy of the inspection report along with an amendment identifying all items from the inspection report that the seller is being asked to repair, replace or service. Once received buyer and seller will have an agreed upon number of days to negotiate the repair items and to reach an agreement on who will be responsible for addressing them. If buyer and seller can not reach an agreement during the allotted time there are provisions for the contract to terminate.
Subject to Due Diligence Period. If this option is chosen it will provide the buyer a specific number of days to conduct any and all inspections, and to submit an amendment identifying any and all concerns which they may ask the seller to address. It also provides the buyer the right to terminate the contract for any reason prior to the expiration of the inspection due diligence period. Many sellers strongly oppose this option, and will not consider an offer which contains it. On the other hand many buyers are insisting on it. We can discuss this at the appropriate time.
It is not necessary to become anxious over this phase of the process. If there are repairs required on your; home as general contractors we can assist you getting this done quickly and affordably by utilizing the contractors and suppliers that we have worked with for many years. This will save you time, money and worry.
How do I prepare for closing?
During this period all parties to the transaction will have certain things they will be responsible for. It is important that everyone does their part to have a smooth closing. This means not waiting till the last minute to handle things.
The Seller and Their Broker
Will arrange to make all necessary repairs.
Will receive, fill out, and return an attorney information sheet.
Will conclude packing.
Will make arrangements with movers.
Will contact utility companies to arrange for final turn offs and final bills.
Will provide Broker a list of the utility companies and their phone numbers.
Will make arrangement to leave the house in a clean condition.
Will come to closing with a picture ID.
The Buyer and Their Broker
Will submit any remaining information to their lender that is needed.
Will transfer utilities into their name on the agreed upon date.
Will secure home owners insurance.
Will plan of a walk through of the property to insure repairs were made.
Will come to closing with a picture ID.
Will bring certified funds or a cashiers check to closing.
Will arrange to meet the seller at the house at the time of possession.
Will order the appraisal and make sure it arrives in a timely fashion.
Will order the title search with the closing attorney.
Will insure that final conditions for the buyer loan are satisfied.
Will prepare the loan package and provide it to the attorney.
Will arrange for the funding of the loan at the time of closing.
Will conduct a title search.
Will schedule a closing which will usually take about and hour.
Will prepare a closing statement (HUD) reflecting all charges to all parties.
Will collect and disburse all funds as provided for in the contract.
Will issues title insurance and order survey if requested.
Will handle and submit all loan payoffs to mortgage companies.
Will submit all documents for recording at the county court houses.
Will return all recorded documents to the appropriate parties after closing.
How does possession take place?
Congratulations! You have closed on your new home and are about to move. As you prepare to take possession there are several things to keep in mind. First of all; the contract requires that the seller leave the house free and clear of all personal items and debris. This includes bath cabinets, attic space, kitchen cabinets closets, basements and crawl spaces. Additionally many sellers will have the house cleaned. This will include thoroughly cleaning bathrooms and appliances. In many cases sellers will have carpets cleaned and will cut the grass one last time for the buyers.
Generally at the time of closing the buyer and seller will agree on a time to meet to do a final walk through and to turn the keys over to the buyers. This is generally a good idea since it eliminates any questions as to the condition of the property at the time possession is given. This concludes the purchase and transfer of your new home.
Remember Your Broker
Don’t forget your broker after closing. Remember I am here to help. There have been countless times we have received calls from past clients who need a good contractor. Regardless of the job we will be able to provide you fast, reliable and affordable assistance for any home project you may have. And last of all, remember us when you know of someone who may be buying or selling a home. We promise to give them the same level of service that you have grown to expect. God’s blessings in your new home.
Need help with packing?
Let's face it, packing is a chore but it doesn't have to be that bad. With a little planning, supplies and a little ingenuity you can get it done by the time the moving truck arrives. Here are some packing tips we hope will get you to that goal.
- Pack heavy items into small boxes, lighter items in larger boxes, maximum of 30 pounds per box.
- Be sure to number boxes with a short description of the contents and the room they go in.
- For boxes with valuables in them make the description generic.
- Keep a detailed list of boxes and their contents so you can locate things quickly if needed.
- Tape power cords to bottom or back of appliances.
- To prevent spills, tape shut boxes from the pantry, put bags of flour/sugar in large zip-lock bags and make sure jar lids are on tight.
- Tape can leave residue on furniture so use twine or elastic bands to secure drawers and doors.
- Use padding underneath rope or twine when securing furniture to avoid rub marks during moving.
- Fill your boxes and pack tightly with packing material so contents don't shift, rub or bang into each other.
- Pack TV and Stereo equipment in their original boxes and tighten shipping screws. Label cables and pack them in the same boxes with the equipment.
- Use towels or bedding to cushion fragile items.
- Pack a room at a time and finish it before moving to the next.
- When a room is packed, move the boxes to a designated staging area then vacuum and clean the emptied room.
- For great prices on boxes, call Cut Rate Box at (404)758-2615
These tips will not only help you pack, by getting organized you should make it easier to unpack. As always, if you have questions or need more information on real estate matters, or if you know someone else looking to buy or sell a home; please let me know.
How should I prepare my kids?
Moving with children does pose additional considerations when you are planning a move but it's also a time of uncertainty for them. Below are some tips on helping your children cope with the move and make them more comfortable with their new neighborhood.
- Prepare your children for the move and include them in making plans for the move. Get their input on the best way to say 'good-bye' to their old home.
- Take time to show your children their new home, their new bedroom and neighborhood.
- Involve them in deciding how their new bedroom will be arranged.
- Get your child an address book and help them collect phone numbers and addresses of their friends so they can stay in contact with them after the move. Older children can exchange email addresses.
- Go to school with your children the first few days to help them adjust to their new classrooms and teachers.
- Aside from school, investigate other activities or organizations your child can participate in their new neighborhood.
- Listen to your child's concerns on the move and discuss them.
- Maintain your child's daily routine as much as possible.
- Moving stress can be more acute with older children, be sure to watch your children for loss of appetite, insomnia, and unexpected mood changes and consult a doctor or counselor if they persist.
- Give you children packing duty, set aside a box or two that they can pack their favorite toys in.
- For safety, arrange to have smaller children stay with relatives or at a day-care during the major part of loading and unloading the moving truck.
- Bring along travel games or other entertainment for the trip to your new neighborhood.
- For the moving day, pack an ice chest with plenty of sandwiches, snacks and beverages.
- Teach your children your new phone number and address.
- Go on walks with your children in your new neighborhood. This gives them a chance to become familiar with their new neighborhood and they may even meet a new friend or two.
- At the end of the moving day spend some time relaxing with your family; you've all earned it.
I hope these tips help you in making the move with your children an enjoyable one. Please remember us when you know of someone who may be buying or selling a home. We promise to give them the same level of service that you have grown to expect.