Four Tricks and Traps Foreclosure Buyers Need to Know...
Interest in buying a foreclosed home is on the rise, but so are concerns about the risk involved in the process. In a December survey, 49 percent of Americans were at least somewhat likely to consider buying a foreclosure, up from 45 percent in May 2010. But the number of US adults who believed there are disadvantages to buying foreclosures had also increased, from 78 percent to 81 percent over the same time frame. Among those folks who had qualms about purchasing a foreclosure, the top concerns were:
Buying a foreclosure might involve hidden costs,
Buying process itself is risky, and that the home might continue to lose value, after closing.
While there certainly are risks that run with buying a foreclosed home, the most risky way to do it is also the least common method: at the foreclosure auction itself. Auction buyers often don't have the opportunity to fully vet the foreclosure to ensure that they are receiving clear title and/or to make sure they're not getting a lemon. With that said, most foreclosures are resold not at the foreclosure auction, but as an REO (short for Real Estate Owned - by the bank), listed by a real estate broker on the Multiple Listing Service.
When you buy an REO in this way, you have lots of opportunities to use some tricks of the trade, so to speak, to avoid some of the traps you may fear.
Here Four Tricks and Traps for Foreclosure Buyers:
1. As-is means as-is, period. (Most of the time.) Banks have very little interest, inclination or even the logistically necessary resources to execute repairs on your home. Many of these homes are managed by an asset management company in another state, and may not even have a local person besides the agent who can handle large repairs. Generally speaking, bank-owned homes are sold on a very strict "as-is, where-is" basis, which just means that you should expect to take possession of it, if you buy it, in exactly the position and location it is, no matter how defective. Do not walk into a viewing of a foreclosed home, notice how the plumbing is all ripped out of the wall, and make an offer for it, assuming you'll be able to get the bank to "fix" the issue later. Usually, if the bank is willing to do any repairs to a foreclosed home, they do so, on the advice of the listing agent, prior to the home being listed.
If a foreclosure you're considering has obvious property damage, have your contractor stop by with you or gather whatever information you need to get as comfortable as possible with your offer price, assuming that the bank will not be chipping anything in for repairs, before you make the offer.
2. The bank speaks no evil. When it comes to real estate disclosures, the fact is, the bank speaks not much of anything! Many states exempt banks and other types of corporate homeowners from making substantive disclosures about the condition of the property. Even in jurisdictions where the bank is not legally exempt, most banks will simply write across the required disclosures something to the effect that the bank has no knowledge of the property's condition. (Before you protest with a "that's not fair!!" keep in mind that the bank never lived in the property, so most often truly does have no idea of any important facts or details about its condition or location, the things an average home seller would be required to disclose.)
Even in a normal transaction, it behooves a buyer to be thorough in having the property inspected and meticulous about reviewing the resulting inspection reports. But buying a foreclosure ups even that ante, as you have no seller disclosures to highlight particular problems you should have looked at, and none of the usual legal recourse you would have if a “regular” seller made incomplete disclosures. Get a property inspection. A pest inspection. A roof inspection. A sewer line inspection. A pool inspection, if you have a pool and care about its condition.
Yes - all these inspections cost money, but the drama and thousands each of them can save you is well worth it. And read your state’s buyer inspection advisory or similar document (ask your agent), just to make sure you’re aware of all the inspections that are available to you, and work with your agent to determine which ones make sense, and which are not appropriate.
Some insider tips:
Vacant foreclosures often have their utilities disconnected. Work with your agent to make sure the utilities get turned on - even for a single day - so that your property inspector can run the water taps, test the stove and dishwasher, see if the water heater and electrical outlets work, and so forth.
If appliances are there, the bank will probably leave them there, even though they may not have technical “legal” ownership of them, so they may not be included in the contract, like in a "normal" home sale. However, the bank will not give you any sort of warranty on appliances, so try to obtain any warranty coverage you want or need elsewhere - from a home warranty company or, potentially, the original manufacturer/retailer.
3. The contract terms are changing. One thing squarely in the wheelhouses of local real estate pros are local market standard practices. From negotiating practices to which party pays which closing costs, every market is different, and experienced local agents are experts on this information. If you’re buying a foreclosure, though, the bank will often require you to use it’s own purchase contract, rather than the more commonly used state forms. Many times, this is done to advise the buyer of the bank’s refusal to make substantive disclosures (see above) and to change some of the normal practices for your area to the bank’s standard practices.
For instance, if you are buying a home in a contingency state, where you would usually have to sign a document proactively releasing contingencies, the bank’s contract will probably change that, so that your transaction operates on an objection period. In "objection" based transactions, you have a certain period of time in which you must either speak up about your concerns with the property and/or cancel the deal, or you will automatically be presumed to be moving forward with the deal and your deposit money will be forfeited if you change your mind after that date.
If you’ve been making offers on non-foreclosures on the standard contract form, or you’ve bought homes before and think you know the drill, please - READ every word of the contract you sign when you buy a home from the bank, and ask your broker, agent or attorney to explain anything that doesn’t make sense.
4. Expect the unexpected. When you buy a foreclosure, you might end up working with the bank’s escrow company, instead of a company you or your agent selects. And the bank's escrow provider might be slow or disorganized. C’est la vie. The bank might rush you for your deposit money, but take their own sweet time coming up with the necessary signatures on their end to close the deal. Par for the course. You might expect that the bank would be desperate for buyers, and instead find out that there are 20 offers on the same REO. Or, you might be the only offer and still get your aggressively low (but still reasonable) offer rejected, only to have the bank reduce the list price of the home to the same price of your offer! (They often want to see if exposing it to other buyers at the new, lower list price might generate more interest and higher offers.)
When you’re buying a foreclosure, expect glitches, expect your calendar to be derailed, expect the bank to be inflexible and possibly even unreasonable. It’s not overkill to ask your broker or agent to brief you on the common complications they see in REO transactions. Having realistic expectations may keep you from pulling your hair out. And if the transaction turns out to run smooth as silk? You’ll be pleasantly surprised.

Make hay while the sun shines...
What a great opportunity to take advantage of record low rates.
Just when it looked as if mortgage rates couldn't fall any further, they did.
Rates on 30-year fixed-rate mortgages (excluding jumbos) hit an average of 4.3% in September, the lowest level since 1953, according to Freddie Mac, and are still hovering below 4.5%.

Fifteen-year rates are even more mouthwatering: 3.8%.
Mind you, those are averages.
The most creditworthy borrowers can do even better, snagging rates perhaps a quarter of a percentage point lower.
So what's in this for you?
A lot, potentially.
If you have a credit score of 720 or higher and at least 20% equity in your home, you might use these crazy-low rates to shorten your mortgage term, free up cash, or even add to your real estate holdings, for example.
Whatever you decide, don't wait too long. "The consensus is that rates will gradually move up in the new year," says Frank Nothaft, chief economist for Freddie Mac.
Freddie projects that the average 30-year fixed will hit 5% by the end of 2011.
It's easy to see why more than a quarter of borrowers today are choosing a 15-year mortgage, according to analytics firm Core-Logic, up from about 9% in 2007.
A 15-year lets you save in two ways:
You get a rate that's about half a percentage point lower than that of a standard 30-year, plus you can save tens of thousands by retiring the loan in half the time.
Let's say you took out a $270,000, 30-year mortgage at 5.9% when you bought your house in 2005.
You're paying $1,596 a month in principal and interest and now have a $250,000 balance.
Let's further assume that you roll $5,000 in refinancing costs into a new 15-year mortgage at 3.8% (so the loan is for $255,000).
Your new monthly payment will be a heftier $1,860, but you'll save more than $147,000 in interest over the life of the loan.
What if you can't manage the bigger monthly bite?
Refi to another 30-year and simply pay more in months when you're able to, assuming you're disciplined enough to actually follow through with that plan.
Given that few new mortgages carry prepayment penalties anymore, kicking in extra money shouldn't be a problem, says Keith Gumbinger, vice president of mortgage data tracker HSH Associates.
Caveat: If you have only a few years left on your current mortgage, or you plan to move soon, a refi may not pay off.
Calculate how long it will take to break even on your closing costs, up to three years is typical. Improve cash flowFreeing up cash may be your biggest priority right now.
Maybe you're trying to replenish your emergency fund after being out of work, or you have lots of high-interest credit card debt to pay off.
Maybe your twins got into Harvard, and you need to cover some of the tuition out of current income.
Or maybe you see enough investment opportunities around that you want to lower your monthly payment and invest the difference.
In those cases, choose a 30-year loan.

Using the previous example, if you refinance to a $255,000 30-year at 4.4%, you'll lower your monthly payment from $1,596 to $1,277.
True, you won't save nearly as much in interest as you would with a 15-year.
But that's not so bad, says Matthew Keeling, a certified financial planner in Mashpee, Mass., as long as you do something smart with the extra $319 a month you'll save.
Do your retirement plans call for moving to a house near the beach or a cabin in the mountains?
If you can afford another mortgage payment, you may want to start your search now, while rates are in your favor and prices are depressed.
Ditto if you've been wanting to buy a second home or an investment property, says Jonathan Bergman, vice president of Palisades Hudson Financial Group in Scarsdale, N.Y.
Assuming you're buying the place as a true second home, lenders generally charge the same rate they would for a primary residence.
But if you intend to rent the place out, even if just for a few years until you retire and you need rental income to qualify for the mortgage, it's considered an investment property.
And mortgage rates on investment properties are running about a half to a full percentage point higher. Still, the numbers are "pretty compelling," says Justin Krane, a certified financial planner in Los Angeles.

Five Reasons to Buy a Home Now...
1. Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they can absorb a few ups and downs as the still-recovering housing market gains traction.
2. Houses are in move-in condition. Home owners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. As these houses enter the market, they are in marked contrast to tattered foreclosures.
3. Terrific houses are coming on the market. Foreclosures are finally starting to clear the system, and they are being replaced by some very attractive properties.
4. Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines, giving appraisers more flexibility to set values that reflect the current market.
5. Plenty of programs. Many programs that encourage middle-class families to buy homes continue to exist, despite market downturns. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.

Top 6 Reasons to Buy Your First Home Today...
1. Affordability. Based on recent property declines and current interest rates, home affordability has not been higher since it was first tracked over 40 years ago. Your grandparents couldn't have received a better interest rate than you can today.
2. Tax Breaks. The IRS allows you to deduct the interest you pay on your mortgage, your property taxes and, in many cases for those who qualify, some of the costs to buy your home and mortgage insurance. Owning a home is a great way to lower your tax bill.
3. Build Wealth. Unlike paying rent, with each mortgage payment you make, you build equity and you decrease your income tax liability. Owning a home is still the best long-term investment.
4. Appreciation. As home prices have fallen precipitously in today's tough economy, the basis for realizing appreciation in future years is very strong. Historically, even with other periods of declining value, home prices have exceeded consumer inflation. From 1972 through 2005, home prices increased on average 6.5%, according to the National Association of Realtors®.
5. Stability. Knowing you can establish roots and raise a family in one location, free of the desires or needs of your landlord to sell the property you are living in. This is something no other investment provides. You can't live in a stock, and you can't raise your kids in a bond.
6. Independence. Enjoy the freedom to do what you want to your home. After all, it's yours to do what you wish. And, with any improvements you make, you have the ability to benefit from your investment. Try that with an apartment!

How to End the Recession in a Week...
by John Adams, for the Atlanta Journal-Constitution
At the risk of offending my good friend Don Ratajczak, I am going to put on my economist hat and offer to solve our economic problems in one seven day period. News from the housing front is simply depressing, and the recovery, such as it was, seems stalled. Washington obviously needs new ideas, so here goes:
All agree that the real estate industry represents a huge sector of the economy, and when somebody buys a new house, it employs hundreds of people all over the USA. But people who are worried don’t buy houses, and a large segment of the workforce is either unemployed or worried.
Real estate led us into this recession, and it will have to be real
estate that leads us out. That’s the way it has worked for the past seven recessions in a row, so what do we need to do?
* On Monday, declare a national moratorium on all residential
foreclosures unless the lender has engaged in meaningful attempts at modification and has employed every reasonable strategy to keep the borrower in the house. Also, grant "safe harbor" status to servicers who grant modifications in good faith. That step alone will keep millions in their homes.
* On Tuesday, modify the Garn-St Germain Act to invalidate “due on sale” clauses used by federally chartered lenders to prevent buyers from taking over payments. This would allow thousands of owners to sell to buyers who are able to make the payments, but unable to meet new more stringent underwriting criteria. Lenders should still be able to require reasonable credit and income standards, but assumption should be quick and easy, and at no cost.
* On Wednesday, change the tax code to incentivize real estate investors. Eliminate all income taxes on profits derived on the sale of any home purchased as a bank-owned foreclosure, then renovated and resold within 12 months to an owner-occupant. This would cause bank-owned homes to become much more attractive to private investors, who would rush to buy them as soon as they became available. They would then renovate them with private money rather than looking for a government handout. And it would help stabilize neighborhoods by eliminating vacant houses and substituting owner-occupants.
* On Thursday, declare a six month “federal tax holiday” and simply stand back and watch the economy move into high gear. It is a fact that tax cuts create jobs, and that’s what the real estate market needs more than anything else.
* On Friday, take the day off, but notice that the stock market has recovered and every home in America has jumped in value by ten percent. Everyone will feel more confident, unemployment will decline, and the recession will officially be over.

Cost Between Renting and Owning Narrows...
The cost difference between buying and renting is as narrow as it has been since 1993, according to a study on homeownership by Marcus & Millichap Real Estate Investment Services for the Associated Press.
The study examined rent and home prices in 45 metropolitan areas and concluded that gap between a payment on a median-priced home and median rent on a similar property is on average only $256.
Marcus & Millichap calculated the number using median home prices for the last three months of 2009, assuming a 10 percent down payment on a 30-year fixed-rate loan at 5.07 percent. It factored in mortgage insurance, but didn’t include either repair costs or tax benefits.
The difference is narrowest in such hard-hit markets as Detroit, Las Vegas, Atlanta, Cleveland, Indianapolis, and Orlando.
Renting remains significantly cheaper in New York, Los Angeles, Seattle, San Diego, San Francisco, and San Jose, Calif.
Source: Associated Press (04/19/2010)

IRS Clarifies What's Needed to Claim Tax Credit...
The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.
While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common.
The IRS clarification says: "In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”
For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.

Fourth Quarter Home Sales Surge 13.9% ...
Strong gains in existing-home sales were the predominant pattern in most states during the fourth quarter, with many more metro areas seeing prices rise from a year earlier, according to the latest survey by the NATIONAL ASSOCIATION of REALTORS®.
Sales increased from the third quarter in 48 states and the District of Columbia; 32 states saw double-digit gains. Year-over-year sales were higher in 49 states and D.C.; all but three states had double-digit annual increases.
Total state existing-home sales, including single-family and condo, jumped 13.9 percent to a seasonally adjusted annual rate of 6.03 million in the fourth quarter from 5.29 million in the third quarter, and are 27.2 percent above the 4.74 million-unit level in the fourth quarter of 2008.
Distressed property accounted for 32 percent of fourth quarter transactions, down from 37 percent a year earlier.
Lawrence Yun, NAR chief economist, said the first-time home buyer tax credit was the dominant factor. “The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates,” he said. “With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices.”
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage fell to a record low 4.92 percent in the fourth quarter from 5.16 percent in the third quarter; it was 5.86 percent in the fourth quarter of 2008.
In the fourth quarter, 67 out of 151 metropolitan statistical areas reported higher median existing single-family home prices in comparison with the fourth quarter of 2008, including 16 with double-digit increases; one was unchanged and 84 metros had price declines. In the third quarter, only 30 MSAs showed annual price increases and 123 areas were down.
The national median existing single-family price was $172,900, which is 4.1 percent below the fourth quarter of 2008; the median is where half sold for more and half sold for less. “This is the smallest price decline in over two years, with the most recent monthly data showing a broad stabilization in home prices,” Yun said. “Because buyers are taking on long-term fixed rate mortgages, avoiding adjustable-rate products, and trying to stay well within their budgets, the price recovery process appears durable."
NAR President Vicki Cox Golder said near-term market conditions will remain favorable. “Mortgage interest rates are expected to trend up later this year, but right now we have very good conditions with steadying home prices and favorable inventory in most areas, especially in the higher price ranges,” she said.
Golder said one of the biggest issues now is for repeat buyer who will have to accelerate their buying plans if they want the expanded tax credit. They have to have a contract by the end of April.
Repeat buyers do not have to sell their existing home, but all buyers must occupy the property they purchase as a primary residence to qualify for the tax credit. Buyers who have a contract in place by April 30, 2010, have until June 30, 2010, to finalize the transaction to get a credit of up to $8,000 for first-time buyers and $6,500 for repeat buyers.
Markets by Region
South: In the South, existing-home sales rose 13.8 percent in the fourth quarter to an annual rate of 2.23 million and are 28.2 percent higher than the fourth quarter of 2008. The median existing single-family home price in the South was $153,000 in the fourth quarter, down 2.4 percent from a year earlier.
“Affordable markets in the South that have relatively better local economies are seeing healthy price gains, such as Houston, Oklahoma City and Shreveport, La.,” Yun said.
A Closer Look at the Condo Market
Metro area condominium and cooperative prices – covering changes in 54 metro areas – showed the national median existing-condo price was $177,300 in the fourth quarter, down 4.8 percent from the fourth quarter of 2008. Eleven metros showed increases in the median condo price from a year earlier and 43 areas had declines; in the third quarter only four metros experienced annual price gains.
Source: NAR

6 Surprising Facts About the Buyer Tax Credit...
The homebuyer tax credit is not as simple or straightforward as you might think. Here are some nuances that will affect homebuyers who plan to use it.
To qualify for the move-up tax credit, a home owner must have occupied the same principal residence for five of the last eight years consecutively.
Buyers can elect to claim the credit on either their 2009 or their 2010 tax return, whichever is best for them.
Buyers who claim the credit in 2009 can’t file electronically because the Internal Revenue Service hasn’t put the required forms on line. The wait for a refund is three or four months.
The home can be a mobile home or travel trailer that is fixed to land owned or leased by the home owner. A mobile home or travel trailer that is actually mobile doesn’t qualify.
The home can’t be purchased from a close relative, including a parent, spouse, child, grandparent or grandchild.
A buyer who earns no taxable income or doesn’t owe any federal income tax can qualify for the tax credit and file a tax return just to claim it.
Source: Bankrate.com, Marcie Geffner (01/21/2010)

IRS Deductions for Georgia Storm and Flood Victims...
Georgians impacted by recent severe storms may be able to increase their standard deduction by claiming their net disaster losses suffered from the federally declared disaster. Provisions of the National Disaster Relief Act allow all taxpayers to claim the casualty loss deduction regardless of their income level. In addition, the law waives a requirement limiting casualty losses to those that exceeded 10% of the taxpayer’s adjusted gross income.
"Eligible taxpayers may be able to deduct disaster losses, even if they don’t itemize, through an increased standard deduction,” said IRS Spokesman Mark S. Green. "This increased deduction is limited to unreimbursed losses. You cannot claim losses that were covered by insurance.”
The standard deduction is a dollar amount that reduces the amount of income on which you are taxed. It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A of Form 1040.
The increased standard deduction for disaster losses is a benefit that could help many Georgia residents. More than two-thirds of the returns filed by taxpayers each year claim the standard deduction instead of itemizing deductions.
"It’s also important for taxpayers impacted by this federally-declared disaster to note this on their tax returns,” said Green. "They should write "Georgia/Severe Storms and Flooding” at the top of their tax returns and any other documents filed with the IRS to identify themselves as storm victims eligible for disaster relief.”
For more information on figuring a casualty loss deduction, see IRS Publication 547, Casualties, Disasters and Thefts, and Form 4684 , Casualties and Thefts. Also, the IRS offers Publication 584, a workbook you can use to calculate personal property losses. These helpful forms and publications can be found on the IRS Web site at IRS. gov.
For disaster information call IRS Disaster Hotline at 1-866-562-5227 or call the IRS toll-free number for general tax questions at 1-800-829-1040.
Decatur Dispatch, January 2010

Refinance your home or move?...
By Lori Rozsa • Bankrate.com
While the tumultuous real estate market has many people hunkered down hoping it will all blow over, proactive homeowners are looking beyond the uncertainty. They're weighing a decision about whether to refinance their current mortgage or trade up to a house they couldn't afford three years ago.
Making a move more alluring, interest rates continue to hover at 4 percent to 5 percent and tax credits of up to $8,000 for first-time homebuyers and up to $6,500 for buyers who have been in their homes for at least five of the last eight years consecutively are available.
But before you take the leap, real estate professionals caution that the same basic rules about buying a home still apply.
Here are four questions to ask yourself:
How long do I plan to stay in the new home? (The rule of thumb is at least five years to make a new mortgage worthwhile.)
Do I really need to move or just want to grab a deal? Can I cover the costs to close and relocate? With every winner, there's usually a loser, and you could be both if you find a great deal on a bigger house but can't sell your current home.
If I stay in my current home, does it make sense to refinance and maybe add that extra bedroom or build a deck to improve the property?
Take a deep breath and analyze what you really need, not what the market seems to be telling you to do.
"The decision depends on the individual. Are they looking to move because their family has grown or has their job changed locations, or do they want a shorter commute? Those are reasons to look at buying," says Bernard Markstein, senior vice president of the National Association of Home Builders in Washington, D.C.
But don't move just for the sake of moving, says Elizabeth Blakeslee, an associate broker with Coldwell Banker Residential Brokerage in Washington, D.C. Now is a great time to buy, but prospective homebuyers should make sure that's what they really should do. "You have to figure out your motivating factors," Blakeslee says. "If you're just trying to get a deal, you might want to think about it a little longer. These low interest rates are certainly a consideration for people, but as with every decision in life, you have to ask yourself, 'What is my goal?'"
Markstein says there are several good reasons to buy a house now. "Rates are historically low; it's essentially a buyer's market. And for people moving up, obviously they won't get as much for their own home as they would have a few years ago. But if they're reasonable and set a good price and they find another house at a good price, the two together could be a real benefit," Markstein says. If you're not really looking to move, but you just don't want to miss the real estate bargain boat, Markstein says it might be smarter to stay put.
"If you look around and say, 'I like my neighborhood, I like the schools and the services, I like my house, and I don't really want to move,' then you have two choices," Markstein says. "You can do a simple refi, and that's straightforward and will save you money in most cases. Or if you have enough equity, you can refinance and add a room or upgrade something in your house." Loans based on actual equity homeowners have sunk into their property for years are worth asking about. If you bought your house in the last four years and didn't put much money down, "I'd say forget" refinancing, Markstein says. Home prices are down around 2003 levels.
"If you've been paying your mortgage for six to 10 years, chances are you have built up a lot of equity," he says, "unless you live in one of the real estate-depressed areas, like Detroit or South Florida, Phoenix or Las Vegas."
Refis for home improvement usually pay off if you stay in your home for at least another three years, Markstein says. Again, the time may be right. Contractors' fees have come down substantially from the real estate boom.
Blakeslee says if you're on the fence about whether to sell and move or stay and improve, do your research. Get your credit score. Find out what kind of mortgage you could qualify for. Look at the tax credit deals which expire June 30, 2010 (although binding contracts must be signed by April 30) and figure out your real motivation. If it's just to save money, you could stay where you are and add a little extra to every month's mortgage payment.
"You'd be surprised how that adds up and saves you money in the long run," Blakeslee says.
And if you're determined to take advantage of this buyer's market? "Contact a competent Realtor. Get busy doing your homework. Have them run an analysis for you on prices in your current neighborhood and prices where you're looking to buy," Blakeslee says. "It's a great time to buy, but all the other basics still apply."

How to Fight for a Lower Tax Bill Through Returns and Appeals...
With the decline of property values many of us have seen in the last several years and with values not expected to increase dramatically in the near future, many homeowners are faced with the reality that the market value of their homes may be less than their assessed tax value. Our local newspaper, The Atlanta Journal and Constitution recently published what we consider an excellent series of articles on this reality and how you may appeal your tax appraisal if you feel this is the case with your home.
Here are some steps that you could take to perhaps help you pay less:
1. Look at your 2009 property tax bill. If you cannot locate it, you can look it up online. Many counties have searchable databases of residential property.
Metro tax assessors enable you to search for data on individual properties countywide.
Clayton: http://weba.co.clayton.ga.us:8003/indextcm.shtml
Cobb: http://www.cobbtax.org/Search/GenericSearch.aspx?mode=PARID
DeKalb: http://web.co.dekalb.ga.us/taxcommissioner/search.asp
Fulton: http://www.fultoncountytaxes.org/fultoniwr/11_depts_property_taxes.asp
Gwinnett: http://gwinnetttaxcommissioner.manatron.com/Tabs/ViewPayYourTaxes.aspx
2. Check the ZIP code map to see how your house compares with the rest of your ZIP on sales and tax values. Also, what do you know about sales of other homes in your neighborhood? Do home values seem to be going down? If so, the county may have overvalued your house for tax purposes. If you think that’s the case, go to step 3.
3. File a form called a property tax return. List what you think your house is worth as of Jan. 1, 2010. Section C asks you to list last year’s “fair market value” on your land and on your house. Then it asks you to list the value of the land and the house this year. This is where you tell the county the value of your property has gone down. You must send the form to your county tax assessor by April 1. (DeKalb and Gwinnett residents must file by March 1.) The assessor reviews your return and decides whether it reflects your property value. Usually you will receive a response between April and June.
If the county turns you down, you have the right to appeal. This gets a little tricky, but ... you also have the right to appeal if the county reappraises your property (whether you filed a return or not). But if the county doesn’t reappraise, and you didn’t file a return, you can’t appeal. This didn’t matter so much when tax valuations often were lower than actual value. Now, however, tax values are often greater than what your house is worth, which means you’ll be paying too much in taxes. So it’s in your interest to file a return.
File your appeal within 30 to 45 days of receiving your notice (counties have different deadlines). First stop: the county board of assessors. If you can’t reach agreement there, next stop is 1) a Board of Equalization, which is a panel of county residents that hears appeals unresolved at the assessor level, or 2) arbitration. There are two kinds, binding and nonbinding. After that, you may appeal to your county superior court. Note that both arbitration and appealing to superior court carry fees.
More info on appeals: https://etax.dor.ga.gov/ptd/adm/taxguide/appeals.aspx

Can You Get a Loan Today...?
Changes in the housing and mortgage industries have prompted many people, including the media, to wonder: "Can you get a loan today?"
The answer is simple: Yes!
Despite the negative headlines over the past year, there's actually plenty of money available for loans. In fact, reports indicate that over $2.7 Trillion in loans were originated in 2009. That's over $1 Trillion more than 2008.
However, mortgages must make sense in today's terms – not the looser standards permitted by lenders a few years ago.
What does this mean to borrowers today?
Lenders have returned to a pre-2000 mindset – a kind of "common-sense lending" that seeks long-term success versus short-term profits.
That means lenders need documented evidence that a borrower is creditworthy and is likely to repay the loan. This creditworthiness is based on the four tenets of lending: the borrower's ability to pay, willingness to pay, equity in the transaction, and the property itself.
With interest rates at or near all-time lows, lower home prices, and the $8,000 tax credit for first-time buyers, it's worth the time and effort to find out if you can benefit from common-sense lending in today's real estate market.

Missing an opportunity...
The $8,000 income tax credit for first time homebuyers (as defined by the US Government) expires as of November 30th, unless the Congress extends or modifies the program.
If you are are first time homebuyer, it is now time to get off the fence.
With less than 90 days left until the program expires (you must close the transaction by November 30th) time is short.
And with the new appraisal and truth in lending requirements for home mortgages, transactions are taking longer to close than earlier this year.
Home prices have not been this low since early this decade and mortgage money is still cheap.
Don't be kicking yourself on December 1st for missing this opportunity, it might never happen again.

Homebuyer Protection Alert!...
Recent Federal legislation can impact your closing date.
When completing your Purchase Agreement, even if you are prepared to move forward and close quickly, a more conservative time frame of at least 30 days from the time of the contract acceptance would be a more realistic expectation at this time.
Listed below is information on two pieces of legislation that stand to impact your closing date, and a few bullet points that explain the reasoning behind and effects of each measure.
HVCC: Home Valuation Code of Conduct:
HVCC was designed to ensure that appraisals are conducted objectively and without pressure from parties with an interest in the transaction. Under HVCC, the appraisal and selection of the appraiser will be ordered by someone not directly involved in the origination of the mortgage. This could be either someone else within the mortgage company or a third-party appraisal management company.
A copy of the appraisal must be provided to the homebuyer/borrower no less than three days before closing. The minimum time expectations for receipt of the appraisal should be a few weeks and not days. (While receipt of the appraisal may be received in shorter time frames, conservative expectations are warranted.) Communication between the appraiser and the originating mortgage professional is prohibited. It is imperative that the agents involved in the transaction be prepared at the time of inspection to offer supporting value information if warranted.
HERA: Housing and Economic Recovery Act:
HERA was designed to ensure that the borrower(s) involved in the transaction are given accurate disclosure information (Truth in Lending Statement pertaining to Annual Percentage Rate or APR) regarding the loan they are applying for and adequate time to re-evaluate their decision to proceed in the event of any changes that would impact their costs to finance.
Under HERA, no fees may be collected for the transaction other than those for running a credit report at the initial time of application. Additional fees may be collected only after four business days. Should the APR change by more than .125% on a fixed rate loan or .250% on an adjustable rate loan, the lender must disclose the new APR and the borrower must have a minimum of three business days to review the information before the transaction may proceed.
Items that can trigger re-disclosure requirements include a change(s) in the loan amount, closing date, loan program, any fees that impact the APR or interest rate from the rate indicated on the original loan application.
In cases where documents are sent by mail to the borrower related to re-disclosure of APR and/or providing a copy of the appraisal, anticipate six business days (three to allow for mailing and three to allow adequate time to review them) before a closing can occur.

Georgia Governor Signs Housing Tax Credit Bill...
On Monday, May 11, Governor Sonny Perdue signed legislation into law that creates a new state income tax credit for home purchases in Georgia. The tax credit will apply to purchases of eligible properties between June 1 and November 30, 2009, and is expected to spur activity in the housing market.
Passage of this bill was the top legislative priority for the Georgia Association of REALTORS® in 2009. House Bill 261 provides an income tax credit for the purchase of a single-family residence during the six months between June 1 and November 30, 2009.
The credit amount is the lesser of $1,800 or 1.2 percent of the purchase price. The tax credit is applied over three years, with one-third of the credit available each year. If a the amount of the credit exceeds the taxpayer's tax liability, the unused credit may carry forward to the next tax year. The credit created by HB 261 may be claimed one time per taxpayer.
The final version of the bill contains the GAR amendment to clarify condominiums and residences occupied at the time of sale are eligible for the credit.
In addition, eligible single family residences include:
New single-family residences; Previously occupied residences that were for sale prior to May 11, 2009. and are still for sale after May 11, 2009;
Owner-occupied residences in which the owner’s acquisition debt is in default on or before March 1, 2009; and
Residences where a foreclosure has taken place and are owned by the mortgagor or the mortgagor’s agent.
This tax credit is in addition to the federal first-time home buyer tax credit, which is available to only those buyers who have not owned a home during the last three years. "I'm proud of Governor Perdue for signing this legislation, and I'm proud to have brought it before the state legislature," said bill sponsor Rep. Ron Stephens (R-Savannah). "This bill will put people back to work, reduce the inventory of unsold homes, and kick-start Georgia's economy."

$8,000 Federal Tax Credit Can Be Used for Down Payment...
Great news for first time home buyers:
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday, May 12 said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.
Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.
“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says. His remarks came in an address to several thousand REALTORS® gathered Tuesday morning at "The Real Estate Summit: Advancing the U.S. Economy," at the 2009 REALTORS® Midyear Legislative Meetings & Trade Expo in Washington, D.C..
He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.

New Georgia law freezes property assessment hikes...
Attention homeowners: Your property assessment cannot increase until after January 2011. Legislation Georgia Gov. Sonny Perdue signed into law on Wednesday, May 6 makes sure of that. House Bill 233, sponsored by Rep. Ed Lindsey (R-Atlanta), prevents local governments from increasing the assessments used to calculate property taxes for two years.
Of course, assessments may be lowered, a distinction that is important as counties deal with the effects of another new law that requires assessors to consider foreclosures and other distressed properties when setting property values.
That has led to thousands of homes seeing assessed values fall. Some counties have needed a little extra push to convince them to do that, however.

Making homes affordable...
If you have a mortgage that is backed by one of the government agencies (Fannie Mae or Freddie Mac), The federal government has launched a new website with online tools that will allow a homeowner to determine if they are eligible to participate in the "Making Home Affordable" loan modification and refinancing program.
The website is: http://makinghomeaffordable.gov
It shares information about how this program works and who is eligible for assistance. This is the same $75 billion program you may have heard of recently in the media.
You should have the following available:
Information about your first mortgage, such as your monthly mortgage statement.
Information about any second mortgage or home equity line of credit on the house.
Account balances and minimum monthly payments due on all of your credit cards.
Account balances and monthly payments on all your other debts such as student loans and car loans.
Your most recent income tax return.
Information about your savings and other assets
Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.
It may also be helpful to have: A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable.
We as Realtors, are committed to helping homeowners avoid foreclosure. We hope you will forward this information to anyone who may need it, and feel free to call or email us if we can further assist you in any way.

Foreclosure: Is There an Option?...
Foreclosure rates continue to rise in most areas of the country and metro Atlanta has been one of the areas affected the most. And it is expected that this trend will continue for the foreseeable future.
The truth is there are life circumstances that can contribute to a family losing their home to foreclosure, many of which have nothing to do with the current economy. Divorce, job change or loss, illness, a death in the family, all are traumatic life changing circumstances.
Currently, many homeowners are “upside down” in their homes, i.e. they owe more than their home is currently worth. They need to sell due to an unfortunate life circumstance but cannot do so without having to bring cash to closing to settle their mortgage debt, which they are not in a position to do.
Given these realties, the demand for creative pre-foreclosure solutions has risen dramatically. And in an effort to avoid accumulating real estate and bad loans on their books, mortgage lenders have become more and more willing to work out a compromise on the pay off, a Short Sale, where the lender agrees to accept less than what is owed as “payment in full”. The difference in the impact of a Short Sale versus a foreclosure on a homeowner’s credit is significant.
Dale and I have recently completed extensive continuing education courses on Short Sales and have become members of a network of Realtors known as America’s Home Rescue in order to be able to consult with folks that may be affected by life circumstances that, through no fault of their own, may be facing foreclosure and need to sell their home.
In many instances, a Short Sale may be a viable solution but most homeowners are not aware the Short Sale is available to help them though their difficult situation.
Should you know of anyone that may be facing foreclosure or has been affected in some negative way by an unavoidable life changing circumstance, please consider referring them to The Randal Group.
We would be glad to consult with them about their options.
Thank you.