Important info for home buyers in the Greater Atlanta area

Coming off the frenzied Atlanta 2021 real estate market, it's hard to imagine things could get tougher for home buyers, but they are. Many factors are at play/still in play so it's not all real estate related, but buyers don't really care what's causing their consternation; the fact is that right now (late Feb '22), buyers are stumbling and bumbling wondering how to get offers selected. It's a beauty contest and the most appealing offers are getting selected.

The average mortgage rate is a good 1% higher than twelve months ago, with an expected 3-5 Fed rate bumps over '22. Home buyers are rushing to buy ahead of additional rate and/or rent increases, some will be trapped on the hamster wheel of renting. Inventory is even lower than last year and no…

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So what happens if the appraisal is below contract price? The early '22 market is already showing it'll be as tight or tighter than the '20 & '21 markets, buyers are tossing off all constraints to "win" the beauty contest of buying a home. Appraisals below contract price will continue to be a challenge in 2022. Consider, appraisals this year will be using data from the already insane market of 2021 and many will still fall below contract. Remember, the buyer’s loan is based upon the lower of the contract price or appraisal. The appraisal contingency protects the lender – and indirectly the buyer – to ensure the home can be sold for at least the loan value. Buyers that waive or modify the appraisal contingency need to have cash on hand to make up any…

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The discussions surrounding the question of “what’s a home worth” will never end, because there is no standard answer. Sure the reflex text book answer is “what a buyer is willing to pay” but that’s hardly the complete picture. A home has a number of “values” and most are not tied to the buyers in the market. There is a best answer of course, it also happens to be the simplest one. Spoiler alert...it’s not what it sells for. This short clip provides a common sense overview, below that we get more into the weeds.

Purchase Price

The purchase price is the amount the buyer agrees to pay the seller; this tends to support the “it’s worth what a buyer will pay” idea. Does it? Consider:

  • The costs of selling – commissions, repairs, closing costs,…

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Buying a lake home presents additional challenges a normal home doesn't; in Georgia those challenges can be formidable. Two major players influence lake homes in Georgia; the US Army Corps of Engineers and Georgia Power. The Corps of Engineers regulates and manages multiple lakes across Georgia, flood control is a significant responsibility of theirs. Georgia Power is the largest non-governmental provider of recreational facilities in Georgia. Power generation is their key role and one that they do exceptionally well. In North Georgia, the Tennessee Valley Authority has influence over the lakes close to the Tennessee border, using them for power generation and flood control. All have a role when it comes to buying a lake home in Georgia.

Value of lake…

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It’s with a MASSIVE dose of “we think” that we offer our latest opinions (12/16/21) for the first quarter of the 2022 North Atlanta real estate market. It's not a rosy outlook; expect home buyer frustration to increase in 2022. Rates are likely to increase as the Fed just responded to the record high inflation, planning at least three rate bumps for 2022. The prognosticators are out there already making bold claims; you can find the overt optimists and you can find the dark pessimists. So what's in store for home buyers and sellers that have to make a move this spring? Well given this environment, we’re not going to look much past the first quarter or so. Buyers will again be challenged and sellers will reap the reward…until they become buyers. As usual,…

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Size matters. It matters because you live in that space, you pay for and tax on that space, and you maintain that space. One day, you’ll sell that space. Size matters so you better understand how it’s determined…because many in the real estate industry don’t. They don't because no one makes them; the confusion over how to measure a home is due in part because there are no agreed upon standards.

Many variables influence the price of a home, size is one of the most influential. How many times is “price per square foot” referenced? Using price per square foot to value a home is unreliable, it is wildly inaccurate for multiple reasons. But it's accepted and big homes rule; you don’t typically see small homes at the top of the value range. Families are the…

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Price per square foot is unreliable to value homes. It is without question one of the most quoted "sources" when home values are discussed but it is so flawed that on any level, it cannot stand even the softest of challenges. In fact, price per square foot is so unreliable that it makes  automatedvaluation models (think Zestimates) look reliable.

The idea that something as unique as a home can be "valued" using a method with at least 10 major variables is idiotic. Yet and still, price per square foot is bandied about as some type of cornerstone when home prices are talked about. It falls cleanly into the "garbage in, garbage out" research idiom as nothing in the data used to ascertain that "value" is credible. The typical real estate agent doesn't even…

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The frenzied real estate market of '20-'21 exacerbated the issues found in normal markets. Buyers were/are so stressed to secure a home that some toss caution to the wind; overpaying, waiving finance contingencies, inspection contingencies and more. This is unwise at best and foolish at worst, when emotion rules the decision making process, bad things happen. 

There are more buyers waiving due diligence and purchasing homes "as is" than ever before. Some feel it's one of the best ways to win a bidding war and sometimes that's correct. But unless the buyer and agent have a working knowledge of construction and a level of experience that allows them to spot signs of trouble, the buyer may be walking off a cliff. Water and foundation issues are very…

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It’s closing day and the buyers walk the home before heading to the attorney’s office. But not all is right when the door swings open. What happens if the seller didn’t make the agreed upon repairs? What happens if the HVAC isn’t working? Can a home buyer terminate on closing day because of condition and refuse to close? Maybe. The most common problems are changes in the home from contract to close and agreed upon repairs.

Substantially the Same

The GA Association of Realtors (GAR) contract stipulates that the property will be in substantially the same condition as it was on binding agreement date.  Briefly: “Seller warrants that at the time of closing, the Property and all items remaining with the Property, if any, will be in substantially the…

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Trying to predict any market; stock, bond, mortgage, real estate or other type is a measured guess at best. Toss in a global pandemic, global supply chain issues along with global inflation and the challenge is exacerbated. But in this maelstrom comes a confident 2022 housing market forecast from Goldman Sachs; they predict home prices will appreciate 16% during 2022.

In 2019 the housing market found its legs and combined with a historically strong economy and low rates, the housing market caught fire. The pandemic slammed on the brakes, but by mid ’20 things inexplicably exploded. Prices skyrocketed, competition was ferocious and this fever has been running hot through most of ’21. The two main drivers; low mortgage rates and historically low…

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