What’s the cost of waiting?

RatesBy now you’ve heard that the Fed is probably, eventually, at some point in the near to middle future, going to begin raising the interest rate. It’s been speculated upon for months now that the rate hike would go into effect sometime in the early fall. So with that speculative deadline looming, many buyers (or current homeowners who may be looking to buy up or downsize) are beginning to eye the market with a little more interest. But how concerned should they really be? Well allow me to paint a picture for you. As a real estate industry specialist, I find that cold, hard numbers can really put things into perspective for some folks.

Let’s assume you want to purchase a median priced home at $250,000. If interest rates go up by just 1/4 of one percent (.25%), you will need to earn an additional three percent (3%) in income to qualify for the same $250,000 house. If you don’t expect your income to go up by 3%, then you must purchase a home priced 3% less.

That quote from an article on Realtor.com puts it right out there. With interest rates for qualified buyers still hovering around 4%, it can be easy to say that you can afford to bide your time and maybe put off a new home purchase for another year or two. And while that may be the best plan for some buyers who need to resolve credit or employment issues, the simple fact of the matter is that your buying power will decrease proportionally to how much the interest rate increases.

The article continues:

What’s worse, for every .25% increase in interest, it ends up costing you an additional $9,518 in interest payments over the course of the loan. Now, if rates go up by one full percentage point (1%), that would cost you $38,072 in additional interest over the life of the loan.

Wow. Looking at what a 1% increase can do to the total amount of debt tied into your mortgage is enough to shock most anyone into action. $38,000 could be a new car, college tuition, or a downpayment on a vacation home. There’s a lot of potential for that cash if it’s not tied up in interest payments.

Now let’s combine rising interest rates with rising home prices. What about those sweeping changes to lending regulations set to take effect on August 1, 2015? Are you opening another tab in your browser to search out home on Zillow yet? (Try searching here, instead!)

If you’re sweating in your socks right now, don’t worry. This isn’t a post to tell you that you’ve already waited too long, and you’ve missed the boat on owning your dream house. But seeing the numbers laid out in front of you can be the compelling push that many people need to make the first step toward buying a new home. And if that’s you, you’re in luck. The summer can be a great time for people entering the housing market. With some of the spring buying frenzy cooling off, buyers may find that there’s less competition to outbid one another. And working with a knowledgable real estate and lending team ensures that your home search will be free of hang-ups.

Financially savvy buyers, now’s your time. Don’t just sit around waiting for your popsicle to melt in this summer heat, get going!

Picks of the Week!

I’m just trying to keep cool by daydreaming about these lush abodes.

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Buckhead. 2/2/1 for $320,000

Handsome, all brick townhouse in walkable Buckhead. Largest floor plan in this community, bright corner unit with extra windows. Unbeatable location with secluded, shady forest views. Updated kitchen with stainless steel appliances and baths with sleek modern features. Fireside living room, dining Area, bamboo floors on main, and a private courtyard for sipping iced tea on hot July evenings. The expansive master suite has a sitting area and huge walk-in closet. Second bedroom and office for work-from-home days when the idea of facing traffic in 90+ degree heat is too much to bear. Fabulous swim neighborhood within walking distance to prime shops & restaurants.

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Cabbagetown. 1/1 for $175,000

Historic converted loft with modern finishes & amenities! Features include open layout, concrete floors, exposed beams and brick. Living room and dining room combination, adjacent to a beautiful kitchen with espresso cabinetry, quartz counter tops, stainless appliances and glass tile backsplash. The stylish and practical bedroom with a walk-in-closet to house all your hippest clothing. There’s a spacious spa-like bathroom with a separate laundry room and storage area! Amenities include superb fitness facility & arguably the best pool in Atlanta. Walk to Krog St Market, Edgewood district, Beltline & many bars & restaurants!


So if you’re picturing yourself in one of these homes, call your friendly Atlanta realtor and let’s get started.

404-388-0400 or email condosales.queen@gmail.com

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Queen’s Picks of the Week

Your Friday round-up of the best homes on the market in Atlanta!

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Morningside

3/2 for $775,000

COMING SOON.  Renovated, comfortably sized bungalow in Morningside.  The large rocking chair front porch with bead board ceiling is equipped with mosquito mist system. What a landing place to come home to and sip a glass of iced tea and meet the neighbors.  The loft upstairs is great for kids or a large office. The 2 car detached garage has plenty of extra storage upstairs. Superb gardens and calming fountain off a low elevation terrace. Fenced yard front and back with electric gate gives you peace of mind for your children and pets  Full security system with cameras.  Remodeled kitchen with keeping room.  Please call for more details.

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Peachtree Battle

3/2 for $519,000

RARE OPPORTUNITY to own one of the last single family residences on Peachtree Road, Atlanta’s most famous street. Also on the National Register of Historic Places, this home became part of the Peachtree Commons Condominium in 1980. Although fully detached, this home enjoys all the perks of a condominium lifestyle! The following items are new: kitchen, HVAC system, roof, windows, master bath, large rooftop deck, additional clothes closets, doors and hardware. Located two blocks south of Peachtree Battle, you will absolutely enjoy the walkability to everything. Location, location, location! Please call for more information. 

If you’d like to know more about the listings in this email or have an interest in Atlanta real estate, please contact Patricia Queen with the BRIGHTSTAR group at Keller Williams Midtown.

404-388-0400

Cha cha changes to Lending Regulations

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You may have heard that the feds are changing the rules and regulations regarding mortgage lending at the beginning of August this year. And while this news has caused a lot of potential buyers (and more than a few realtors) to panic, it’s not as scary as it first seems. Yes, the new changes to the rules will tighten down on lenders and buyers, but the ultimate goal is to eliminated the chaotic frenzy that often pops up right before your closing is scheduled. Let’s go over some of the major points of the changes and what their intended purpose is.

  1. Loan estimates: buyers will need to supply all documentation (identification, income, property address, etc.) to lenders earlier on in the lending process. The lender will then have a shorter amount of time to issue the loan estimate. This will eliminate the back-and-forth process of the lender asking for more and more obscure documents, and you frantically digging through several year’s worth of paperwork that’s been shoved in the back of a desk drawer. It also means that you’ll want a lender who is really good at communication. Online lenders may be able to provide a slightly lower interest rate, but they may not be responsive enough to address issues with these new laws. Talk with an experienced mortgage lender at a local institution. Interview them, and make sure they really know what they’re doing.
  2. HUD statements: if you’ve never bought a home before, you probably don’t know what this is. It’s a three to four page document prepared by the closing attorney with hundreds of lines of tiny print that spells out all your future taxes, escrow, interest payments, etc. It’s a daunting thing to sort through. Most people’s eyes just glaze over trying to figure it out. No more. The new form, the Closing Disclosure, will be easier to read and MUST be delivered to the buyer a full 3 days before closing. This is the biggest win for buyers because very often a preliminary HUD gets issued on the morning of closing (or the day before, if you’re lucky), leaving very little time to read over the document and make necessary changes.

The main take away for buyers is that these changes will hopefully eliminate stressful last-minute changes. Realtor.com says, “Real estate and other industry professionals should no longer expect to be able to make last-minute changes at the closing. They should prepare their clients for this as well. A good rule of thumb is if you want to close on September 30th, make sure everything is ready on September 23rd.” Ultimately this will be a good thing for everyone as it insures that all documentation, numbers, and rates are finalized before the eleventh hour deadline. However, it does mean that lenders and realtors will need to be exceptionally organized and efficient. So when shopping for your new house this fall, make sure you work with a trustworthy realtor and a knowledgable lender.

Queen’s Picks of the Week!

I’ve been sending these fantastic new listings out via email for about the past year. I thought it might be time to share them here too. Read on to find out more about my picks for the best new listings on the market this week and each week to come.

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Morningside

3/2 for $725,000

Classic updated home on Morningside’s favorite street. Picture perfect renovation with attention to original period details. Fireside living room, dining, & two large bedrooms on main with a lovely bath; custom designed kitchen with high-end SS appliances including Wolf range & Bosch dishwasher. French doors from kitchen open to large deck overlooking professionally landscaped, & fully fenced backyard. Enjoy peace & quiet in the middle of the city! Master suite upstairs with his/her closets, ensuite bath with double vanity, jetted tub & large shower. Home is situated on wide and deep lot and is exceptionally private. 

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Buckhead

1/1/1 for $210,000

A neat spacious two story loft with 20 ft ceilings in the living room. Extremely rare loft layout in the heart of Buckhead! This condo features hardwood floors on the main level, tiled back splash, granite countertops, convection oven, full-size washer/dryer and walk-in closet. Amenities include rooftop terrace (pictured above) with hot tub, outdoor fireplace, gym, conference room, 24/7 concierge & more. Low maintenance living with an HOA that includes everything but electricity. Easy walk to Buckhead upscale shopping and restaurants.

Why are May, June and July Such Important Months?

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Simply put, home buyers in Georgia have greater interest in buying a home during these three months. This means that is you are thinking of selling you may want to be up to speed on the following two subjects.

Signs You Should Sell (via RIS Media)

  • You’ve outgrown your space—really. This is usually the number-one reason that gets me thinking about moving up to a bigger home. I get anxious trying to find sleep spaces for overnight guests or frustrated by my overcrowded closet. But truly needing more space is about more than that. Do you have kids outgrowing shared bedrooms? An in-law moving in? A new virtual work opportunity that requires a home office? These are the life events that really necessitate a bigger home—not the inability to curb one’s shoe-buying habit.
  • Your neighborhood is booming. While home sales and values are improving at a healthy yet gradual rate on a national level, you may find yourself smack-dab in the middle of a hot market. Pay attention to those “Recently Sold” postcards in your mailbox and talk to those neighbors plunking down For Sale signs in their yards. Contact your local real estate professional and check out comparable sales. If homes are selling above listing price and you’ve been on the fence about selling for a while, now might be a wise time to take the leap.
  • You’re letting things go. Remember when home improvement projects and landscaping chores were fun? When you’d spend hours happily painting, planting and hammering away? Well, if that’s a distant memory and your grass is knee-high and the porch railing’s rotting, this may be a sign that you’re ready to move onto a maintenance-free way of life. Realize that the more you let things go around the house, the more money you’ll have to invest to get it ready for market or worse, you’ll have to drop the price to get it sold. So honestly evaluate if it’s time for a home that offers a simpler, less work-intensive option.
  • Your equity is back. Many of us didn’t even consider selling for many years based on the fact that our equity evaporated during the housing crash. But don’t stay stuck in that mindset. The fact is, increasing numbers of homeowners are returning to positive equity. According to Corelogic’s Third Quarter 2014 Equity Report, 94 percent of homes priced at $200,000 and above have positive equity. So do some research and have your home reappraised. You may find that your equity is back and that selling is an option again.
  • Your life has changed. An important life change can trump all other reasons to sell your home. Growing or shrinking families, a new job with a new, long commute, retirement, divorce, etc., are cause to seriously consider moving on to a home that makes more sense for life as you now know it. Ultimately, a happy home is one that’s in sync with your current phase of life. Make sure you find the right fit.

Fast Fixes for Frugal Homeowners

  • Up your curb appeal. Annuals and potted plants are a good way to bring life and color to a drab exterior.
  • Clean out the cobwebs. Dust off your home’s exterior with a broom or pressure wash to make sure there’s no dirt lingering on your doorstep.
  • Paint the front door. Paint the window trim too, if you’re feeling ambitious.
  • Paint interior walls. Something neutral. Light grays are gaining in popularity.
  • Update the lighting. If you’re still rocking that brass chandelier from the early 90s, now might be the time to invest in something a little more contemporary.
  • Install new toilets. It’s not uncommon for inspectors to find problems with seals and installation. Proactively avoid this by installing new, low-flow toilets prior to listing for a sparkly, clean look. For bonus points, install new faucets too.
  • Stage bathrooms. New shower curtains and towels go a long way.
  • Shine! Shine the floors. Shine the door hardware. Shine the windows. These three areas give your home the feeling of being brand new.

Residential Romance: Falling For Your New Home 

Is finding your new home like falling in love? While love at first sight sounds great, it’s not always that easy. A 2014 study found that homebuyers view an average of 10 homes before finding “the one” and slightly more than half spent six months searching the market. According to the same study about half of homebuyers struggled to find the home they wanted within their budget. And while 71% said they’d be willing to settle for something less than their perfect vision of a new home, three out of four buyers think they’ll know immediately when they find the right home.

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However, our team’s experience is a little different as we find that over 50% of our buyers find their home after seeing 5 homes. About 15% of our buyers accept the fact that the perfect home and price for them does not exist and they settle… somewhat. Happy but not the whole enchilada.

If you’ve been “dating around” to find the right house, you might be getting a little tired of the game. It’s important to set realistic expectation, as with anything in life. So how will you know when it’s time? Perhaps the following questions to ask will help.

WHAT DO YOU FEEL?

Does the home make you happy, excited, hopeful? Did you go home and immediately start looking at pictures of it online? Are you talking about it with family and friends? Clearly a great sign that you may have found your dream house.

IS IT A HEALTHY HOME?

Getting a home inspected in a crucial part of the process. Make sure that your agent negotiates a sufficient due diligence period for you to hire a home inspector to check for any hidden defects. And make sure you and your realtor have a plan for what to do it any are found. Radon is the new buzz service. However my friends. Atlanta real estate sits on top of granite and granite emits radon. As for readings, a reading of .4% is acceptable according to the EPA. 2% is pretty darn good. Basements and homes on slabs are the most likely to encounter higher radon readings. Don’t let this alarm you too much. A typical situation can be remediated for less than $1500 – and the resulting air quality will be the best on your block. Please call or write if you would like to contact the company we use.

DOES IT CHECK ALL THE CRITICAL BOXES?

Is it big enough? Is your family growing? Are the schools good? Good schools = can mean higher profitability when you sell and you do not need to have a family to appreciate profitability. How about location? What is important to you and in what order? A shorter commune? Retail and restaurants in your neighborhood? Churches? Schools? Those are important questions. Does it have a claw-foot bathtub with a build in waterproof sound system? Not so important because that can always be added later.

IS THIS THE HOME FOR YOUR FUTURE?

You’ll likely be living in your new home for several years to come. What does several years to come mean? Even if it’s perfect right now, is it something you can grow with? And, what does several years to come mean? Our housing behaviors have changes drastically in the last 30 years. Typically, we move much more often than our parents did. Today, we tend to move every 5-7 years. Whether it be a transfer or new job elsewhere or you want a bigger or smaller home, we Americans move often. As for myself, I have owned oodles of homes and lived in all of them.  Want to guess how many? Comment below and if you are correct I will send $5 to you.

Next week’s blog will be on home design trends. Until then, Atlantans, work hard to make up the two misjudged snow days just experienced in the ATL.