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3 Ways to Improve Home Buying Power
Posted By - Michael Tally - 08/22/2019

If you or anyone you know is buying a house this summer, chances are you’ll be dealing with competing for offers and low inventory issues.  Here are three ways to avoid getting priced out of the house you want:

1 – Consider Your Overall Debt Strategy
For example, what would it look like if you used some of your down payment funds to pay off other debts instead of using those funds for a down payment?  This may open the door to getting you qualified for a larger mortgage so you can bid higher on the house. Plus, home loans often carry a lower after-tax interest cost than other debts that may not be tax-deductible. Please see a CPA for details on the tax-deductibility of mortgage debt in your situation.

2 – Consider an Adjustable Rate Mortgage (ARM)
Depending on bond market conditions, the interest rate (and monthly payment) on an adjustable-rate mortgage can often be lower than a fixed-rate mortgage.  If this is the case in your situation, you may be able to use an ARM to comfortably afford the home.  Keep in mind that many ARMs have interest rates and payments that are fixed for a period of 5 years or 7 years.  This means the only risk to you is that you keep the house for longer than the initial fixed period AND interest rates go up considerably after that timeframe.

3 – Consider the Use of Gift Funds
Gifts from friends and relatives can often be used for a down payment.  Gift funds could be very useful if you find yourself in a bidding war where you’ve maxed out your mortgage options and the only other option is to come to closing with more cash.

Contact me for further details




Choose a Realtor
Posted By - Michael Tally - 1 day ago 559 comments

Many buyers today have become very adept at using numerous real estate sites to look for homes.  Though, there's a lot more to a home than just some pretty pictures and a link to a web site.  The old adage about "location, location, location", is still true.  And, when it comes to a local neighborhood it's your local Realtor that can be your greatest source of information:




Discontinuation of the REO Sales Initiative FY 2015
Posted By - Michael Tally - 1 day ago 585 comments

Effective October 1, 2014, the Atlanta Homeownership (HOC) will be discontinuing the use of the Broker Bonus Initiative in the following markets: Alabama, Florida, Georgia, Mississippi, Illinois, Indiana, Tennessee, and Kentucky.

HUD’s Asset Managers will continue to review those preliminary bids that are submitted through September 30, 2014, for the three-tier broker bonus that is currently being offered in the above referenced markets. However, all preliminary bids submitted to HUD on or after October 1, 2014, will not be eligible for a broker bonus. HUD will not entertain any exceptions to this change.




The Biggest Mistake People Make When Selling Their Home
Posted - 2 days ago 68 comments

 


The biggest mistake when selling your home is the listing. Are you going to

try to defy all odds and sell it yourself, or are you going to put the odds in

your favor by marketing your home on the Multiple Listing Service (MLS)?
OK. You know you can't save the commission by going it alone.

The For-Sale-By-Owner or FSBO only invites problems. And the biggest problem for the seller is

the bottom-fisher, the guy who is looking to "steal" your home. He knows you

don't want to pay a commission to get "expert" advice, negotiating skills, and

marketing efforts. So you must "pay" him. After all, he put in the effort to find

you, he put up with limited ability to "view" the home, and he knows that the

home isn't presented in its best light. So he deserves a discount. A huge

discount. He doesn't have much competition either. Only other bottom-

fishers.

Real Buyers

The "real" buyers are working with an agent to gain access to the

homes they want to see, and to help them make an offer.
So FSBO isn't your best move. Who are you going to list it with? You could

"give" the listing to your Sister-in-Law who has a license and works at real

estate part-time when she isn't at her "real" job. No matter who you "give" the

listing to, it is a gift. They will get a lot of money in exchange for your gift.

After all, they didn't do anything, you just gave it to them. A gift, pure and

simple.

Hire The Best

When you list you house, you need to employ someone to be your full-time

agent, to be your full-time marketing expert, to be your full-time negotiator,

and your full-time advisor. And most of all the listing agent needs to be your

fiduciary. That means he puts your needs ahead of his own. He isn't going to

urge you to accept a low offer just so he can get paid. Your best interest Is his

duty (morally, ethically, and legally).

This not a gift. It is a professional

employment contract. You get real value for signing the listing contract.
The biggest mistake people make when selling their home is by not

employing the best full-time, experienced, knowledgeable, and able real

estate professional that they can.

Don't give away money, hire the best agent to list your home.

-




Freddie Mac Announces Up to 12-Month Forbearance for Unemplo
Posted By - M.Tally - 2 days ago
Effective Feb. 1, Freddie Mac is giving mortgage servicers expanded authority to provide six months of forbearance to unemployed mortgage holders without prior approval, and an additional six months (12 months total) with prior approval. This new policy essentially doubles the previously offered forbearance period. It’s important to note: This applies to Freddie Mac-owned or guaranteed loans only. There is ACTION required. The homeowner must contact the servicer to request the forbearance. Delinquent borrowers in an existing short-term forbearance plan can be evaluated for an extended forbearance term under the new policy. Again, homeowners will need to contact their servicer to apply.


Congress Extends Mortgage Debt Relief Act!
Posted By - M.Tally - 2 days ago 7 comments
On January 1, 2013, as part of the so-called fiscal cliff negotiations, Congress passed an extension of the Mortgage Forgiveness Debt Relief Act. This extension of this act, which has saved homeowners more than $1 billion dollars in taxes, is great news for struggling homeowners nationwide, and for the agents that represent them. The extension is now only awaiting President Obama’s signature. The Mortgage Forgiveness Debt Relief Act was originally passed in 2007 to aid the millions of homeowners who suddenly found themselves in danger of losing their homes to foreclosure following the housing market crash. Under the Mortgage Forgiveness Debt Relief Act, debt forgiven in a short sale, foreclosure, or loan modification, is exempt from federal taxes on primary residences. For homeowners facing foreclosure, this exemption saves them from paying thousands, or even tens of thousands, in taxes on top of losing their homes. Now for another year, homeowners can take advantage of this exemption and avoid foreclosure without the fear of an impossible tax liability. And with banks recognizing the significance of short sales as an effective loss mitigation tool, they’re ramping up for business. Short sales will be the key loss mitigation tool used by mortgage servicers in 2013. Be sure to visit my short sale website www.tallyshortsales.com for additional short sale materials.


Buyers 10 Commandments
Posted By - M.Tally - 2 days ago 554 comments
As a Realtor, when I meet with first-time buyers, we discuss what they need to do – get pre-approved for a mortgage, evaluate priorities, sometimes save money. And we go over what they MUST NOT DO. We’ve created a tongue-in-cheek set of commandments, things like “Thou shalt not become self-employed, change jobs or quit your job.” Most buyers sort of laugh at this. I’ve never had a buyer actually do something like that. But I have to believe that not every Realtor covers this information with their buyers because this week we had not one but two buyers break the commandments on our listing, sending the loan approvals into a downward spiral. One buyer apparently thought he could still getting a loan after taking a leave of absence, suing his employer and then quitting a job. And with many buyers purchasing short sales (sometimes a long” process), there’s enough time that buyers’ financial situation can change dramatically from the time of pre-approval to the time of final underwriting. Some situations – devastating illness, death of a spouse – are unpreventable. Others are definitely in the buyers’ control. Here are the 10 commandments for getting a mortgage: Don't buy or lease a new car or you may find yourself living in it Don't quit your job to change industries or start a new company Don't switch from a salaried job to a heavily-commissioned job or 1099 independent contractor position Don't transfer large sums of money between bank accounts. If you need to do so, check with your loan officer to ensure what kind of documentation will be required BEFORE you make the transfer Don't forget to pay your bills -- even the ones in dispute Don't open new credit cards -- even if you're getting 20% off. (And yes the offers at some of the department stores are tempting but resist the temptation!) Don’t make big purchases on the existing credit cards. The time to buy the new furniture and appliances on credit is AFTER you own the home, not before Don’t close any credit card accounts. This may change your ratios, which help determine how much mortgage you qualify for Don't accept a cash gift without filing the proper "gift" paperwork. Ask your lender what documentation is required. Don't make random, undocumented deposits into your bank account If circumstances dictate that you might need to engage in some of these behaviors, always talk to your loan officer first. And then follow their advice. If you need a referral to a good loan officer who can help you through the process, I’d be happy to provide one.


The time to SELL your home is NOW...
Posted By - M.Tally - 2 days ago 5 comments

Federal Reserve’s Quantitative Easing Ushers In Perfect Time To Sell Your Home Or Buy A New One

 

Over the past month the call has gone out for all those who have waited that perfect time to sell their home or were unsure of the best time to buy. Have you heard the big news about the Federal Reserve's plan to spend $40-billion each month buying mortgage-backed securities to boost the sluggish economy?

 

The mortgage debt buying through QE3 will continue over the next several months, until measureable improvements to the economy are seen. Hoping this action will help strengthen recovery efforts of the housing market, the Fed wants to put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

 

As a home owner ready to sell or a home buyer looking to purchase a property, there has never been a more definitive time for you to make your move than right now. When the interest rates are low, buyers have more buying power and sellers do not have to settle for less. The ability to purchase more changes dramatically, even at a 1% lowered rate.

 

For example, a home selling for $225,000 at a 4.65% interest rate has a calculated payment of $1,160.18 per month. With a 3.65% interest rate, or 1% lower, the monthly payment would be reduced by $130.90 equating to a housing payment of $1,029.28. This translates into another $28,615 of buying power.

 

Whether you are buying or selling, it is a major financial decision that directly impacts you and your family, so in order to get the best deal, you must act quickly. Political gimmicks and election year aside, no one knows when this Federal Reserve spending will suddenly end. Yes, it has the capacity to disappear, maybe even right after the holidays and before spring is in the air.

 

If you have been waiting for the right time to sell or purchase property, this is it. Now is the time to take advantage of this great opportunity to use this incentive to sell your home or buy the house you have always wanted.

 

Contact me today and let me help you buy or sell your home.

 

All the best,


Michael Tally

678.519.3722

michael@tallyrealestategroup.com 

Tally Real Estate Group

 




5 Reasons Why Credit Reports Matter
Posted - 2 days ago 6 comments

Credit reports are an indispensable tool for agents and property managers because they help you filter out the most qualified renters. Following your gut about an applicant isn’t reliable, and it could get you in trouble under Fair Housing laws. Looking at credit and background checks gives you documentation and grounds for either accepting or rejecting a renter. If you aren’t utilizing credit reports to help you select new tenants, here are some reasons why you should start.

It’s important to lease to responsible tenants

Looking at a credit report tells you if a renter is financially responsible — a big deal if you plan on receiving rent payments on time. If they have outstanding debt or financial burdens, you’ll have an immediate red flag. Use a credit report like a report card: Use the records to make a positive or negative judgment on a person’s ability to pay monthly rent.

Avoid being the victim of a scam

Researching a renter’s background and financial history allows you to confirm the tenant’s identity. Renting out your unit without a lead qualification process opens yourself up to being the victim of renter fraud. Confirm a renter’s identity and employment, and speak with previous landlords to confirm rental history.

Maximize your time

Unqualified tenants aren’t worth your time or effort. Don’t make filling vacancies a rushed process. By requiring each applicant to submit a credit report, you’ll save yourself time in the long run by being able to eliminate problem tenants early in the leasing process, which is way better than finding out the hard way a few months into the lease. Taking the time to find the “perfect” tenants is a good investment because they’ll make paying rent on time a priority and take care of your property.

Judge all tenants fairly

Violating Fair Housing laws can get you into big trouble. A good way to minimize the risks of this happening is to judge all your applicants using the same method — by analyzing their credit reports and performing background checks. Select tenants on their ability to pay rent on time and take care of your property.

Establish trust

Leasing out your property is similar to getting into a long-term relationship — trust is the key to ensuring that both you and the tenant have a good rental experience. Knowing that a renter is financially secure and has a clean background gives you a solid ground upon which to build a sound landlord-tenant relationship.




What To Do If You are Facing Eviction
Posted By - M.Tally - 2 days ago 19 comments

While it’s never nice to be presented with an eviction notice, there are ways to deal with it gracefully.  Even though eviction laws vary from state to state, and every situation is different, there are some things you can do if you find an eviction notice taped to your door.

  • Don’t ignore the notice.  Whether the notice is considered a legit, court-ordered notice posted by the sheriff or an “empty threat” note posted by an angry landlord, you MUST respond.
    1. Respond with common courtesy.  If you feel that the eviction is unfair, then the beauty of this country is that you can have your say in the matter in front of a judge.  However, if you really are behind on your payments and/or have broken some sort of agreement to pay (i.e., a lease or mortgage agreement), then you will likely need to have a really good reason for non-payment.  But you can’t go screaming, yelling or cussing at the landlord or the judge.  Be professional, you’ll get farther with both and maybe find some leniency that is fair.  Just be sure that you have your ducks in a row and have documented everything.
    2. Initiate a conversation with the landlord and propose some sort of payment arrangement.  Maybe you can’t make the entire $1,000/month payment, but you can make it in pieces.  Chances are your landlord doesn’t want another vacancy, so maybe they would be willing to make arrangements in which you would pay $500 at the beginning of each month and $550 in the middle of the month for a short term.  If possible, show good faith by offering to pay a little more to the landlord (call it capped late fees) for their efforts.
    3. Follow through.  Whether you make payment arrangements or some other sort of agreement, you must follow through.  If you can’t keep the arrangement that are agreed to, then ask the landlord if they have another rental that is less expensive for you to move into that will meet your budget.
    4. Accept that truth is truth.  Maybe there is no way of working something out and you must really vacate your home before the landlord and sheriff physically move you and your stuff to the curb. There is nothing wrong with downsizing until you get back on your feet.  Your landlord knows that sometimes people fall on hard times and chances are they are not completely heartless, especially if they see that you are trying.  Therefore, be cooperative and when you are back on your feet, you may still be able to use the landlord as a future reference.

    Notice that every single one of these tips are related to some sort of communication.  Evictions aren’t pretty, but if you do find yourself in one then take a deep breath and let all the parties know what is going on.  Whether it be an exit plan on how and when you are moving out of the property or a payment arrangement plan, good communication will make a sour situation easier to handle.




    When Will Real Estate Values Begin to Appreciate Again?
    Posted By - Aubrey Clark - 2 days ago 53 comments

    When will the nation’s property values begin to appreciate again? This is the $64,000 question that real estate professionals, investors, and mortgage professionals would like to know. The truth is nobody can accurately predict the return of the real estate market.  Like everyone else, I can’t predict the end of this crisis either, but what I can do is tell you what will have to happen to facilitate that change. The answer is quite simple: America must reinvest in herself once again. Without an investment, real estate is as worthless as the Dollar is today.

    Think back, or read a history book, about how families in the ’40s and ’50s used to buy homes. Young couples lived with Mom and Dad during the “courtship” prior to getting married, until they had saved 20% to put down on their “dream home”.  They made an investment in America, (i.e. the American dream). In the years that followed we have devalued that investment in lieu of credit and the easy access to it. Property values rose artificially and our nation became addicted to credit.

    The value of the dollar has been demolished due to the same principle. When we place value in assets based on their ability to be easily bought and sold versus the value that has been invested in the asset, we devalue its worth. For example, two years ago I could have bought an $800,000 house (and I assure you that I cannot afford a house that expensive). The owner of that asset (the $800k house) placed value on his asset based on the availability of buyers like me who could buy the home. The problem is, this homeowner probably had less than 5% invested in the home. Where do you think that homeowner is today?

    Had he put 20% down on his home, he would then own a valuable asset in which he has a real investment. This outlay of cash forces him to buy and sell his home in the same manner he would move an $800k investment around in the stock market – very carefully. Thus, the home has REAL value. However, having bought the home with little or no money down, the asset became disposable and so follows the real estate market.

    So, as I said earlier, I cannot predict when the real estate market will bounce back, but I can tell you what needs to happen before it does. America needs to reinvest in herself by getting back to solid buying and selling principles. This strengthens home values, which encourages investors who employ builders who employ carpenters, painters, real estate agents, loan officers and so on. America was built on the “American Dream” which has turned into the “American Nightmare”; she can only be rebuilt by hard working Americans, not by Wall Street.




    WHY I OWN REAL ESTATE
    Posted By - M.Tally - 2 days ago 535 comments

    WHY I OWN REAL ESTATE
    And why you should too.

    • INCOME - Rent pays for the property & in essence, the tenant is buying the property for you. Aim for positive cash flow, but be willing to endure a little negative cash flow to ensure the potential for future appreciation of the property.

    • DEPRECIATION & OTHER TAX BENEFITS - Depreciation is a non-cash expenditure, and can be used to offset income from other sources. That's a tax shelter. The profit from a home sale is taxed at long term capital gains rates which are lower than regular income tax rates. The profit isn't subject to Social Security tax of over 15% like ordinary income.

    • EQUITY BUILD-UP - Sooner or later, the loans on all of the property you own will be paid off, and after that, it's just taxes. All my mortgages are 15 year.

    • APPRECIATION - Each day houses are worth more than they did the day before. The stock market is volatile, while real estate tends to be stable. When home sales are slow, prices tend to be flat, and when the market's hot, prices tend to jump up, but it's unusual for prices to decline.

    • LEVERAGE - Leverage is the ability to use other people's money to control a large asset. It allows you to acquire and control huge dollar amounts of real estate without having to have a lot of cash. By using the tax deferred exchange technique, you can move from property to property always leveraging your way up in the world of property ownership and never have to pay a dime in income tax.



    Short Sales: Short End of the Stick or Wise Investment Oppor
    Posted By - M.Tally - 2 days ago 5 comments

    Price is often one of the largest factors that goes into the decision to purchase a home, during your housing search. So long as they don’t sacrifice other elements that are important to them like size and location, the cheaper the better tends to be most home buyers’ motto. Many homes are selling for far under their actual worth in today’s harsh economic climate. Short sales encompass much of these homes.

    When a home owner falls behind on their mortgage payments, short sales occur. The home owner’s mortgage lender agrees to allow the home owner to try to sell the home for a lesser value than what’s still currently owed on it, instead of going through the foreclosure process, which can be emotionally draining for everyone involved. This is not without its caveats, although it can be a great deal for a would-be buyer.

    If you find a home you love that happens to be a short sale, you need to get informed on a few separate things. First, a seller’s acceptance is only the first step to obtaining the home on which you’ve put an offer. It’s the lender’s loss to suffer if the home sells for under what’s still owed on the mortgage. The lender consequently is the one to accept or reject any offers placed on the property, as opposed to the seller. You may have to wait up to several months to hear a response back from the lender, even if the seller accepted your offer immediately. If you’re under time constraints to buy a house, you might have to reconsider your options.

    Despite the lower house sale price, there may be hidden costs to short sale properties. Most lenders will note in the housing contract after they’ve accepted your offer that the house sale is as-is. Housing inspections are important, and it’s not so much a matter of whether or not to actually have one done but more an issue of whether you can afford to fix anything that the inspector notes as defective. It usually will not be possible to negotiate with a lender any changes in price as a result of the discovered defects.

    Short sales can consequently be a good option if you’re looking for a deal of a home to buy. Just be sure to note the pitfalls and keep your expectations realistic during the process.




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