Bargians for brave consumers - Alpharetta, Ga

Consumer Reports
Recession's bright side? Bargains for brave consumers

Lets say you have some cash on hand, your job (or other source of income) is secure, and you love a good bargain. What opportunities might a recession bring?

First a disclaimer: Nobody, including us, knows whats ahead for this economy or, indeed, precisely whats happening now. (Recessions are officially determined after the fact by the National Bureau of Economic Research.)
However, the battle-scarred veterans of our Money team have seen our share of recessions, and some of us even took notes. Based on our collective judgment, here are some of the possible buying opportunities that consumers with cash and the guts to spend it may find:

Homes. Home prices are already down in many parts of the U.S. Where they go from here is anybodys guess, but few of us would expect them to rise at a steep pace anytime soon. So if youre in the market for a home, now could be a good time to start looking and get a baseline feel for the market even if you decide to hold off buying for a while.

Mortgages. Interest rates are already relatively low, averaging 5.42 percent for a 30-year fixed-rate mortgage as we write this. Credit standards have been tightening, though, so expect higher hurdles in getting the very best rates.

Stocks. Some are sure to become bargains, but unless youre a stellar stock picker, consider a no-load stock index fund and hope to benefit from an overall rise in the market. Keep in mind that stock prices will often start upward well before a recession ends, as investors look ahead to better times.

Credit cards. Our resident credit expert thinks people with good credit scores should have a golden opportunity to negotiate for lower rates. Issuers will want to hold onto creditworthy customers more than ever.
Cars. If demand continues to drop (sales for 2007 were down compared to 2006), car makers and dealers will have to do something to move their wares.

Appliances and electronics. Ditto.

Luxury goods. Sales are already slowing, we hear, so high-end goods may carry less-high prices.

EBay stuff. People eager to raise cash may be auctioning off knickknacks and what nots in record numbers. So that Pee-wee Herman doll or first edition of Proust youve long wanted could be yours for the clicking.

Home remodeling. Lower demand should mean more room to bargain and, possibly, less wait to get the work started. If you need to finance your home improvement, you might also find favorable borrowing terms if your credit score is high.

Travel. Our travel expert says to expect fare cuts from the airlines, but beware of the carrier going bankrupt before you can use your ticket. Hotels and rental cars should see cuts too.

Other services. If its something consumers can put off until the economic clouds clear (cosmetic dentistry vs. an aching tooth, for example), demand should drop and prices along with it. And it rarely hurts to haggle even in the best of times.
Copyright © 2004-2008 Consumers Union of U.S., Inc

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Recessions & Home Buying - Alpharetta, Ga

Seven Reasons to Welcome a Recession

By Jeffrey Strain, Special to TheStreet.com
Recessions breed fear.
It's only natural. A slowdown in production at companies can result in layoffs and restructuring. People fret about their jobs and worry that it will be much more difficult to find new employment if they are let go. These are understandable concerns.
But for contrarians and bargain hunters, recessions provide a world of opportunities. Here are seven ways that a recession can actually benefit your personal finances:

Affordable Homes

Those who bought homes looking to flip them for a quick profit and those who took out huge loans that they couldn't afford to pay will look at a recession with fear, but a recession should have little meaning for those who bought a home with the purpose of living in it for a long time.
Recessions are usually short-lived, and the housing market should recover long before most people are planning to sell their house.
For those who had been unable to afford a house because of soaring prices in the past few years, a recession is a golden opportunity. It brings housing prices down to more affordable levels. That means that many people who wanted to buy a house will be able to purchase one.
Recessions are also a good time to look for investment properties or vacation homes if either had been in consideration.
A recession gives anyone looking for quality housing a lot more bang for their buck than when the economy is flying high. Being able to purchase a quality house at an affordable price can greatly increase a person's net worth in the long run.

Low Mortgage Rates
In the attempt to ward off a recession, the Federal Reserve has made interest rates extremely low, resulting in more affordable loans for those who are in the market to purchase a house.
While these rates may not be available throughout the entire recession if inflation continues to rise, the rates will be around as long as the Fed can use them to ease the recession. Taking advantage of these low rates along with lower housing prices can truly make housing a deal.

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Hot Deals in a Cool Market

Hot Deals in a Cool Market
By Kiplinger

Buying or selling a home? Here's how to strengthen your hand in rough times.
Birth, death, marriage, divorce. Throw in new careers and lost jobs, and you've got the reasons most of us fail miserably at timing the real estate market. We sell and buy because life -- not market conditions -- drives the decision.

It's how you manage the deal that dictates whether you'll give up too much of your profit in a fire sale or forsake future profit by paying too much -- especially now that the housing market has taken a chilly turn. In the fourth quarter of 2007, the median home price in the U.S. fell 5.8% over the same period 12 months prior, according to the National Association of Realtors. And 13% fewer homes were sold last year than the year before. Below, we have tips for both buyers and sellers to help you strengthen your hand in these rough times, no matter what side of the transaction you're on. (Hint: It wouldn't hurt to read both sections so you know the other team's strategy, too.)

Buyer Tips
Buyers definitely have the upper hand in a cool market. You can press your advantage to negotiate the best price possible. However, bear in mind that today's credit crunch has lenders tightening their belts, so you'll need to make the right moves to get a good deal on a mortgage. Also, dust off those negotiating skills that went unused during the seller's market of the past few years.
1)Have a down payment. A 100% financing deal is much harder to get. So be prepared to put at least 5% down. Lenders also want you to have at least two months' worth of PITI (principal, interest, taxes and insurance) in reserve.
2). Boost your credit score. Based on current interest rates, the average rate on a 30-year fixed-rate mortgage is about 1.3 percentage points lower for someone with a credit score of 760 to 850 than for someone with a score of 620 to 659. On a $200,000 loan, a borrower with a top-tier score would pay $173 less per month -- a saving of $2,076 per year -- than a borrower near the bottom, according to MyFICO.com.
3). Do your homework. Learn as much as you can about the local housing market and the seller's motivations. For example, find out what similar homes in the neighborhood are selling for at Zillow.com. Ask questions about the sellers, such as why they're selling, how long the home has been on the market, when they bought the home and how much they paid. Once you zero in on a property, hire a home inspector to find any defects in the home.
4). Sharpen your negotiating skills. Just about everything is negotiable when buying a house, especially in a buyer's market. When making an offer, it can include contingencies that protect you, such as requiring that the home pass an inspection, appraises for at least as much as you're paying for it and that the seller accept your offer by a certain time.

You also can ask that the seller pay part of your closing costs, include a redecorating allowance or remove an above-ground pool you don't want. The trick, though, is to prove to the seller you're a serious buyer without looking too eager. And you've got to be willing to walk away from a home if the seller refuses to negotiate in price or make concessions to your satisfaction.

Seller Tips
A cool market means it may take you longer to sell your home, and you might not get as much money as you'd like. Those are two tough pills to swallow. But if you make the right moves, you can increase your odds of striking a good deal and getting the most from your sale.

1). Pick the right agent. You want somebody who is going to market the place, not some slacker who talks you into setting a low-ball price and then waits for a bargain hunter to trip over the house on the MLS. Your best bet is to find someone who was in the business during the last downturn. That's a survivor who knows how to sell when others can't. Interview several agents.
2). Shop the market yourself to get a feel for prices. Ask your agent to show you listings that are competing with your own.
3. Buy down the interest rate. It's not a sales price that people are buying -- it's the mortgage payment. And buying down the buyer's interest rate is a smart way to attract buyers without giving up your profits. For example, lowering the buyer's interest rate from 6.5% to 5.5% on a $150,000 loan reduces the monthly payment by almost $100 per month.The buy-down would cost you about 4.75% of the loan amount, or $7,125 in this example. Alternatively, if you lowered your sale price by that amount, the buyer would save only $45 a month. You can also offer to buy down the interest rate for the first year or two for less money. Either way, you're allowing buyers to get more home than they would have otherwise been able to afford.
4). Dress up the house. Agents call it staging: Haul out the oversize furniture; get rid of clutter; break out the touch-up paint; polish the glass; buff brass fixtures; eradicate smells. "Things you were willing to live with are not necessarily something you want a buyer to see," says Kevin Cook, president of the Cottage Realty Ltd. in Berthoud, Colo.
5. Hire an inspector. Most buyers make their purchases contingent on a home inspection. But hiring your own inspector before placing your house on the market can help you identify things to fix ahead of time and make your home more attractive to the buyer. For example, you'll find out if your roof needs replacement or if any electrical or plumbing work should be done. Copyrighted, Kiplinger Washington Editors, Inc

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Historic Fed Move Cuts Both Ways for Borrowers - Alpharetta, Ga.

Historic Fed Move Cuts Both Ways for Borrowers

Hot on the heels of its surprise inter-session rate cut of 75 basis points last week, the Federal Reserve cut key interest rates again, the fifth straight cut since September 2007. In its statement last week, the Fed said it had decided to cut the federal funds rate "in view of a weakening of the economic outlook and increasing downside risks to growth." In other words, economic data suggests the US is on the brink of recession, and the Fed is acting accordingly.



Who benefits from this cut? If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit (HELOCs) and variable rate charge cards are the types of loans that will have an interest rate reduction on their next statement.

What does this mean for long-term rates? Long-term mortgage rates, the lowest we've experienced in years, could actually increase after today's cut, based on historical performance and recent trends.

So if you're waiting for long-term rates to fall further, don't count on it. Your best chance to lock in the lowest rates since 2005 is now. Getting your application in process now will allow you to capture a great rate before it's too late.

Thinking about buying or selling real estate in the Alpharetta? Have a Real Estate question? Please feel free to call Traci (no obligation) 678-575-6735 or e mail me at huntforhouses@yahoo.com

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Best Real Estate Agent in Alpharetta: What I will do for you!

Are Full-Service Real Estate Agents Worth the Extra Money?

Consumers are always looking for ways to save money, and paying real estate commissions can amount to tens of thousands these days. Not an insignificant sum to most people. Is it worth it to hire a full-service real estate brokerage over a discount service? Reasonable question. It's one I hear often. And the answer is it depends.

Type of Marketplace
Buyer's markets exist when inventory exceeds the supply of buyers. In these markets, some homes aren't selling at all.

Listings that sell at top price are typically those exposed to the most buyers, which are priced well, marketed well and show well.

MLS and the Internet.
I cringe when I see new listings hit MLS without a photograph because I know that agents and buyers are passing them over without a second thought. Many multiple listing services accept 8 to 12 photographs nowadays. For that reason, many full-service agents hire professional photographers and shoot double the photos required. The pros spend considerable time sorting through photos to select those with the most light, the best angles, sharpest contrast & color. Photos are cropped and resized to accentuate positive attributes. Each photograph is entered into MLS with a full-length enticing description.
When I see a photograph taken by the multiple listing service instead of a pro or the agent, I also see a lazy real estate agent who doesn't care enough or isn't getting paid enough to properly market her client's property.

Signage
Lots of mom 'n' pop operations and discount brokerages don't spend money on professional signs because they don't believe in it or they can't afford it. Good signage is free advertising. Many full-service firms will advertise:
Main office phone number
Agent's personal cell phone or voice mail number
Web site for more information
Virtual tour links
Specific information that makes this home different from others in the area.

Marketing Materials
Full-service companies tend to project quality, and that means four-color flyers and four-color direct mail pieces. The days of hiring neighborhood kids to toss photocopies on neighbors' front steps are gone. Full-service marketing is first class.

Open Houses
Not all homes are right for an open house, but those that are require finesse. This means working the buyers who come through by pointing out impressive features of the home without making the buyer feel oppressed or hounded, and that in itself is an art. It requires the service of an experienced sales person. Many discount brokers refuse to hold homes open.

Full-service agents counsel sellers.
They find out what made the seller decide to buy the home and how that moment happened. Then, they employ that knowledge at open houses. For example, suppose a seller said that moment came when she first stood gazing out at the pool. When she turned to her husband and gasped, "I can't believe we can afford to buy this home." Good sales people at an Open House would ask buyers to stand in that same spot by the pool. Then, they'd share the seller's first experience verbatim.

Negotiation Real estate is an extremely competitive business, and there are many agents fighting for the same listings. A full-service agent who wins the listing is probably a good negotiator, a person you want on your side during offer negotiations. Think about it. Agents who can persuade you to pay what they feel is reasonable, will probably persuade a buyer to pay your price. Ultimately, that means more money for you.

Final Sales Price
Sometimes full-service agents lose listings because the seller was promised a higher price based on hot air and a lower commission. It's these listings that often show up in MLS a month later with reduced prices. The amount of the price reductions, not surprisingly, tend to exceed the difference in commissions between the dualing agencies! In these scenarios, sellers received fewer services and ended up losing money on the sale as well.

If you can't decide between an agent who charges 1 or 2 percent less than another, think about how you would feel if you had to reduce your sales price, say five percent, to get the house sold. Ask the agents to show you their last 24 months of price reductions and compare them.

How Much Do Agents Make?
Agents are paid by brokers. Brokers retain a portion, sometimes 50%, and pay the balance to the agent. From that, the agent pays her overhead and taxes, which can easily amount to 50% of the net. A listing agent's true salary ranges from 20% to 30% of one-half the commission. Full-service agents typically spend more on overhead than their competitors; by refusing to compromise service, they tend to charge more.
Special Thanks to Ms. Elizabeth Weintraub for this article!

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Things Buyers Dont Ask For, But Should! Alpharetta, Ga

By M. Anthony Carr

When you're sitting right in the middle of a buyers market, or at least an equitable market (neither a buyer nor seller market), this is the time when buyers should start asking for the moon. If you don't ask, you'll never get what you want.

I've talked with many agents who entered the real estate market back in the day -- in the day when buyers meekly came to the door with their little contracts in their hands like some Dickens character asking, "Please sir, may I pay you some more," but during the whole exercise expecting a rap on the head for even asking. Thus these agents are still stained by the time of buyer pays for everything, seller get's everything.

Folks, those days are over. Ask for it all. "Please sir, may I have some more. May I take your house for 5 percent less than your asking price, you give me 3 percent closing on top of that, then throw in new carpet, fresh paint, new cabinets and the car parked in the garage?"

Instead, I hear agents say, "Well, I'm asking for so much in closing I thought it might insult the seller to ask for (fill in the blank)." Trust me, let the seller be the judge of that. If an agent is a "buyer" agent and comes back without asking for a lot of stuff, then they're not doing their job. The contract should come back marked up with a counter offer.

In a very limited survey I conducted in my area, 40 percent of the deals I looked over (more than 100) did not ask for closing costs -- and this is in a market where the sellers are willing to pay for it. I wasn't privy to the nuances of every paragraph on these contracts, but I can almost guarantee that if they didn't get closing costs assistance, then they probably didn't get a lot of other things like the items listed below.

Home inspection: If you're not asking for this item in today's sales environment, then you're just not in the game. It's almost expected. While the buyer traditionally pays for it, once defects are found, the seller is the one who usually has to get them fixed. Why buy a house today with a leaking air conditioner system, slow draining toilet or misfiring electrical outlets. The seller wants to sell and is willing to put in the money to get these items fixed. What s/he's not willing to fix, s/he will tell you. But if you don't ask … .


Home warranty: Contracts that don't ask for a home warranty from the seller just boggle my mind. Most sellers are about to come down on their price by thousands or tens of thousands of dollars, yet the buyer is "too embarrassed" to ask for a home warranty. It just amazes me. The buyer is willing to buy the house for $400,000, but not ask for a $400 home warranty to help protect the house over the next year. My advice: once the negotiation is over and let's say you have a seller who just won't pay for it -- then up the price $400 and get the cash from the transaction to pay for the home warranty. Done deal.

Closing costs: Whatever you're doing with the contract, at least ask for some sort of closing costs. The most effective closing cost item any buyer should ask for is a point for the mortgage. With this type of closing assistance, you'll have lingering benefit from the cash at the table because the point paid at the table will result in a cheaper mortgage payment month after month.

Until housing inventory begins to shrink and houses start selling for more than asking price, buyers should take advantage of the current market and negotiate more from the seller. The buyers get what they want -- assistance getting into the house. The sellers get what they want -- their house sold.
Published: August 17, 2007
By Realtytimes