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Buyer Tips Category

Owning a Home may be a wise Investment

Homeownership as an Investment


In Real Estate: Today’s Golden Opportunity we compared the current housing market to the market for gold about a decade ago. Some commented on the fact that you can’t compare gold to real estate as an investment as gold is a very liquid asset and it would take more time and effort to sell a house. We were not trying to make the case for real estate vs. gold as an investment in our blog. We were just showing that all investments go through cycles and that the best time to buy any investment may be when everyone is saying not to.

However, since the subject of comparing real estate to other investments has come up, let’s take a closer look. There are two major advantages to investing in a home of your own rather than another option:

You Can’t Live in Your IRA

When you buy your own home you are not taking available dollars away from another investment. You are replacing one housing expense (rent) which has no potential for a return on investment with another (mortgage payment) that does give you an opportunity for a return. We realize that there has been research showing that over the last 30 years renting has been less expensive than owning. That research also says that if you invested the entire difference between the rent payment and mortgage payment you may have done better financially.  There are two challenges with this conclusion:

  1. Today, in the vast majority of the country, renting is actually more expensive than owning a home.
  2. History has proven that tenants DO NOT invest the difference in their rent and mortgage payments.

Today,studies show that owning a home is no more expensive than renting a home. However, even if this wasn’t the case, history shows that owning a home creates greater wealth.

Paying a mortgage creates what financial experts call ‘forced savings’. The Joint Center for Housing Studies at Harvard University released a study last year titled America’s Rental Housing: Meeting Challenges, Building on Opportunities. In the study, they actually quantified the difference in family wealth between renters and homeowners:

“[R]enters have only a fraction of the net wealth of owners. Near the peak of the housing bubble in 2007, the median net wealth of homeowners was $234,600—about 46 times the $5,100 median for renters. Even if homeowner wealth fell back to 1995 levels, it would still be 27.5 times the median for renters.”

There Are Tremendous Tax Advantages to Investing in a Home

There is no doubt that selling an investment such as gold is easier than selling your home. However, this liquidity comes at a price. The price is called capital gains. That is the tax you pay on any financial gain you receive from the investment. This tax doesn’t apply the same way when you sell your primary residence:

Theresa Palagonia, a CPA and the Accounting Manager for the firm G.S. Garritano & Associates, was good enough to explain the Home Sale Exclusion Rules:

“You may qualify to exclude from your income all or part of any gain from the sale of your main home. 

Maximum Exclusion

You can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true:

  • You meet the ownership test.
  • You meet the use test.
  • During the 2 year period ending on the date of the sale, you did not exclude gain from the sale of another home.

If you and another person owned the home jointly but file separate returns, each of you can exclude up to $250,000 of gain from the sale of your interest in the home if each of you meets the three conditions listed above.

You may be able to exclude up to $500,000 of the gain on the sale of your main home if you are married and file a joint return and meet the requirements. (Special rules apply for joint returns.)

Ownership and Use Tests

During the 5 year period ending on the date of the sale, you must have:

  • Owned the home for at least 2 years, and
  • Lived in the home as your main home for at least 2 years

Certain exceptions exist in which you may qualify for the exclusion without satisfying the tests listed.”

Bottom Line

Every investment has pros and cons. That is why there is such an assortment of great opportunities. Real Estate has been, is and always will be one of those opportunities.

Move up Buyers – Do it now!!!

If you are thinking of moving up to your next dream home, wait no longer.  The market is perfect for that type of buyer right now.  Why?  Because the stats say it all!   500,000 and under homes in Atlanta are officially a sellers market, bringing more money for this home, AND 500,000 and up are still in a buyers market in Atlanta with more choices and lower prices.   The market is split between these two price points, so if you have  a home you want to sell under 500.000 and want to move up to the next price point, you will reap greater money for your current home and sell it faster and then benefit from a softer higher end market with price and choices.  Also , the interest rates are fabulous!!  Call me today if you are thinking of moving up and I can help you assess whether this will work to your advantage!

Is it time to buy rental property?

With housing  prices up and rental rates increasing, this may the perfect time to invest in rental property. Right now according to the National Association of Realtors    “Investors…accounted for 17 percent of all transactions in the third quarter.”

More than one out of every six houses sold are purchased by an investor. In the most recent MarketPulse Report by CoreLogic, their Principal Economist, Sam Khater, wrote on the subject in a story titled Roll Tide, or The Rise of the Single Family Rental Market. The major takeaways from the article are:

  • The single-family rental market remained very active in the late summer of 2012 with increases in demand, tightening inventory and rising rents.
  • Nationally, rental leasing volumes were up every month for two years. In August, they were up 7% over last year.
  • Supply was down 11% over the same period.
  • This tightness in supply has caused rents to increase.
  • Rent growth is expected to increase at a ‘strong clip’ late in 2012 and in 2013.

Call  me today to get started investing in your real estate portfolio. Now is the time!

Understanding Agency in Georgia

When people choose an agent, its important to understand what is entailed in Buyers agency and Sellers Agency.

When a  seller hires an agent to sell their home, they are contracting with that agent and the brokerage in which the agent holds their license.  So technically any agent from that brokerage could represent them.  An agent who is representing a seller charges a fee to the seller and splits that fee with the buyers broker.   It’s important to define “fiduciary”-  this means that the agent owes the client to always represent the client best interests above the agents interests. It’s important to hire a Realtor that is a member of National Association of Realtors and a local board. There is a code of ethics that Realtors must adhere to, and not every agent is a Realtor.
Who Works for Whom?

? Agent will represent the best interests of the seller
? Agent will owe the seller fiduciary duties
? Agent must give the buyer all material facts so that the buyer can make an educated decision

? Agent will represent the best interests of the buyer
? Agent will owe the buyer fiduciary duties
? Agent must give the seller all material facts so that the seller can make an educated decision

? Agent represents both the buyer and the seller equally
? Agent’s objective is to get a mutually satisfactory agreement among all parties
? Agent gives all options to the buyer and the seller
? Depending on the local market, all parties may be present at contract presentation to negotiate on their own behalf
? All parties have confidentiality. Agent may do nothing to the detriment of either the buyer or the seller
? Both the buyer and the seller have a right to counsel. Before making any decisions, both parties have the right to seek family, religious, legal, or financial counsel.

In all relationships as your agent I have a duty to act honestly with both the buyer and the seller.

If you or someone you know is thinking of hiring an agent to help them with their move, give me a call and let’s discuss how I can help. 770-354-0243

Happiness is getting to the closing table!

Real Estate transactions pretty much have common elements in them. Offer, accepted contract, due diligence, inspections, appraisal, loan approval and closed.  The reality is that those are the only things that are consistent in a real estate transaction. 
Every transaction has a problems to be solved,  constant negotiations, issues with inspections, appraisals, lenders, surveys and more.  It is really important to get an agent that has done many transactions and can solve problems quickly and efficiently and will work for your best interest and with all the other parties involved to bring a win-win situation to the transaction. It is important to have an agent who does not give up easily when things get tough– My clients will tell you that I constantly stay in the game until it is over.  Always looking for creative solutions and continue to work hard to have positive results.

Call me today  at 770-354-0243 if you are in need of an agent who won’t give up on you or the process and will get you to the closing table a happy camper 🙂 

Power of Pam – Personal Service = Positive Results!!!


Top 10 tips on Choosing the Right Neighborhood

Location, location, location — goes the saying about what’s important in real estate.
Most home buyers start by looking for a suitable area. The following tips will help you find a neighborhood that feels like home.
Set priorities about things that matter most to you and your family:
• Is safety a prime concern?
• Are you looking for vibrant nightlife?
• Do you need to live close to work?

The best purchase is usually a trade-off among several desirable elements.
These factors will help to illuminate a neighborhood’s style:
• Are there good local schools? Whether or not you have children, good schools increase property values.
• Is the area close to services such as hospitals, public transportation, shopping, parks, and recreational and cultural sites?
• How safe is it? Check with local police, and look in the newspaper for crime-watch statistics.
• Are people outside their homes, working in their yards or walking their dogs? Neighbors who interact with one another create a safer and more pleasant environment.
• Is the area popular? Ask your Realtor, and check the number of “for sale” and “sold” signs.
• What is the neighborhood’s price range? Have average property values gone up, gone down or stayed the same? Areas about to become trendy are often found on the fringes of highly desirable locations.
Is there vacant space nearby? What kind of development is planned for it?
I can be a valuable source of inside information about how to distinguish two neighborhoods that seem alike. Contact me for the latest information about neighborhoods at 770-354-0243 or feel free to email me a [email protected]

New Homes for Sale In East Cobb

New homes are really a hot commodity now, especially in areas like East Cobb where there is not much land left to build on.  I just love the way a new home smells, feels and looks!  There is something really special about being the first owner.  Prices are good too on them, the builders reduce pretty quickly at the end of a build out, so if you are thinking new in East Cobb, take a look below.  Also if there are other areas you are interested in–give me a call or email me and I will be happy to send you a list of new homes in the areas and price range you are interested!
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Foreclosures are not always the best deal in Atlanta

Many buyers want to look at foreclosures because they think that they will get a great deal.  Well….maybe, but most likely no.  Why?  Values in Atlanta have dropped 30% or more in the last few years and many say we are at 1999 values.  Foreclosures and traditional real estate are really around the same pricing schedule.  Foreclosures are distressed properties and have not been maintained, they often require repairs and cosmetic updating.   After you make the repairs and bring the home up to date you will be at the level of a home in good condition in the traditional real estate market.  Sometimes you may be ahead and very often not.  Investors who are builders and or contractors can make some money but they also repair below retail value and they only buy properties where they know that the can make a profit, or hold as a rental property.  For the average buyer, it is often a better idea to buy a home that has been properly maintained and in good condition.  It could save years of headache and money and you look back and you think that your great deal is not so great as time passes by.

Happy 4th of July!

Inventory Levels Down 50% from Last Year at This Time

We have a sellers market in certain parts of Atlanta.  Buckhead, Walton High School District in East Cobb and Johns Creek.  If you have a house to sell in these areas call me today! We need your house to sell.  We have active buyers today that cannot find what they are looking for and we are seeking homes that are not on the market right now but are thinking of selling!  Call me today to discuss getting your home SOLD!  770-354-0243