Atlanta Condos For Sale

What Is Mortgage Insurance?

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PMI and Why I Have it On my MortgageAs you look to purchase your new home, you are going to see one of the costs of borrowing money will be mortgage insurance, or private mortgage insurance (PMI) Most likely, this will occur due to your amount of down payment and the interest rate on your mortgage. Let’s take a look.

Benefits of Mortgage Insurance

  • Flexible premium payment options (your lender may have numerous options available)
  • Premium Payments are temporary – PMI can be cancelled once your home reaches an 80% loan to value ratio
  • Ability to buy your home sooner with as little as 3% down payment (this will depend on other factors)

FAQ’s about Mortgage Insurance

How much does PM cost?

The amount will vary based on your loan terms. You need less PMI with 15% down payment than you do with a 3% down payment. And it depends on the type of mortgage and other factors. Your TEAM Lender can provide you with specific payment amounts. 

Won’t PMI Increase my mortgage payment?

While there is an added cost to PMI, it’s a small percentage of your overall mortgage payment. Most of it will be determined by your interest rate, and the loan amount.

Do I pay PMI for the entire time I have a Mortgage?

Thankfully, no! YOu can request to have PMI removed from your mortgage when your loan balance hits 80% of your original appraised value. Additionally, the FHPA (Federal Homeowners Protection Act) requires that mortgage insurance be automatically cancelled when your balance reaches 78%. This law may or may not apply to your mortgage….and you will want to discuss this with your lender. 

At your closing (we like to call it a Celebration!) your lender must provide you with information about the mortgage insurance on the loan, and the conditions when you can cancel it. Furthermore, each year after you close, your lender must send you a reminder about PMI and that you can make that cancellation request once the conditions have been met. 

Why do Lenders need Protection?

One need not look any further than the housing crash for this answer! But, to be more specific, it protects your mortgage company or bank if you are unable to continue making mortgage payments. 

Studies have shown that homeowners with less than 20% invested in a home are more likely to default. It makes a loan with a lower down payment a higher risk. This should not be read that ALL home buyers with less than 20% are going to be a problem!! But you know how statistics work……not always in your favor. And you should not let this deter you from buying a home. MANY buyers buy with less than 20% as a down payment. 

How Do I Pay PMI?

It is usually a part of your monthly payment, but can be paid in a single premium and financed as part of your mortgage. Again, your TEAM Lender can answer these questions, based on your specific situation. 

The Consumer Financial Protection Bureau has more information about Mortgage Insurance HERE.

And one of our TEAM Lenders, Movement Mortgage has a great article HERE.

Every Buyer and their situation, and every mortgage can be different. This is why we strongly encourage you to meet with a lender early on in your home search process to know what your specific situation is. Your lender can look at numerous options for you, and even suggest ways to lower these amounts. 

We always say that it is OUR job to help you find the right home at the best possible price and terms, but it is your LENDER that helps you pay for it. 

Should I Use One of Those On-line Companies to Sell My Home?

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Pretty much like any industry or business you can think of, times are changing in real estate. With the wonders of technology, it’s amazing what you can do, that you maybe could not do some 10 years ago…maybe even 5. But, in real estate, Should I Use One of Those On-line Companies to Sell My Home?

Should I Use One of Those On-line Companies to Sell My Home?

Selling Your Home with an on line companyThere are probably countless professions where you will always need “a real person” to make it happen. A plumber? Fix your A/C? A Dentist? A Doctor? A real estate agent?

There is a new “disruption” in the real estate world with several on-line companies that are offering to help you buy or sell real estate. I’m sure you’ve seen the ads for OpenDoor and OfferPad, and now even Zillow is launching a home buying service. The question is, can you “automate” the biggest financial transaction of your life? Hmmmm.

In the article I’ve shown below that just appeared in REALTOR Magazine, it’s not all peaches and cream when you choose one of these options. In the article below, these companies are referred to as iBuyers. They business model is promising to streamline the real estate transaction with quick, all cash offers. This way, you (as a Seller) bypass the longer process of listing your home, going through showings, negotiations (maybe more than once if a contract falls out) and such. But, an all cash offer will often have a catch. And with an iBuyer, the catch can be quite a challenge. 

The iBuyer, Opendoor, after their offer was accepted, came in with a TEAM of contractors, and when all was said and done, wanted new bathtubs, new toilets and a host of other things. In a nutshell, they wanted a remodeled house and they wanted the Seller to pay for it. (Not that I’ve not had the same thing happen in a real estate transaction, but it was not as dramatic.) The agent ……ah….note I said real estate agent spent weeks negotiation with Opendoor. They had requested some $16,000 worth of repairs on a $300,000 home. Shreeeek! Those weeks spent negotiating with Opendoor…..in an agent-driven transaction, that process would have been resolved in a matter of a couple days, during the Due Diligence period. The parties would have agreed on a price, or the contract would have been terminated. In DAYS….NOT WEEKS! 

What kind of valuable marketing time was lost in looking for another buyer that would have purchased the home with perhaps minimal repair requests…not new bathrooms?

Should I Use One of Those On-line Companies to Sell My Home?The article quotes an agent from right here in Atlanta that helped clients sell their home to Knock. (NOTE….”agent helped clients sell their home to Knock.”) And in this instance, there were multiple people involved from the Knock-side of the sale. As they sale moved along, there were “a lot of missed loops and extra follow-up needed to make sure everything was going smoothly for our Sellers.” 

Having not worked with any of these iBuyers, I’ll make the assumption that these agents did not work for free, and were paid a commission, either by the iBuyer or by the Seller. 

The priceless mention is an agent in Phoenix who had an iBuyer make an offer of of $750,000 on a home that the agent later sold to a traditional buyer for $900,000. Imagine leaving a $150,000 on the table they would have moved on the iBuyer offer? Of course, there can be any number of circumstances behind any of these sales that we are not aware of. 

Should I Use One of Those On-line Companies to Sell My Home?

I think it is a decision that cannot be made lightly. In the article below, and as I’ve highlighted, there were agents still involved to help the Seller SELL to the iBuyer. And it seems like there were a lot of added steps and ‘i’s to dot and t’s to cross’ to make it all happen. And unless you have bought and sold numerous properties on your own already, there could be a land mine someplace you’ll miss. 

But if you can sell your home for more money, working with a real estate agent, than you can selling it to an iBuyer, you’ll probably see, or do the math and agree. 

There is a lot of things that go on during the sale (or purchase) of a house that the agent is involved with, or handle. As agents, we may be bad in not letting you know every little thing we do. We just do it to keep it as stress-free for you as possible. We are kind of a stress ball in the process and keep as much of it from you as possible. 

It’s not because I AM a real estate agent, but I think when you are working with the largest part of your financial portfolio, your home, you’ll want someone right there with you helping you through the process, and being your advocate to make sure you are protected and have the best possible outcome you can. 

The link below will give you the entire article. 

Should I use an On Line Company to Sell my House

Home Warranty vs Home Inspection – What’s the Difference?

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We’ve talked about both of these subjects in the past, so we won’t beat them to death here, but will point you to the past posts. They are still relevant and will give you more information about a home warranty vs a home inspection.

Home Warranty vs Home Inspection – What’s the Difference?

Home Inspection vs Home WarrantyA home warranty is an insurance policy (of sorts) on your home for a certain period of time, usually one year. You may get a home warranty as part of your negotiation process with your initial contract, or after you have had a home inspection completed. A home warranty covers most major systems in the home for repair or “replacement.” (Each warranty company is different, but most will work very hard to REPAIR an item before they will replace it.) Even still, the cost of the repair will be much less via the service call fee on a home warranty vs. calling a specific trade person (plumber, electrician, appliance repair, etc.)

We did a detailed post about What is A Home Warranty, and you can get more information there.

A home inspection is much like a snapshot look at a home at a certain time. When you make an offer on a home or condominium, and it’s accepted, you have negotiated a Due Diligence period. It is during this time you have the property inspected. The purpose of this 3rd party inspection (done by a home inspection company, not your Brother or Father!) is to get an opinion of the condition of the home. An inspection will look at systems (HVAC, plumbing, electrical) as well as things like flooring (say cracked tiles or damaged wood flooring) windows (have they been painted shut, do they work) and other aspects of the home. This helps you determine the condition of the home in more detail than when you just walked through it with your real estate agent. 

Once this inspection is completed, you will review it with your agent and determine what actions you want to take next. This can vary from asking for no repairs, to an extensive list of repairs, to deciding you may not want to purchase the home at all. You can learn more about the home inspection process from one of our Team Members, National Property Inspections.

We did a post, Do I Need a Home Inspection on a Midtown Atlanta Condo, which talks about the importance of getting an inspection done on a condominium. They will just vary as the inspector is not checking for structural or roofing items…those are related to the building. But you will find an informative short video on that post about the home inspection. 

Home Warranty vs Home Inspection – What’s the Difference?  

If you have further questions about the home warranty or inspection, we are always ready to help our Buyers or Sellers with this part of the home buying and selling process! 

It’s Tax Season ..Use Your Refund to Jump Start Your Down Payment Savings!

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It's Tax Season Jump Start Your SavingsAccording to data released by the Internal Revenue Service (IRS), Americans can expect an estimated average refund of $2,840 this year when filing their taxes. This is down slightly from the average refund of $2,895, last year.

It’s Tax Season Jump Start Your Down Payment

Tax refunds are often thought of as ‘extra money’ that can be used toward larger goals; for anyone looking to buy a home in 2018, this can be a great jump start toward a down payment!

The map below shows the average tax refund Americans received last year by state. (The refunds received for the 2017 tax year should continue to reflect these numbers as the new tax code will go into effect for 2018 tax filings.)

It's Tax Season

(Georgia’s average is $2,767!)

Many first-time buyers believe that a 20% down payment is required to qualify for a mortgage. Programs from the Federal Housing Authority, Freddie Mac, andFannie Mae all allow for down payments as low as 3%, with Veterans Affairs Loansallowing many veterans to purchase a home with 0% down.

If you started your down payment savings with your tax refund check this year, how close would you be to a 3% down payment?

The map below shows what percentage of a 3% down payment is covered by the average tax refund by taking into account the median price of homes sold by state.

It's Tax Time Jump Start Your Down Payment Savings

The darker the blue, the closer your tax refund gets you to homeownership! For those in Alabama looking to purchase their first homes, their tax refund could potentially get them 69% closer to that dream! Georgia…you are half-way there!!! 

Bottom Line – – It’s Tax Season Jump Start Your Down Payment

Saving for a down payment can seem like a daunting task. But the more you know about what’s required, the more prepared you can be to make the best decision for you and your family! This tax season, your refund could be your key to homeownership!

You can learn more about other steps you need to take in buying a home or condo with our Atlanta Real Estate Buyers Guide. 

Have other questions about down payments and buying your home?  Contact us!

Your 2017 Fulton County Tax Bill

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Your 2017 Fulton County Tax BillBy now, your early Christmas present has arrived….Your 2017 Fulton County Tax Bill!

Along with the tax bill came some information about the 2017 tax rate. I’m not going to dive into all the numbers and millage rates….just some of the other information that was there. This can be useful to you if you are a new home owner, or perhaps looking to relocate to Atlanta. This will help you learn about the tax expense and benefit of owning a home (subject to any current tax plan under consideration by Congress)

2017 Tax Rate

Under Georgia Law, the Board of Tax Assessors determines the ‘Fair Market Value’ of your property, then ‘assesses’ it at 40% for tax purposes. Each year, Fulton County Government, the school boards, and each municipality set their respective budgets and millage rates. The following charts provide information concerning the financing of these services, including credits for sales tax. The Tax Bill was designed to serve the billing needs for both the Unincorporated area and Incorporated Cities within Fulton County. Your bill may also may include a rate for a Community Improvement District. 

You’ll find the aforementioned charts at the bottom of this post! 

Basic Homestead Exemption 

To qualify for basic Homestead Exemption you must own and occupy the property as your legal residence as of January 1 of the current tax year. So if you purchased in 2017, you will BE the owner as of January 1, 2018 and can file for the Exemption on your 2018 tax bill. You must file for this exemption by April 1, 2018 to receive it for the 2018 Tax Year. You can file your Homestead Exemption at any time, but, you must file by April 1.

Once you receive the Exemption, it is automatically renewed each year as long as you continuously occupy the home under the same ownership. 

Property Tax Returns

If you feel your property value is not reflective of fair market value, you should file a Property Tax Return requesting a change in the assessment between January 1 and April 1. If your Return is not accepted, you will receive your assessment notice, and then you have 45 days to file a formal appeal.  (See Below)

Payment of Taxes on Property Under Appeal (Don’t Pay, Don’t Stay….sort of)

When you signed your mortgage paperwork at closing (unless you paid cash) you heard me mention the phrase “If you don’t pay, you don’t stay” as it relates to your lender being able to foreclose on your home if you don’t make your payments. In this case, if you file an appeal, your taxes will still be paid by your lender out of your escrow account. If you are successful in your appeal, and your tax bill is reduced, you would see a credit (or refund) back to you from your lender when they review your escrow account. 

But, if you did pay cash, you still have to pay the tax bill you received to avoid interest, penalty, and/or foreclosure. 

Assessment Appeals

The Board of Tax Assessors is required to issue a notice of assessment for taxable tangible real and personal property. Once you receive this notice, you have 45 days to appeal said assessment. You can appeal based on taxability, value, uniformity, and/or the denial of an exemption.  When you make this appeal, it must be written and you must declare your chosen method of appeal…..

Three Methods of Appeal

Board of Equalization:  The appeal is filed by the property owners and reviewed by the Board of Assessors. The Board may change assessment and sena new notice. You may appeal THIS assessment in the amended notice within 30 days. The second appeal made by the property owner or any initial appeal which is not amended by the Board of Assessors is automatically forwarded to the Board of Equalization. A hearing is then scheduled and the Board renders its decision. A further appeal would be to Superior Court. 

Hearing Officer: The taxpayer may appeal to a Hearing Officer, who is a certified appraiser, when the issue of the appeal is the value of non-homestead real property, but only when the value is equal to or greater than $1M. Not satisfied here….Superior Court. 

Arbitration: An Arbitration appeal is filed with the Board of Assessors who must notify the taxpayer of the receipt of said appeal within 45 days. The taxpayer must submit a certified appraisal of the subject property. It may be accepted…or rejected. Rejected….the Board of Assessors must certify the appeal to the County Clerk of Superior Court for arbitration. Arbitration is authorized by the judge and a hearing is scheduled within 30 days. 

The arbitrator will issue a decision at the conclusion of the hearing, which is final and which may not be appealed further. 

(Now you know why you see arbitration in many real estate contracts (say a new home builder) as you can’t drag out an issue with multiple appeals or a law suit.)

If you have more questions about your tax bill, I am a real estate broker, not an accountant and I can’t speak for the Tax Assessor. I can help you get competitive market information to assist you in your appeal. But you can contact the Tax Assessors Office at (404) 613-6100 or online at FultonCountyTaxes.org

Real Estate FAQ’s | How Many Parking Spaces Will I Have?

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Real Estate FAQ at MyMidtownMojo.comA question I’m often asked by condominium buyers is How Many Parking Spaces Will I Have?

It has been a “standard” and a building code in the Atlanta Condo Market to have one parking space per bedroom. In other words, buy a 1-bedroom condo, get 1 parking space. Buy a 2-bedroom, get TWO parking spaces. Needless to say, for a couple, this could be a problem.

If you purchase a 1-bedroom and you BOTH have cars, you will need to look for an additional parking space. Where? Here are some options:

  • Other Condo Owners — There may be an owner of a 2-bedroom that only has one car. They might be willing to rent out their other parking space on a monthly basis. Check with the HOA Property Manager, or if the building has a website, or bulletin board where such information can be found.
  • Purchase an Additional Space — Some new construction condominiums will offer extra parking spaces For Sale during the early sales period. This may, or may not be a wise investment. You should not expect to ever get back what you pay for an extra parking space. I purchased one for $15,000 in 2007 when I bought my condo. I sold it in 2010 for $5,000. OUCH! But, if there is someone in the building that purchased like I did, and then wants to sell, this can be a great (and as my experience will tell you, cheap) way to get another parking space.
  • Lease a space off-site — Depending on where your condo building is located, there may be surface parking lots, or even parking Where Can I Find an Extra Parking Space in Midtown Atlantagarages where spaces could be leased. There is some serious lost revenue opportunities in Midtown Atlanta for the renting of parking spaces. Here is a photo that includes the top floor of the AT&T Parking garage on 5th and West Peachtree Streets. I’ve only ONCE ever seen a car on that top floor. There has to be a few thousand dollars in lost revenue there!

When purchasing an Intown Atlanta Real Estate condominium, always be sure to ask How Many Parking Spaces Will I Have?

Thom Abbott

Associate Broker, REALTOR(R)
905 Juniper Street, NE Suite 110
Atlanta, Georgia 30309
770.713.1505 Direct
404.876.4901 Office

 
 
 
 
 
 
 
 
 
 

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