There are five factors that comprise the credit score. They are listed below
in order of importance, just as an underwriter would look at the score:

* Payment History: 35% impact. Paying debt on time and in full has a
positive impact. Late payments, judgments and charge-offs have a negative
impact. Missing a high payment has a more severe impact than missing a low
payment. Delinquencies that have occurred in the last two years carry more
weight than older items.
* Outstanding Credit Balances: 30% impact. This factor marks the ratio
between the outstanding balance and available credit. Ideally, the consumer
should make an effort to keep balances as close to zero as possible, and
definitely below 30% of the available credit limit when trying to purchase a
home.
* Credit History: 15% impact. This marks the length of time since a
particular credit line was established. A seasoned borrower is stronger in
this area.
* Type of Credit: 10% impact. A mix of auto loans, credit cards, and
mortgages is more positive than a concentration of debt from credit cards
only.
* Inquiries: 10% impact. This quantifies the number of inquiries that
have been made on a consumer’s credit history within a six-month period.
Each hard inquiry can cost from 2 to 50 points on a credit score, but the
maximum number of inquiries that will reduce the score is 10. In other
words, 11 or more inquiries in a six-month period will have no further
impact on the borrower’s credit score.

With so much focus on what’s wrong with the economy, I thought you might be interested in hearing some of the good things. These stats were posted on Good Economic News, at 60secondmarketer.com:

·         PepsiCo revenue grew 10% last year to $43.3 billion.

·         Walmart sales rose 6% last quarter, net sales rose 1.7% to $108 billion.

·         McDonald’s global comparable sales were up 7.1% in January. More        specifically, the U.S. was up 5.4%, Europe up 7.1, Asia/Middle East/Africa up 10.2%.

·         Coca-Cola had an 11% increase in revenues in 2008 to $31.9 billion; net   income was up 17% to $7.4 billion.

·         Oil is 76% lower today than last summer.

·         H. J. Heinz fiscal 3rd quarter net income climbed 11% to $242.3 million, up from $218.5 last year.

·         Box Office receipts for the movie industry are up 28%.

·         Interest rates at historic lows.

·         Home prices dropped/most affordable level since 1971.

·         BKV (the parent of 60 Second Marketer) is growing at double-digit rates and          is on a hiring spree.

·         The S&P 500 is predicted to rise as much as 20% towards year end (Source: NPR).

·         In December, inventories declined at twice the rate than was anticipated, which means manufacturers will have to make more stuff to compensate for low inventories.

I’ve had lots of questions about the Economic Stimulus Plan’s tax credit for first-time homebuyers. Truly, this is a no-brainer. The 2009 package is so much more buyer-friendly than the one that took effect last July ’08. Here are some details about the new one:

1) The NEW tax credit is for $8,000. (Before, it was for $7,500.)  

2) The NEW tax credit is available for home purchases made between 1/1/09 thru 11/30/09. (Before, it was 4/9/08 thru 6/30/09.)

3) The NEW tax credit has NO repayment requirement. (Before, the homeowner paid back $500/yr for 15 years, i.e., full pay back.)

4) The NEW tax credit has a 3-year recapture requirement (if the home is sold within 3 years). (Before if the home sold within the 15-year repayment period, the outstanding was recaptured on sale.)  

5) The NEW tax credit allows for MRBs …. bond loans. (Before there was NO credit for state/local bond funding.)  

So, there are five good reasons to take advantage of the NEW Homebuyer Tax Credit.  It is improved and it is available now. Not all that familiar with the overall tax credit to begin with? Here are bullet points to sum it up, in addition to the points mentioned above:

1) The dollar amount of the credit is actually 10% of the purchase price, up to a max credit of $8,000. (Ex: $72,000 purchase price = $7,200 tax credit.)

2) The credit is available for principal residences only (owner occupied).

3) The credit is available to first time homebuyers — note that the definition of a first time homebuyer is a purchaser (and purchaser’s spouse) who has not owned a principal residence in three years previous to purchase. Owning a second home(s) or an investment property(s) does not disqualify a person as long as the principal residence rule is intact.  

4) There are income limits — To receive full credit the max AGI (adjusted gross income) for individuals is $75K; for joint returns it is $150K. There is a phase out above those caps.  

5) Any house, anywhere — new/old, cheap/expensive, REO/short sale/regular, a hi-rise, a dump or a palace — if the buyer is “eligible”, the credit is there.  

6) AND I’VE SAVED THE BEST FOR LAST: This is an actual tax CREDIT — it’s not a tax DEDUCTION!!! As such, this is a dollar-for-dollar tax REDUCTION — the buyer’s tax liability for the year of purchase may be reduced, eliminated, OR he/she might even receive a refund. (Example: The Purchaser is eligible for the full $8,000 credit; he/she has a total tax liability of $2700; the $2700 wipes to -0-, and the purchaser will receive a refund of $5,300 from the filed tax return.) Money INTO the pocket BECAUSE you bought ….. likely at a great price; likely at a great rate; likely with a PITI that competes loudly with renting.  

My office – Keller Williams Realty First Atlanta – has the proud distinction of rating as the single highest-volume real estate office in Atlanta over the past 12 months!  In terms of closed volume, KWFA ranked ahead of not only every other Keller Williams office, but every Re/Max, Coldwell Banker, Jenny Pruitt, and Harry Norman office as well.

I’m pleased, but not surprised. We have an amazing synergy among the agents in my office, which is especially impressive during these challenging times. What that means for my clients is that I have a wealth of talent to draw on and a wonderful pool of buyers and sellers to pull from.

Nationally, there’s been a big jump in sales of previously-owned homes – up 5.5% from last month. That’s the biggest gain since July 2003 and is considered a very hopeful sign for the troubled housing market. It is also the first time in nearly three years that the sales numbers beat the same time period a year ago – September 2007.

Of course what matters is what’s going on in the local market. The third quarter numbers are coming out this week and we’ll get you those as soon as we get them. One of the things we’ll be checking is the percent that sales are down compared to the same quarter last year. For the last three quarters, the numbers have formed what could be a bottom – consistently down 28%. If we see an improvement, it could be a strong signal that we’ve already hit the bottom and are headed back up.

Interest rates on smaller mortgages called conforming loans – $417,000 or less – have been coming down for awhile now. But rates on larger mortgages called jumbo loans – more than $417,000  - have been remaining stubbornly high – 7.3 – 7.5%. Good news: I just heard from John Davis from Countrywide who says their jumbo rates have dropped as low as 6.5%. That’s good news for anyone who is trying to sell a high-end house, as potential buyers can get more for the same money or pay less for the same.

Keller Williams Realty, Atlanta, GA Named the 2008 Consumers’ Choice Award in the

Category of Residential Realtors

For Immediate Release, Atlanta, GA – Atlanta offices of Keller Williams Realty have been named the 2008 recipient in Residential Real Estate for the Consumers’ Choice Award, a division of Market Data Systems, Inc. In Atlanta, the Consumers’ Choice Award is becoming the standard of trust upon which clients decide their choice for excellence.

Award recipients were identified through a comprehensive and objective survey conducted in May 2008 by Survey Sampling International (SSI). SSI is the world’s largest statistical sampling organization dedicated to survey research and serves over 1600 clients globally. This is the ninth year that the award has been given and Keller Williams Realty is the only company honored in this category for 2008. 

Shaun Rawls, Operating Partner and Owner/Broker of six of the Atlanta based offices noted: “We are thrilled to be recognized for an award that models our belief system that customers always come first. To be chosen by the people we serve every day is what we strive for. When you operate as a Real Estate Professional who aims to create clients for life, there is no greater honor than being recognized for just that.”

Jeri Moran, General Manager, Keller Williams Realty, The Rawls Group, said: “Consumers today have many choices when selecting a Real Estate Professional. In the market we are in, trust, knowledge and good old fashion customer service is paramount and defines value. We believe this award honors our agents for these things and we are so proud of the work they have done.” 

In the last five years, Keller Williams is the only Real Estate office in the Atlanta area to increase market share every year. The Southeast Region of Keller Williams Realty opened its first office in 1999 and has grown to the largest region in the company.

Okay, so we’re still the sixth-worst state for foreclosures, but in the August statistics, finally a glimmer of light: things are better than last month! According to RealtyTrac, foreclosures were down 13% from July 2008 and down 11% from the same month last year.

This is another solid indictor that bottom of the market is here or already past.

That said, this August statistic is still sobering: Georgia’s rate of foreclosures was 1 for every 442 households.

I got a call from Jeff Adams at Countrywide yesterday morning. He was really excited. Interest rates dropped to 5.5% on a 30-year fixed rate!

Combined with depressed home prices, this is really shaping up to be one of the best times to buy. Because Atlanta’s housing market is predicted to be one of the first to bounce back, we could see prices begin to tick back up soon. Right now, I’m seeing homes priced about where about where they were in 2005. All the gains over the last three years, just wiped out. And because inflation is real threat right now, we could well see interest rates begin ticking back up soon. The smart analysts are saying they think that in retrospect, we may find that the best time to buy will have been between now and the election.

To give this interest rate drop some perspective, the interest payment on a $350,000 loan at 6.5% (where rates were just a few weeks ago) is $1,895 per month. That same loan at 5.5% is only $1,604. Same loan amount, but you’re paying almost $300 a month less for it. That’s a car payment. Put another way, last month, you could just have a house. Now you can have a house and car for the same money.

The news today is startling. Foreclosures have jumped 55% compared to the same month a year ago. According to the Associated Press, that means one in every 464 U.S. households received a foreclosure filing last month.

Many buyers have come to me asking to look at foreclosures. That’s understandable. Who wouldn’t want to get a deal? But what we find once we get to the house, most of my clients don’t want to deal with.

Virtually every foreclosure I’ve been in is a wreck. Angry owners have ripped out anything and everything they can. In one upscale home in Atlantic Station, the entire kitchen was gone – including all the cabinets, and they weren’t ripped out gently, if you know what I mean. In another house, every doorknob and lock was stolen and the home was open to the elements. In another, even the framing around the inside front door had been removed. (How much could someone get for that??)

And it doesn’t take a big leap in logic to figure out that people who didn’t have the money to pay their mortgage, certainly didn’t have the money for maintenance and repairs. Some of these houses have leaky roofs with ruined ceilings and hardwood floors.

So if you are one of those people who loves a bargain, the price of a foreclosure can look attractive. But you better also be one of those people who loves a project, because many of these homes need a lot of work.