‘Pre-qualified’ means that a mortgage broker has spoken with the buyer, taken information over the phone, and has run a buyer’s credit. The mortgage broker deems the buyer “pre-qualified” if all the information the buyer has provided verbally is correct.

‘Pre-approved’ means the mortgage broker has actually gathered from the buyer all the necessary documentation to prove what the buyer is saying is correct.

If you are a seller, you want a pre-approval letter from your buyer’s lender. It means so much more than a pre-qualified letter.

That’s not to say the buyers are out to intentionally provide false information to lenders. It’s just that some things get lost in the translation. Here are some problems I’ve run into:

1. 1. The buyer is self-employed and reports to the lender his income. It’s not until the lender gets his tax returns that it comes out that the buyer has legitimately written off half his income, thereby qualifying him for a much smaller loan.
2. 2. The buyer tells the lender how much he plans to put down on the house, but doesn’t mention that the money will be a gift from his parents. Only when the lender asks for the documentation of funds does that fact come out. For some loans, gifted down payments can be a real no/no.

If you are a buyer and you are competing for a property that someone else wants too, having a pre-approval letter can give you the edge over the other party.

Inventories in the Atlanta market continue to be high. Even if no more houses went on the market, it would still take 11 months for the houses currently on the market to sell. The highest inventories are in the million + market, which has a 26-month supply of homes for sale. The “under $200K” market is much closer to balanced with a 9.7-month inventory.

The 4^th Q statistics show that pricing your home correctly has never been more important. Only 9% of homes sold without price drop. 27% required a price drop, netting sellers just 76% of their asking price. A full 64% of homes did not sell at all, almost certainly because they were over-priced.

Foreclosures and short sales (when a lender agrees to take less than it is owed) continued to dominate the real estate landscape. In the 4^th Q, 39.9% of all homes that sold were distressed properties, the highest percentage all year.

Monthly median sales prices in 2010 were consistently higher than in 2009 until July, when they declined to the lowest level since 2003.

1. Is there a form to use for the appeal?
At this time, no standard form has been provided by the counties. There may be a suggested form online at the various counties at the time the notices are mailed. However, a simple letter including the following information will be sufficient to start the appeal process:
Parcel ID number
Property Address
Your daytime phone number
Your intention to appeal to either: Board of Equalization, Hearing Officer, or Arbitration (see Information below to help you decide which to choose)
Any supporting documentation you may have as to why you disagree with the value
2. When will the Notices be mailed?
Most counties have not stated when they intend to mail the notices, but it should be in the first half of the year. (Dekalb County has stated that their notices will go out mid-May)
3. When does the 45 days start?
The 45 days starts from the date on the Notice. Your appeal must be postmarked by the deadline by the U.S. Postal Service. A metered mail stamp is not acceptable if there is a question as to when it was mailed.
4. On what basis may I appeal?
Property owners may appeal based on Taxability, Uniformity or Value.
5. What supporting documentation should be included?
If you have a recent appraisal or closing statement showing a lower value, attach it to the appeal. Also, if you have a market analysis of comparable properties recently sold in your neighborhood, attach that. You can look online in most counties and see what information the assessor is using to assess your house and your neighbors’ houses. If the information is incorrect, you can include that in your appeal. The new law states that the taxpayer must be given access to all data used in determining the value. REMEMBER: sales prices establish the value of the property for the following year
6. What will my tax bill be based on if the appeal is pending when tax bills are mailed?
A temporary tax bill will be issued based on 85% of the value on the original Notice. Once the appeal is complete, an additional tax bill will be issued or a refund will be issued.

What happens after the appeal has been made?

1. If the county does not respond to your appeal within 45 days, you win!
2. If the homeowner has stated that they wish to appeal to the Board of Equalization in their original letter, The Board of Assessors (BOA) will review the appeal, can make changes, and send a notice of such to the homeowner. If BOA does not change the value, the appeal is automatically forwarded to the county Board of Equalization (BOE) and a notice of hearing date is sent to the homeowner.
3. The homeowner and the County present their cases to the BOE at the hearing and a decision is rendered at the conclusion of the hearing. The parties are notified in writing of the decision.
4. Either party can appeal to the County Superior Court. This is a jury trial and most homeowners hire an attorney to present their case here, if they didn’t have one before.
5. If the homeowner has stated that they wish to Arbitrate, a current appraisal must be provided to the BOA. The BOA will accept or reject the appraisal. If they reject the appraisal and Arbitration is set up, the decision of the Arbitrator is binding unless both parties agree otherwise.

What is the difference between the Board of Equalization and Arbitration?

A: The Board of Equalization

• - The Board of Equalization is made up of a three-person panel appointed by the Grand Jury.
• - No member of the Board of Equalization has an affiliation with the Tax Assessor’s Office.
• - The Board of Equalization is charged with hearing both sides (the property owner and the Tax Assessor’s Office) of a property value dispute.
• - After hearing both sides the panel will render a decision, which may be appealed by either party in Superior Court.
• - There is no additional cost to the taxpayer for a Board of Equalization hearing.

B: Arbitration:

• - Arbitration is a legal process defined in Georgia’s Property Tax Code indicating a specific preference for a more procedurally structured approach to a property tax appeal.
• - The arbitration process begins with certification to the Superior Courts.
• - It can be expensive.
• - A Superior Court Judge will appoint a referee (an attorney) to conduct the hearings on the property tax appeal.
• - The referee will schedule an initial meeting where each party will name an arbitrator.
• - Arbitrators must be either a licensed appraiser through the Georgia Board of Real Estate Appraisers or an attorney.
• - At the agreement of both parties, the referee may act as a single arbitrator.
• - The panel of three arbitrators sits as a jury when both sides present testimony.

If you have any more questions about all of this, don’t hesitate to call me at 404-314-7052.

Not so fast….What the 3Q stats show is that we’re not out of the woods yet. Bumping along the bottom, yes. In full recovery, no. People who were going to buy strategically timed their buying this spring. That left a fairly significant hole in the market this fall.

In the 3Q, sales in the Atlanta metro area were down 19.3% compared to the same time period last year. Of the houses that sold in the 3Q this year, 37.5% of them were distressed sales – either short sales or foreclosures. A stunning half of all the homes that sold for $200K or less were distressed properties. The median sales price reached its third lowest point since all this began, largely due to the high volume of distressed properties changing hands.

Good news for buyers: The bargain are out there and it’s never been cheaper to borrow money.

Here’s something cool and oddly comforting:  if the economy takes another downturn, officials will consider it to be a brand new recession.

And in case you couldn’t tell, The Great Recession really was The Great Recession. It lasted longer than any other recession since World War II. Clocking in at 18 months, it beat the closest competition – 1973-1975 and 1981-1982 – both 16-month recessions.  

Now, nobody is saying the economy is roaring back to life, and the Atlanta foreclosure statistics are still staggering, but as history plays itself out there’s new hope that the light at the end of the tunnel is not an on-coming train.

You are actually better off buying now without the tax credit than back then with the tax credit.

How can that be, you ask? It’s all about interest rates. Interest rates have dropped so low – we’re talking historic, all-time lows – that buying now is like getting the tax credit and so much more.

Here’s how it shakes down:

Let’s say you got a $160,000 mortgage last April. Your interest rate would have been about 5.21%. Your monthly payment would have been $880/month. At the end of 30 years, you would have paid $156,644 in interest.

But…

If you bought now and got a $160,000 mortgage, your interest rate would be 4.42%. Your monthly payment would be only $803 per month.  You’d recoup the tax credit you missed in 8.7 years, AND at the end of 30 years, you would have paid only $129,119 in interest. That’s a savings of $27,525. Not chump change.

So if you are still licking your wounds for missing out on the tax credit, stop licking. Turns out you were brilliant to wait. As long as these interest rates stay where they are, the perfect time to buy is NOW.

Most people never know that there is an option. It’s called a ‘short sale.’ It’s where you convince the bank to take less than what you owe. And I’ve been trained to manage these kinds of transactions.

My motivation in making this investment of time and money was watching so many agents do it wrong – not out of a lack of caring or bad intention, just ignorance. Truth be told, none of us even knew what a short sale was 2 or 3 years ago. Now short sales are part of everyday life in America.

But there’s a big difference between knowing what a short sale is and knowing how to navigate the tricky, shark-invested waters of short-sale land. Frankly, many agents in the Atlanta area are just winging it. Not good. This is an area of real estate that requires specific training and expertise.

I’ve got that training and expertise now. If you’re in trouble, email me or call me. In a confidential conversation, I’ll help you figure out your best option. And it’s almost never foreclosure. Let me help.

But if things have just felt better than that, you’re right – for particular areas, that is. In the Buckhead area, sales were up a stunning 38% from the same quarter last year. In Sandy Springs, sales actually doubled. (If you want the specifics for your neighborhood, just send me an email. I’d be glad to send them to you.)

Foreclosures continue to define and set the market. Overall, foreclosures were up, representing 32.8% of all sales. Think about that number. Roughly one out of every three homes that closed this past quarter was a foreclosure.

What’s interesting is that the <$200K market actually looks like it’s on the mend with foreclosures falling from 48.4% of all sales to 43.3%. The news is that the upper tier market is now getting hit by foreclosures. Although foreclosures represent only 14% of all sales, that percentage has more than tripled from a year ago.

These numbers make sense, if you think about it. A shift in the market almost always starts at the bottom and trickles up. The foreclosure tremors were felt first in the <$200K market. Those owners were likely the ones with the least amount of savings and equity to survive the storm. And as the recession drags on, the resources of the high-end owners are slowly being depleted, resulting in increasing numbers of foreclosures in the top markets.

When it comes to prices, there’s actually cheery news. The median sales price rose 8%, the first real gain in three years. Inventories are down as well. The biggest threats we now face are the foreclosures that the banks have taken back and not yet released to the market. If the banks decided to release them all at once, we could anticipate a steep drop in prices. But we’re counting on the banks not being that stupid.

If you’re a first-time home buyer or haven’t owned a home for three years:
You are eligible for an $8,000 tax credit. Remember, this is not a deduction, it’s a true tax credit. For example, let’s say that after you do your taxes next year, you owe the government $2,000. If you qualify for the $8,000 tax credit, instead of having to write a check, the government will write one to you…for $6,000.

Important deadlines: You have to have a home under contract by April 30th and you have to have closed on it (purchased it) by June 30th.

If you are a move-up buyer:
This is a tax credit for people who have lived in their homes for five years and want to buy a new house. And when I say new, I don’t mean new construction, I just mean new to them. These buyers are eligible for a $6,500 tax credit.

Important deadlines: You have to be under contract by April 30th and you have to have closed on it (purchased it) by June 30th.

All of this tax stuff can be really confusing, I know. So if you have more questions, don’t hesitate to send me a quick email.