I bring over twenty years of appraisal and broker experience working in the Marietta / East Cobb real estate market to the table for my clients. This is my full-time job and my clients benefit from my thousands of appraisals completed and consistent performance ranking in the top 2% of all Atlanta real estate agents. Take a few minutes and see what we can do for you:

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 To reach the Hank Miller Team anytime, call 678-428-8276 or CONTACT US WITH QUESTIONS

Click to see the FNMA bulletin and the FHA guidelines; these may change so verify everything with a trusted mortgage rep.Note that credit worthiness of borrowers and the standard underwriting guidelines come into play as well. Given the myriad of variables with even pristine borrowers and the constantly changing regulations, specific qualification questions are best left to mortgage pros. Drop me a line and I can recommend the ones that we trust.

Prior to the craziness that engulfed the real estate market, it was a pretty mundane and systematic process; boring but logical would also describe it. Issues were few, expectations were reasonable and clients were grounded. Fast forward to 2003-2007 range and everyone used real estate as an unlimited ATM. Suddenly there are no limits and no one was concerned about the obvious downside to any investment; the chance that you might lose.

Companies like “Buy Owner” hit a seller’s most sensitive nerve – reducing costs. It’s not hard to undermine what a typical agent does and the discount companies do a great job. Of course, many agents are knuckleheads and in some cases an argument can be made that listing a home with them or a discount firm is similar; the real difference however (with full time agents, not the part time hacks) comes during negotiation and transaction maintenance; when Buy Owner says bye bye.

Sellers expecting to navigate the nonsense tossed up with the current real estate environment have no idea what they’re in for. I cannot tell you how convoluted the process is; from mortgages to underwriting to appraisal to title….nothing is easy. How an unrepresented owner or one with a “limited service contract” can think it’s a good idea to deal with this baffles me. 

Sellers are losing money, no kidding. While there are genuine hardship cases, most that I see resulted in fiscal negligence and irresponsibility. I still complete foreclosure appraisals for Fannie Mae and research on those homes almost always shows a pattern of financial indifference.

The bottom line on “Buy Owner” is that they owe about $5.1 million to creditors and they can’t cover expenses. Funny how a company that seems to appeal to sellers in untenable financial situations now finds itself right there with them.  The article is HERE

The terms are familiar but many buyers don’t fully grasp the situation. A short sale is a home that sells for less than the outstanding debt; this can be due to a single mortgage or multiple liens. The homeowner cannot stay current and the lender or the lenders recognize that there will be a loss. Considerations for a successful short sale include estimated market value of the property, owner’s financial situation, area market trends and evaluating foreclosure against accepting a short sale. If it makes fiscal sense to the lender and the owner is legitimately unable to pay, they may accept a short sale. If the lender elects not to consider a short sale, the home typically moves into the foreclosure process and is auctioned on the courthouse steps. 

As an owner, is it better to try for a short sale or just let the home go into foreclosure? The answer is that it depends. Under the new Home Affordable Foreclosure Alternatives program, borrowers will earn a $3,000 “relocation incentive” and servicers will get $1,500 for handling a short sale; the idea being to motivate owners to leave the home in decent condition so that lenders don’t have to factor in repairs. Credit-wise, owners will take significant hits either way but slightly less with a short sale. They also typically have a shorter negative impact than a foreclosure when it comes to getting another FHA backed mortgage. Owners have many other considerations as well, tax consequences and possible collection of portions of outstanding debt being two major ones. Those are unique to the situation and professionals in those specific fields should be consulted before making any decisions. 

For buyers that are constantly inundated with media reports, infomercials and advertisements extolling the riches to be made with distressed properties, the reality is usually quite different. This is a lengthy process that is naturally complicated, no two situations are the same as owners and real estate are unique entities. Add to that the sheer volume of distressed properties and the limited staff of lenders and asset management firms, successfully completing a distressed home purchase is akin to running a marathon without training; few cross the finish line. 

Do not consider a distressed property without setting realistic expectations, it is a time consuming process and one that may never reach the closing table. It is foolhardy to enter this arena without an experienced agent; the process is different than a traditional transaction. Listing agents are evaluated on their ability to deliver maximum sales prices in as short a time as possible; they are expected to generate interest and offers. Most homes are evaluated on a 90-120 day time frame so it is not unusual to have a listing agent immediately call for a “highest and best” offer. Experienced buyer agents frequently have this happen and there is a spirited debate as to just how often there are multiple bids or just a single buyer being pushed to essentially bid against themselves…it is all part of the mystique. 

Homes are sold as is; there is no disclosure provided and buyers are responsible for completing any and all research during the “due diligence” period. From home inspections to surveys to termite inspections to area research…buyers should make good use of that period. This also includes finalizing financing options. It is critical to allow ample time for an appraisal; it’s wise to extend this period for as long as possible. If any issues are found that the buyer finds objectionable, the offer must be terminated during the due diligence. Once that time frame ends, buyers are expected to close. At this point most traditional transactions begin the march to the closing table, this is not necessarily the case with distressed sales. 

Language is routinely inserted into contracts that allow sellers to reserve the right to cancel the deal before closing without penalty. It is possible that multiple debtors will need to approve the offer and it if one balks the deal can fall apart. There is also little sense of urgency by sellers, many times asset managers are working up to a hundred homes and they become desensitized to agent calls, many simply become unreachable. For them, it is simply a numbers game and one contract is no more important than another. Their objective, like that of the listing agent, is to maximize price and most work within defined sale to list price ratios. 

Buyers that leave the closing table with keys to a distressed home share many traits, patience and determination being the primary ones. It is critical to understand that this is likely to be a lengthy and fluid process; there are often many unforeseen obstacles and these opportunities are not for every buyer. The need for proper and thorough research before and during the process is critical, successful buyers align themselves with experienced professionals and view this process as a business transaction. That can be difficult as real estate is often driven as much by the heart as it is by the head; this has to be carefully managed.

For those educated buyers privy to the challenges, the rewards can be many. Excellent opportunities can be found all over metro Atlanta and at all price points, buckle your chin strap and jump in the game….just watch out for that blind side hit.

The text below is from an appraisal newsletter and the link will provide additional information.
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http://www.greenfieldadvisors.com/publications/drywall.pdf

We’ve all seen reports of Chinese Drywall in the press, and may be vaguely aware of the issues from noxious fumes to corroded electronics. As we learned from Chris Miner in our first Buzz interview on this topic …During normal times, drywall used in the US is manufactured in the US, Canada, and Mexico. However, when a hurricane-driven demand spike overlaid a housing boom, a drywall shortage resulted.  

About 60% of Chinese Drywall apparently entered through ports in Florida between 2004 and 2007, although there are reports that it first entered the country in 2001. It has been used, to a large extent, in the Southeastern United States.  A watchdog report  cites Corrosive (Chinese) Drywall- related complaints  in Alabama, Arizona, California, Florida, Louisiana, Mississippi, Nevada, New Jersey, Ohio, Texas, Virginia, Washington, Wisconsin,  Wyoming and others;  potentially up to forty one states.

The problem apparently stems from the character of the fly ash used to make the drywall, which is a by-product of burned coal (produced in large volumes during the generation of electricity). There was a recent spill of fly ash by the Tennessee Valley Authority that contaminated many properties and ultimately caused the US government to classify the locations of other fly ash containment sites so terrorists wouldn’t target them.   The TVA fly ash contained toxins, heavy metals, and other nasty stuff.   The issue with the Chinese Drywall, from a homeowner’s point of view, is not so much the chemicals that are trapped between the paper, although that may be of concern to installers and demolition crews,  but the off-gassing of  sulfur-based compounds in the drywall.  In fact, it’s reported that some first signs of the Chinese Drywall are the odor and the failure of the air conditioning system caused by chemical pitting in the copper coils.  Reported health concerns have included respiratory problems, headaches, and more severe symptoms. Epidemiological studies have been started.  At present, there is no US standard for the manufacture of drywall although the wheels are in motion.

It’s a simple idea; never mind the moral and contractual obligation you accepted when you purchased your home, if the numbers don’t work then cut your potential loss and walk away. Rough estimates of owners “strategically defaulting” continue to grow at an alarming rate; from about 3% in ’04 to about 18% in ’08. There’s little doubt that the number is past that for ’09. In GA, the rate grew from about 2.5% on ’04 to 8.97% in ’08 with a higher number anticipated for ’09. One study estimates as many as 25% of foreclosures may be “strategic”, and once the first one goes, others tend to follow. See a national map of “strategic defaults” CLICK HERE.

I’ve had many potential clients tell me that this was their plan; punch out of their existing home and buy something before their calculated failure to perform. And I’m not talking about folks in trouble; I’m taking about folks that felt it was just time to move on…call in the moving trucks, gas up the expensive cars and ride away from their responsibility. Of course in their wake they leave a foreclosure to further muddy this market’s recovery – multiply that by the hundreds and add it to an already busy “expected” foreclosure pool and you see the results. One can only hope that the states and Feds pursue these owners as vigorously as possible and for as long as possible.

I see postings on this topic and people actually asking for advice about it. It’s a sad commentary when folks resort to removing any sense of moral, ethical and legal responsibility and do something like this. The Wall Street Journal has an interesting article on just this topic – CLICK HERE

Agents taking responsibility for their actions has been a pet peeve of mine for a good twenty years, it really bugs me. No one can say that that the real estate profession doesn’t deserve the public perception that we have; how in God’s name can we look so bad in the eyes of the public? Actually, I don’t think it’s all that complicated; we’re not good at policing ourselves. Have a look at this:

So many agents are “part timers” that it’s really alarming. True, this job isn’t splitting atoms or disarming an IED but what happens when the part timer screws something up? We wind up rated as above. Being both a broker and active appraiser I see contracts daily and speak with agents continuously….and more often than not I end the day shaking my head in disbelief. Much of what I see and hear is downright frightening.

I’ve been an Army officer and owned and operated large appraisal firms, I understand managing people in fluid situations. Managing brokers have their hands full, you can only mandate so much for agents. Personal responsibility has to kick in; I submit that if you are in ANY business then be in it all of the way. Real estate is not selling a commodity; you earn your fee by selling your experience and ability, not widgets. You develop that by working every day, by shadowing more experienced agents, by immersing yourself in the data, mastering the appropriate tools, understanding contracts and amendments, keeping abreast of trends and current regulations….how is that a part time job? 

Consumers bear significant responsibility as well. As long as one of the first questions is “how much will you cut your fee or rebate me” you will have problems. Again, you are not hiring someone to sell or buy a widget! The unique thing about real estate is that there are no two parcels exactly alike. Toss in the billion other influencing factors and then the million things that can go wrong with negotiations, contracts, inspections…..And yet and still, consumers love to lead with the “how much” question. Let me know how that question works out while you’re losing buyers with an overpriced undermarketed home, leaving money on the table during negotiations, overpaying for a home and or mortgage, missing inspection items, spending money on lawyers with contract issues….have a look at questions on Trulia! Can some of these people asking these questions really be represented?? 

Hey Mr. & Mrs. Consumer, try this. When you need the services of a real estate agent find your top 5 and contact them, set appointments to speak with each one. Ahead of that, write out at least 15 pointed questions, random in nature but pertaining to your situation. Something like “How will my house being stucco impact things” or “What’s the sale to list price ratio in this neighborhood” or “How will that HVCC appraisal regulation impact me” or “What’s the difference between a short sale, foreclosure, distressed sale and a corporate owned home”. Invite them over if it’s a listing presentation and let them get comfortable. Give them five minutes to babble then ask them to close the presentation book – start asking pointed marketing questions and then your pointed questions, see what happens. You’ll know pretty quick who knows the biz and who spits back realtor-speak. This is great for sellers but also works well for buyers. Oh yeah – real estate is a world where everyone is “Number 1” at something; call them out. Make certain that any agent brings you a printout of their year to date performance – NOT THE COMPANY. Professional agents are earning, they will have the data you need. 

While I’m ranting…can agents please give the ridiculous “personal marketing” nonsense a break? Does the consumer really care if you like reading mystery novels, your favorite music is disco or if you enjoy going out to dinner with friends? Do they really want you to be a realtor for life? Do they want to be badgered with recipe post cards every month? Maybe I missed the boat, but my clients want me to do my job for them; they refer me to others when I do that. I don’t see dentists walking around in tooth costumes holding toothbrushes, lawyers dressed as Lady Liberty holding the scales of justice or doctors holding giant syringes chasing a flu bug. Read their qualifications, nowhere in there do I see “I want to be your lawyer for life”.

The real estate industry is a mess right now and right or wrong we’re being blamed for it. The direct blame starts and stops with the consumers; you can’t regulate stupidity and so many were. Our challenge in this field is to change with the times, we have to be more demanding of our peers, we have set much higher standards and we have to win the confidence of the public. This isn’t a part time job and unless every agent treats it as a profession, the public will continue to treat us as they do.