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        <title>Atlanta Real Estate Blog</title>
        <link>http://www.realsourcebrokers.com/blog/atlanta-mortgage/</link>
        <description>Atlanta Real Estate Blog - a complete Atlanta Home Guide helping local buyers, sellers and investors make informed decisions through insightful market news and analysis.  Because we focus specifically on the eclectic Intown Neighborhoods (Candler Par</description>
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            <guid>http://www.realsourcebrokers.com/blog/price-is-how-much-you-pay.html</guid>
            <link>http://www.realsourcebrokers.com/blog/price-is-how-much-you-pay.html</link>
            <author>joshua@thekeenteam.com (Joshua Keen)</author>
            <title>Price Is How Much You Pay</title>
            <description> <![CDATA[ 
NY Times reporter, David Leonhardt, shares some interesting insight on the connection (or disconnect) between Mortgage Rates and Home Prices.


...

Its not easy to see much of a relationship.

...

My best guess for why the two dont correlate more closely is the role that psychology plays in housing markets. Prices just dont move as quickly as economic theory suggests they should.



Not really, David.



The market, for all it's recent folly, is a generally rational experience.  And buyers, for all the talk of the &quot;emotional purchase&quot;, make rational distinctions.&nbsp; For instance:  The price is how much I pay for a house.  The interest rate is how much I pay for financing.  

In today's REO (bank owned) driven market -- many buyers pay cash.  Would a cash buyer pay more because interest rates are low? 

 Probably not, David. 



It's true that low interest rates make buying a home more attractive than renting.  It's also true when it's more attractive to buy (vs. rent)-- there is more demand for housing.&nbsp;  Supply/demand economics ensue.&nbsp;  But to the earlier distinction: A smart (rational) buyer will consider low rates are temporary and will rise in the future when they sell the property.&nbsp;  So for a theory such as low interest rates impacting price to run full course, it must be considered the price of a given home will decline in the future as interest rates rise.  The result?  The attractiveness of low interest rates in the present are cancelled out by the buyers rational predictin of higher interest rates in the future.  A buyer who can take advantage of low interest rates today does not want to overpay for fear of high interest rates tomorrow. 

At least that's why we &quot;don't see much of a relationship&quot; in the graph. 
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            <pubDate>Wed, 08 Sep 2010 14:53:38 -0400</pubDate>
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            <guid>http://www.realsourcebrokers.com/blog/4-reasons-to-sell-now.html</guid>
            <link>http://www.realsourcebrokers.com/blog/4-reasons-to-sell-now.html</link>
            <author>joshua@thekeenteam.com (Joshua Keen)</author>
            <title>The Perfect Storm</title>
            <description> <![CDATA[ 
Spring is here.

I know it sounds silly coming to you on a rainy day in early February when it's 35 degrees outside and &quot;wintery mix&quot; is the weekend forecast, but the real estate market is on strange footing these days.

Here's A Fact: 

Spring has sprung in the real estate market.

 And the next 3 months are the best opportunity to get your home sold in over a year.

Why?

Several factors are creating a &quot;perfect storm&quot; for sellers in the current market.

 I'll do my best to explain...

Wikipedia defines a &quot;Perfect Storm&quot; as an &quot;expression that describes an event where a rare combination of circumstances will aggravate a situation drastically.&quot;

 It's also a movie starring George Clooney as the captain of an ill-fated fishing boat.

But the perfect storm I'm talking about is a good one.&nbsp; No sinking ships here.

 And if you play your cards right ... you'll be sitting comfortably at a closing table with your home sold in 4 (or fewer) months.

 So ... what &quot;circumstances&quot; are &quot;aggravating&quot; the real estate market right now?

Here are four of them...   

 Circumstance #1: $8000 1st Time Buyer Tax Credit

 The springtime spurt in home buying comes early this year as buyers scramble to meet an April 30 tax credit deadline.&nbsp; The spring buying season typically takes off in late March and runs through summer into August. But buyers who want to claim this year's tax credit &mdash; up to $8,000 for first-time buyers and up to $6,500 for repeat buyers &mdash; must have signed purchase contracts by April 30. And they have to complete the deal by June 30.

 Let me say that again ... buyers who want $8000 in free government money need to have a house under contract by April 30th, 2010.

 So ... what's in it for you?

 More buyers looking at and, we hope, buying your home sooner rather than later.

 That's what.

 My prediction: the market will heat up over the next 30 days and first time buyer should be out in droves to take advantage of this incentive between now and April 30th, 2010.&nbsp;&nbsp; In turn, the market will slow moving through the rest of the year.

 Expires: 84 Days and counting

 Circumstance #2: Low Interest Rates

 Right now, interest rates for a qualified borrower with a 720 credit score and a 3.5% down payment can get an interest rate as low as 4.75%.&nbsp;&nbsp; One a $300,000 purchase that's a P+I (principle+interest) payment of $1,510.&nbsp; Wow!&nbsp; Good for your buyer.&nbsp;&nbsp; The question is how much longer can rates like this last?

 About a year ago, the Federal Reserve announced a $1.25 Trillion mortgage rate subsidy by purchasing mortgage-backed securities in the open market, through March, 2010.&nbsp; Right before the subsidy, mortgage rates were at or above 6%.&nbsp; The subsidy, known as Bernankes &quot;nuclear option&quot;, uses an extraordinary monetary stimulus to keep mortgage rates artificially low.

 Before this program began, real market rates were around 6.25%

 Why should you care?

 Interest rates have a direct impact on the &quot;affordability&quot; factor of your home. &nbsp;

 Low interest rates mean more buyers can afford to buy your home.

 And that's good.

 My prediction:&nbsp; As the Federal Reserve quits buying mortgage backed securities - mortgage rates increase to 6%.&nbsp; And it won't take long for them to get there.

 Expires: April to June 2010

 Circumstance #3: Financing

 First time home buyers getting an FHA loan from HUD need to buy before it gets harder to get a loan.&nbsp; &nbsp;

Last week, Housing and Urban Development (HUD) announced they are making changes to the FHA loan program.

Change # 1: Increasing required mortgage insurance on each loan. Right now its at 1.75% of the loan amount.&nbsp; This &quot;rolls&quot; into the loan and the buyer pays for it each month over the life of the loan.&nbsp; This will increase on April 1st to 2.25%.&nbsp;&nbsp; The goal is to help rebuild their insurance reserves after massive losses with mortgage defaults.

 Change # 2: Increasing the required credit score.&nbsp; Starting May 1st, buyers need a FICO score of 580 or better to qualify for the 3.5% down payment program.&nbsp; Once in effect, this pushes many buyers out of the market all together.

 Change # 3: Reducing the allowable seller contributions from 6% to 3%. This is the most significant change and impacts everyone getting a loan. For cash strapped home buyers having you (seller) contribute toward their closing costs is a must.&nbsp;&nbsp; Soon buyers will only be able to accept 3% (or $3000 dollars) towards closing costs or pre-paid items. Not good.&nbsp; Buyers want to have a home under contract before this happens.&nbsp;&nbsp; You want to sell your home before this happens.

 Are you confused yet?

 Don't be.&nbsp; It's not as complicated as I've made it.

 At root &hellip; these changes are a bad for buyers and, as a result, a bad for sellers.

 It's in your interest to try to sell before it becomes too hard for a buyer to finance your home.

 My prediction: As these changes take effect, the number of buyers meeting FHA financing guidelines will decrease significantly.&nbsp; This makes it harder to sell homes.&nbsp; Period.

 Expires: April 1st &amp; May 1st

 Circumstance #4: Low Prices

Let's face it ... the last couple years have been brutal for our homes' value.&nbsp; In some local areas prices have decreased as much as 40% and overall sales volume, 60%.&nbsp; The good news for you and, more importantly, your buyer is prices are at (or near) bottom.&nbsp; In fact, most leading economists say prices bottomed back in 2009 with little to no movement either way in the last few months. 

 Why should you care that &quot;most economists&quot; think your home is now worth the least amount it's been worth in 4 years?&nbsp; Because your buyers are listening, that's why.

 Buyers have been waiting for the proverbial &quot;bottom&quot; for too long.&nbsp; Now that it's here (according to most economists) it's time for them to act.

 My Prediction:&nbsp; foreclosures will continue to be a problem through 2010 and prices will remain low and likely stabilize late 2010 into early 2011.&nbsp; I expect to see some appreciation in local Intown neighborhoods starting spring 2011. &nbsp; 

 Expires: late 2010/early 2011
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            <pubDate>Fri, 05 Feb 2010 15:49:55 -0500</pubDate>
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            <guid>http://www.realsourcebrokers.com/blog/whats-up-with-fha.html</guid>
            <link>http://www.realsourcebrokers.com/blog/whats-up-with-fha.html</link>
            <author>joshua@thekeenteam.com (Joshua Keen)</author>
            <title>What's Up With FHA?</title>
            <description> <![CDATA[ 
FHA announced this week it will seek to implement changes to current
policies.&nbsp; These changes are all restrictive and have a significant
impact on the real estate buying public.&nbsp;&nbsp;


You can read all about the changes here: FHA Announces Policy Changes to Address Risk and Strengthen Finances&nbsp;

For those less inclined to sift through all the beauracracy ... here's a quick snapshot: 


The upfront mortgage insurance premium will increase by 0.5% from 1.75% to 2.25%

The maximum seller concessions will decrease from 6% of the sales price to 3% of the sales price 

There are some credit score/LTV limitations that should not affect &ldquo;A&rdquo; paper lenders



When Do The Changes Go Into Effect? 


FHA will issue a notice and have a comment period on most of the
items prior to implementation. There's no hard date for conversion but,
per HUD, the changes will go into effect in the spring or early summer.

Why This Impacts You...

It's
safe to assume it will get harder to get a loan within the next 3 to 6
months.&nbsp;&nbsp; And the seller concession limitation will make it more
difficult on homebuyers in the &quot;lower&quot; price ranges, for sure.&nbsp;&nbsp; 

The biggest challenge will be the sellers concessions reduced to 3% instead of 6% for buyers purchasing with smaller loans.

For
example, for a home buyer purchasing a $100,000 home with 3.5% down the
closing costs are approximately $3,444 and the pre-paid reserves
(property taxes, insurance, escrow establishment, etc) are
approximately $1,051.&nbsp; That's about 4.5% of the purchase price.&nbsp; Which
means when these changes are in play, this buyer needs an additional 2%
they woudn't have needed before the change. 

($150,000 price
with 3.5% down the closing costs are approximately $4119 and the
pre-paid reserves are approximately $1561. Total cc and pp are 3.7% of
the price; requiring an additional 1.2%) 

An Alternative Approach For Making Homes More Sale-able... 

So
how do Seller's deal with a shrunken buyer pool and increase their
chances of selling when it's hard for their buyer's to get a loan?&nbsp; The
resolution is to have your buyer go out at a bit higher on their interest rate and reduce the
origination fee and some of the costs associated with buyer financing.
For example, as of yesterday, charging .25% higher in rate allows a
lender to absorb 1.25% in closing costs.&nbsp; On $100,000 purchase, that's
$1,250 less the lender needs to collect for closing costs. &nbsp; And on a
$100,000 purchase price it makes a $15 a month difference in payment
(150,000 purchase price it made a $23 a month difference in payment).

This idea of raising the interest rate may not, at first, be attractive to most buyers but with the appropriate positioning by a savvy Seller it could make the difference between a sale or no sale. 

Would love to hear your thoughts... 
 ]]> </description>
            <pubDate>Fri, 22 Jan 2010 18:31:01 -0500</pubDate>
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            <guid>http://www.realsourcebrokers.com/blog/its-so-hard-to-say-goodbye-to-yesterday.html</guid>
            <link>http://www.realsourcebrokers.com/blog/its-so-hard-to-say-goodbye-to-yesterday.html</link>
            <author>joshua@thekeenteam.com (Joshua Keen)</author>
            <title>It's So Hard To Say Goodbye To Yesterday</title>
            <description> <![CDATA[ 
If you've been following mortgage rates over the last month you've likely noticed a quick and steady climb.&nbsp; In fact, since a low of 4.5% on November 27th, 2009 to around 5.25% today (December 30th, 2009) they've done nothing but go up.&nbsp;

What's Going On? 

Mortage rates are going up.&nbsp; And this rise in mortgage rates is something I've been expecting for a few months now.&nbsp; Mortgage rates are on their way up, likely to 6% or more over the next few months

Why Is This Happening? 

 Because that's what they were about a year ago (and where they would
be today) before unprecedented intervention by the Federal Reserve.&nbsp; It's not the result of the economy is recovering ... the economy isn't in recovery mode.&nbsp;&nbsp; Last year the Federal Reserve starting their campaign to purchase $1.25 Trillion in mortage backed securities (MBS).&nbsp; That program is scheduled to end in March, 2010 and one year into the game they've spent $1.07 trillion.&nbsp;&nbsp; So with about $150 billion buring a hole in Bernanke's pocket we've got about 2 to 3 months left of low mortgage rates, right?

Not so fast...

If you subscribe to the &quot;theory&quot; of markets as discounting mechanims (meaning Wall Street traders anticipate how the Fed monetary policy and rates will affect future value in this scenario) then the market will adjust quicker than the Fed can spend the remaining $150 billion. 




 

What Does This Mean For You?

All signs point to mortgage rates being above 6% before March 2010.&nbsp; So if you're a buyer it would make sense to call your preferred lender and talk about what it means to lock in at current rates (30 or 60 days) as you look for your next home.&nbsp; 
 ]]> </description>
            <pubDate>Wed, 30 Dec 2009 16:51:19 -0500</pubDate>
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            <guid>http://www.realsourcebrokers.com/blog/walking-away.html</guid>
            <link>http://www.realsourcebrokers.com/blog/walking-away.html</link>
            <author>joshua@thekeenteam.com (Joshua Keen)</author>
            <title>Walking Away</title>
            <description> <![CDATA[ 
I was talking with one of my top investor clients a couple days ago and he mentioned he &quot;walked away&quot; (aka foreclosed) from two investment properties last month. The two properties - both Atlanta condos - had lost a combined $250,000 in value over the last 18 months.&nbsp; Meanwhile, the bank holding the note refused to entertain 3 bonafied short sale offers, denied application to modify the adjustable rate mortgage and increased his monthly interest payment $600 a month.&nbsp;

Foreclosing on Your Atlanta Home: A Strategic Approach

For a professional real estate investor who makes his living creating profit in the homes he buys and sells, it was a smart decision.&nbsp; A strategic one, really.&nbsp; Either continue to hemhorage massive amounts of money every month paying interest on a loan financing a sinking ship or simply stop making payments altogether. &nbsp; But what about the milliions of homeowners stuck in the same debt prison?&nbsp; A RECENT study
suggests that most homeowners have reservations about &quot;walking away&quot; from a mortgage
that they can afford to pay, even if it ties them down to an investment
thats unlikely to pay off anytime soon.&nbsp; 

But if the property has lost significant value, or if many neighbors walk
away from their mortgages, the study says, &ldquo;strategic defaults&rdquo; are a very real part of today's real estate landscape.

&nbsp;

&nbsp;
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            <pubDate>Fri, 30 Oct 2009 06:56:24 -0400</pubDate>
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            <guid>http://www.realsourcebrokers.com/blog/credit-crisis-explained.html</guid>
            <link>http://www.realsourcebrokers.com/blog/credit-crisis-explained.html</link>
            <author>joshua@thekeenteam.com (Joshua Keen)</author>
            <title>Credit Crisis Explained</title>
            <description> <![CDATA[ 
Ok.  So we all have some idea how we got here, right?  We've all heard the terms at least.  Credit crisis.  Subprime mortgages.  Foreclosure.  Securitized debt.  Bernanke. AIG.  Leyman Brothers.  Wall Street.  Main Street.  Greenspan.  Federal Reserve.  Treasury.  Under water.  Credit Default Swaps.  Meltdown.  Crisis.  National Debt.  GDP. Recession.  Depression.


But just how did we get here?


And how why exactly has the entire economy suffered so much at the hands of this Credit Crisis?


Check out the Video below where it's all explained in just shy of 11 minutes:
 
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
 ]]> </description>
            <pubDate>Mon, 31 Aug 2009 21:16:57 -0400</pubDate>
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            <guid>http://www.realsourcebrokers.com/blog/how-to-find-the-best-atlanta-mortgage.html</guid>
            <link>http://www.realsourcebrokers.com/blog/how-to-find-the-best-atlanta-mortgage.html</link>
            <author>joshua@thekeenteam.com (Joshua Keen)</author>
            <title>How to Find the Best Atlanta Mortgage</title>
            <description> <![CDATA[ 
Banks vs. Mortgage Brokers 

If you're in the market to buy a home...likely, you're also in the market to find the right mortgage to finance that home.&nbsp; It's important to know there are huge variations between mortgage brokers and bank loan officers. 

Atlanta Bank Loan Officers


Loan officers at a credit union, bank or large lending houses (ie. Wells Fargo, Bank of America) are employed by those institutions and, hence, work to sell the loan and mortgage products offered by their employer.&nbsp; Many of these institutions have a large selection of loan types to select from but it's important to note that all of those loans &quot;originate&quot; from one source.

Atlanta Mortgage Brokers

Much like real estate agents, mortgage brokers act a &quot;freelance&quot; agents who are paid an origination fee to broker loans between hundreds of lenders across the nation. &nbsp; 

One way to think about a mortgage broker is as a &quot;scout&quot;.&nbsp; They seek out and evaluation a home buyers personal credit situation to find a loan product that is the best fit.&nbsp; A good mortgage broker will work on the buyers behalf to find the very best rates and terms available for their specific credit and debt scenario. 

What Difference Does it Make?

It depends on your specific situation and what you value most in a transaction. 
 ]]> </description>
            <pubDate>Thu, 11 Jun 2009 20:01:59 -0400</pubDate>
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            <guid>http://www.realsourcebrokers.com/blog/is-being-ok-really-okay.html</guid>
            <link>http://www.realsourcebrokers.com/blog/is-being-ok-really-okay.html</link>
            <author>joshua@thekeenteam.com (Joshua Keen)</author>
            <title>Is being "ok" really okay?</title>
            <description> <![CDATA[ Jeffrey Pinkerton of HillSide Lending recently posted this article on the problem with being OKAY in a service oriented business.  


Have you ever had a waiter or waitress ask you if your meal is &ldquo;okay?&rdquo;  Isnt that a strange question, &ldquo;Is everything with your meal ok?&rdquo;  Its like saying, &ldquo;Is everything with your meal average?&rdquo;  Wouldnt the better question be, &ldquo;Is everything with your meal excellent?&rdquo;  Or better yet, &ldquo;Is everything with your meal finding your great satisfaction!?&rdquo;

What has happened to going above and beyond what people expect?


My waitress never asked me if my meal was excellent! And I'm not talking about my last trip to the Golden Coral either.  That being said, I'm left more inclined to inquire if &quot;going above and beyond&quot; ever really happened at all.  Sure...there are your Nordstroms' of the world, but I'd bet a steak dinner against you giving me the name of 10 more service providers that have really knocked your socks off with service in the last...well...forever, really.  

Jeffrey doesn't end by pinning this one on the waitress though...there is really more to it than that and he sees it very clearly.  In a world being consumed by consumerism, the consumer has more power than they like to let on and the power of an informed consumer armed with penetrating questions is the greatest weapon against mediocre service.  


simply ask this question, &ldquo;Mr./Mrs. Loan Officer, how are you going to ensure that at the end of this process, after everything is signed and done, and closed, how are you going to make sure that I am a thrilled and happy customer?  So thrilled that when I think about getting a mortgage, I am going to think about you?  So thrilled that when I hear of someone else thinking about getting a mortgage, I am going to tell them about you?&rdquo;


In fact, replace the mortgage specific context with any given service oriented business and by answering this question you have the recipe for a successful business.   Afterall, if you're paying $250 for a pair of levi's  questions tend to roll off the tongue quite naturally.

And, Jeffrey, if you're ever in need of a professional endorsement - I'd be happy to oblige. 
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            <pubDate>Sat, 13 Jan 2007 06:20:07 -0500</pubDate>
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