​There are investors and companies that send out postcards and letters telling people that they are looking to buy their home.  They pick their lists based on many different criteria.  Some target owners that are late on their mortgage.  Some target non-owner occupied homes.  Some target homes with owners over 65 years old.  Some target people going through a divorce.  Some target the obituaries.  Some target all of the above.

Obviously, these investors are not looking to pay market value for the property, and they are looking for the people that are the most likely to sell their home for pennies on the dollar.

What do I mean for ‘pennies on the dollar’?  The investor tries to get the home as cheaply as possible.  Many will start out at as low as 40 cents on the dollar of the homes current value in the homes current condition, and the cutoff is usually 70 cents on the dollar.  Please note that this is in current condition and not after repairs.

Many of these investors are hoping they can get your home under contract and then find someone who can actually buy it.  They don’t have the cash in the bank to purchase the property.  They will get the home under contract, then start calling everyone they can to see if someone wants to buy the contract before they ever even close on the property.  If they can’t find someone, then they can’t close and you are in a worse situation.

So, what to do if you are in a desperate situation and see working with an investor as the only, or most convenient way out?

#1) Call a real estate agent.  (This is not as self-serving as it seems)  Pretty much all real estate agents are going to be willing to sit with you and give you an idea of what the home is worth.  It will be a free service.  Try to find someone who knows your area.  (Side note, if you don’t know who to call, call me and I will find someone in your area)  Why don’t they charge?  If you decide to list the property, the hope is that you will call them to do so.  This gives you an idea of what the home will sell for and how long it will take to sell the home if they were to list it.  This keeps you from selling for a discount unknowingly. 

In my former life as an appraiser I had the opportunity to do an appraisal for an older lady who had bought her home for $70K nearly 30 years prior.  It was one of the hottest areas in Atlanta.  I asked her what she thought it would be worth.  She said, probably at least a 100k by now.  It was worth over 700k.  (Well, she wasn’t wrong, it was at least 100k)  She nearly fainted when I told her.

#2) If you decide to move forward with the investor:  Remember, this is a negotiation.  Yes, the investor may play hard ball and threaten to walk away.  Do not be intimidated.  Also, don’t be scared to walk away yourself.

#3) Insist on receiving proof of funds showing that the investor has the cash to purchase your home.  This should be a letter from their banker stating that they have at least the amount of the purchase price and all closing costs available in liquid assets at time of the contract.  Make sure you call the bank to verify that this is correct.  A letter without verification could easily be fraudulent.  A deal with any investor should be one that is quick and easy.  You are trading price for convenience.  You are, essentially, selling your home to a business, the same way one sells jewelry to a pawn shop.  Part of that convenience is making sure there is no loan to obtained, no last minute detail that can derail the transaction.

#4) Read the contract carefully and make sure you understand it.  Many contracts will have a due diligence period.  This allows the other side to pull out for any reason at all.  Push to have an inspection period instead of a due diligence period.  Look to have this period as short as possible.  Best case scenario is 7 days or less.  Do not accept any inspection period or due diligence period over 21 days. 

#5) Make sure the investor has skin in the game.  In Georgia, we call this earnest money.  The sticky part here is that the attorney that will be closing the transaction will likely be working for the investor.  So, insist that whoever is holding the earnest money issues a signed statement that is part of the contract stating that they will handle and disperse the earnest money as required by the contract.  Also, earnest money should be significant in these cases.  Ask for 10% earnest money to be held by the attorney in the event of a breach.    

#6) Stipulate in the contract that the investor cannot flip the contract to another party prior to closing without specific written permission from you. 

#7) Be prepared for the offer price to be reduced after the inspection.  Unfortunately, one of the games investors play is to come to an agreement at one price, then negotiate for a reduction of the price after the inspection.  It happens with listed properties too.  Inspectors are looking to lock the property up and then negotiate the price. 

#8) Stipulate in writing that the contract cannot be flipped or sold prior to close. Most important of all:  Don’t ever sell your property by letting someone take over payments.  It will not absolve you of the financial obligation.  So, if he/she doesn’t make the payments on time, your credit takes a hit.  If the home is foreclosed on, the foreclosure is on you.  Even if they make every payment on time for the next 30 years, that payment will be counted against you on your credit report.  It will limit your ability to buy another home or any other expensive item until it is paid off. 

In many cases an investor and distressed home seller can come to an agreement that is a win-win.  I am not here to bash all investors.  I am here to give a word of caution to unsuspecting home owners.

The key is for the distressed seller to be informed and not to operate out of ignorance.  Make sure you fully understand every implication of the agreement.  If there is anything you don’t understand, reach out to a professional.  (Preferably an attorney.)  Do not take the investor’s verbal word for anything that is not in writing.  (This should be standard practice for ALL contracts, not just ones that are offered by investors)

As always, if you have any further questions, don’t hesitate to
contact me directly.  I am happy to answer any questions you may have.  My number is 678-992-3817.

Edited 10/01/2013- I was dead wrong yesterday.  


Well, no matter which side of the isle you are on, the government shutdown could affect you.   As far as Real Estate transactions go.... this is a big deal.

President Obama said specifically that "Federal loans for rural communities, small business owners, families buying a home will be frozen,"  


Yesterday, I went into each of the loan products and what the impact would be.  Well, if you aren't already in process, there will be significant delays regardless of the loan product.


Mortgage companies use a system to verify SSN's and another system to verify tax returns/income.  These systems are obviously run by the IRS.  And, these systems are currently shut down.


Until the government is started back up, cash offers should carry even more weight than normal.

Wrong.  This is one of the things that buyers often struggle with, but the seller has no obligation to fix the property or to reduce the price.

The due diligence period, or inspection period, depending on the contract, merely affords you the opportunity to have the home inspected.  There is no obligation on the seller's part to complete repairs or reduce the price in lieu of repairs.

Once the inspection is complete, you can ask that the seller complete repairs.  At that point, it becomes a negotiation.  They may elect to fix everything you ask for, or NOTHING you ask for.

There are many things that affect the seller's decision.

#1) Market-  If the market is a seller's market, (as it is right now in our area), the seller knows that even if you don't complete the purchase, someone else is right behind you bringing another contract.  Now, conversely, two years ago, sellers just wanted to hold the contract together, so they would fix just about anything they could.

#2) Financial ability- Some sellers have no money to pay for repairs, or financial flexibility to reduce the price.

#3) Types of repairs-  Is it a safety issue?  Is it a functional issue?  If so, many times, these get fixed.  But, the reality is that if you are buying an existing home, and not one that is being built, there will be some minor things that the inspector can find.  Even on well maintained homes.  So be reasonable with what you are asking.

#4) Seller's perception of your original offer-  If the contract price is really lower than they wanted to go, and they feel like you are getting a 'steal' to begin with, they will be less likely to complete repairs.

#5) Motivation-  The market plays into this as well.   However, if a seller is being transferred, or has another home under contract, or is getting a divorce, or..... fill in any scenario in which the seller has pressure to get the sale completed, then they will often agree to far more repairs in order to keep the contract and sale moving forward.

#6) Type of loan-  Some loans like FHA, VA, and USDA all have minimum property standards.  If the inspector finds something 'should' come up when the property is appraised by the bank, then the listing agent should advise the seller to go ahead and get it fixed to keep it from being an appraisal/lending condition.

#7) How long has the home been on the market-  This goes into motivation as well.  If the home was on the market for a week, then the seller may just elect to put it back on the market and get a buyer that is less picky.  Heck, maybe one that doesn't even get an inspection.  If the home has been on the market for a year, then they will be motivated to keep the sale moving forward.... of course, unless they just don't have the financial capability.

I have it posted elsewhere, but you should ALWAYS get a home inspection.  When you fall for a home, it is often like the beginning of a romance..... there are flaws that you just don't see.  Love is blind, after all. 

To sum up, keep your requests to the items that would prevent you from buying the home.  Try to picture being on the other side of the transaction and figure out what you would think was 'reasonable'.  

Example- AC is not in working order.  It is reasonable to ask the seller get AC to be in good working condition.  It is not reasonable to expect the seller to replace the AC if they can get the existing unit working properly.

One of the most asked questions I ever get.  

So, a while back, I started a series about what makes a good agent.  There are obviously two sides to a deal.  The agent that represents the buyer, known as a buyers agent or the selling agent.  Then, there is the agent that represents the seller, known as a listing agent.   

I wrote about some of the general things that makes a good agent with the part I of this series.  Then, I posted what makes a good buyer's agent.  Now, we will talk about what makes a good listing agent.

#1) Knowledge- I started to try to list out everything that a good agent should know.  And, well, it was a long list.  Here are the five major things that jumped out at me.  

Property value- You don't want to ask too much and have the listing go stale, and you also don't want to under price your home and leave money on the table.  (of course, in this market under priced homes are quickly bid up..so, believe it or not, it is even better to under price your home right now than to over price it)

Marketing-  How to get the most eyes on your property.  Yes, the listing services are a great start.  It is more than just that.  It is having a great website that ranks highly on Google.   It is featuring them on Zillow, Trulia and Realtor.com.  It is about getting them on Craigslist, Facebook, and Backpage.  Basically, everywhere you can get them.  Some agents feel it is a waste of time to run Craigslist and Backpage ads.  But, the first time homebuyer often starts there because they are comfortable with that sight.  They have looked for things there already.  Most people try the familiar first.  

Loan products and lenders- Why does this matter?  The seller isn't getting a loan.  The seller isn't buying the house.  Why should the listing agent care?  Well, there are many different loan programs out there.  And, so many things depend on the type of loan.  The listing agent should know the different types of loans and what the implications are.  The two biggest factors that change with loan types are time to get done and repairs required.  Some loan programs will require you to fix certain things.  So, you may be looking at two similar offers and decide based on price alone.  Only, one loan type may cost you thousands in repairs that the other would not have.   Oh, and of course, if the listing agent knows the loan types, then they can help you navigate those waters more smoothly and get the house closed on time.

Common negotiating strategies-  So many people think that the only thing that matters is price.  But, this couldn't be further from the truth.  Some buyers' agents actually overbid to get the house under contract, only to then negotiate the price during due diligence.  Some look to have ridiculous contingency periods that protect them long after what is reasonable and well into the realm of abusive.  Some overbid, knowing that the appraisal will knock it down.  Other than perhaps the first one, these are not 'improper'.  They are just strategies.  There are more, especially when you get into different types of sale.  Many negotiations are like chess matches.  The good agents see the board from many different angles.    

Contracts-  We use standardized forms.  However, so many agents have misconceptions about parts of the form.  It's as if we don't need to read and understand them, because it is a 'standard' contract.  And, due to this complacency, many agents put their clients in jeopardy by an improperly completed field.

#2) Communication-  This is one of the most common complaints I hear.  This is key.  Not only to the seller, but also to other agents.  I know how frustrating it can be calling a listing agent to show a home and not hearing back for days.  Or, calling with a question so that I can submit an offer and hearing nothing.  And, of course, communicating with the seller to let them know what is going on and what you are doing to get their house sold.

#3) Willingness to invest time, money and resources-  Listing agents are only paid if they sell the home.  Due to this, some are unwilling to invest the proper amount of time or, more importantly, money to getting the listing marketed correctly.  The shortcuts that they take will help their wallet, but it certainly doesn't help your home sell or sell for as much as possible. 

#4)  Knowing our own limitations-  I do not stage homes, nor do I take the photos that go on all my marketing.  I hire a certified staging specialist and a professional photographer.  Does this increase my expenses and decrease my bottom line?  Yes.  I could easily walk around and give you mediocre staging advice.  But, I know that homes sell better when staged.  And, I know that those photographs are what represents your home to millions of people.   This is so very important, especially in upper price ranges.  It isn't just about getting your home sold.  It is about getting the most for your home in the shortest amount of time.

#5)  Counsel-  Your agent is your advocate.  And, they should be willing to go to bat for you at all times.  That should never change.  They represent you in this transaction.  However, they should also be able to put things in perspective.  The other party may not be in the right.  However, it may cost you more in the long run to be right, than to let the other party have their way.  The agent has to be able to frame those conversations.  

Like I said at the beginning, there is a lot that goes into being a great listing agent.  It would be hard to pick the most important.  I supposed it would be integrity.  A person who has integrity would work on the rest because they would know how important each of these is.  

What do you think the most important attributes are?

I can't tell you how many times I have went to look at a home that was listed as a four bedroom that was actually three bedrooms, or listed as having one extra bathroom.  (I don't think this is often intentional by the agent, I think that most often, it is just a mistake)  This may get 'more' people through the front door, but even the ones who were fine with one fewer bath or one fewer bedroom feel disappointed when they are viewing your home.  And, the feeling of disappointment is not what you should be going for.

I have also seen agents list the house as having one fewer bedroom or bathroom.  While those who go to see it are pleased to get more than they thought, the reality is that the home was taken off the lists of several buyers who needed (or at least thought they needed) that extra bedroom or bathroom. 

Lot size is pretty easy to get, you just have to check tax records, yet.... I see tons of listings everyday that the lot size is incorrect, or not listed at all, and also incorrectly indexed.  

Square footage is difficult.  I encourage my buyers not to search by square footage.  Many agents don't list the square footage at all and the agents who list it often get it from tax records, which are often incorrect or hard to read.  But, realize that many buyers do search by it and if you don't have the square footage indicated, or it is listed as less because the tax records are wrong, you are getting fewer buyers.

And, perhaps the worst mistake of all.... incorrect school district, or failing to list a school district altogether.  I see this error as much as I see any other.  And, I assure you that this one thing can affect your listing as much, if not more, than any other.  Especially if your home is in the suburbs in a community that appeals to families.  Make no mistake that the biggest single criteria I get from families with children is school district.  Sometimes it is just one district that they consider, sometimes it is a list of three possible school districts.  And, it isn't always just based on academics.  Sometimes it is an awesome athletic department, or an awesome theatre department, and awesome technology department, or an awesome media/journalism program.  So, if your agent doesn't want to spend the 10 minutes or less necessary to determine your school district, then you could be leaving thousands of dollars on the table.

And, today's real estate search engines - whether it be MLS used by agents, or consumer sites such as Zillow and Trulia - can break it down even further.  We can narrow a search down the most minor details.  If your home has granite counterops, but doesn't get listed as having granite countertop, then the buyer who won't buy anything without it....never sees your home.  And, this is just one feature.  You can search for whirlpool tub, garden tub, hardwood floors, trey ceilings, separate living and dining rooms, formal dining room, lot size, square footage...you get the picture, and that is a very, very small list.

The point is to list the home accurately so that the buyers that your home fits the best actually come and look at it, and to have as many of those buyers as possible.  That is how you get the best possible price for your home.


So, once you have your home listed.  (even if it is listed with me)  Ask for a copy of the listing and then go over it.  Check how they describe the home, but more importantly, make sure all the 'facts' about the house are correct.  Otherwise the buyer who were hoping for is not even going to see your home, other than when they are driving by to look at another home for sale in your neighborhood.

What is a Due Diligence Contingency?
When going into a contract, there are several protections for the buyer.  This post will be covering the due diligence contingency.  IN other words, the deal is contingent on the buyer doing their due diligence.  Due diligence is defined:  Reasonable steps taken by a person in order to satisfy a legal requirement, esp. in buying or selling something.  

The due diligence contingency is active for a specified length of time.  This time is negotiable and can be any length that the parties agree on.  The seller will want this as short as possible and the buyer will want this as long as possible.  This length of time is called the due diligence period.

The easiest way to describe the due diligence period is a period of time that the buyer can terminate the contract for any reason.  This is the time that you will get your inspection completed, get any additional information about the HOA you need to know, and, well, do your due diligence.  In other words, discover any and all information that would cause or preclude you from buying the home.

The most common reason that someone terminates a contract during due diligence is that the inspection uncovers an issue that the seller is not willing to fix.  However, as mentioned above, the buyer can terminate the contract for any reason.  If at any point during the due diligence, the buyer changes their mind, they get their earnest money returned.

Don't hesitate to make an offer!
As many buyers, especially those purchasing below $150,000.00 realize, there is a lot of competition in the market right now.  There aren't enough homes being listed and those that are are getting put under contract within days, if not hours.  If you want to sleep on it, you won't have the opportunity to purchase it when you wake up in many cases.

So, right now, it is imperative that you put in an offer as quickly as possible, and use the due diligence period to fully investigate it and ensure you want to go forward.  

Word of caution:
Some REO companies do not allow for due diligence, they have an inspection period.  These are a bit more restrictive in the reasons you can terminate the contract.  However, these companies move slowly in responding.  You won't have signed contracts for a few days.  Until the contract is signed, it is not binding and you can terminate. 

Final word:
No one wants to rush the decision to purchase a home.  It is a huge purchase and you want to be sure that this is the home for you.  That said, you absolutely cannot handle these decisions the way we have traditionally handled them.  You can't 'think about it'.  You have to act.  Be decisive and know you have protections if you discover something that makes the house not work for you.

Oh, and of course, make sure you have an agent that knows how to protect you, and someone that can explain all the contingencies.


Happy Hunting and good luck!

Well, first, let me apologize, for being away from the blog for so long.  I try to never let a week go by without posting something, but I have been busy being a good buyer's agent.  (and a good listing agent, but that isn't the point of this post)

If you are currently in the market, I am sure you have had this experience. You are looking around, maybe on http://www.metroatlantagarealestate.com/ , you find the exact perfect listing.  You call an agent, and low and behold, the home is under contract, or even closed already.

Or, lets say you are working with an agent, and by the time you are finding out about things, they are already under contract, you have missed the highest and best deadline, or you are competing against 60 other offers.  Nope, that is not an exaggeration.  1818 Stonebrook Way, Lawrenceville, GA 30043 had over 60 bids. 

This can grow frustrating and disheartening.  So, what does a good agent do?  Well, first, a good agent should be setting your expectations.  It is one thing to know all this going in, it is another to have missed out on four or five homes a month into it and then find out about this.

A good buyer's agent should also set you up on a market alert system of some sort.  If you are not getting daily emails with anything new that has come on the market that fit your criteria, then by the time you meet with your agent again and find it, it will be too late.  If you have objected to the listing alerts, rethink your position.  If your agent has offered them, rethink your agent.

A good buyer's agent should know what is going on and be able to pull comps for you so that you understand what the true market value is and also show you what the current market is doing.  Your offer is up to you, but if you are putting in unrealistic offers, that does nothing but waste time and cost you an opportunity to own the house you want.  However, the flip side of that, bidding way over list price and buying well above market value isn't smart either.  Yes, homes are appreciating.  Yes, you are competing against other buyers.  Yes, you will need to pay market value.  No, you don't need to pay 10% OVER market value.  As agents, our income and livelihood is not determined by how many clients we have or how many offers we write.  Our ability to fee our families is determined by our ability to getting the offer accepted, and ultimately, you closing on that home.  That puts pressure on the agent to, perhaps, push you farther than you should go.  Again, remember, I led with the fact that you should be putting in realistic offers.  But, your agent should be able to counsel you on that and why.  Paying above market is fine and perfectly understandable in this market.  So long as you love the house, and you KNOW you are paying at the top of the market if not above the market.

A good buyer's agent should have a network of resources.  The most important is a lender.  So much of how well a transaction goes, is resting solely on the lender's shoulders.  A bad lender can cost you the earnest money and the ability to close on the house you want.  Not to mention loads of stress and frustration.    A good buyer's agent doesn't get anything from a referral to that mortgage company other than the peace of mind that you will be well taken care of.  Okay, so we also feel more comfortable that you will be able to close and that we will be able to get a paycheck.  

A good buyer's agent should also have a few good inspectors and home warranty companies as well. 

That is stuff that all buyer's agents should be doing.  So, what is above and beyond.  Well, we all know there is limited inventory and countless bidders.  So, is your agent finding homes that aren't listed?  If I can't find something that someone is looking for on the market, I knock on doors.  Some seller's don't realize that they can easily sell their home right now.  Does this work?  Absolutely.  I have several clients right now looking in the 130K and below price point.   (this price point is in the highest demand of any)  I have found two of them unlisted houses that I expect to go under contract this week.  

In a balanced market, you can afford to wait for the 'right' listing to come along.  In this market, your agent needs to go above and beyond.

A good buyer's agent take fiduciary responsibility seriously.  Recently, I was helping a couple.  I flat out missed a landfill that was proximate to the home they had just put under contract.  You are probably wondering how you miss a landfill.  I knew about the landfill.  I did not realize that it was that close to the subdivision they were buying in.  The entrance is well away from the home, it just covers a much larger area than I expected.  Well, we found out about this AFTER they had put down a non-refundable $5000.00 deposit.  It was new construction, and they were paying for upgrades.  I knew that they were depending on me to inform them about anything like that.  I made a mistake.  So, I guaranteed that they would either get their money refunded, OR I would pay it from my pocket.  Was there any legal requirement for me to do this?  No.  It clearly states in the contract that this falls under the buyer's responsibility.  But, I knew that they were depending on me.  That is why you get an agent, right?  In the end, I was able to get their money back.  (It is amazing how much weight it carries when your brokerage has such a huge market share in your area that the builder knows that a bad reputation would cost far more than $5000.00)  Remember, you are hiring the agent to guide you in all parts of the transaction.  Not just 'sell' you a house.  This isn't a used car, and your agent shouldn't act like a used car salesperson.

A good buyer's agent should be available and be able to give you answers.  I am perplexed about how many calls I get from other agent's clients.  Their agent is on vacation and they would just like to look at a house.  Their agent can't figure out what is going on with a listing and on and on.  Everyone should be allowed to take a vacation, but an agent should never expect someone to put their home search on hold while they take time off. I have other agents I refer things to when I go on vacation.  (Well, if I ever to decide to go on vacation, I have other people to refer clients to)  There is no excuse for not having another agent lined up to help in the event that they are unavailable.  Buying a home is a big deal.  And, there are important time frames that must be met.

As far as the answers part of this.  I admit, I have things that I look at that some agents don't know about, or don't think to look at, or are too lazy to deal with.  Having the experience as an appraiser, loan officer and investor has taught me to be able to dig a little deeper than most agents.  But, MOST of the time, any agent can answer most of the buyers questions about a property if they just took the time to look.

Finally, a good buyer's agent is your advocate.  When you look at the property, they are looking for any potential issues.  They aren't directing your eyes away from them.  When they talk to you, they make sure to explain the situation fully and all the ramifications, but when they are talking to the other party, there is no sign of weakness or lack of unity.  They write the contract to best protect you, not obligate you.  They negotiate the best they can to get the other party to compromise, not get you to compromise.