July 2016

ATLANTA HOME ADVISOR

By Robert Whitfield

The Real Estate Newsletter For Home Buyers

Knowing These Possible Snafus Can Help When You Relocate
Relocation is rarely easy, but many problems are predictable.

Tax Rate Comparisons
Cobb/Vinings
North Fulton
Alpharetta
Roswell

New Home vs Existing The advantages of each.

Pre Qualification vs Lending Commitment
There is a major difference!

Robert Whitfield 

www.TheHomeBuyersRep.com 

Advantage Home Buyer Representatives, Inc. 

Call 678.585.9691

Knowing These Possible Snafus Can Help When You Relocate

Relocation is rarely easy or trouble free. But many problems are predictable. That's good news for transferees who have relocated two or more times, but not so good for the uninitiated who relocate only once - 52% of all relocatees.

Being prepared can help you make better decisions and ease the transition. Here are some of the snafus you can expect to encounter when you move to take a new job:

1. Your children resent the move. Many people wait until the summer to move so their children can finish the school year. This can be a mistake, says Richard Otto, sales manager at the Impact Group, a career transitions service provider in St. Louis. Children generally are happier if they can start immediately in school, where it's easier to meet friends, even if it means picking up mid-year. Otherwise, they could spend the summer months isolated in their new home, moping and resenting the move.

"Teenagers are not real enthralled about moving. It's not so hard on younger ones," adds Mr. Otto. Teenagers' budding social lives are just beginning to become all-important, he explains. Expect to suffer heavy damages on your phone bills, he warns.

Getting the kids involved in the move will also help smooth the adjustment, says Mr. Otto. Explain why you're making the change, why it's important and what it will mean. Let the children help plan some aspects of the move and make them feel part of the process early on.

2. Your spouse can't find work. As more women build careers and more households depend on two incomes, many relocating couples struggle with this issue. Additionally, more men are finding themselves in the position of being the trailing spouse as their wives pursue high-powered jobs that require them to relocate.

Some companies offer career counseling and job placement for the trailing spouse, says Dennis Ransdell, vice president of corporate relations at ReloAction, a Pleasanton, Calif., relocation management company. However, few have policies in place across the board. If you want assistance, you may want to negotiate a package before accepting an offer, he adds.

The need for such support can vary according to where you live and what kind of position you're taking, says Mr. Ransdell. Employers in the Midwest are less likely to offer help as fewer couples there depend on two incomes. A second paycheck also can be less important to senior-level executives who are more likely to earn higher incomes, he says.

3. You get slammed by hidden costs. Again, this problem is less likely to be a concern to senior managers at large companies, who typically can expect to have all their expenses paid when they move. But less-senior professionals should manage expenses carefully. Review your company's relocation policies to make sure you know what will and won't be covered.

Employees should keep in mind most packages are intended as an assistance program, says Pat O'Connor, director of outsourcing programs at Burnet Relocation, a Minneapolis relocation management firm. "Don't expect to be reimbursed for every dime," she says. If you receive a lump-sum payment package, wait before you rush out and buy a new computer with the cash. Contrary to what many expect, employees rarely make money or break even on such deals.

Further, many moving van lines have complicated fee structures and few transferees understand all the charges on their invoice, says Brian Fudenberg, vice president of sales and marketing at Burnet. You could run up additional expenses for services you thought would be part of the standard package, such as assembling beds, bringing boxes down from the attic, using special crates for fragile possessions, disconnecting gas and electric appliances or even shuttling your possessions to a trailer farther than 75 feet from your front door.

Additionally, timing is critical, Mr. Fudenberg.  If things go wrong with your closing or some other aspect of your move that requires you to put your possessions in storage, be prepared for sticker shock. The first day of storage can be expensive and the total cost could make up 20% to 30% of your overall van-line bill, he says.

4. You don't like the new community. Often transferees move into a new area without knowing enough about it and discover later -- whether because of the schools, housing, commute or culture -- it's not right for them. To ensure a good match, employees should gather as much of the usual info on the area as they can, and if possible visit a few times and do some casual exploring to get a feel for the area. An Exclusive Buyers Agent, (EBA) especially one who serves a large geographic area, can be an excellent source of unbiased information on communities. Because EBA's don�t list properties, they have no agenda to try to steer a buyer to, or promote any particular development or community. 

5. You're shocked by the cost of living. This issue catches some transferees by surprise, especially employees moving from the Midwest to either coast. You can buy a lot more house for $250,000 in the Midwest than you can in, for example, the San Francisco Bay Area. Many companies will offer cost of living adjustments or mortgage financing to ease the financial pain. But most transferees want to replicate their lives and housing situation as quickly and as easily as possible, says Mr. Otto. When they discover they can't, "they view whatever happens to them as a negative."

For instance, an executive earning $70,000 who moves to New York City from Bloomington, Ind., would need to earn $159,456 to maintain his previous standard of living. But a move from New York to Bloomington would require only a $30,729 salary to stay even.

Compare the impact of different local property tax rates on an example $325,000 home.  The appropriate homestead exemption deductions were factored in for each of these desirable North Atlanta communities. 

E Cobb / Vinings   $291.40 Mo.       

North Fulton           $372.31 Mo.

Alpharetta               $408.06 Mo.

Roswell                   $389.66 Mo.

New Home vs Existing

This is a question many people consider and while there are advantages to both, it usually comes down to a matter of personal preference and which has the better location.

First lets look at some advantages of new homes:

• New homes tend to have the latest in materials, modern fixtures and systems, and usually a more open floor plan with brighter spaces. There are no dark wallpapers, paints, or kitchens to redo. There are some great new floor plans, though this is more dependent on the builder than the age of home.  The above benefits are not large improvements over an existing home only 3 to 8 years old.

• New and recent homes  (less than 10 years old)  if built well by a conscientious builder - are actually built better than older homes in several ways, most importantly the foundation.  This is due to improved modern building codes and  improved building products. Unfortunately, there are caveats to the above statement: - there are several modern building materials that we now know to be faulty  with well  documented problems. In many cases these are best avoided. Building lots are getting smaller and quality lots are harder to find especially closer in. Finally, non custom newer homes are mostly "production built" ie, often built with less skilled workers and with volume and cost cutting a high priority. Does the fact that there are far less true craftsmen working on the average home in cities like Atlanta with major construction  mean you can't find a well built home? Not at all. However the builders integrity, and at least as important if not more so, adequate, even vigilant site supervision is absolutely  imperative.  

• The home has never been lived in before, and that is important to some people, especially those wanting to establish milestones such as a first home, or a new baby arriving.

• New homes tend to have more space and more storage which is important to everyone especially those with children. In this aspect, a new home will not necessarily outshine recent homes that are no older than 12 to15 years.

• A possibility exists to gain extra equity buildup because new developments tend to increase in price as they progress. However, you have to be one of the first few buyers in the neighborhood for this to work, and it has to be a very hot area. It is not advisable to look for your next home with the intention of trying to find this situation, however. There is no guarantee any development will escalate in price as you would like. Second, while you wait to see what the next new development will be like, and if the builder and homes will even be desirable, you can miss other great opportunities for a wonderful home and sound investment.

Now lets look at some advantages of existing homes:

• You can get the same size home and similar amenities usually for less than a new home. Ideal choices to start with are recent homes about 2 to 6 years old.

• You can get beautiful lots with  established landscaping that would cost money and take years to achieve in a new home. Most new homes have very minimal landscaping and often builders bulldoze most of the great trees. This is one area in which existing homes can trounce new homes.

• When it comes to neighbors and privacy what you see is what you get. If privacy is an issue, with a new development you have to select lots very carefully. What looks like a beautiful hardwood forest in your back yard now, could evolve into three or four neighbors with full view to observe your "private" deck or patio. Your best option then becomes waiting about 3 to 8 years, depending on height needed, for rapid growing screen plants such as Leyland Cypress to grow into a towering green privacy wall! 

• You can get expensive upgrades (besides landscaping) that the owner has added which a new home may not have. Items like additional baths, upgraded kitchen appliances, built-in book cases, swimming pools, and the big one is finished basements, which can often be obtained for the same price or less than the cost of a comparable new home without them! As an example, a finished basement done well can easily cost you $35,000 or more depending on size, to do yourself! New homes cost about $35,000 more just to have the unfinished basement option instead of a slab foundation. You could very easily add in excess of $ 75,000 to the base price of a new home to get one with the basement finished!

• Finally, you can often get larger lots. As land gets more scarce, homes are getting more expensive and lots are getting smaller, especially near or inside the perimeter!

Pre Qualified vs. Lending Commitment

Pre qualification is nothing more than  an informal non-committal estimate of loan potential, based on usually unsubstantiated and incomplete information a buyer conveys to a loan officer, usually over the phone.

When it comes to buying a home, I advise all purchasers to get qualified and have a "lending commitment" letter in hand as soon as possible, preferably before you even make an offer on a home. Better Buyer Agents will advise all buyers to obtain this letter because they are in a stronger bargaining position when making offers.  

This letter is a formal commitment from a lender to lend a stated amount of  money based on your credit report and the information and records you must provide to the loan officer. This  lending commitment is worded such that it will be honored as long as everything stays the same, i.e. you don't lose your job, or incur more debt for example. This document can be the deciding factor in a buyers favor in situations where an offer is made on a property and another offer comes in, or is already in, but the other buyers are not approved for a loan yet.

Some listing agents who are really looking out for the best interests of their seller will place a clause in the contract giving the buyer a time limit to get written underwriter approval of their loan. This window can vary but is usually 10 to 14 days, and if the written approval is not obtained by the deadline, the contract is void, and some selling agents even stipulate that part or all of the buyers earnest money be given to their seller if the contract becomes void. This action is taken to protect the seller and minimize the time the home is pulled off the market and the risk of losing other able buyers, in case the purchaser can't go through with the deal.

Having a loan commitment letter avoids these seller concerns altogether, and puts buyers in a much stronger bargaining posi