Ball Ground, GA

This week on the Mountain real estate report we talk about the difference in flipping and investing. We also talk about investing models. We feature the gated community of talking rock creek. The mountain real estate report is heard every Thursday on WYYZ in Jasper Georgia.

This Fall has been pretty wet . So the leaves are not as super as usual. But they still are great in our North Georgia Mountains

Did you ever notice that our British and other English speaking friends use the word Autumn instead of Fall? They would say we can always tell an American because they say Fall instead of Autumn. Well I am here to tell you Fall is Shakespearean English. It was the word used at the time of our colonization. We have not changed the word or replaced it with Autumn. So when a British person speaks in a condescending manner about our use of the language, you can politely tell them to stick it in their steak and kidney pie. What could be more English than Shakespearean English!

This is not a blog about base housing. Instead our current market today is greatly influenced by the military. Before the G.I. Bill after WW II the housing market was very different. People went to banks and sat down with a banker.

Usually they knew the banker. They usually put down 40 -50 percent. The loans were for 10 -15 years tops. The whole process was very dependent on your relationship with the banker. It was a very subjective process.

The G.I. Bill changed all that. The bill created the environment we are in today. It made for 30 year loans. It set the standard for 20 percent down. It introduced insurance on Mortgages. It created obviously the VA loan. In addition it started to create the standards for credit scores we use today

So as many changes in medicine and technology come out of military necessity and invention so did many of our current housing rules

The lease purchase has become something we are dealing with more and more. Causes for this are numerous. But in many cases a buyer has come out of a short sale, or even a foreclosure, and needs some time to build back up their credit score. They find a home they want, like , and can afford so they offer a lease purchase contract.

The seller on the other hand may be in a sluggish market. The seller may have taken a move to preserve a job that they may not be able to get where they are. They now have a house payment, and a rent payment in a new location. So a lease purchase can eliminate a cash flow issue and now becomes an option the seller might not have normally considered.

A Realtor is just as valuable in this type of transaction for a number of reasons. But I am going to list a really common mistake both people acting in good faith can make.

Seller Jones has entered into a lease purchase agreement with Buyer Smith. Buyer Smith has come to know and trsut Seller Jones during the face to face negotiation as neither has an agent. Buyer Smith agrees to give Seller Jones a $5,000 deposit on the house as down payment and leases for 15 months. Everything is fine and Buyer Smith loves the house. Seller Jones has the $5,000 in his bank ready to go. Buyer Smith is going to use an FHA option as 100 percent financing options are not available in his area and he is not a veteran. The house price agreed on is 250,000. Buyer Smith needs $8750, 3.5 % plus closing costs. He goes to Seller Jones for the 5k.

Here is where the problems start. FHA considers that 5k a gift and since Jones and Smith are not related will not allow it. Further more doing conventional doesn't work either as the same problem about a 5K gift arises. Now Jones can either come down on the price, for FHA. or use the 5 k in closing costs only in a conventional setting. Either way both acted in good faith and Smith is stuck.He does not have enough cash to close and the deal falls through.

Is there a correct way to do this? Yes. The money needs to be in an Escrow account clearly earmarked for down payment. If Smith or Jones had used a Realtor this problem would have been avoided and the deal would have gone through.

This is just one example of why even with Lease Purchases you should use a Realtor

It is Fall here in the Mountains. This photo was taken yesterday in Ball Ground. At this time of year there are fields and fields of Golden rod. Beautiful wild flowers bloom all year in the North Georgia Mountains. Whether you are looking in Big Canoe, Jasper, Ball Ground, or other areas in our mountains, the folks at All Mountain Realty are here to work for you. We are your mountain experts . Give us a call at 706 579 1098.