Michelle Francis

Why I don't like home warranties! I have never been a big proponent of warranties. I guess they come in handy on your car. However, my experiences with houses is not too good. I will not take a lease property management agreement on a property with a Home Warranty.

Why, you ask? Well, in my experience, they add a huge layer of frustration and time wasting to getting a house item fixed. For example, the first time I met them at a house, I had not realized the house had a policy like this, so I had another HVAC contractor look at it first, who I use frequently and trust. The first HVAC guy told me it had a cracked heat exchanger, and should be replaced. So, now I met the warranty companies guy out there and he says, that's not it, it's just old, doesn't work and they won't replace it. Second company that I recall on this does the same thing. So, two extra visits, 5 days, more money and no solution. We use my regular guy and get a new system. The last thing we want to have happen is Carbon Monoxide Poisoning.

Next AHS policy house I have: again, the owners didn't tell me until later that the house had this policy. Well, the heater breaks, it's freezing cold, I have my regular guy come look at it, he gets it working, but says if it fails again it's the circuit board. It stops later that day, my second client tells me it has an AHS policy and I call them. Their first guy comes out and says it's a dirty evaporator coil and no that's not covered. So, my client has another company come out for the system that is not AHS or worked with me before. Surprise, he suggests it's the circuit board. Well, now, the tenant has been cold for 5 days!!!!! The first HVAC company is called to do the work and again, because of the fees to pay the companies to come out and look at the problem, my client is out another $135 + the cost of the circuit board that AHS won't cover, since that's not what their guy found, and the tenant is MAD because it took so long.

This same scenario was repeated with this same systems AC in the summer. It went out four weeks in a row with the owner convinced that AHS would pay for a new system. Unfortunately, this was not what the tenant believed and they chose not to renew, as they just wanted a working system. I also felt forced to stop managing the property, as I know I wasted countless hours scheduling appointments (that took days to get), long waits to see if AHS would pay for it and too much frustration by all parties. They never did replace the system!

If you've gotten a new system from AHS, good for you. However, that's probably only slightly easier than winning the lottery. For me, I am good to go with reliable service that keeps me and my customers with a working system in a house. It's amazing how long and drawn out the American Home Shield Warranty process is designed to be. I think they believe if you get frustrated enough you'll just go away and get it fixed on your own. I truly believe you get what you pay for and an American Home Shield Warranty isn't worth it. You might as well save the $450 a year in an account to pay for the new system!

Ok, so that's a pretty strong title. I am a house (or Residential Detached, as our FMLS now calls it) proponent for the cities of Atlanta and Sandy Springs. Why is this? Well, the biggest reason is resale value. For me, the resale value of Condos and Townhomes in Atlanta is horrible for the next five to ten years.

First, we've had tremendous overbuilding of Condos and Townhomes by developers and banks who thought they could make more money with less land by filling it up. The number of listings grew in a ten year period from just over 1k units to almost 12k units listed. (And sadly, most units are not listed individually, but as one floor plan is listed in a building, not all of the units that have the same floor plan, so the actual number of true listings is much higher!) Today, there are officially about 10k units listed for sale.

As a contrast, Single Family Homes listings grew from about 20k units to a high of 60k units in a slightly longer 12 year period. Today, there are about 37k units listed for sale. So basic, supply and demand, we are returning to a period that's NORMAL for number of units that typically sell a year. We aren't going to have normal sales this year, with folks putting off buying, mortgage and appraisal challenges. However, we have a shot with a city of 5.5 Million of getting back to normal levels of buying for Single Family Homes.

I don't think the same can be said of the Condo and Townhome market, which has a much higher level of "neighborhoods" in distress. By distress, I mean that the whole building is under water and no one is buying or there are still too many builder units in foreclosure and no one is buying at a level of what it cost to build, let alone with profit. There is also way too many units over $1 Million available with even less possible buyers today in our changing economic times. (Even if the economy hadn't changed, I still believe we would have had an oversupply of these high end units, now it's worse.

Another challenge to the Condo and Townhome market is the monthly fees collection and no lease policy. First, if a number of units aren't paying their monthly fees, those fees are then added onto the folks that are paying the fees and can DOUBLE the amounts that they are charging for fees to try to keep the association numbers in balance. Second, a number of units have a no or limited lease policy. I read an article in the Atlanta Journal and Constitution where a Condo would prefer an owner foreclose than lease the unit, as they didn't want tenants in the building. (I can't even begin to make sense of how that is better for all in the building. I am all for minimum tenant guidelines, but no tenant at the risk of foreclosing seems to be more detrimental.)

A big aspect of resale that is affected more in Condos and Townhomes is land. Every tax bill I see has land value and house value. What folks don't realize is what's appreciating slightly more (or had been) is the good old dirt their home is built on. So, some of the appreciation in a property is the land itself, which made the tear down concept so popular, where the house has little or no value over what the land itself will yield. Of course, this is less today, but this will return as our market balances out.

Lastly, I see my job as helping folks make a very large "stock" purchase, typically the biggest of their life. I haven't sold any Condos and Townhomes yet and don't want to, as I prefer to maximize my clients rerturn on investment as much as possible. Call me crazy, but very few folks who sell their properties are looking to lose money!

I'm a big house proponent, not as much a condo or townhome fan in Atlanta, Sandy Springs area. (I'll give you more details in another blog.) However, one feature many folks don't think about is how walk able is your home? Can you walk to anything? There's a great tool I found called WalkScore.

Just click on it and add an address. For instance, while I love my current community and the fact that I am nestled in the woods, I am not a good walk score. However, we do have good walk score neighborhoods. Garden Hills, located just east of Peachtree Rd can receive walk scores in the high 80's and low 90's (out of a possible 100.)

One of the other things I really like about the link, is that it shows you interactively restaurants, grocery, coffee houses, etc on a map from the house address you put in. You get a great visual of how far they are for the address you selected. Let's face it the number one reason people buy homes is the neighborhood and location. What a great tool to show that off in tangible terms.

I've used this so far with several buyers, printing out the WalkScore's of potential properties for international clients, who are much more used to walking places. They love that they know they can walk for items, the more the better in their minds. Now, my personal challenge to myself and other agents is to incorporate this into the listing and marketing data! What about you?

I made a mistake a couple months back and accidentally did not pay a car insurance bill. I pay my bills on time and have great credit. However, I had just paid a different insurance bill and got confused. So, I sheepishly called the insurance company and got a new policy for the car. To my huge surprise, my new policy with all of the identical covereages as before was now $200 cheaper per six month premium. So, my mistake saved me $400 a year.

Now, I know my husband is not going to be happy about me telling him our coverage lapsed. However, he was of course happy about the reduction in premiums. We then started contemplating why this was and could we save money on the other cars (on a s.eparate policy.) So, my husband called and had them requoted. Well, those came back $300 cheaper for the same six months coverage period with identical coverages from before. Total savings $600 a year

The only thing we could figure out about this is that the insurance company had continued to raise our premiums every year over the long period of time we have been with them. It was cheaper to get their covereage if you were a new policy verses a renewed policy.

Since saving money is so much fun, we continued on and re-quoted our homeowners insurance policy. Again, there was a substantial savings of about $700 a year for the same coverages. A note on changing your homeowners policy, this should be reported to your mortgage company when you do this!

Our annual reduction in costs were a total of $1,700. We have passed this information on to our neighbors and friends and heard other positive stories. One neighbor said they were able to reduce their costs by over $3,000 a year! Note I am not sharing the name of who I have my insurance with, as that didn't seem to matter, almost all insurance companies will have a reduction if you re-quote!

It's certainly a tough financial environment we are in. There are many folks who got in too deep or those who had unusual circumstances cause great financial distress. It seems like our consumerism attitudes from the 1980's on, more, more, more have really caught up to us. Of course, I hate to see folks go through financial upheaval.

On the flip side, how we were spending money and saving it as a country wasn't working. You can't put a lot on credit that makes you a paycheck to paycheck living status and move forward and up very easily. The best thing I see to come out of our current economic environment is everyone taking a look at what they spend and seeing what makes sense.

For some this will mean cutting back on eating out, for others downsizing the house they own, others limiting private schools and many other changes. It's giving us a good chance to take stock of ourselves, spending habits, goals and more to see what makes sense for our own futures. There's a lot more freedom to living debt free, like Dave Ramsey advocates. It's a great time to figure out a plan for your future determining what is important to you and what you can reasonably afford.

As a Realtor, I've had the good fortune to work with a lot of folks who are very fiscally conservative. I remember one client who told me what the bank said they could buy and he took the number down by 40%. He thought the bank was crazy that they would loan him that much and didn't want any part of it. We'll be in better shape as a country with that kind of logic if we can reign it in a little.

From a real estate perspective, the suggestion I have is to plan on putting at least 20% down for your new home purchase. Plan in a savings plan of a number of months savings if you lost your income stream. Make sure you have a mortgage that is either paying down your mortgage. Take advantage of great home prices along with amazing interest rates that really create a sound opportunity when we swing back the other way. Even if we don't swing high onto year to year increases, solid home appreciation of even a few percent a year moving toward a home that is paid off is a great investment in your future!