You’ve often heard the phrase, “real estate is location, location, location.” Well, the location determines lots of things including your real estate transaction. In Georgia, your closing will be done at an attorney’s office. But, Who Does The Closing Attorney Represent?

I know (or read) in some states BOTH the Buyer and the Seller have an attorney that looks at contracts. But here in Georgia, a lawyer is really not required during the actual contract process. Later, if there is a dispute, rest assured you will then need one. Here in Georgia, when you do your closing to take possession of your new home, the Closing Attorney represents the LENDER that is providing your loan. As a Buyer, you have the preference to select your Closing Attorney in most cases. But when they prepare the closing documents, the are being done from a loan package that the lender has sent to the attorney.

The Purchase and Sale Agreement we use in Georgia has been written by a lawyer, and reviewed by brokers as well. It is the result of years of real estate transactions and “issues” that have come up. Now, most everything is covered in the body of the agreement, or in special stipulations and exhibits. There is no need for you to have an attorney for your real estate closing in Georgia.

If you are purchasing a foreclosure or short sale property, the Seller may have stipulated the attorney you must close with. This can be for various reasons. If a short sale, the closing attorney have have assisted in the actual negotiation of the short sale for the Seller, and the Seller is giving the attorney the opportunity to handle the closing as well. Is this a conflict of interest? Not really, as again, when the actual closing comes, and the documents are prepared, the attorney will be doing this on behalf of the lender.

In Georgia, Who Does The Closing Attorney Represent? They represent the lender.

When you start shopping for your new Intown Atlanta Real Estate home or condominium, you’ll hear me say “Make Sure you bring your Checkbook!” Why? So you can write out your Earnest Money Check? Well….

What Is Earnest Money, you ask?

Earnest Money  is a deposit towards the purchase of real estate made by a buyer  to demonstrate that he/she is serious (earnest) about wanting to complete the purchase. When a buyer makes an offer to buy residential real estate, he/she generally signs a contract and pays a sum acceptable to the seller by way of earnest money. The amount varies enormously, depending upon local custom and the state of the local market at the time of contract negotiations.

In some markets earnest money deposits could be as high as 5% of the sales price or more. In other communities, as little as $500 or $1000 is acceptable.

This deposit is credited to the purchase price of the property when you close and take possession. However, earnest money is also that money forfeited to the Seller of the property if you breach your contract. There are many times and points along the way of a Georgia real estate contract when the earnest money can be lost by the Buyer, depending on how the contract was written.  The amount of money you “have on the table” can be the amount of money you lose.

It’s also very important that if you sign a contract that says the money has been paid, and you have actually NOT paid it, it can get both you AND your agent in trouble. It is acceptable to sign a contract and state the earnest money will be paid at a later date. A common practice here again is to receive earnest money once there is a binding agreement between the parties.

In some cases, the Seller can/will demand more Earnest Money to show your serious! I recently sold a foreclosure condo owned by Fannie Mae, and the Buyer was paying cash. They requested a TEN PERCENT earnest money deposit.

Be sure to discuss What Earnest Money Is with your real estate agent.

 

If you have never lived in a condominium community, or a single family home community with a strong Homeowners Association (HOA) then you may have not experienced getting fined for being bad! So, Why Do HOA’s Have Fines?

In the simplest of terms, not everyone gets that you are living in VERY close proximity to your neighbors. Say about 6-8 inches!!! All that seperates you from your neighbor in a condo building is….a WALL! And on one floor, you can have 12-16 neighbors! And when you do certain things (things that are wrong in many ways) there has to be a way to remind you and all your neighbors that you have been….well BAD!

But in reality, the purpose of Why HOA’s Have Fines is to protect not only the common property of all the residents, but the overall quality of life in the building. If a resident repeatedly does something against the HOA rules, there has to be a way for the HOA Board to fix the situation. It’s not like an apartment complex where management can terminate a lease and ask you to move out! You OWN the condo!

For example, think about smoking. Personally, I can’t stand it. (I tried it in High School, and thankfully it did not stick with me) And if you have ever been around smoking, you know that an ashtray full of butts is a nasty thing at best. So, in a condo building, when you are done, why not just toss your butt off your balcony? Yeah, that’s a pretty cool thing to do, right? W-R-O-N-G!!!! How would you like to wake up in the morning and find your balcony (you live below the guilty guy) covered with butts? Better yet, remember that butt still has flame on it…and what do you suppose happens when it lands on a piece of balcony furniture with a cushion on it, or better yet in the landscaping on the amenity deck below? Did you know that trees, mulch and cushions BURN AND CATCH FIRE???

That’s Why HOA’s Have Fines.

I know you’re thinking, ‘What idiot would do such a thing?’ Well, plenty of them, unfortunately.

You’ve been at work all day, and Fido needs to go! But Fido’s got to go down the hallway, wait for an elevator, ride to the lobby and get out the door to the dog walk. Suppose Fido has an accident along the way….do you clean it up? Ya think, right? Well just imagine smelling the carpet on your elevator floor foyer after Fido’s tinkle…..YUCK! And WHO pays to have the carpet cleaned? EVERYONE!

That’s Why HOA’s Have Fines.

Landscaping, carpet, pools, pool decks, club rooms and such are all common elements in a condominium building, s-h-a-r-e-d by ALL residents. So when a few are bad apples, there has to be a way to help the bad apples out of the barrel. We can’t throw them out, but we can get them “healthy” with a few fines.

So what are some other common Condo HOA Fines?

As you can see, being a “bad resident” can get pretty costly in this condo building.

Just remember, we all have to live together and so that’s Why HOA’s Have Fines.

You’ve heard the saying, “one man’s loss is another man’s gain.” That kind of applies to some real estate today. People have lost homes to foreclosure and investors have come in, purchased them, and then rented them back out. It’s helping get rid of the inventory, but such is not the case if you are thinking I’m Going to Buy The Condo and Then Rent It Out!

Many people, investors and owner’s alike, are often surprised when I tell them you can’t just rent your Midtown Atlanta condo out when you feel like it. As part of the Condominium Covenants and Restrictions (called CC&R’s) or the Condominium Declaration, only a certain percentage of homes may be leased out at any given time. Say WHAT?

Most CC&R’s or Condo docs limit the number of homes that can be rented at any given time from as low as 10 percent to as high as 25 percent. So, if you live in a building with 398 homes, at 25%,  99 of the homes in the building may be leased at any given time.  Why?

These rules are in place for a couple of reasons. First off, if a condominium building has to many rental homes, it will often be considered an “unstable community” by a lender, and as a result they will not finance any purchases in the building. This hurts both the Seller trying to sell and the Buyer trying to Buy. Secondly, and I’m certainly not bashing renters, but….owner occupied homes tend to be better cared for than by someone that does not have a financial interest in the property. Sorry….it’s a fact!

I recently took over management of a condo for an absentee owner. He’d been getting his checks for 3 years, what could be wrong? $5,000 later the condo was finally ready to rent again. But that’s another story.

When you purchase a condominium, I always tell my Buyers to place their name on the Rental WAIT List as soon as possible. Yes, you heard me right….Rental WAIT List. In the Atlanta condominium market, the length of time it can take you to get a leasing permit can range from THREE TO FIVE YEARS!  You may not be planning to move or rent your home, but things change. And in 4 years from now, you might be moving, or getting married and needing a bigger place, and it would be nice to know you have the option to turn this condo into an investment property while you purchase another home.

So, think twice before you say, “I’m Going to Buy The Condo and Then Rent It Out! NOT!