Short Sales of Homes in Jasper and Pickens County GA . . . A New "Trend"?

The new catch-phrase in Pickens County GA real estate, as with markets across the country, is "possible short-sale".

In real estate terms, a short sale is the sale of a home for less than what is owed to the lender. This usually occurs when the borrower is substantially behind on mortgage payments and is faced with foreclosure, but in which the lender is willing to take an upfront loss rather than go through the expense and headache of foreclosing, and dealing with upkeep and listing of the home for sale themselves.

While clearly not a welcome option for the lender, in the face of growing delinquencies and slow real estate sales, short sales are definitely growing as an option being used by banks and borrowers to stave off foreclosure.

But, as always, caveats are necessary.

Any real estate transaction, even the most straight-forward contract of sale, can encounter all manner of obstacles and unexpected turns. Branching out into any more complicated or creative agreements naturally leads to even more potential for problems prior to close.

I have previously discussed possible issues to contend with when dealing with other recent Jasper GA real estate "hot topics" -- foreclosed homes and lease-purchase sales. As with those types of transactions, whether buying or selling a home, before taking on short sales, it is essential to understand the potential downsides and pitfalls.

One of the first things to keep in mind, is that short sales are always subject to bank approval. This usually means full seller documentation as to income and expenses, an explanatory letter from the seller, possibly a recent appraisal, and any number of other items, which have to be submitted to the lender before any determination can be made as to what they might be willing to accept, or if they will even consider a short sale at all. (Generally the seller has to be behind on payments, be able to show financial hardship, and have very little in terms of assets, before it will be allowed.)

I see many listings now posted as "possible short sales" as a way to draw the attention of buyers and agents, but little or nothing has been done to coordinate the process with the lender or work out an acceptable price. No matter what price the seller and their agent are willing to list the property for, unless the bank is on board, list price is irrelevant, and it can be a waste of time submitting an offer, even for full price.

Always check with the listing agent and/or seller as to the level of lender involvement before proceeding. (A proposed short sale should usually have an account rep at the lending institution already assigned to file, with all seller doc's already in hand, before the first offer is presented.)

The next thing to keep in mind is that the transaction is likely to take considerably longer than a standard purchase. Whereas closing the sale of a home or land in 30-60 days (or less) is relatively easy to do, a short sale could take several months . . . and even then may not close. Many factors can come into play during the months of waiting, including a decision by the bank not to accept the deal. It is also possible for the home to still be foreclosed on during these months, and all the effort to that point is wasted.

Those handling the files have their hands full, meaning communication can be a slow and frustrating process. Both buyer and seller (and their agents) have to be willing to grit their teeth and hang in there if they want to see the deal through to its conclusion. Not always easy to do. Of course, there are exceptions, most notably among smaller local banks, who are more familiar with market conditions, property values, and perhaps even the seller, and who often have a greater interest in making a "deal" and getting it done fast.

As with foreclosures, for the buyer there is matter of the home's condition to bear in mind. Often the financial difficulty that leads to delinquency on mortgage payments can at times lead to deferred maintenance on the home (not always, but in some cases). Fortunately, there may be more opportunity to engage in inspections and due diligence than with a purchase of a bank-owned (REO) home, but the seller is unlikely to be in a financial position to address anything discovered in an inspection anyway. So, this needs to accounted for in negotiations and planning.

For sellers, there are the possible financial consequences of debt forgiveness. For some home sellers, the Mortgage Debt Relief Act of 2007, and IRS code 108(a)(1)(b), may provide for tax relief on the "income" produced by this forgiven debt . . . but, not in all cases. Sellers, particularly non-occupant owners, should check with a tax or other financial advisor as to their particular scenario, so as to avoid finding themselves hit with a big tax bill on top of everything.

Since a short sale will still show negatively on a credit report, sellers should likewise consult with an advisor as to which would be more harmful or "beneficial" in their unique situation -- a foreclosure, short sale, or deed in lieu of foreclosure. It is possible that a short sale is not always a preferable alternative to foreclosure, depending on the tax situation and amount of equity in the home.

There are of course advantages for buyers and sellers in pursuing short sales that might make dealing with the "hassles" quite worthwhile -- whether in avoiding foreclosure or picking up a home for what can be quite a substantial discount. However, as always, its important to avoid getting caught up in the buzz and assuming that because it's something everyone's talking about, it's the way to go.

With short sales, like any other real estate process, research and diligence (and sometimes a great deal of patience), is required.

Jasper GA Home Sales: First Quarter 2008 Market Update

Will 2008 be a better year for Pickens County GA real estate than 2007?

Uh . . . In a word, no. Not likely.

As much as I would like to present a positive front and not be one of the many "nay-sayers" out there feeding on the negative news, I also feel obligated to present facts as I see them and not some dressed up version of the truth. So . . .

In addition to my "Week in Review" weekly market updates I contribute on ActiveRain and sister site, Localism, I decided to take a look at how Jasper GA homes for sale are doing on a year-on-year quarterly basis, and share my findings -- good, bad, or downright ugly.

Through the end of March 2008 there were 77 single-family residences either sold or under contract of sale. By comparison, quarter one 2007 saw 107 closed sales. First quarter 2006 . . . 139 transactions. Percentage-wise that reveals a 23% sales decline from 2006 to 2007, and a 28% drop from 2007 to 2008 (assuming all transactions currently slated to close, actually do so). This places current Pickens GA home sales levels at only 55% of 2006's January to March numbers. Quite a substantial drop no matter how you look at it!

And what of price?

Average first quarter Pickens County GA home sale prices:
2006 -- $220,232.
2007 -- $218,978.
2008 -- $192,286 for YTD closed sales, while properties yet to close have an average list price of only $183,174!

Another way of looking at this downward trend is by viewing the median sale price for these same periods: $174,650; $165,600; $159,500; and $152,900, respectively. Clearly lower priced homes are faring better than higher-priced homes in today's tight sales environment.

Yet another indicator of market conditions is the average list to sale price ratio (what the home actually sold for versus the ask price, expressed as a percentage). In 2006 this was 95.88%. In 2007, 96.79%. In 2008, only 93.48% . . . again suggesting pressure on home prices, as some sellers are forced to accept less in order to get their houses sold.

One note about the pricing trend and home sales . . .

Of the 77 homes mentioned above as either "sold" or "pending sale" in the Pickens area this year, approximately 27 are listed as foreclosures or "bank-owned". Thirty-five percent! As previously blogged on the subject, the impact of foreclosure homes in the Jasper GA area is one worth keeping an eye on, as it is likely to distort market values.

A final note on sales trends (unfortunately, still no good news here) . . .

A look at a possible turnaround for the next quarter, as of this writing, is not very promising. Comparing month-to-date "pending sales" numbers for April 2008 to the same period in prior years offers an even bleaker picture . . . only 13 pending sales MTD -- a level just 35% that of the 37 contracts written during the same time in 2006!

About the best possible way to find a positive under present conditions is to take a longer view than the short term. April might be weak, as might May and June. But there will come a point when we turn a corner, and it's merely a matter of hanging in there until that happens. Buyers are in a good position to lock in some really great deals right now, and take advantage of the upside potential when the market picks back. And for those sellers who can hold out and don't absolutely have to sell at this point, now is the time to tackle deferred-maintenance, de-cluttering and sprucing up for when things start to improve . . . there will be a rush of buyers, and a great opportunity to capitalize for sellers who are prepared.

As always, I look forward to the time when I can publish a more encouraging post, and will do so the moment I feel strongly that a correction is in the works. But for now, the facts are what they are and I will report on them as such. . .

For a heads up on some of the better home-buying opportunities available in Pickens, Cherokee, Forsyth and Dawson County right now, email specific needs or call for a no-obligation list!

Pickens County GA Courthouse Renovation or Replacement Approved: So What Happens Now?

So, the voters have spoken once again (at least a narrow majority of those who actually voted), granting Pickens County GA officials permission to allocate $17-million dollars of a new SPLOST -- replacing the one about to expire -- toward either rebuilding or remodeling the present courthouse located on Main Street in Jasper.

Fair enough. Justice needs a home.

WARNING: Editorial content to follow . . . If you don't want my opinions, read no further!

I think that keeping administrative and judicial facilities modernized and functional is important (critical even), to best serve the public interest. And, it is particularly important in our fast-growing community--which is competing with other high-growth counties for incoming business and tax dollars--that the local citizenry have something other than an eye-shade wearing scribe, with quill and inkwell, to handle their needs.

I further think the recent relocation and expansion of the County offices to the old Mountainside Hospital building was likely a good move, and one accomplished relatively smoothly, with few major delays or cost over-runs, under Commissioner Rob Jones' current administration. So, if the courthouse project can be accomplished in the same manner, that would be a definite positive.

But, on the other hand, I think for many, the recent jail fiasco still strikes a note of discord. (Others, who aren't aware of the jail issue under the previous administration, should be, as we are still paying for cost overruns there!)

Of the current SPLOST budget we just approved, $3.2 million will go to cover outstanding debt on the jail construction . . . which construction was to already have been paid for under the previous budget! An original allocation of $6 million for the sheriff's department in the last SPLOST has reportedly grown to an estimated expense of more than $10 million! That's not a small difference. (If I missed the mark in budgeting for my business by nearly 70% over my original estimate, I'd be . . . well . . . out of business!) Since this began under the administration of former Commissioner Bill Newton, we can only hope there will be no repeat of this breach of responsibility by our current elected official (if Commissioner Jones is re-elected, or by his replacement if he isn't).

Unfortunately, it doesn't end there. Unconfirmed reports indicate that the practically brand new correctional facility already has its share of "problems". This means additional expense to address these issues (if and where they are actually addressed). School construction has not escaped "quality" issues, and seem to exceed capacity as fast as we build them. The brand new GA State Patrol post across from the jail is still a big ???? for many. And, the courthouse annex now faces possible demolition . . . despite itself having been built not too long ago to facilitate expansion, and having just undergone a renovation costing $240,000!

As we all know, that's often the problem with the government and our money . . . easy come, easy go, and little accountability.

Yes, we probably need an improved justice system in Pickens County. And I support a new or mostly new (not "renovated") building, among other things, to this end. But that's not to say there should be carte blanche liberal spending and waste, with little oversight or remonstration. Let form follow function, without the frills.

Although there's obviously no causal relationship (and could be more a reflection of foresight than anything), it often seems that creation of bigger jails and courthouses might be something of a self-fulfilling prophecy.

A few years back (starting in 1995) I had the opportunity to work within the court system in Cherokee County, GA. They had just completed their own new $16-million courthouse in Canton -- the Cherokee County Justice Center -- which at the time was served by a single paved parking area. While there was occasional crowding on busy days, parking could usually be found.

In the little more than ten-years since, they have added a 3-level parking deck (in addition to the original parking lot I described above) . . . yet finding a place to park can now easily take 45-minutes of driving around! That's a huge increase in demand, even for a growing county like Cherokee.

In a similar fashion, Pickens County officials are quick to point out with pride a much higher arrest rate in the last couple of years . . . despite a crime rate that hasn't increased accordingly. Fortunately, we have a new, bigger jail to keep people locked up in, so that works out quite nicely. Now we'll also have a new, bigger courthouse to process them in. And more lawyers. So, we'll need more office space, more parking, and more services around the court complex.

A bustling little business.

Perhaps this is all just an inevitability of growth, and obviously I support the role law enforcement and the judiciary play in maintaining order, but something inside of me can't help wondering: What if we spend less on mahogany, cherry, and marble finishes? What if we choose paint rather than fancy wall coverings? What if we increase the efficiency of court staff and technology, to make better use of available resources? What if we keep a closer eye on the bottom line, and not squander money for a sub-par product, the way we did with the sheriff's office? What if we exercise a little fiscal discretion, rather than growing the demands to fit the budget, and direct the unused funds elsewhere . . . could we possibly benefit the community far more?

There is a constant demand for assistance -- for the needy, for deprived children, for healthcare, for animal rescue, for job training, for basic education . . . you name it. For me there lingers the question as to whether perhaps strengthening basic community services such as these, wouldn't also possibly to some degree reduce our need for elaborate judicial complexes to begin with? As a nation, we spend a lot on guns and lawyers . . . maybe it's time to give books and teachers more of a chance, starting at the local level?

Personal soap box aside, we've greenlighted the project . . . so now it's up to us to hold our public leaders to their promises, to oversee how they use our money, suggest alternatives where possible, provide input where needed, ensure that we get what we pay for, and to always enforce accountability when they ask for more.

Most of all, it's up to us to make sure they understand where are our priorities lie . . . which should possibly be in continuing to build our community from the ground up, more so than top down.

Septic Systems In Pickens County GA: Buried Facts (Part 2 of 2)

To continue on the topic of septic tank requirements in and around Jasper, GA . . .


As previously posted on this subject, there are certain things for both buyers and sellers of homes and land in Pickens County GA to keep in mind when dealing with property requiring an on-site (septic) sewer system, rather than public sewer service.

• In Pickens County GA, for new development(s) with septic systems, a minimum lot size of one-acre is required when the property is served by a public water. For properties utilizing a private water source (well, spring, etc.), the lot size increases to a minimum of 1 1/2 acres;


• Septic system approval and permitting by the County Health Department is required before any physical development of a lot or structure takes place;


• A permit can only be issued after, among other things, a satisfactory soil percolation (perc) test has been conducted by an approved soil classifier. Among the factors considered in the permitting process will be: Soil characteristics and perc rate; Ground water level; Bedrock depth; Topographical and other site conditions. (Site conditions include such things as areas of "Fill", Cuts and Grading, Slope, and Drainage.)


• Setback requirements must also be considered in positioning the tank and drainage field. Setbacks are applied to all property lines, wells, creeks, rivers, ponds, lakes, springs and other water features, water lines, drainage ditches, embankments, foundations, and related elements of the property, which limits where the system and home can effectively be placed.
  
• A minimum tank size of 1,000 gallons for up to four bedrooms is called for, with an additional 250 gallons per bedroom thereafter. Capacity has to be increased 50% for a "grinder" (disposal unit)!

These considerations can impact the highest and best use of any parcel of land, whether developed or undeveloped. So . . .

• Always take into account the shape, slope, and characteristics of the lot in question -- just because it meets the county "minimum size" requirement, doesn't necessarily mean it will serve its intended purpose. Many factors can affect whether a home and septic system can be accommodated, particularly where there are water features on the property. Hint: If a property seems a particularly good deal, there may be a very good reason . . . perform your due diligence! (Lots with creeks or water frontage are popular with buyers, and often fetch a premium, but can also be particularly problematic.)
  
• Remember, even platted subdivision lots previously approved as "buildable" by the County may no longer be so under current state regulations. Neighborhoods such as Bent Tree, which include many lots under 3/4 acre, are now faced with lots too small to fit the "replacement field" area requirement -- necessitating particular care in the buying or selling of land, or the expansion / replacement of existing structures, in these communities.
  
• Be wary of buying land that has a system "already in place", (usually the result of an intended home-building project that never reached completion). The tank and/or field may not correspond to today's standard. Get full documentation as to County approval, tank size, etc., and double-check with the County that the approval still stands.
  
• All repairs and other work on septic tanks requires permitting, as does remodeling that would impact septic capacity. This is a particular area of caution . . . adding extra bedrooms to create a five- or six-bedroom home could also mean digging up and replacing the existing system. Adding a garbage disposal to a home that doesn't have one could become a very costly affair! If a disposal is important, make sure the home has one, before buying.
  
• Like any other part of the home, septic systems require care and maintenance. Aside from being careful what goes into the tank, an inspection should be conducted every 3-5 years. Pumping will also likely be necessary from time to time. When buying, ask when the last inspection/pumping was completed. Sellers may want to consider having an inspection done if it has been more than five-years to avoid any last-minute issues with a sale.

These are just some of the issues to be considered in regards to on-site sewer systems (there are likely others not covered here), of which many buyers and sellers are unaware.

The complete state on-site sewage management systems regulations are available from the Georgia Department of Human Resources, Division of Public Health (a fun read!).

Please feel free to comment or ask questions (or share your experience) in the comments section below.

Jasper and Pickens County GA Septic Systems: What You Need to Know (Part I)

Although not one of the most thrilling of topics to cover, it's one about which I quite routinely encounter questions . . . and one that anyone looking at Pickens County Georgia homes for sale should keep in mind. As the title suggests, I'm speaking of the requirements for sewer, or more specifically, septic tank, systems in Pickens County, GA. (Told you it wasn't fun!)

Generally, inside the city limits this topic won't apply to most Jasper Georgia homes for sale, as they're often connected to city sewer. Septic tanks are therefore not an issue. I say "generally" however, because there are homes that have been annexed into Jasper city limits after they were built, and for this reason (or others), some houses in Jasper may not have public sewer service provided. Always check with the seller or city officials as to type of sewage disposal available (if you're working with a real estate broker, they should be able to get you a copy of a property disclosure from the seller, or seller's agent, to confirm the type of service).

Outside of the city of Jasper itself however, you're invariably going to find some form of septic system. This is usually not much of a problem when you're buying an existing home for sale . . . chances are fairly good that the system is in compliance with local and state regulations, because permitting is required before any improvements to the land or construction can be started. However, there are some key points to know and keep in mind, even for existing septic systems, which I will cover in my next post.

Perhaps more immediately and directly affected by current septic tank and drainage field requirements than home buyers, are those who have land for sale in Pickens County GA and surrounding areas.

Current Georgia law now requires more available land for waste water treatment than was previously needed, including a requirement that soil be perc tested prior to septic approval. This has affected the value of some developed lots and land tracts (not all), which no longer meet the basic minimums required by the state. Those wanting to sell land may suddenly find themselves holding a parcel worth less than what they thought, while unsuspecting land or lot buyers may have something that they can't use for their intended purpose!

With this in mind, my next post will cover some of the basics of existing GA regulations ,and some simple pointers for those buying or selling homes or land in Jasper and Pickens County.

If you're considering a lot or land purchase or sale and have questions about the requirements, let me know and I will try to offer what (non-legal) guidance I can.