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Protecting Client Data in Real Estate

A common, but dangerous, practice in our industry is the copying and disbursement of earnest money checks over email. Sellect Realty takes our clients financial data seriously and prohibits this action for our agents. Our goal is to ensure a smooth and safe transaction for our clients. Earnest money checks are either delivered directly to our office for deposit, or, if the contract allows, paid by the Buyer electronically through our e-check system (deposit.sellectrealty.com).

In the event a copy of a cleared check is needed by an attorney or lender, Sellect Realty will use a secure email service to send that document directly to the necessary party. At no time is any Sellect Realty agent authorized to copy our clients checks to keep in a file, or disburse to a co-oping agent.

Some agents might ask, why? The answer is simple. A majority of real estate agents lack the simple security measures in place to protect sensitive data. Agents are prime targets for hackers because of the sensitive nature and size of the transaction we deal with. Therefore, it is Sellect Realty’s policy to never ask for or retain more data than required for the transaction.

For questions on this policy, contact Chris Lazarus, broker@sellectrealty.com.

 

Downtown-Woodstock

How Earnest Money Works

MARIETTA, Georgia – August 8th, 2016 – A Buyer recently asked an agent if they can buy a house without paying earnest money in to escrow for the duration of the contract. This question has stuck in my head. As I look back on my career, I realize that I’ve explained, often simply, the necessity of earnest money more times than I care to count.

What is Earnest Money?

Earnest money is a way for a buyer to show seriousness with their intent to purchase a house. When a buyer places an offer to purchase a house there is always uncertainty for the seller. This uncertainty is interpreted as risk that the sale may not close. The payment of earnest money helps offset this risk to the seller. Some common reasons for the buyer to not close include:

  • Buyer’s loan is denied
  • Buyer backs out of the contract
  • Buyer becomes unemployed
  • House does not appraise
  • Buyer changes mind
  • Buyer improperly files their taxes

How much earnest money should be held in escrow?

This number can vary on the contract. At a minimum it should cover the risk the seller faces. If a property is vacant and sub $100,000 then a seller may find a smaller amount sufficient.

If the property is a higher value, or if the seller will have to vacate prior to closing then there will be a higher cost incurred by the seller if the property fails to close. The seller will have to cover the expense of movers, temporary housing, and the opportunity cost for seasonal market changes. I recommend that the earnest money be sufficient enough to offset some of this risk for an acceptable contract.

How does it work?

When a buyer and seller enter into a contract, the contract designates how much the buyer will pay and who will hold the earnest money. The buyer will then follow the terms of the contract to pay the earnest money. In Georgia, the funds are usually held with a real estate broker or a closing attorney. Both brokers and attorneys have strict requirements for handling earnest money. The holder of the earnest money never has a claim to the funds and therefore must keep the funds in a trust/escrow account.

When the contract closes, the broker can handle funds in one of two ways. The first way is that any commission owed to the brokerage holding the funds is reduced by the amount the broker is currently holding, then the broker may transfer their funds from the trust/escrow account to their general account. The second way is the broker can send the funds to the attorney to disburse along with the general accounting for the transaction.

If the contract does not close then the holder must disburse according to the terms of the contract. The buyer and seller often times agree where the funds should go. If there is a dispute then the job falls on the broker or attorney to reasonably interpret the contract and disburse accordingly.

While rarely needed, in some severe circumstances, court intervention is needed to resolve disagreements.

 

Chris Lazarus is the Principal Broker of Sellect Realty in Marietta, GA.

Inman

Sellect Realty gets National Recognition at Inman Connect

MARIETTA, Georgia – Sellect Realty’s Broker, Chris Lazarus, was an invited panelist at the nations largest industry conference.

Inman Connect is held bi-annually in New York and San Francisco. The conference is host to thousands of top real estate professionals from all over the US.

Chris was invited to showcase 5 pieces of technology that other firms might consider using in their brokerage to improve efficiency, agent engagement, marketing, and client security.

Through the implementation of new technology Sellect Realty was able to increase it’s sales volume by 30% in 2015. The video below is recorded from the conference panel.

Real Estate Broker Chris Lazarus Speaks at Inman Connect from Chris Lazarus on Vimeo.

Average US rate on 30-year mortgage slips to 3.58 percent

Original Article from AJC.com

WASHINGTON — Average long-term U.S. mortgage rates edged down this week to their lowest levels of the year, offering a continued incentive for purchasing during the spring home-buying season.

The benchmark 30-year fixed-rate loan touched its lowest point in nearly three years, since May 2013. Mortgage buyer Freddie Mac said Thursday that the average slipped to 3.58 percent from 3.59 percent last week. The key rate stood at 3.67 percent a year ago.

The average rate on 15-year fixed-rate mortgages declined to 2.86 percent from 2.88 percent last week.

The continued strong demand for U.S. government bonds, spurred by indications that the Federal Reserve won’t raise the interest rates it controls any time soon, has kept prices of the bonds at high levels. The bonds’ yields, moving in the opposite direction from their prices and influencing mortgage rates, have remained at low levels.

The yield on the 10-year Treasury bond stood at 1.76 percent Wednesday, unchanged from a week earlier. The yield rose to 1.78 percent Thursday morning.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year loan rose to 0.5 point from 0.4 point.

Rates on adjustable five-year mortgages averaged 2.84 percent this week, up from 2.82 percent last week. The fee fell to 0.4 point from 0.5 point.

How much did the home prices in Metro Atlanta grow in January?

Original Article from Atlanta Business Chronicles

Metro Atlanta home prices are growing year over year, according to the latest S&P/Case-Shiller Home Price Indices published Tuesday.

Home prices in the area were flat from December 2015 to January 2016, but up 5.7 percent year over year. That’s higher than the national year-over-year growth rate of 5.4 percent.

“Home prices continue to climb at more than twice the rate of inflation,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. The low inventory of homes for sale — currently about a five month supply – means that would-be sellers seeking to trade-up are having a hard time finding a new, larger home. The recovery of the sale and construction of new homes has lagged the gains seen in existing home sales. This may be starting to change: starts of single family homes in February were the highest since November 2007.

Mega Developments in Forsyth County

Original Article from Atlanta Curbed

Like its north metro neighbor Avalon, a Forsyth County live-work-play utopia with a similarly fancy name — Halcyon — is forging ahead, and a fresh rendering has emerged to preview exactly what it could be.

With 135 acres and some $370 million behind it, Halcyon is one of five transformative mega-developments in the works for the affluent upper reaches of metro Atlanta, which could theoretically bring almost 7,000 residential units, more than 700 hotel rooms, 6 million square feet of office and commercial space, and unneeded car traffic.

Halcyon will be the northernmost project of its type planned on the Ga. Highway 400 corridor. Across the border from Alpharetta, it would be connected to 40-plus miles of greenways, and as such, its leaders plan to emphasize outdoor living. Once finished, it would encompass an area more than two-thirds the size of Piedmont Park.

Halcyon’s developers broke ground last month and seem optimistic the first phase will open in fall 2017 with a whopping 125,000 square feet of retail, 65,000 square feet of offices, and a 110-room hotel. (These guys must be fast).

With the initial phase, Halcyon watchers can also expect to see 87 homes, 155 townhomes — with prices starting in the high $400,000s — and 448 apartments, reports the Milton Herald.

Plans for the commercial village will include “a movie or entertainment venue, gourmet market, outdoor outfitter, up to 10 local and regional full-service and fast-casual restaurants, a boutique fitness club, and service retail,” the newspaper reports.

Google’s Southeast Expansion

Google has been on an expansion march in Metro Atlanta in recent months. Aside from the Millennium in Midtown renewal, the firm announced plans to expand its Google Fiber presence to the metro area—one of the first cities to experience its rollout.

From Bisnow.com. Read Article >>