What are condo reserves?

Just yesterday, I was speaking with a buyer about condo reserves..her question was, how do associations arrive at a dollar amount charged for monthly dues/reserves? The answer happens to be posted in the AJC today:

Q: I’m considering buying a condominium. A friend of mine told me to make sure there is money in reserve. What does that mean?A: The “reserve” is an amount of money set aside by a condominium association, or other type of community association, for uses such as emergencies or unexpected repairs. Georgia’s Condominium Act does not require associations to keep a specific amount of money in reserve. But most do have reserve accounts. In many cases, a community association will have conducted a “reserve study” to evaluate how much it should keep in reserve based on the age and condition of the condominium and its amenities.

Generally, the larger the reserve amount, the less chance a new purchaser will find him or herself paying unexpected special assessments or increased monthly assessments. The amount in reserve also has some bearing on the fair market value of the condominium as a whole and its individual units, respectively.

Finally, the declaration of covenants and restrictions to which a condominium is subject may require a reserve amount payment, sometimes called a “capital contribution fee” to be paid by the transferor upon a sale or transfer of unit. This payment is often equal to one to two months of condominium dues and its payment may be negotiated as a closing item between the seller and buyer.

Time to buy?

CNN reported last Thursday (10-25-07)a 4.8% INCREASE in home sales for the month of September. There’s never been a better time to own your living quarters. Tax incentives, growing equity, having the pride of owning your space, are all benefits to owning. You may be able to own for less than your rent! It’s a very exciting time in the market to buy!

Atlanta home forclosure statistics

Is it just me, or does it seem like the market- particularly the forclosure market- is not as bad as portrayed in the media?

I’m an eternal optimist, so maybe it’s just me. However, in today’s AJC there is an article titled, “Foreclosure figures overstate crisis” that cited some pretty incredible statistics supporting my hunch.In the article author CARRIE TEEGARDIN writes, “In July, RealtyTrac reported Georgia had 12,602 foreclosure filings. But a review of the company’s data, which it provided to the Journal-Constitution, identified more than 2,300 duplicate records, as well as 1,700 bank repossessions that had been completed in previous months.”
That means this report was off by at least 4000, or a whopping 32% miscalculation!

Our policy-makers, and the media depend on data from RealtyTrac to make/change policy and create alarming headlines.
Remember the concept of “GIGO”, garbage in-garbage out?
In many states, including Georgia, there is no government entity monitoring or reporting on this data; they rely on companies such as RealtyTrac to provide the information. Using this data is garbage.

RealtyTrac has ranked Georgia “among the top 10 states for highest rate of foreclosure actions”.
How can this claim be made with the half-baked-garbage information RealtyTrac has collected?

At the very least, reporting of this kind is misleading, and irresponsible publishing.
Minimally, a statistical margin of error should be listed somewhere in the article.
Of course, if an article posted a 40-50% margin of error, would it even be credible news?

I’d love to hear your thoughts.

Please read the article in its entirety, here’s the link:
http://www.ajc.com/business/content/business/stories/2007/10/13/realtytrac_1014.html?cxntnid=biz101507e

Arizona

If you are planning a move to the Grand Canyon State, I would encourage a look at Realtor, Tomi Emptage.
I’ve known Tomi for many years and trust her ethical high standards. If you choose to work with Tomi, please do let us know how your experience is by replying to this blog. Thank you!
http://www.propertiesinphoenix.com/

Weekly Soapbox~ Pay off your home loan early

Have you heard of a “money-merge” account? The concept of a money-merge is not new, even if the name is. Money-merge accounts are used to pay off home loans early, saving the borrower a bundle in interest. Proponents of money-merge accounts use the shock value borrowers can save in interest to promote these specialized accounts. Of course, providers of money-merge accounts take a little cash to manage the process of paying your loan.

I’m all for paying to outsource a project or duty that is time consuming, or out of your scope of expertise- BUT why would you pay someone else to manage the process paying off your loan early? Isn’t that something you can do yourself without a special “account”?

The reason’s people do not pay a little extra on each mortgage payment vary. I believe most home owners don’t realize the impact paying down a loan will have on their overall finances. Of course lenders don’t advertise how much cash a borrower can save by paying down…why would they, they make gobs of money in interest?!

If allowed by your lender without penalty, pay something extra with each monthly mortgage payment. You’ll pay off your loan much faster and thus reduce the potential interest expense for your loan. You don’t need a special account to do this, just a basic awareness of how compounding interest works.

To calculate how much sooner a loan can be repaid, first enter numbers into an online calculator as if the loan has a 30-year term. Then re-calculate with a shorter loan term to see how much extra you need to pay per month and how much interest you can save over the life of the loan.

You don’t need to give anyone a penny to accelerate your loan pay-off — and you shouldn’t.

14th Street bridge construction

GDOT Announces New Construction Schedule for 14th Street Bridge Project:  
 
The Georgia Department of Transportation has released an updated project schedule for the replacement of the 14th Street Bridge;  
 
Starting October 1, Williams Street between 10th Street and 16th Street will be reduced to one lane until June 2009. Motorists will be encouraged to bypass Williams Street at 10th Street by using West Peachtree Street.  
 
In March 2008, Techwood Drive will be closed to traffic between 16th and 10th Streets. The roadway is expected to reopen by September 2009. 
 
In fall 2008, the 14th Street Bridge will be closed to traffic and will not reopen until summer 2010. Motorists will be detoured to the 17th Street Bridge during this period. 
 
Additionally, in March 2008, DOT crews will begin resurfacing the Downtown Connector between University Avenue and 10th Street. During construction, interstate lane closures will occur at night –  
 
Monday through Thursday from 7:00 p.m. until 6:00 a.m. – with continuous closures on weekends starting Friday night and concluding Monday morning.

Your housing rights as a pet owner

I wanted to share an interesting booklet “Best Friends For Life: Humane Housing for Animals and People.”  It can be found in pdf form at http://www.ddal.org/pdf/bffl.pdf

It provides interesting information on the rights/rules governing of pet ownership in a variety of different living situations. 

October Home Maintenance

Fall is coming and it’s time to put away the grill, along with a few other home maintenance items below:

• Inspect caulking and re-caulk where necessary

• Prepare landscaping for winter

• Clean and inspect gutters

• Inspect roofing and joints

• Winterize lawn furniture

• Remove screens and brush clean

• Wash windows

• Inspection and cleaning of heating system

• Clean all filters

• Clean heat vents