Michael Hickman\’s Blog

My phone has been pleasantly ringing the last seven days.   Some properties that have had no activity whatsoever, even though they are priced correctly, are getting looks.   Is it the nice weather?   Is it pent-up buyer demand?   Is it low interest rates?   What do you think?

I have been a lifelong resident of Georgia, but only 7 years in Forsyth County.   Every once in a while, I take stock of my life here as it compares to other places I’ve lived and visited.   One of my friends says we live in “Disney World”.   I think he might be right.   We have water, mountains, clean air, great shopping, great neighborhoods, involved sports programs from 3 years old through high school and a ton of other plusses.   This led me to start a Facebook page called, believe it or not, “365 Things To Do in Forsyth County, GA.   I’m making a concerted effort to highlight our great community.   If you would like to help, email a suggestion at Mike@MikeSellsNow.com.

My phone has been pleasantly ringing the last seven days.   Some properties that have had no activity whatsoever, even though they are priced correctly, are getting looks.   Is it the nice weather?   Is it pent-up buyer demand?   Is it low interest rates?   What do you think?

I have the numbers for N. Fulton, Forsyth, Hall, Lumpkin & Dawson Counties along with Lake Lanier properties as well.   If you want to know about your area and price range, just email me at Mike@MikeSellsNow.com

With the uncertainty in the general economy (look how a typo can send Wall Street into a 1,000 point swing), it seems to me that the luxury buyers (specifically in the $750k to $1M range) are reticent to come out and buy.   I have several listings in this range in and around Forsyth County, Georgia.   Unfortunately, I can’t blame these buyers for being cautious.   If they are a business owner, they are looking at major changes in health care costs, slow business recovery, potentially rising fuel prices, etc. etc.   The good thing is that interest rates are still low.   I’m personally glad the tax credits are over.   Less government meddling in business will allow for stability to return, and that’s good for everybody’s business.

In my experience dealing with banks on short sales, the very best way to buy a propety through this method is to make multiple offers.   If you give the bank 1 day to respond to your offer (which they won’t do 95% of the time), your offer is expired, yet you can keep contact with the bank or negotiator to see if they “accept” your offer.   During that time, you may be out-bid.   So, make 5 offers on 5 consecutive days, all of them expired at the end of the week.   Keep negotiating with each until you can put together a binding contract.   The key is that you have to be OK with whichever house you get.

Who knows what will really happen with the new administration, but it seems that taxes will go up, or previous tax cuts will be allowed to expire.   So, if you want to defer taxes, this is a great way to do it, BUT you need to know the rules and have the right help.

 In a nutshell, under this section of the Internal Revenue Code, you can exchange a property you own for another property or properties (with no gain or loss incurred).   The key issues with this exchange are the TIMING.   Once you sell the relinquished property, you have 45 days to identify the replacement property or properties.   The property or properties designated must be closed upon within 180 days from the date that the relinquished property sold OR the date the taxpayer’s tax return is due with automatic extensions included, whichever comes first.

 You must show the entire exchange on one year’s tax return.   To see the reporting form, go to www.IRS.gov and reference Form 8824.

 There are a number of other rules that apply, such as exchanging Like Kind properties and how you treat the properties you purchase.   For instance, if you sell an investment property and trade it for investment property, you must treat the new property as an investment, which means holding it long enough to be considered an investment.   Most experts say you need to hold it for a year and a day at least.

Many title companies have departments that perform exchanges for a flat fee.   It is definitely worth using a service to do your exchange since there are many fuzzy areas of the code that have been defined by court cases over the years.

With the current amount of inventory (including a larger than normal amount of pre-foreclosure and foreclosure properties), I’m telling my clients that they need to “Sell Low & Buy Lower” to create a net positive in their transaction.   I don’t mean that they should give their home away, but writing a check at closing instead of receiving a check at closing will become more and more prevalent as it was in the mid-80′s.   Of course, the home they are selling still needs to be in peak condition, as buyers are still not interested in “fixer uppers”.   On the other hand, buyers need not to overlook “fixer uppers” that can be increased in value very quickly wth a little improvement  or sweat equity.   The idea is to think a little longer term than we have thought in the past.   The 7 and 10% appreciation we saw in 2004 – 2007 probably won’t be back in quite a while.   I expect the average time an owner stays in a home to increase from the current statistic of 7 years.

I wanted to relate a little of my life experiences as they relate to real estate.   I grew up in the plumbing & electrical supply business.   I started stocking shelves when I was 7.   As a teenager, I installed heating & air conditioning systems as residents of the Southeast began adding these central systems to their homes in the late 70′s and early 80′s.   After graduating from high school, I attended the Georgia Institute of Technology where I earned a Bachelors in Civil Engineering.   For the next several years (and even occasionally today) I provided consulting engineering services in the civil, geotechnical and environmental specialties.   Much of this work was done for residential and commercial developers all over the state of Georgia, but mainly centered in the Metro Atlanta Area.   I was offerred the opportunity to begin the development of the Georgia Tech Club in Alpharetta, Georgia.   I helped with a little of the engineering (with respect to water capacity to water the golf course) and handled both golf membership and real estate sales.   This 620+ acre super-luxury development now has the toughest golf course in the state.   The community itself is called Echelon.   It is one of the most picturesque pieces of property I have ever seen.   The rolling hills & hardwoods are spectacular.   Again, an opportunity arose through a Georgia Tech connection, to work with Keller Williams Realty.   After 5 months of studying Keller Williams and other real estate companies, I came aboard KW.   It was one of the best decisions of my life.   I’m blessed to work with a company, top to bottom, that has the best interests of it’s agents in mind at all times.   So, that’s how I got into the real estate sales business.   By the way, in the middle of all the consulting, I also helped grow a small telecommunications company called Hickman Communications, Inc.   That’s where I learned all of my sales, negotiation and marketing.   At one time, we were billing over $500,00/month.   Unfortunately, the small fry can’t compete long term with the likes of Bellsouth, AT&T, etc.   I’m glad for the experience, because it has been a huge help with my real estate business.

As a former consulting engineeer (civil, geotechnical & environmental), I’ve been around the construction and development business for quite a while.   In fact, my parents owned a plumbing, electrical & HVAC supply store, in which I worked while growing up.   I’m one of the youngest people to plumb DWV with Oakum & a Lead Pot (if you know what that is, it shows your age).

In my opinion, the rush by national builders to snatch up land & lots in Forsyth County was terribly overzealous.   Now, we are in a situation where these national builders have backed off, sold lots, sold whole subdivisions, or have put production almost on hold.   This is a good thing for sellers with an existing home to sell, especially in the $250k – $400k price range, because some of the new-home competition isn’t there.   In fact, I expect it to get even better since these national builders will be slow to react back into the market.   It will also be good for quality, local home builders.   They can react a little quicker and get product built to coincide with the thousands that are going to move to our area in the coming years.