We’ve assembled answers to questions often asked by our clients, whether in the market to buy or to sell Atlanta luxury homes. Armed with this information, you can approach the decisions inherent in a real estate transaction and feel confident that you have a clear understanding of the important issues.
GENERAL ATLANTA REAL ESTATE QUESTIONS
Real Estate Value
What factors affect real estate value in the Atlanta luxury real estate market?
There are several factors that determine the value of Atlanta’s luxury real estate. Design, amenities and ‘curb appeal’ affect value, but a critical factor is the topography of the land. Homes with large backyards that are flat, usable and private command the highest prices.
Schools and Education
How do school ratings affect real estate value and where can I find information on the schools that my children might attend?
The qualities of schools and school districts have a significant impact on the value of Atlanta real estate. Properties in better school districts will command a higher price.
Click on the links below to find out more about ratings and statistics regarding Atlanta schools.
AJC Ultimate Atlanta School Guide
Georgia School Rankings
Agency Disclosure and Election
When purchasing real estate in Atlanta, must the client’s relationship to their broker be disclosed to all parties to the transaction?
Yes, when purchasing a home in the state of Georgia, the relationship between brokers, buyers and sellers must be disclosed to all parties to the real estate transaction. Dillard & Company’s consultants will be happy to advise you on which agency relationship best fits your situation.
REAL ESTATE TRANSACTIONS
Offers to Purchase
When I’ve found the right property and want to make an offer, who provides the offer to the seller and what must be included in the offer?
The offer to purchase is usually provided to the seller by the selling (listing) broker. This document will include all terms of the proposed agreement and must be accompanied by an earnest money check from the buyer (purchaser). Once the offer is negotiated and signed by all parties, it becomes a legally binding (enforceable) contract. Both buyer and seller should make sure they understand all the terms and conditions of the offer before signing and should seek legal counsel if they have doubts or concerns.
How much earnest money is required when making an offer on a property and what if the seller does not accept the offer?
The buyer must make an earnest money deposit of approximately 5%, or an amount acceptable to the seller, at the time of offer submission. A personal check is acceptable. If the seller accepts the offer, the earnest money is immediately deposited in the broker’s escrow account. It is held in the account until closing, at which time the earnest money is applied toward the purchaser’s down payment and/or closing costs. If the offer to purchase is rejected by the seller, the earnest money check is never deposited and is returned.
What happens to a contract if the buyer cannot secure financing after making an offer?
Contracts are generally contingent upon the buyer’s ability to secure the financing described in the contract within a specified period, and may be rescinded by the buyer if, after a diligent search, the loan described is not available.
What is the timing of the actual closing after the seller accepts my offer?
Closing and transfer of title, from seller to buyer, generally takes place within 30 to 60 days after acceptance of the contract to purchase. Occasionally, there are unavoidable delays in securing loan approval. Be aware that even the most diligent agent will have no control over the loan approval time-line once you submit your loan application.
How long after the closing will I take possession of the property?
Occupancy generally takes place 2 to 3 days after the closing and this period is usually provided rent free to the seller. A specific date of occupancy is negotiable and is a term of the contract.
Where does the closing take place and which parties are present at the closing?
Closings generally take place at an attorney’s office, with all parties to the transaction being present. The listing and selling agents and/or brokers are also present.
Does an attorney handle a closing in Atlanta and who is responsible for the attorney fees associated with closing?
Most closings in this area are handled by the attorney representing the mortgage company, whose fee is paid by the mortgage company and is part of the closing costs. The closing attorney is responsible for the title examination, recording of the documents, etc. Buyers and sellers are encouraged to seek private counsel to resolve any legal questions regarding the transaction or to have their counsel accompany them to closing. In those instances where no mortgage company is involved, the purchaser may engage, at his expense, any attorney he chooses to handle the transaction.
Funds Required for Closing
What funds must the purchaser provide at closing and what is the appropriate currency?
Down payments and closing costs must be provided in the form of a cashier’s/certified check, payable to the purchaser, who endorses the check at closing. An estimate of closing costs may be obtained, from the mortgage company, at the time of the loan application.
What is title insurance and whom does it protect?
Mortgagee’s title insurance, in an amount equal to the amount of the loan, which protects the lender only, is required by all lending institutions. Purchasers are encouraged and advised to obtain owners’ title insurance for the full value of the residence, or to discuss this matter with legal counsel.
What is hazard insurance and is the purchaser required to obtain a policy prior to closing?
Purchasers are required to bring a fire and hazard insurance policy to the closing and, if applicable, a flood insurance policy. The minimum value of this policy should be equivalent to the loan amount. One year’s premium must be paid prior to, or at closing and the policy must contain a loss-payable clause in favor of the lender. Should you pay for the policy before closing, you must furnish the paid receipt at the closing.
What is involved in a home inspection and are there contingencies for structural aspects of the property?
Most real estate contracts require the seller to warrant, to the purchaser, that at time of closing, the property will be in the same condition as it was on the date the purchaser signed the agreement, normal wear and tear excepted. It is the purchaser’s responsibility to inspect and ensure that all appliances contractually included with the premises, and the heating, air conditioning, plumbing (including without limitation, septic tank system or systems, pool and spa) and electrical systems are in normal operating condition prior to closing, as the seller’s responsibility, for these systems, ceases at closing.
It is common practice for the Purchase and Sale Agreement to contain a contingency allowing the purchaser to obtain a complete inspection of the home’s structure and mechanical systems. Inspections can be accomplished by employing the inspector of your choice. The cost of the inspection, born by the purchaser, ranges from a flat fee of $150.00 to $1.50 per thousand of the sales price. Purchaser and seller typically negotiate the process and payments required to correct any defects discovered during the inspection.
Wood Infestation Report
How can a purchaser be protected from possible wood boring infestations at the property?
It is common practice for the Seller to provide to Purchaser at closing, at Seller’s expense, a report from a licensed pest control operator on a standard form conforming to Georgia Structural Pest Control Commission regulations, stating that the main dwelling has been inspected and found to be free from visible evidence of active infestation by termite or other wood destroying organisms. If visible evidence of active or previous infestation is found, Seller agrees to (a) correct said infestation and structural damages resulting from said infestation and provide documentation evidencing correction of same and/or (b) provide documentation, satisfactory to lender (if applicable), indicating that there is no structural damage resulting from any previous infestation. If any additional inspections and/or reports are requested by Purchaser or Purchaser’s Lender, costs, if any, for such inspection(s) and/or report(s) shall be paid by Purchaser.