So, why do buyers keep using real estate agents?

Being Able to Find Data is Different than Being Able to Interpret It

Sure, millennials are doing the majority of the home searching themselves online, but doing an initial home search is only a small piece of the home buying puzzle. Buyers and sellers need to know what’s on the market, price, and property specifics. That’s data. But do homebuyers know what to do with that data when they see it? Often, they need help analyzing the data, making sense of it, and navigating the process after the initial searches have been conducted.

What Does a Real Estate Agent Do?

Some brokers point out that the “real work” doesn’t even begin until the property is under contract. Then, real estate agents who have experience with the full home purchasing process become especially important.

Beyond scheduling viewings, finding homes that meet your needs, and writing up the offer, real estate agents are a valuable resource and representative in

• Negotiations (Getting the Best Deal!)
• Inspections
• Dealing with Boards, Home Owners Associations, Zoning, Land Use, etc.
• Ensuring Clear Title
• Getting the Sale Finalized

On top of all the work they can do for you, agents also have a network of attorneys, lenders, inspectors, and other professionals you will need throughout this process. Having a pre-vetted list of professionals to choose from can save you big time on expenses, time, and frustration.

Maybe you’ve heard, but the market is particularly challenging for buyers right now. Inventories are particularly low, and prices are high. In this environment, it is a particularly wise investment to work with an experienced agent who can help you save time, get the best deal, avoid costly mistakes, and get a home you love.

Research and Knowing When to Ask for Help Make for an Informed Homebuyer

Having access to online home searches makes homebuyers more informed and more prepared to engage in the home buying process. Across the board, this is great! But, being an informed home buyer doesn’t mean you are an expert, and research isn’t actually a good replacement for an experienced agent. An informed homebuyer not only has done the work to fully engage in the real estate transaction process, but he or she also knows when to ask for help. An experienced real estate agent is a valuable guide to help walk you through the entire process.

In the State of Georgia, professionals are actually a required part of the real estate transaction process. Closing must be conducted by an attorney. At Brian M. Douglas & Associates, our experienced real estate attorneys work every day with home buyers to help them navigate the process, alongside their real estate agents. To learn more about what a closing attorney does in the home buying process, click here. If you have any questions, feel free to reach out! You can reach one of our excellent Atlanta attorneys by calling (770) 933-9009.

The post Are Real Estate Agents Obsolete? appeared first on Brian M. Douglas.

Location scouts are always on the lookout for locales that evoke a certain feeling or match a particular character, and stage sets don’t always cut it. Did you know that you can rent out your home as a location for commercial, TV, or movie filming? You can actually make some decent money at it, and there are other perks, too: you could get a behind-the-scenes look at how film production works and maybe even meet some of your favorite celebrities.

It’s often said that buying a home is an investment. Making your home work for you is a creative way to use that investment to build wealth — or at least, to earn some extra spending money.

In the past couple of years, the State of Georgia, slipped from its top spot as the number one filming location in the world. We may not still be on top, but we are pretty high up there. No wonder people call Atlanta the “Hollywood of the South.”

How Much Can I Earn?

How much you can actually earn by renting your house as a film location depends on a number of factors: the budget of the production, how intrusive the filming will be, and the size of your property. You can likely expect somewhere between $2,000 and $5,000 per filming day, plus $500 per day for prep and wrap. Some locales fetch up to $35,000 a day! In Atlanta, it is possible to hire a management company to represent your home. Managers can help get your home into more films and negotiate price on your behalf, but they generally take about 20% of your rental fee.

How Disruptive Will Filming Be? 

Offering your home as a film location is not for those who don’t like people in their space or their stuff being moved. How disruptive filming will be depends on the nature of the production. A vehicle crash scene will be more disruptive than a walk in the garden scene. It is not unheard of to have all of your furniture moved around or even to have a home completely repainted. Film days often exceed 12 hours, and there will likely be prep and clean-up days. Depending on the length of filming time, you may find your home in use anywhere from a few days (for a single TV episode) to a few weeks (if your home will feature prominently in a full-length film). Expect over 100 strangers in your home at any given time.

What Other Perks Might be Available?

In addition to the cash you can earn, there are other perks to renting your home as a film location. Depending on the needs of the production, home improvements like cleaning and painting may come with the price. You also may negotiate more substantial improvements in exchange for use of the property.

Do I Have to Live in a Mansion to Get My Home in the Movies?

Nope! TV and movie producers are looking for sets that are realistic, so homes need to range socioeconomic levels. Often, production companies are looking for standard, middle-class homes.

How Do I Get Started?

If you are interested in getting your home onto the big screen, you can start by submitting photos and other information on the Georgia Department of Economic Development film commission’s website. You can also post your home on websites such as Reel Locations or Locations Hub. Around Atlanta, keep an eye out for fliers in your neighborhood. Location scouts often seek filming locations that way.

If you do get some interest in your home, respond quickly and clearly. The crew will move on if you don’t move fast. Ask questions, make sure that insurance covers the whole operation, and make sure your own expenses are covered if you need to relocate during filming.

Remember to be careful! If a production approaches you about using your home in a film, run a check on the company name, as well as on the location scouts. Ask them for references and a list of previous film or TV credits. If the scout is with the Location Managers Guild International, they are likely ok.

For more advice right from the Atlanta-based set directors’ mouths, check out this interview on Atlanta Journal-Constitution. As always, don’t be afraid to reach out to us at Brian M. Douglas & Associates, too! We may not be Hollywood buffs, but we definitely know our way around a rental agreement. Our experienced real estate attorneys can help you through the process of getting your home into Show Biz. Give our office a call at (770) 933-9009.

The post Homeowners: Ever Thought of Getting into Show Biz? appeared first on Brian M. Douglas.

You know Airbnb as the company that revolutionized travel around the world by making home-sharing easy. You have probably also heard about the big waves the $38 billion company has caused in the hotel industry, sparking legislation and regulation throughout the US. But have you heard about Airbnb’s latest project? There could be big things coming in 2019.

Airbnb: Home-Sharing AND Home-Building?

In November, Airbnb’s co-founder Joe Gebbia announced a new project called Backyard, “an endeavor to design and prototype new ways of building and sharing homes,” according to a press statement. What does this mean? According to Gebbia, Airbnb is launching its first prototype buildings in 2019 for its latest project: to develop and produce green building materials, prefabricated dwellings, houses, and multi-unit residential complexes.

In Gebbia’s telling, Backyard is going to rethink home building by responding to its vast community of home-sharing travelers. Pretty soon, the new branch of Airbnb will be designing a home around the needs of its occupant, “utiliz[ing] sophisticated manufacturing techniques [and] smart-home technologies.”

It seems like a usual shift, from home-sharing to home-building, for the tech company, but this may be Airbnb’s way of diversifying and moving away from a purely digital business model.

We Will Keep You Updated

Although much of Backyard’s announcement, and its 2019 plans, remain somewhat mysterious, it is clear that Airbnb has some big ideas in the works. You can read more about Gebbia’s November announcement here. Keep an eye on our blog for updates about Airbnb, as well as other real estate news in Atlanta. We will do our best to keep you informed!

The post Airbnb Cities May Become a Reality in 2019 appeared first on Brian M. Douglas.

Escrow, Defined

The word “escrow,” used in different contexts can mean slightly different things. In the world of homeownership, an escrow account is a special account that you fund and a bank (or other financial institution) manages for you. The purpose of an escrow account is to make it easier to pay the costs associated with homeownership.

Each month, homeowners make one payment into their escrow account. This payment includes the monthly mortgage payment, as well as prorated monthly contributions to real estate taxes, homeowners insurance, and mortgage insurance. Unlike mortgage payments, which are due every month, these other costs are only paid once a year. By contributing to an escrow account, the homeowner can make smaller monthly payments over the course of the year rather than having to come up with a lump sum payment for each. When each of these bigger bills comes due, the financial institution holding the escrow account simply withdraws the full amount and pays the bill on time.

How Does a Bank Determine the Amount a Homeowner Should Contribute Per Month?

A bank, or any other financial institution that manages escrow accounts, will determine how much a homeowner should pay monthly into the account by determining what he or she will pay over a twelve month period in real estate taxes, homeowners insurance, and mortgage insurance. These amounts are based on estimates using previous years’ data. Some states allow for a little extra money to be contributed as well to offset any potential increases in costs. Once adding together these yearly costs, a bank will divide the amount by twelve and then add that prorated amount to the homeowner’s monthly mortgage payment.

Let’s take a look at an example. Homeowner Harry pays $1,800 per month toward his mortgage. Each year, his real estate taxes amount to about $3,000 and his homeowners’ insurance premium is $1,200. He also pays an annual premium of $1,500 for mortgage insurance.

Harry’s annual costs are:

$3,000 (real estate taxes) + $1,200 (homeowners’ insurance) + $1,500 (mortgage insurance) = $5,700

Divided over a twelve month period, Harry’s monthly contribution to these costs equals $475. Added to his monthly mortgage payment, Harry will contribute $2,275 into his escrow account each month. When the real estate taxes, homeowners’ insurance premium, and mortgage insurance premium are due, the bank will simply make those payments on Harry’s behalf out of his escrow account.

What if the Contributions are Not Enough to Cover the Actual Annual Costs?

Since the monthly contributions are based on estimated costs, it is possible that the actual real estate taxes may be higher than expected. If it happens that a homeowners’ actual annual costs exceed the amount being held in escrow, most banks offer two options.

The first is that the homeowner will be notified of the deficit and is given the opportunity to simply pay the balance into escrow to cover the full annual costs. A second option is that the homeowner may decline to pay the difference between the amount held in escrow and the amount owed to the state and/or local government. In this instance, the bank will cover the shortage and then increase the homeowners’ monthly contribution amount to repay the difference.

What if the Contributions Exceed the Actual Annual Costs?

If at the end of the year, the actual costs are less than the amount being held in escrow, the bank will simply return the excess to the homeowner. If the excess amount is relatively small, some financial institutions may roll the amount over into the next year.

What are the Pros and Cons of Using an Escrow Account?

For the most part, using an escrow account to pay annual homeownership costs is a convenient and easy way to budget for these large expenses and ensure they are paid on time. In our experience, the majority of homeowners prefer to use an escrow account to manage their homeowners’ bills. However, some homeowners do not like the concept of an escrow account. This is because not all escrow accounts are interest-bearing, so some homeowners see escrow accounts as an interest-free loan to the financial institution.

Are Escrow Accounts Required for all Homeowners?

Some mortgage lenders require homebuyers to use an escrow account. For example, the Federal Housing Administration (FHA) requires that borrowers have an escrow account to pay homeownership costs. However, not all lenders require the use of an escrow account, and others offer an opportunity to cancel an escrow account if the homeowner is able to show a history of on-time payments.

Contact an Experienced Atlanta Real Estate Attorney to Learn More

If you are a first-time homebuyer or if you simply would like to learn more about escrow accounts in the State of Georgia, feel free to reach out to Brian M. Douglas & Associates. Our experienced Atlanta real estate attorneys are always happy to answer questions and help in any way we can. To make an appointment, give our office a call at (770) 933-9009.

The post Homeowner 101: What is an Escrow Account? appeared first on Brian M. Douglas.

If you are in the process of selling your home, likely it’s not the only thing you’ve got going on. You may be moving, starting a new job, starting a new family, anything. It’s a time of transition and the last thing you need is to end up in a lawsuit. So, hire an experienced real estate attorney. You will be glad you did. Here are the top five reasons why.

#1 Real Estate Closings in Georgia Must Have an Attorney Present

In the State of Georgia, real estate closings are conducted by a real estate attorney. There are a number of reasons for this, but mostly it is to avoid mistakes. However, it is important to understand that this attorney is not your attorney. He or she is hired to oversee the sale of the property, but the attorney is not there to protect one side over the other.

#2 Resolve Title Issues Without Losing Sleep

As the seller in a real estate transaction, it is your job to provide real estate for sale that has free and clear title and no undisclosed conditions on the property. We will get to the property conditions in a moment, but first, you’ve got to have clear title to make the sale. After you accept an offer on your home, the first thing that will happen is a title company will start looking into your title. If they find anything — trust complications, liens on the property, unpaid property taxes, or cloudy title — the sale could be delayed or fall through. By working with an attorney, you can preempt some of these challenges before you even put the property up for sale and any unexpected title challenges can be dealt with quickly and accurately. It can take a lot of documentation to clear title, and it’s definitely not something you want to do alone.

#3 Have a Strong Advocate in Negotiations

Before closing, the buyer will want to have the home inspected to confirm that there are no undesirable conditions on the property. If the inspection shows anything — mold, environmental issues, structural problems — the buyer and his or her agent will want to start negotiating. Everything is on the table: price, who will pay for repairs, whether repairs need to be done before or after closing. An experienced real estate attorney, trained in the art of negotiation, will be a valuable asset in this part of the process.

#4 Save Money in the Long Run

Hiring a real estate attorney from the get-go, before you even put your house on the market, may seem like an unnecessary expense in an already bank-breaking process. We have seen it go wrong so many times: waiting to hire an attorney until there is a serious legal problem ends up costing way more than simply hiring an attorney to protect you throughout the process. The amount of time and money it costs to unwind a thorny title or messy escrow issue is exponentially higher than the cost of hiring a lawyer from the start. Don’t let the sale get away from you. Make the investment up front to save time, stress, and money down the road.

#5 Dot Every ‘I’ and Cross Every ‘T’

Even if no problems arise during a home sale, an attorney on your team puts your mind at ease. You can go into the sale of your property knowing that every single line of every closing document has been reviewed and approved by your legal counsel.

Work with Experienced and Versatile Atlanta Real Estate Attorneys

At Brian M. Douglas & Associates, our attorneys are not just real estate lawyers. We are experienced in a wide array of commercial and residential real estate matters, including asset protection, corporate entities, and real estate investing. Our experienced attorneys have seen and done it all, so we have what it takes to work efficiently, effectively, and creatively on your behalf. Give us a call to set up an appointment at (770) 933-9009.

The post Five Reasons You Need a Real Estate Attorney to Protect Your Home Sale appeared first on Brian M. Douglas.

As we near the end of the year, we draw closer to another tax season. If you are a homeowner in the State of Georgia, you are likely very familiar with the season of property assessments and taxation. However, you may not know as much about your homestead exemption. In the State of Georgia, there are special benefits conferred to properties that qualify as homesteads. We have written extensively about the Georgia Homestead Exemption here, but we wanted to provide a reminder for all Georgia homeowners before the end of the year.

How Do I Qualify for the Georgia Property Tax Homestead Exemption?

You qualify for the Georgia Property Tax Homestead Exemption if

• You are a homeowner in the state of Georgia
• Your Georgia home is your legal residence on January 1 of the taxable year (the only exception to this is if you have to be away from home during the year for health reasons)
• You do not already have a homestead exemption for another Georgia property, or for a property in any other state

If all of the above criteria are met, you are likely eligible for a homestead exemption on your property taxes.

What are the Main Homestead Exemptions Available to Me?

The Georgia Homestead exemption is meant to help ease the burden of property taxes, and there are a number of versions of this exemption designed for Georgia residents in different circumstances. Each county also has slightly different homestead exemptions, so it is worth reaching out to your county Board of Assessors or Tax Commissioner to learn more about your options. However, in general, the State of Georgia provides certain minimum homestead exemption benefits, including the following:

Standard Homestead Exemption:

Each Georgia home that is occupied and used as the primary residence of the owner may be granted a $2,000 deduction from 40% of the fair market value of the home.

65 Years of Age or Older:

Homeowners 65 years of age or older may claim a $4,000 exemption from all county if the household income does not exceed $10,000 for the prior year (retirement from retirement sources, pensions, disability is excluded up to the maximum amount allowed to be paid to an individual under the federal SSA. In 2018, this is $66,912).

Disabled Veteran or Surviving Spouse:

Qualifying disabled veterans may be granted an exemption of $60,000 plus an additional sum from paying property taxes for county, municipal, and school purposes. The additional sum is set by the US Secretary of Veterans Affairs. In 2018, it’s $81,080. The value of the property in excess of this amount remains taxable. This exemption is extended to the unremarried surviving spouse or minor children as long as they continue to occupy the home.

What Do I Need to Do if I Have Applied for and Received the Homestead Exemption in the Past?

If you have applied for, and received, a homestead exemption in the past, you may not need to apply again. Homeowners only need to apply for the homestead exemption once, and then it continues to apply as long as

• There is no change in ownership
• You have not made any changes to the deed (including changes in name and spelling)
• You do not wish to apply for a different homestead exemption

If any of the above circumstances do apply, you will need to submit a new application, applying for the homestead exemption again.

How Do I Apply for a New Homestead Exemption?

As you likely know, property tax returns are due each year by April 1st. To apply for a homestead exemption, applications must also be submitted by that date. Late submissions received after April 1 will apply for the following year.

You may file a Homestead Exemption Application any time of year. The only requirements are that you own the home on January 1st and submit the application by April 1. November is a great time to check in on your property tax exemption options and speak with someone in your county tax assessor’s office. He or she can provide you full information about your homestead exemption options and let you know if there is any additional paperwork required for elevated homestead exemption benefits. This gives you plenty of time to get your tax exemption application in order and speak with the necessary governmental representatives, as well as your CPA, well before the craziness of tax season begins.

Get in Touch with an Experienced Real Estate Attorney for Assistance

If you are a Georgia homeowner who has not yet taken advantage of the homestead laws, or if you are considering changing your homestead exemption status, contact Brian M. Douglas & Associates. Our experienced real estate attorneys can help you prepare to make the most of your county’s homestead exemption laws and ensure that you don’t miss important deadlines. Give our office a call at (770) 933-9009.

The post Georgia Homestead Exemption Reminder appeared first on Brian M. Douglas.

Where You’ve Heard It Before

If you are interested in wholesaling real estate, you have likely seen advertising for real estate wealth building seminars pretty much everywhere. If you are already in the business, you may have even attended one. While some seminars are giving out good, accurate, and transparent information, others are peddling dishonest or incomplete information shared to make real estate investing seem much simpler and much less costly than it really is.

At Brian M. Douglas & Associates, clients regularly ask about double dry closings because the seminar they attended recommended that investors use this method to wholesale property without capital. So, what is a double dry closing and is it really possible in the State of Georgia? Let’s break it down.

The “Dry” Closing

First, let’s go through the definition of a “dry” closing. At a real estate deal closing, when it is time to finalize the purchase and sale of a particular piece of property, the “closing” occurs when all terms of the contract have been completed and the purchase price is exchanged for property ownership. However, a dry closing occurs when all other closing requirements are fulfilled except the funds are not readily available. In this situation, either the contract for sale would be breached, because not every part of the agreement was fulfilled, or the parties involved can agree to move forward with the closing process, and funds will be transferred soon after closing.

A dry closing occurs when there has been some delay of the funding for a real estate transaction. In a traditional closing, a loan would have been approved and guaranteed ahead of time by a mortgage lender. However, in a dry closing, the funds come a few days or weeks after closing.

In general, both buyers and sellers would prefer a “wet” closing that finalizes the deal and satisfies every part of the contract at once. However, dry closings do occur if

• The mortgage lender has a delay,
• The buyer still needs to satisfy a condition for approval with the mortgage lender, or
• The seller has not resolved all issues with the property that are conditions of the sale.

A dry closing prevents any of these situations from killing the sale. Instead of viewing these failures as grounds for breach, a dry closing in an agreement that the sale will be finalized, and the final details will be resolved shortly thereafter.

The “Double” Closing

A “double” closing, also known as a back-to-back or simultaneous closing, is a tool that some wholesale real estate investors use to buy and sell properties more quickly. In a double closing, two transactions are happening at the same time, and it is easiest to explain using an example:

A wants to sell a property to B. Simultaneously, B is planning to sell that property to C.

Each of these transactions (A-B and B-C) are independent transactions with their own escrow and settlement statements, and title actually does pass from A to B to C. The investor, B, will show up on the chain of title and will be required to pay all costs associated with closing.

Here It Is: The Double Dry Closing

So, this mythical “double dry closing” that you have been hearing about is a combination of the above two ideas.

• A wants to sell a property to B
• For whatever reason, financing has not yet come through, and A-B decide to finalize the sale anyway (with the promise that the funding is coming through very soon after closing)
• B then turns around and sells the property to C
• At closing, C pays B, either in cash or through a mortgage lender
• B takes the funds from C and pays back A, completing the original contract

Sounds great, right? This is how those get rich quick seminars are selling investors in double dry closings. In reality, however, it is not this simple at all.

So, Is It Really Possible to Execute a Double Dry Closing in Georgia?

Although a double dry closing makes a certain amount of sense in theory, it will not work in the State of Georgia (and in many other states). It may not technically be illegal to complete this kind of transaction, but title companies in Georgia are highly unlikely to insure title under these circumstances.

In the past, double dry closings were possible. However, in recent years, title companies have been cracking down on these transactions because they are highly vulnerable to mortgage fraud. Without a title company’s agreement (and the agreement of the mortgage lender involved), the transaction cannot move forward.

The Solution: Transactional Funding

So, is there a solution? Of course! The solution is something called transactional funding. What this basically means is that the investor in our scenario, B, would have to bring their own funds to closing (cash) or use someone else’s cash to close that first deal. B (or the person B borrows cash from to complete the first transaction) would be paid back once the second deal is finalized.

Does it sound a little complicated? Let’s break it down again.

Transactional funding is basically a short-term lending solution for real estate investors looking to quickly buy and sell property. In fact, it is almost exclusively used in this particular scenario, for wholesaling real estate. This is because the transactions can be completed quickly, and the cash lender can be repaid in short order.

In the past, transactional funding was really only available to well-connected real estate investors who had access to private lenders and individuals with plenty of cash on hand. These days, there are some commercial lenders who will work with investors to provide transactional funding.

Get Good Information: Hire an Experienced Real Estate Attorney

What does this all mean for you, a real estate investor? What it means is, you must be confident in the source of your information, especially when it comes to building a new business. Gathering information and doing your research is great, and you absolutely should learn as much as you can before diving into a new venture. However, it is always important to check your facts. Working with an experienced real estate attorney is the best way to ensure you are getting good information and to build a business that earns you profits. Give Brian M. Douglas & Associates a call today to learn more!

The post Debunked: The Myth of the Double Dry Closing appeared first on Brian M. Douglas.

Throughout the country, the real estate industry is booming. As the industry continues to grow, more homeowners are investing in rental properties. These investment properties can generate stable, long-term income for the property owner and generate a number of other financial benefits. Renting out your property is a business transaction, and as with any business deal, it is important that you protect yourself and your investment.

If you are interested in investing in a rental property, or if you already have one, do you have a team you can rely on? Having a great support team, such as a property manager and a real estate lawyer, makes owning and earning profit from rental properties much easier. A professional property manager can handle the financial and logistic aspects of your rental property, allowing you to enjoy the benefits without having to undertake all the work alone. An experienced real estate attorney can draft your lease and help you create a management agreement with your property management company in order to protect your interests.

What is a Rental Property?

Any property you own and rent out to others is a rental property, regardless of how often or how long you rent out the space. There are numerous types of rental properties, and each type may be regulated differently under the law. Because different laws can apply to different types of rental properties, it is important to know how your property can be classified.

Local, state, and even federal laws dictate certain aspects of renting out your property. Federal tax laws may impact the deductions you can claim when renting out your property. State laws typically require homeowners to purchase certain insurance before renting out their properties. Local laws may regulate whether you can list your home as a short-term rental or a long-term rental. Laws impacting homeowners’ ability to rent out their properties can change often, especially at the local level. Many cities and municipalities are beginning to restrict short-term vacation rentals offered through websites, such as Airbnb. Deciding whether you want to lease your property as a short-term or long-term rental is one of many important decisions to consider when becoming a landlord. To learn more about the short-term rental laws in this state, see our blog post here.

Build Your Team: Hiring a Property Manager

Hiring a property manager can make your transition from homeowner to landlord go much more smoothly. Leasing out your residential or commercial property, especially for the first time, can be a daunting task. There are numerous legal and financial factors to consider. Instead of undertaking this process alone, rely on the guidance of an experienced property manager. There are numerous benefits to hiring a seasoned property manager, including:

•       Having a rental property expert in your corner to protect your interests
•       Gaining more control over the rental process
•       Taking advantage of a fast-moving real estate market
•       Saving time and energy by delegating tasks to your property manager

Many landlords misunderstand what property managers do. A common misconception is that property management companies simply collect rent checks and take a large fee to do very little work. In reality, experienced property management companies will handle the big picture and day-to-day tasks associated with being a landlord. A property management company can help you get your property ready to accept tenants and manage the rental process from start to finish. Depending on your management agreement, a property manager can take on:

•       Marketing your property
•       Securing tenants
•       Managing the move-in/move-out process
•       Ensuring your tenants pay their rent on time
•       Managing any maintenance issues that occur
•       Supervising other logistics related to owning a rental property
•       Handling the eviction process, if necessary

Level Up: Hiring a Lawyer Can Help You Become a Better Landlord

Working with a property management company can significantly improve your experience as a landlord; however, a property manager can only do so much. To protect and preserve your investment for years to come, it is wise to consult with a real estate attorney before you put your home on the rental market. As local and state rental laws change, it is important to ensure your property is compliant with the law before your tenants move in. A real estate lawyer can advise whether your property is compliant with occupancy standards, disability accommodation laws, historic preservation laws (if applicable), and other zoning laws that may restrict how you use the property. Additionally, your lawyer can help you address any personal injury liabilities, such as dangerous conditions in the home, which could make you vulnerable to lawsuits.

As noted above, property managers often handle the legal paperwork associated with leasing out a property. However, the lease is one of the most important legal aspects to renting out your property. The lease you have with your tenants is a legally enforceable contract that dictates your responsibilities to your tenants, and their responsibilities to you. While some property management companies may have a standard lease for residential landlords, these form leases are not typically tailored to the homeowner’s unique needs. A real estate lawyer can help you draft the right lease for you, one that will protect you from some of the risks associated with renting out your property, and will ensure the lease is valid and enforceable in your jurisdiction. Your lawyer can also work with your property manager to create a property management agreement that protects your interests.

Contact an Experienced Real Estate Attorney and Start Building Your Team Today

Renting out your property can be a financial boon. However, it can take a lot of time and effort to reap the benefits, especially for homeowners who manage their own rental properties. Preparing your property for future tenants means you have to consider a variety of legal and financial factors. One of the best ways you can protect your rental property investment is by working with a team of legal and real estate experts. An expert real estate lawyer like those at Brian M. Douglas & Associates can review your property management contracts, create a valid lease, and ensure your property is compliant with the law. Then, your property management team can handle the day-to-day tasks of managing the rental property. With an experienced team on your side, you can manage your real estate investments with confidence without having to sacrifice all of your time and energy. Give us a call at (770) 933-9009 for more information!

The post Hiring a Property Manager for Your Rental Property appeared first on Brian M. Douglas.

In the State of Georgia, there are special benefits conferred to properties that qualify as homesteads. Only homeowners can receive the benefits of a homestead property, and these benefits are only available if the home is the owner’s legal residence as of January 1 of the taxable year. There is an exception to the primary residence rule if the homeowner was away from home during the year due to health reasons.

What is the Georgia Property Tax Homestead Exemption?

If a homeowner owns a qualified Georgia Homestead Property under the preceding definition, then he or she can apply to receive a Property Tax Homestead Exemption. This statewide tax exemption is designed to ease some of the burden caused by property taxes.

Homeowners may only apply for one homestead exemption, and they cannot receive the homestead exemption on any other property, including other counties in Georgia or in other states. Depending on the county where the property is located, applications can be submitted online, in person, or through regular mail.

In general, you will only need to apply for the homestead exemption once, and then the exemption will continue to apply as long as there is no change in ownership, name, spelling, or any other correction on the deed. You will, however, need to reapply if you want to qualify for a different exemption.

Standard Homestead Exemption:

Each Georgia home that is occupied and used as the primary residence of the owner may be granted a $2,000 deduction from 40% of the fair market value of the home.

65 Years of Age or Older:

Homeowners 65 years of age or older may claim a $4,000 exemption from all counties if the household income does not exceed $10,000 for the prior year (retirement from retirement sources, pensions, disability is excluded up to the maximum amount allowed to be paid to an individual under the federal SSA. In 2018, this is $66,912).

Disabled Veteran or Surviving Spouse:

Qualifying disabled veterans may be granted an exemption of $60,000 plus an additional sum from paying property taxes for county, municipal, and school purposes. The additional sum is set by the US Secretary of Veterans Affairs. In 2018, it’s $81,080. The value of the property in excess of this amount remains taxable. This this exemption is extended to the surviving spouse that has not remarried.

County Exemptions: Above and Beyond

Although the State of Georgia offers the homestead exemption to all qualified homeowners in the state, some counties and cities have chosen to extend their homestead exemptions by local legislation. In response to rising home values, many counties have also implemented a freeze on valuation. As long as the homeowner continues to qualify for the homestead exemption, these counties will either wholly freeze the property valuation or limit increasing property values for the purpose of property tax assessment.

Fulton County: Fulton County Board of Assessors

Basic Exemption extended to $30,000

Homestead Freeze: Taxes are tied to the Consumer Price Index, so home value increases at the growth rate of the CPI or 3% per year, whichever is less. This freeze only applies for the county maintenance and operations part of the property tax bill. It does not apply to the school or city taxes.

Fulton County Exemptions Guide

DeKalb County: DeKalb County Tax Commissioner

Basic Exemption extended to $30,000

The Homestead Freeze is only on the county portion of the tax bill. This freeze does not apply to school, city, or state taxes.

Gwinnett County: Gwinnett County Tax Commissioner

Basic Exemption extended to $10,000

Value Offset Exemption freezes the assessed value of the property on county portion. This freeze does not apply to school and city taxes. The freeze only applies to the home and up to 5 acres of land.

Cobb County: Cobb County Tax Commissioner

Basic Exemption extended to $10,000

Douglas County: Douglas County Tax Commissioner

Basic Exemption extended to $6,000

The homestead freeze is only on the county portion of the tax bill.

Clayton County: Clayton County Tax Commissioner

Basic Exemption extended to $10,000

Coweta County: Coweta County Tax Assessor

Basic Exemption extended to $7,000

Fayette County: Fayette County Tax Commissioner

The basic exemption for this county is $2,000 on state and school and $5,000 on county and fire.

When/How Can Homeowners Apply for the Homestead Exemption?

Each year, property tax returns must be filed by April 1. Applications for Homestead Exemptions are also due on that date. Exemptions filed after April 1 will not count for that tax year and will be suspended until the following calendar year. Although the deadline is April 1, Homestead Exemption Applications can be filed at any time during the year. The only requirements to qualify for the homestead exemption in a given year are that the applicant owned the home on January 1st of that year and submitted the application prior to April 1.

To file for the Georgia Property Tax Homestead Exemption, Georgia residents will either need to apply in person, online, or vial regular mail within the City or County where they live. In some counties, applications should be sent to the Tax Commissioner’s Office. In others, the Tax Assessor’s Office collects Homestead Exemption applications.

Get in Touch with an Experienced Real Estate Attorney for Assistance

If you are a Georgia homeowner who has not yet taken advantage of the homestead laws, or if you are considering changing your homestead exemption status, contact Brian M. Douglas & Associates. Our experienced real estate attorneys can help you decode your county’s homestead exemption laws to ensure you are making the most of your eligible benefits.

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Are There Any Encumbrances on The Land?

Before you choose how you want to take title to your new property, you will first want to be sure that the seller has full and exclusive rights to sell the property to you – this is called “clear title.” If there is any lien against the property or any other encumbrance on the land, this is said to “cloud title.”

With clear title, you will be purchasing real estate as you expect it – you will have full ownership of the land and any improvements on the land, such as the house, fence, driveway, and septic system. If the seller cannot prove clear title, then you likely will not want to purchase the property at all.

This is why the closing agent (in Georgia, this will be an attorney) will conduct a title search before completing the transfer. The title search is a way to check records and make sure that the title is clear and, therefore, marketable. However, title searches are not foolproof. It is possible that the title search could miss an encumbrance that is not recorded in the land or public records. That is why you obtain title insurance. Title insurance is a policy that covers real estate buyers (up to the coverage amount) in the event that the title search missed something, and the seller did not deliver clear title.

Most buyers will not complete a real estate transfer if there is cloud on the title because lenders will not issue a mortgage without title insurance, and a title insurance company will not issue a policy if it finds an encumbrance on the title. If you are paying cash, you may choose to take the property “as is”.

Forms of Property Ownership

Once you are sure that title is clear and marketable, you will then have to decide how to take ownership of the property.  How you choose to take title should be reflected in the title documents and, most importantly, on the deed.

Sole Ownership

If you are purchasing real estate with another person, such as a spouse, family member, or business partner, you will have a few options regarding joint ownership. However, if you are purchasing property as a sole owner, titling is much more straightforward. Sole ownership of a property means that the real estate will be owned by one individual. If you are married and choose to own property without the involvement of your spouse, he or she may need to execute an affidavit or quitclaim deed to relinquish any ownership in the property.

Taking title to real estate as the sole owner does not confer any particular tax or estate planning benefits, as there may be in other forms of ownership. There is no creditor protection conferred, as the real estate will just become one of your assets. As a part of your whole estate, real estate will transfer to your heirs through the probate court, unless you transfer ownership to a trust.

Tenancy in Common

If you and another person(s) want to take ownership of property together, the State of Georgia recognizes two basic kinds of co-tenancy. Tenants in Common co-own real estate in shares without the right of survivorship. This means that if one tenant in common dies, his or her share in the property will pass in accordance with his or her will. The surviving tenant in common will then become co-owners with the deceased tenant’s heirs. This is one of the challenges with this form of ownership. Because there is no right of survivorship, it is possible to end up co-owning real estate with someone you do not know.

Tenancy in common does not require that all owners hold equal shares in the property. However, the percentage of ownership held by each tenant in common should be specified in the deed.

Joint Tenancy with a Right of Survivorship

This form of ownership allows more than one person to co-own a property, however, each holds full ownership of a single interest in the property.  This means that, if one tenant dies, the other tenant(s) will continue to be sole owner(s) of the property, avoiding the need for probate.  In Georgia, this form of taking title is most commonly used for family members who wish to keep a property within the family. As joint tenants, all co-owners have equal ownership rights to the property and retain the right to occupy the entire premises.

A Note on Tenancy by the Entirety

If you are coming to Georgia from another state and are married, you may have questions about tenancy by the entirety. In many states, tenants by the entirety is a special form of co-ownership reserved for married couples. The State of Georgia does not recognize tenancy by the entirety, although it does provide some protection for spouses when one partner passes away. Spousal rights are preserved through a mechanism called Petition for Year’s Support, which passes title of the home to the surviving spouse.

What If the Owner Is Not A Person?

It is possible to own property in a trust or through a business entity (corporation, LLC, or partnership). Each of these forms of ownership creates additional taxation and estate planning implications. It is best to have an attorney represent your company or trust in the case of a non-person entity taking title to real estate.

Does the Closing Attorney Represent Me or the Seller?

Georgia is a lawyer settlement state. That means that a real estate transaction must be overseen by an attorney. However, this lawyer does not specifically represent the buyer or the seller. Instead, it is the closing attorney’s job to manage the settlement process while ensuring all documents are prepared correctly, all necessary money is paid, and all signatures are valid.

Homebuyers, especially first-time homebuyers, may wish to engage their own attorney to represent them specifically during settlement. Your own attorney can review documents and help you resolve any issues that may arise during a real estate proceeding.

Explore All of Your Options and Consult with an Atlanta Attorney

We highly recommend that you consult with a Georgia attorney before beginning the homebuying process. A skilled attorney like the ones at Brian M. Douglas & Associates will be able to advise you on the legal and tax implications for each choice of title. In the long run, hiring an attorney will likely be cheaper than fixing any problems that may arise as a result of a mistake in taking title.

If you are thinking about purchasing real estate in Georgia, call our Atlanta office at 770-933-9009 to schedule an appointment with one of our experienced real estate attorneys today!

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