If you are like many first time homebuyers, you are excited and eager to purchase your first home.  Yet, your funds are somewhat limited, as you are just starting out. How do you calculate how much to spend on your first home?

One key calculation utilized by lenders is your debt-to-income ratio.  Lenders use this ratio to determine how much mortgage debt you can handle and, consequently, the maximum loan amount you will be offered.  This ratio is based on how much personal debt you carry, (including auto loans, student loans and minimum credit card payments) in relation to how much you earn, or your gross income.

To determine this ratio, you’ll need to do a little math.

1.     First, determine your monthly gross income. Remember, your gross monthly income is the before-taxes total earnings from the month, not how much money you actually take home after paying taxes, social security and other deductions.  Multiple your monthly gross income by .36, which will give you the monthly debt payment number that experts have identified.

2.     Next, add up all your family’s fixed monthly debt expenses, such as car payments, your minimum credit card payments, student loans and any other regular debt payments.

3.     Then, subtract the second number (your fixed monthly debt expenses) from the first (your debt payment number) to determine the maximum mortgage payment you can make per month. Keep in mind that this number includes private mortgage insurance, homeowner’s insurance and property taxes.

To determine the price of home you can afford based on this amount, use an online home affordability calculator.

Finally, in addition to the above calculations, sit down and go over your monthly budget and make sure you feel very comfortable with your estimated monthly mortgage payment.  If your mortgage payment needs to be lower to give you flexibility in your budget, reduce it accordingly.

When searching for a new home, finding the right house is often the buyer’s primary concern. But while locating that perfect house is certainly a key component, the neighborhood in which the house is situated is equally important.  Buyers should ask themselves the questions in this podcast before buying property in any area:

1. Have I visited this neighborhood more than once? If the answer is “no,” then you should make at least two additional visits to the neighborhood, each at different times of day.  You may find that traffic at 8:00 a.m. in that area is unbearable, or that at 9:00 p.m. on Fridays the next-door neighbor plays electric guitar with is rock band in the backyard.  Be sure to get to know the neighborhood at different times of day.
2. Have I talked with any of the other residents in the area? Again, if the answer is “no,” then be sure to chat with a prospective neighbor soon!  Talking with the locals will help you to understand their likes and their dislikes or concerns about the neighborhood.
3. Have I researched the schools, hospitals, healthcare facilities, parks and local law enforcement? As a homebuyer, you should know how the prospective school district performs, which healthcare facilities are available and where the local service providers and parks are located. If everything checks out to your satisfaction, great!  If not, you may need to assess your values and make a decision as to whether the neighborhood will meet your needs.
4. Have I reviewed the local crime statistics? When considering any neighborhood, it’s important to consider your personal safety and the safety of your family. In most cases, local crime statistics can be accessed online through the police department’s Website.  Otherwise, call the local police station and ask to view a copy of the city or town’s most recent crime report.  If you have questions about the report, talk with the local law enforcement officials and they will assist you with interpreting the report and answer any questions you may have.
5. Can I picture myself and my family living here? Does the neighborhood offer the restaurants, retailers, entertainment complexes and sports facilities that you and your family enjoys?  If not, can you live without them?  It’s critical that your future neighborhood suit your way of life, so be sure you can imagine yourself living and thriving there.

Everyone needs a distraction on a Friday and we have a great one for you! We are looking for votes to support HomeAid Atlanta’s video contest that will help raise much needed funds to support this charity.

If you don’t know HomeAid Atlanta, the mission of HomeAid Atlanta is to build and maintain dignified housing where temporarily homeless families and individuals can rebuild their lives. This is accomplished through generous donations of construction services and materials from members of the homebuilding industry.

HomeAid Atlanta strives to improve the conditions of Atlanta’s temporarily homeless families and individuals by focusing on increasing capacities at local transitional housing facilities, providing more homeless children, women and men with an opportunity to restore their lives.

You have an opportunity to help HomeAid win $500 from My Friend’s Place Biggest Fan Contest. Voting is open until late November. Please take a few minutes to vote, and ask your co-workers, friends and family to vote as well. It’s an easy way to support HomeAid and it only takes a few minutes.

My Friend’s Place Biggest Fan Contest

• Go to www.youtube.com/group/MFPBiggestFanContest.

• Click “Sign In” at the top right and enter your username and password.

• Once you’re signed in, click the yellow “Join Group” button at the top.

• On the right side of the page, look under the “Top Rated” section and scroll down until you see the video titled “HomeAidContestVideo2”. Click on the video.

 • While the video is playing, you will see a tab that says “I love it” under the video. To vote for the video, simply click “I love it”. A message will then appear that says “thank you for voting”.

I’m catching up on e-mail after a nice long week vacation and an article regarding low interest rates stops me in my tracks.  According to Inman News, mortgage rates have hit historical lows since 1971.

Rates for 15-year fixed-rate mortgages are 4.04 percent for those of you thinking of refinancing! For all of the sales agents out there, this information is key to helping you show the affordability of home ownership. With developers offering significant price reductions and with the right financing – now is the time to buy.

Even though the Federal Housing Tax Credit program is a distant memory, there are still many opportunities for buyers to take advantage of in this marketplace.  There are several new construction town home and condominium projects with a handful of homes remaining in their inventory, and developers are offering amazing deals in order to closeout these projects.

For instance, Grinnell, located in Inman Park, has a 2-bedroom/2-bath home discounted by $69,000.  Just up the road, LaVista Walk has just 2 remaining townhomes with amazing price discounts.  Kirkwood Station, located in the historic Kirkwood area, has only a few townhomes remaining that start from $249,900.  For a buyer who wants to be in the heart of Decatur, The Artisan has 4 remaining 3-bedroom condos with close out pricing up to $160,000 off original pricing.  And the deals are not limited to inside the perimeter area. Highgate at Sandy Springs have 3-bedroom homes available starting from $119,900!

Now is the time to take advantage of developers who are in the position to close out their remaining inventory and offer amazing values, as these prices may not last. This week’s Atlanta Journal-Constitution article, “Home prices, sales continue to rise,” reported that both the median sale price and the number of homes sold increased in Atlanta in May from the month before and the year before.

Collin Ellingson racing over the finish line!

Building awareness and raising money to finding a cure for HIV/AIDS is 100-fold harder than the back-to-back centuries these riders take on, both with challenges of their own.  Out of 150 cyclists who participated, Collin was among the top ten fundraisers for this year’s ride, raising $5,000!  Because the event is fully subsidized through sponsors and volunteers, 100% of all funds raised go to the Emory Vaccine Center, which is at the forefront of AIDS vaccine research.

This is just one of the many ways that NRT Development Advisors’ executives give back to our community.  To view photos and learn more about this great cause, visit at the AV200 site.

NRT Development Advisors’ Real Estate Tweetups (#atlre) always attract such a lively crowd!  We enjoyed engaging conversation and tasty libations at last week’s Tweetup, held at the Loews Atlanta Hotel’s Bar Eleven.  Click here to view photos from last week’s event.

The Tweetups will pick back up after the summer, and we will share event details then.  In the meantime, let us know which locations you recommend for future Tweetups by leaving a comment.  We try to rotate the location (they’ve been held in Midtown’s Loews Atlanta Hotel, Buckhead’s Cantina Taqueria & Tequila Bar and West Midtown’s Ormbsy’s in the past) to make them convenient to all who are interested in attending.

As we mentioned in a recent blog post, The Stacks at Fulton Cotton Mill worked with Savannah College of Art and Design (SCAD) to help showcase its loft product.  The contest provided an opportunity for an up-and-coming interior designer, Christy Hudson, to showcase her talents, as well as help the property show off its unique loft charm.  It was a win/win for all!

The Atlanta Business Chronicle featured Christy’s loft design in this Living in Atlanta article.

April 30^th … Tax credit deadline. I am not writing today with answers or insights, I have questions.

The big question on my mind:  What will traffic and sales look like post April 30^th?  At 3 sites (White Provision, 1010 Midtown and Villa Sonoma), we’ve written more than 35 contracts in the frenzy of first time homebuyers getting in under the deadline. These contracts were written in a 20-day period since April 10^th. The good news is that 35 closings will take place before the June 30^th deadline!

The real estate market has reinvented itself multiple times over the past 18months, and I can’t wait to see what the new form takes on starting tomorrow!  Per Brad Horner’s blog post today, recent news indicates that positive changes are coming.

Professionals in just about every industry know the marketing buzz words for the past year have been “Social Media” and how important it is to participate in order to help sell product, in our case our residential properties.  We have diligently incorporated Facebook marketing into our campaigns and trained our agents on how to use Facebook and other social media channels in order to network and build their pipeline.

But has Social Media really moved the needle? I have to be honest that I’ve been a skeptic, but I’m writing today as a new believer.  Here are a few reasons why:

• After reviewing the data, it’s clear that maintaining an active Facebook program actually improves organic search results.  In fact, many businesses use Facebook as a second Web site for the company, as savvy marketers can employ the same SEO tactics within a company’s Facebook page as they would within a company Web site. According to National Association of Realtors, 84% of buyers use the internet to search for a home.  If Facebook improves your chances of serving your product first, and it is free, I’m making sure it is a number one priority.

• What I’m really excited about is recently learning that Twitter is actually not a useless, self indulgent tool to let people know you are eating lunch or just bought a pair of shoes.   Has everyone heard of a Tweetup?  Apparently it is all the rage, but I’ve been in my bubble and had no clue.  Basically a Tweetup is an event at which people with a common interest come together.

For example, 1010 Midtown hosted a Tweetup last week. More than 100 people attended the event, but what is incredible to me is that these 100 people actually reached more than 25,000 people when you consider each attendee’s list of followers.  Photos of the sunset and comments about the homes’ affordability were posted, which was priceless.  Check out the unsolicited press we received from the AJC based on their attendance at the event.  The event was not a hard sell, but the product itself motivated the discussion!

I can’t wait until I plan the next Tweetup.  If you were like me and had no idea about this networking tool, you can follow this link to learn more about organizing a Tweetup.  Also, click the below screen shot to read the “chatter” from the 1010 Midtown event.