Northwest Atlanta Properties

Home | Client Forms | Contact | (770) 726 -1454
  • Property Management
    • Property Management Services
      • Property Management Forms
      • Properties Recently Rented
      • Rental Value
    • For Tenants
      • Tenant Information
      • Tenant Forms
      • General Information for Tenants
      • General Questions and Answers
      • Tenant Move-Out Information
      • Emergency Procedures for Tenants
      • Utilities
  • Real Estate Sales
    • Looking to Purchase? Search Here!
      • Search Our Listings
      • Our Recent Sales
    • 1031 Exchange Overview – GA Edition
    • What Is My Home Worth?
    • What to Expect in an Offer
    • For Sale By Owner Resources
  • About Us
  • Testimonials
    • We Want to Hear from You!
  • Blog & Newsletters
    • Blog
    • Newsletters

Real Estate Stats and Thoughts From Your Friends at Northwest Atlanta Properties

December 22, 2022 by Jon Burke

Our primary areas of service are below. The rise in interest rates has hit Northwest Atlanta Hard in terms of numbers of sales with our total number of sales down 39.6% !

Prices are holding up well (although the year over year increase has declined from a 24%+ growth to about 7%.) The days of multiple offers and bidding wars are largely behind us as homes are selling  for 97.9% of their asking price compared to 101.8% a year ago. On the flip side, many equity-rich homeowners who bought or refinanced during the past few years are not feeling compelled to sell, so new listings are down. Despite these factors, the number of homes for sale continues to increase about 50% (from 2217 last year to 3325 today.) The chart below shows that this decrease in sales is a national phenomenon.

All of these factors have already driven the median selling price down 10% from $502,532 in May to $452,056 last month. These price reductions are an incentive for some buyers to get back into the market. As mortgage rates fell nearly a full percent recently, many buyers raced to lock in a lower rate. Meanwhile, we know several new home builders who are sitting on inventory with substantial incentives for buyers who can close quickly.

If you’ve considered selling NOW MAY BE THE BEST TIME. Home price forecasts average at virtually no appreciation expected in 2023 with some experts calling for prices to drop.

Property Management Alert.  Rental prices are dropping.

This may be seasonal as we often see the winter months command lower rents but our experience has been for the last four weeks that homes are sitting on the market longer and rental prices have dropped.  We are estimating about a 4% decline over the past 5 months.  ApartmentList is showing similar decreases with many areas losing up to 2% over the past month. Clicking the link takes you to a cool interactive graph towards the bottom.

With our shifting market – many wise investors are considering selling and conducting a 1031 Exchange to defer taxes on their gain – here are some does and dont’s

We are not qualified intermediaries or tax experts. However we have supported over 100 clients through their successful 1031 Tax Deferred Exchange. There are many details and nuances to consider whenever doing a 1031 exchange. We thought it might be helpful to address some of the most common do’s and don’ts that customers face in successfully executing and maximizing the tax benefits of a 1031 exchange.

Though you may be tempted in this market, please do not offer seller financing on the property you are selling if you are doing a 1031 Exchange. – Owner financing is also called an “installment sale note” and can cause tax issues. Because all gain must first be allocated to the note, you could lose most, if not all, of the tax benefit of a 1031.

Having 1031 language in your sales contract is advisable, but is not required. – Giving the buyer or seller the heads up that you will be doing a 1031 exchange on your side of the transaction leads to fewer surprises, but does not have to be included. Should you have the time and wherewithal to include it, here is the link to what we recommend you add to the contract: Sellers reserve the right to conduct a 1031 Exchange. Buyers agree to cooperate provided there is no additional expense liability or cost.

In a standard deferred 1031 exchange, you must sell what you have (called the “relinquished property”) before you acquire what you want ( known as the “replacement property”). However, if you find your dream replacement property before you sell your relinquished property, you may be able to still reap the benefits of a 1031 by doing a more expensive reverse exchange.

Basically, all investment real estate is “like-kind” with all other investment real estate (see the three disqualified uses discussed below). For example, you can sell land and buy multiple rental properties, sell a shopping center and buy a warehouse, or sell several rental houses and buy an apartment building or even vacant land. Many buy their intended retirement home and rent it out before moving into. Check with your tax advisor.

For a valid 1031 exchange, you do need to have a Qualified Intermediary (QI) involved at — or before — the relinquished closing. Once the sale is closed, it is too late. Many people are under the misunderstanding that they can close on the property they are selling and either have the closer hold the proceeds or hold the proceeds check themselves without depositing it, and still do a 1031. You cannot begin a 1031 after the property has closed, even if the proceeds have not been deposited. Plan in advance!

Buying a replacement property that costs less than the relinquished property will result in tax consequences. – To have no tax consequence and defer all gain, two criteria must be met: 1) the cost of the replacement property must equal or exceed that of the relinquished property, and 2) you must use all of the proceeds from the sale to purchase the replacement property.

You can keep some of the cash from the sale and just pay the tax on the portion that you keep.

Though the definition of like-kind is decently broad, you can’t do a 1031 exchange on properties that fall into one of the three following uses:

1) A property that is used as your primary residence; or

2) A property that is a personal-use second home that you do not rent out; or

3) A property that you acquire with the intent of “flipping” or developing it for sale (also commonly called “dealer inventory”.)

You can’t take title to the replacement property in a different tax name than the relinquished property. – If Megan Smith was the seller of the relinquished property, then Megan Smith must also be the buyer of the replacement property. She could also use a disregarded entity, such as a single member LLC. See the Same Taxpayer Rule.

You can’t close out your exchange bank account anytime your choose. – There are very specific rules that govern when any remaining proceeds or interest earned can be distributed. See Distribution of Exchange Proceeds.

You can’t extend the 45 day ID period  or the 180 acquisition perios– Seriously. We recently had an attorney tell our client that these dates were flexible – THEY ARE NOT! The only exception occurs when you are considered an affected party in a Presidentially Declared natural disaster.

You may have less than 180 days to complete your exchange. – This is true. You will have 180 days to complete your exchange or until the date your tax return is due, whichever comes first. This situation occurs when your relinquished sale is towards the end of one tax year and your replacement purchase is in the next tax year.

You can’t buy replacement property from a related party. – Unless the related party is also doing a 1031.

You can’t change your ID letter after your 45 days have passed—-period. You cannot substitute or make changes. It is a firm rule.

Either using all the cash OR reinvesting all your profit does not defer all the taxable gain. It requires both! As stated above, you must buy property that costs the same or more than the property you sold, and use all of the cash. .

Most residential lenders will not make a loan to an entity – typically just to people. – This problem arises when you own the property you are selling in a 2-member LLC or Corporation, plan on buying residential rental replacement property, and need to borrow money for the acquisition. Few, if any lenders, will make a residential loan to an entity.

You can’t buy REIT stock as your replacement property.

You can’t sell or buy an LLC membership interest or partnership interest as part of your 1031. – Per Section 1031, these interests specifically do not qualify.

You can’t take out cash (i.e. do a partial exchange) without paying tax. – This means you cannot pull out the initial money you invested without triggering gain.

Northwest Atlanta Properties 

Mike.stott@mac.com

678-232-0927

Click Here to Unsubscribe

Filed Under: Newsletters Tagged With: #1031TaxExchange, #Atlanta, #atlantarealestate, #investment, #Investmentproperty, #Investors, #NorthwestAtlantaProperties, #realestate, #sellyourhome, Agent, Broker, Build a home, Build your home, buyers, consumer spending, CoreLogic, Down Payment, Economist, Equity, Fast Expert, Freddie Mac, Georgia Real Estate, homeownership, homes, housing, Housing Bubble, Investment Property, Luxury Home, Luxury Homes, Luxury Living, Mike Stott, National Association of Realtors, new home buyers, New Home Construction, Property Management, real estate, Real Estate Advice, sellers, selling your home, Top 10, Top Agent, Unemployment, Warm Fuzzy, Wealth

Latest From Our Blog

You May Not Need as Much as You Think for Your Down Payment

… Read More...

Experts Forecast a Turnaround in the Housing Market in 2023

The housing market has gone through a lot of change recently, and much of that was a result of how … Read More...

Should You Rent Your House or Sell It?

If you’re a homeowner ready to make a move, you may be thinking about using your current house as a … Read More...

View Full Blog >>

More from Our Clients

“You can invest in the best markets in the country but if you don’t have a great management team looking after your investments you can still lose money. That is why I stick with Northwest Atlanta Properties. I tell people it is like buying a mutual fund. You buy a property and the fund manager does the rest. If he does a good job you buy more. That is why I am buying more.”

Jamie Neely
Jamie Neely

“Great Service, everything was wonderful”

Gary Thurman
Gary Thurman

“What a Fantastic Job you guys did! I knew I wanted to hire the team the moment I met them. They are spot on. They did all of the legwork, and at times seemed to move mountains for us. We truly could not be happier!”

Johnston
Kim Johnston

“You guys are the best! I was so scared to pull the trigger on this and you have gone above and beyond to make things go smoothly. You guys are the best!! Many mahalos”

Maili
Maili

“Mike and Jon are the best! They made everything so easy!”

Andy Sexton
Andy Sexton

“This is our second transaction with Mike, Jon, & Donna. I Recomend them to everyone I know!”

Vic & Tammie Pecora
Vic & Tammie Pecora

“I just bought a home in the Woodlands! If you need a great realtor, Jon Burke with Northwest Atlanta Properties was Awesome! He was very knowledgeable and there for me every step of the way!”

Patty Cunningham
Patty Cunningham

“Many Thanks, Jon, Mike for outstanding service & support”

Ritesh Betala
Ritesh Betala

“We went from knowing that we could never buy a house to owning our new home!”

Don & Kris
Don & Kris

“Couldn’t be happier. Looked at houses one weekend, picked our favorite. That’s the one we bought. Got everything we wanted and more in negotiations. They held our hands through the entire process, going above and beyond at every opportunity. NWATLP Introduced me to my now lender, my inspector, and even helped me pick a home warranty! ‘One and Done’ should be their new catch phrase!!!”

Elizabeth W.
Elizabeth W.

“Wow, we ended up being one of those people who sold their house in a day. Mike and Donna delivered exactly what we asked them to do and we are so happy we trusted intuition and our friends.”

Chris G.
Chris G.

“Seriously, you were great!”

Dan & Mimi Murray
Dan & Mimi Murray

“This was our eight transaction. It went as smoothly as possible and sold in two days!”

Marc Bootman
Marc Bootman

“We were blessed to have Mike and Jon sell our house. They were extremely professional and stayed in great contact with us. We interviewed 7 agents and they were simply the most prepared and had the most logical marketing plan. Their pricing spreadsheet really made a big difference. We highly recommend them.”

Daren & Sandra Woods
Daren & Sandra Woods

“I can hardly believe we made it. Thanks for your patience with me and the loving guidance you
gave.”

Lynn Bodenstein
Lynn Bodenstein

“Just wanted to take a moment to thank God for sending you to us. You made the sale of our house grace-filled andeven fun with your humor. And, literally, you have driven all over the place trying to help us find the right home nowthat you sold ours. You get 5 stars and my personal recommendation which I don’t give out lightly. Thank you forbeing a man of excellence!”

Jay & Becky Harmon
Jay & Becky Harmon

“Mike and Jon helped us find a home that we love! They answered every question with professionalism and ease. They made the homebuying process so smooth! 5 stars to Northwest Atlanta Properties, we will recommend them to anyone looking to buy or sell their home!”

The Kornegay's
The Kornegay's

“Wow. Service with a smile. Knowledgeable and gave me all the info needed to find and buy our perfect house.”

Adam Winnie
Adam Winnie

“First of all, I want to tell you how happy and fortunate we are to be working with you. I love the way you are with people. You’re so calm & attentive and present. And it was wonderful how you had taken pictures before the meeting. So we are so lucky to have you on our team. Thank you, Jon!

The Fabozzi's
The Fabozzi's

“The BEST out there. I loved how I would get an email when the house was shown. I was always super informed! Super professional in all aspects!! Thank you, Mike!”

Kristy Haines
Kristy Haines

“Northwest Atlanta Properties sold our house for the highest price in the neighborhood; EVER! That can’t be beaten! “

The Louder's
The Louder's

“My Wife and I became first time home owners in Sept. Northwest Atlanta Properties guided us every step of the way. They introduced us to several lenders, Home inspectors, and Appraisers. They were always concerned with what we thought and our preferences. We went out One Saturday and saw 6 listings. We put in an offer on the one we liked and Got it!!! They stepped in and made negotiations easy as well as prepped us for the eventualities we faced. They should change their slogan to “One and Done” We will never use anyone else.”

Josh
Josh

“This family-owned business was a joy to work with! They listed to exactly what we wanted and put our priorities above their profit margins. I never felt pressured to go into a higher price point then we were comfortable with. They showed us several homes in the areas we were considering and worked with us every step of the way. We were new to the state so relied on their expertise to find us the perfect community for raising our children. I was in constant contact with Donna, Mike, & Josh who never made me feel like I was bothering them. Their many years of expertise made me feel safe and confident while looking for our home. I couldn’t recommend them enough!!!”

Katherine B
Katherine B

“If you are looking for carefully curated experience combined with friendly and understanding customer service then this is the place for you! This is a company that puts their every effort into finding you the perfect home. I spoke with Donna and Mike Stott, Jon Burke, and Josh Weinberg and they were absolutely fantastic. I never felt rushed and they listened to my idea of my perfect dream home with rapt interest that resulted in a selection of beautiful properties and houses. I can’t thank them enough for their experience, time, and attention to detail.”

Alexis
Alexis

“It was a pleasure working with Mike and Donna on getting their properties scanned for 3D tours! Responsive and fair, I would love it if all my clients were this way 😉 Thanks so much for the great relationship!”

Sasha B
Sasha B

“Mike was my listing agent and I had what we both knew would be a hard sale. I went though several other agents and Mike was the one who put in the hard work to get a contract and most importantly closed. It was not an easy process but he made it happen. I highly recommend.”

Ryan Jacobs
Ryan Jacobs

Mike, we had the best realtors in GA❣️😘 thanks to you and Donna we found our dream home! We highly recommend Northwest Atlanta Properties!

 

Ellen Rich-Fox
Ellen Rich-Fox

“Outstanding! I wish every realtor was this thorough! Thanks!”

Frank MUSCENTE - Owner, a closer look
Frank Muscente, Owner, a closer look

“Couldn’t of been easier, best realtor service I have ever had”

Amos Cordell
Amos Cordell

Donna, you and Mike are not at the top of my list of Realtors — YOU AND MIKE ARE THE LIST!!📣

Aileen

Northwest Atlanta Properties

Home Sales & Property Management Services

Professional real estate services for Sellers, buyers, owners & tenants. Specializing in the Northwest Atlanta communities of Roswell, Marietta, Alpharetta, Milton, Woodstock, Kennesaw, and the Surrounding Areas.

Contact Us

We look forward to hearing from you!
Office: (770) 726-1454 anything@nwatlp.com

3380 Trickum Rd Bldg #1300 Suite 100 Woodstock, GA 30188

Be sure to follow us!

Follow by Email
Facebook
Facebook
fb-share-icon
LinkedIn
LinkedIn
Share

Copyright © 2023 · Northwest Atlanta Properties · Website by Visule Web Media

Copyright © 2023 · Executive Pro Theme on Genesis Framework · WordPress · Log in