It seems that more and more people are getting excited about being on the winning end of the foreclosure crisis. Even though they are great deals customers sometimes are frustrated with the amount of red tape we have to go through and the fact that we have to do it the banks way. The game has changed in Real estate and navigating short sales and foreclosures requires a little study so I thought I would share a few foreclosure cliff notes with you.
Category: Tips
How to Deal with Multiple offers on a Short Sale
There have been more questions than answers this week. Among other, people have asked: What do those zeroed out items mean in a contract and are you sure you can not take multiple offers on a short sale??? Since we do not have time enough to answer the first one lets talk about some more questions that I continue to get about Short sales. All of my customers and myself agree that the short sale is certainly not a short process and there continues to be so much confusion on how to handle them between the buyer and the seller.
Continue reading “How to Deal with Multiple offers on a Short Sale”
Save Money on Homeowners Insurance – Q&A, Part Two
Last week we addressed the Wind Mitigation inspection and how you could save some bucks on your home owners insurance. Since space would not allow I only gave a brief introduction to what was involved and how it resulted in savings for you. This week we are going to go a little deeper and answer some other questions you may have about the Uniform Mitigation Verification Inspection form. Again, please consult an expert that can help you as I have borrowed this information from an article written by John Staab a licensed inspector as well as the web site of Richard Pickle inspector in the Orlando Area.
Continue reading “Save Money on Homeowners Insurance – Q&A, Part Two”
Save Money on Homeowners Insurance – Q&A
Lucky for me real life gives me my subject matter every week and this week I have some great information about a friend on Facebook, and he had a GREAT article with FAQ on Wind Mitigation – so I get to borrow it for you. WE Floridians are blessed with incredible beaches, endless coastline and some pretty fabulous weather but along with that comes our exposure to tropical weather that can bring on those ill fated hurricanes. Because of this we tend to have some hefty insurance cost but now there are some things that you can do to mitigate that with the help of your FAVORITE home inspector.
Receivership and Why it isn't that Scary
WOW what a week for Real Estate for me with so many great things to write about. I could not decide if I needed to write an article or get some extensive therapy or maybe change jobs. Just when we thought we had this condo thing almost figured out we get thrown another Real Estate curve ball. Receivership has been a word that keeps cropping up in Real estate circles with many more questions than answers, so I thought I would get the scoop by reading and calling different groups whose complexes are already in Receivership.
First of all quite simply: Receivership happens for many reasons but for our purposes in really easy layman terms I will share what little I know. If a developer owns a property and is no longer able to pay, the developer oftentimes will sign over ownership, and in other cases the Receiver comes in and manages the complex and the developer retains ownership. Now keep it mind this is quite simplified, but the thing that potential condo buyers want to know is how does it impact them and is it always a bad thing????
I have had many questions about what this means for my potential buyers. This is an impossible question to answer with a blanket statement because it depends on the overall stability of the complex. The fear that many buyers have when looking to make a purchase is the ability of the HOA to fund itself and what happens when owners do not pay. Does the complex go down the tubes? Or better yet are the few owners that ARE paying stuck with a huge assessment? While these are valid concerns that is not always the case so it is best to check out each complex and see also if the bank is willing to fund them. In spite of the horror stories out there, many banks will loan money on a complex that is in Receivership so it is not an automatic death sentence for the condo. Do your homework before you cross a troubled condo off your list. Have confidence that is in the banks best interest that the complex remains stable. The new standards are very stringent and are designed to keep us from going down the same dark road again.
The other fears that buyers have when they find out a condo is in Receivership is the prospect of the remaining condos going to auction further driving the prices down. While that may happen the fact remains that until things sell then nothing is going to recover. The best thing to know about values in a complex is that they are a moving target. If you are buying in today’s market you are getting a DEAL. If all was perfect and the complex was completely solid then we would not be talking and you would be buying at yesterdays prices. Prices may jump around for a few more years but now is still a great time to get the most bang for your buck.
So this big bad thing called Receivership may not be the awful foe that is painted out to be. Please check with your bank and get their take on it and by all means check out the solvency of the Home Owners Association and you many just find out that you can get a really great deal. If you are a condo buyer, chances are you realize that you need to plan on enjoying it for many years to come and build the memories with your friends and family that no recession or threat of one can take away. There are many people (especially the news) that at times will paint an awful picture when that may not be the case. I assure you sitting on your beach front balcony may enhance your life and make you think about what really is important and you will find that they are all sitting on the balcony with you. Once again, thanks for the therapy and I think challenges and all. . . I will keep my job!!!! Besides I get to work a and live on the beach, what a country!!!!
Contingencies, Love 'em or Hate 'em
All you sweet Beach show followers know that ALL of my articles come from Real life problems or challenges that happen during my week; I conduct a therapy session by bringing them before you. So thanks for listening. So many things have already come up this week with 2 short sales buyer back outs after 5 months, one going into foreclosure and lending and appraisal issues. . . where do we start? Although all that needs some reflection I had another issue that came up this week and I think many people are not aware of how some of the contingency issues work in Florida. So lets talk a little about common Purchase Contract Contingencies that a buyer may utilize.
I have a sell going on and we are waiting on an appraisal and holding our breaths to make sure it flies and the question was. . . What if it does not appraise? Does the buyer have to buy it? For the most part the answer is NO. Unless the buyer states that the offer is cash and does not put an appraisal contingency in the contract, then failure of property to appraise is an acceptable back out of a contract. The bank will require an appraisal by a third party that has no interest in the sale to determine the property value. There was a time in the distant past that a buyer would just come to the table with some extra cash to buy that dream hacienda. Not saying that NEVER happens but do not count on it. Many cash offers today include an appraisal clause in the contract.
Another common contingency is the inspection period which varies from state to state and can be explicitly stated in the contract. If the sale is an AS IS with right to inspect then the buyer can get an inspection and at his sole discretion get out of the contract if he does not like the findings of the inspection. If a buyer has a regular contact such as FAR 9 then the seller is required to fix any warranted or safety items. The seller and the buyer will discuss and come to terms with how that is handled. But for clarification sake it is the duty of the seller to have those items fixed by a licensed professional and may be required to have a re-inspection before close.
Federal law also gives a buyer 10 days to inspect for lead paint. Don’t run for the hills this will only apply to older homes but again ask your trusted Realtor. We will talk about Chinese Dry Wall another time!!!
Lender approval is another facet of contingencies embedded in the contract unless waved, and even though a customer has a pre-approval letter that does not mean that he has the loan locked in. Any number of things can happen and sometimes do so if a buyer can not attain a loan he has a suitable back out of a contract. A perfect example as happened in one of my deals today was a buyer who lost their job before the property went to close. She now no longer qualifies for her loan so was able to legitimately get out of her contract and have her earnest money returned.
I have heard in the past contingencies called weasel clauses because they allowed a person to weasel out of a contract. That does sound kind of slimy but the fact is contingencies are a necessary part of the Real Estate transaction, and your Realtor can explain all of these to you. Remember I am not a lawyer and I do not even play one on TV so this is meant to be a basic intro to contingencies as they relate to a typical sale in Florida. Thanks for being my therapist one more time.
4 Reasons Why Listing Your Home with a Realtor Works
I love my job and I think that is in part because of all the great people I get to work with. Active working Realtors are some of the hardest working most energetic people I have ever met. They love to share their knowledge of Real Estate with their customers and thankfully with each other. I enjoy working with my other Realtor buddies and so respect what they do so I wanted you to know what your Realtor can do for you.
Many people try to sell their homes themselves and that is certainly an option that all of us have, however when doing so you miss a valuable selling tool. According to the National Association of Realtors more than half of all home sales involve a listing agent and a buyers agent. The majority of those sales are made possible because of the all powerful MLS system that is blasted out to countless Realtors and people and reaches many web sites and locations across the United States. To add to that, many Realtors are a part of advertising campaigns through magazines and sites such and Homes and Land further putting your listing in front of even more people. Statistics show that nine out of 10 people use a real estate agent in their search for a home and adding to that, internet has risen as a mega tool from only 2% of buyers in 1995 to 79% in 2006 so you can imagine what the stats say now.
The MLS system is great but would be lacking without all the buzz that Realtors create when we are out and about sharing with each other. Realtors are really my best customers. One of my favorite sales happened when I was NOT WORKING. I went to Carrabbas and saw one of my favorite Realtors (you know who you are) waiting tables and I just happened to mention that I had a great listing with exceptional rental dollars generated. Ward had just the right buyer in mind!!! Needless to say that was an unexpected treat but that happens all the time. Listing with a Realtor is like the gift that keeps on giving. When you employ a Realtor to market your property you can get a lot of bang for your buck.
One of the most pertinent tangible things that your Realtor will do when listing your home is to give you up-to-date information on what is happening in your market and the price, financing and condition of competing homes. You need this information so you can sell your house at the best price and as quickly as possible. Your Realtor has vast knowledge of market values in your community and that is vital today in selling your home. Remember it does not matter what something is listed for what matters is what it is selling for.
Advertising your property is more than throwing a sign up and your Realtor will know how and where to advertise your property. There a is a misconception that you just have to advertise and that sells the Real Estate. The National Association of Realtors indicate that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts.
Your Realtor has spent years of training and learning how to market and sell what may be your biggest investment ever. There is so much more to Real Estate than making a sale; there are procedures for closing the deal that your Realtor will know how to guide you through. Zig Ziglar always said you have to close the deal to be a salesman, so with that in mind call your favorite Realtor and close that deal. Thanks to all my sweet Realtor friends out there for all your knowledge and guidance. . . you really are some of the best customers ever. And again, you know who you are!
The Beach Show Secrets to Success
This is really not a tip, rather an explanation of what Jason and I are up to and how and why we do the thing we do (sounds like a song). As many of you know, for the past 19 weeks we have been having a great time doing thebeachshow.com. It is the ONLY INTERNET TV SHOW ALL ABOUT REAL ESTATE on Panama City Beach. If you know both of us and many of you do, I do not have to tell you who the techno brain child is. . . AND it ain’t me.
Realtors and others call me each week to find out how can they get on our goofy little show and does it cost anything for their property to be featured? So I thought an explanation was in order. Jason came up with the idea that this format would be an incredible, far reaching way to get the word out about hot properties and be an incredible marketing tool. It has far surpassed that and we are having a great time while doing it. WE do not charge any money for listings to be on our site and we have a high integrity level of what makes the grade for the show. I am in charge of searching the internet and the streets in hot pursuit of what I think is a great deal. We consider price, rental dollars, affordability and basically finding what the real customers are looking for. Bottom line, if it looks great to me I bet you will like it too.
Each week I pick 3 great deals and many times they are not our listings so I call and get permission from the listing Realtor and we go shoot a video. WE give a very informal preview of the home and why we think it is a hot deal. It is not rehearsed as you can tell and we just want to be fun and informative. It is our quest for people to feel like we are having a conversation with friends about the Real Estate that we find while living and loving our beach. We have met so many nice people because of this adventure and have built great relationships with other Realtors as well. We just love it when one of the properties sells whether it is ours or not. It is kind of our version of paying it forward.
We shoot every Tuesday, rain or shine, and Jason spends the better part of that day and night uploading and editing the video. About midnight I usually write my Real Estate tips because who wants to do it early? Thanks to Hunter Palmer each week for providing us with a Mortage minute. You will find thebeachshow.com on the air and up and running each Wednesday at 11:00 AM and again on PCBdaily the following Monday. Please feel free to share it with your friends and let us know what you think.
You will notice that sometimes we keep visiting an area and it seems that some areas become hot areas because the price has finally hit the point where people start buying. A perfect example of that would be Wild Heron. Last year much of nothing sold and this year it has busted wide open with over 20 houses and condos selling since January, not to mention the lots are moving now as well. I am excited to say that condos on the beach are moving too and the buyers just keep on coming.
We so appreciative of all the Realtors who have been so kind to cooperate with us and also are tickled when they call us up and say, “Karen I think I have a hot one.” If we think it is a super deal then we may switch properties at the last minute and go shoot that one. Last week was great example as we were heading in one direction and found out about a foreclosure that just hit the market we turned the jeep around and headed west. Of the 3 properties that we featured in Episode 18 we are happy to report that 2 out of 3 are under contract. Wow you just gotta love it!!!!
What an exciting time to be a Realtor, no more business as usual. But who wants business as usual, NOT ME. I love that we are having to stretch and grow and reach and climb and find different ways of reaching our market. I think the thing I most like about challenging times is the power and the persistence that I see in people. Creativity is born and new ways of doing life are fostered. Hellen Keller put it just right for all of us today. . . “One can never consent to creep when one feels an impulse to soar.” I do not know about you but I am not much for creeping and it is a good thing because our market today calls for us to SOAR!!!!!!
Part 3 Debunking the tax credit Myths
You know how you receive those lovely thick pieces of hard to open Junk mail that say in bold big letter, “TIME SENSITIVE ” well this is your online version of that but it really is TIME SENSITIVE, so in an attempt to wrap this topic, up here we go.
Tax Credits are a wonderful way for saving money on that dreaded tax bill but there is still much misinformation out there. This will be my third and final attempt to seperate the fact and fiction surrounding the tax credit for New home buyers. We have addressed some of the other questions in prior articles but there are a few myths that remain. . . So we will try to stick to “just the facts Ma’am”
Myth #1 To qualify it has to be a house.
NO, a home is different for everyone and the only definition that need apply for a home is a residence. With that in mind then you may purchase a detached single family, a duplex, townhome, condominium, pre-manufactured home (mobile home) and even a house boat!!! The only restriction that the program requires is that you are not able to buy a home from your parents, children,grandchildren or spouse. In other words it must be an “Arms length transaction”
Myth #2 I have to fill out loads of paper work before I even purchase my home.
There is no paperwork to file ahead of time to receive the credit. You just need to fill out the IRS tax form 5404 when filing your income tax return. Then, follow the instructions on the tax forms. Again, as in all things, discuss your personal situation with your lender and he will guide you through the process.
Myth #3 I have to buy an existing home.
NO absolutely NOT. This one is timely right now however and if a home is not already started you may be pushing the envelope a bit. Remember you must close on or before November 30, 2009. You are allowed to apply the tax credit for an existing home or a newly constructed home. If you own a lot and construct your home yourself, or with a builder, your date of ownership is considered to be the date you first occupy the home. For homes that are built by a developer/home builder, eligibility is determined by the settlement date. I have one couple doing this but the home was already started so borrowing any acts of Nature then they should be just fine.
Myth #4 I must be a US citizen to utilize this program.
An alien resident who has not owned a home in the past 3 years, and is within the income limits, may also claim the tax credit if he meets all other requirements.
For space and time and my writing skills we can not address every issue that comes up but his should get you started. Please discuss this with your Realtor, banker and accountant to see what best fits you. Hopefully if you are looking forward to the credit to help buy your home you have already started the journey and if not what are you waiting on???? Get on your boogey horse and GOOOOOO.
Let's Clear the Confusion – Home Buyer Tax Credit
I always share as I write that I am not an expert and I do not even play one on TV so I want to make some of last weeks article a little more clear if I can. As my husband says, “lets see if we can make this as clear as mud” There is still confusion surrounding the tax Credit with the emphasis on CREDIT and not deduction. Please take my limited knowledge and run straight to your banker and your favorite Realtor and see what you can come up with. I have borrowed some examples that may apply to you and have consulted again with my banker friends that are wiser than me.
- A refundable credit means that if you pay less than $8,000 in federal income taxes, then the government will write you a check for the difference
- In the case that you owe $4,000 in income taxes at the end of the year you would pay nothing to the IRS and and receive a $4,000 payment from the government.
- If you are due to receive a $1,000 tax refund from the government, your refund would grow to a whopping $9,000. ($1,000 plus $8,000 from the home buyer tax credit)
- If your final tax liability is $6,000, but you’ve underpaid through your payroll witholding by $1,000. Normally, you would have to write the IRS a $1,000 check. This time, the first $1,000 of the tax credit pays your bill, and you get the remaining $7,000 as a refund.
Additionally, there are income restrictions: To qualify, buyers must make less than $75,000 for singles or $150,000 for couples. (Higher-income buyers may receive a partial credit.)
This is short and sweet this week so you will have time to run on down and get all your ducks in a row so you can get that house. I like to think of this as a little house warming present. Some of my buyers are looking at it as a discount so to speak on their home and with money being tight that is a welcome and one more reason to purchase their first home. I will leave you with some resources that may help you clear up the process and navigate you to a successful purchase.
First-Time Home Buyer Tax Credit information from the IRS.
State Housing Agencies with programs that provide short-term loans that may be used to fund a downpayment in conjunction with the tax credit.
Buying and Owning a Home Freddie Mac
Buying a Home Department of Housing and Urban Development
Buying and Owning a Home Freddie Mac
Buying a Home Department of Housing and Urban Development
The Home Buying Process Federal Housing Administration
FHA Loans Federal Housing Administration
Homeownership Resources Fannie Mae
NOTE: Please know that much of this knowledge is general in nature and your local lender will let you know what is available in your location.
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