Greetings!
In my last blog post, I mentioned that HOA fees may be an issue when a buyer is financing rather than paying cash. Be careful! Even if you are NOT buying distressed real estate, you could still be affected.
As of April 1, 2009, FNMA (Federal National Mortgage Association) put a new guideline in place that pertains to condominiums eligible for financing. The new guideline is as follows:
"No more than 15% of the total units in a project may be 30 days or more past due on their HOA (Homeowners Association) dues. For example, a 100 unit project may not have more than 15 units that are 30 days or more delinquent."
This is another reason why FORECLOSURES are better candidates for purchase than SHORT SALES.
Once a lender has taken legal ownership of the property (through foreclosure), they are required to bring all delinquencies current.
On the other hand, if the real estate in question is in short sale status, chances are high for delinquent HOA dues. The smaller the project, the higher the likelihood that conventional mortgage money cannot be found.
This new guideline change makes it even more difficult to reduce the inventory of distressed real estate, although the cash buyer is always welcome!
Have a great day and please send any questions my way!
Tuesday, July 28, 2009
Monday, July 27, 2009
Where are all the Foreclosure properties??
Contrary to popular belief, as well as numerous overblown media reports, the number of actual foreclosure listings on the market is surprisingly low. Many prospective buyers are under the impression there are hundreds of these in our local beach area.
From a professional point of view, it seems to be a confusion of terms, as MANY real estate agents consider SHORT SALES (aka "Pre-foreclosure") to be the same classification as FORECLOSURES, when, in fact, they are very different. I cannot stress this often enough.
From my recent tracking of local distressed properties in the MLS (Multiple Listing Service, used exclusively by licensed real estate agents), I consistently find FOUR TIMES AS MANY SHORT SALES as FORECLOSURE listings!
For the past several months, the weekly list of ALL BEACH FORECLOSURES in Pinellas County (from Clearwater Beach to Tierra Verde) numbers from 12-20 properties TOTAL.
So....WHERE ARE ALL THE FORECLOSURES??
The most obvious reason pertains to the lenders themselves. (I am not the most un-biased person to comment on this, given my 15-year career in mortgage lending.) Lenders have a backlog of pending foreclosures, short sales and pending loan modifications, as well as overworked and underpaid/under-trained personnel, creating a frustrating experience for those depending on them to move the properties off the market.
Also, lenders are in no rush to take over the maintenance of these properties, paying for lawn care, **HOA fees and other securitization services, not to mention paying property taxes!
** non-paymentof HOA fees is causing problems also- look for upcoming blog on this subject!!
Another, related, factor is the court system. In Florida, foreclosures are judicial, meaning the courts are backlogged as well. In a normal environment, a Florida foreclosure takes about 5 months. Right now, the average time is 10 months or even longer.
A third factor? Various "foreclosure moratoriums" set forth by FNMA (Federal National Mortgage Association) and both the Bush and Obama administrations, all of which are currently expired. The moratoriums were put into place to allow distressed homeowners an opportunity to take advantage of numerous plans to modify or refinance their home loans.
Only when and if lenders and courts can streamline the process will more foreclosures enter the marketplace. In the meantime, the current inventory I track is moving from listing to SOLD in a very timely manner. Foreclosed properties (aka Bank-owned) seem to be priced right and ready to move at this time.
For a weekly list of FORECLOSURE properties, all you have to do is visit my website and click on the "Foreclosures" link to access the documents.
www.MyPinellasParadise.com
Have a great week!
From a professional point of view, it seems to be a confusion of terms, as MANY real estate agents consider SHORT SALES (aka "Pre-foreclosure") to be the same classification as FORECLOSURES, when, in fact, they are very different. I cannot stress this often enough.
From my recent tracking of local distressed properties in the MLS (Multiple Listing Service, used exclusively by licensed real estate agents), I consistently find FOUR TIMES AS MANY SHORT SALES as FORECLOSURE listings!
For the past several months, the weekly list of ALL BEACH FORECLOSURES in Pinellas County (from Clearwater Beach to Tierra Verde) numbers from 12-20 properties TOTAL.
So....WHERE ARE ALL THE FORECLOSURES??
The most obvious reason pertains to the lenders themselves. (I am not the most un-biased person to comment on this, given my 15-year career in mortgage lending.) Lenders have a backlog of pending foreclosures, short sales and pending loan modifications, as well as overworked and underpaid/under-trained personnel, creating a frustrating experience for those depending on them to move the properties off the market.
Also, lenders are in no rush to take over the maintenance of these properties, paying for lawn care, **HOA fees and other securitization services, not to mention paying property taxes!
** non-paymentof HOA fees is causing problems also- look for upcoming blog on this subject!!
Another, related, factor is the court system. In Florida, foreclosures are judicial, meaning the courts are backlogged as well. In a normal environment, a Florida foreclosure takes about 5 months. Right now, the average time is 10 months or even longer.
A third factor? Various "foreclosure moratoriums" set forth by FNMA (Federal National Mortgage Association) and both the Bush and Obama administrations, all of which are currently expired. The moratoriums were put into place to allow distressed homeowners an opportunity to take advantage of numerous plans to modify or refinance their home loans.
Only when and if lenders and courts can streamline the process will more foreclosures enter the marketplace. In the meantime, the current inventory I track is moving from listing to SOLD in a very timely manner. Foreclosed properties (aka Bank-owned) seem to be priced right and ready to move at this time.
For a weekly list of FORECLOSURE properties, all you have to do is visit my website and click on the "Foreclosures" link to access the documents.
www.MyPinellasParadise.com
Have a great week!
Thursday, July 23, 2009
Foreclosure homes- How much should I know?
Increasing numbers of looming foreclosures indicates that now is the time to become as familiar as possible with the pros and cons of buying distressed real estate. If you are working with a professional, knowledgeable Realtor that you are comfortable with, half the battle is already won as he or she will be guiding you every step of the way.
A great agent is a critical asset to you, especially when considering distressed real estate. I've found that, as in any relationship, compatability is key! Spend some time in the initial meeting or phone call to determine if this person is someone you feel comfortable with. Some agents are annoying and some buyers are annoying. It's just the way life is. Do not agree to work with someone exclusively if you feel you cannot trust or rely on the person to keep your best interests in mind.
On the other hand, if you are comfortable with the Realtor, keep working with him or her and make it exclusive, even for a limited time period if you are concerned about getting "stuck in a long-term agreement." And, I'll let you in on a little secret: some Realtors are also observing you as a client, and from time to time may not want to work with you. Don't be offended, as they are usually only trying to save both parties from an unpleasant experience.
What else can you do to become familar with the distressed property market? There are about a million resources on the internet. However, as anyone familiar with the online world knows, most of the content is pretty much the same. Don't get overwhelmed- choose 2 or 3 resources you really like and get involved- read articles, ask questions, and also include your agent in the process, if you've selected one. Some popular sites are Realtor.com and Trulia.
Some caveats: Most of the public sites that allow you to search for homes do NOT differentiate between SHORT SALE and FORECLOSURE. Since many short sale homes are listed at low prices in order to generate offers, online home shoppers are most attracted to these, and are usually surprised to learn the home is actually a short sale.
Since not all search engines are up to date, some of the listings found online by independent home shoppers have been taken off the market or sold by the time a Realtor is contacted about the property.
By engaging an agent with MLS (Multiple Listing Service) access, you can be assured of the most current and accurate information available.
A GREAT OPPORTUNITY to buy real estate exists right now. What are you waiting for?
View this week's foreclosure lists for bank-owned property in the local area on my website and have a great week!
www.mypinellasparadise.com
A great agent is a critical asset to you, especially when considering distressed real estate. I've found that, as in any relationship, compatability is key! Spend some time in the initial meeting or phone call to determine if this person is someone you feel comfortable with. Some agents are annoying and some buyers are annoying. It's just the way life is. Do not agree to work with someone exclusively if you feel you cannot trust or rely on the person to keep your best interests in mind.
On the other hand, if you are comfortable with the Realtor, keep working with him or her and make it exclusive, even for a limited time period if you are concerned about getting "stuck in a long-term agreement." And, I'll let you in on a little secret: some Realtors are also observing you as a client, and from time to time may not want to work with you. Don't be offended, as they are usually only trying to save both parties from an unpleasant experience.
What else can you do to become familar with the distressed property market? There are about a million resources on the internet. However, as anyone familiar with the online world knows, most of the content is pretty much the same. Don't get overwhelmed- choose 2 or 3 resources you really like and get involved- read articles, ask questions, and also include your agent in the process, if you've selected one. Some popular sites are Realtor.com and Trulia.
Some caveats: Most of the public sites that allow you to search for homes do NOT differentiate between SHORT SALE and FORECLOSURE. Since many short sale homes are listed at low prices in order to generate offers, online home shoppers are most attracted to these, and are usually surprised to learn the home is actually a short sale.
Since not all search engines are up to date, some of the listings found online by independent home shoppers have been taken off the market or sold by the time a Realtor is contacted about the property.
By engaging an agent with MLS (Multiple Listing Service) access, you can be assured of the most current and accurate information available.
A GREAT OPPORTUNITY to buy real estate exists right now. What are you waiting for?
View this week's foreclosure lists for bank-owned property in the local area on my website and have a great week!
www.mypinellasparadise.com
Thursday, July 9, 2009
Foreclosure vs. Short Sales- What's selling?
If you are still in doubt about the difference between a "Foreclosure" and a "Short Sale", you can refer to my first post on this blog.
When pursuing distressed real estate, you will be happy to learn that you can avoid several unknowns by targeting a specific type of property.
My recent analysis of the local market area indicates that FORECLOSURE SALES and SHORT SALES are closing at around the same rate over a 60-day period; although the ratio of active For Sale listings reveals a 4:1 ratio of SHORT SALES to FORECLOSURES.
Putting in simpler terms, there are FOUR TIMES AS MANY SHORT SALE listings as FORECLOSURE listings, an obvious indicator of very long periods of time associated with buying a short sale property.
When pursuing distressed real estate, you will be happy to learn that you can avoid several unknowns by targeting a specific type of property.
My recent analysis of the local market area indicates that FORECLOSURE SALES and SHORT SALES are closing at around the same rate over a 60-day period; although the ratio of active For Sale listings reveals a 4:1 ratio of SHORT SALES to FORECLOSURES.
Putting in simpler terms, there are FOUR TIMES AS MANY SHORT SALE listings as FORECLOSURE listings, an obvious indicator of very long periods of time associated with buying a short sale property.
Now is the time to always, always, ALWAYS remember.....
It's ONLY a good deal if it CLOSES!!
You can see this week's list of foreclosures for sale in this area by visiting my website. These lists are updated every Friday, but if you see something attractive- DO NOT WAIT. Chances are it will be gone soon. There are some very good deals on the list!
Thanks and have a great week!
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