Monday, March 28, 2011

"10 Deadly Buyer Mistakes in Real Estate"

     Actually there are a lot more than 10.  But you wouldn't read "458 Deadly Mistakes...," would you?

What I'm trying to say is that we Realtors can really, really, really, REALLY help you!  It's a chaotic mess right now... a winding path through the real estate jungle.  We're like every other profession, in that some of us are not so professional and should have our licenses taken away.  Many of us are average and can help you out.  Then there are those of us who live this... We eat, drink, and breath real estate.  It's in our blood.  It's a big part of who we are.  By the way, we're the ones you want to call.  Then, when the deal is done, you can say, "Wow, there's no way we could have done that on our own!"

Here are 10 Very Basic Mistakes to Consider:                                            

  1. Get pre-qualified by a lender before you ever start looking.  Pre-approved is even better.
  2. Make sure you get a home inspection - even if it's an "as-is" transaction.
  3. Don't call "every agent on every sign" you drive by... or call every agent on the Internet.  Find one agent you can trust and put it on them.
  4. There's way more to it than a website, an ad in the paper, or an open house.
  5. Narrow your search (PLEASE!) before you start.  You will never "get there" if you want to "see everything for sale in town."
  6. Think ahead 3-10 years.  Are you ready to start a family, etc?
  7. Due diligence is important.  Satisfy yourself on locations, schools, commutes, crime reports, etc.
  8. Think of "total costs."  Stay in your budget.  Don't buy to the max and then say, "Oh, oh... we have no money for furniture!"
  9. Don't get involved in a "Short Sale" unless you know all about them first.  You need lots of patience and even then it might not go.
  10. It's a buyer's market, but don't let that fool you into thinking every house will yield a massive discount from the asking price.  It's all about how well the house price/value ratio is addressed... and the seller's motivation.
In Palm Coast, FL (as well as Flagler Beach and all of Flagler County... Southern St. John's and Ormond Beach), call me and we can talk about this.  Cell:  386-931-1987.

Wednesday, March 23, 2011

"Short Sales - MUST READ!"

Everyone hears about "Short Sales" these days... and probably knows a little bit about them. Sort of like me, in that I know a little bit about cars.  Engine?  Check!  Trunk?  Check!  Radio Controls?  Check!  But beyond jumping a battery, changing a fuse, or inflating the tires... I'm not much good.  The other day a lady called me about a listing I have in Flagler Beach, FL.  I said, "It's a short sale.  Do you know anything about how they work?"  Her answer was pretty good.  "Of course I know how they work," she said, "I went to real estate school!"  Now I spent 20 years in the Army and had a little vacation in Viet Nam in 1968-69.  Her response was sort of like, "Of course I know what combat is like.  I went to Basic Training!"

Suffice it to say that in today's real estate market, Short Sales = Combat:

  • In the US today, 1 in 7 are not making their mortgage payments and are in default.  Closer to 30% have missed at least one payment or are experiencing difficulty.
  • The US unemployment rate is near 10%.  The "real rate" in Palm Coast, FL... Flagler Beach, and Flagler County, FL is "over 20%."
  • The number of short sales has tripled since 2008.  Nearly 60% of single family homes closed in the past 1-2 years in Palm Coast, FL, has been a short sale.
  • The national S&P "Case-Shiller Index" predicts another 6 - 8,000,000 foreclosures before the end of 2012... and Florida will see more than our fair share of these!

As a CDPE (Certified Distressed Property Expert), we are uniquely equipped and trained to get you through the complex process of a short sale - AND TO HELP YOU AVOID BEING FORECLOSED UPON!!!  Now, it's true, any licensed agent can "take your listing."  Yet you want to be very careful here.  Ask them to explain the process - in detail.

Ask them about:

  • The ten or more required forms and authorizations needed to get a short sale off the ground.
  • The five-step pricing strategy that will prove effective for the market... and the bank.
  • The back door information needed for the file... for when negotiations start with the bank's loss mitigation rep.
  • The ways to compile and present a professional "short sale package" to the bank.
  • The way to deal with needed repairs.
  • The ways to deal with Title issues, IRS & Federal tax liens, and other property related liens not recorded as mortgages.
  • The ways to reduce their legal fears and effectively handle the question, "Do we need a lawyer?"
  • The ways to effectively market their short sale listing.
  • The ways to help them move forward upon completion of their short sale closing.
 There's a lot to it.  make sure you hire the right agent to maximize your chances for a successful short sale.  If you are in need, call me at 386-931-1987.  As a CDPE with 25 years experience... and as a Harvard Certified real estate mediator, I can help you...

Monday, March 21, 2011

Buying a Home? 3 Great Questions!

3 Questions You Must Answer Before Buying a Home


  If you are thinking about purchasing a home right now, you are surely getting a lot of advice. And most of that advice is probably negative. Why buy now with prices still falling? Don’t you realize real estate is no longer a good investment? Don’t you know that people who bought five years ago lost their shirt? We understand the concern your friends and family have. However, let’s look at whether or not now is actually the perfect time to buy a home.

There are three questions you should ask before purchasing in today’s market:

1.  Why should I buy if house prices are still depreciating?

We believe that in most parts of the country prices will in fact soften in 2011. Price is the major concern for anyone selling a home. When you are buying, COST should be your primary concern however. Your monthly payment (cost) is definitely impacted by the price of the home you purchase. The other major component is the interest rate. Waiting for prices to bottom out while rates are increasing can wind up costing you more over the life of the mortgage (see chart here).
Over the last seven weeks, rates have increased over 1/2 a point going from 4.17 to 4.86. Looking at the attached chart shows this increase. Waiting for prices to bottom out seems to make perfect sense. Yet, at a time when rates are increasing, it might NOT make sense. Make sure you have a mortgage professional help you with this math before making a decision.
In an article last week CNN Money reported:
“You can kiss those record lows goodbye,” said Greg McBride, chief economist for
Keith Gumbinger of HSH Associates, a provider of mortgage information said that the market reached a new plateau.
“I don’t think we’re going back to a 50-year low anytime soon without an economic collapse,” he said. “Rates will probably never revisit those levels.”

2. When will I begin to see appreciation if I buy now?

This is a great question. Macro Markets, LLC is a company that studies housing prices. They started their Home Price Expectation Survey in 2010.  They ask 100+ housing industry experts to project housing prices through 2015. The most current survey shows that the experts are predicting prices to soften until 2012. The experts then project prices to rise reaching a cumulative appreciation of over 10% by 2015.
Purchasing a home today makes great sense from a financial standpoint. Think of the old axiom: You want to buy low and sell high. We may be at the low point regarding the COST of a home. But, this decision should not only be a financial one.
That leads us to our third and final question:

3. Why am I buying a home in the first place?

This truly is the most important question to answer. Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with finances. The Fannie Mae National Housing Survey shows that the four major reasons people buy a home have nothing to do with money:
  • A good place to raise children and for them to get a good education
  • A place where you and your family feel safe
  • More space for you and your family
  • Control of the space
What non-financial benefits will you and your family derive from owning a home? The answer to that question should be the reason whether you decide to purchase or not.

Bottom Line...

The COST of a home will probably remain relatively unchanged even if prices continue to depreciate. Don’t allow money to get in the way of you making the right decision for you and your family. In the long run, the finances will work in your favor anyway.

Wednesday, March 16, 2011

"Mortgage Myths in the Short Sale & Foreclosure Economy"

(This commentary is by Tara-Nicholle Nelson, a Broker in San Francisco, CA.  It was written as a real estate research piece for Trulia.  It is well done and is accurate.  The list of "hard hit states" at the bottom includes Florida.  However, at this time, only Lee County qualifies.  Obviously, the system is not fully fleshed out, as the Flagler County, FL areas of Palm Coast and  Flagler Beach are experiencing short sales at an unprecedented rate - 60% of closings!) 

In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction.  For buyers, misinformation can be the difference between qualifying for a home loan or not. Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power! Without further ado, let’s correct some common mortgage misconceptions.

1.       Myth: Buyers with bad credit can’t qualify for home loans. Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit.  In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score.

At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default.  However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.

2.     Myth: The Mortgage Interest Deduction isn’t long for this world.  Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.

Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted.  Fortunately for buyers and sellers, MID reform is not one of them.  Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery.  Congress-folk aren’t interested in stopping the stabilization of the real estate market.  As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.

3.       Myth:  It’s just a matter of time before loan guidelines loosen up. 
The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners.   It’s possible that loans are as easy to get as they’re going to get.  So don’t expect that if you hold out, zero-down mortgages will come back into vogue anytime soon. Fortunately, Fannie and Freddie aren't likely to disappear for another 5-7 years, so you have a little time to pull your down payment and credit together. If you want to get into the market, the time to get yourself ready is now!

4.       Myth: If you don’t have equity, you can’t refi. Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them.  If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation. But there are actually a couple of ways homeowners can refi their underwater home loans.  If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan.  That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.

If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value.  So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.

5.       Myth: 
If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in.  Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.

The US Treasury Department’s Hardest Hit Fund allocated $7.6 billion to the states listed below – all of which are now using some portion of these funds to offer up to $3,000 per month for up to 36 months in mortgage payment assistance to help unemployed homeowners avoid foreclosure.  Contact the state agency listed below if you need this sort of help:

Monday, March 7, 2011

"Home Value Confusion? You Bet!"

     So you want to sell your home in Palm Coast, FL...  What pricing strategy will you follow?  Hint:  It is no longer 2005 and buyers are a tiny bit smarter than they once were!  If I come to visit you to discuss putting your home on the market and your opening comment is, "We are NOT going to give our house away!," we will have some significant work to do!

     If you like to study the numbers - and I do - you will see an obvious (and predictable) phenomenon in our Flagler County, FL, Association of Realtors MLS (Multiple Listing Service).  When the smoke clears away, what we really have is two distinct MLS databases.  One is the part of the MLS where people have their head in the sand and are dreaming of 2005.  Since we are near Orlando and Disney, we'll call this database Fantasy Land.  This is where houses are priced 20% to 100% over the current market and will never sell.  This is where you see numbers like "1,785 Days on the Market."  Ouch!

     The other area is where folks have hired experienced local agents and priced their homes to sell.  They have studied the market and transitioned from confusion to clarity!  This is what we call Reality Land.  Houses will generally sell 2%-10% off list price and get closed within 3-6 months.  These sellers know they will have to endure some hurt... may have some equity... and are highly motivated to cut their losses and go on to the next adventure.

     In the first 2 months of 2011, cash transactions in Palm Coast and Flagler Beach, FL have outdone mortgaged deals an astonishing three to one!  Guess what?  These have not been on expensive, overpriced Fantasy Land homes.  Distressed property (Short Sales and Bank Owned) sales continue to dominate the market.  The leading housing indicator, the Case-Shiller Index (Standard and Poors):,  shows 9 of the 15 shakiest markets to be in Florida through 2012.  Also, Mr. Shiller, Yale Economist, says that we may see another 10-25% drop in price before it's all over!

     Bottom line?  If you want to sell, get your price down and take your medicine.  Oh... and if you are a buyer... that's a good thing!  Pssssst!  Don't try to "time the market," as speculation has been the ruin of many in recent times.

Why read "Palm Coast Unplugged?"

"Palm Coast Unplugged" gives a "backstage pass" to locally focused Palm Coast, Flagler Beach, and Ormond Beach, Florida... Real Estate and other useful information:
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