Short sales, foreclosure, more questions than answers

Short sales, foreclosure, more questions than answers

Are you, like so many others, confused about short sales or “fire sales”?

Here in St. Petersburg Florida we have seen a lot of short sale listing lately and, yes, the concept has been around for a long time, but even I as a Realtor did not run into one for the last 10 or so years. Now they are everywhere in Pinellas County.

Well, I am one of these personalities that “NEEDS” to understand everything, early last year I went to a seminar on short sales. Guess what, they could not even answer half of my questions. Every second time I heard, “well, you got to talk to the bank about this” As you can imagine, I was very disappointed, but now I was one a mission to learn more. Since than my office has done quite a few short sales, on the buyer’s site and the seller’s site and what I learned in the very beginning is true.

YOU HAVE TO TALK TO THE BANK.

Every bank, lender or financial institute has a different policy on short sales, different time frames, and different attitude. It is complicate and can be very frustrating to find your way through this  “Jungle”, but it can be done.

The key is persistence and focus and timing.

If you are the buyer or seller find a good Realtor or lawyer to assist you. This is important. Take one piece of advice from this post.

Short sales can be done successfully, but do not think you can do them alone.

You need a professional at your site.

Short sales, foreclosure, more questions than answers

Real Estate Market Reort St. Petersburg Pinellas County

 

GOOD NEWS  for our local real estate market

End of January we had 16,993 residential units active on the market in Pinellas (not including FSBO)

End of March we had 16,787 residential units active on the market in Pinellas (not including FSBO)

In January   we sold       567 

In February    we sold    679

In March      we sold      763

You see why I call it GOOD NEWS the number of active listings is dropping the number of sales in going up.

Prices, well I think we can see a change there too.

I do not have any statistics to proof it but from what I see and hear this is the first time in about 2 years we can see some (just a few) areas balancing and stabilizing. (Others still have ways to go)

One of the “recovering subdivisions” is Harbourside.

A gated community with 818 condo units in St Pete Beach – South Pasadena.

Denise Hobbs,  our Top Producer at South Beaches Real Estate Professionals and a resident of Harbourside and needless to say THE Harbourside Specialist, says  “The worst in over, we are on our way back”  Trust me, if someone knows Harbourside, it is Denise.

 

 

New software     Listingbook.com

I have a new software for buyers and sellers and people who just want to know what is going on in their area. It is a fantastic tool and it is free of charge for you.

Please give me a call or send an email if you are interested and I will set up an account for you. Once you log in you have access to all the listings and sales in Pinellas County and you can customize it any way you want.

You can even ask questions online and I will answer.

 

 

Quote

 

Do what you can, with what you have, where you are.
- Theodore Roosevelt

 

 

TIP

Remove red wine stain with a 50 – 50 mix of dawn liquid detergent and hydro peroxide

Just soak for a few minutes than wash as usual

 

 

 

April 14, 2008

Consequences for ‘Walk-Away’ Borrowers 

 

The government and the lending industry are taking aim at “walk-away” home owners who stop making payments and months later send the house keys back to their lender.Such borrowers will not be able to get another mortgage through Fannie Mae for five years, unless there are “documented extenuating circumstances.” In that case, the prohibition is three years. Even after the prescribed time has elapsed, a borrower with a foreclosure in his file will have to make at least a 10 percent down payment and have a FICO credit score of at least 680 to qualify for a Fannie Mae loan.

Freddie Mac, which counts foreclosures as major credit black mark for seven years, is now aggressively pursuing walk-away borrowers where permitted under state law, a senior official said.

Federal legislation enacted last year allows home owners who negotiate loan modifications with lenders and have portions of their principal debt eliminated to escape income tax liability for the amount forgiven.

Walk-away borrowers, by contrast, have nothing forgiven, and the Internal Revenue Service may demand taxes on the balance they never paid, the IRS says.

Source: Washington Post Writers Group, Kenneth R. Harney (04/12/2008)

 

 

 

 

As always, I hope you enjoyed our little newsletter and feel free to contact us for more information or with any questions you might have.

 

Short sale, foreclosure,is it the owner – seller’s fault?

Short sale, is it the owner – seller’s fault?

I just wrote a post about short sales in Pinellas County and “who is to blame”

I got a lot of phone calls on this short sale post and I have to make one of my points again. In my opinion, a short sale is not the homeowners fault.

And here is an example for it.

In the summer of 2005 someone bought a condo motel unit here in St. Pete

for $ 170,000. It seamed to be a good deal because all other comparable units were advertised for $200,000 and more.

The buyers were “snow birds” and they bought because they wanted to use this unit as a vacation home and since it was a condo hotel unit with a great rental history, they thought the income could help with some of the expenses. The property taxes were around $1200 per year and the maintenance fee was about $3000 per month.

They invested 30% of their own money and borrowed $119,000

At the time, everybody would have told you that this is a solid investment.

A few months later the market crashed. Now everything happened at once.

The rental income was down to about $5000 per year verses the $12,000 from the year before (gas prices were too high, people did not come down to Florida as much as they used to) the maintenance fee went up to $4000 per year because of high insurance cost..

The property taxes went up to $3400 per year. So now you think – that is really bad,

They have to come up with about $10,000 more per year than they thought. . . .well, it get worst

The property values fell to $100,000 on this property.

Now, people with 30% down payment which equals $51,000 are upside down by about $20,000 plus another $8000 or $10,000 in closing cost. So, altogether they will loose about $80,000

Now, is their still anybody out there that wants to tell me it is all the owners fault?

This is just one of many cases. We are all human beings and everybody wanted to take the opportunity to make some money in crazy real estate market, and yes, some people took a risk, but if it wasn’t for the gas prices and the outrages property taxes, the increase in insurance rates and a bad economy in general, we would not be in this mess.

Short sale, is it the owner – seller’s fault?

If you think about buying or selling a house or condo in the Saint Petersburg Tampabay Florida area, please give me a call. Ask me about waterfront homes or condos in St. Pete beach, Treasure Island, Madeira beach, Seminole and other Clearwater Tampabay neighborhoods. Find out what we can do to sell your home or condo and what the value of your property is. Check out great real estate deals or visit condo associations like Seminole Isle.

We also work with short sale bank owned and foreclosures. Find a property or go to my website for more real estate information or simply contact us. 727 409 8706

Pinellas County tax bill 2008

How much are you going to pay in property taxes here in St Petersburg Florida?

Call the Pinellas County property appraiser’s office NOW, talk to them, get an estimate and let them explain WHY and HOW they came up with this number.

One of my buyers wanted to know the property taxes before she made the offer on a house here in Pinellas County. I gave her my rule of thumb but told her that this is just a wild guess and urged her to call the appraiser’s office herself and get the answer directly from them. (but I was confident that my old rule would still work, like it had the last 10 years or so) In this particular neighborhood sales in 2007 indicate a 30% drop in property value (lots of short sales and foreclosures) So, the comparable properties that sold last year are around $200,000 .

The home that my buyer inquired about had an asking price of $160,000 the mileage rate is 2.1. So, according to my calculations the taxes should be about $3,200 on the high end or $2,700 on the low end.

My buyer was quoted $4,300, The explanation was that “the taxes are not based on the sales price but on the comparable houses in the area and that the appraiser will not take any short sales or foreclosures, distressed sales in general into consideration.

I do not know what to say anymore. I will call the property appraisers office myself first thing on Monday and use my own home to get an estimate. My client is a very intelligent woman and I can not believe that there was any type of mis communication.

A lot of people are counting on a drop in their property taxes. The last thing our economy and housing market needs right now is another tax drama.

I urge you, start the conversation with them right now, do not wait until you trim notice comes out (by than they have pretty much made up their mind)

I want to buy a Short Sale.

Please e mail me Short Sale property listings only. Do you have any Short Sales in St. Petersburg? How do I find a Short Sale? I really want to buy a Short Sale, can you help me? Is this property a Short Sale?

These are the calls or e mails I have been getting over the last few month.

For some reason in a buyer’s mind, a Short Sale is always the best deal in town.

Well, it might be and it might not be. As a buyer looking for a great deal, you have to be open minded and you have to know the area and the market values. The fact that a home or condo is a short sale only tells you the seller is upside down on their mortgage and they will probably walk away from the closing table having lost thousands and thousands of dollars. To give you an example

Someone bought a condo in 2005 for $395,000 with 100% financing. Now they can not make their payments anymore and need to sell before it goes in foreclosure, so they negotiate a short sal with the bank, asking prices in $350,000 or $280,000 or $250,000. You think this is a good deal?  No, it is not because similar units in the area sell for around $220,000 and they are not short sales.

If you are looking for a fantastic deal, you or your Realtor needs to do their homework.

Let’s say a unit in the same complex was bought in 1980 for $60,000, the owners dies and the heirs just want to get the money out of it, fast.

They will probably ask $200,000 for the unit and you can negotiate it down to $170,000

Now you have a good deal. And guess what, it was not a short sale!

So, please do not get stuck on the word Short Sale, you have to know the area and the market conditions to find a great deal.

Short sale, who is to blame?

The short sale listings here in St. Petersburg Florida have gone up so much over the last couple of month. Most people, the government, the press, they all blame the banks, the lenders, the mortgage brokers, they even blame the owners of the property.. Well, I think it is time that we rethink the situation.

Sure, the banks offered some “very creative financing” so, yes it is partially their fault

But what about the appraisers?  They appraised properties higher and higher by the day, so I think they should also take some of the blame. What about Realtors? (and I am one)

If we worked as a single agent for the seller, of course we tried to get the highest possible price for the owner. What about builders and developers? Well, they saw the opportunity to make money and unfortunately they flooded with market with new construction units.

And my list could go on and on, BUT let me make my point.

I mostly blame the county property appraisers (guess I am not making friends with this statement) and the economy.

I am usually not a “what if”  person, but today let’s go there.

I believe that we would not have this whole mess on our hands if the taxes had stayed reasonable (they doubled or tripped in some cases) and if our gas prices and cost of living hadn’t gone up so much. If you did not have to pay $200 more per month to feed your family and another additional $200 per month on gas and another additional $300 per month on property taxes and another additional $100 for increased insurance rates, than you might still be able to make your mortgage payment.

So, you decide who is to blame.

One thing is crystal clear in my mind

The one person that is not to blame is the home owner.

What is a short sale?

Here in Pinellas county Florida we have a lot of  “Short Sales”  

Buyers, sellers, banks, realtors, we all use the word but for most people it is a new word, a word they have never heard or used before. The first “short sale” seminar that I attended as a Realtor was packed with people, all wanting to know – What is a short sale?

The answer is simple but than again very complex because every short sale is different.

Short sale means that the seller’s mortgage is higher than what he can sell the house or condo for in today’s market. So, when the owner decides to sell and goes to closing, he would have to bring money to the closing table. Negotiating a short sale with the bank before closing gives the owner at least a chance to minimize his lost.

The bank might forgive some or all of the difference between sales price and loan amount. The key to a successful short sale scenario is finding the right people to guide you. This could be your realtor or your lawyer.

If you, like so many other people, are in the unfortunate situation of being upside down on your mortgage, take action, do not wait. Time is crucial; you need to start the process as soon as possible.

The earlier you start the better chance you have to negotiate a short sale deal.