First Time Home Buyers Category
Tax Credit Can Be Used on Closing Costs
August 6th, 2009 Categories: Credit & Financing, First Time Home Buyers
Recently, FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development (HUD) on so-called home buyer tax credit loans that was released today.
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What is P.I.T.I. ?
August 2nd, 2009 Categories: Credit & Financing, Diamond Dwellings, First Time Home Buyers
NO! You’re thinking of a Greek pocket bread for sandwiches.
How Can PITI Figure Into Your Monthly Budget?
If you are in the real estate business, you are probably familiar with the acronym: P.I.T.I.
This is one acronym that first-time home buyer should know about and it’s a handy, simple group of letters — that could save you money and help with your monthly budget planning concerning your house payment. Read the rest of this entry »
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Buyer Expectations For Foreclosures Will Cost Many Money!
April 8th, 2009 Categories: Brandon, First Time Home Buyers, Foreclosures/ Bank Owned, Riverview
Recently I had a buyer find a house they wanted badly. The house was a foreclosed property and had been on the market for a while. The bank had originally listed the house for $159,900. It was not a house that I recommended to my buyer clients at that price.
After roughly 30 days, the bank dropped the price to $139,900. Better, but I continued to feel it was not priced properly. After 80 days, the house was re-priced to $119,900. Another $20,000 decrease. At this time I thought we had a property to market. I sent the listing information to several of my clients and I got a phone call requesting a showing. At the same time, I selected 3 more foreclosures I thought were of good value and scheduled showings.
Sure enough the client and his wife loved the property. I pointed out that the roof would need replacing and that could give us a little additional room to negotiate. I suggested we price in down by twice the cost of a new roof and be happy if we are met half way.
My client insisted that we offer in the $80’s and pay no more than $95,000 because of the repairs required on the house. I immediately searched for a foreclosed house that was pristine, in his price range. I found a two year old home described as “barely lived in and with upgrades galore.” Yes, he and the wife loved it. Basically a new roof and new everything. It was the same size house and listed at only $11,000 above the older “needs repairs” house.
What was he willing to pay (not offer, but pay)? “No more than $100,000.”
That led me to provide him a study to share with all buyers in the market for a foreclosed home.
This study was based on homes listed in Riverview and Brandon Florida for a list price between $90,000 and $150,000 since the beginning of 2009. Here is what we found.
|
List Price |
Sold Price |
Price p sq ft |
% Ratio |
DOM |
|
$120,660 |
$119,247 |
$74.83 |
97% |
48 |
List price is the final list price on MLS
Sold price is what the buyer actually paid
% Ratio is the ratio of the list price to sold price. (Based on actual square footage prices)
DOM is Day On Market
What do these numbers tell us?
Banks on most of the properties are getting their price. List price decreases with Days On Market, but does not necessarily open the door for further price reductions. Price per square foot is a starting point to understand value, but not the final point. Property condition, neighborhood, supply and other attributes help to determine price.
What can the buyer walk away with regarding this information? First, don’t set yourself up for disappointment after spending a lot of time finding the right house and lose your excitement or the home by unrealistic expectations. Banks are not desperate as we all may think or as the media reports. In the study area 41% of all sales were bank owned properties that closed on average 48 days or less. That is a hot market for the banks and they don’t need to come off their price except on very special circumstances. Your real estate agent can help you understand those circumstances.
We have specialized in finding great foreclosed properties and will gladly find or review foreclosures for you. Give us a call or email us.
If you would like a copy of this stuy in Excel spreadsheet form let us know. It contains each and every foreclosed property in Brandon and Riverview along with the list price (study price of $90,000 to $150,000), sold price and days on the market as well as other helpful information. Drop us an email and request “Foreclosure Study 1/1/09 to 4/8/09. We will be glad to send you the report.
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Do it yourself or Hire a Pro: Fixer-Uppers offer Opportunity
February 22nd, 2009 Categories: Credit & Financing, First Time Home Buyers, Foreclosures/ Bank Owned
The oft heard phrase “Buyer Beware” is never more appropriate than when considering the purchase of a fixer-upper.You really need to know exactly what you’re getting into before buying.
It’s commonly believed that fixer-upper properties represent easy money that is ripe for the taking – that you can buy it, do a little work on it in your spare time, and then resell quickly for a large profit. Usually, this simply isn’t the case. Although, with proper planning and foresight, good profits can be made by buying “distressed” properties at less than market value, making appropriate improvements and repairs, and then reselling. And for many first time buyers who intend to live in the house while working on it, buying a fixer-upper can be the very best option. It’s less risky buying a fixer-upper when you can live in the house while fixing it. And of course, by living in the house for at least 24 months you should be able to avoid paying regular income taxes on the profits. Read the rest of this entry »
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Brandon Florida Bank Owned Properties- AKA Foreclosures
January 15th, 2009 Categories: First Time Home Buyers, Foreclosures/ Bank Owned, Real Estate Investment
Buying Brandon Area Bank Owned Properties
There is a lot of interest in buying bank owned properties in the Tampa Bay Area these days. A lot of information, some good and some bad, is floating around about the subject. Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”. The fact is, you can make money buying foreclosures and short-sales, but that there are no secrets, and to make money does require effort.
What’s an REO?
REO stands for Real Estate Owned. These are properties that have gone through foreclosure and are now owned by the bank or mortgage company. This is not the same as a property up for foreclosure auction. When buying a property during a foreclosure sale, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. And on top of all that, you’ll receive the property 100% “as is”. That could include existing liens and even current occupants that need to be evicted. An REO, by contrast, is a much “cleaner” and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. The bank will see to the removal of tax liens, evict occupants if needed and generally prepare for the issuance of a title insurance policy to the buyer at closing. Do be aware that REO’s may be exempt from normal disclosure requirements. In California, for example, banks are exempt from giving a Transfer Disclosure Statement, a document that normally requires sellers to tell you about any defects they are aware of. Read the rest of this entry »
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