Short Sales

05.02.09 by

In areas where home prices have significantly declined, some owners find themselves strapped with mortgages that total more than their home’s value. When options such as extending the term of the loan or negotiating a lower interest rate have been exhausted, then a short sale may provide the solution.

However, short sales are complicated, requiring approval from a number of parties, so you need the representation of a professional to make sure the transaction moves quickly. You can have more than half of the paperwork done before that first offer even comes in.

Most lenders require an application package to be completed by the sellers, including a financial worksheet, as well as a letter of hardship explaining why the owners cannot continue to pay the mortgage. The real estate agent can also help with other aspects of the required paperwork, which should be assembled before the property is listed.

While the bank may be willing in such cases to accept less than the mortgage balance, the buyer’s offer must still reflect a fair price under current market conditions, so be sure to consult with an agent in order to arrive at a reasonable price that will be accepted by all parties, including the lender.

Short sales may not be easy, but they do provide an “exit strategy” for homeowners most in need of a solution.

If you’re interested in pursuing a short sale as either a seller or a buyer, your odds are greatly improved with agents that have an intimate knowledge of the process and a successful track record with short sales. Give us a call at (772) 323-6996 or visit us on the web at www.GabeSanders.com or www.TreasureCoastFLHomes.com. Our office is located at 2391 SE Ocean Blvd. in Stuart, Florida; please ask for Gabe Sanders.

A Quick Buyers Guide to Short Sales

05.01.09 by

What is a ‘Short Sale’

A short sale occurs when a seller wishes to sell a property that is now worth less than the mortgage and any other indebtedness that is owed on the property and is asking the lender to forgive all or part of the difference. If the seller is in a position and willing to pay this difference, it is not a short sale.

Who Should Buy a Short Sale:

It can be anyone who finds a property that they feel will suit their needs. It can be an investor, a first-time home buyer, or a second home buyer. The governing factor is that you must have patience and not need to take possession of the home in a short period of time. If you need to close in less than 3 months or possibly even longer, select a different type of sale.

What Should a Buyer Look for in a Short Sale:

Short sales come in different flavors with differing odds of a successful conclusion.
The best odds are with an owner in a pre-foreclosure situation where the current seller no longer has the assets to continue making payments on the home and it will be foreclosed upon in the future. Even better odds if there is no second mortgage on the home. The lender can’t ask for additional money from a seller without assets and they will prefer to take some loss now, rather than go through the expense of foreclosure at a later time. But, keep in mind; that the bank/lender will not sell it for a ridiculously low price if they feel that they can get more after a foreclosure. Can it be bought for less than the current market value? Yes, depending on the location from 10% to 25% under market value.

For the seller with a second mortgage, the negotiations will be a bit more involved, but given enough time, with a proper offer, the sale should lead to a successful conclusion.
After the above, come the investor properties. First, those investors that have gone bust or almost bust and have one mortgage are good short sale candidates, followed by those with second mortgages. However, if they have any assets, the short sale can be delayed and very often not completed due to the lender attaching large deficiency notices against the seller which they may not agree to thus causing the short sale to fail.

If you have an indication that the short sale belongs to an investor with considerable assets, be very leery as there is a good chance that the short sale will never happen.
The Short Sale Contract:
Your odds of a successful short sale are much better if you select an agent that knows the short sale process with a good track record. Unfortunately, you can’t always select the listing agent of a short sale and if they do not have much experience and/or short sale knowledge, it can be a very difficult transaction.

Once underway, the short sale is almost the same as any transaction. It is an agreement by a buyer to purchase a certain property from the seller. Both parties sign this agreement (the Purchase and Sale Contract) and now the sale is contingent on the specifics of the contract. In the case of the short sale, probably the important contingency is a lender or bank approval. Most short-sale contracts will specify that after the initial approval, all timelines will commence after lender approval. There is also a given time for the lender approval that may or may not require adjustment at some later time during the waiting process.

There are many ways to structure a short sale offer and this is where selecting an experienced agent will help your chances of a successful conclusion as well as protect your interests along with a reasonable escape or withdrawal clause.

The Short Sale Process:

Unfortunately, more often than not, this involves a lot of waiting. A good short-sale agent should try to get you updates or status reports every week or so. If they don’t, ask them, but be prepared for no news. When the lender orders an appraisal or BPO (Broker Price Opinion – a simplified appraisal normally performed by a real estate agent), it means that the end is getting closer. Probably (but, not always) within 30 days of an answer.

The Bank/Lender Approval:

This is not a sure thing, and the Bank/Lender could simply say no, and the buyer is back to square one, or they could come back with a counter offer that the buyer can either accept or reject or, they can simply approve the offer.

After making you wait all of this time, the bank will invariably demand a quick closing. Sometimes trying for as little as a week. Don’t be bullied at this point. You will need to complete inspections and satisfy yourself that the property is in an acceptable condition. If financing is involved, adequate time must be given to complete the financing contingencies.

The Closing:

The hard part is over and you will soon take ownership of your property at a great price. But one more thing to consider, often the lender will use their own attorney or title company to convey the title. They will only be interested in ensuring that they are free of any obligations on the property. They may or may not ensure all other liens or obligations on the property are satisfied. It may be very prudent to have your own attorney review the title and the title policy.

Congratulations if you have enough patience and diligence to complete this process!

If you’re considering purchasing a home, but feel ‘out of touch’ with what’s happening in real estate give us a call today at (772) 323-6996 or visit us on the web at www.GabeSanders.com or www.TreasureCoastFLHomes.com. Our office is located at 2391 SE Ocean Blvd. in Stuart, Florida; please ask for Gabe Sanders.

An Ounce of Prevention

04.25.09 by

If you’re planning to go bargain hunting, you are likely to come face to face with a special challenge: the long-vacant home. Many of these properties have been foreclosed, and now rest in the hands of the bank. The owners are long gone.

While the greatest percentage of these “distressed properties” are still in fair to good condition, how can you be sure of possible defects in the home when the previous owners are not available to disclose such facts?

Since the bank owners and their real estate agents may not know all the details about the previous owners, you would be well-served by ordering a “pre-inspection” if you find an attractive property at a low price. Hire an inspector for a preliminary look, and do not make an offer until you know more.

You can pay just a couple hundred dollars for a brief inspection, money well spent before you submit a bid. Having an idea of the home’s true condition can help you determine your offer, or help you make a decision to walk away from the deal, without any obligation.

If the utilities are cut off, ask your representative about getting them turned on during the inspection, which is critical to the inspection’s accuracy. Take a careful look at recent sales in the neighborhood, and make your offer armed with knowledge and confidence!

Understanding real estate dilemmas and their solutions are our business, and we’ll happily share our knowledge with you. Why not give us a call at (772) 323-6996 or visit us on the web at www.GabeSanders.com and www.TreasureCoastFLHomes.com. Our office is located at 1121 SE Ocean Blvd. in Stuart, Florida; please ask for Gabe Sanders.

Turn Those Red Flags Green

04.17.09 by

When selling a home, two situations may occur which are red flag indicators of a lengthy sale time. Each requires the property owners’ attention in cooperation with their sales agent, and involves either the price or condition of the home.

The first involves a home that has been on the market for 60-90 days, but has been shown only once or twice. More buyers are beginning to enter today’s real estate market, and homes for sale should be attracting a number of prospects.

When buyers choose not to tour a home, the reason is often the price. Homes that are attractive, but not being shown, are often priced “above” the market. The key to increased showings, then, is to learn the market price of the home, then reset the price.

The second “red flag” occurs when a home is being shown often, but neither sells nor attracts offers. The home’s condition is often the culprit in this situation. Buyers learn the price, then drive by, making a judgment that it is an attractive home. Once they see the home, however, their interest evaporates.

The solution can be a critical “walk-through” by the sellers’ agent to identify needed repairs and cosmetic improvements. Until corrected, traffic is likely to remain high, while the chances of selling remain low. Remove these red flags and prepare for a sale!

If you’re planning to sell your home soon and would like accurate and up to date information on its current value, give us a call at (772) 323-6996 or visit us on the web at www.GabeSanders.com or www.TreasureCoastFLHomes.com. Our office is located at 2391 SE Ocean Blvd. in Stuart, Florida; please ask for Gabe Sanders.

It’s time to invest in America For the economy to strengthen!

04.17.09 by

Americans need to become consumers again.

In the American economy, some 70 percent of activity is derived from consumers. But when consumers hunker down and quit spending, economic activity decreases.

The history of America shows it has always had a tendency for action. It has made this country great. People and companies believed in the possibilities of the future and spent their money accordingly.

Today, the mood is the opposite. Economists warn that if we don’t jolt consumers and the economy back to life, we could fall into what economist John Maynard Keynes called the “paradox of thrift.” That is, if everyone saves during a slack period, economic activity will decrease, even more, making everyone poorer.

If we don’t start spending and investing again, we also run the risk of experiencing what was known as Japan’s “lost decade of the 1990s.”

There have been signs that investors are putting money back to work again. Retail sales are slowly rising, and housing starts for February were up more than 22 percent. Sales of existing homes increased by about 5 percent. But we have still a long, long way to go.

The rush to hoard cash and pinch pennies is understandable, given that the net worth of many investments has declined dramatically, say experts writing in Newsweek.

But for our $14 trillion economy to recover and thrive, money hoarders need to open their wallets again and become consumers.

No one is recommending big credit card debt, but worthy and affordable purchases or investments should no longer be put on hold.

Mortgage rates are historically low right now!

04.16.09 by

The 30-year mortgage: In mid-March, 30-year conventional mortgages carried interest rates of from 4.875 percent to 5.125 percent depending on the lender, the state, and the buyer’s credit score. (See bankrate.com and others)

At 5 percent interest, the monthly payment on a 30-year mortgage for a $100,000 loan is $536.83, which many homeowners could easily afford.

The 15-year mortgage: Some home buyers look forward to paying off the mortgage before they retire or before their children enter college. The 15-year mortgage is a good choice for them.

It’s nice to know that while it will pay off in half the time, they won’t be paying twice as much each month. The 15-year payment for a $100,000 loan is less than you would think. At an interest rate of 4.25 percent, it would be $752.28 a month. Over the life of the mortgage, they would save almost $67,000 in interest.

Seller Financing Can Be an Option for Some Buyers, Sellers

04.14.09 by

When the home you want does not have a mortgage or has one the seller is willing to carry, seller financing can be a great deal for a person buying a home.

Usually, the seller will want 10 percent down, but not always. The interest rate charged could be a point above the lowest bank rate. But one big advantage: The seller usually doesn’t require mortgage insurance, meaning the monthly payment will be lower in any case.

The loan can be constructed on a 30-year basis. Most seller-finance deals, however, last for five to seven years, then are settled with a balloon payment for the balance.

Sometimes, a buyer who opts for seller financing will be in a better position five or seven years down the road and will then be able to qualify for a 30-year conventional mortgage.

When buying a seller-financed property, be sure to get a current appraisal. Get title insurance for a few hundred dollars. It will show any tax liens and any other claims that could affect a property transfer.

Buyers Are Gaining Steam

04.11.09 by

A recent profile of buyers and sellers compiled by the National Association of REALTORS® has revealed promising, if not surprising statistics about the changing face of the marketplace. The percentage of first-time buyers is on the rise, and they are making their purchases for the long term.

Frankly, this makes sense, because first-time buyers aren’t struggling with the sale of an existing home. Combine that advantage with low home prices, large inventories, and low interest rates, and the result is a positive trend for both buyers and sellers.

Recently enacted tax credits and modifications in the Federal Housing Administration are also helping buyers, along with predicted increased credit flow from a federal funds injection into the banking system. More buyers entering the marketplace means more sales, reduced inventories and increasing home values.

The profile of sellers shows that over 90% used a real estate brokerage to market and sell their property. Buyers profiled listed the most important agent services as helping to find the right home and negotiate satisfactory terms and prices.

If you’re planning a purchase, and need funds for a down payment, learn from buyers in the study who mostly used savings or a gift from family, and who also chose a fixed-rate mortgage over 90% of the time. Consult with a trusted agent today, and get on board the homeownership train.

We know and understand all the financing methods available on the Treasure Coast of Florida. Why not give us a call at (772) 323-6996 or visit us on the web at www.GabeSanders.com or www.TreasureCoastFLHomes.com. Our office is located at 2391 SE Ocean Blvd. in Stuart, Florida; please ask for Gabe Sanders.

The Indian Street bridge has been approved

04.04.09 by

What has taken decades of planning and discussion is finally about to begin. The Florida Department of transportation started releasing bidding for the new bridge to join Stuart and Palm City by 36’th Street in Palm City and Indian Street in Stuart. This long awaited project has been approved using $128 million of Federal stimulus monies and $72 million that has been raised previously through federal, state and county collections.

This bridge will alleviate congestion on the one existing Palm City Bridge that is the main route between Stuart and Palm City. In addition to making access easier between Stuart and Palm City, this project is estimated to employ 3500 workers and have a tremendous trickle down benefit for the local economy and employment levels.

While it took a very long time to be approved, many residents feel it couldn’t have come at a better time.

Want more information? Visit us on the web at www.GabeSanders.com or www.TreasureCoastFLHomes.com . Our office is located at 2391 SE Ocean Blvd. in Stuart,  Florida; please ask for Gabe Sanders.

Martin County Real Estate Inventory Declines

07.14.08 by

Martin County Florida’s single family home inventory in June declined for the fifth consecutive month, which is an indication of market improvement.

There are 2409 homes available through the Multiple Listing Service, a decrease of 71 homes from the previous month and 495 since January 2008. The month-to-month inventory declined 20.5 percent since January.

The current inventory reflects a 16-month supply at the current sales pace.

Martin County had 152 single family home sales in June, a 5 percent improvement from the 144 home sales in the month prior, and 12 percent above the 134 homes sold in June 2007.

To date, 754 homes have been sold by Realtors so far this year, a 4.3 percent increase from the 722 sales posted in the same period a year ago.

The median sales price of a home in Martin County in June fell to $234,950, a 3.1 percent increase over May’s $227,500, but 32.5 percent below the June 2007’s $337,000.
Condos sales in Martin County increased 22.2 percent in June, from 35 in June 2007 to 45 last month. Condo median prices fell 30.7 percent from $260,000 in June 2007 to $180,000 for June of 2008.

There are currently 1168 condos available for sale in the MLS as compared to 1281 in June of 2007.

These numbers show signs of positive activity in home and condo sales while showing that we’re not at the end of price declines yet. If inventory levels continue their decline, we should see a leveling of prices when absorption rates reach less than 9 months.

Understanding real estate dilemmas and their solutions is our business, and we’ll happily share our knowledge with you. Why not give us a call at (772) 323-6996 or visit us on the web at http://www.gabesanders.com/ and http://www.treasurecoastflhomes.com/. Our office is located at 1121 SE Ocean Blvd. in Stuart, Florida (Sewall’s Point); please ask for Gabe Sanders or .

January 2007 Market Update

03.04.07 by

Martin County escaped the slowdown in home sales experienced across the rest of the Treasure Coast during January, but not the continued slide in prices.

Realtors sold 93 homes, the same number as in January 2006, according to figures provided Tuesday by the Martin County Realtors Association. The median home price dropped to $296,000 from $310,000 between the two months, the association said.

Martin County’s report was a positive indictor for the market, said Jennifer Atkisson-Lovett, president of the Realtors Association of Martin County. “We are seeing our residential market begin to show signs of recovery as our number of pending sales are much better than 2006,” Atkisson-Lovett said. “We feel confident about the 2007 market as the pending sales have increased, and buyers are recognizing the outstanding values for investment that are abound in this market.”

Martin’s condominium market was mixed in January. There were 29 Realtor sales in that month versus 50 a year earlier, according to the association. The median price jumped, though, to $305,000 from $219,900 between the two months.

When lumped with the Port St. Lucie-Fort Pierce market, the housing market looked weaker. The Florida Association of Realtors said Tuesday that its members sold 252 existing single-family homes in that metropolitan area during January, down from 343 a year earlier. The median price dropped 8 percent to $241,000 from $261,500. Realtors sold 51 existing condos versus 62 in January 2005. The median price rose 6 percent to $225,000 between the two months.

“Basically, this shows that people listing their homes for sale are not marking them down to the proper market prices,” said Brad Hunter, director of the housing research firm Metrostudy in West Palm Beach. “At least there are still buyers in the market.”

Don Santos, past president of the Treasure Coast Builders Association and president of Santos Construction, said the numbers reflected that it’s still a buyer’s market. “I didn’t expect there would be a turnaround this month,” Santos said. “But I actually think the numbers are a good sign because we’re not seeing 30 percent and 35 percent drop-offs anymore. The bright side is a lot of consumers can really get good deals now.”

The West Palm Beach-Boca Raton area saw 496 sales of existing homes, down 15 percent from the 586 recorded during the same period last year. Prices dropped 1 percent to $388,000 from $393,700 last year.

Statewide, sales of single- family existing homes totaled 9, 382 last month compared to 12,906 homes sold in January 2006 for a 27 percent decrease.

Nationwide, The National Association of Realtors said sales of previously owned homes rose by 3 percent while the median price dropped to $210,600, a decline of 3.1 percent from a year ago.