Renters: Be Very Careful Today

When you’re renting a house and discover that the property owner is facing foreclosure, you might wonder, “What happens now?”

First, be careful that you aren’t paying rent to some one who has stopped making mortgage payments. This is sometimes very difficult to determine on your own, however, you should be able to ask the owner for proof of payments. In today’s market there have been quite a few renters sending money to a landlord who has stopped paying the mortgage and just waiting for the bank to take over the home. As the wronged party, you can sue the landlord, but it’s an expensive proposition and since the owner went into foreclosure, they probably don’t have enough assets to get a judgment to recoup your losses.

So what happens when the bank takes over the property you are currently renting? In most cases a representative of the bank will notify you that they now have the deed and will ask (sometimes not so nicely) that you move out of the premises in 30 days. On occasion some of the better run companies will give you 60 days to make arrangements and move out.
As for your security and any other deposits you may have made, unless you rented from a property management firm, you are most likely out of luck, unless the owner is willing to give them back to you, but remember, his home was just seized by the bank for lack of money/assets so there’s a very high probability that you won’t be receiving your deposit. If you were smart enough to rent a home from a property manager you should be able to get your deposits returned according to the agreements since they are required by law to put such funds into an escrow account.

Unfortunately having a lease is no protection in the event of a foreclosure, with the bank taking possession of the property. In fact, you can get into serious difficulties should you refuse to vacate the home. In such cases, the bank will commence eviction procedures and this will result in a downgrade of your credit score making it even more difficult to find adequate housing.
So, please be aware of your situation and if you are contemplating a new rental home, it’s a very good idea to go through a reputable property management firm.

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; please ask for Gabe Sanders or .

Stepping Up To Down Markets!

Remember the ancient curse, “May you live in interesting times”? While many are indeed cursing the current real estate climate, others see opportunities. In a “soft” market, the short-term options dwindle, but seasoned investors in for the long haul are positioned to take advantage.

In the words of billionaire J. Paul Getty, “Buy when everyone else is selling and hold until everyone else is buying.” Just like the stock market, more money is often made in a down cycle than in an up market.

Slower times encourage sellers to be more open to negotiation. Combine acceptance of lower prices with currently low interest rates, and you’ve got the perfect recipe for bargains. Real estate is continually cycling, and it’s guaranteed that prices will rise again. The time to get in is now, before that begins to happen.

A “buy and hold” strategy works in this market, while your property appreciates. While you wait, consider leasing it. The property can pay for itself with rent collected, and an investor that can pay off a small mortgage is in an excellent position indeed.

Learn from your real estate agent and tax advisor how a “1031 Exchange” can greatly reduce your tax liability when it does come time to sell your investment. Now is the time to get in, but be sure to know how you’ll get out, too!
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 www.GabeSanders.com and www.TreasureCoastFLHomes.com. Our office is located at 1121 SE Ocean Blvd. in Stuart, (Sewall’s Point) Florida; please ask for Gabe Sanders or .

Who or what is Fannie Mae?

You could argue that if Fannie Mae had been around, George Bailey’s Building and Loan would not have been in trouble, despite his absent-minded Uncle Billy, and he would not have needed an angel and the whole town to bail him out.

It would still be a wonderful life, but perhaps not as dramatic a life.

Fannie Mae’s real name is the Federal National Mortgage Association and it is a federally charted corporation, owned by shareholders, that has one main mission: To make sure there is enough money around that any American who has the resources to buy a home can get a mortgage. But not just any American can pick up the phone and call Fannie Mae.

When you get a mortgage from your local lender, the lender is the one who will be in touch with Fannie Mae. Your local lender wants to make loans, because it makes money (interest) on loans. But each local lender can only make just so many loans with the money it has available. That’s where Fannie Mae comes in.

Thanks to Fannie Mae, your lender doesn’t have to wait 30 years until you pay off your mortgage so that it can make a new loan to another family. Instead, your lender can sell your loan to Fannie Mae, make some money on the loan, and then loan someone else in your community money for a home.

Fannie Mae makes money because it can borrow at the best possible rate, a better rate than you get on your mortgage. Fannie Mae buys your mortgage for a lower rate than the lender is charging you, then holds your mortgage (or maybe even sells it again) until you pay it off.
In the meantime, you keep right on paying your local lender, just as you have always done.
Of course, Fannie Mae is the mega player in the mortgage paper world. It makes still more money by packaging up your loan with others and selling it in a bundle to investors, pension funds and other groups. Fannie Mae guarantees that the investors get their money, even if you default on your mortgage.

This is where Fannie’s government relationship comes into play. If a vast number of people default at one time and overwhelm Fannie Mae, then she has a great ace-in-the-hole: Your tax dollars. The U.S. government has never explicitly guaranteed that if Fannie Mae failed, tax dollars would be used to prop up the corporation. But most people think that is what would happen.

Today, more than 70 percent of American families own their homes. Not a bad track record, even though Fannie Mae is often criticized as a titan that fights regulation and uses its own size and complexity to avoid close scrutiny.

BUY OR BUILD?

It’s a lot to consider! If you’re considering new construction, the first item on your To Do list is to find a suitable lot. The experience of builders and architects points to a few key features you should investigate in your search for the perfect spot.

First, and perhaps most obvious, is the size of the lot. The larger the lot, the greater the cost, depending on location. Consider the property taxes and how much maintenance it will require. Remember that the smallest lots tend to appreciate more quickly than their larger neighbors on a square foot basis.

Next, imagine how the terrain will affect aspects like drainage and the positioning of the home. Ask your builder to explain the impact the terrain will have on your plan.

Related to the terrain is the view the property offers. Take great care in discovering how adjoining land will be developed, and how that could affect your view. A gas station may one day be built on that beautiful meadow out back.

Make sure you check with the local government zoning and building department. There may be restrictions on the size and location of any structure that may be placed on the lot. And don’t forget the impact fees that you will be charged for new construction.

And finally, the mantra of real estate is “location, location, location.” Want a faster commute? Buy a lot near the entrance of your subdivision. Want to keep your kids safe from traffic? Then plan a purchase further toward the back.

Much of this is common sense, really, but it helps to take an organized and educated approach to this critical element of home construction.

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 www.TreasureCoastFLHomes.com. Our office is located at 1121 SE Ocean Blvd. in Stuart, (Sewall’s Point) Florida; please ask for Gabe Sanders or .

LOOKING BEYOND THE PRICE!

What pops in your mind when you think of a real estate contract? The price, right? It’s the critical term, but far from the only important factor to be considered by buyers or sellers. There are costs, finances, conveyances, and consequences to consider.

Typical costs include commissions, inspections, legal fees closing costs, title insurance, and so on. Your representative should firmly negotiate and explain who pays for what.

How about the escrow deposit and financing contingencies? Unless the buyers pay cash, an escape clause should release them from obligation if financing falls through. Specifying that the loan will be secured at a certain interest rate or lower provides further protection.

Also pay close attention to conveyances of personal property, such as some appliances, lighting or window treatments, or furnishing. Avoid argument and further negotiation by assuring there is zero confusion about what is included in the sale price.

Another factor that should be clearly spelled out is the consequences of a breach in contract by either side. This is a binding legal document, whereby buyers in breach can lose their deposit, or sellers in breach can be sued for “specific performance” to force the sale of the home.

It’s best for you and your representative to review a standard contract before you make or consider a purchase offer. Understanding real estate contracts and their implications 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 www.GabeSanders.com. Our office is located at 1121 SE Ocean Blvd. in Stuart, (Sewall’s Point) Florida; please ask for Gabe Sanders or .