My New Blog

Buying properties at auctions

Buying properties at auction certainty has its advantages but the pitfalls are plentiful.

Shopping for real estate is always a trial, but buying a property at an auction-whether it’s a Foreclosed unit sold by a lender or a new condo offered by a developer comes with a special set of problems.

Auctions are poised to become an alternative to conventional purchase strategies as bargain hunters seek to take advantage of the worst U.S. housing slump in 16 years.

South Florida has become one the most hardest hit areas of the nation, because of the cheap arability on money early in the decade, condo developers launched dozens of projects across the region, especially in downtown Miami. Now thousands of the new condos are coming on the market and developers are facing a glut of units either unsold or abandoned by; their buyers.

Auctions of foreclosed properties and excess developer inventory produced mixed results last year. At some auctions, almost nothing sold; at others, there was a buyer for almost every unit.

Some buyer’s priced out of the market during the housing bubble now have the opportunity to acquire homes at there true market value, But bargain hunters need to educate themselves to avoid trips to court or buying an unsuitable property.

On of the things to look out for is the “buyer premium” which is a 5 or 10 percent premium that is added to the final bid by the auction house to pay for there advertising and other expenses. Buyers often get caught up in the buying frenzy and forget about this extra expense.

To resister to bid, buyers are required to provide on the day of the auction a check which has to be certified funds or a cashier’s check for the amount of the buyer’s premium. Unsuccessful bidders get there check back, checks of successful bidders go toward the purchase.

Successful bidders’ must deposit 10 Percent of the final sales price at the auction and close within 30-45 days. The contract is not contingent on obtaining financing. If buyers fail to get a mortgage they lose there deposit.

Every auction house has its own rules tat are available to buyers well before the auction. Some auctioneers even hold workshops to educate potential buyers.

The challenges of buying houses and condos at auction go beyond understanding the terms of the auction. It includes researching the condo complex and the individual unit to be bid on

In a down market there are many variables that need to be taken into consideration before biding. A bidder needs to research the percentage of foreclosed units in a building and the number of homeowners who are behind on there maintenance fees. A high number of foreclosures or delinquent dues can impact the bidders financing on the deal.

Lenders may require lager down payment or increase the interest rats of a loan if they think the property is risky.

Lenders are aware of the fact that the condo association could go broke if the dues are not paid and this could cause property values to fall in the entire complex.

When a lender forecloses on a property in Florida, it takes part in a foreclosure sale at the courthouse. If it finds no takers there, the lender buys the property and either auctions the property off or contacts with a real estate brokerage to market the property as an reo.

Auction sales are not contingent upon inspection, so it is important to inspect the unit before bidding on it. This is sometime difficult to do but I would recommend making this inspection before biding, if you are unable to make the inspection yourself you may want to consider paying a professional to do so for you.

Developers are warming to the idea of selling fast and at a discount rather that continuing to pay carrying cost, which for those who are willing to do there homework before buying could save them a lot of money on there home purchase.

James Loftis P.A./Realtor,Broker Assoc,CRS,GRI,EPRO

www.RealEstate911.com

Building your own home

Building your own home can be difficult, but you can get a decent ball park figure if you have a good idea about the floor plan and materials you want before choosing a contractor.

Construction cost currently average between $95 and $150 per sq foot according to B4UBuild.com a company that provides floor plans and other information for people who are planning to build a new house.

You probable can keep your own costs down near the lower end of the spectrum if you settle for basic building materials, but expenses can quickly soar above $150 or even more than $200 per sq foot if you instead want expensive tiling , fancy cabinets or the like.

Your construction costs will also depend on the actual shape of your new home. As a general rule, the simpler the floor plan, the lower your costs. Rectangular or square homes minimize the needed amout of lumber and save on labor charges for framing. More elaborate plans that include things like vaulted ceiling drive up the cost because they require extra materials and additional labor.

There are some internet sites and software programs that are available to help you with the estimates of your project. . One of the the websites is www.Buiildig-cost.net, which can provide you with a free estimate based on the factors ranging from the quality of materials you want to the use to the cost of permits and related items that you’ll need to obtain from the city or county.

Once you have figured out how much you want to spend, call a t least three contractors and ask each one for written bids on the job.. Also check out their insurance coverage and licenses with state regulators, contact your local Better Business Bureau to se if they have any complaints on file, and make sure you ask for references so that you can call there previous customers and set up a time to look at each builder’s work.

After you decide on which contactor to use, sit down with him or her and decide which changes you might need to make in order to keep your construction cost within the budget that you established earlier.

Building your own home is certainly not a task for everyone. But for those who have a dream of building there own home, it is not as difficult as it may seem. There is a lot of help that is available to you. For a lot of people who do build there own home it will a source of pride for many years to come.

Good Luck.

James Loftis P.A.,CRS,GRI,EPRO

www.RealEstate911.com

Steps you can take to help avoid Foreclosure

Facing foreclosure is a very difficult situation for most anyone.

If you are facing foreclosure there are a few things that you need to consider.

By the time you get a court date, it’s a little late to unwind the clock; instead if you want to stop the bank for foreclosing on your house, the time to get help is in the early stages of the foreclosure process not at the end.

Most people know how to account for every dollar that come in, It may not be your favorite task each month, but if money is tight and you’re trying to make ends meet, you know when the budget is about to snap.

When you have a list of debts and bills, you should sort them from most important to least important. While all the bills should be paid, the one that goes to the top of the list is the one that will cause your family the most damage if it isn’t paid on time.

If I were organizing a list, it would read: mortgage payment; home equity line of credit; utility bills; car payment; credit card debt and other bills.

Once you know that you won’t have enough cash to go around, it’s tempting to skip the largest bill, which is typically your mortgage payment. But in some states, foreclosure is fast-tracked, which means you could find yourself receiving a foreclosure notice from your lender in as little as 60 days.

So once you know there isn’t enough money to go around and you know you’ll be missing a payment you need to call your lender. If you’ve already missed a payment, and your lender has called you, you need to pick yup the phone and return the call.

Talking to your lender is the best way to stop foreclosure.

Many borrowers have complained that when they call there mortgage company no one picks up the phone. Or, they get transferred from department to department.

The truth is, if you don’t talk to your lender, and it doesn’t get recorded in your file, it doesn’t matter how often you tried to call. When it come to foreclosure

Trying doesn’t count.

If you’re having trouble reaching your lender, call a HUD-certified housing counselor, who may be able to reach out to your lender on your behalf. The toll free number is (800)569-4287, or goes online to www.HUD.Gov/foreclosure/index.cfn.

Once you miss a payment your lender will start sending you letters. If you want to avoid foreclosure, open the letters,. These are supposed to contain information on how you can save your home.

IN order to help you save your home, lenders can make changes to the terms of your loan agreement. The best time to do this is either just before or just after you miss your first payment.

There are a number of things that the lender can do.

(1) Reinstate your loan (you’ll catch up with everything you owe by a certain date.

(2) Offer forbearance (give you a few months off from making payments, while developing a plan to get you current on your loan down the line.

(3) Set up a repayment plan (where you agree to pay a little each moth for the next six months or a year until you’re caught up

(4) Modify your loan (this will change the terms so that the payments are more affordable.

All of the talk you’re hearing about the government-sponsored solution to the mortgage crisis deals with loan-modifications. The federal government is pushing investors who bought your loan to agree to modify the terms for the next few years. When a lenders aggress to modify your loan, it could mean that the missed payments will be added to the loan amount, or that the interest rate will be changed from a variable rate to a fixed, or perhaps it will be lowered to a different interest rate. A final loan modification option is to adjust the amortization schedule, so that you have a longer loan term, but your payments each month are smaller.

So, if you are facing foreclosure, Talk to your lender.

There are options available to you.

Good Luck.

James Loftis P.A. CRS,GRI, EPRO

www.RealEstate911.com

Some positive news for Realtors  and home buyers in -08

In spite of all the bad news reports as of late regarding the nations housing, there is plenty of good news, the most recent of which comes from NAR, the National Association Of Realtors.

Laurence Yun, the chief economist for NAR, has plenty of good news for realtors. At last month’s conference. Yun attributed much of today’s sub prime mortgage problems to greed. Wall Street wanted the 10-12 percent return that traditional mortgage products yielded as opposed to the smaller returns from more traditional mortgage products. His take on the Wall Street types were that they gamble and lost.

Yun’s outlook for 2008 sees a shift from greedy speculators to serious homeowners. 2008 will be a year of opportunity where there will be serious healthy business.. Furthermore, Yun predicted that the market returns to normal by 2009.

Here are some key pieces of the report from Yun,

1. New Housing stats: Even though these are dropping, there was too much building in recent years. The Market is simply adjusting to normal supply-and demand pressures.
2. Foreclosures: According to Yin, the 41 percent increase in foreclosures has resulted primarily from investor-heavy real estate purchase in California, Florida and Nevada. The majority of these individuals are flippers whose investment did not payoff. More importantly, the number of foreclosures in Utah, New Mexico, North Carolina and South Carolina is actually declining.
3. 3. Under-priced markets and superstar cities: Although the coastal markets are still overpriced. Middle America is under priced
4. The recovery has started: Other than the three states hit heavily by job losses in the auto industry, (Indiana, Michigan and Ohio) the states that first experienced a downturn in the northeast are now in recovery, Specifically Connecticut, Massachusetts, New York and Rhode Island were the fist to feel the slump and are now well into recovery. Furthermore , there appears to be a pent-up demand for first time buyer properties due to a large number of Gen Y’s (born 1977 to 1994) that are now buying there first homes. Falling interest rates will motivate many of these buyers to step into the market now.

5. New Jobs and corporate profits are still strong: Corporate profits are still strong with companies as diverse as Microsoft and Jack Daniels reporting close to record profits. Furthermore, the economy has generated 4 million net new jobs and wages are rising.
6. A weak dollar may harbinger more foreign investment s in U.S. real estate: Although the decline of the U.S. Dollar will end up costing us more when we go overseas or purchase imports, it has resulted in more manufacturing jobs returning to the U.S. It also may mean more foreign investment in the U.S. properties as well. Just a few years ago, the Canadian dollar was only worth 70 cents in U.S. Currency. Today, the Canadian dollar has been hovering at about $1.05 to $1.10 U.S”. What this means is that we can expect more Canadians and Europeans to be purchasing U.S. property, because our prices are approximately 50% cheaper that they were just three years ago.
7. Real Estate: Still the best shelter: For those agents who represent reluctant first time buyers, Yun points to some interesting research from the Federal Reserve. Between 1995 and 2004, the average renter accumulated $4,000 in wealth. In contrast the average homeowner accumulated $184,000, Furthermore, the typical homeowner holds there property for 6 years. Within this period of time, NAR’s research shows that approximately 97 percent of the homeowners will have a positive equity position after that period of time.

Bottom line is that 2008 represents the best window that buyers will have to find excellent deals with excellent financing.

Good Luck

James Loftis P.A.,Realtor,Broker Associate,CRS,GRI,EPro

http://www.RealEstate911.com