Foreclosures

Beat the competition in buying foreclosures

While bank-owned homes are plentiful in many markets, they aren’t always easy for a buyer to snag.  Foreclosures sell at bargain prices – sometimes at 35 percent discounts when compared to non-foreclosures.  But the ultra low prices attract investors and all cash offers, which makes it difficult for other buyers’ bids to win out.

So how can buyers beat the competition to get a foreclosure?

Get the first look:  Fannie Mae and Freddie Mac’s First Look program offers first-time homebuyers and others who need financing and are looking for a primary residence the first opportunity to see bank-owned homes before investors.   Buyers have a 15-day window to submit offers before investors have the opportunity to start bidding.  Homebuyers can search for Fannie Mae’s REO properties at HomePath.com.  Properties owned by Freddie Mac can be found at HomeSteps.com.

Submit a competitive offer:  Homes priced at heavy discounts are usually in high demand and attract multiple bids.  Lowball offers will not work.  Some housing experts suggest starting with your best offer.  My advice is to offer the most you feel you would ever pay for the property.

Make a large deposit:  If a buyer wants to get the banks attention, they should offer a larger than typical good faith deposit.  The lender sees that, along with a short inspection period, as a sign that this is a serious buyer and their offer should be taken seriously.

 

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What is a short sale?

What is a Short Sale?

A Short Sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagee (homeowner).

Extenuating circumstances delegate whether or not banks will discount a loan balance.  These circumstances are usually related to the current real estate market climate and the individual borrower’s financial situation.

A Short Sale typically is executed to prevent a home foreclosure.  Often a bank will choose to allow a Short Sale if they believe that it will result in a smaller financial loss than foreclosing.

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Naples Florida real estate is on sale!

Beach playThis is the time to buy your “place in the sun”!  We’ve still got a generous inventory at pre-2001 prices.  Email me for a free list of foreclosures and short sales.  We’ve got them all…..Gulf access boating friendly homes, golf course properties, beachfront condos, villas, estate homes.  Don’t miss out on snagging YOUR warm weather escape.

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Considering a Short Sale? Time to act is now.

Should you Short Sell?

You may owe federal income taxes in 2013 if you have a short sale or foreclosure after this year.

Now is the time to make the hard decision: Are you going to walk away from your underwater home? Uncle Sam is still giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences – as long as the lender officially releases the debt.   But on Jan. 1, 2013, the rules change: The amount a lender forgives, ether in a short sale or foreclosure, on a primary residence will be taxable on federal income taxes.

So if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section.

Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: The banks must officially sign off in writing before Dec. 31.

It’s a huge issue – it will be a shock to many taxpayers after 2012.  The law first came into effect five years ago as the housing market went bust nationwide.  The Mortgage Debt Relief Act of 2007 “generally allows taxpayers to exclude income from the discharge of debt on their principal residence,” according to the Internal Revenue Service. “Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.”

Homeowners should decide now what they are going to do – to give themselves enough time to get to the closing table before December 31, 2012.

 

 

 

 

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Is a homeowner’s warranty necessary?

Protect your home.Many people only think of the term “homeowner warranty” as it applies to the purchase of new construction.   However, the term can also apply to the buying and selling of existing homes as well.

A home warranty pays for repair or replacement costs of the mechanical systems and built-in appliances that break down in a home.  Warranties can be purchased by either the buyer or seller.   If the home is new, the builder typically provides two types of warranties; a HOW warranty which covers structural defects for years two through ten and a one year builder warranty for most anything else which goes wrong in the first year after closing.  For a resale property, it’s negotiable in the contract, but usually the seller will pay for the warranty.  The coverage period is normally one year.

There are many companies offering home warranties (sometimes referred to as repair service contracts) and coverage of individual policies can vary widely.  Please email me for a list of reliable, BBB A+ rated warranty companies. Usually, central heating and air conditioning systems, electrical, plumbing and major appliances are covered.  The cost for a one year home warranty typically runs between $300 and $600 depending on the size of the home and the specific types of coverage.  In addition to the policy premium, there is normally a deductible of $50 – $75 to pay when making a repair claim.  This is normally paid directly to the service person that completes the repair.

There are some very good reasons to pay for a home warranty when selling.  Providing a warranty can give you an edge over your competition.  Buyers very much appreciate having a warranty, and will feel more confident about buying your home without having to worry about hidden issues or unexpected costly repairs shortly after closing.  Providing a warranty can even result in a higher price, many times offsetting the cost.  It’s been my experience that it can go a long way to an offer closer to your asking price.  Certainly it can make it easier for a buyer to make an offer. These benefits make the home warranty an excellent marketing tool.

If you are considering purchasing a home and it doesn’t come with a warranty, your Buyer’s Agent may want to request it on your Offer to Purchase.  I have found it to be an excellent negotiating tool.  Or, you also may wish to purchase one for yourself.  The first year after buying a home is a time when most people don’t have a lot of cash on hand to cover problems that might arise.  

How Comprehensive Should the Home Warranty Be?

Be sure to check the home warranty policy to see what items are covered.  Also check to make sure the policy covers the full replacement cost of an item that can’t be repaired.

Examples of covered items include:

Dishwasher/Disposal Pool Equipment
Electrical Systems Refrigerator
Furnace/HVAC Stove/Cooktop/Ovens
Microwave Washer/Dryer
Plumbing Water Heater

For more information on home warrantees, please feel free to contact me directly.  I will be more than happy to assist you in answering any questions you may have.

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International Buyers Love it Here!

International Home BuyersInternational home buyers are increasingly attracted to property in the U.S. Several factors, including the strength of the dollar, the value and desirability of U.S. real estate, and the emerging economic recovery, continue to drive international interest in owning a home in this country.

The U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country. Several factors have contributed to an increase in international buyer interest in the U.S.  Aside from the value of the American dollar, perceptions abroad about trends in the U.S. real estate market have led many international clients to believe purchasing a home in the U.S. is more affordable than in their country and holds more value.

International buyers came from 53 different countries around the world. The top four countries were Canada, Mexico, the U.K. and China/Hong Kong. With 23 percent of international buyers coming from Canada, the country has remained the largest buying group in the past three years. Florida typically attracts European, Canadian and South American buyers. Florida and California remain the top two destinations in the U.S.

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