Interesting piece in CalculatedRISK today(see link below)...however, in our local market we have not seen the huge influx of distressed property as predicted. Certainly, more homes than in years past that are foreclosing and even fewer being accepted for short sale. This phenomenon highlights the incorrect public perception that banks would rather settle in a short sale situation than foreclosing.
As agents, were are finding that banks are opting for the foreclosure rather than negotiate short sale options. Usually, with outstanding second loans being left in the lurch with little to no money coming their way, the foreclosure process swiftly deals with these outstanding second and third liens and clears the title for the bank to place the home back on the market; in many cases for less than the short sale offers. I have personally seen two instances in the past six months where this has occurred.
As for additional homes coming on the market in this "shadow" inventory...it's hard to say if folks are hanging on through the end of their savings, if they are actually finding gainful employment to continue making payments or if the former stigma of foreclosure has softened and folks will let their homes go back to the bank without batting an eye. Only time will tell...
Survey: Sales of Distressed Homes increased in January
Showing posts with label foreclosures. Show all posts
Showing posts with label foreclosures. Show all posts
Tuesday, February 22, 2011
Wednesday, February 02, 2011
Revisions to 90 Flip-Give and TAKE!!
As our mortgage broker at our office said, what the government giveth, the banks taketh away.
Apparently, someone at the bank didn't think that the 90 flip rule should be shared with regular Joe homeowner, only the banks should be allowed to move their inventory. Hence, we end up today with joint decision-making between some of the big banks like Wells Fargo, B of A, Chase, etc.) who determined that this will no longer pertain to individual sellers. And of course, these cats hold the purse strings because as FHA lenders, they determine who gets a loan and what those terms will be!
*Exemption was extended through 12-31-11. However, the investor decision is that this does not pertain to individuals who have purchased and are reselling a home within 90 days. This DOES include HUD REO's, Sales by Federal Agencies or federally chartered institutions and GSE's and approved non-profits.
*There are still overlays to the above approved purchases which usually means that these banks/investors will not purchase a property that has increased in value more than 20% or acquired within the last 90 days.
*In addition, if a property is being turned over between 91 and 180 days and the sales price is
100% or more over the price paid by the seller, a 2nd appraisal is required but at no additional charge to the borrower.
This all says to me, the layman, that once again, what is good for the government is not for us to use. Saving all the good stuff for themselves and leaving taxpayers to hold the bag! Sorry, but keep in mind, some of these distressed properties are still a great deal and deserve a once over!
Brooke
Apparently, someone at the bank didn't think that the 90 flip rule should be shared with regular Joe homeowner, only the banks should be allowed to move their inventory. Hence, we end up today with joint decision-making between some of the big banks like Wells Fargo, B of A, Chase, etc.) who determined that this will no longer pertain to individual sellers. And of course, these cats hold the purse strings because as FHA lenders, they determine who gets a loan and what those terms will be!
*Exemption was extended through 12-31-11. However, the investor decision is that this does not pertain to individuals who have purchased and are reselling a home within 90 days. This DOES include HUD REO's, Sales by Federal Agencies or federally chartered institutions and GSE's and approved non-profits.
*There are still overlays to the above approved purchases which usually means that these banks/investors will not purchase a property that has increased in value more than 20% or acquired within the last 90 days.
*In addition, if a property is being turned over between 91 and 180 days and the sales price is
100% or more over the price paid by the seller, a 2nd appraisal is required but at no additional charge to the borrower.
This all says to me, the layman, that once again, what is good for the government is not for us to use. Saving all the good stuff for themselves and leaving taxpayers to hold the bag! Sorry, but keep in mind, some of these distressed properties are still a great deal and deserve a once over!
Brooke
Monday, January 31, 2011
90 Day Flip Rule Takes a Vacation...
Recently the feds overturned the 90 day flip rule that requires sellers to "hold" onto a property for 90 days after the initial seller purchase regardless of whether they can sell the property in a shorter time period.
This move was pushed by the need to get the existing inventory of foreclosures reduced, therefore allowing potential investors to buy properties, do needed improvements and immediately put the property back on the market to sell. Over the past several years, this has not been possible, causing investors to hold back purchasing investment property because hanging onto the properties for 90+ days was just not financially reasonable.
Another consequence the 90 day rule was the impact of contractors losing work as a result of investors not needing projects on distressed properties. These jobs are part of the fuel for a healthy real estate economy.
There may be a glut of homes on the market but the majority need updates or minor repairs, something an investor can certainly handle with cash on hand. Unfortunately, the 90 day rule halted these small improvements in their tracks. Small projects can take less than a week and investors used to be able to get the home back on the market and sold quickly. Repairs and updates such as carpet, paint and minor cosmetics can help a property sell and keeps the buyers from having to come out of pocket with hard-to-get cash since down payment requirements are now larger and there are limitations on seller contributions. The ability for a seller to make these improvements on a recent purchase also helps to steady declining housing values.
All in all, the break will hopefully encourage investment, put contractors back on the job and remove the glut of foreclosures and distressed homes on the market.
Read the waiver from HUD
http://www.hud.gov/offices/hsg/sfh/currentwaiver.pdf
Want to get in on the action? Give me a call 336-817-3598 or shoot an email to me at brooke.cashion@allentate.com. There are some great opportunities out there and we look forward to assisting you in your real estate needs!
Brooke
This move was pushed by the need to get the existing inventory of foreclosures reduced, therefore allowing potential investors to buy properties, do needed improvements and immediately put the property back on the market to sell. Over the past several years, this has not been possible, causing investors to hold back purchasing investment property because hanging onto the properties for 90+ days was just not financially reasonable.
Another consequence the 90 day rule was the impact of contractors losing work as a result of investors not needing projects on distressed properties. These jobs are part of the fuel for a healthy real estate economy.
There may be a glut of homes on the market but the majority need updates or minor repairs, something an investor can certainly handle with cash on hand. Unfortunately, the 90 day rule halted these small improvements in their tracks. Small projects can take less than a week and investors used to be able to get the home back on the market and sold quickly. Repairs and updates such as carpet, paint and minor cosmetics can help a property sell and keeps the buyers from having to come out of pocket with hard-to-get cash since down payment requirements are now larger and there are limitations on seller contributions. The ability for a seller to make these improvements on a recent purchase also helps to steady declining housing values.
All in all, the break will hopefully encourage investment, put contractors back on the job and remove the glut of foreclosures and distressed homes on the market.
Read the waiver from HUD
http://www.hud.gov/offices/hsg/sfh/currentwaiver.pdf
Want to get in on the action? Give me a call 336-817-3598 or shoot an email to me at brooke.cashion@allentate.com. There are some great opportunities out there and we look forward to assisting you in your real estate needs!
Brooke
Thursday, November 04, 2010
Foreclosure 101
Questions and comments swirl in the media, coffee shops and living rooms across America regarding short sales, foreclosures and how they work. You hear of folks living in their homes months, sometimes years after not making a payment. You hear of others who miss one payment and are never able to rebound. So what is the skinny on the foreclosure process?
*Missing one payment does not constitute foreclosure. It can take months or years from the first missed payment for the bank to repossess the home and make the borrower leave.
*According to the NC Commissioner of Banks, over half of foreclosure proceedings that start, actually are foreclosure sales.
*When a buyer misses a payment, the bank starts by sending threatening and ominous letters. These letters include notions of accelerating the loan balance, phone numbers of credit counselors, information for military service, etc.
*Sometime around the 90 day mark, the bank contacts a trustee. This trustee is supposed to make sure that everyone receives proper notice of the pending foreclosure and the proceedings to follow.
*Once notice is given, a date is set to establish a hearing. This usually takes place at the "courthouse"--most of the time in the Clerk of Courts office.
*Proof must be given at the hearing that there is a debt to collect and that all outlets have followed the proper guidelines to get to this point.
*Once the home is foreclosed on actual eviction can occur forcing the borrower to vacate the property. More and more often, borrowers are leaving their homes well before this process occurs.
*Because there are more "strategic defaults" (folks walking away from their homes because continuing to make payments doesn't make financial sense) we are finding more of these foreclosures in better condition than in times past.
*Foreclosed homes that are in good condition are becoming competitive with homes that are owner occupied listings, thus driving prices down and resulting in a vicious cycle of depreciating values.
*Missing one payment does not constitute foreclosure. It can take months or years from the first missed payment for the bank to repossess the home and make the borrower leave.
*According to the NC Commissioner of Banks, over half of foreclosure proceedings that start, actually are foreclosure sales.
*When a buyer misses a payment, the bank starts by sending threatening and ominous letters. These letters include notions of accelerating the loan balance, phone numbers of credit counselors, information for military service, etc.
*Sometime around the 90 day mark, the bank contacts a trustee. This trustee is supposed to make sure that everyone receives proper notice of the pending foreclosure and the proceedings to follow.
*Once notice is given, a date is set to establish a hearing. This usually takes place at the "courthouse"--most of the time in the Clerk of Courts office.
*Proof must be given at the hearing that there is a debt to collect and that all outlets have followed the proper guidelines to get to this point.
*Once the home is foreclosed on actual eviction can occur forcing the borrower to vacate the property. More and more often, borrowers are leaving their homes well before this process occurs.
*Because there are more "strategic defaults" (folks walking away from their homes because continuing to make payments doesn't make financial sense) we are finding more of these foreclosures in better condition than in times past.
*Foreclosed homes that are in good condition are becoming competitive with homes that are owner occupied listings, thus driving prices down and resulting in a vicious cycle of depreciating values.
Wednesday, November 04, 2009
For The Record...NC Real Estate Update
Per Issue 6, November/December 2009 North Carolina Realtors Association:
Just some quick factoids regarding the current state of NC real estate. We hear so much nationwide news, I thought it would be beneficial to share some state numbers with you. Keep in mind, all real estate is local and even though these are state numbers, numbers specific to your area and/or neighborhood can be obtained by contacting me, Brooke Cashion at 336-817-3598 or brooke.cashion@allentate.com
*First-time buyers continue to fuel the housing rebound. Most are between the ages of 25-45 and they have accounted for nearly 50% of the homes sales in the first 7 months of 2009!!
*NC existing homes sales posted its fourth consecutive month of improvement in September, the longest period of gain in 5 years. **My commentary** This may be attributed to prices adjusting to more "normal" levels**
*NC ranks as the 6th most popular state in the nation when it comes to where people want to love, according to a recent Harris interactive poll.
*National foreclosure rates soared in the 3rd quarter with 1 in every 136 homes going into foreclosure...HOWEVER in NC, we had the 14th lowest rate of foreclosure with only 1 in every 417 homes going into foreclosure.
Please feel free to post commentary on your observations of these facts and figures and contribute any additional pertinent information you may have, including references and links.
Just some quick factoids regarding the current state of NC real estate. We hear so much nationwide news, I thought it would be beneficial to share some state numbers with you. Keep in mind, all real estate is local and even though these are state numbers, numbers specific to your area and/or neighborhood can be obtained by contacting me, Brooke Cashion at 336-817-3598 or brooke.cashion@allentate.com
*First-time buyers continue to fuel the housing rebound. Most are between the ages of 25-45 and they have accounted for nearly 50% of the homes sales in the first 7 months of 2009!!
*NC existing homes sales posted its fourth consecutive month of improvement in September, the longest period of gain in 5 years. **My commentary** This may be attributed to prices adjusting to more "normal" levels**
*NC ranks as the 6th most popular state in the nation when it comes to where people want to love, according to a recent Harris interactive poll.
*National foreclosure rates soared in the 3rd quarter with 1 in every 136 homes going into foreclosure...HOWEVER in NC, we had the 14th lowest rate of foreclosure with only 1 in every 417 homes going into foreclosure.
Please feel free to post commentary on your observations of these facts and figures and contribute any additional pertinent information you may have, including references and links.
Wednesday, April 22, 2009
Foreclosures Down in the Triad----I'll Drink to That!
The Triad Business Journal reported last week that foreclosures in the Triad were down 42% in the first quarter from the same period last year. This hopefully means some price stabilization for our area and local sellers. The state's total was reported at just under 6,000 last quarter according to the article. Please take the time to read previous posts as to why sometimes a foreclosure is a good idea and sometime needs a good hard look at what kind of investment you are making and at what price.
Tax re-evaluations are really "fiddling" with our local real estate market. Overly gracious evaluations have left current sellers feeling as if they are "giving" their homes away and that prices should be listed up, rather than where the buyers are dictating. Most homes on the market are showing "under tax value". Well, that's not saying much, since it seems that most of my current listings are under tax value and could not sell for close to the county's estimate of value. Beware when the government tries to set housing values...contact a local real estate professional for an a market assessment. Makes good info when submitting or going before the board to lower your value.
This weekend Kerner's Folly is hosting its second annual Cheers to the Folly. A beer tasting, chili competition and music event. The event is this Saturday, April 25 from 4-9 with proceeds going to Folly restoration funds. If you have never attended the wine or beer event or have never visited the Folly, it's a great opportunity to enjoy historic Kernersville for a great price! Hope to see you there!
Brooke
Tax re-evaluations are really "fiddling" with our local real estate market. Overly gracious evaluations have left current sellers feeling as if they are "giving" their homes away and that prices should be listed up, rather than where the buyers are dictating. Most homes on the market are showing "under tax value". Well, that's not saying much, since it seems that most of my current listings are under tax value and could not sell for close to the county's estimate of value. Beware when the government tries to set housing values...contact a local real estate professional for an a market assessment. Makes good info when submitting or going before the board to lower your value.
This weekend Kerner's Folly is hosting its second annual Cheers to the Folly. A beer tasting, chili competition and music event. The event is this Saturday, April 25 from 4-9 with proceeds going to Folly restoration funds. If you have never attended the wine or beer event or have never visited the Folly, it's a great opportunity to enjoy historic Kernersville for a great price! Hope to see you there!
Brooke
Monday, February 23, 2009
Keep Your HEAD In The Game...
In these unique economic times there are many so-called "bargains" out there, such as homes in short-sale, homes in foreclosure, homes for sale by owner, homes "under tax value", homes for "swap", homes for lease-purchase and so on. You get the picture. Everyone wants a "deal" and make no mistake "deals" are out there, but you have to adhere to the adage that you truly "get what you pay for". Meaning that just because a home that you are considering making an offer on has one of these glamorous tag lines that assures you that you are getting a deal that no one else can--doesn't mean it's so. Keep in mind these points when making an offer so that no matter what market you are in, your investment in real estate is as sound as it can possibly be.
*Buy a home that fits YOUR needs--don't buy a 2 bedroom home with one bath and no garage because you feel like its a bargain if your family needs more space and you have a classic car collection--buy a home that makes you happy in the short and long term.
*Don't assume that all foreclosures are bargains--You never know the condition of the home, how the previous owner cared for and maintained (or didn't) the home. Also, there may be other homes in the same neighborhood or area that are in better condition, that offer the same or more amenities AND at a similar or lower price. Why pay for something that needs a ton of work, has no history that you know of and may have other negative attributes, when you could pay a couple thousands of dollars more for the same or better home, less work and peace of mind? Make sure you've seen all of the homes on the market in an area and have compared the pros and cons...sometimes distressed sellers can offer better bargains than the banks!
*Be aware of short sales--Until the banks have additional staffing in place to handle the volume of short sales that they are experiencing, you as a buyer could wait for MONTHS to even receive a reply. In that time other buyers are also submitting offers that are directly competitive with yours. If you are considering purchasing a home that is part of a short sale situation, make sure that both your agent and the listing agent have had experience in this arena and make sure that they have good working relationship and line of communication with the bank involved in the sale.
*Just because it's under tax value doesn't make it a great investment--Tax value is assigned by the local government, in our area, the county tax assessor. These folks don't enter your home or your neighbors' and usually use a multiplier based on previous years' values and overall appreciation over the past five or so years. They don't know that you changed the green shag carpet or updated your kitchen...they make an educated guess based on numerous factors and equations. Tax values are all over the place as compared to market values and have little bearing as to what a buyer and seller agree is a good price on a given day. Tax values are a "catch-22" --meaning, you want a low value as an owner because you don't want to pay a lot of taxes, but when you sell, you want the value higher because unfortunately buyers look at this number as some sort of "rule of thumb" as to what kind of "deal" they are getting...so my advice is let's use this number for what it's intended for and that's to pay Uncle Sam--not to establish value!
*It must be a great deal if it's a FSBO! Not so! Just because the unrepresented seller isn't paying an agent, that doesn't give it the stamp of approval as a certified DEAL! Keep in mind that the sellers establish the price they are asking for the home with little to no experience in setting prices--of course they think their home is best--it's theirs, which usually means an inflated price! This understandable passion for their own home can translate into awkwardness and difficulty when negotiating and not using a licensed agent as a third party perspective. I cannot even begin to tell you how many listing appointments I have been on where the folks trying to sell their home have discovered that they grossly overpaid when they purchased years ago because they thought the seller was "cutting them a deal." Though it's getting easier to get comps off of the Internet to see what other homes in the area have sold for, it's not so easy to find out if the area has a stigma due to new road construction, railroads, air traffic or industrial nuisances. Usually it's not the owner who is eager to share these tidbits with you or know that they are legally obligated to do so.
So in a nutshell, be vigilant in these times of opportunity, keep your head on straight and don't be swayed by lots of catchy marketing verbiage. Employ a buyer's agent to keep you on the right path, to represent your interests and to advocate for you...it's well worth it and it doesn't cost you a dime out of your pocket!
If you need more information on any of the topics discussed here or to talk about how I can represent you, please contact me via phone 336.817.3598 or visit my website http://www.brookecashion.com/. I would be happy to discuss your specific situation and provide references should you request!
Happy house hunting!
Brooke
*Buy a home that fits YOUR needs--don't buy a 2 bedroom home with one bath and no garage because you feel like its a bargain if your family needs more space and you have a classic car collection--buy a home that makes you happy in the short and long term.
*Don't assume that all foreclosures are bargains--You never know the condition of the home, how the previous owner cared for and maintained (or didn't) the home. Also, there may be other homes in the same neighborhood or area that are in better condition, that offer the same or more amenities AND at a similar or lower price. Why pay for something that needs a ton of work, has no history that you know of and may have other negative attributes, when you could pay a couple thousands of dollars more for the same or better home, less work and peace of mind? Make sure you've seen all of the homes on the market in an area and have compared the pros and cons...sometimes distressed sellers can offer better bargains than the banks!
*Be aware of short sales--Until the banks have additional staffing in place to handle the volume of short sales that they are experiencing, you as a buyer could wait for MONTHS to even receive a reply. In that time other buyers are also submitting offers that are directly competitive with yours. If you are considering purchasing a home that is part of a short sale situation, make sure that both your agent and the listing agent have had experience in this arena and make sure that they have good working relationship and line of communication with the bank involved in the sale.
*Just because it's under tax value doesn't make it a great investment--Tax value is assigned by the local government, in our area, the county tax assessor. These folks don't enter your home or your neighbors' and usually use a multiplier based on previous years' values and overall appreciation over the past five or so years. They don't know that you changed the green shag carpet or updated your kitchen...they make an educated guess based on numerous factors and equations. Tax values are all over the place as compared to market values and have little bearing as to what a buyer and seller agree is a good price on a given day. Tax values are a "catch-22" --meaning, you want a low value as an owner because you don't want to pay a lot of taxes, but when you sell, you want the value higher because unfortunately buyers look at this number as some sort of "rule of thumb" as to what kind of "deal" they are getting...so my advice is let's use this number for what it's intended for and that's to pay Uncle Sam--not to establish value!
*It must be a great deal if it's a FSBO! Not so! Just because the unrepresented seller isn't paying an agent, that doesn't give it the stamp of approval as a certified DEAL! Keep in mind that the sellers establish the price they are asking for the home with little to no experience in setting prices--of course they think their home is best--it's theirs, which usually means an inflated price! This understandable passion for their own home can translate into awkwardness and difficulty when negotiating and not using a licensed agent as a third party perspective. I cannot even begin to tell you how many listing appointments I have been on where the folks trying to sell their home have discovered that they grossly overpaid when they purchased years ago because they thought the seller was "cutting them a deal." Though it's getting easier to get comps off of the Internet to see what other homes in the area have sold for, it's not so easy to find out if the area has a stigma due to new road construction, railroads, air traffic or industrial nuisances. Usually it's not the owner who is eager to share these tidbits with you or know that they are legally obligated to do so.
So in a nutshell, be vigilant in these times of opportunity, keep your head on straight and don't be swayed by lots of catchy marketing verbiage. Employ a buyer's agent to keep you on the right path, to represent your interests and to advocate for you...it's well worth it and it doesn't cost you a dime out of your pocket!
If you need more information on any of the topics discussed here or to talk about how I can represent you, please contact me via phone 336.817.3598 or visit my website http://www.brookecashion.com/. I would be happy to discuss your specific situation and provide references should you request!
Happy house hunting!
Brooke
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