Hi everybody!

WOW--talk about HEAT! In all the years I have lived here, it's never been over 100 degrees...until this week! With an even higher heat index! And just looking at the weather channel, it looks like record highs in MANY areas. Drink lots of water!

Anyway, this week I'm going to talk about Home Inspections, what they entail, and whether or not they are worth the cost. I always recommend to my buyers to spend the money to get a home inspection--in this area, on an average 1500 square foot house, the cost is approximately $300. Cost is usually based on the square footage of the home.

So what does a home inspection cover? A thorough home inspector will check a lot of things in the home. They will climb on the roof, and check for obvious leaks, and identify if flashing is loose or broken, as well as soffitts that are damaged or in need of repair. They will also check the electrical system, the plumbing system, turning on all lights and ceiling fans, as well as faucets and showers, and appliances going with the home. This will include the dishwasher, stove, microwave, refridgerator, hot water heater and air conditioning and heating system.

If there are other systems, like a swimming pool, hot tub, etc., those will be checked to be in working order as well.

Regardless of the terms of the sale, (whether a regular sale or an "as-is" sale), getting a home inspection is a good idea for the buyer. This identifies issues that might snow-ball if not known. My husband and I bought a house a few years ago and had a home inspection. It was an "as-is" sale, and the inspector identified a number of electrical issues. This helped us to identify the costs needed for this prior to the purchase. In some contracts, if written accordingly, you can back away if updates or repairs will be over a specified amount. We still bought the home, but got the electrical fixed right away--it was a potential fire hazard.

So what about a seller getting an inspection when they are getting ready to list the home? If it is not an "as-is" sale, and you plan on fixing any issues anyway, it could help your closing go quicker than it otherwise would. I've seen sellers get the home inspection, make all the repairs, and provide all that information to those interested in the home. The buyers could have gotten their own home inspection, but chose not to. It's a personal choice.

SO, is a home inspection worth the cost? As a Realtor® and a home owner, I definitely think it is worth the cost to help eliminate surprises. It doesn't guarantee that things will continue to be perfect and work indefinitely after closing, but it sure helps give peace of mind!

What are your thoughts? Would you get a home inspection when buying? How about when selling your home, before putting it on the market? Let me know!

Until next time!

Valerie Sullivan
Broker/Owner, GRI, e-Pro
Sullivan Enterprises, LLC
www.ValerieSullivan.com
Valerie@ValerieSullivan.net

Hi all!  It's been HOT HOT with the temperatures in the mid-90's and heat index at 105 around here--GREAT weather for going to the beach, or water park, or just staying inside in the air conditioning.  Me, I'm having a yard sale this weekend.  It's amazing how you can finish a yard sale and keep finding even more stuff you could have/should have put in it to sell!

I find being a realtor very enjoyable in many ways, but as with any job a person has, there are always the bumps and bruises that go with it.  I have shown buyers houses, and when driving up to the home never even make it inside the home.  This is through no fault of the seller, as they've landscaped nicely, the house is in great shape, well cared for, BUT, the neighbor either next door, or across the street has so much "stuff" in their yard, that it looks like a permanent yard sale...except there's never a "sale" sign put up.

I had one listing at one point that showed VERY well--a paradise yet close to everything.  The feedback I got from every realtor that showed it had to do with the neighbor across the street.  Just one house made the entire neighborhood look run down and decrepit.  The owner didn't know what to do.  She didn't know her neighbor, they had strange hours, and she didn't want to cause waves (can't blame her!).

SO, how can you handle something like this?  Well, I'm sure there are MANY ways, and I would be interested to hear any ideas, but I will explain how I handled this one.  We had scheduled a weekend open house for this listing, and of course, the question was "how do we deal with the "yard sale look neighbor"?   Well, a couple of weeks prior to the open house, I went over to the neighbor's house, gave him my business card, and explained as nicely as I could (you never know what the situation is in someone else's life) that we were having an open house in a couple of weeks, and the realtors that have shown it have given feedback regarding "your" house saying that it would show better if these things (showing and naming specific things) were moved out of the yard.  I asked him if he could possibly move the things to the back yard until the house sold to help his neighbor out.

The gentleman was very nice, and said that yes, he would get it cleaned up.  It was all of his mother's stuff, and he never knew what to do with it.  Before the open house, not only did he move all the junk (I don't know where any of it went), he set up a little table and chair set on the front porch with flowers on the table!

My seller was SO tickled that this guy was so willing to do this without any issues.  When the open house was over, I took over a large plate of cookies to him and thanked him profusely, not only for me, but for my seller.  He was tickled over getting all the cookies!  Win-win for everyone.

SO--any ideas on other ways to handle a situation like this?  I'm glad this turned out well, but am always open for suggestions and improvements!

Until next time!

Valerie Sullivan
Broker/Owner, GRI, e-Pro
Sullivan Enterprises
www.ValerieSullivan.com
Valerie@ValerieSullivan.net

Valerie Sullivan
Broker/Owner, GRI, e-Pro
Sullivan Enterprises, LLC
www.SullivanHomes4U.com
Valerie@ValerieSullivan.net

Hi all!

I just wanted to pass on some great local area news about one of our military bases. This is about the base that was my last assignment before retiring from the Air Force.

Hurlburt Field was a great place to be stationed for many reasons. If you want or need more information about Hurburt Field, visit www.Hurlburt.af.mil or Eglin AFB (just a few miles away) at www.eglin.af.mil.

Thank you SO much to all of you that are still on active duty and defending our nation while I sleep as well as when I am awake. You are appreciated so much more than you will ever know.

Until next time!

Valerie Sullivan
Sullivan Enterprises, LLC
Owner/Broker, GRI, e-Pro
www.ValerieSellsTheBeach.com
Valerie@ValerieSullivan.net

Selling Florida's Panhandle!

Hi all!

There weather here has been fantastic the last week or so--it is warming up enough to go to the beach and not freeze any more. The water is still cool, but I guess that's all relative. My sister came to visit me one November from Minnesota. I was freezing and turning blue, and she was basking in the Gulf--amazed at how warm it is here in November. It's all relative!

I hope the weather is great wherever you are as well!

I have put together a Teleseminar for first time home buyers that will take place on June 9th. This is a free teleseminar loaded with all kinds of information! So what will this teleseminar cover you ask? Briefly,

• What to do first when buying a home
• What an adjustable rate mortgage is (how to figure out when they ARE a good idea)
• $8,000 IRS Tax credit and how it works
• First Time Home Buyer Programs
• What to look for when you do buy a house (i.e. size, location, features)
• Inspections
• There will also be a question and answer period at the end

This is a no-obligation, FREE teleseminar.

So, how do you sign up? Go to www.7ThingsEveryFirstTimeHomeBuyerShouldKnow.com and click on the sign-up button. You'll be glad you did!

Valerie Sullivan
Broker, GRI, e-Pro
www.ValerieSullivan.net
www.7ThingsEveryFirstTimeHomeBuyerShouldKnow.com
 

Hi all!

Spring break is still on in many parts of the state and country, and state legislators are trying to come up with a program where first time home buyers can use the $8,000 tax credit they will receive buying a home prior to December 1, 2009 as their down payment for the home they do buy.

The point being that as a first time home buyer, you will be receiving the credit when you file your 2009 tax return. This could be a good idea, create more jobs, and put money back in to the economy this year instead of next--AND also allow people to get in to homes that will qualify for a loan, but do not enough for a down payment.

Keep in mind that the home needs to be owner-occupied, and the first time home buyer cannot have owned a home in the last 3 years.

While this would be a great idea, due to the time it takes to pass new legislation, there is a slim possibility that it will happen. For more information and the latest information, go to the article here:

http://www.floridarealtors.org/NewsAndEvents/n4-040309.cfm

The good news is that VA (veteran's administration) loans still allow for 100 percent financing as long as you qualify. Rural Housing loans are currently the only other program that allows for 100 percent financing.

With interest rates at an all-time low, the $8,000 tax credit, and how many houses are available for sale right now--THIS is the time to buy!

Looking at the Emerald Coast Association of Realtors Multiple Listing Service, there are 97 homes under $100,000 currently on the market in Fort Walton Beach. Increase that area to the rest of Okaloosa county, and that number goes up to more than 250 homes available for sale under $100,000. Increase the price to $150,000, and there are 268, and 901 available homes in Fort Walton Beach and Okaloosa county respectively. Defnitely plenty to choose from!

So for those of you in other areas, please take a moment to share with us what prices you are experiencing--we're all interested in what is going on around the country!

Until next time!

Valerie Sullivan
Broker, GRI, e-Pro
Sullivan Enterprises, LLC
Valerie@ValerieSullivan.net
www.ValerieSullivan.net

Hi all!

It's been a hectic but fun few weeks. With spring coming, it's getting warmer out, and the kids are getting spring fever--waiting...ever so impatiently...for spring break! I can't say I blame them--I enjoy walking on the beach every chance I get!

I recently wrote a book 7 Things Every First Time Homebuyer Should Know, and after speaking with my publisher about it, we decided releasing it as an e-book due to the timeliness of the information was a good idea.

With a new and different economy upon us, there are still plenty of people that need and want to buy a home--and for many it's their first home. You've heard from family, friends, and co-workers that it's better to own your own home than to rent--but why? You hear bits and pieces, but this book will put it all together for you!

7 Things Every First Time Homebuyer Should Know will explain what to do first when looking for a home, how best to utilize your time, as well as the services of your realtor. It explains how adjustable rate mortgages work and why and when they might be a good option. You can also read about and understand how the $8,000 first time home buyer credit works--is it really a credit? How about first time home buyer programs? Do they really exist? How can I qualify?

Along with this book, there will be a 4-week free webinar for those that are interested, covering information many first time home buyers are looking for. The webinar will be offered in April.

Maybe you're just thinking about starting to look, and just want some information. There's a lot to digest, and having this book to refer to when you are ready is a handy resource. It explains the steps you will go through in the home buying process, and when you should and shouldn't get a home inspection.

What about short sales and foreclosures? Bank-owned properties and REO'S? What is a short sale, and how do you know if buying one of these is a good deal or not?

Purchase 7 Things Every First Time Home Buyer Should Know and receive for FREE:

- 4-week webinar series explaining the home buying process, how to get started and what to do next!

PLUS These FREE Reports:

- 10 Things to take the Trauma out of Home Buying
- 10 Questions to ask your lender
- 10 Questions to ask your home inspector
- What your home inspection should cover
- Common Closing Costs for Buyers
- What to keep from your closing

All for only $25.00!

SO, check back in a few days--I'll post the web address where you can purchase this e-book, and you can use it yourself, or give it to a friend or relative considering buying their first home!

Until next time!

Valerie Sullivan
Realtor, GRI, e-Pro
Valerie@ValerieSullivan.net
www.ValerieSullivan.net

Hello all!

I hope this finds you all doing well! Well, I will get right to the point today...FULL DISCLOSURE is a must when it comes to selling your house. But what exactly, does FULL DISCLOSURE mean?...

Well, technically, we don't have to disclose crappy neighbors as a reason for selling our house (or do we?!) BUT, as a seller, if you've had burst pipes in your home, or a leaky roof, walls that spontaneously opened up with new holes, or a basement that is actually a pool in the spring, EVEN IF YOU HAVE TAKEN STEPS to repair these, should be disclosed when you sell the property. Also, if you've made updates, upgrades or major improvements to the property, it is best to disclose these as well.

When you list your home, your listing agent should have a seller's disclosure for you to fill out--whether you've lived in the home or not, I'm sure you would be aware of any issues in which you had to fix--so disclose them. Why? To avoid future litigation issues.

I'll tell you of close friends that bought a house with a finished basement--the sellers had finished the basement and claimed everything was up to code. After the closing AND beginning work to modify the basement in to an apartment, they found that permits were never pulled for the upgrade work already done, and the plumbing was too close to the walls according to the local codes. The sellers claimed they didn't do that work--so it turned in to a "he said, she said" thing because nothing was in writing. Then when my friends started pulling down drywall as they ensured everything was up to code, found the drywall stamped with the year it was made...which proved the sellers had done the work--and not up to code. The sellers then had to pay to bring things up to the CURRENT code requirements.

Could this have been prevented? Maybe--they did get a home inspection, but the inspector didn't identify that these could be code violations, or an issue. Was it his responsibility? That depends on the state requirements for his licencing and what he is responsible for. In this case, he was not.

The sellers could have prevented the ENTIRE issue, though, prior to selling, by pulling the required permits before getting the work done and getting the required inspections to ensure they were up to code. It would have saved everyone a LOT of heartache.

In another instance, I had a buyer ready to buy a house, really liked the outside and the yard and called me to view the inside. When I called the listing agent to show the home, she informed me that the seller had built a garage on to the house without getting the required permits pulled...and as it turned out, he built his new garage on his neighbors property. As soon as my buyer heard about this, they didn't want to even deal with someone that couldn't follow the rules. I didn't follow up on the house, but that sellers options at the time were to take down the garage (lowering the value of his property), request a variance in the building--not easy to get when no permit was pulled to begin with, or buy the land from his neighbor. This seller could have prevented issues by pulling required permits.

SO--do you HAVE to disclose changes, or issues when it comes to selling your home? Well, gee, Wally, I guess you don't HAVE to, but golly, would it be the right thing to do? Wouldja really went to deal with all the potential litigation and lose any profits you might have gotten from selling the house?

But what about those crappy neighbors? Well--maybe they'll talk their friends (if they have any, that is) in to buying the house and they can live next door in harmony!

Until next time!

Valerie Sullivan
Realtor, GRI, e-Pro
Valerie@ValerieSullivan.net
www.ValerieSullivan.net

Hi all!

Well, it looks like the economic stimulus plan had some changes made to it--go figure!

The one that affects the housing industry the most, though, is the homebuyer credit. It was rumoured that there would be a $15,000 tax credit to ANY homebuyer this year, but that got completely nixed (there goes the new house we were going to buy this year! Of course, we hadn't thought about what we'd do with the house we're currently living in yet...)

All is not lost, though. The $7500 tax credit that went in to effect last year for First Time Home Buyers was raised to $8,000 and now it doesn't have to be paid back (the original version had to be paid back over time). You do have to live in the home for at least three years, though.  If you sell the home prior to the three year mark, you will have to pay back the credit you do receive.

The dates were changed, too, and extend now to December 1, 2009--but remember, that means the property has to close by the first of December, not just go under contract. This also means that since it is a tax credit, it affects you when you file your annual taxes--this credit does not "come off the top" when you buy the house.

So make sure you talk to your tax professional if you are a first time home buyer and you buy that home this year!

ALSO, as a reminder to those of you that purchased a home in the State of Florida during 2008 through the end of February this year. If you have not filed for your homestead exemption, you have until March 1st to do so. You'll need to bring your paperwork from your closing to the county tax collectors office. They will verify that you are eligible for your homestead exemption. And for those of you unaware, the previous $25,000 homestead exemption is now $50,000, and if you are a disabled veteran, you are eligible for another $5,000 exemption, too.

Here's to lowering your tax bill!

Have a great weekend!

Valerie Sullivan
Realtor, GRI, e-Pro
850-803-8446
www.valeriesullivan.net

Author of 7 Things Every First Time HomeBuyer Should Know to be released Spring, 2009

Hi all!

It's amazing how different perspectives can be SUCH an eye opener...

I had a conversation with a friend this last week who made that title comment. "EVERTBODY is buying real estate." And you know what, she was right! EVERYBODY is buying real estate. Those that own their house outright, they've already bought, but they're still buying...by paying the taxes and insurance on the house.

The homeowner with the mortgage (whether they owe more or less than the house is worth is irrelevant) is buying real estate. While they pay the bank a mortgage every month, and only a fraction of that payment actually goes towards that principal payment, that homeowner is buying real estate, too.

But what about the renters? They don't pay a mortgage, they pay rent. Well, actually, a renter IS paying a mortgage. While some rental properties are owned outright, the majority have a mortgage on them. So as a renter, that $1300 a month rental payment goes to the homeowner, or apartment owner, and they in turn use that money to pay the mortgage, taxes and insurance, as well as maintenance, repairs and upkeep of the property. The advantage? The owner of that property gets the tax benefits of owning it. While the owner may get a cashflow (or, maybe not), depending on repairs and maintenance, they get to write off those costs. They also get a depreciation deduction--which also helps to lower that tax bill.

SO, while your entire house payment doesn't go towards paying down your principal, when you think of it, paying 5 percent on a mortgage, I think I would rather have my "rent" go towards my own mortgage payment, but that's just me.

What about you?

Hi all!

We've had some crazy weather running across the country the past few weeks--I'm not sure if I'm supposed to be hot or cold any more! I do feel like I need to keep multiple layers with me at all times, though!

I work often with first time home buyers, and it's alway interesting how we (those of us that have been through the process many times) take for granted the "little things." This past week I had one who was concerned about what and EMD is, how it works and does this mean I have to pay MORE for the house I'm buying?

First off, and EMD is short for Earnest Money Deposit, and this is a check you write when you put in an offer on a house. This money goes towards the purchase price of the house OR the closing costs. It is not in addition to the agreed upon price.

Why is an EMD required? This is a good-faith payment to the seller saying you are seriously interested in this home, however, if you get cold feet because you suddenly do not like the house, this is money you could lose. If you are getting a loan, though, and are concerned that you "might not get" the loan, there is a contingency clause regarding financing. This means that if you don't get approved for the loan to buy the home, you can get your EMD back.

How much is an EMD? It depends on your area specifically. It is usually at least one percent of the offer price, or some areas will have a minimum of $1000 regardless. Either way, this is still "your" money and goes towards the purchase price/closing costs.

Does the seller get my EMD as soon as I pay it? It can, however, not customarily. In Florida, you will make a check out to either the real estate brokerage listing the home, or a title company that will be holding the money in escrow until the closing on the home. The amount you paid will be a part of whatever your costs are at closing. If, for some reason, there is excess money left over at closing, then you can get that back at closing, depending on your lender.

I've seen a few buyers that are concerned about an EMD, thinking they are paying more, or it's money they will never see again, but you have to look at it like this--it's a large investment--buying your first home--you need to put forth a good faith deposit and let the seller know you're serious about buying their home.

If you have questions or are concerned about how the EMD works, talk with your lender or your realtor--or feel free to ask questions here!

Cheers!

Hi all!

It got cold over the last few days (ok, "cold" for this part of Florida is in the 30's at night and not getting above 50 during the day), but I have to admit, I'd rather have this weather than what they are dealing with up north! Digging snow tunnels is great when you're a kid though!

Anyhow, I had a conversation with a friend of mine this morning, a mortgage broker and one question that came up that many buyers are wondering right now...are there ANY 100 percent financing home loans available left? With all the changes, and stricter guidelines for getting a loan, people still may not have 20 percent of a down payment saved up to buy their home.

Well, believe it or not...the answer is yes...for starters, the Veterans Administration is still offering 100 percent financing (which in some cases can be raised to 103 percent to roll in the funding fee you must pay). If you are a disabled veteran, though, you do NOT have to pay that funding fee (minimum of 2.2 percent of the loan amount). You do need to ensure your lender gets a copy of your disability determination as part of your necessary paperwork.

But what if you are not a veteran? What are your options? Well, the only program out there that still does offer 100 percent financing is Rural Development loans. This means that the house itself has to be considered in a rural area--which may be different than what you think. In Okaloosa County, Florida, the area between Hurlburt Field, and Eglin AFB is NOT rural (Fort Walton Beach), however, areas of Mary Esther, Navarre and Destin (YES, DESTIN) are considered rural development.

So what about this Rural Development program? Right now, with one of the programs my friend was telling me about is that the seller gets an appraisal on the property when they list the property. Rural development lenders will not lend more than what the house is worth "today" (ok--so that's the way it is with ANY lender). However, since Rural Development lenders will lend up to 100percent of the property VALUE (not just contract price--all other lenders lend based on the LOWER of appraisal price or contract price).

Once the seller has the appraisal on their Rural Development property, they KNOW that the buyer cannot get more than that for their loan, so now they can determine how much they are willing to pay towards the buyers closing costs on top of their realtor fees, and determine their bottom line early in the process.

So why is this such a good idea? Many times, a house is listed and while the realtor does a comparative market analysis on it, the true value isn't known until the appraisal is done. With knowing the appraisal amount now, both the buyer and seller know what they're dealing with in terms of an appraisal. If the seller gets the appraisal and realizes that it won't give them enough, they don't have to waste their time listing the property for more than they will know it will sell for today.

So, are you ready to buy? Does this give you some good options? Then don't hesitate, do something about it!

www.rurdev.usda.gov

www.homeloans.va.gov

Hi all!

I hope everyone had a Merry Christmas and Happy New Year! I enjoyed time over the holidays spent with family, and everyone I've spoken with has said the same thing. Family is important, and my broker put it in perspective when he said "no matter what you do for a living, the bottom line is that you do it for your family, to be with them and spend time with them." This was a holiday season that it really hit home.

That said, we all have our New Year's resolutions, but I find it amazing how so many go by the wayside within six weeks. I stopped making "New Year's resolutions" many years ago for that very reason. I set goals, but not necessarily at the beginning of the year. Businesses usually set up projections/plans/goals for the next year mostly to be in conjunction with the new year--which coincides with the tax year.

So what are your goals? Not just for this year, but your future? Are you renting, or in a situation where you'd like to buy a home? Do you have a great job, but want a better job? Or are you working at a crappy job and want better, or you love your job, but think that things could be better? How about your family life? Are there things you would like to do and it just hasn't happened?

If you haven't written down your goals, now is the time to do it. Owning a house, buying an investment property, getting a better job, traveling or spending more time with your family--these are all goals. Some people prefer pictures--cut out from a magazine, or off the internet--do what works for you. Write them down and then be open to ideas on how to accomplish them as they come to you.

I'll use buying a house as an example. It's at the top of your list and you're ready to own. Let's say you've never owned a house, you know you're credit is not the best, but honestly are not sure what your credit score is. You have balances on a few credit cards, and you're able to put a little away each month to save for your new home. You think it'll take years before you will be able to buy, but have you really figured out the details? First, by talking to a banker or mortgage broker, they can pull your current credit report which will give you a credit score. This information alone can help determine your ability to buy. If you have a credit score of 395, chances are really good you won't get a mortgage. But in the 620+ range, you could be in a good range to buy, depending on your other factors.

Your household income and debt, as well as any savings you have also play a factor in your ability to buy. A lender will look at your debt-to-income ratio to help determine how much house you can afford to buy.

Also, as a first time homebuyer, there are first time homebuyer programs available based on your income and family size (a family of one is eligible), and/or occupation.

See, while a goal may be to "buy my first home" in the future, it could very well become a reality for you this year. Home prices are stablizing, and interest rates are now below five percent. The last time they were this low was when the housing boom did happen (now 3 years ago)--except home prices are much lower now--in a more realistic range.

If you figure out that you have just a little too much debt to buy a house, then come up with a plan to turn that around--a better paying job, and/or paying off credit card debt, putting just a little more each pay period in to the savings account. The point is to come up with a plan and stick to it--whatever that plan is.

Good luck and have fun with getting your goals together!

I have family in town for Christmas and am enjoying the holiday a great deal. Even the dog has been doing his part in being entertaining! Grandpa did by a new rug for inside the front door that Odin can't slide/jam up against the door any more (thus preventing anyone from getting in or out the front door! Odin has still tried--he can't figure out why he just slides across this new rug--and keeps trying!

SO-Just a short note to tell everyone Merry Christmas for this week!

Enjoy your time with your friends and families.

I'll be back next week with interesting real estate topics!

Valerie

Hi all!

This is going to be a short post today--with getting ready for Christmas, like most people, and having too much on my plate, I managed to get the flu so am trying to get over it before family arrives for the holidays!

Anyway, I did receive an email from one of my lender contacts showing interest rates for today. Keep in mind that not every lender/mortgage broker will have the same rates on the same day, but this still gives you an idea of what's out there.

Getting a loan at 5 percent interest today is EXCELLENT, so if you're considering purchasing, don't hesitate! Now is the time to buy before rates begin rising!

CONVENTIONAL-30 years-4.875% with .875 points/5.250% with 0 points.
15 years-4.750% with 1.000 points/5.000% with 0 points.

JUMBO-30 years-7.500%% with 1.000 points/8.125% with 0 points.
15 years-7.625% with 1.250 points/8.000% with 0 points..

ARM'S-3/1 ARM-5.500% with 0 points/ 5/1 ARM-5.500% with 0 points/ 7/1 ARM-6.500% with 0 points.

GOVERNMENT(VA & FHA)-30 years-5.125%% with 1.000 points/5.500% with 0 points.
15 years-5.500% with 0 points.

INTEREST ONLY-3/1 ARM-6.500% with 0 points/ 5/1 ARM-6.250% with .375 points/ 7/1ARM-6.500% with .250 points.

RURAL DEVELOPMENT-30 years-5.500% with 0 points.

CONSTRUCTION/PERM-5.500% with 0 points.

BOND- 6.75% with 0 points-First Florida-(FHA/VA/RD) with down payment/closing costs assistance.
6.50% with 0 points-Community Heros(FHA/VA/RD) with down payment/closing costs assistance.
6.25% with 0 points-Florida Advantage(FHA/VA/RD) with down payment/closing costs assistance.

Stay healthy and enjoy the holidays!

Hi all! I hope you had a wonderful Thanksgiving! I had the opportunity to spend it with my dad who I had not seen in 2 1/2 years. It made me realize that I need to make sure less time passes when I see him again, and to not let life get in the way of spending time with family.

Well, even though a lot of people are dealing with short sales and foreclosures, there are many people who are also in a position to buy that second house--an investment property--their first investment property. With the large number of homes on the market, interest rates still low, this is the time to buy. There are quite a few deals out there to be had. You do have to do your homework though.

First off, when you do buy a rental property, it is a long-term investment. You have to plan to be in it for more than two or three years. The initial concern when looking at a property that you are considering purchasing for rental is to find out what the current going rents are in the area. Even if there are a lot of rental properties available, if you can afford to list yours for rent just a little lower than the going rents in the area, you'll get it rented quicker than the rest.

If you have the funds to pay for a rental property out-right that is great, but this is for those who will get a mortgage for their property. When you get that mortgage, you'll want to be able to "cash flow" your property. This means that after paying your mortgage, property management fees, and any other expenses, you'll have more money coming to you than you will pay out.

Usually the best properties for rental investment and re-sale value in the future are at least three bedroom, two bathroom homes, with garages. These are your basic "bread and butter" type homes.

If the going rents for the average 3 bedroom 2 bath in your area are around $1,000 a month, then you want to make sure your mortgage payment (which includes Principal, Interest, Taxes & Insurance), plus management fees equal less than that $1000 per month. Your payment, of course, will depend on the price of the home, and your interest rate, and your down payment. Taxes and insurance will vary with the home and area, so you will need to do your research and get insurance quotes to find out your costs.

Property management fees average around 10 percent for long-term rentals. Depending on the area you live, they may be higher or lower. This means that if you get $1000 a month rent for your home, your property manager will get ten percent of that.

You can purchase a home warranty annually as well to help lower repair costs. A home warranty will require a deductible of around $50 to repair something (as long as it is covered under their policy). Some owners require the tenant to pay that deductible if a repair is called in. This is a personal preference.

When you do find a home to buy, I always recommend you get a home inspection prior to the purchase to alleviate surprises. Many times, fixer-uppers are great properties to buy and turn in to rental properties. Done right, you will have equity in the home, even after making repairs, and you will still cashflow easily.

When you decide to get in to buying rental properties, it is best to have a reserve for vacancies and repairs of about three to six months. More is better, but not always possible. You can also cut costs if the property is local, you can do repairs yourself and/or you manage the property yourself.

And, of course, there is always the tax benefit of owning a rental property. Talk with your tax professional as to how it will affect you directly, however, you can take depreciation, as well as write off repairs, taxes, insurance, and interest on your mortgage.

Regardless, before buying your first investment property, do your homework--it can be a great long term investment.

Good Luck!

Hi all! I hope this finds you doing well!

With the housing market the way it is right now, I'm sure we either know someone, or are dealing with it ourselves the choice of having to sell a home or rent it out and trying to figure out what is the best option. Utlimately the decision IS yours as to what you do decide to do, but knowing some information, and the right questions to get answered can help a great deal.

I know there are many people that, due to a job transfer, have to leave their house behind. They've put the house on the market for six months prior to leaving, with little to no activity. And, like it or not, a house WILL sell at the right price. Sometimes the challenge is figuring out what that price is. And if you've only owned the home a few years, or took out a second mortgage on it, you probably don't have a lot of wiggle room to keep lowering the price.

SO, what are the options? Well, you can sell via a short sale, and deal with those consequences, continue to lower the price until it does sell, you can leave it vacant until it does sell, or just leave it vacant without having it on the market to sell, or you can choose to rent out the house. The choices are yours. If you have a mortgage, though, and your income won't cover a mortgage on this house, plus a mortgage on your next house (or rent if that's your choice), then you have to figure out where the money is going to come from to pay that first mortgage payment.

Renting can be an excellent option, but there are things to remember when you do rent out your house. First off, chances are, even if you have excellent renters, the house is not going to be in as good a shape as when you left it. There is going to be normal wear and tear, things wear out, settling happens. Granted other things can and do happen, whether it's the fault of the renter or not. You do have to realize that nobody will take as good care of your house as you do. This doesn't mean that by renting the house will be "ruined" forever. Sometimes some repairs are required, or painting, new flooring, things like that, but keep in mind, after living in the house for a few years yourself, you would likely be changing out the flooring and painting anyway.

When you rent, there are a couple of ways you can handle the renting. You can manage it yourself regardless of where you are. Some people see this as a hassle and don't want to bother. If you have a good rapport with your renters, though, it can work out wonderfully. The disadvantage, though, is that you can't see for yourself damage or issues--some issues that can be fixed are relatively minor and you can save money by doing them yourself. If you have a good tenant, they often take care of many minor issues themselves (I LOVE renters like this!). There are plenty of places that you can advertise your property for rent for little to no cost. Check out the area where you live, and where people go to look to find a place to rent.

The other option is to get a property management company to manage the rental. They usually charge 8-10% of your monthly rent (some will be higher or lower--vacation rentals are considerably higher). Some companies also charge a fee for getting a renter in to the property. This could be a flat fee, or a partial month's rent once the renter does get in there. They show the house to respective renters, let you know what the current market rents are, and a good price for your house if you want to get it rented quickly. With the market flooded with so many properties that are not selling, the rental market is now getting flooded as people think it is a great option--except right now you have to either have a house that is highly desirable, or a great price. Both will ensure it rents quickly.

What's the best way to determine a price to rent? Look around to see what people are asking for properties similar to yours, in the same neighborhood, and see how long those houses have been on the market for rent. To get yours rented quickly, lower it from what everyone else is asking. Think about it, if you were going to go rent a house, and you saw two that were identical, same neighborhood, both in great condition, and what you are looking for, which house would you pick? My guess, the one that's priced lower. Granted, you won't make as much of a profit, however, getting most of your mortgage paid due to a lower rent amount is better than getting none of it paid because you have no tenant.

Things to ask your property management company; if you haven't personally witnessed how they've handled rental issues previously, you'll want to know. How do they handle when the rent is late, what do they do if someone violates the lease in other ways? This could be something as minor as, you thought it was a husband, wife, and small child renting from you, and you find out later it's actually 8 adults in a 2 bedroom house. While some families have no problem with doing this, it may be in violation of the lease--so find out what your management company would do in that case. I would personally be concerned about this, because even if the rent is on time, chances are that my property is not being taken care of as well as it should be if they are violating the lease agreement.

Screening tenants. You obviously want to know you have tenants that are going to pay rent, so how does the company determine that will happen? Some companies will let anyone rent as long as they have the needed cash to move in. Others will do a credit/background check, and of course, there are scenarious everywhere in between. If it's important to you to have a check done, ask the questions.

Eviction. What would constitute an eviction, and how does that work? I know it varies with the state. In the state of Florida, I can have a tenant out of my rental in 23 days if I do things immediately and by the book. As an owner, I can also file a judgement against a renter for damages, and past due rent. A property manager is limited--they can file eviction paperwork and take back possession of the property, but they cannot represent you, or file for monetary issues. If you want to sue the tenant for money, you will either have to show up yourself to do the paperwork, or hire an attorney.

I have seen some leases that do have a provision for illegal activity at the house--in those cases, eviction can happen within 24 hours. This could be a tenant getting arrested for illegal drug activity in the house for example.

In other states, it takes longer to get a tenant out, so you will need to know the landlord tenant laws of the state your house is in. A local property manager can help with educating you on how things work in your state. You can also do a search on the internet for the state statutes, and read through them yourself if you are so inclined.

Rent it or sell it...that is the question...if you're still not sure, if you're sitting on the fence, and not making a decision because you don't know what is the best way to go, sit down and write down on a piece of paper all the facts, and the pros and cons of doing both. Write down a list of questions that may help you with your answer. Can you lower the sales price any more? Is a short sale an option? As you get more and more "no's" on your list, you'll find what your options are, and be able to make a better decision as to what to do.

Good Luck!

Valerie A. Sullivan

Broker Associate, GRI, e-Pro

Hi all!

I know it's been a while. It has been quite a hectic time this past few weeks, but I'm back on board.

I've made some adjustments with work and am now working for a company called Anderson Auctions, Inc. in Destin, Florida. I'm very excited about the move, and about learning the ins and outs of this niche in real estate.

Anderson Auctions, Inc. mostly auctions off real estate in the Panhandle of Florida. It's another option for sellers selling their homes, as well as buyers when it comes to buying their homes.

With this type of auction, as a seller, you can sell absolute, or reserve bid. Absolute means that the house WILL sell at ANY price. This type of sale usually brings in a lot of bidders because many believe they will bbe getting a good deal. There is a chance the house will sell for less than the seller is hoping, but there is also a good chance a seller will get more than expected.

With a reserve auction, the seller determines the minimum price they will accept. If the bidding does not reach that point, you can decide if it's still "close enough" to sell, or not sell at all.

For the buyer at one of these auctions, you do have 30 days before you have to close on the property. This type of auction property usually holds open houses prior to auction, and you are able to view the inside as well (unless an auction on the courthouse steps).

When you buy a house at one of these auctions, you buy it with NO contingencies--this means you need to either have cash, or already have been working with your lender and become pre-approved (not pre-qualified) for the loan prior to bidding on ANY property. If you cannot obtain financing on a house you've won the bid for, you could be in for a lawsuit, so get pre-approved first.

With an auction sale, it's "as-is" and what you see is what you get. If you're concerned about any issues with the home, and plan on bidding, then it's best to get an inspection prior to the auction.

You can also put a bid/offer in on a property before the auction actually happens. This will be like a regular sale and purchase offer. If you buy the property before it goes to auction, then the auction doesn't happen. If the seller doesn't like your offer, then he'll reject it, and you will have the option of going to auction to bid on it.

As a seller, you will have to pay a marketing fee up front in order to sell your property. The cost depends on your property, the price, and the marketing plan.

When you win a bid on one of these auction properties, you, as the buyer, pay a 10% buyer's premium. This basically pays your closing costs.

When a property is auctioned, it usually happens relatively quickly--within 30-60 days. In a market where property isn't selling quickly and there is a large inventory, this is a good option for a seller that hasn't had any activity on their listing in months, or someone that just doesn't want to deal with going through the traditional listing process.

As I learn more about the auction process, I will pass on that information to keep you informed. And as always, I will continue to talk about different aspects of real estate. Feel free to ask questions as well. I will be glad to discuss them here.

Until next week!

Hi all! I found this information, and couldn't have said it better myself, so thought I'd leave you with this article from Money Magazine. I know the questions about this fall under "how is this bailout going to benefit me?" Good question!

I'll be back in two weeks as I'm going out to celebrate my anniversary with my husband on a cruise for a week!

Enjoy!

What the bailout does for you!!!
The $700 billion bill offers more than just relief for the banking system - it's a sweet deal for John Q. Taxpayer too.
By Amanda Gengler, Money Magazine writer
October 15, 2008: 11:09 AM ET
NEW YORK (Money) -- By now you're well aware that the federal government recently approved a historic bill aimed to rescue our nation's faltering financial system. But what's gotten far less attention than the billions approved to prop up banks, are significant tax benefits included for individuals.

Buried in the 400+ page plan are more than $150 billion in individual and business tax breaks, including another temporary patch for the alternative minimum tax, credits for energy-efficient upgrades to your home and extensions for many benefits set to expire, according to CCH, a tax information and software provider. Some of the breaks apply to the upcoming filing season.

"There are nearly 100 changes to the tax code," says Mark Steber, vice president of tax resources at Jackson Hewitt, a tax preparation company. "There is a little bit of something in here for a lot of people. This is a very pro-taxpayer piece of legislation, separate and apart from the financial bailout related changes."

Here's a rundown on what's new, and what has returned, so you can make sure you're not handing Uncle Sam any more than what you have to.

A quick fix for the AMT. Once again, the government has approved a one-year patch to keep many middle-class taxpayers - about 23 million, according to the tax information publisher J.K. Lasser - out of the reach of the alternative minimum tax in 2008. The law ups the exemption amount this year to $69,950 for joint filers and surviving spouses and $46,200 for single taxpayers. But Congress will have to act again in 2009 for these middle income folks to dodge the AMT going forward.

Mortgage debt forgiveness. The law brings some good news for homeowners who foreclose, sell for less than they owe or restructure their mortgage with their lender. Traditionally, when a lender forgives any mortgage debt, the cancelled debt is treated as taxable income. So previously if you had lost your home, you would have also faced a big tax bill. Double whammy.

The new bill extends a soon-to-expire law that temporarily stops homeowners from owing federal taxes on up to $2 million of forgiven debt. The catch? The debt has to come from purchasing, building or upgrading your primary residence (which includes your original mortgage) - and not from, say, a home equity loan taken out to pay off credit card bills, says Mark Luscombe, a principal analyst at CCH. The new law will extend the break until 2012.

A break on education. Individuals paying college or graduate tuition for their children, spouse or themselves in 2008 and 2009 can deduct - even if you do not itemize - up to $4,000 if your adjusted gross income is $80,000 or less for singles and $160,000 for joint filers. The previous deduction expired last year.

You cannot, however, take this deduction and get the existing HOPE or Lifetime Learning credits for the same person. If you qualify for both you are generally better off with one of the existing credits, says Luscombe. But many individuals who earn too much for the credit can take the deduction, since that income cap is higher, he adds.

A sales tax deduction. For the last few years individuals had the option to deduct state and local sales tax instead of income tax. "This was especially popular in states like Florida and Texas where they don't have income tax, and even states like Illinois, which has a modest income tax but a fairly high sales tax," says Luscombe. But that deduction expired in 2007. The new law brings it back through 2009. Even residents of high income tax states who make a large purchase such as a boat or car during the year may save more with the sales tax deduction then the income, says Steber.

Lower property taxes. Originally only for 2008, but now extended to 2009, homeowners who do not itemize can deduct up to $500 ($1,000 for joint filers) of property taxes in addition to the standard deduction. So homeowners who pay little or no mortgage interest, maybe because they have nearly or already repaid their loan, or they bought the home with cash, can likely save, says Steber.

Tax-free charitable donations. If you're 70.5 years or older you can withdraw up to $100,000 from an IRA and donate it to charity, tax-free. You can tap a traditional or Roth IRA, but you will typically save more in taxes if you go with the traditional account since you can withdraw your Roth contributions tax-free anyway, says Luscombe.

Energy tax credits. The government is enticing you to make your home's energy footprint smaller next year. In 2009 (they skipped over 2008, says Luscombe) you can qualify for a credit of up to $500 for qualified improvements to make your home more energy efficient. These include adding insulation, replacing windows or buying an energy-efficient water heater.

You may also be eligible for a credit on any expenditures for solar or wind power for your home. There's a catch: if you previously took the $500 energy home credit, you're out of luck. It's a one time thing.

Disaster aid. If you were affected by Hurricane Ike or this year's floods or tornadoes in the Midwest, you may qualify for relief, including significant benefits like some of those offered to Hurricane Katrina victims, according to J.K. Lasser. For example, you may be able to deduct more of your losses than traditionally allowed, or to tap an IRA without paying the 10% penalty (you still may have to pay taxes) to help fund the clean up.

<http://money.cnn.com/2008/10/15/news/economy/bailout_tax_credits.moneymag/mailto:money_letters@moneymail.com>

Hi all!

We've had some good rains here the past couple of days--and we've needed it. But now it's time to cut the grass one last time for the winter!

This week's topic--Home Warranty's. I am finding out that many people--those who've owned homes for a while, as well as those who have never owned a home, have no idea what a Home Warranty is, so I'm here to explain them to you.

There are a number of Home Warranty companies out there, and basically, what they are is a company where you "buy" a warranty on your home for one year. It costs approximately $400 for coverage (varies according to your coverage level). If one of the covered systems in your home goes on the fritz--whether is the air conditioning system, heat, plumbing, hot water heater, dishwasher, you name it, you call up the Home Warranty company and say "Hey! It's broke!" and they will send a local company to fix it. You have to pay a fee of about $50 (also varies with the coverage you get), regardless of the price of the repair. The Home Warranty service pays for the rest.

I highly recommend getting a Home Warranty when you buy a home. If it's a new build, though, everything is likely covered under the original builder's warranty, so it's not as much of an issue. With an older home (5 years or more), it's a good idea, though. When I bought my home, it was 8 years old. I got a Home Warranty with it, and 8 months later, my A/C system quit. It cost me $45 for a $1,600 repair. Talk about RELIEF! I didn't have to scrape up that $1,600!!

The good part about a Home Warranty is that you don't have to wait to buy your home to get one. Some companies will only sell them to you when a property is sold, but others don't have that requirement.

When it comes to buying or selling a home, as a seller, you can offer a Home Warranty for buyer's peace of mind. As a buyer, you can request in the negotiations that the seller pay for the Home Warranty. If that doesn't happen, you can always call once you've moved in to your home and tell them you just bought a home and you would like to get a Home Warranty.

You can renew your Home Warranty annually if you so choose, but it is not a requirement. Make sure when you get one, though, that you pay attention to what is covered. I bought a Home Warranty for a property once, and made sure I had coverage for the A/C system, however, found out when I needed it repaired that this company DIDN'T cover geothermal A/C systems. That was quite frustrating. They always say "Read before you sign on the dotted line!" and even though I know that, I didn't this time.

If you have a Home Warranty in effect, and are in the process of selling your home, most companies will allow the warranty to transfer to the new owner.

Good Luck!

Hi!

I know it's only been a day, but I thought it was worth posting again so soon because of the new program HUD has just rolled out called Hope for Homeowners.

If you go to www.hud.gov it has fact sheets that explain the details, but in short, this program is designed to help homeowners that want to stay in their homes, but can no longer afford the payments, but if they sell the home, it will have to sell through a short sale.

It is designed to work through your current lender, with HUD, to refinance your existing mortgage to 90 percent of the current appraised value through a new fixed 30 year FHA mortgage.  There are restrictions, of course.  It must be your primary and only home, and when you do sell, you share the equity in the home with FHA, but considering you would walk away with NO equity in a short sale, this could be a great option for you if you qualify.

If you, or someone you know are in a position where you are unable to pay your mortgage, take a look at the website above and go to the information on Hope For Homeowners.  Check out the qualifications and see if you qualify. 

All-in-all, it looks like a good program that could help a lot of homeowners in trouble right now.

Good luck!

Hi all!

I know I missed a week, but I'm back now! 

One thing about buying a house is that it's a time in your life when you pay particular attention to your credit score and what your credit report says about you and how you handle your finances.

We all are now aware that we can get a free annual credit report, however, after doing some research, I discovered a few things.  First off, like with any other search parameters, when you put in your search terms, it will bring up a plethora of places that say "free credit report" and when you go to the sites, you find out that you have to sign up for a "trial period" for another service and then remember to cancel the membership before you get charged.  I can never remember when I have to do that, so I don't like to sign up for those free trial periods.

Well, the good part is that there is a good option.  There is only one site that the Federal Trade Commission authorizes to give the free credit reports.  Mind you, you will not get your credit score (unless you pay a price--go figure!), however, it's still a good idea to get the free credit report from the 3 credit bureaus so you can see if there are any potentially negative things on your credit report that you need to clean up prior to getting a loan.

SO, if you haven't gotten your annual free credit report yet, go to www.annualcreditreport.com and you can get your report from each of the bureaus.   To verify it is you, they ask questions that only you will know that will appear on your credit report.

It's a good idea to check your report annually anyway, but if you haven't looked at it in a while, or your planning on buying a house in the next few months to few years, or you know you need to clean up your credit, take some time and get your free credit report.  If there are issues, there are directions on each of the sites on how to file a dispute.  I've had to do this, and while it may seem tedious and time consuming, it was worth it in the long run to get the issue pulled off my credit report.

Enjoy!

Hi all! I know it's been a while. I was in Atlanta last week in some pretty intense conferences and meetings. The best part was the meeting I had with my publisher. I have started writing a book "Nine things every First-Time Homebuyer should know." I realized after talking with just a few people at a time about buying homes--the majority being first time home buyers--that I could reach more people by writing this book. It's something I am quite excited about.

The home-buying process is daunting for anyone--regardless if it is your first time or not, and even though there is SO much information available at our fingertips--especially on the internet--it is sometimes hard to wade through it all.

With that said, I've talked with a number of first time homebuyers just in the last couple of weeks that were just getting started and had no idea where to start (confirmation for me to get this book written!) And while I always explain that the best place to start is to talk with a lender, I try explaining some things a first-time homebuyer may not know or understand yet.

When you rent a home or apartment, you know that your $1000 rent payment is RENT. Period. Sometimes you are lucky enough to have utilities included in that rent, some or all, or maybe the benefit of being a part of a complex that has a pool, tennis courts, and exercise rooms. You know before you start paying your rent what it will include.

The same should go for your house payment. When you talk to a lender to get qualified, and they tell you that the biggest payment you can afford is $1500, you need to know what goes in to that payment, and how that translates to how much house you can afford. Usually, if you put less than 20% for a down payment, your lender will require an "escrow" account to be set up. Part of your monthly payment will go in to that account each month and when your tax bill and insurance bill is due, the lender will ensure it is paid out of that escrow account.

When you talk with a lender and they say "you can afford a PITI of $1500 a month" this means that P=Principle; I=Interest; T=Taxes; I=Insurance. Your annual tax and insurance estimates are broken down in to 12 monthly portions which are added to your principle and interest payment.

SO, you ask, how do I figure out how much house the comes out to? Good question! You need to have an idea of how much the taxes and insurance are in your area where you live. Your Realtor can help you with this, or your lender. In Okaloosa County, Florida, we have the ability to go to the property appraiser's website, and find out what last year's tax bill was on any given property. Not all counties in the United States have that capability, though.

Interest rates and terms will also have an effect on your payment; allow me to illustrate on a loan for $175,000. The same home, this shows a fixed loan rate for 15 and 30 years, at both 6 and 7 percent interest rates, and the difference in total house payments. This is why it is important to talk with your lender. Interest rates change daily, and right now are under 6%, so that does affect what you can afford based on your personal circumstances.

Years	Interest Rate	Annual Tax	Annual Insurance	P&I	PITI (Monthly payment)
15	6%	$1,500.00	$1,500.00	$1,476.74	$1,726.74
15	7%	$1,500.00	$1,500.00	$1,572.94	$1,822.94
30	6%	$1,500.00	$1,500.00	$1,049.21	$1,299.21
30	7%	$1,500.00	$1,500.00	$1,164.27	$1,414.27

Tax and insurance rates depend on where you live. The only way to know how much insurance you will pay is to get insurance quotes for the house(s) you are interested in buying.

There is a lot to digest--and this should help explain where you are headed when buying a home!

Good Luck!

Hi all!

As you may or may not know, I have a number of listings that can be viewed on my website at www.ValerieSullivan.net. Well, one of these listings that I have is a property my husband and I own. It's been listed for a few months, and we finally got an offer on it this past weekend.

I've bought and sold my own properties for a few years so one would think it would be no big deal. However, this is the first time I actually lost sleep and became emotional over the whole thing. I analyze things (sometimes to a fault) to figure out the "why's," and this time was no different. I understand getting emotional over a home you've built memories with your family in, however, that was not the case with this home. It was strictly an investment when we bought it.

We rented it out for a few years. It is a cute little Florida cottage, and when we decided to sell it, decided it would be best to make some updates (central A/C and heating and new kitchen, plus a few other things).

I read through the entire offer, and presented it to my husband like I do to any other seller, with all the numbers, and the options, but something just didn't feel right about the whole thing. I could feel it in my gut. I couldn't put my finger on it, though. I had to chuckle to myself because here I am, the one, who on a regular basis helps buyers and sellers do what they can to take the emotion out of a very large financial transaction, and my head was hurting. I couldn't decide ANY direction, let alone spell them all out.

The realization at that point, was this is an excellent reason to bring in a disinterested third party to help iron out the options. But it was too late to call anyone. I'd thought of all the different people I could call the next day, and went to bed...however, lost more sleep over this than when I bought the house I live in! (Which, by the way cost more than this house we received the offer on).

I decided to re-read the entire offer (submitted from another Realtor), and realized two things. Number one; this wasn't a serious buyer. First off, as a seller, I see a serious buyer as willing to put down an Earnest Money Deposit. No such thing here...but that's not all! (Mind you, an Earnest Money Deposit is not REQUIRED to enter in to negotiations, but a good Realtor will tell you that it's generally a good idea. I would not recommend a transaction with no EMD.) Second; this buyer had not even spoken with ANY lenders yet. This, too, is not a requirement to enter in to negotiations, but, again, in the current market, if you are serious about buying a home, show it. Not only to the sellers, but to your Realtor.

One thing that kept going through my mind was "what if this falls through?!" until I realized that if it didn't, it wasn't the end of the world. I've had clients where we negotiated two offers before the third finally stuck--and it was better than either of the first two.

SO what are the major learning points here? There's some for both buyers AND sellers.

Buyers: In any market, it's a good idea to talk to a lender (or multiple lenders) when you're ready to start viewing houses (if not sooner). Find out what you are qualified for. This way you don't waste your time looking at houses that are too small for your needs because you think it's all you can afford. Or on the opposite side, this keeps you from wasting time looking at homes that are out of your price range. If you know what you can afford, it will help your Realtor help you focus in on what you do need and want.

Many sellers are now requiring a pre-approval letter accompany an offer--wouldn't you rather, as a buyer, only have to make one quick phone call while your Realtor® is writing up the offer to get a letter sent over, than have to wait a week...and then find out someone else that WAS ready with their pre-approval letter from a lender snagged up that perfect house?

Also, as for an earnest money deposit (EMD), this money will go for the price of the home. It's not money that you "lose," unless you decide suddenly that you don't like the color of the house and back out of the contract after all parties have agreed to terms and signed the paperwork. This is money that the seller can keep given the right conditions. But it's showing the seller you have "good faith" in buying this home.

Sellers: In any market, it's a good idea to ask for a pre-approval letter to accompany any offer. This way you do know your buyer IS serious about buying a home. If they aren't getting a loan, and expect to pay cash, then ask for proof of funds. This should not be an issue if this is a serious buyer.

Requesting a pre-approval letter will also weed out those buyers who are "just looking" to see what they can get. This will weed out what I call "the time-wasters," that are truly afraid to take that step--for whatever reason.

Regardless of the situation--whether you are a buyer or seller, make sure you talk with your Realtor®. Talk with him or her honestly about your situation. Your Realtor® is there to help you get started with financing if you don't already have it to buy a home. They are also there to answer your questions when it comes to selling your home. Never be afraid to ask the questions, and what it takes to get started.

Good Luck!

Well, it is now official. One of the first-time homebuyer programs the FHA currently provides, is ending as of 1 October, 2008. This program allowed someone (seller, builder, friend, relative, etc.) to gift the 3% down payment requirement to a first time homebuyer.  After October 1st, relatives or friends, or anyone that will not benefit from gifting the 3% down payment is allowed to gift/contribute the 3%. You just won't be able to request the seller or builder to contribute this down-payment any more.

This program is still in effect through September, so if you're a first-time homebuyer, you can still find a home, and take advantage of this program as long as you close on the property prior to October 1st.

So why is this happening? Well, the primary reason that lawmakers have stopped this program is that 40 percent of those FHA loans that used this program just since October have gone in to foreclosure.

This does limit those that don't have 3 percent saved up to put down on a home, or a friend or relative that can gift the funds, however, all is not lost. Keep in mind that there are other programs for first time home buyers. In Florida there is the SHIP program as well as Florida Bond money--programs that can be used together and you can qualify for up to $17,000 in assistance to buy your first home. FHA will still allow use of these programs. There are stipulations for each program, however, they are designed to help the first time home buyer with down payment and closing costs. You may still have to provide funds for the down payment, but you may not need as much as you think.

And let's not forget about the $7,500 tax credit for first time homebuyers as well. This is a program that is expected to last only a year, but will give you a credit spread out over a few years.

SO--the question is, are they any truly 100 percent loans available any more? Well, things are always changing, however, right now--today, there is only the VA Loan program and US Rural Housing Loan that are 100% loan programs.

With a VA loan, you have to have served in the military for a specified amount of time (it differs from full time active duty and reserves/guard duty).

With a Rural Housing Loan, the home has to be in a Rural Housing area. In Fort Walton Beach, FL, there are no homes that fall in to the rural housing category, but there are some in Mary Esther. Crestview, and Defuniak Springs both have plenty of these opportunities, as well as some homes in Destin. There is a website that your lender or realtor can go to and input the address--and find out if it is considered a rural housing area.

SO, if you aren't qualified for a VA loan, and not in a position to use a rural housing loan, and want to take advantage of this FHA program, get to your friendly lender, call your neighborhood realtor, and get started!! Time is running out!

GOOD LUCK!

Hi all! School's back in session! Now it's time to get back in to that "school routine" for those of you that have school-aged kids.

With that in mind, one thing I've learned is that there is always something new to learn. Even with how the real estate market works, and how loans works. Markets change, so we learn how to deal with that. The mortgage industry also changes, so we learn what we can do with those changes.

With so many short sales on the market right now, it's smart to have some strategies in your pocket. As I've said before, short sales and foreclosures can be good deals, you just have to make sure you do your homework and determine how much work you are willing to do. I've seen some short sales that are move-in ready, while others need everything, including kitchen cabinets, walls and appliances.

So if you've found that home, it's a good deal, you have money for the down-payment, and even the closing costs, but that leaves you with NO funds to put in new flooring and painting the inside (many of these short sales only require a deep clean, new flooring and paint). So the question is "HOW can you buy a home like this?"

Well, you can get an FHA 203K Rehabilitation and Home Improvement Loan. Keep in mind, not all lenders are signed up to offer these, so if this is what you want, make sure you ask around. With an FHA 203K rehab loan, you can get this on a home you already own, or one you are getting ready to buy.

In a nutshell;

- Must be on an owner-occupied property (up to 4 units)

- One time closing with up to 5 draws

- 30-year fixed rate loan

- Low down payment requirements on purchases

- Flexible requirements--down to 580 credit score (changes 1 Oct)

- Up to 6% seller concessions for closing costs

- Non-occupant co-borrowers allowed

These funds can be used for rehabilitation, structural alterations and reconstruction, modernizing and remodeling, replacement of plumbing, electric, wells, and septic systems, flooring, roofing, gutters and downspouts.

There is a minimum of $5,000 in rehabilitation costs in order to get one of these, and you do need to get estimates from qualified contractors. You don't have to actually use these contractors--but you need the estimates from them. If, for some reason, you don't use all the funds you asked for, it will go towards the principal of your loan--as a principal reduction.

This is a fantastic way to get in to some of these homes out here right now. With so many short sales on the market, this is one way for someone with limited funds to get in to the home that needs a little "TLC" as we call it.

If you have questions, you can talk with your realtor if you are currently working with one, or call around to some lenders to find out who can do these loans, and what you need to do in order to get one of these.

Good Luck!

Hi all!

I was talking with my husband yesterday--he's working out-of-town right now--and he was telling me that when he took a break from all the reading he had to do, he was listening to two co-workers talk about the housing market. One is in the process of moving to another state, and just put an offer in on a new house there, and the other was saying to her "well, in this market, you offer at least 20% below what the listing price is..."

First off, anyone who knows my husband would expect him to speak up, but he chose not to this time--he wanted to hear what was being said. I'm not so sure I could have kept quiet...which is why I chose to write in my blog about negotiating an offer in this market.

Second...in ANY market, there are NO hard and fast rules about "always offer 10% less than what they ask" or "never pay full price." There is more to the picture than the listing price. ALL real estate is local. Even in today's market, there are areas of the country that the list price is the starting price and when you put in an offer, you put in what you are willing to pay over that. The key is knowing the market where you are planning to buy. Even within suburbs in a city the markets can be VERY different.

In my local multiple listing service, I ran a search to see what homes are selling for compared to their list prices in Fort Walton Beach, FL, and it's been steady since January 2007 that the sell-to-list ratio is at about 95%--meaning that on average, sellers are getting within 5% of their asking price. In 2006, it was at 90%, 2003, 2004, and 2005 it was 96%, 97% and 98% respectively. In 2002 it was at 95%. We've come full circle.

So HOW do you negotiate an offer on your dream home? Well, as I always preach...get pre-approved first to make sure you are not wasting your time looking for something more (or less) than you can afford.

When you've found the home that meets your needs, you like the neighbors, the neighborhood, the schools, the amenities, the distance to everything you want and need, look at the houses that have sold recently in that neighborhood. You can look at the property appraisers page to see what has sold, however, in Okaloosa County, Florida, it takes 30-60 days for those to update after the sale of a home. This is where it pays to work with a realtor. If the house was listed in the multiple listing service, they will have near real-time--at most within 2-3 days knowledge of how much the house next door sold for.

Your realtor can get a comparative market analysis for you on the home you're interested in. It shows if this home is over priced, or under priced in comparison with other homes that have sold recently in the neighborhood. While some sellers are still stuck in the "boom years" and expect to get more than they paid for their house then (or think that the should be able to get the price others did during that time), more and more sellers are being realistic, and as a result, are pricing their homes competitively. You see, every seller is different, as is every realtor. Some houses will still be out there over-priced, and some won't.

If the home looks like it's underpriced, ask why--what's the sellers motivation? They're tired of it and they just want out? They want to pay off bills? They need to move? Sometimes "they're just ready to move" is the answer. But that doesn't mean they can or want to "give" the house away. If you as a buyer holds to that "offer 20% less rule" you may lose out on the perfect house in the perfect neighborhood that all your kids absolutely love because it has the yard that has the treehouse in it. The house is exactly what you've pictured, and has the layout you were looking for, as well as the size yard you need, and it's close to everything you want and need.

Sometimes terms are a bigger issue than price. A buyer knows what they can afford, and they're looking at that price range, but they have very little to pay in the way of closing costs. A buyer can ask for closing costs to be paid, plus offer a lesser amount, and see what happens.

I always tell my buyers to ask for everything, but don't expect to get it. I tell my sellers what I'm told is the buyer's motivation (no money to pay closing costs), so then they can decide how to come back with a counteroffer. Sellers have their bottom line that they want/need to walk away from the sale from, and that's where they negotiate from. Just as the buyer has their limit, so does the seller--so in the negotiating process, everyone wants to get the best deal. It is possible that can happen.

As a seller, it is best to come back with some type of counteroffer. This is part of the negotiation process. Sometimes it may take going back and forth a few times to make it all work.

Now, short sales and bank-owned properties are a whole different ball game. While the "motivation" is that the bank needs to get this property off their books, there is nothing "personally" motivating a corporate entity to negotiate a sale of a home. These are instances where you have to be patient and wait for the answer to come back. Sometimes there will be multiple offers, and you have no idea what the other offers are. All that you know is that the bank will take the offer that nets them the most money.

Builders are also a different issue. Usually they are not very flexible on their price, but they will offer other amenities or upgrades instead.

So the point is...know your market, wherever you are buying OR selling. If you don't have the time to figure it out and do the research, find a good Realtor that knows your market to help you out. It will be well worth your time.

Hi all!

I hope this finds you doing well!

The latest question that has come up is "Why are some loan programs better than others, and how are they better or worse?" Well, it all depends on your situation.

While there are Rural Housing Loans (the home has to be in a designated rural housing area), VA Loans (must be currently active duty, or a veteran with certain stipulations), FHA (government backed), there are also Fixed Rate, Adjustable Rate Mortgage (ARM), and Interest Only mortgages (just to name a few).

Fixed Rate Mortgages: when you get the loan, you get a fixed rate for 15, 20, 30 years. You pay that interest rate for the life of the loan, it does not go up or down. Your principal and interest payment will stay the same. That does not mean your payment won't change, though--your taxes and insurance may change, and if they do, it will affect your monthly payment. That's the advantage of having a fixed rate mortgage--knowing your payment won't change by too much. You can budget that amount for the next 15, 20 or 30 years (whatever the life of your loan), and know that it won't change. When you get the loan, your interest rate is based on "today's" going rate, and can be locked in for 30 or so days (how many days will depend on your lender--some will be longer, some shorter).

Adjustable Rate Mortgages (ARM): There are a many variations of these. They are fixed for a period of time, anywhere from one month to five years, and then they will adjust according to the index and the margin. The disadvantage of these is that your payment COULD go up, but it could also go down. When the interest rate adjusts, it adjusts according to what the rates are doing at the time of adjustment. There is a CAP rate you also need to be aware of. A CAP rate shows the maximum amount your rate can go up in an adjustment period and/or for the life of the loan.

Interest Only Loan: These are loans where you pay only the interest, and none of the principal on the loan. This means that your principal won't go down--you won't buy down any equity by making the payments. These usually have a balloon payment at a certain point, where you are expected to either pay off the mortgage in full, or refinance.

So what's the best loan to get? That depends on your situation. If you know you're going to be in your home for less than five years due to the nature of your job, an ARM isn't necessarily a bad option. With an interest-only loan, you may have gotten a GREAT deal, and already have a lot of equity in it, and only plan to be in it a short time (whether you occupy it, rent it or sell it or any combination of the three). Fixed rate, you're payment will pretty much stay the same except for tax and insurance adjustments that would affect your monthly payment.

The BEST thing to do is to talk to your lender about your current circumstances and what your future plans are regarding your current job, and with this home (live in it, rent it, buy/fix/sell it). AND ask a LOT of questions. Ask them to explain the different programs to you (there are SO many different ones, which is why it important to be honest with your lender). The ultimate decision is yours. It can all seem confusing, so if you need to, take the information home and read through it until you do understand it better. If you have additional questions, you can ask your Realtor, or your lender. There's a lot of paperwork you have to sign when you get a loan, so it's best to understand it before you get to the closing table.

Hi all!

This has been an interesting week--but the newest item is that The President signed in to law the new Housing and Economic Recovery Act (HR 3221) of 2008. There are a number of new provisions to help homeowners currently in distress with refinancing under the right conditions.

The one I like the best has to do with helping out First Time Home Buyers (those that have not owned a home for the last 3 years); it allows them a tax credit ten percent of the cost of the home (up to $7500).

Now, this home does have to be a primary/principal residence. And the income limit is $75,000 (or $150,000 on a joint return). It is phased out at $95,000 and $170,000 respectively.

This is a program that is effective on homes purchased on or after April 9, 2008, and terminates July 1, 2009.

So what does this mean for the first time homebuyer and how does it work? Well, since interest rates are still at an all-time low, and home prices about as reasonable as they're going to get, plus with this, it truly is an incentive to buy a house before July 2009! Once you buy your house, just make sure you provide your tax professional with the documentation of your closing they request and they'll get you taken care of.

If you've got questions on how it affects you and your taxes personally, the best thing to do is talk with your tax person to find out exactly how it affects you as everyones situation is different.

To find out more about the act, you can read the press release below;

http://www.reuters.com/article/pressRelease/idUS171972+30-Jul-2008+BW20080730

http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions?OpenDocument

Have a GREAT week!

Hi all! It's been a hectic time the past couple of weeks with summer in full swing!

I've talked with many buyers as well as sellers the past couple of weeks and interestingly enough, a question that stood out from both sides had to do with the homes that are still occupied and whether or not the seller should be at home during the showing(s).

Some sellers may not think it is an issue to be there and to answer any questions that might come up, however, I don't think it is a good idea to be at home if your home is being shown for a variety of reasons. First of all, every buyer I've spoken with prefers to be able to walk in and get a "feel" for the house on their own terms. I've shown some homes where the seller remains in the house, and while helpful, respectful and friendly, the buyer is there to scrutinize the house, not visit. A buyer does not feel comfortable to open cabinets and closets if the seller is "hanging out" in the other room, and it quickly comes off their possibility list.

Also, while a seller must disclose known issues with the home, they do so via a seller's disclosure. If in the home when a potential buyer comes through, and the subject comes up of "why are you moving" and then the seller proceeds to explain all the reasons why--one of them being "well, it's just too far from town and with gas prices we just can't afford to be running back and forth..." While this may be honest, now you, as the seller, have brought to light gas prices and the distance to the nearest amenities. This may not have been an issue for these potential buyers, but now you have them thinking about it, and that may be the only reason they do cross it off their possibility list.

Another reason, buyers are working with their agent, who has gotten to know them and what they're wants and needs are in a home. When they view your home, they discuss with each other what they do and don't like about the home. They do not feel comfortable talking negatively about your home if you're in the other room, or in the room they are in for that matter.

If a buyer has questions that are not answered by the listing itself, or the seller's disclosure, then they let their agent call the listing agent to find out the answer.

I understand that sometimes it is not feasible to leave the home--especially if there are pets or small children involved, however, in a case like this, it is best to walk out of the home when the buyer and buyer's agent arrives, and either take the pets for a walk, or play with the kids in the back yard, or even the neighbor's yard if that's possible.

Hi! I hope everyone enjoyed the 4th of July weekend! I'm not sure yet if I enjoyed mine, but it was productive! I did enjoy it, watching fireworks with my son and good friends and cooking out, BUT WAIT, there's more! I also installed new wood laminate floor in my living room and master bedroom.

I have a good friend, Michelle, who has remodeled her own homes each time she's moved--and looking at her work, you KNOW she's a perfectionist. She's a plethora of knowledge, so I asked her if she'd help me with my new floors. I've never put down wood laminate, and didn't think having my 9-year-old help was quite enough. One thing I've realized (yet again), is that there is nothing like putting in your own floors to realize why it costs so much for a professional to do the same thing. We spent 2 full days putting in the flooring, taking out carpet and moving furniture. I'm not as young as I used to be!

With that said, the question came up about buying and selling homes, and work needing to be done on them. Of course, as a Realtor, and helping both buyers and sellers, I see benefits of different scenarios. When I talk to sellers about selling their home, I do explain that most buyers do want a home that is move-in ready. Most homebuyers are scrimping to get IN to that new home to begin with, and for whatever reason, may not have extra funds to pay for work necessary to be done, or the know-how (or WANT) to do it themselves.

SO, that said, as a seller, the best case scenario is to have your house as move-in ready as possible. If you're not sure everything that needs to be done, try walking in to your home with the mindset of a buyer. Sometimes that is not so easy, so you can ask a friend, relative, neighbor, Realtor, OR hire a home inspector to do an inspection. A home inspector won't necessarily comment on cosmetic issues, but can identify other things you can't see (loose shingles, faucet leaks, electrical issues, etc.). If it's not possible as a seller to make updates or repairs, you can give an allowance as part of the sale, or else adjust the price and sell "as-is" as a fixer-upper, depending on the condition of the home.

As a buyer, if you know your level of comfort on your new home is that you do want it to be move-in ready, there are a lot of homes that are ready. And there are also many that require different levels of work (I've seen some gutted to the studs). If you don't have the funds, know-how, experience, or just don't want to do the work, then don't waste your time on looking at homes that do require work. If you're comfortable with doing some of the work yourself, then some homes that need "TLC" usually only require paint and carpet/flooring. I've put down wood laminate now, and in the past carpet, vinyl tile and ceramic tile. The one I WON'T do again is carpet. But know your level of comfort on doing the work before jumping in to it!

Neither a buyer or seller, but want to do the updates? This is the position I'm in, and changes that I wanted to make. I know how expensive it is to lay flooring, so when I can, I try doing the work myself. The nice part about being in this position is that you don't have to be in a hurry because you have to sell. You can work at it at your own pace, one project at a time. And this is what makes it more YOUR home, and not what someone else's preferences are/were. Whatever your scenario, by doing the right updates/upgrades to your home, you are increasing the value--which is always a good idea!

The one thing I really enjoyed about putting down my new floors is that because Michelle is such a perfectionist I knew it would be done right (THANKS MICHELLE!), and it was a lot of fun watching it go from the aqua painted cement floor I had (I took out the living room carpet last summer and painted the floor), to the Rustic Pine we put down. It looks awesome and I love it...now we just have to put the baseboards back!

Hi all! The weather has been wonderful here to go "house shopping" and that's what has been happening with my clients. And one question that came up with each of my clients--new and those buying again--is "ok, once I have a contract on a house--we've negotiated and agreed and I've turned over my earnest money deposit and we're supposed to close in 30 or so days...WHAT NOW?"

Good question! Even for those buying a house again after a few years--we all know markets change, and requirements change--especially when you move across state lines. Different states have different requirements. For example, in the state of Florida, each home closed on requires a pest inspection prior to closing.

Now your lender, your realtor, and the title company will remain in contact to stay on top of the transaction. The first thing is if you haven't already been approved for a loan, is to find a lender and get approved and make sure your lender and realtor have each others contact information. Chances are your realtor will ask for the lender info and follow up with them. Your lender may require additional information from you, even if you have been pre-approved (tax returns, bank statements, pay stubs or leave and earnings statements). The quicker you get this to your lender, the quicker the transaction can close.

Second, if you want to get a home inspection, you need to get it scheduled and done. This is usually a buyer's cost (around $300). It's not mandatory to have one, but highly recommended. If something is found like electrical issues, or a leak somewhere, something comes up that wasn't obvious when you were looking before, you can ask the seller to have it fixed. The Pest inspection is different from this, but could also find damage due to pests.

Third, get insurance quotes and decide on who will insure your home. The listing information you received for the house should have all the information the insurance agent will need to get you an accurate quote. Quotes can vary considerably so be sure to get more than one quote. When you decide on your insurance, tell them you need a binder and make sure they have your lenders information.

There are a number of things that happen "behind the scenes" that you may or may not be aware of. First, if you're getting a loan, the lender will require an appraisal. Sometimes a survey is required. If there is a survey from a previous sale, and no significant changes have been made to the property (additions), this will suffice.

The title company will need to do a title search on the property. This search identifies current liens on the property (loan, tax lien, mechanics lien, etc.) and they will ensure these liens are paid once closing happens and the "new" loan is funded.

Both the listing agent and buyer's agent will remain in contact and if there are any issues, they contact their respective clients. They are also both usually in regular contact with the title company. As it gets closer to the closing date, the lender will send the package to the title company to prepare the HUD-1 settlement statement. This shows all the numbers--who is paying for what, how much, and how much the buyer/seller needs to come to the table with, or will get at closing.

In Florida, it is not customary for buyer and seller to sign all the papers together in the same room at the same time. The title company will schedule with the buyer and seller separately.

As the buyer, you will do a final walk-thru the day prior or the day of closing with your realtor. If any repairs were to be done, this is when you verify they've been done. Also, this verifies no significant damage has been done to the property prior to closing (fire, flood, hurricane, tornado, etc.).

You arrive at the closing table, sign lots of papers, walk out with a copy of what you've just signed, and the keys to your new home!

Now you get to move everything in to your new home and start making memories that will last a lifetime!

Congratulations!

p.s. keep in mind, this is a for a "general" transaction. Each transaction is different, and short sales, bank-owned properties, and as-is sales have different requirements. Also, lenders and loan programs have different requirements so keep that in mind as well.

Hi all! I hope everyone is enjoying the weather! I've had a busy week that resulted in driving over the Destin bridge numerous times. I am always in awe of seeing the view from that bridge--the boats all over Crab Island as well as the Destin Pass and the Destin Harbor.

With the real estate market ever-changing, a question that comes up with buyers--new, first-time buyers, as well as those that are selling their current house and buying again. "How much money do I need for a down-payment on a house these days?" Well, that depends on your particular circumstances. Right now, the only loans that you can get at 100% financing are VA loans and Rural Housing Loans.

Of course, the best thing to do is talk with your lender and be honest with them about your debt and your income. You will likely have to prove your income through tax returns or pay stubs or a leave and earnings statement.

The lender will need to pull your credit to find out your credit score. Your credit score and debt-to-income ratio will determine the program(s) you qualify for, which also determine how much money you will need to put down when buying your new home.

FHA loans can require as little as 3% for the down payment (some of which can be used for closing costs). Some loan programs allow you to roll your closing costs in to the loan, or, as part of negotiations, you can ask the seller to pay some or all closing costs, depending on what your lender allows. Some lenders only allow the seller to pay no more than 2% towards buyers closing costs. Some will allow more. Just be sure to talk to your lender about what is allowed.

The best thing to do is speak with some lenders, find one you are comfortable with and that can answer all your questions to your satisfaction. Once you have decided on a lender, make sure your realtor has their information. The information you get from your lender can help you and your realtor with the best negotiations for you when you are ready to put an offer in on your new home.

Enjoy your week, and feel free to call or email me with any questions you may have!

Hi all!

I hope everyone had a great weekend!

I went to a real estate auction this weekend that I found quite interesting. I thought I would share some of what I learned with you. First off, this auction I attended is not like an auction on the courthouse steps that is going in to foreclosure. In Okaloosa County, Florida, you have to have the full amount of your winning bid by the end of the day in the courthouse type auction.

The auction I attended included properties from Panama City to Gulf Breeze, Florida. Some were lots, some were single family homes, and some were even very nice waterfront--both lots and homes. ALL of the properties were short sales, though. I thought that was interesting, because this did turn out to be a different option for both buyers and sellers.

If you've never heard the term "selling absolute" this is an auction term that means that the property WILL be sold to the highest bidder at that bid price. This auction company does not do absolute auctions, but also did point out that you cannot sell absolute on a short sale since the bank does have to approve the price in order for the sale to happen.

So how does the process work in this instance? For a seller who already has their home listed, and wants to try this route, they can work through their agent with the auction company. If it is not a short sale, the seller does have the option of not selling if the bids aren't high enough. The auction house does advertise prior to their auctions which they try putting on once every 4-6 weeks. At this auction a number of the properties already had offers that had gone to the bank for approval, but the bank approved them to still go to auction. After all, someone may come in with a higher bid than what's already on the table. It's likely the advertising that they were going to auction sparked the interest for those that did put in offers.

Those at the auction have no way of knowing what the current offers are that the bank is considering, so that can be a disadvantage.

So how is this a good option for buyers? You do have to pay a 10% buyers premium, which means that you pay 10% above the final bid price. BUT, you can still obtain your financing within 30 or so days. If you're already pre-approved, and you've viewed the property or properties you are interested in, this may be a very good option for you. The specific properties I was there to get a status on did not have a specific open house date(s). A buyer could view them with their agent through the lockbox system agents use.

Since all of the properties at this auction were short sales, that does mean that a property with the "winning bid" still had to submit it as an offer to the bank, for the bank to approve. There were only about 20 people at the auction, and I watched a few leave as soon as the property they were interested in was auctioned off. A few had the winning bids on their properties--and submitted those. Some didn't have any bids at all--which made me think this would have been such a wonderful opportunity for a buyer.

There are other auction companies out there, and I've learned they all do things differently, so make sure you do ask the questions important to you with any that you do work with as a buyer or seller. As the other auction companies sell properties, I plan to attend and share more of what I have learned with you!

Until next time!

Hi all!

The weather here has gotten in to the high 80's over the past couple of weeks with "abundant sunshine" as weather persons like to call it! BUT, as you may or may not know, June 1 marks the beginning of Hurricane Season (I'm from the midwest where a "season" meant we hunted for and killed it...).

Well for those of us that do or have lived in areas ravaged by hurricanes, we know first hand the havoc it can cause. And when you are buying or selling a home, watching one "come this way" can be stressful. You have your house on the market to sell, and now "they" are telling you to evacuate. Or better yet, you have a contract on your house--whether you are a buyer or seller, and suddenly you find out you can't get insurance to close on your set closing date.

While dealing with a hurricane is stressful in itself, you can mitigate some of it when buying or selling a home. In the state of Florida, if a named storm enters the Gulf of Mexico, all insurance companies cease writing insurance binders until the storm completely dissipates or hits landfall. I've seen some hurricanes bounce around the Gulf for what seemed like forever, and then of course, in 2004, where we had 4 grace their presence in Florida. This can increase the stress level considerably.

If you have a house on the market, or you are in the market to buy, you do want to keep an eye on any storms. Once you have an insurance binder "locked in" you are ok. However, if you're buying, and haven't decided on a house yet, you can't get insurance until you have a contract--and of course, an address. If you've found the perfect home, and can't get insurance, the closing will be held up until you can get insurance. You can still make that offer, go under contract and complete everything else you can...and wait. A bit stressful, but knowing you've been keeping an eye on this before hand can alleviate some of that stress.

The two places I go to a lot during hurricane season are of course www.weather.com and www.noaa.com both are good resources of weather information.

Hi all!

I was looking at the Wall Street Journal for some information on the Housing Market as a whole today, and maybe to use for my blog and found out something interesting. One article from the WSJ I was sent last week said that the housing crisis nationwide is over. That April IS the bottom. This doesn't mean we're going to see values return to the boom levels of 2005, or even that they will begin rising soon. The builders have slowed down their building, so housing starts are lower than they have been in years.

Then I went to the same paper today and it states that the market is still declining nationwide, except for some pockets here and there. It's amazing how the story changes from day to day. But then that's the news.

So what does all this mean? In Valerie's opinion, we are in a normal market. While we had a big boom of 2005...that boom and fall is 3 years old. Real Estate has seen double-digit interest rates in the 80's, and people bought and sold houses regularly then. Interest rates are 1/2 to 1/3 what they were then, they've remained steady for the last few years, but how long will that continue? With interest rates in the 6% range, it's still a good time to buy. At least you know more will be going towards equity than for the interest than in the 80's timeframe!

So, if you have to move from one region to another due to a job transfer, how do you determine where within that area to buy your new home? Or would it be better to rent? That depends on your situation. If you are there for the short term--2 years or less, you may want to consider renting. Longer than that, buying may be an option, but of course, you need to do your homework. There is a lot of information on the internet to research the area, the schools, activities you prefer, and how long you prefer for your commute to and from your job. With gas prices, it's time to think about maybe paying a little more money for a house closer to work instead of your gas tank eating up the money.

Even if you don't have children, areas with good school districts have housing with better market and resale values, so that is something to consider. Also, just because your current commute where you live is only 30 minutes for a 30-mile drive, doesn't mean that's the way it will be in your new area, so make sure you ask someone at your new job, or your realtor if you are working with one, about traffic and commuting if that is a concern for you.

For example, in Fort Walton Beach, Florida, between Eglin AFB, and Hurlburt Field, from just about anywhere in Fort Walton Beach, you can get to either base in about 20 minutes at the most (depending on traffic). For those stationed at either base, they live anywhere from on the bases themselves, to Fort Walton Beach, Navarre, Gulf Breeze, Pensacola, Crestview, Holt, Baker, Defuniak Springs, and Freeport all climbing to an hour commute, sometimes more. As with anything, you have to decide if the commute is worth the house. If you've checked out the schools for your children if you have any, the house itself, the neighboring communities, and your new neighbors, jobs for those in the house that will be commuting and their commute time.

There are a lot of factors to consider--while the news stories paint a pretty picture one day, and then the next say we are still spiraling, the decision to "wait it out" is not always the best decision or option. While everyone wants to get a good deal when buying their new home, it's not only about the price of the house, it's the condition, the size, how it makes you feel being there, and in the neighborhood. This is a place you'll be building memories for just a few years, or maybe a lot of years to come. Memories your children will have the rest of their lives.

Gauging the value of a home is not always just about the price, but what you will get out of it as well.

Hi all!

I hope this finds you doing well! I spent last week in the second portion of a three-portion GRI-class. GRI is short for Graduate Realtor Institute, and it means I've taken additional education on how best to help my buyers and sellers meet their needs when it comes to buying and selling homes. I learned SO much information last week. I'm glad the class is broken up in to sections so that I can put what I learned in one portion to use before learning more.

Anyway, this week I am going to talk about CMA's, or rather Comparative Market Analysis. This is a tool that helps both buyers and sellers when they are listing their home for sale, or searching for the home of their dreams, or making the steps to get to that point.

In short, a CMA is a "snapshot" of what the market around your house looks like "today." As soon as a new house comes on the market, or another one sells, it will change the statistics, hence the term "snapshot." A CMA is something that your Realtor can put together for you, and they will look at all the sales in your neighborhood, to include thos that weren't listed on the multiple listing service. The point is to look at those houses that are "comparable" to yours. If your house is move-in ready, the house down the street that sold as a fixer-upper isn't a comparable--but it does help to look at the price to guage where you need to be to sell yours. With this CMA, you can determine the average listing price, and average sold price, price per square foot, among other things.

This tool is helpful in determining your list price when selling. For example, let's say the house on the corner sold last week, and you've decided to list yours. Your house is similar in age, size, lot size, number of bedrooms and bathrooms, you don't want to price your house $35,000 more than the one that just sold. Why? Because a smart buyer will use these same tools to help determine if the house they are considering buying is worth the asking price. They will use it to determine what they should offer for a house.

So why not just list a house at $35,000 over the neighbors house that sold last week when someone can just "offer whatever they want to?" Well, because statistics show that a property that is overpriced to start out will end up selling for less than it would have had it been priced properly to begin with. When a potential buyer (and remember, as a seller, at some point you are also a buyer) looks at a house that's just been listed and it's overpriced, they won't take the seller or the price seriously, it stays on the market longer and then potential buyers start wondering what is wrong with it, so they wait longer to "see what will happen" before making an offer. In turn, the seller, wanting or needing to sell the house gets "more" desparate and needs to keep lowering the price to get the activity.

So how do you KNOW for sure if you're house is listed at the right price? Well, at the risk of sounding flip, when you have a contract on the house. In reality, your house is worth only what someone is willing to pay for it. How many people do you know today that are willing to pay $35,000 more than the house that sold on the corner last week--for a similar house? I don't know any. Besides that, when it comes to getting a loan on that house that is priced $35,000 than the neighbors...the appraiser the bank hires uses the same comparables those buyers use. And if a house doesn't appraise for the contract price, the bank is not going to lend over the appraised value. If you still want that house, though, you can always come up with that extra as a down-payment on your own. I wouldn't recommend that, though.

The best thing to do is talk to your realtor, or if you're a FSBO, do your research. Part of selling a home is getting the exposure for your property, and there are many ways to get exposure...I'll talk about exposure and marketing a house in another entry.

Have a GREAT day!

Hi all!

I hope all of you were able to enjoy the wonderful weather we had here this last weekend! I know I did!

I had a conversation this last week with a good friend of mine about short sales. She's in the military and is up to transfer sometime in the next year. Unfortunately, when she bought her current house, it was at the top of the real estate boom 2-3 years ago. Renting out the house was not an option, and she's well aware of the fact that to sell your home quickly, you have to price your home ahead of the market (meaning what the price will be 30 days from now--not yesterday or today), but to do that, she would have to price it lower than what is owed to the bank--which--as I've mentioned before, is called a short sale.

As any well-informed consumer does, though, she educated herself on the ramifications of short saling her home. She knows what she is and is not willing to do to sell her home. As it turned out, she decided it was worth it to come out of pocket and show up at the closing table with whatever was owed to the bank instead of doing a short sale. And believe it or not, in the 1970's it was not unheard of to bring money--as a seller--to get your home sold. Back then there was no such thing as a short sale.

Anyhow, so why did my friend decide this route? Because she didn't want to take the hit on her credit report. I found an excellent article that explains how much credit scores drop when doing a short sale, as well as a foreclosure, or deed in lieu of foreclosure (signing the deed over to the bank, give them the house, and walk away).

Making the decision between going into foreclosure and doing a short sale is like deciding if you want to get hit by a train or a bus. Hmmm. A foreclosure AND short sale will drop credit score ratings 200-300 points. Someone with an outstanding credit at 720 could see it drop to 420. WOW! So if I have "good" credit at 650, it can drop to 350--what a punch in the gut! I can't say I blame my friend for her decision! But either way, it is a personal decision for everyone, and only you know what the best option is for you. Make sure as a seller, you are informed about all of your options. Talk to an attorney if you have to.

If you would like to read the full article--which also discusses time frames before a lender will even consider giving you another house loan, go to

http://brokeragentpro.com/viewArticle.html?ArticleID=1147

As always, keeping you informed!

Valerie@ValerieSullivan.net

Hi All!

I hope you've had a great week! The weather here in Fort Walton Beach has been as low as the 40's at night, but getting to the low 80's during the day. It's great weather for walking on the beach, but the water is still a bit chilly!

Anyway, we all like the idea of saving money on our homeowners insurance right? I know I do! There's something that's great for current homeowners, as well as buyers and sellers. I've heard the ads on the radio about My Safe Florida Home. Their website is www.mysafefloridahome.com. You can spend a few minutes filling out their form on line and they will send someone out to inspect your home to see how it will withstand a hurricane. If there are things that can be done to make your home more "Hurricane proof" they will let you know what that is and you could even qualify for matching funds up to $5000 to make those upgrades. AND, you can also use the report (and any updates made), give that information to your insurance agent and possibly be eligible for lower insurance rates on your house!

So you ask, "but I'm selling my house soon" or "my house is on the market, why bother?" Well, in a case like this, it makes your house more attractive to potential buyers because you've already found out what (if anything) needs to be done. The inspection is free. It takes less than an hour (I've had it done on my home). You could provide the report to a buyer so they can present it to their insurance company and then they could get the lower rates.

As for a buyer--you have a 10-day inspection period once under contract on your home. If the seller has not already had the My Safe Florida Home Inspection done, you could ask that at be done during the inspection period. Normally, only the homeowner can get this accomplished, not a potential buyer.

Either way, even if you are not a current home seller or buyer, but home owner, visit www.mysafefloridahome.com and have your home inspected. You have nothing to lose!

Feel free to call 850-803-8446 or email me at Valerie@ValerieSullivan.net with any questions!

I've been in a number of discussions lately with people about short sales, and the motive of the banks. It's not easy to figure out what "the bank" wants (any bank), even when they tell you, because the answers seem to be always changing, but I thought this was an interesting article from the Wall Street Journal to pass on...

Why Lenders Are Leery of Short Sales
Wall Street Journal (04/17/08) P. D1; Simon, Ruth; Hagerty, James R.
The National Association of Realtors says 18 percent of home transactions are now short sales, though experts point out that lenders are reluctant to approve such deals. Research from Clayton Holdings Inc. reveals that lenders lose only 19 percent of the loan amount on average with a short sale, compared to 40 percent on a traditional foreclosure sale. However, short sales require approvals from primary lenders, servicers, investors and home-equity lenders--a process that can take several months to complete. Mortgage servicers blame delays on staff shortages resulting from the unexpected rise in problem loans, and Mortgage Bankers Association senior director Vicki Vidal points out that pricing also poses a challenge because buyers are making low-ball offers on distressed properties. While servicers prefer rep ayment plans and modifications to short sales, the process is getting easier for borrowers who are encountering financial difficulties but continue to make timely payments. Additionally, Fannie Mae and Freddie Mac both are taking steps to speed up the process, with Fannie Mae looking to make acceptable minimum prices known beforehand and Freddie Mac giving servicers more leeway in approving short sales.

Hi all!

As promised last week, I said I would speak about Tax Liens this week and explain how they work. This is an avenue some investors use in hopes to acquire real estate for "pennies on the dollar." Does it work? Well, that depends (hey! there's that phrase again!).

I know many counties across the United States do things differently, and since I live in Okaloosa County, FL, I will use how they do these sales as an example. In Okaloosa, taxes on your house are due no later than March 31 for the previous year. Lenders usually have an escrow account where you pay a portion of your taxes each month, and they pay them in November (to get the discount for early payment). They want to make sure "their" investment is protected. Tax liens on a property take precedence over lender liens.

If someone does not pay their tax bill by March 31, then your tax bill "goes up for auction" usually in May or June. This is where the public can bid (all online) to pay your taxes! (Sounds Cool! Someone else paying your taxes, right? But wait, there's more!). Well, what happens during this bidding, is that bidders compete against each other--yes they will pay this bill, but for a price. Bidding starts at 18% interest, and goes down in 1/4% interest points.

What does this mean? Say I win the bid at 14% on June 1st. I pay the tax bill, and am charging this rate for "loaning" you the money. Mind you, you will never meet the person who has bid/paid your taxes. Now, say you go in on August 1st to pay your overdue bill. You will owe your bill, plus the 14% interest rate to the tax assessor. Then the tax assessor pays me back plus the interest that you've paid.

So how does one get a property if you pay your bill? Well, some people don't, for whatever reason, and after 3 years of holding this certificate that shows I paid your taxes, I can now foreclose on your home. But what about the 2 following years? Well, if you bought those liens as well, then there is no competition. If not, then you pay those bills plus the interest and you have those deeds.

While all of this sounds SO simple...there's a LOT more involved. You need to do your research right from the start. I heard on the radio just a couple of weeks ago about a guy that bought a piece of property using this method for only $5000.00! He was going to build his dream home on the property...until he found out that it was a 4x100 piece of land. Yes those are the correct numbers. It was a county-owned easement. You see, he got SO excited that he had a piece of property for "cheap" (or so he thought), but he didn't do his due diligence prior to bidding on it.

The Okaloosa County website is www.BidOkaloosa.com and they have great information there, a tutorial on how the auction works, as well as previous years auction results so you can peruse them and figure out how it all works. From this website, you can also see other counties that have the same format, most in Florida, and some in Arizona, as well as other states.

If you plan on trying this route for investment or finding a lot to build your dream home, just make sure you do your research before you start your bidding. The parcel ID numbers are on the list, and you can go to the property appraiser's page to find out what kind of property this is--if there is a home on it or not--AND it will also identify whether it is a county or city-owned easement. Look at the lot size, and use the maps available to see where it is located. The research itself does take a lot of time, so be prepared for that. Also, when you do foreclose on it, you need to check to see if there are other liens on the property and if you will be responsible for those liens even if you foreclose on it to pay the taxes.

If you have further questions, feel free to ask here, or email me or call me.

Hi All!

I took a week off from blogging due to spring break. I have to admit, I got a whole lot of lazy done--I went to Tampa and hung around the pool and took naps! What a great way to recharge!

Anyhow, the latest questions I've been hearing have to do with all the deals out there in real estate. With the "mortgage crisis" there are a lot of deals, and figuring out what is the best avenue for you can be a challenge. With all these deals--are they really deals? Well, that depends.

I explained previously what a short sale is--where the bank will take less than what the home is currently worth. In essence, this is a "pre-foreclosure" where the seller/owner is doing what they can--working with the bank in getting the property sold so that they can move on.

But what about buying a foreclosure? Well, one way to do this is to buy it from the bank after they have already foreclosed on it, and now they are the "owners" of the property. Some banks will try to sell it on their own initially, and if it doesn't sell quickly enough, they will list it with a Realtor, and then you'll find it on the multiple listing service.

There is also the option of buying a foreclosure on the courthouse steps. This can be tricky, and you need to be prepared before walking up to the courthouse steps. I know different counties do it differently, however, in Okaloosa County, Florida, if you win the bid on the house, you have to have the FULL AMOUNT to them by the end of that business day. There is usually a bank representative there at the auction to make sure that the bidding starts at what the loan amount is (at least), so the bank doesn't entirely lose their investment (ever hear of those cases where someone bought a house on the courthouse for $100? I've heard of them but never met anyone who actually accomplished this.) So the bidding will start at or about what the loan value is. The disadvantage of this is also that you don't get to look inside the house and determine how much you want to spend prior to the auction on the courthouse steps. You might get lucky enough to peek in the windows and/or do a drive-by, but that's about as far as you get. Also, you need to make sure there aren't other liens on the property you will be responsible for--like a tax lien, or mechanics lien, a 2nd mortgage holder, etc. This is where it is wise to get a title search done with a title company if you're serious about this route. Also, check to see what the values of similar properties are in the area. If similar houses in the area are worth $250,000, and bidding starts at $250,000 (yes, this does happen), this might not be such a good deal-especially if you don't know what the inside looks like.

After doing your due diligence--checking all your facts--and you decide you want to try this route to get a house, decide BEFORE showing up at the auction what the HIGHEST amount you will bid--and stick to it. It's easy to get caught up in the frenzy and keep upping the amount until you realize you're short, and all the work you've done got you nowhere.

Some people that buy houses on the courthouse steps have funding all ready prior to showing up--if they don't have the cash ready that day. Even if one has cash in the bank, be sure to talk with your bank a few days ahead of time and find out what their requirements are. They may have requirements/approvals they need to accomplish for large amounts of cash withdrawals, or even large checks drawn on your account--even if it is sitting in your account.

Hard money lenders are also available to help out, or you can get multiple investors each putting up a predetermined amount. There are many options, and whatever you decide to do, make sure to do your homework ahead of time. It will help things run much smoother on the day you get the house.

Good Luck!

www.clerkofcourts.cc/foreclosures is the website for Okaloosa County foreclosures. Next week I'll talk about Tax Deed Sales and how they work!

Home inspections--to get one or not to get one...that is the question.

Many people are unaware what a home inspection is, what it does, and what it's all about. When buying or selling a home, there's an option to hire a home inspector to find out if there are any issues that need to be taken care of prior to closing.

Most home inspectors will charge for a home inspection based on the square footage of the property. The average price in this part of Florida is about $250-$300. The home inspector will inspect the entire home, including the electrical system, A/C, heating, plumbing, roof, and if any appliances are part of the sale, they will inspect those as well. With current technology, they are now able to take pictures of any problems they find and add them to their report findings.

While it is not mandatory to get a home inspection, I recommend it to all my buyers. Some buyers have bought homes before, and are confident they know what to look for and choose not to pay for a professional home inspection. It is definitely a personal decision.

In an home that's being bought "as-is" (a fixer-upper) it's a good idea to get one so there are no surprises. Even though, in a case like this, the seller will not make any repairs, if you find the repairs will cost you too much, you can choose not to buy the property.

So is it a good idea for a seller that's getting ready to put their home on the market for sale to get a home inspection? Once again, that is a personal decision, however, the advantage of doing this is that, as the seller, you can fix any problems ahead of time. Once completed, you can make this inspection available to your potential buyers, and show receipts/work orders where any issues were taken care of. If the buyer chooses to also get another home inspection, that is their decision, and they would have to pay for it.

How about getting an inspection on a newly built home? As always, it is a personal decision, but just like with older homes, an unbiased inspector can uncover issues that were forgotten or neglected--minor or major, so that the builder can take care of it quickly. While the assumption is that newly built homes have no problems, there is still that possibility that something wasn't finished or connected or attached properly, and if you're not sure what to look for, an inspector should be able to find it.

The home inspectors I've also worked with have also are very good about educating those at the inspection about things they look for in their new home.

I remember years ago when I bought my first house I'd "heard" about a program for first time homebuyers. The realtor I used to buy my first home didn't know anything about them, so I didn't have the benefit of using one of these programs. Things do change, though, and there are programs now that can help first time home-buyers in to home ownership.

The first assumption is that a first time homebuyer is someone who has "never" owned a home in their name. Well, when it comes to using Bond Money, the requirements for being a "first time home-buyer" is that you can not have owned a home within the last three years. Other requirements include income limits based on family size (a family of one can qualify as well) and limits on the price of the home ($281,137 in Okaloosa County, FL; $237,431 in Santa Rosa County, FL; $429,619 in Walton County, FL). Income limits in Okaloosa County are $62,600 - $77,700, and in Escambia, Santa Rosa, and Walton Counties, they are $54,800 - $63,020.

Depending on your qualifications, Bond money, or SHIP Funds (State Housing Initiatives Program) can both provide funds to help with down payment and/or closing costs. Also, depending on the location of the home, it may qualify for a Rural Housing loan. The benefits to using a Rural Housing Loan are that you can borrow up to the appraised value of the property (usually you can only borrow the contract price, regardless of appraised value). This is a way to roll your closing costs in to the loan and have to pay less at the closing table. Ask your lender or Realtor to check the address of the house you are interested in to see if the home is considered Rural Housing.

So how do you know if you qualify for any of these programs? First, by talking to a lender about what you are qualified for. Not all lenders will be signed up to use Bond Money, so be sure to ask the questions. Also, keep in mind that using SHIP Funds or Bond Money may require a longer process than the normal loan process (usually approximately 30 days from the contract date), so keep that in mind when considering your time frame to move.

With all the real estate shows on TV like "Flip This House," "Flip That House," "Design on a Dime," "Extreme Home Makeover," and the plethora of others available, I've heard the questions "is it really possible to make that kind of money?" Well, it depends (don't you hate hearing that?). With all the books out there, the bottom line of so many of them are that "The Key to True Wealth is to Buy and Hold" when it comes to real estate--just ask Donald Trump. Most times that means you become a landlord, or you're holding vacant land for future sale. Of course it's harder to sell it quickly than if you were to sell stocks or bonds.

But that option may not be for you, and the thought of making $50,000+ in one flip transaction can make anyone's mouth water. So how do you know if there's money to be made in your local area? While there is a lot involved, I'm going to outline what you need to look at here to give you an idea of what to consider before making that step.

Before you buy an investment property, the first thing you need to think of is multiple exit strategies. While your intent may be to flip it, what happens if you have more money in it than its worth by the time you're finished? Or the market takes a serious downturn before you're finished. Hopefully you prevent this by coming up with a budget and time frame and sticking to it, but having an idea of maybe renting it out, or various ways to sell it (maybe seller financing could be an option), will help you adjust quickly if you need to.

That said, you need to compare your "target house" with similar others in the area that aren't fixer uppers and see what they are worth "now" on the re-sale market, as well as the rental (in case that becomes an option you need to use).

Some fixer-uppers only need a coat of paint and new flooring--which considering how much is done on some (just watch any of those TV shows I mentioned!), is not bad. If it's possible prior to buying or closing on the property, the best thing to do is to get a professional inspection on the property, and then have people come out to give you estimates on work that's required. A general contractor can do just about anything that's required, however, they can also be quite expensive. Sometimes it is more cost effective to hire the different subcontractors yourself or do the work yourself, depending on your time constraints and personal experience. The best thing to do is get 3 estimates--or more if you're not comfortable with those three. In this area, estimates can vary greatly. Don't be afraid to call around, and ask a lot of questions. The things you need to consider are the electrical and plumbing (if the house is older, it may need to be brought up to code for the best benefit). What about the A/C system? Pulling out old carpet and painting will get rid of most smells (especially if previous owners/tenants had indoor pets and/or smoked inside). Just make sure to wash down walls and floors before painting and putting new flooring down to help eliminate those smells. What is the overall condition of the walls (1970's paneling? or holes to be repaired?) as well as the condition of the bathroom(s) and kitchen. Some updating can be done by just putting a coat of paint on it, others require complete replacement. And as the new owner of this property, that choice is up to you. The point is that you want to market your home to the highest number of buyers possible--so while thinking of what needs to be done, keep that in mind.

Of course, as you are getting your estimates together, you add up what your budget should/will be, and add that to what you are paying (or planning to pay) for the property. If the current fair market value is well above what those costs are, then it looks like you'll be able to make money. But keep in mind what your holding costs will be as well. If there's a loan, there are loan payments. As always, property taxes and insurance will need to be paid.

And, as always, there are taxes on the profit you do make. Everyone's situation is different, so it is best to contact your tax professional--one that deals with real estate. If you hold a property for over a year, then your capital gains on it is 15%, however, in the case of fixing and flipping, it may be considered "ordinary income" and get tacked on to whatever your earned income is for the year--so depending on your tax bracket, you may pay higher taxes than that 15%.

The bottom line? When buying any property for an investment, make sure you do all of your homework first. Ask a lot of questions, do a lot of research. The information is out there for everything you need, but it does take time to find it, put it together, and then to fix up the property. Many people like the idea of doing something like this "on the side" in addition to their day job, however, there is a lot of work involved, whether you choose to do it yourself or hire someone else to do the work. If you're serious about it, there is money to be made, but you need to have a plan and go from there.

The question always comes up as to when to buy real estate, and it's always that the best deal in real estate is the one you bought yesterday. Let's face it, as much as we'd all like to have a crystal ball, and KNOW that now is NOT the time, or IS the time to buy or sell, that's not going to happen. It's kind of like life...just like when you have a baby---you don't know if this screaming little bundle is going to grow up to be president (of the U.S. OR their own company), work in a factory all their lives, serve in the military, or just choose to live with you "forever." So how do you decide when the best time to buy is?

Look at your personal situation. Are you planning on staying in the area or the job you are currently at for more than 2 years? Look at your financial situation. Lenders look at your debt-to-income ratio as well as your credit rating--unless, of course, you can pay cash for the house you plan to buy. You also need to look at family size and what is necessary--you don't want to buy a small 2 bedroom house if you have 3 kids and one on the way. These are situations based on your personal life and decisions.

As it is, too many buyers assume they'll "wait until the prices drop" however, Jim Svinth, chief economist at Lending Tree says that may not be the best idea--especially now. Jim says "As the economy recovers, finance costs will rise. Waiting for the perfect time to get into the market may cost prospects, especially renters, more in the long run."

"The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher," says Svinth. Any savings you might incur by a further drop in prices might be offset by rising financing costs."

Svinth goes on to use the example of buying a $250,000 home in today's market at 6% on a 30 year fixed rate mortgage, 20% down payment, the monthly payment is $1199.10 (principal and interest only), however, if you choose to wait a year, and prices drop 10% to $225,000 on that same home, but interest rates are at 7%. The same 20% down payment and 30 year fixed rate mortgage, your monthly payment is $1197.54...a savings of only $1.56 a month.

The entire article is available at http://www.floridarealtors.org/NewsAndEvents/n1-030308.cfm

Meanwhile, waiting that year, a renter continues to pay rent (or rather, the landlord's mortgage), and is unable to reap the benefits of writing off interest and taxes paid on their tax returns.

Buying a home is one of the biggest decisions a person makes in their life and can be daunting. I've bought and sold many of my own personal properties so am quite familiar with the process on a personal level. If you have questions about the process of buying or selling, feel free to contact me at Valerie@ValerieSullivan.net, 850-803-8446 or visit my websites at www.ValerieSullivan.net, www.ValerieSellsTheBeach.com, or www.TheBeachRealEstate4U.com.

For those of you that bought a new home in 2007--in the state of Florida, March 1, 2008 is the deadline for filing for your homestead exemption. You will need to go to the property appraisers office to do this. March 1 is this Saturday, so you have until close of business on Friday to file.

The same deadline also applies for the portability of the homestead exemption if you acquired a new homestead and sold or moved from the previous homestead.

Previously the homestead exemption allowed you to get $25,000 off the assessed value of your home, lowering your tax bill. This year that has increased to $50,000 on homes worth at least $75,000, so taking a few moments to file this paperwork can save you a considerable amount of money.

Remember, also, if you are a disabled veteran, you also get an additional $5,000 added to your exemption. Benefits also apply if you are widowed as well.

There is also a 10% cap on non-homesteaded properties, however, it does not apply in 2008.

For Okaloosa County, Florida, the link for more information is:

http://www.okaloosapa.com/index-exempt.html

To find property appraisers in other counties in Florida, follow this link:

http://dor.myflorida.com/dor/property/appraisers.html

A relatively new term coming to light in real estate is called Short Sale. I'm asked what is a short sale and how does it work.

A short sale is when a home is sold for more than is owed on it. It's an alternative, or rather, a step prior to going through foreclosure. Chances are that if the house is selling for less than what is owed on it, the current market value won't support the current loan amount. The seller will need to work with their lender, and find out what needs to be done to accomplish a short sale. When a realtor is involved, the seller can sign paperwork allowing the realtor to discuss negoations directly with the lender and their loss mitigation department.

In buying a short sale house, not only does the seller have to approve the offer, but so does the bank/lender that is holding the loan. Because of this, buying a short sale house may take longer than the average (approximately 30 days) to 60-90 days--sometimes longer--depending on the lender. Some of these homes can turn out to be very good deals, but as with the purchase of any house, it is best to do your due diligence--get an inspection, check things that are pertinent to you as a buyer, find out what your taxes and insurance will be and work closely with your own lender and Realtor.

So how does a short sale affect the seller? In the past, if a seller sold their home for $50,000 less than what was owed, the bank/lender would send the seller a 1099 at the end of the year identifying this $50,000 as income you received and then you would owe taxes on that $50,000. Due to the recent upswing of foreclosures and shortsales, though, this has recently changed, and banks are supposed to be forgiving these amounts. It's best to check with your tax professional first to find out what your specific circumstances are--everybody's tax situation is different. Information can also be found at www.irs.gov and searching on "short sale."

If you have further questions, feel free to email me or give me a call!

I've been getting a lot of questions lately about how does a person know if it is better for them to buy or rent. There are times when it is much better to rent for a while--usually if you expect to be in a place temporarily it's better to rent. If you plan to stay in one place 4-5 years, or more, financially you are better off buying a house.

Many people assume they don't qualify for buying a house, but they haven't talked to a banker or mortgage broker to find out what their status is. There are as many variables in a person's finances as there are people, so there is no cookie cutter answer, which is why it is best to talk to a banker or mortgage broker--maybe even more than one--I've worked with people that have been told previously they don't qualify to buy a home, yet, within a month of being told this, and a different lender, they were approved and moved into their new home.

Buying a house is the first step many people take towards long-term wealth management. Think of it this way, if you rent for 30 years, all the while your rent is going up, maybe not very much, but it seems every time you get a payraise, it goes straight for the increased rent. With a fixed rate mortgage, the money you put to the mortgage each month pays down the equity in your home. After 30 years, you own this property and have more options than you would had you rented all that time. I have a friend who's husband passed away after 40+ years of marriage. They lived in the same house for 28 years--renting. On her social security, she could no longer afford the low rent (the landlord rarely raised the rent as they were such good tenants!), so out the door she had to go...with very few options. She's angry because had they bought that same house 28 years earlier, she would have had so many options--even to rent out the other rooms in her house to pay off the last 2 years of her mortgage...and then have a place to stay rent-free the rest of her life...

The following is taken from the Florida Association of Realtor's website, and the full article link is below;

For someone who plans to stay put more than two or three years, home ownership usually makes more sense financially. The key benefits include annual tax benefits, "forced savings" from paying down the mortgage and potential appreciation in value. "Owning a home is one of the best builders of wealth," says Todd Nordstrom, a sales associate with Esslinger Wooten Maxwell, Miami Beach. "There is a huge difference in net worth between renters and owners." In fact, the most recent Federal Reserve Survey of Consumer Finances shows the median net wealth of a homeowner household is $171,700 compared with just $4,800 for a renter household.

http://www.realtor.org/PublicAffairsWeb.nsf/Pages/TPHousingasanInvestment

Enjoy!