• Aug. 27, 2010 - Thanks! But No Thanks! By Owner.....
"Buy Owner" Files for Liquidation......
Article below concerning the court filing for liquidation of the "broker free" real estate company. They site that the market "continues to struggle". Well while nationally sales are down, if you look at our area, year to year sales are actually UP. In addition, even in the down market agents who are savvy and know how to get homes sold are THRIVING. For us 2009 was a land mark year - the best in dollar volume and the best in number of transactions. So why, if they are so good at selling homes without using an agent, do they find themselves struggling? I remember seeing ALL those ads with all those smiling faces. I also note NONE of those ads ever were trying to sell a client's house. Only trying to sign up for new listings. And even in the article below they are quoted as saying - “The phones, as far as people interested in the service, remain very active, and we are signing up new clients everyday"
But if they are filing for liquidation SOMETHING in their model likely doesn't work.
Thanks for nothing!
- Mike W.
Buy Owner service is in liquidation
BOCA RATON, Fla. – Aug. 20, 2010 – The Buy Owner broker-free real estate firm, known for its familiar “Thanks, Buy Owner” advertisements, has filed for liquidation as the housing market continues to struggle.
The Deerfield Beach-based company will continue to operate with a reduced staff as a buyer is sought for its assets, which could include the purchase of the firm in its entirety, minus its debt.
“The phones, as far as people interested in the service, remain very active, and we are signing up new clients everyday,” said Philip J. von Kahle, managing director for Michael Moecker & Associates, which is the assignee for Buy Owner. “There is still a very valuable core business here.”
Buy Owner president and CEO Scott A. Eckert lives in Boca Raton.
The company filed last month for an assignment for the benefit of creditors in Broward County, which is similar to a Chapter 7 federal bankruptcy but in state court. As assignee, the Fort Lauderdale-based Michael Moecker & Associates, is responsible for maximizing the assets of the company so creditors can get paid.
Von Kahle said the combination of a down real estate market and a large Bank of America loan that recently required payment led to the liquidation filing. According to court documents, Buy Owner owes about $3.9 million to Bank of America, and $1.2 million in back pay to its executives, including Eckert. It has 33 shareholders.
Buy Owner, founded in 1984, charges fees to sellers based on how much exposure they want on its website, and what features, such as custom fliers or talking yard signs, they choose. It is free to buyers.
The company has franchises in Atlanta, Chicago, Dallas, Jacksonville, New Orleans, Orlando, Philadelphia and Tampa.
“I don’t think the company could scale down quick enough because it got so big,” said von Kahle. “It appears to me the loan from Bank of America was the straw that broke the camel’s back.”
A 2009 Florida Realtors report found about 10 percent of homes sold last year did so without the help of a Realtor.
Leyza Blanco, an attorney with Miami-based GrayRobinson, P.A. who is representing Michael Moecker & Associates, said she has filed a motion to allow for liquidation of the business as a whole, rather than its parts. Because Buy Owner is a service-based company, that could maximize profits, Blanco said.
“There’s not a lot of tangible assets that you can just take apart and sell,” she said.
Creditors have until Nov. 23 to file claims against the company.
• Jul. 28, 2010 - Update: Foreclosure versus Short Sale
Foreclosure vs a Short Sale - what is best for YOU?
Below is an article which outlines, in terms that also understand current trends in programs etc - the relative value of a Short Sale versus letting your home go to Foreclosure. If you have questions or concerns having read it we're here to help!
- Mike W.
Foreclosure vs. short sale: pros and cons
PALM BEACH, Fla. – July 28, 2010 – With today’s reduced property values and increased unemployment, it’s tempting for some homeowners to just throw their hands up in defeat, allow the bank to take their home in foreclosure and rid themselves of the monthly mortgage burden.
Even suffering through the paperwork and stress of a short sale may seem too much for an overwhelmed borrower to handle.
But Florida homeowners should be aware of unique rules in the state that make the benefits of a short sale typically outweigh the ease of walking away in a foreclosure.
“I want to be very clear on this, short sales are a better solution than a foreclosure, even when all the options in a situation where you lose your house are not great,” said Mark Greene, owner and president of Short Sale Operations LLC in North Palm Beach.
The biggest difference between Florida and many other states when it comes to losing a home is the deficiency judgment.
While some states ban lenders from collecting the remainder owed on a loan after a foreclosure or short sale is completed, Florida law allows banks to go after borrowers for up to 20 years. That can lead to a garnishment of wages long after the home is gone.
In a short sale, where the bank agrees to take a lesser amount for the home than what is owed on a loan, lenders sometimes are willing to write off the deficiency on the front end.
Greene said in 90 percent of the cases he handles, the bank has waived its right to seek a deficiency.
That was the case with Jupiter resident Kathryn Lorello, who in 2008 found herself in a home she couldn’t afford.
Following a divorce, and with three children, Lorello bought a $408,000 home that she lived in comfortably for a year. But then she lost her job as a manager of a real estate company.
She remembers the day the bank served the notice of foreclosure.
“I cried my eyes out,” Lorello said. “That’s when I panicked because I really didn’t want it to happen.”
Lorello got advice from Greene on doing a short sale.
Her bank, Wells Fargo, waived its right to seek a deficiency even though it ended up taking $200,000 less than what was owed on the loan.
Also, if a bank refuses to waive the deficiency in a short sale, it still would have to go back to court to seek a judgment.
In a foreclosure, at the end of the proceeding, a deficiency judgment is automatically awarded by the courts and the bank is free to seek a claim.
“In the past, people just wanted to move from the property and get on with their lives and didn’t understand what the lenders’ rights were in terms of pursuing a deficiency claim,” said Paul Baltrun, director of loss mitigation at the LaBovick & La-Bovick law firm.
“I think people are more aware now about what can happen after the fact and that their nightmare can continue.”
Another consideration is the effect of a foreclosure or short sale on credit.
According to the Fair Isaac Corp., which developed the widely used measurement of credit risk called a FICO score, the negative effect of a foreclosure is only marginally worse than a short sale.
But in Florida, a deficiency judgment from a foreclosure is likely to have a much larger impact that will prohibit your ability to buy another home for many years.
Daniel Poulos, a mortgage broker with Elite Lending in North Palm Beach who has studied the effect of foreclosures and short sales on credit, said unless a borrower pays off the deficiency, it may be 20 years before someone is eligible for another mortgage.
“That’s the kind of information that’s not getting out in Florida,” Poulos said.
There are a few situations where some experts believe it is better for someone to go to foreclosure rather than do a short sale.
To do a short sale, a borrower must give all of his or her financial information to the bank before it will decide whether to allow the short sale. The idea is that if a person can afford to pay the mortgage, the short sale may be denied.
“Now the lender knows everything about your finances and they can better decide whether they will go after you or not,” said Jon Maddux, CEO of YouWalkAway.com, a company that advises people on strategic defaults.
If a lender doesn’t know your finances, Maddux argues, it reduces the chances it will go after you following a foreclosure.
“You might fly under the radar,” he said. “With the millions of people going through this, they are probably going to go after the low-hanging fruit.”
Southwest Florida Can't AFFORD to "Drill Baby, Drill"
Article below pointing out how dead in the water the concept of drilling for oil off the Florida Coast is now - even though it was being considered as a great idea only a month ago.
From Tampa all the way south to Naples, Marco Island and the Florida Keys - this economy is all about folks coming to the beach. Forgetting completely the horrible ecological ramifications of spills on this coast the economic ramifications would be DIRE.
And to all the folks who try to tell us that the technology has advanced so far that major spills are unlikely we can only point to BP's inability to cap this current underwater geyser of oil that is about to decimate the fishing industry and give a huge secondary wallop to an area whose economy was only now beginning to dig out of Katrina.
If we ever have to send pictures of the pristine white sand of Siesta Key covered in tar balls and oily birds there will be no $2.50 a gallon gas worth what will have been lost here.
- Mike W.
Oil issue dead in Florida for now
TALLAHASSEE, Fla. – May 4, 2010 – Gov. Charlie Crist declared the issue of drilling off the Florida coast effectively dead Monday as he monitored the latest news surrounding an oil spill caused by an explosion on a BP rig last month.
"It hasn't happened in Florida, but it happened in Louisiana and we may suffer as a result of it," he said. "But I think the timeliness of when this occurred is pretty extraordinary when you think about it because there may have been legislation in this last week that would have permitted it, but for this occurring."
Incoming Senate President Mike Haridopolos and House Speaker Designate Dean Cannon have pushed for offshore oil drilling in Florida for the past two years. The two have held hearings over the past year on the subject to garner support for the proposal. With the two of them set to lead the two chambers come November 2010, oil drilling was expected to become a major part of their platforms.
A committee led by Cannon had even released a report talking about the potential benefits of drilling.
But when the oil rig in the Gulf of Mexico exploded, the two incoming leaders were less fervent in their support of drilling, saying they needed to monitor the situation closely and tour the coastal areas.
"We're going to take the entire summer and fall to see, first and foremost, what happened in the Gulf," Haridopolos told reporters last week. "It gives me great pause. But a tragedy does not stop all progress."
Nearly every major candidate for office has weighed in on the issue. Chief Financial Officer and Democratic gubernatorial candidate Alex Sink called for disaster loans and an oil spill task force Monday afternoon. And Attorney General Bill McCollum said last week that he would veto Cannon's proposal if he were governor because it involved drilling too close to the shore.
"If I'm governor, he'll face a veto on my desk if he brings it up the way it is now," McCollum said last week.
State Sen. Dan Gelber, D-Miami Beach, who is running for attorney general, put out a release saying he was "inalterably opposed" to drilling. What potential Cabinet members think matters because under the proposal as it was last floated, the Cabinet would ultimately decide on new leases.
"I don't think we need to study it, I think we need to reject it outright and put the entire idea where it belongs: in our rear view mirror," Gelber said.
Scott Maddox, a Democratic candidate for agriculture commissioner, held a press conference Monday asking all candidates for Cabinet positions to sign a pledge saying they would not support offshore oil drilling in Florida.
"No state in the nation is dependent on its beaches for tourism the way Florida is," he said.
His Republican opponent, U.S. Rep. Adam Putnam, R-Bartow, also released a statement saying he was "deeply concerned" about the economic and ecological impact of the spill.
"It is clear to every elected official, from the President on down, that consideration of any new exploration closer to shore needs to be taken off the table and we need to have a thorough investigation into what happened and the inability of the industry to effectively respond," Putnam said.
Source: News Service of Florida, Kathleen Haughney
Below is an article from today's Wall Street Journal concerning an upcoming change to FNMA's stance on granting new mortgages to folks who end up short selling their home or who successfully negotiate a DIL (Deed In Lieu of Foreclosure).
FNMA, starting in July, will consider folks who have 20% to put down and whose credit scores have sufficiently recovered for a new mortgage in only TWO years after a successful Short Sale or Deed In Lieu. In the past it had been four years.
With SO MANY homes underwater it is great that Fannie is finally realizing that a lot of these Shorts were NOT "strategic" but in fact unavoidable due to job loss etc.
Keep in mind too that they still mention having your credit score recover. If you end up with a three month late in order to get your short sale done - that can strike your credit for about 150 points. That COULD recover in the two years though if you properly manage your credit.
Lastly it is IMPORTANT to note that while the article below would lead one to believe that a deed in lieu is simply you sending the keys back to the lender that is NOT the case. A Deed in Lieu (DIL) must be NEGOTIATED with the bank, usually using all the same criteria to evaluate as they use for loan mods or short sales (without an offer of course). If you simply mail back the keys you will find yourself in foreclosure and with a deficiency judgment etc etc so be sure you understand the differences. Speak with a professional before you "make your move". But this is very good news.
- Mike W.
Fannie sweetens offer to avoid foreclosure
WASHINGTON – April 26, 2010 – Struggling borrowers who give up their homes through a "deed in lieu of foreclosure" or a short sale will be able to obtain a new Fannie Mae loan in two years. Currently, these owners must wait at least four years.
The new policy, which takes effect in July, is designed to make foreclosure alternatives more attractive. The policy applies only to Fannie Mae's willingness to approve a mortgage, however. Homeowners' credit scores will still take a hit following a short sale or deed in lieu of foreclosure.
To qualify for a mortgage after the two year wait, Fannie Mae says borrowers must make a 20 percent downpayment; but those who lost a job or have other extenuating circumstances will be able to make a 10 percent downpayment.
Freddie Mac – which, with Fannie Mae, insures over half the mortgages in the U.S. – currently makes homeowners wait four years after a short sale or deed in lieu of foreclosure before it will back a new mortgage. Owners who go through a foreclosure wait five years. For both Fannie Mae and Freddie Mac, the waits can be shorter in some cases if borrowers show extenuating circumstances.
Source: Wall Street Journal (04/26/10) P. A2; Timiraos, Nick
• Apr. 16, 2010 - Homebuyer Tax Credit Raises Chance for IRS Audit? Say it Ain't So!
Pasted below is an AP News Article saying that one fifth of all IRS examinations done by mail in the last 6 months were for people claiming the first time homebuyer credit! Also look at the delays it mentions in getting refund - up to six months! Certainly this program may prove to be a double edged sword.
This program is rapidly coming to an end but the quote from the independent watch dog is exactly what a great many agents had been saying - that this program would have spurred more activity if the buyers had been able to take advantage of this injection right at the closing table.
Anyway, not that you wouldn't have anyway, but if you are planning to take advantage of the credit, with the odds running one in five that your return will get some "special attention" you and your accountant may want to be extra mindful of your P's and Q's on this return!
- Mike W.
Want to get audited? Apply for homebuyer credit
WASHINGTON (AP) – April 16, 2010 – Here’s a good way to get audited by the Internal Revenue Service this year: claim the new homebuyer tax credit.
About a fifth of all IRS examinations done by mail in the past six months were for people claiming the credit, National Taxpayer Advocate Nina E. Olson told a congressional committee Thursday – the filing deadline for individual tax returns.
The audits mean big delays in getting refunds – as much as five months – just as Congress and the Obama administration hope that tax refunds will spur economic growth and the homebuyer tax credit will improve the housing market.
“The first-time homebuyer credit is a program that I personally would not have run through the tax code,” Olson, an independent watchdog within the IRS, said in an interview.” The taxpayers need the money at the closing, and by definition, the tax code is a one-time-a-year filing event.
“Most people don’t close on their houses on April 15,” she said.
Congress passed an $8,000 credit for first-time homebuyers early last year to help jump-start housing markets as part of the massive economic recovery package. The program was so popular, Congress extended and expanded the program in November, opening it up to longtime homeowners who buy new homes.
Buyers who have owned their current homes at least five years are eligible, subject to income limits, for tax credits of up to $6,500. First-time homebuyers – or people who haven’t owned homes in the previous three years – can get up to $8,000. To qualify, buyers have to sign purchase agreements before May 1 and close before July 1.
To help prevent fraud, homebuyers are required to include a settlement statement, also known as a HUD statement, with their tax returns. Longtime homeowners have to provide proof they have owned their current home for five years. That could be done with old property tax bills, said Jackie Perlman, an analyst at the Tax Institute at H&R Block.
“Understand your obligation to provide documentation and provide it, it’s as basic as that,” Perlman said.
The documentation requirements mean that taxpayers applying for the credit cannot file their returns electronically, which also delays refunds.
Refunds take about 10 days for returns filed electronically in which the refund is deposited directly into a bank account. Refunds can take six to eight weeks for last-minute filers who use paper returns and receive checks.
As of April 2, the average refund was $2,950, up about $255 over last year.
The National Association of Realtors estimates that about 2 million first-time homebuyers took advantage of the credit last year, said spokesman Walter Molony. The Realtors project that about 900,000 additional first-time homebuyers will qualify for the credit this year, along with 1.5 million repeat buyers, he said.
Through March, the IRS had completed more than 650,000 correspondence exams in which taxpayers are required to share additional information by mail. Of those exams, or audits, about 140,000 were for people claiming the homebuyer credit.
Through the end of February, more than 1.8 million taxpayers applied for the credit. Of those returns, 260,000, or little more than 14 percent, were selected for audits, Olson said in written testimony to the Senate Finance Committee.
By comparison, the IRS completed a little more than 1 million correspondence exams last year, out of about 140 million individual returns filed.
Deputy IRS Commissioner Steven Miller said the agency has worked to publicize the requirements of the homebuyer tax credit as well as others that were part of last year’s economic recovery package.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said the IRS has a responsibility to help taxpayers understand the new tax breaks.
“The IRS needs to effectively implement the many tax incentives we enacted last year to help jump-start our economy and create more jobs,” Baucus said.
On The Web: IRS FAQS on homebuyer credit: http://tinyurl.com/db3gnn
• Jan. 19, 2010 - Loan Modifications are Like Unicorns!
Hopes for a Loan Mod remind me of The Irish Rover's Song!
We speak with folks almost every week who are thinking they might have to short sell their home. But FIRST they say - I spoke with someone who assures me he can, for a fee of (insert here a number that's always at least $1200) he/she will get me a loan modification.
And that's when the song starts in my head:
You'll see green alligators and long-necked geese
Some humpty backed camels and some chimpanzees
Some cats and rats and elephants, but sure as you're born
You're never gonna see no LOAN MODIFICATIONS!!! (unicorns)
Below is an article from yesterday's Palm Beach Post showing just how few (less than 8500 loans in Florida and only 66,000 loans nationwide) have been modified using the $75 Billion plan from last February. And when you see these numbers you have to say to people who think they are going to get a loan modification that truly loan mods are like Unicorns. People talk about seeing them but nobody HAS!
Meantime of course there has been ample opportunity for these very same banks to award generous bonuses to exectuives, rewarding them for their ability to drink at the federal trough - not really for making great business decisions!
Ahh your tax dollars at work!
Only 8,405 in Fla. get mortgage modification
TALLAHASSEE, Fla. – Jan. 18, 2010 – Fewer than 3,000 South Floridians have a permanent loan modification under President Obama’s nearly year-old program to stem home foreclosures.
In the Treasure Coast, just 111 troubled borrowers have seen permanent relief from the $75 billion plan announced in February.
The dismal performance of the program marketed as a helping hand for the nation’s more than 3.3 million delinquent home loans was released Friday in a Treasury Department progress report.
Throughout Florida, which by every measure is one of the states hardest hit by the real estate crash, there are 8,405 permanent modifications. In Palm Beach, Broward and Miami-Dade counties combined there are 2,987 permanent modifications.
Another 96,703 Florida loans are on trial modifications.
The Making Homes Affordable program gives incentives to banks to modify loans in three basic ways; reducing interest rates to as low as 2 percent, increasing the life of the loan, and reducing the principal owed on the loan.
“You keep hearing about this wonderful program the government is doing but it’s not working,” said Joel Bienvenu, who owns a home west of Boca Raton and has been trying to get a loan modification through Wells Fargo since August. “I keep getting excuses that they are just overwhelmed.”
Nationwide, 66,465 permanent modifications have been approved, less than 2 percent of the total loans that are 60 or more days delinquent. Another 46,056 permanent modifications have been approved by the lender, but not yet by the borrower.
The median monthly decrease to mortgages that received permanent modifications was $516, according to the Treasury Department.
From the beginning of the program, homeowners have complained about having to send lenders the same paperwork multiple times, while banks say borrowers provide the wrong documents or fail to meet the requirements for the permanent modification.
Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association, said Friday that lenders have been on a learning curve, but are improving.
“I think the industry is working hard,” he said. “You can’t ramp up a program like this overnight.”
Fort Lauderdale real estate attorney and foreclosure mediator Shari Olefson said the more than 1.1 million trial modifications offered to borrowers nationwide shows lenders are making an effort.
The fact that just 66,465 have become permanent points to a fundamental problem with the program, she said.
“The program itself is a failure,” said Olefson, author of Foreclosure Nation, Mortgaging the American Dream. “It’s trying to put a square peg in a round hole.”
To qualify for a modification, a person’s monthly housing expenses must be more than 31 percent of gross monthly income. But you also must prove that you can pay for the modification.
Olefson believes high unemployment and a steep loss in housing equity is keeping the plan from working.
“The whole program was crafted before we correctly identified the problem,” she said.
• Oct. 6, 2009 - Sarasota the Number ONE Market to Buy in Now!
Today Show Lists Sarasota as THE Number One City to Buy In Now!
Barbara Corchran says if you wanted to TIME a Real Estate Market that has turned - Sarasota is the NUMBER ONE CITY in the US to buy in right now. Check out this video!
• Sep. 4, 2009 - "If They Gave Awards for Sand - Well They Do! Great article in NY Times!
New York Times uncovers the Hidden Treasure That Is Siesta Key!
I just had to share with you the article from the travel section in today's New York Times regarding visiting Siesta Key, and in particular doing so in the warm summer months. I will paste the link below and say that the article is SPOT ON. The only other things I might add: if you're interested in Renting a place here you should not miss www.SiestaKey.com and of course should you decide you want to own here - then visit www.RingTheWingers.com.
Fate smiled on Siesta Key, near Sarasota on Florida’s Gulf Coast, giving it powdery white quartz sand that stays cool even in the hottest summer weather.
• Aug. 5, 2009 - Buyers shouldn’t wait on falling prices!
Buyers shouldn’t wait on falling prices
We keep hearing here in Sarasota that a particular buyer wants to wait because they are convinced the market has further to fall. Well if the law of supply and demand holds true that MAY not really be the case for OUR area. MLS inventory levels are substantially lower now than they were six months ago. But the REALLY interesting this I found in the article reprinted below is the statistic that if interest rates go up just one point (and all indications are that we ARE at a market LOW for rates) your payment will be the SAME even if the acquisition price dropped by TEN PERCENT from today's pricing.
If you also factored in the current tax advantage for first time homebuyers as an example, that will expire in just a few months sitting on the fence or trying to "time the market" could in fact be a very bad move!
From Florida Association of Realtors:
NEW YORK – Aug. 5, 2009 – Fear of overpaying for property is common these days, especially in places where prices continue to be unstable. If you encounter potential buyers afraid to commit based on a fear that they’ll pay too much, point out these factors:
• Waiting for the right time can be expensive. Some buyers would have more equity today, despite falling prices, if they had bought when they first considered it instead of continuing to pay rent.
• Financing is fickle. Some people who were highly qualified last year can’t find financing this year because the credit market has tightened or their personal financial situation now makes them an undesirable borrower.
• Interest rates are headed up. If prices decline by another 10 percent but interest rates increase by 1 percentage point, the monthly payment will be the same.
Source: The Wall Street Journal, Douglas Heddings (07/27/2009)
• Aug. 5, 2009 - IRS Goes Web 2.0 to Promote $8000 First Time Homebuyer Credit
The IRS Wants ON to your IPOD to Illustrate the First Time Homebuyer's Credit!
On a recent visit to the IRS's Website I was surprised to find both English and Spanish Ipod Podcasts to help taxpayers understand the benefit of the current (and SOON to expire if not extended) $8000 First Time Home Buyer's credit. I will paste the link below but be sure to look in the upper right hand corner of the page that loads for the links to the Podcast.
Also note that if you work with certain lenders in Florida there may even be the ability to use the $8000 toward closing costs/downpayment. I'll put a link to the Florida Housing Finance Corporation to see if your favorite lender is participating!
Ahh the IRS on my IPOD - is this a great country or what?
“The new credit can get money in the pockets of first-time homebuyers quickly,” said IRS Commissioner Doug Shulman. “For people who recently purchased a home or are considering buying in the next few months, there are several different ways that they can get this tax credit even if they’ve already filed their tax return.”
First-time homebuyers represent a significant portion of existing single-family home sales. The expansion in the first-time homebuyer credit will make it easier for first-time homebuyers to enter the housing market this year.
Under the American Recovery and Reinvestment Act of 2009, qualifying taxpayers who purchase a home before Dec. 1 receive up to $8,000, or $4,000 for married individuals filing separately. People can claim the credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.
Link to Florida Housing Finance Corp's Lender Pages:
Keep in mind that at least for now - these transactions MUST CLOSE by 12/1/2009 to qualify so given how long it is now taking to get financing in place and to work out issues with lenders on short sales and foreclosures - time is of the essance.
• May. 13, 2009 - Nice Enhancement to the $8000 First Time Homebuyer Credit!
You Might Not Have to Wait Until 4/15 to Get Your Money!
First off if you are in the market for a home you should become conversant with this $8000 First Time Homebuyer credit being offered on purchases through Dec of 2009. Here is a link to the relevant information at the IRS Wesbite:
Keep in mind: the credit Is fully refundable, meaning the credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed!
But wait it MAY actually be getting even better: you MAY shortly be able to use the credit for DOWNPAYMENT ASSISTANCE with certain FHA lenders:
DOWNPAYMENT ASSISTANCE
First-time homebuyers will soon have another option if they want to use their $8,000 tax credit toward a downpayment. According to HUD Secretary Shaun Donovan, FHA-approved lenders will soon be able to issue a short-term bridge loan equal to the tax credit. Buyers will then pay back the bridge loan after receiving their tax refund. Donovan hopes to have the details available within a few days.
• May. 12, 2009 - More than just light at end of the Tunnel!
Southwest Florida Led The Way INTO the Housing Decline - And we May be Leading the Way OUT!
Very good stats out from the Florida Association of Realtors below. Our own experience is bearing this out. Sales activity in the first four months of 2009 was WAY up and the Sarasota Association of Realtors/MLS shows that Pendings are still up again AND that inventory is coming down - fairly quickly. Buyers have jumped back in here as they clearly see the value - so much so that it is actually a lot harder this month to find those bargains that we found four months ago. Truly if you were on the sidelines wondering when to get back in - if you want to be in our area - that time is now!
HOME SALES
Sales of existing single-family homes in Florida rose 25 percent in first quarter 2009 compared to the same period a year earlier, according to FAR - the third consecutive quarter for higher existing home sales. Statewide existing condo sales in the first quarter rose 19 percent compared to 1Q 2008. Nationally, NAR says sales of all housing types slipped in the first quarter.
• Apr. 23, 2009 - Could There BE a Silver Lining to the Chinese Drywall Story?
Hard to Believe Chinese Drywall Could Help You with a Short Sale!
This is a true and funny story and the names have been changed to protect the innocent (and not so innocent!)
First if you do not live in Florida you may not have HEARD of Chinese Drywall. During the go-go years of 2004-2006 with the building boom on, US manufacturer's couldn't keep up with demand for drywall for new construction. So we began importing it from China. Now a lot of homes built with the product are having "mysterious" problems with wiring and plumbing corroding behind the walls and air handlers turning black and dying. The culprit SEEMS to be a sulphur gas being outgassed by the drywall. OK that being said - today the Sarasota Herald Tribune had another front page article about the problem and how the various builders affected are handling the situation (or in some cases NOT handling it!) Here's a link to that article:
OK so that puts this in context for you. Now as anyone who reads this knows, we do a fair amount of short sales, and not surprisingly one of them is in one of the communities where one of the builders in the article above built homes. I have been being frustrated with one of the lenders on the home who has been stalling hoping that they would get MORE money out of the short sale. Today I am speaking with their loss negotiator and asked where does she live. She was in a northern state. I asked have you HEARD of Chinese Drywall? Well she had not - so I mailed her the following note with a copy of the article:
"Attached is an article from today’s Sarasota Herald Tribune concerning what is happening here regarding Chinese Drywall. Note that the article specifically mentions XYZ Builders as one of the builders with problem. The subject property was built by XYZ Builders and is in XYZ Builders (name of community) and XYZ has acknowledged this IS one of the affected communities. The value on this property could drop like a stone if we lose this buyer."
And Hey PRESTO - she called back and told me - she is reccommending the bank ACCEPT the current Short Sale and I should have my acceptance letter shortly!!
I may have to incorporate this into my strategy for ALL short sales built after 2003! Guess they really don't WANT to own THOSE houses!
• Mar. 2, 2009 - It's ABOUT TIME - Fannie Mae Finally Gets Real About Short Sales
Even Fannie Mae May Now Realize, You Get What You Pay For!
In a move toward a little sanity in the Real Estate Marketplace real estate commissions are now protected in some short-sale transactions. In response to Realtor concerns, Fannie Mae announced that "preforeclosure sales may not be conditioned upon a reduction of the total (real estate) commission," providing the total commission does not exceed 6 percent. The policy became effective March 1.
I will put a link below to the new Fannie May Guidelines. Why is this good news for ALL concerned? Well make no mistake, Short Sales are HARD WORK, taking typically 3 times as long as an average real estate transaction AND probably ten times as much time when done RIGHT. You need someone who is willing to negotiate with your lender or lenders and is working hard to try to get the property sold prior to foreclosure and get the seller the best possible terms, satisfactions ideally, in working out the short payment with the lenders.
Somehow banks had decided the Realtor was one more spot they could reduce their "haircut" and many do try to make acceptance of the sale contingent on the realtor cutting their take on a deal they need to put so much added time into. Doing that leaves home sellers, particularly where the sale price is low, vulnerable to incompetent or unscroupulous practictioners as those who are best at doing this want to abandon the low end knowing their compensation, already low, would be cut.
We find it takes as much work to do a $100,000 Short Sale as a $3,000,000 one and once you cut the commission from 6 to 5 or 4.5 on that $100,000 sale - you just may not be able to afford to give it the attention it deserves. It's nice for one to see the value of this hard work recognized.
• Feb. 5, 2009 - Chinese Drywall, Foreclosures, Short Sales and "As-Is" Agreements!
A New Reason for Caveat Emptor in Getting That Bargain on your Dream House?
Below is a link to a recent article from the Sarasota Herald Tribune about a relatively new "threat" that is turning up in some newer Florida homes. Chinese Drywall. During the boom years for builders demand for drywall to build new homes far outstripped available US manufactured supply and a number of builders or their subs ended up sourcing drywall made in China. Now it seems to be outgassing something that may be causing pipes and wiring behind the walls to discolor and corrode. Yet the builders say it does not pose any threat to human inhabitants. I am not a scientist but my own perspective is, if it will corrode copper pipe, I'd just as soon not inhale it!
OK to WHY do I now wrap this around Foreclosures and Short Sales. Well in both Short Sales and Foreclosures you almost always HAVE to buy the home "As-Is" with a right to inspect. If you're buying a resale house right now built in say 2005 to even today (the Tribune article says the product is still sitting on shelves in the US and may be being sold or installed) then you MAY want to try to ascertain if this was used. But in the case of at least Foreclosures, because the bank never "lived" in the house, you always have to buy the house without receiving ANY Seller's Property Disclosure. And even in the short sales, where you're likely to get a disclosure, the lender, if they approve the sale, will make ALL parties sign what I euphemistically call the "Hold Harmless from Hell" where they make everyone state and restate that the seller is NOT going to be responsible for ANYTHING post the inspection - that you as a buyer release them etc etc etc.
If you're buying a resale home built prior to 2005 it's probably not an issue but if you find yourself looking at a home that is a "distress" buy and it is in that date range, perhaps a call to the builder to ask what THEY know about this issue from their other homes or their subs might be warranted.
In any event, let this be another reason why you never ever purchase ANY home without getting inspections from a reputable inspector - let the Buyer beware!
Article below points out a more and more common "flaw" if you will of short sales that are not properly managed. The seller thinks the sale has gone through and he has been released from the debt but INSTEAD, upon closer review of the short sale acceptance documents you find that all the bank agreed to was to RELEASE the LIEN on the property so it can be sold. If not CLEARLY spelled out then you cannot assume that you are not still on the hook for some or even all of the old debt. We see MANY investor homes where the one or both of the lenders ask for SOMETHING more than the proceeds of the sale to issue a satisafaction. I guess that is the point that needs clarifying here. A release of the lien on the house ONLY clears the way to SELL the house - that's not the same as issuing a Satisfaction of Mortgage. A satisfaction ALSO clears the lien but it is also the thing that shows on your credit report that you have, by either paying in full or in part, satisfied the debt. Anyway - BEFORE you get to the closing table, if you are working with your Realtor on a short sale - make sure you understand what is being offered to you and what will be expected of you post closing and include in that discussion any possible TAX ramifications as well. You may elect to suffer some of this but you need to understand what you are agreeing to....see below - Mike - W
Short sales were a hot topic at a recent meeting of the California Association of Realtors' board of directors; and brokers, brokerage attorneys, and risk managers underscored the importance of agents reviewing all short sale documents carefully. They should ensure that lenders consider the balance completely paid after the short sale goes through. Sellers who find out after the fact that they still owe the entire loan balance will be dissatisfied and possibly blame their real estate agent. Want more short sales information? Go to: http://www.floridarealtors.org/LegalCenter/HotTopics/index.cfm
• Nov. 17, 2008 - Short Sales and Foreclosures Moving UpMarket - The Trickle Up Theory!
Think Short Sales Are Only in the Subprime Market? Think Again!
Attached is a link to a Florida Association of Realtors article pointing out the changes in the market place that are now affecting the half million dollar plus and even million dollar place home market.
For us, our experience is that, like the article said a large group of these short sale homes ARE located in the sub $200K and now even sub 150K range and WERE limited to the sub prime market but we had already been seeing plenty of Shorts 500K plus and even 1 million plus as far back as this time last year. We believe that this (Sarasota Bradenton) market was a "leader" if you will, into the downturn - having had a market stall in September of 2005 and then at first a slow erosion of price which has turned in the last 14 months or so into a pretty rapid decline in price. And while the higher end SEEMED to react a little later - we saw that end of the market come down long before the folks nationally in the markets quoted have seen them.
Perhaps too, these took longer to go short as folks on the upper end of the market had more resources to exhaust and were willing to do so to try to avoid the stigma of either a short sale or a foreclosure. We have also seen banks be a lot more agressive in asking for some "owner contribution" on the higher end as they see this type of customer as having a better income stream to tap into or they would ask them to liquidate 401K type assets (that usually can't be harmed in a Bankruptcy but the bank is assuming the customer wants to avoid that route as well) or even that the customer has a better income stream and can afford to take back a note after the lien is released.
But as the market continues to weaken AND folks have had their 401K's and their portfolios depleted they have less resources to tap on AND are less willing to exhaust what they have left to keep a mortgage that is far bigger than the current value of the home current.
Once again, this is not the answer for everyone but if you find yourself in this position and need to understand your options you should speak with someone who has done a number of successful short sales before you get too far behind on your payments.
Below is a link to an AP Newswire article saying that foreclosure rates are up 25% year over year for October of 2008 back to October of 2007. As folks who read this blog know, in a way our real estate practice has benfitted from the spate of short sales and foreclosures but the last two years have been a real eye opener for us as well - on a lot of levels.
My heart goes out to folks who truly have financial misfortune and find themselves upside down and unable to stay in a home they thought they could afford but that is only one piece of this group of underwater properties.
More and more I am going into homes that were built by speculators and investors, they never lived in the home and they did 100% financing on the home - and now they cannot sell them for the outstanding loan balance and they end up in foreclosure. And here I'll use a specific to describe a general, never a good thing, but we have one where someone, AFTER they tried to sell the home themselves and before the home ends up in the property of the bank, literally REMOVED the KITCHEN from the building. Went in with a sawzall, cut the plumbing back to the wall, took every cabinet, appliance, counter, EVERYTHING. Now I can't say for sure WHO did this but the home shows no sign of forced entry. IF the previous owner did it, exactly how does one square the idea that although the bank financed EVERY dime of the home, if it's headed to foreclosure and the bank is going to lose 100's of thousands ANYWAY, then this person can in good conscience take a 50 to 60 thousand dollar kitchen with them as well??
We see it all the time, people are mad at the bank and destroy the home as they are leaving. SOOOO they leave all their NEIGHBORS with an eyesore that cannot be sold and when it does it severely depreciates values all around them and somehow they "punish" the "Bad Ol Bank" for loaning them money they probably shouldn't have borrowed to begin with! I guess I don't understand that logic at all.
I am no advocate for banks who made loans to people who had no business borrowing more than they can afford but conversely I feel if the bank financed the home, all of it, then if you give it back to them you should give it back, INTACT.
• Sep. 4, 2008 - Florida Dept of Revenue Kicking Short Seller's When They Are Down?
Ahh a New Source of Tax Revenue from Those Who Can Least Afford It - DOC STAMPS on DEBT FORGIVENESS!!
Yup you're reading that right. I had been getting warnings this was coming but now I've had my first short sale where it's taking place. I had a letter from a large title company that read in part:
"The Department of Revenue took an unofficial position last month that documentary stamps must be calculated based on the sales price paid by the buyer plus the amount of debt forgiven by the Short Sale Lender. Last week the Department of Revenue indicated that it was still considering the issue and that the position previously communicated by their staff was the unofficial opinion of the revenue officers, not the official positionof the Department. The Department has agreed to communicate their official position as soon as theyhave determined it."
What does this mean? Well lets say in the past if you sold your house for $100,000 but had paid $200,000 and you were going to make up the shortfall on any loan at the closing - well the state got paid Doc Stamps on the actual new purchase price and that's 70 cents per $100 of purchase so it's $700 on $100,000. But NOW the state has figured out how truly to give you a kick when you're down. IF you work out a short sale with the bank and you sell the house for $100,000 but you OWE $200,000 well then they are considering you paying doc stamps for an over all purchase price of the full amount. In this case the doc stamps would double to $1400. In the case of the short sale I am closing later this month - it added $910 to the seller's costs at a time when they can LEAST afford to pay ANYTHING. And because the state IS unclear we now have closing agents who want to collect the maximum tax even if in three weeks the state were to rule the other way!!
Even the IRS sees the need to work something out here for folks losing their primary residence and the debt forgiveness act of 2007 takes this issue off the table for most homeowners. But it doesn't satisfy the state of Florida - and being that we're one of the top states in the nation for Foreclosures, Short Sales and Debt Forgiveness the state may be tapping into a new, lucrative and EVER SO PAINFUL new revenue stream. Surprised? I'm not.
• Aug. 21, 2008 - Is this the END of Downpayment Assistance?
Down Payment Assistance Set to Bite The Dust October First
Below is a link to a very informative article from BankRate regarding the possible (PROBABLE) end of Seller down payment assistance.
I had mentioned in an earlier blog what I felt were the pros and cons of these "Gift" programs. As of October 1st if the legislation stands as written - these will no longer be allowed for any Fed Insurance backed mortgages.
My own experience with them is a real mixed bag. Yes they DO allow people with very little of their own money to put in to achieve home ownership and get a mortgage. That in itself is a two edged sword. Home ownership is a positive influence on the economy in many ways and obviously personally for us as well.
The downsides as I see it are these: First, with so little down and with the market in many areas continuing to fall, we will be left again with a large number of these where the folks who feel any financial pinch will realize that they have zero equity and no real reason not to default. For the market to finally stabilize we HAVE to get all these defaults with their corresponding Short Sales and Foreclosures to work their way out of the system. They depress appraisals in general and continue the downward spiral in property values.
Second the entire practice of turning cash back from the seller into a "Gift" that meets the current lending guidelines has created a nice "cottage" industry for companies that do exactly that - they take a Seller's cash back at closing and, for a fee, convert it into a complying "gift". So what's the problem with that? Well in the ones I have been a party to (and I have NEVER had one of my buyers do it - I have only been part of having my sellers participate) the cost these "not for profit" companies charge is very dear. In one case it was $750 to convert just $5000!! That's FIFTEEN PERCENT to convert it into a complying gift. No surprise that in this article two of the biggest players in this business are very vocal and actively trying to protect first time homebuyers (and their own best interest) in finding a way to keep this very lucrative (for them) program alive.
My point would be, if you're going to allow seller participation and take the risks associated with it. just allow it, with some reasonable guideline. But let's just call it what it is, let the market assume the risk associated with it, and eliminate the need for "clever" conversions that only add needless expense and just line someone's pockets with the already crimped funds available from a buyer with limited funds and seller's who keep having their equity chipped away. Otherwise let's live without the practice.
• Oct. 1, 2007 - Strength in Numbers - Stand Up and Be Counted on Property Tax Reform!
STRENGTH IN NUMBERS
It's time for supporters of property tax
reform to be counted. Gov. Charlie Crist just launched his "Yes on 1" Web site to promote passage of property tax reform,
to be accomplished through a proposed constitutional amendment. "While the amendment is temporarily off the ballot, we
have every confidence that the citizens of Florida will be voting on tax reform on Jan. 29," says John Sebree, FAR vice
president of public policy. "Floridians have suffered long enough and deserve an opportunity to vote for the largest tax
cut in Florida history." The Web site asks visitors to join the reform movement and includes a count of the "number of
Floridians who support Amendment 1." Help make that number grow by going to the "Yes on 1" Web site, http://yeson1florida.com/.
Don't let this pass you by...if you are
concerned about real estate values here in the Sunshine State property tax reform is a MUST. High property taxes along
with high insurance rates are the two main factors quoted most often when you read about flight out of the Florida housing
market. Stand up and be counted!!! - Mike W
• Sep. 26, 2007 - Best Places to Retire: Venice, Florida!
A hidden treasure that is not so hidden anymore:
This week's US News lists 10 best places to retire for 2007. Venice Florida is one of them! Our office is in Venice and we do lots of business there and always have great properties available. Venice has so much going for it, beaches, great downtown, awesome schools, the ICW, shark's teeth, golf, boating, lots of great restaurants, close to all the entertainment and amenities of Sarasota and even Ft Meyers and Naples. Easy to get to and of course, the weather. It's not just one of the best places to retire - like the rest of the Suncoast it's also one of the best places to live period! Here are links to the article:
Real Estate Market statistics, buying, selling strategies, financing, short sales, foreclosures, distresssed property, financing and insurance for Sarasota, Siesta Key and the barrier islands from Ann & Mike Winger, REALTORS with REMAX Tropical Sands.
Copyright © 2010 The Associated Press, Stephen Ohlemacher, Associated Press writer.
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