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!