Expansion of First Time Home Buyer Tax Credit

The senate is expected to vote this week to expand the tax credit until June 2010 or March 2010 with $2000 decreasing each quarter in 2010. In addition expanding to all home buyers. The first time home buyer credit has fueled the housing market with many proponents in support to continue its benefits.

What should your property offer be?

That just depends…on many factors…all which need to be considered.

1. How long has the property been on the market? Is it stale or a hot new property? The longer a property is on the market, the more motivated the seller will be.

2. Who is selling the property? Is it someone that is willing to wait for the target price, or is it a seller that needs to move? A job transfer, divorce or a bank owned property will work in favor of the buyer.

3. Location. Is the property in a prime location, in a desirable neighborhood or out in the woods off a dirt road? If the location is special, the price will be firmer, if the location is off the beaten path, there will be less demand for the property.

4. What is the competition? How good does it look? Is this a special property with a lot of interest in an area of few homes on the market? Or is it on “foreclosure row” with more homes just like it?

5. Last but not least, how is it priced? Is it overpriced, or a deal at full price? If there are multiple offers on the property, you have to give it your best shot with “highest and best” offer and keep your requests simple.

We are experts at sorting out the value and, providing you with all the information needed to make a good decision.

What goes into a Short-Sale package?

1. Hardship letter: the purpose of this letter is to tell the lender your “story” of why you have missed payments and why you cannot continue to pay. It should be handwritten and come from the heart.

2. Financial disclosure: Like a loan application, except you are not applying for a loan…you are showing the lender that you cannot afford the loan that you have, because your expenses are greater than your income.

3. Copy of purchase contract. Most banks will not talk to you without an offer on your property.

4. Proof of income for past 2 pay periods.

5. Copies of last 2 bank statements.

6. Copies of last 2 years complete tax returns with
W-2’s and 1099’s.

7. HUD 1 prepared by a title company showing the cost of closing, estimated expenses and net to bank.

Most banks will not speak to a borrower about a short sale unless they are behind in mortgage payments and have a contract on their home. Submitting a short-sale package does not guarantee the bank will agree to accept a short pay-off.

Is paying $10,000 over full price enough?

Maybe not. If the property looks good and is priced right, there will be multiple offers and some will be above full price. Guaranteed.

Don’t listen to the media “doom and gloom” about the glut of foreclosures and the prices falling…it isn’t so everywhere.

If the area is nice and the property is decent, paying $10,000 above list price will probably not be enough to buy the property. First time homebuyers are buying and there is no shortage of investors trying to snap up the good deals…with cash.

Don’t let the sticker price fool you!

Time to Buy is now for Home Buyer Tax Credit

#1 Reason short sales do not close…

The paperwork submitted to the lender was not packaged adequately.

Here is the deal…the mitigators for the bank are overwhelmed, overworked and underpaid. Many carry 200-300 files; way too much for even a super worker.

Some banks are now paying incentives to employees for closed files…so what files do you think they will work on? Certainly not the ones that are incomplete, missing information, illegible, or unidentified…those files have a place of their own… at the bottom of the pile or “out of sight”.

There are rules that need to be followed and if something is missing, the short sale package is stalled many times “forever” and you never hear from the bank. The property may just go into foreclosure.

Coming next: “What goes into a short-sale package?”

Orlando Real Estate September Statistics

Orlando Regional Realtor Association compiles monthly statistics on the sale active for the Metro Orlando Area. Sales pace is up, and inventory slow dewindling. Here is more about September 2009.

• Current Inventory: 15,967
• New Listings: 4,030
• Average Days on Market: 97
• Average Mortgage Rate: 5.09%
• Orlando home sales in September are up 54.30 percent over September 2008; year-to-dates sales are up 50.69.
• Normal sales made up 44.44 percent of sales in September, while 55.56 percent were either bank-owned or distressed.
• There are 8,790 pending sales, of which 3,858 contracts were filed in the month of September alone (the most in a single month this year). There were 1,908 new contracts filed in September 2008.
• Condo sales increased by 242.64 percent. Duplex, town home, and villa sales increased by 89.91 percent.
• The overall median price of all existing homes sold declined 2.34 percent to $125,000 in September, from the $128,000 recorded in August. The median price is a decrease of 31.32 percent compared to September 2008 ($181,995).
• The median price for “normal” sales is $175,450. The median price for bank-owned sales is $79,000, and the median price for distressed sales is $126,000.
• Affordability improved in September to 202.03 percent as a result in part of in the month’s decrease in median price. There are 8,805 homes in Orange and Seminole counties currently listed in the MLS that are considered affordable ($268,697 or less).
• The inventory level decreased by 394 homes in September and is 35.33 percent below the level in September 2008. There is a 7.42-month supply.
• Year-to-date, Lake County sales are up 30.07 percent above 2008; Orange County is up 72.96; Osceola County is up 109.37; and Seminole County is up 19.14 percent.

For historical months, please click here.

“Walk thru” prior to closing…

Typically done on the day of closing, the buyer (or agent) will check the property again, to make sure that everything is in the same condition as when the buyer bought the property.

BIG misconception as to what “walk thru” really means.

Many agents think that it is just to see that the house is standing or that the kitchen is still there. Not true,…it is much more than that. If all the appliances were working during the home inspections, then they should all be working on the day of closing. The walk-thru is to check to make sure that nothing has changed…

The Florida contract specifies that the seller is to have the utilities on for the “walk-thru”…the electric to check the appliances and A/C unit and water to make sure that the plumbing is still working and the septic did not collapse.

Do not let anyone minimize the importance…we have experienced lightening damaging the appliances, sellers remove the washer that was to stay with the property, new roof leaks, good fans replaced with cheaper ones, missing carpet, broken windows and more…

Buying “AS-IS”...the Real Story

There are many misconceptions about what an “as-is” contract. It does NOT mean than you have to buy a property “as-it-is” with all its problems.

You still have the right to do inspections….for anything that you wish, as long as you do not destroy the property.

After inspections you have the right to say:
a.) OK, I will take the property as it is.
b.) No thank you, I do not want it.
c.) Maybe, if you lower the price or fix the problem.

Buyers have the right to re-negotiate the contract after inspections. If the seller agrees to fix certain things, then the contract is no longer “as is” because the seller now made an agreement to repair, which they are obligated to do.

On the other hand, if your contract is written to protect you and the property has deficiencies that you cannot accept, you can just walk away and get your deposited monies back.

You as a homebuyer have many rights, the problem is that you probably do not know what they are…we know your rights and will be glad to tell you.

Just ask me,
Eve