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Archive for the ‘Sellers’ Category

Six Ways Investing in Real Estate Can Save You Money

In Buyers, Commercial Real Estate, florida, Investing, Investor, IRS, miami, miami beach, Miami-Dade County, Multi-Family Real Estate, real estate, Roth-IRA, Self-Directed IRA, Sellers, tax deductions, Tax Matters on May 10, 2013 at 1:28 pm

There are many investment vehicles. Stocks, bonds, art, coins, postage stamps, toys, commodities and real estate, among others.

Some economists even suggest that as long as you are disciplined and can comfortably pay for it, you should buy any investment you can. If you can finance the purchase, even better.

However, real estate is probably the only one against which you can borrow and have the asset pay itself off through rental income, EVEN as it pays YOU.

In fact, I have spoken to property owners who have managed to leverage a property two, even three times in their lifetime, by borrowing against the property they now own free and clear, to buy another.

What’s more, the income from the new property (let’s call it property B), paid with borrowed funds from say, property A, plus the income they still generate from that newly leveraged property A, can over time, pay back the loan on A from rent collections on A and B, while proving the owner with a boost in passive income. In other words, party money.

Even if you can purchase property in cash, many recommend you consider financing after the fact. Leveraging allows you to possibly, acquire two or more properties, update or fix them up and let themselves carry the burden of paying down the loans with rental income.

Over time, you would have the ability to acquire even more properties and eventually, when you are at the right stage in your life, own them all free and clear while enjoying all that income in retirement. The ultimate 401K or IRA.

Of course, you must buy right and be disciplined throughout. With every payment received in rents, you must set aside a portion every month to pay for licenses, taxes, insurance maintenance and miscellaneous repairs, improvements, etc. In short, you must budget as you would with any business.

Below, we examine some of the advantages for owning investment property and in particular, multi-family property.

1. Economies of Scale

When you buy a single family house or condo unit, small investors often feel they’re easy to manage. That may be true to some extend. On the other hand, consider that with a multi-family building, you only deal with one roof and/or one yard to mow, you are the board that approves tenants or how many times a year you rent your property and in one single trip, you can fumigate, inspect and have a punch list ready for your handyman, plumber and/or electrician to take care of, minimizing headaches.

2. Lower Taxes

There are several tax incentives for real estate investors. If you are employed, deductions from real estate investments may be used to offset wage income. In addition, there are a number of tax breaks for real estate investment which often allow property owners to turn a loss into a profit. Deductions can include any actual costs involved in financing, managing and operating the property, to include maintenance, repairs, property management fees, travel, advertising, and utilities. In addition, the IRS allows a depreciation deduction that accounts for a portion of the building (not the land portion of the property) over time, usually some 27 years.

3. Cash Flow

A property can generate negative or positive cash flow. Cash flow simply refers to the amount of money that flows in and out in pursuit of maintaining a property. Rents are an example of cash flowing in while taxes and insurance must be paid out, typically from a portion of the rents received. When the amount of income received exceeds the payments, it is said you have a positive cash flow. There are times when the amount of payments exceed your income and in these cases, you are said to have a negative cash flow. Regardless, when it comes to real estate investment, there are two more important concepts involved: pre-tax and after-tax. A pre-tax positive cash flow for instance, may also be said to occur when income received is greater than expenses before taxes are paid. However, even if your are experiencing a negative cash flow, you may end up with an after-tax positive income when your expenses are more than your collected income, but the tax breaks bring you back in the black. Depreciation can often help turn a negative into a positive.

4. Use Leverage

An old rule of thumb in real estate is to never spend a dime on your real estate investment unless you have to and/or unless it will save you money. Leverage is an important aspect of saving money through real estate investment because a real estate investor uses leverage to increase their assets without spending their own money. By taking advantage of your equity, you also improve your return on equity and it provides you with tax-free funds to help fund your next deal or improve the value of your existing property by making updates, upgrades or repairs that entice tenants (to come in or stay) and should allow you to raise rents and improve your bottom line.

5. Equity Growth

The best way to save money and earn money, is to build up equity from real estate investments. That way, with high equity you are able to save on your mortgage while earning a nice chunk of profit. However, idle equity is like idle funds in the bank. Ideally, you are always utilizing your equity to improve the value of the property and/or pursuing and acquiring new opportunities. Often, selling is a great way to take advantage of existing equity, which would allow you to reposition yourself in a potentially better property with better opportunities. For instance, you may own a building sitting on prime land which may allow you to build a much larger structure for more potential. However, you are not a builder and you’re not in the mood to start. Even if that property is making money, selling it may bring enough to allow you to purchase a more suitable property or properties.

6. The Benefits of Inflation

Generally speaking, inflation can help you save money on your real estate investment because as rent increases, your mortgage costs will remain static (assuming it is a fix-rate loan), which means you will improve your position with the increased cash flow from the rent and equity growth. Although inflation is quite low these days, there is a typical amount of appreciation properties experience as a result of even low inflation, which adds to your equity without a single penny out of pocket.

Of course, it is not all rosey with real estate investing. There are a LOT of factors that deter people from getting involved. It is scary, you could lose a lot if you engage from an emotional standpoint and there are headaches and horror stories borne from bad tenant situations to fill a few books.

Regardless, I reiterate that if you buy properly, budget properly and stay involved, you may never have to worry about money when it counts – throughout the live of the property and during your retirement. What could be more beautiful than that?

Most real estate professionals can help a buyer or seller make the right buy or sell decisions. Obviously, as you would listen to a quality attorney, doctor or accountant, listening to a quality real estate professional’s valuable information will go a long way in helping you achieve your buying or selling goal. Budgeting however, is a function of habit and here again, you must proactively seek qualified, quality, professional advise.

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15 Ways to Prep Your Multi-Family Building Exterior for the Spring Market

In international buyers, Investing, Investor, miami, Miami-Dade County, Multi-Family Real Estate, real estate, Sellers on April 6, 2013 at 8:46 am

Spring is the season for rain, sun, flowers and humidity buildup. It is also the season buyers and sellers traditionally come out of hibernation. It is a time when folks turn to spring cleaning, regardless of whether they are selling their property or not.

However, if you are in fact, looking to sell, you will definitely want to pay close attention and properly prepare. This article will hopefully, help you get started and get you to a fast closing that nets you the most money in your pocket, ready to enjoy, retire other debt or reinvest.

As I flip channels and sometimes watch a particular product they may be selling, particularly jewelry, I notice that ‘shine’ is critical. I also notice the effect I feel when I walk up to a car dealership that keeps its cars sparkling clean versus when I walk up to a car that seems poorly maintained.

Similarly, I notice what I feel when I approach a property. As I walk through it, I notice the big and little things that say WOW. The question is, what follows that “wow”? Is it, wow this is great or is it, wow this needs a lot of work!

As rents climb or stabilize, buyers are watching for opportunities. Your job as a seller is now to convey the message to the buyer that your property has been well taken care of and that it will provide a handsome return and that it is therefore, worth their investment.

The tips below will cost little money and could go a long way to convey the right perception that attracts buyers to make an offer. Even if you are a distressed seller, the more appealing your property looks, the higher the perceived value and the more money you could net.

With this in mind, here’s how to get the exterior of your building shipshape so it tell buyers, “yes, this is a good investment”:

1. Clean the glass covers of all light fixtures and make sure to remove all bugs. Also, replace any broken or missing glass covers. Make sure they all match. If not, replace them all to match and improve the look of the fixtures.

2. Replace missing or burnt bulbs. Consider replacing every bulb with bright white energy efficient bulbs. They brighten up the common areas making it more appealing and saves energy while helping deter crime.

3. Clean or replace mailboxes. Busted mailboxes often convey a sense of neglect.

4. Clean or paint all doors and frames and replace or polish their hardware so they all match throughout.

5. Make sure the building address number and each unit number are clearly visible and neat.  You may also want to consider replacing them for a clean look.

6. Make sure all stairs, hallways and stair guardrails are clean and/or painted as needed.

7. Wash all windows and seal them right to avoid water leaks while improving energy efficiency. See that tenants cooperate by keeping old tape used during a prior hurricane watch or warning and even odd window coverings, off windows.

8. Make sure to pressure clean parking areas and that they are swept clean. If necessary, cover driveway and parking areas with a fresh coat of tar. Check that all parking stoppers are painted and if appropriate, labeled.

9. Rake the lawn and ensure all green areas are trimmed.  Use fresh mulch or stones accordingly to cover patches, driveways and other areas. Plant fresh flowers or plants if possible. These are often inexpensive and greatly ‘green-up’ common areas.

10. Clean all debris from gutters and drain spouts and repair or replace them as needed.

11. If there is a community barbeque, be sure to clean it thoroughly and wash down the lid if there is one.  Replace a worn cover if needed.

12. If there is a community swimming pool, make sure it sparkles. Treat or repair any surrounding pool ground area that isn’t perfect.

13. If there is patio or pool-area furniture, make sure it is clean. Remove or replace any broken pieces.

14. Check your roof and make sure to repair or replace any missing or damaged shingles or tiles. Make sure to apply a sealant to flat roofs. Even if it does not seem necessary, this is a small expense compared to what a poor roof inspection result may represent.

15. Paint. Although this could be the costlier of the cosmetic preparations, I can’t say enough about this, especially if the building has not been painted for 3+ years. When it comes to selling, remember, ‘sparkle’ is key and nothing sparkles more than a fresh coat of neutral color paint. Make sure it is properly done and that cosmetic cracks are patched prior to application.

Now, go ahead and comment on any of the above or add your own to the list.

As a buyer, what items do you look for when you walk through the exterior of a building you are considering?

Also, as a buyer, HOW is your offer price affected by either a positive or negative impression you experience while walking the exterior of a property? How much more or less would you offer be as a result of your experience?

Get your home Sold faster

In real estate, Sellers, Short Sales, Trends on September 2, 2011 at 7:13 pm

Many sellers have bought and sold more than one home in their lifetime.  Today, these sellers struggle to understand that this is not the market they bought their current home in, nor the market they sold their previous home in.  They may even be holding on to the hope that the market will recover “soon” and holding on to past selling experiences that no longer work.

In fact, these reluctant sellers could sell their home soon(er) if they could only wrap their head around a few simple selling tricks. These are the same tricks professionals and most successful sellers (those who’s homes are now showing in the “Homes Sold” statistics you receive from your agent), have used to get their home SOLD. What tricks did they use you ask? Simple…

Use Sales Incentives

Incentives are used to market everything, from car insurance, to beds, cars, clothing, airline tickets, etc. Don’t think so? Consider paying attention to the incentives used by pretty much every vendor in almost every commercial on t.v. or radio.

Hec, what incentives have you used to lure your boss, employees, spouse or your kids to do something they initially did not want to do and you “incentiviced” them to?

The incentives don’t have to be big – they can be little – either way, their purpose is to get them (a buyer), to pay attention and to seek you (the seller), out over all other competing homes.

If vendors offers some sort of incentive to get you to call or at least consider their product or service, many of them spending hundreds, thousands, even millions in advertising dollars to make sure they get you to listen or have your eyeballs zoom-in on their advertisement and at least get you to think about and consider them or their product or service, then why would you not consider these tactics yourself to get what may be the largest asset you own ( your home), sold?

Here’s the best part…unlike advertisers who pre-pay for your attention, you often don’t have to spend a dime ahead of closing to get your home sold. So, what did successful sellers use to get their homes sold? Here are four tactics they used – and now, you can too:

  1. Buy-down buyer’s interest rate.  Interest rates are at all-time lows. However, if a marginally qualified buyer may be turned off by the fact that, for whatever reason they will have to buy your home with a higher interest rate, then offering to buy-down their rate may make them re-consider and choose to buy your home over a neighbor’s house. In fact, they may even like your neighbor’s house more than they like yours but, your neighbor may not offer this incentive and this “financial” reward, which may save the buyers thousands over the live of the loan, may be enough to get them to commit and buy your home instead.
  2. Pay for Closing cost.  Besides the down payment lenders require from buyers, they typically also require buyers to come to closing with an additional 3 to 6 percent of the loan amount to cover closing costs such as loan fees, title and mortgage insurance, prorated charges like taxes, homeowner’s insurance, etc. Depending on the lender or loan program the buyer applies and qualifies for, you may be able to pay all or a portion of these closing costs for the buyer. Again, if your neighbor is not willing or able to do this, this may give you the competitive edge you need to get this buyer to sign on the dotted line and place your home on the SOLD side of the equation.  Think about it.  A 3% closing cost contribution you offer to your buyer on a home that requires a $200,000 loan, represents $6,000 the buyers no longer have to bring to closing and use instead for other things like decoration, moving or just keep tucked-in for a rainy day.
  3. Offer to pay their HOA/COA dues.  If you are selling a home or condo that is in a homeowners’ or condo association, then surely you remember how these buyers may feel when that bill comes due after being depleted of cash from down payment, closing costs, moving expenses and personalization (updates, upgrades, decorating, etc). Buyers may put pencil to paper and realize that this incentive alone could get them interested in at least considering your home or condo over your neighbor’s. Obviously, you can offer to pay this fee for a period of time you negotiate – be it 6 months, a year or longer.
  4. Brokers are people too.  Smart sellers using the expert services  of real estate professionals typically understand that agents are people too, and that incentives can also move some agents to make sure your property gets shown often.  Offering to pay an extra commission as an incentive to buyer brokers also helps get your home sold. Consider that, most buyers who are ready, willing and able to make the ultimate commitment (well…after marriage), to buy a home are usually represented by a broker.  After all, buyers typically do not pay for the broker’s services and they use them for their expertise and for guidance between contract to post-closing. Since buyer brokers have to sort through dozens, sometimes hundreds of listings to decide which ones to show a buyer, it stands to reason that these brokers may be a key buffer between you and a buyer and that incentives may get them to present your home to their potential client. If the broker sees they will get pay 1% or 2% more in the chance their buyer likes your home, they will make absolutely sure to show your home first – and to as many buyers looking for your type of home they come in contact with. This, in combination with the right price and property condition, helps improve your “traffic” (or exposure), because Buyer-brokers will be sure to include your home in the list of homes they will show to all their qualified buyers.

Remember, your home must be competitively priced, must be kept in “show condition’ every time it is shown and in today’s market, you must also consider “incentives” to get buyers through your door. This increase in traffic will increase the probability of getting an offer – even multiple offers, ensuring a faster sale of your home than your neighbor’s, often at a higher price (in today’s market – property values are still fragile. Not selling today, may mean selling for less tomorrow).

Finally, none of these ideas will cost you a dime before closing, and though they may reduce your proceeds at closing, incentives will help ensure you “move-on” with your life and begin to look forward to new opportunities you will now be able to pursue and enjoy sooner – without the looming and persistent effect of a home that won’t sell.

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Your comments and opinion welcomed

Miami sales up – and it’s no longer just me saying it…!

In Buyers, closing, Downtown Miami, First Time Sellers, First-Time Buyer, florida, Home Buyer, home sellers, Industry trends, miami, miami beach, Miami-Dade County, real estate, second home, Sellers, South Beach, vacation home on December 23, 2010 at 12:49 pm

It is no longer me saying it. The Miami Herald just published the article in the link below.

http://www.miamiherald.com/2010/12/22/1985942/condo-sales-heat-up-as-deals-resume.html

If you are THINKING about buying…well….I’m not really sure what there is to think about.

Think about it too long and with Average AND Median “closed” prices up in October AND November, PLUS interest rates up for 5 weeks straight, “thinking” may start to get expensive – even price you right out of the market.  THE WINDOW MAY BE STARTING TO CLOSE. Snooze and well…lose?

Sellers can’t get too excited still though. Properties sold are still the properties “on sale”. Who in their right mind would buy milk  for $9 a gallon if they can pick it up down the street for $3.49/gal.?  Not many, I’d guess.

This is no time to let greed creep up your spine if you are looking to get your place ‘sold’. This is the time to sit with your agent and find out what exactly needs to happen to move your property from the “for sale” (hope and wish list) or “expired” (rejected), side of the ledger to the “sold” side of the ledger.  What a weight off your shoulders if this needs to happen for you soon.

If you don’t need to sell right now and you intend to wait for the right buyer to come along, you may be much better served taking the property off the market and reposition it to SELL in a few months when you see yet more confirmation that you can finally get that magic number you need or want.

Keep in mind though, if you are waiting to sell in order to buy your next home, that other property may also cost you more when you finally get yours sold. If you are looking to find a bargain you can buy…getting that property sold today will help ensure you don’t miss this great opportunity to also buy at bargain prices.

As the old saying goes…pay the piper now…or pay the piper later. Perhaps you Sell low and then Buy low. Otherwise, may be you get to Sell high to Buy high. You choose.

I Can’t Pay My Mortgage and I Don’t Know What To Do :-/

In Distressed Sales, fannie mae, FHA, First Time Sellers, florida, forclosure, foreclosure, foreclosure moratorium, foreclosure prevention scam, Freddie Mac, government, HAFA, HAMP, home sellers, homeowner, HomePath, HomeSteps, HUD, Industry trends, IRS, Market Report, miami beach, Miami-Dade County, modification, mortgage, NAR, National, option-arm, real estate, REO, scams, Sellers, Short Sales, South Beach, Tax Matters, Trends, Wenceslao on December 22, 2010 at 4:05 pm

About 75% of folk who lose their home to foreclosure, do so because they either do not seek help, or they get the wrong kind of help.

I am often asked legal questions to which I must invariably reply…I am not an attorney. The best I can do is speak from personal experience and remind them that it is imperative to seek competent and relevant legal and tax advise from active professionals.

In real estate for example, not all real estate agents are even Realtors.  Realtors are agents who as members of the National Association of Realtors(c) (NAR), they must adhere to NAR’s strict Code of Ethics. In addition, many are no longer in the business full-time nor are they truly keeping up with all the industry changes.

Homeoners looking to sell must always seek the assistance of full-time professionals. When in distress, they must take extra precautions in order to avoid falling victims of scams and even, downright fraud.

Below are some of the most common Frequently Asked Questions (FAQs) about foreclosure avoidance.  If you have further questions not addressed below, or would like additional information and resources, feel free to Contact Us.

Do I qualify for a short sale?

The qualifications for a short sale include any or all of the following:

  1. Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
  2. Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
  3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

What is a mortgage modification?

A mortgage modification is a process through which your mortgage lender changes any or all of the following:

  • Your interest rate
  • Your principal balance (through a reduction)
  • Your loan terms (example: from an adjustable to a fixed rate)

This process can allow borrowers to stay in their property when they can no longer afford their current mortgage payments.

Why would a lender modify my mortgage?

Lenders have realized that in some cases it is better for them to work with current borrowers to lower payments or possibly improve terms in order to keep homeowners in their properties. The average foreclosure can cost a lender from 35-50% of the value of a property, so keeping borrowers in their homes is a good option for everyone.

What do I need to qualify for a mortgage modification?

According to the Making Home Affordable Web site (www.MakingHomeAffordable.gov), you will need the following information for your lender to consider a modification:

  • Information about your first mortgage, such as your monthly mortgage statement
  • Information about any second mortgage or home equity line of credit on the house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans and car loans
  • Your most recent income tax return
  • Information about your savings and other assets
  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources

If applicable, it may also be helpful to have a letter describing any circumstances that caused your income to reduce or expenses to increase (job loss, divorce, illness, etc.)

How do I qualify for a mortgage modification?

The first call you make should be to your lender, have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking, you can ask to be referred to one of the following departments (different lenders have different names for these departments):

Prior to contacting your mortgage lender you can quickly complete an eligibility test atwww.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP). For a list of mortgage lenders and servicers, visit www.HopeNow.com.

What if I don’t qualify for a mortgage modification, can’t afford my home, and owe more than it’s worth?

You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment, you may want to consider a short sale. Agents like me, with the Certified Distressed Property Expert® Designation, have undergone extensive training in how to process and negotiate short sales. A short sale allows you to sell your home for less than what you owe and avoid foreclosure. Speak to your market expert to see if you may qualify.

What is a Home Affordable Refinance?

If Fannie Mae or Freddie Mac owns your mortgage, you may be eligible for a Home Affordable Refinance. This will allow you to refinance your home and often lower your payments.

What are the qualifications for a Home Affordable Refinance?

According to the resources released by the government, following are a list of qualifications:

  • You are the owner occupant of a one- to four-unit home
  • The loan on your property is owned or securitized by Fannie Mae or Freddie Mac (see Useful Links)
  • At the time you apply, you are current on your mortgage payments (you haven’t been more than 30 days late on your mortgage payment in the last 12 months, or if you have had the loan for less than 12 months, you have never missed a payment)
  • You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house
  • You have income sufficient to support the new mortgage payments, and the refinance improves the long-term affordability or stability of your loan

Courtesy:  ©2009 Distressed Property Institute, LLC. | All Rights Reserved

The Distressed Property Institute LLC is behind the Certified Distressed Property Expert (CDPE) designation that over 29,000 professionals now hold.

Downturn Makes Rent-to-Own More Appealing

In credit, Home Buyer, home sellers, Industry trends, Lease-Option, Leasing, mortgage, NAR, National, real estate, Sellers, Trends on December 16, 2010 at 8:51 am

December 9, 2010: Downturn Makes Rent-to-Own More Appealing
As the housing downturn continues, rent-to-own contracts are becoming increasingly popular.

Rent-to-own allows buyers time to see if they like the property and time to repair their finances and get a mortgage.

Fritzi Barbour, an associate with Coldwell Banker Caine in Greenville, S.C., says many practitioners are unwilling to recommend a lease-to-own arrangement.

The negatives from a buyer’s standpoint: less flexibility than a rental situation without the permanence of owning and the potential loss of a hefty down payment if the deal doesn’t close.

The down side from the seller’s vantage point: the possibility that the buyers will be unwilling or unable to buy and their presence make a purchase by someone else unlikely. Also, the seller doesn’t get the money right away, nor is there real closure to the deal.

Source: the Wall Street Journal, Sarah Max (12/02/2010)

[Editor’s note: NAR last year hosted a how-to webinar on lease-to-own. The recorded version is available for free access.]

MIAMI’S CLOSED PRICES UP FOR SECOND MONTH IN A ROW

In Buyers, First Time Sellers, First-Time Buyer, florida, Home Buyer, home sellers, homeowner, Industry trends, Interest Rates, Investing, Investor, Kiyosaki, miami, miami beach, Miami-Dade County, real estate, second home, Self-Directed IRA, Sellers, Short Sales, South Beach, Trends, Wenceslao on December 10, 2010 at 3:16 pm

Not surprisingly, Miami-Dade county’s Average and Median Closed prices were up again, for the second month in a row.

Recently, you read my blog post “LISTENING TO NATIONAL REAL ESTATE NEWS MAY BE DANGEROUS TO YOUR FINANCIAL HEALTH” where in response to recent news claiming that national resale prices were down 2% in Q3/2010, I reported that these were already stale reports that were 2-months old and that by contrast, in October, 2010, the Average Closed Price in Miami-Dade had gone up 6.3% while the Median Closed Price went up 5.5% from September, 2010.

As it turns out in November, 2010 and for the second month in a row, the Average Closed Price in Miami-Dade went up another 5.7% and Median Closed Prices also went up another 3.8% from Oct./2010.

Although the number of properties Sold went down 9.4% from October, 2010, and 1.1% from October, 2009, the number of Pending Sales was up again by 4.1% from October 2010 and up 38.3% from October, 2009.

So, is this proof certain that we’ve hit bottom? I don’t know.

What I do know is that, if you are looking to buy in Miami-Dade county, and you are looking to close before the 12/31/2010 deadline so you can get the deductibility and Homestead Exemption, you must hurry.

Although you do not need to have the deed recorded by 12/31/2010, all documents must be executed by then.

Also, waiting may already cost some people about 12% more based on the recent increases in the Average Closed Price since September, 2010 and 9.3% more based on the Median Closed Price since September, 2010, which stood at $125,000 then and stands at $135,000 as of November, 2010.

Sellers must also understand that, this is NO time to play or allow greed to take over. It is time however to get serious about discussing your marketing with your Realtor.

There are several components of marketing and Sellers control one of the most critical: PRICE

Although a buyer’s ability to have easy access to see the property and how the property shows (is it staged or cluttered), are also two-critical components sellers control, price is a function of almost everything else, including property condition, market condition and other factors we cannot control.

Your professional Realtor controls the promotion and marketing of the property. However, when a property does not show very well or making showing appointments becomes inconvenient for buyers, your Realtor’s best efforts to get the property sold at the highest price, within the shortest time and the least hassles, may be (at least to a degree), negated.

Buyers on the other hand are competing for deals with other buyers and investors. This is no time to hesitate, over-analyze or waste time before looking at the potential deals your Realtor is sending you. It is also no time to second-guess prices if you are at risk of suddenly, being priced out of the market.

With prices on the rise and interest rates also on the rise (even if marginal), the combination of higher prices and higher rates could be lethal to a border-line buyer.

If you are looking to make a purchase or selling decision in the next 15-30 days, don’t hesitate to contact a professional Realtor (remember, not all real estate agents are Realtors – members of the National Association of Realtors who adhere to a strict Code of Ethics), and one who is additionally trained in helping you navigate through the idiosyncrasies of distressed properties*.

If you are looking to sell (not list for sale but list to sell), you may request a Free Market Analysis at FreeMiamiHomeValuation. There is no cost or obligation and you will also get two special reports with your Free Valuation report and will also entitle you to a 30-minute, no cost or obligation consultation.

For Miami Beach, the numbers are even more staggering.  Closed sales in November, 2010 were up 5.9% from October, 2010 and up a whopping 38.5% from October, 2009.

At the same time, Pending Sales in November, 2010 were up 42.1% from October, 2010 while up an incredible 80% from October, 2009, clearly demonstrating that the beaches, as a localized location, is quite more attractive and continues to produce strong results.

More on Miami Beach on a separate post.

*Visit www.CDPE.com and find a Certified Distressed Property Agent near you.  With about 29,000 CDPE’s nationwide, this is the largest professional association of its kind in the nation.

Frequently Asked Questions About Foreclosure

In forclosure, foreclosure, foreclosure moratorium, foreclosure prevention scam, government, HAFA, HAMP, homeowner, Industry trends, miami, miami beach, Miami-Dade County, modification, mortgage, Multi-Family Real Estate, real estate, scams, Sellers, Short Sales, South Beach on November 9, 2010 at 2:34 pm

It is understandable to have questions when coping with a new and challenging situation, especially when a home is at stake. The reality is that millions of homeowners across the country are finding out that they have more questions than answers.

We hope that the following information will help you better understand the circumstances. If you have further questions not addressed below, or would like additional information resources, feel free to Contact Us.

Do I qualify for a short sale?

The qualifications for a short sale include any or all of the following:

  1. Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
  2. Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
  3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

What is a mortgage modification?

A mortgage modification is a process through which your mortgage lender changes any or all of the following:

  • Your interest rate
  • Your principal balance (through a reduction)
  • Your loan terms (example: from an adjustable to a fixed rate)

This process can allow borrowers to stay in their property when they can no longer afford their current mortgage payments.

Why would a lender modify my mortgage?

Lenders have realized that in some cases it is better for them to work with current borrowers to lower payments or possibly improve terms in order to keep homeowners in their properties. The average foreclosure can cost a lender from 35-50% of the value of a property, so keeping borrowers in their homes is a good option for everyone.

What do I need to qualify for a mortgage modification?

According to the Making Home Affordable Web site (www.MakingHomeAffordable.gov), you will need the following information for your lender to consider a modification:

  • Information about your first mortgage, such as your monthly mortgage statement
  • Information about any second mortgage or home equity line of credit on the house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans and car loans
  • Your most recent income tax return
  • Information about your savings and other assets
  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources

If applicable, it may also be helpful to have a letter describing any circumstances that caused your income to reduce or expenses to increase (job loss, divorce, illness, etc.)

How do I qualify for a mortgage modification?

The first call you make should be to your lender, have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking, you can ask to be referred to one of the following departments (different lenders have different names for these departments):

Prior to contacting your mortgage lender you can quickly complete an eligibility test at www.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP). For a list of mortgage lenders and servicers, visit www.HopeNow.com.

What if I don’t qualify for a mortgage modification, can’t afford my home, and owe more than it’s worth?

You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment, you may want to consider a short sale. Agents like me, with the Certified Distressed Property Expert® Designation, have undergone extensive training in how to process and negotiate short sales. A short sale allows you to sell your home for less than what you owe and avoid foreclosure. Speak to your market expert to see if you may qualify.

What is a Home Affordable Refinance?

If Fannie Mae or Freddie Mac owns your mortgage, you may be eligible for a Home Affordable Refinance. This will allow you to refinance your home and often lower your payments.

What are the qualifications for a Home Affordable Refinance?

According to the resources released by the government, following are a list of qualifications:

  • You are the owner occupant of a one- to four-unit home
  • The loan on your property is owned or securitized by Fannie Mae or Freddie Mac (see Useful Links)
  • At the time you apply, you are current on your mortgage payments (you haven’t been more than 30 days late on your mortgage payment in the last 12 months, or if you have had the loan for less than 12 months, you have never missed a payment)
  • You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house
  • You have income sufficient to support the new mortgage payments, and the refinance improves the long-term affordability or stability of your loan

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Locate a CDPE in your area for an evaluation of your individual situation, property value, and possible options.

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If you or someone you know and love is facing this difficult challenge, make sure to Contact Us. 7 our of 10 foreclosures happen because the borrower (home owner), did not seek proper professional advise from experts dedicated full-time to helping folk find ways to overcome this challenge. Get the answers that suit YOUR needs, today. Get more answers at http://www.cdpe.com/faqs

Open Letter to Obama and Congress

In bank-owned properties, Buyers, credit, Distressed Sales, First Time Sellers, First-Time Buyer, florida, forclosure, foreclosure, foreclosure moratorium, government, Home Buyer, home sellers, homeowner, Industry trends, Investing, Investor, IRS, lenders, Loan Program, Market Report, miami, miami beach, Miami-Dade County, mortgage, NAR, National, new rules, Obama, real estate, REO, Sellers, Short Sales, South Beach, Wenceslao on October 15, 2010 at 11:08 am

With our economy draging (in spite of the recession being over according to “experts”), it is more important than ever to find common ground, leave politics aside, get comfortable, get friendly and come together to find answers, compromises and solutions.

The recent foreclosure fiasco is absolutely appalling. The government and oversight entities, failed; banks and investment houses, failed; borrowers failed and everyone in between, failed; while those who were never even interested and stayed in the sidelines,  are all paying for it.

Some title insurers are already issuing statements refusing to insure recently litigated foreclosure properties.

If we want to see this country come out of the ashes and be the beacon of financial opportunity for everyone again, we need to start coming up with ways to incentivise certain bahaviour and dis-incentivise other.

For instance…for prices to begin to stabilize, even increase, real estate needs to improve. For this to happen, we all agree that jobs must improve.

Looking at the stabilization of real estate, there are certain actions that can be taken with government policy/legislation that will motivate lenders to act in a way that will, in my view, improve market conditions.

The now on-going foreclosure fiasco, has investors/first-time buyers in the sidelines or competing for less properties. An unintended consequence of this may be that prices may begin to rise as buyers/investors compete over remaining inventories, raising the bottom to new highs during this period.

Temporarily, this may also drive investors across the proverbial fence if they insist in avoiding Short Sales and feel that they don’t want to compete at higher prices for the REO inventory now in play.

The higher prices go, the more diluted their returns can be if they feel that the increases are still unsustainable until the employment/ tax situation is sorted.

Lenders must be given a choice to either continue to pay more attention to the REO area of their business, rather than to actually begin to pay attention to short sales and to divert attention and resources that lead to the settlement and conclusion of these, less costly deals.

To continue to ignore this cheaper, friendlier and still competitive alternative that helps save money in legal and other REO related expenses and legal responsibilities and liabilities, while helping to stabilize neighborhoods further, would be a shame.

Worst still…for the government to continue to incentivise rather than dis-incentivise lenders to take the REO route with pain – pleasure oriented programs that help lenders “choose” to continue rather than to abandon the REO alternative (unless absolutely necessary), in favor of the short sale route, would be aweful.

Leadership, starts with our government and the policies they create on behalf of and to help the citizens they represent. If the policies implemented create an environment where sellers can get their property sold with dignity, while keeping a gleam of hope for some future chance of home ownership again, then we are helping multiply the blessings in the future.

Otherwise, foreclosed home owners loose their chance of buying again while required to answer whether they’ve ever had a property foreclosed on or gave it back to the bank in lieu of.  Lenders in the future will be reluctant to lend to these folks.

To create policy that “overlooks” the foreclosure / character side of the mortgage application process in the future as a patch to address the needs of these borrowers 10 years from now, will be in that future, a hindrance to good lending practices. Instead, those borrowers should be allowed to sell with dignity today so they can perhaps buy again tomorrow.

Diverting resources and creating policy that “encourages” lenders to make a deal in a short sale rather than foreclose, will help stabilize prices, will help buyers get into good properties, and will help those outgoing homeowners get their act together so they can consider buying again in 3 to 5 years.

In the meantime, investors will consider buying short sales (once expediently processed), so they can enjoy rental income and then sell to future home owners when things improve, or continue to repair and resell to end-users and other investors as they have. Again, only if they can avoid the pain of the current short sale process.

I’m not coming up with anything that hasn’t been thought of. However, it is time for simple, sensible leadership, NOW.

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OPINIONS WELCOMED

Government moves toward foreclosure moratorium

In Distressed Sales, forclosure, foreclosure, foreclosure moratorium, government, Home Buyer, home sellers, Investing, Investor, lenders, Market Report, mediation, miami, miami beach, Miami-Dade County, mortgage, new rules, real estate, REO, Sellers, South Beach, Wenceslao on October 12, 2010 at 4:43 pm

WASHINGTON – Oct. 12, 2010 – Despite concerns about its impact, some legislators are pushing for a nationwide moratorium on all foreclosure sales.

U.S. Rep. Edolphus Towns, a New York Democrat and chairman of the House Committee on Oversight and Government Reform, says the top 10 mortgage lenders should immediately suspend foreclosure proceedings in all states.

“The implications of ignoring the foreclosure problems are far too great to be ignored,” he said Friday.

Other legislators are moving to revive cramdown legislation, which would give judges the power to reduce mortgage principal to market value in bankruptcy cases. The controversial bill had passed the House earlier but was stuck in the Senate.

But the Mortgage Bankers Association of America and the Financial Services Roundtable said Friday in a joint statement that, after reviewing paperwork, nearly all bank foreclosures are legitimate.

“Calls for a blanket national moratorium on all foreclosures are a bad idea and would cause significant harm to communities at risk, the unstable housing market and the fragile economy,” the statement said.

Source: The Wall Street Journal, Ariana Eunjung Cha, Steven Mufson, and Jia Lynn Yang (10/09/2010)

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