May 30, 2010

Fannie Offers Spur to Avoid Foreclosure

Fannie Mae will make it easier for some struggling homeowners to buy houses in the future if they avoid foreclosure in the present.

Under rules released this month that will take effect in Jul 2010, some troubled borrowers who give up their homes by voluntarily transferring ownership through a "deed in lieu of foreclosure" or by completing a short sale, where a home is sold for less than the amount owed, will be eligible in two years to apply for a new mortgage backed by Fannie.

May 25, 2010

Stoneybrook Buyers Hit With $4,000 Fee

Homeowners associations have been struggling to make up for thousands in dues lost when homes sit empty for months, waiting for foreclosure.

Two Orange County golf-course communities have decided to make their new residents foot that bill. Buyers in Stoneybrook West in Winter Garden and Stoneybrook East in east Orange County have to add $4,000 to closing costs - mostly for dues that went unpaid by previous owners while the houses were in foreclosure for more than a year.

The so-called "resale capital contribution" doesn't sit well. Typically, buyers in those communities would pay $1,000 to move in, but the fees were increased as the housing crisis deepened.

Read full story from Orlando Sentinel.com

May 19, 2010

All Cash Sales Remain Strong

Who can pay cash? Apparently, lots of buyers can. 1/3 of all homes sales in east Orlando in the past 60 days were all cash deals - and nearly half of these homes sold at or above list.

What does this mean to the average buyer? The average buyer finances their home purchase, so if you’re competing with a cash offer, it’s over - an all cash buyer will always trump a financed offer even if the financed offer is higher on purchase price.

The financing contingency - the #1 contingency to a sale - is removed with an all cash buyer. From a seller’s perspective, financing takes time - typically 35 to 40 days in today’s market. A cash deal can close in 10 to 15 days assuming no title issues. In terms of time & money, a financed deal innately comes with a degree of uncertainty – will the buyer’s lender close on time, will the buyer get their financing? With a cash deal, these uncertainties are removed.

May 13, 2010

Major Competition For Buyers in the $100s

For buyers in the $100,000 to $200,000 price range in east Orlando, they likely saw & felt the increased competition over the past few months while out house hunting & making offers.

57% of all east Orlando home sales in the past 60 days were for homes btwn $100,000 & $200,000. And 73% of these sales were distressed sales (bank-owned & short sale). This is an affordable price point for many buyers – singles & families - particularly first-time buyers who pushed to take advantage of the $8,000 federal tax credit that just expired Apr 30.

While inventory in the $100s is still high, over half of all homes are short sales - homes that come with a high degree of uncertainty for buyers with weeks (or months) of waiting for short sale approval from the existing lender. I am seeing my buyers turn away from short sale homes & focus exclusively on normal & bank-owned homes; they want/need a home now & the short sale buying process is too much of a gamble for many buyers.

The condition of these homes is only ‘fair’ for the vast majority of all home inventory – home needs a deep clean, yard is overgrown, carpet is stained/torn, doors ripped off hinges, ant trail through kitchen - things that turn the average buyer off. The average buyer wants a home that is move-in condition, so when that rare, affordable, move-in ready home hits the market, it will likely receive multiple offers & sell for over list.

May 10, 2010

Avalon-Waterford Road Congestion Relief?

Alafaya Trail will no longer be Orange County's largest cul-de-sac with the opening of Monument Parkway, a mile-long connector for temporary access to the BeachLine/528.

The road will bring some relief to residents of Avalon Park, Waterford Lakes and other area neighborhoods who had been waiting on a stalled plan for Innovation Way, a proposed high-tech corridor that would connect Alafaya Trail to the BeachLine/528 and Orlando's "medical city" in southeast Orange.

Read full story from Orlando Sentinel.com

May 3, 2010

Short Sale Buyers Need To Know

Buyers are attracted to short sales because of price – no one can compete with the lowball pricing of a distressed sale. However, there is more to consider than purchase price alone. Purchasing a short sale home is unlike any other home purchase (normal or bank-owned). Buyers need to armed with knowledge, be informed, ask questions, understand the process & know what to expect before writing an offer on a short sale home.

The questions below are fundamental information the listing agent should freely provide when asked. If the listing agent will not provide this info or answers ‘I don’t know’ to any of these questions - move on, find another home. Trying to pursue a short sale home without this basic knowledge is taking a stab in the dark & you will most likely end up empty handed after investing time, money & energy on the process.

Who is the existing lender? Every short sale transaction is handled on a case-by-case basis - no two short sale transactions are the same (even within one lender). Every lender has different timelines, requirements & business processes. Lenders have ‘reputations’ for their short sale handling: some lenders are aggressive in closing short sales within 60 to 90 days. Other lenders ignore the transaction or do not respond in a timely manner…then weeks (or months) later, the buyer tires of waiting & walks.

Is there one lender/lien, two lenders/liens or more? Closing a short sale purchase on a home with one lender/lien is a challenge in and of itself. Add multiple lenders/liens & the hurdle quadruples (not doubles!) in size. It is all too common for that second lender/lien to reject the short sale & derail the entire transaction. If the second loan is with the same primary lender, the hurdle becomes somewhat easier to navigate.

What is the expected response time on an offer? You find a home you want to buy, you make an offer & like all buyers, want to hear immediately if your offer is accepted...you want the home! With a short sale, response time to an offer is 45 days at best, though majority of lenders are still quoting 60 to 90 day response time. Are you prepared to wait around one, two, three months (or longer!) for a response?

Are there any offers currently being considered? Listing agents will commonly accept numerous offers in order to have ‘back ups’ for the all-too-common 1st buyer who walks away. Since short sales are considered by the existing lender on a case-by-case basis, a ‘back up’ offer cannot simply be inserted in the transaction if & when the 1st buyer walks. The listing agent starts from scratch with the short sale package, the ‘back up’ offer that has slipped into primary position & resubmits the entire short sale package for consideration.