Have You Found Your Dream Home? is it in Foreclosure?
Posted on March 3, 2010
Filed Under Buy preforeclosure | 6 Comments
Buying a home in foreclosure is tricky. There are a lot of good deals out there. Timing is everything, buying a property in the pre-foreclosure stage can be a very good deal. Pre-foreclosure is the period of time the current owner has to either bring their current mortgage up to date or the bank or lender takes the property back. If the homeowner can, they would rather sell the house on their own for less than it is worth, but enough to pay the bank and have a little money left over. The bank will usually take the house leaving the home owner with nothing and auction off the property.
Sometimes things arenât always as they appear. For this reason, it is essential that you have all of the information that you need to know about a property. Here are some important things to consider about buying a home or property in foreclosure. The fact that some property owners know that they are going to lose their home may have stopped doing general maintenance and are not taking care of the home or property anymore, some may even destroy things with the attitude that if they canât have it why should the bank. Does it have a good title, general warranty deed, special warranty deed, quit claim deed, property value and liens. It is also important to understand what each kind of deed grants you. A general warranty deed certifies that the grantor’s title is good, while a quit claim does not. Proper legal representation can aid you in understanding such distinctions. Real estate laws differ from state to state. There are many law firms that specialize in this field.
This can be a very good to buy a home. Make sure your finances are all in order before considering this move. There are different types of lending institutions. Do your homework before choosing one. Your lawyer can also help you with this task. Donât let your dream home turn into a nightmare.
                                                                                                                     Â
babwebstar
http://www.articlesbase.com/real-estate-articles/have-you-found-your-dream-home-is-it-in-foreclosure-684614.html
Short Sales, Bank Owned Properties (reos) and Standard Listings
Posted on March 3, 2010
Filed Under PreForeclosure Listings | Leave a Comment
Everyone says it is a Buyers Market and to Buy Now. Is that really so true if almost half or the majority of real estate sales are foreclosures, REOs and short sales. It seems to be more of a Bankers market.
SHORT SALES:
Short Sales may be a great buying opportunity. The major complaint from people is the time involved to get it approved by the lender for the short sale price. The home is normally listed by a real estate agent for a value that they feel is right to bring buyers, and will be adjusted accordingly once the lender has finished a complete home valuation analysis to determine the actual sales price. The majority of the time the lender approves a sales price below the current market value just to sell it quick. One needs to remember that prices in the first-time buyer range have lots of competition which could make it bidding war.
Immediately after the lender approves the short sale and home value, time must pass before it is actually gone. The time involved may range between 3 to 6 months or more until it is actually gone. Although, during that time anything can happen such as the seller could work out a loan modification, not show the home to prospective buyers and simply let it go into foreclosure. If you have made an offer on a short sale, do not be surprised if more offers arrive once there is an approved short sale.
BANK OWNED HOMES
Bank owned homes are the ones everyone wants because they are priced aggressively and ready to be purchased. There is no long waiting. You simply need to act before the competition. When a bank owned home comes onto the market, you will want to be one of the first ones to make a solid and strong offer. The better your offer, the more chances you have to win. A worthy offer to the bank is one that is close to the listing price, or above the asking price, with a large down payment or an all cash offer. People can find Bank Owned Homes in most major cities and suburbs.
Â
“NORMAL” MLS LISTINGSÂ
If you are like most people, they are looking for a bargain or discount when it comes to most consumer items and even more so when it involves buying a home. Buying a home that is listed on the multiple listing service which is not a short sale or a bank owned home you can still find a good deal if the seller priced their home aggressively. Some sellers are doing it simply due to personal reasons such as work or other financial debts. You can still offer what you think is a fair price to the seller and even somewhere close to an exact property that is a foreclosure that sold down the street.
Frank Collins
http://www.articlesbase.com/real-estate-articles/short-sales-bank-owned-properties-reos-and-standard-listings-709604.html
South Florida and Miami Residential Real Estate Outlook 2009
Posted on March 3, 2010
Filed Under Preforeclosure Properties | Leave a Comment
South Florida’s commercial and residential real estate markets suffered in 2008, and the New Year doesn’t figure to offer much relief. Continued foreclosures and weak economy will continue having an impact on prices and number of properties available with only aggressive sellers disposing of properties.
Although home sales started picking up this summer, the beleaguered housing market has been hammered by foreclosures and falling prices. Meanwhile, the sputtering economy has local businesses retrenching and cutting jobs, dealing a blow to the retail, office and industrial sectors. All this carnage creates an opportunity for those positioned to take advantage of the adjustment in prices, and higher expected returns.
What follows is an outlook of the region’s residential markets as 2009 approaches:
Residential Real Estate
The three-year housing slump may ease by this time next year, but the real estate market in Florida, particularly the Miami real estate market almost certainly will still be in decline. After a five-year boom, South Florida’s housing market began to tumble in 2006.
People who stretched to buy properties they couldn’t afford have been forced into foreclosure over the last two years. Homes have lingered on the market for months as prices are driven down and as tightening credit makes it difficult for buyers to get financing.
But, although it might seem that we must be almost finished, there’s still a lot of pain to come in terms of write-downs and losses that have yet to be recognized.
The trouble now is that the insanity didn’t end with sub-prime mortgages. There were two other kinds of exotic mortgages that became popular, called “Alt-A” and “option ARM.” The option ARMs, in particular, lured borrowers in with low initial interest rates - so-called teaser rates - sometimes as low as one percent. But after two, three or five years those rates “reset.” They went up. And so did the monthly payment. Now the Alt-A and option ARM loans made back in the heyday are starting to reset, causing the mortgage payments to go up and homeowners to default.
With defaults at unprecedented levels and no evidence that the default rate is tapering off, it will lead to further foreclosures, homes being auctioned, and home prices continuing to fall.
Analysts that have looked back at what was written in ‘05 and ‘07, the reset dates and the current default rates, predict the beginning of a second wave. Billions of dollars in sub-prime mortgages reset last year and this year, but what hasn’t hit yet are Alt-A and option ARM resets, when homeowners will pay higher interest rates in the next three years. The damage is substantial if one considers that the sub-prime is approaching $1 trillion, the Alt-A is about $1 trillion and then option ARMs are probably another $500 billion to $600 billion on top of that.
To get a sense from where we have come Broward County median price for existing homes declined by 35 percent from November 2005, Dade County by 33%. The overbuilt South Florida and Miami condo market has taken an even bigger hit. Median prices on existing condos have fallen more than 40 percent in the two counties since 2006.
Home sales in South Florida started increasing in July, bringing a hint of optimism, but the upswing was caused by months of falling prices in a market still flooded with homes for sale. Rates on 30-year, fixed-rate mortgages have been low and last week hit 5.19 percent, a 37-year low, contributing only slightly to the uptick at best.
However there is a sense that the opportunity may be arriving for some. First, individual buyers that have been on the sidelines renting property suddenly feel that foreclosures are closer to what their incomes allow them to purchase. Also, corporations such as Lennar, a large South Florida multifamily developer that like all others has been hurting is positioning itself to take advantage of the market. First, Lennar’s strategy includes hoarding cash — it had $1.09 billion in reserves as of Nov. 30 — and second, it is establishing a fund aimed at buying distressed residential properties.
Mike Smith
http://www.articlesbase.com/real-estate-articles/south-florida-and-miami-residential-real-estate-outlook-2009-715726.html
Posted on March 3, 2010
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Wholesaling Bank Owned Foreclosures ‘ a Definitive Guide
Posted on March 1, 2010
Filed Under Pre-Foreclosures Investing | Leave a Comment
Beginning investors who find themselves strapped for cash often start real estate investing by wholesaling properties to other investors.
With the market in its current condition more and more investors find that they are coming across hordes of motivated sellers. Unfortunately, all of these potential prospects tend to share one thing in common. They don’t have any equity! This little dilemma is causing many investors to turn their efforts toward bank-owed foreclosures.
The single biggest advantage associated with REOs is the fact that equity can be created instantly either by finding a hot deal or through shrewd negotiation. There’s nobody telling the bank that they owe too much on a property and can’t lower the price a bit. In theory…any house could be sold for as little as a dollar.
In fact, there is only one downside to wholesaling REO properties. Non-assignability. When an investor gets a bank owned property under contract it always comes with multi-page addendums that make the deal non-assignable.
A lot of new wholesalers will consider this one obstacle to be the end of the line where flipping bank owned homes is concerned, never knowing that there are four ways to maneuver around this bump in the road.
Method #1 - Add to Contract, Then Quit Claim
Most banks do not have an issue with adding an additional party to a contract, they just do not want the ORIGINAL parties removed from it at any time. So Ivan Investor can get an REO property under contract for $50,000. Ivan calls Louie Landlord and after talking about the deal Louie agrees to pay a total of $60,000 for the property.
Ivan calls the bank up and requests that an addendum be drawn up that adds Louie to the contract and title. The Bank agrees and everyone shows up on closing day.
Louie brings TWO certified checks. One for $50,000 for the purchase of the property, and one for $10,000 made out to Ivan. All parties then show up for closing and both Ivan and Louie then own the home. Louie hands Ivan the $10,000 check and Ivan signs a quit claim deed removing him from title on that property. Pretty simple, right?
Pros: The advantage to this method is that there is only one set of closing costs. It’s a rather simple and straight-forward method that works for most deals. It works around the 90-day deed restriction that comes packaged with many Fannie/Freddie properties.
Cons: Here are the negatives that come with this method. This does NOT work for HUD properties because HUD does not allow any changes to the parties that are on the original offer and the end buyer usually cannot be getting a mortgage because a mortgage company won’t allow you to be on title if they are lending someone else money against the home.
Method #2 - Simultaneous Double-Close
The simultaneous double-close (also known as a simul close or a “dry” close) is actually two transactions. An investor is buying from the bank and then instantly reselling to a third party in a separate transaction. It follows a typical A-to-B-to-C deal flow.
The “twist” that comes with this method is that the wholesale investor never actually brings any money into play. The end-buyer’s funds are used to fund BOTH transactions. This is possible because, as long as both closings take place on the same day, it doesn’t matter which one closes first for the title company’s accounting purposes. The second transaction (B-to-C) could take place a 9am with all the paperwork for that transaction taken care of at that time while the first transaction (A-to-B) doesn’t close until 2pm.
What really matters is that the deeds are RECORDED in the proper order when filed with the county. It’s important at that time to have the A-to-B deed filed first with the B-to-C deed following on record.
Pros: This works well for those who have zero cash as long as they have a good title company that will still do these types of transactions. It still works even with end buyers that are getting conventional financing if the end buyer is getting their financing through the right lender.
Cons: This method is NOT an option if the end buyer is getting FHA financing. This method also does NOT work for Fannie/Freddie foreclosures in most cases because these super-banks put a deed restriction in place that prevents you from reselling the property to ANYONE for a full 90 days.
Also, with all double-close deals there are two sets of transfer taxes, recording fees, and other closing costs that cut into your profit. Of course you can just build that into the deal by lowering your offer price in order to circumvent this small annoyance.
The biggest roadblock to getting these transactions closed is the fact that fewer and fewer title companies are comfortable with the “dry” simultaneous close where the wholesale investor brings in no cash to the deal. In fact, they are often refusing to close these deals at all!
Method #3 - True Double Close
The true double close (also known as a “wet” close) is the same as the simultaneous close in that the investor is buying the foreclosure property and instantly reselling it to the end buyer for a profit. However, the wholesale investor is actually bringing in his own cash to fund his end of the deal.
This little difference makes the title companies happy but it doesn’t work so well for beginning investors that don’t have piles of cash sitting around to make the deals work.
Then came Flash Funding. There are “transactional funding” lenders will lend you all the money you need to do these same-day double-close deals…for a price. Most will never run a credit check or request an appraisal on the property.
The pros and cons to this method are pretty much the same as the simul close, except that on the good side more title companies are willing to do business with you if you go this route and on the bad side you have additional costs in the form of Flash Funding fees chewing away at your profits.
Method #4 - Sell The LLC
This last method has been popularized by Steve Cook who’s said that he swiped it from commercial real estate investors who have been using it for years to avoid paying transfer taxes.
The idea is that an investor would submit an offer in the name of an LLC. If the investor was placing an offer on 1221 Sycamore, he may send it in with “Sycamore Group LLC”. If the offer is accepted, the investor immediately faxes in his LLC articles of organization and creates the company to match the Buyer on the purchase agreement.
From there the investor finds his end buyer and they agree that on closing day the end buyer will purchase the entire LLC from the original investor for the amount of the wholesale fee. From there, as the new owner of the LLC, the end buyer is empowered to close on the original transaction and purchase the property.
Pros: The upside to this method is that you workaround the extra costs in the form of transfer taxes and/or Flash Funding fees that come with the two Double-Close methods, and for those who are concerned about guarding their privacy, your name never goes on the deal.
Cons: The major obstacle to this one is that the end buyer has to pretty much be paying cash. Banks do not loan traditional mortgages (either to owner occupants or investors) in company names. You have to buy it in your own personal name to get a mortgage. Other concerns are that if you do this often enough you may attract the attention of state regulators who are confused as to why you start and sell 5-10 LLCs each month.
Armed with these four workarounds, investors nationwide are able to successfully wholesale flip REO foreclosures. None of these methods require the wholesaler to bring his or her own cash into play other than the initial earnest money deposit and none require a credit check. One of these methods will work for pretty much any situation you will come across when flipping bank owned homes.
Brian Kurtz
http://www.articlesbase.com/finance-articles/wholesaling-bank-owned-foreclosures-a-definitive-guide-736881.html
Have You Found Your Dream Home? is it in Foreclosure?
Posted on March 1, 2010
Filed Under Buy preforeclosure | 6 Comments
Buying a home in foreclosure is tricky. There are a lot of good deals out there. Timing is everything, buying a property in the pre-foreclosure stage can be a very good deal. Pre-foreclosure is the period of time the current owner has to either bring their current mortgage up to date or the bank or lender takes the property back. If the homeowner can, they would rather sell the house on their own for less than it is worth, but enough to pay the bank and have a little money left over. The bank will usually take the house leaving the home owner with nothing and auction off the property.
Sometimes things arenât always as they appear. For this reason, it is essential that you have all of the information that you need to know about a property. Here are some important things to consider about buying a home or property in foreclosure. The fact that some property owners know that they are going to lose their home may have stopped doing general maintenance and are not taking care of the home or property anymore, some may even destroy things with the attitude that if they canât have it why should the bank. Does it have a good title, general warranty deed, special warranty deed, quit claim deed, property value and liens. It is also important to understand what each kind of deed grants you. A general warranty deed certifies that the grantor’s title is good, while a quit claim does not. Proper legal representation can aid you in understanding such distinctions. Real estate laws differ from state to state. There are many law firms that specialize in this field.
This can be a very good to buy a home. Make sure your finances are all in order before considering this move. There are different types of lending institutions. Do your homework before choosing one. Your lawyer can also help you with this task. Donât let your dream home turn into a nightmare.
                                                                                                                     Â
babwebstar
http://www.articlesbase.com/real-estate-articles/have-you-found-your-dream-home-is-it-in-foreclosure-684614.html
Short Sales, Bank Owned Properties (reos) and Standard Listings
Posted on March 1, 2010
Filed Under PreForeclosure Listings | Leave a Comment
Everyone says it is a Buyers Market and to Buy Now. Is that really so true if almost half or the majority of real estate sales are foreclosures, REOs and short sales. It seems to be more of a Bankers market.
SHORT SALES:
Short Sales may be a great buying opportunity. The major complaint from people is the time involved to get it approved by the lender for the short sale price. The home is normally listed by a real estate agent for a value that they feel is right to bring buyers, and will be adjusted accordingly once the lender has finished a complete home valuation analysis to determine the actual sales price. The majority of the time the lender approves a sales price below the current market value just to sell it quick. One needs to remember that prices in the first-time buyer range have lots of competition which could make it bidding war.
Immediately after the lender approves the short sale and home value, time must pass before it is actually gone. The time involved may range between 3 to 6 months or more until it is actually gone. Although, during that time anything can happen such as the seller could work out a loan modification, not show the home to prospective buyers and simply let it go into foreclosure. If you have made an offer on a short sale, do not be surprised if more offers arrive once there is an approved short sale.
BANK OWNED HOMES
Bank owned homes are the ones everyone wants because they are priced aggressively and ready to be purchased. There is no long waiting. You simply need to act before the competition. When a bank owned home comes onto the market, you will want to be one of the first ones to make a solid and strong offer. The better your offer, the more chances you have to win. A worthy offer to the bank is one that is close to the listing price, or above the asking price, with a large down payment or an all cash offer. People can find Bank Owned Homes in most major cities and suburbs.
Â
“NORMAL” MLS LISTINGSÂ
If you are like most people, they are looking for a bargain or discount when it comes to most consumer items and even more so when it involves buying a home. Buying a home that is listed on the multiple listing service which is not a short sale or a bank owned home you can still find a good deal if the seller priced their home aggressively. Some sellers are doing it simply due to personal reasons such as work or other financial debts. You can still offer what you think is a fair price to the seller and even somewhere close to an exact property that is a foreclosure that sold down the street.
Frank Collins
http://www.articlesbase.com/real-estate-articles/short-sales-bank-owned-properties-reos-and-standard-listings-709604.html
Predicting Real Estate Trends in Boston
Posted on March 1, 2010
Filed Under Preforeclosure Properties | Leave a Comment
In Boston, an expensive real estate market, coupled with all sorts of advice coming from all sorts of economic and real estate experts, is reason for pause.
The economy is battered and the real estate forecast in unclear. But that doesnât prevent voices from calling out. Some people claim 2009 will be much worse than 2008. Others say it is the beginning of the end, a period in which sellers, buyers and realtors can find new ways to improve their performance and reap the rewards.
Karl Case is a Wellesley College economist. His name is synonymous with the housing market. He is known for his ability to predict changes, trends and problems. He was one of the first to warn us about the current real estate crisis. Now he is sought out even more. People look to him for advice, a sign that everything will be all right, or if they should run for hills because nothing is going anywhere but down.
This time, though, Case, like the rest of us, is uncertain about the future. He says a combination of factors make this an unprecedented situation. The market is saturated. Prices are falling, and yet people are unable to buy a new home.
As banks tighten their belts and potential buyers are kept from the loans they need for down payments, homes remain on the market longer, declining in price and stalling the revitalization of the economy. The Boston Globe ran an interesting article about Caseâs prediction for 2009âs real estate market.
The outlook for real estate is so foggy that not even a smart guy such as Case - who has studied past housing downturns so extensively he’s identified three indicators that signal a rebound - wants to venture a guess.
“This is absolutely uncharted water,” Case said. He said the complex nature of the current recession and global credit crunch, mixed with the particular problems brought on by huge numbers of foreclosures, make it difficult to predict where the housing market is headed, other than further downward.
That is not great news for prospective sellers and the professionals who make money helping them sell their homes. Falling prices, of course, are good for buyers, especially in an expensive market such as Massachusetts. Many who were priced out during the last boom are now finding homes much more affordable.
But just when you might start feeling optimistic, Case points out:
Unless you can’t get a mortgage, because of greater lending restrictions imposed after the credit and subprime mortgage debacles.
Unless you’re also trying to sell a home, especially one bought during a market peak.
Buyers can be affected in other ways, too. A weak market prompts many would-be sellers to wait on the sidelines, which reduces the number of choices available to buyers, especially of nicer homes. If you have to buy now, you may wind up settling for less than what you want.
It sounds like much is still to be determined, which, after all, we already know. It seems the best advice is to use sound judgment. Be cautious, smart and informed. Now is certainly not the time to be taking unnecessary risks, but if you have the means, a new home, or property, might be available for a price that is significantly lower than usual.
michaelrussell
http://www.articlesbase.com/customer-service-articles/predicting-real-estate-trends-in-boston-720959.html
