By Kemba J. Dunham From The Wall Street Journal Online
For small investors who've been shut out of the commercial-property market in recent years, there's a bright side to the mortgage meltdown: It's much easier for them to compete.
When Andrew Brooks first offered $15 million for a medical-office building in Valencia, Calif., in early August, the seller turned down the 44-year-old orthopedic surgeon.
But just three weeks later, the seller called back Dr. Brooks, who lives in Los Angeles. The two large real-estate investment trusts that had knocked the doctor out of the running with their bids were no longer interested. Dr. Brooks believes that the companies were unable -- or unwilling -- to come up with the cash.
Related Link Join a reader discussion on the U.S. housing market.
That left Dr. Brooks, who buys medical-office buildings (in addition to performing surgeries related to sports injuries), as the sole player. He quickly put down a "substantial" nonrefundable cash deposit to buy the property for $800,000 less than he had originally offered, and is waiting for the deal to close. Though the marketplace for health-care-related properties has been extremely competitive over the past few years, "if you've got some cash to spend, there's a tremendous opportunity," Dr. Brooks says.
Over the past few years, more investors have wanted to add small apartment complexes, office buildings and shopping centers to their portfolio. Retirees, well-off individuals and the self-employed -- who often lack corporate pensions and retirement plans -- have traditionally used these types of investments to amass long-term wealth and fund their retirement.
But as prices soared, both individual players like Dr. Brooks and small companies that buy such properties, which are typically priced between $1 million and $20 million, found themselves outbid and outmaneuvered by better-capitalized firms, including investment banks and publicly traded real-estate investment trusts, or REITs.
Now, with the capital markets roiling, once-active big firms are being more prudent about making deals. That's opened a window of opportunity for smaller investors who want to buy these properties. "Right now, everyone is trying to figure out how to make these deals work, so while we're in that transition period, the institutional investors are taking a wait-and-see approach," says Mark Larson, national director of Grubb & Ellis's private-capital investment group.
The Upper Hand
Small investors now have an edge in bidding for certain commercial properties. Here's why:
• They often pay with cash, while larger firms typically borrow funds.
• They are more likely to buy properties in need of renovation.
• Bigger firms have become more risk-averse because of the credit crunch.
Tools For Investors
• iiProperty.com is an online property management tool for investors (registration required). Visitors to the site can use the tool to track property expenses, rents collected and cash flow. The site's basic suite of tools are free, however, other tools -- such as automatic tenant invoicing range in costs from $12.99 a month to $64.99.
• Rentometer.com gives apartment landlords (and renters) the chance to compare the rent for a particular unit against other rentals in an area with a simple-to-understand graphical meter.
• Goodmortgage.com provides a calculator to help investors forecast the possible financial outcome of purchasing and renting an investment property based on data such as purchase price and mortgage terms, monthly rental rates, expenses and expected growth in property value.
• About.com offers a downloadable spreadsheet to track the performance of a commercial real-estate investment, as well as definitions and how-tos for mathematical calculations used by real-estate investors.
--Lauren Baier Kim
Smaller investors -- a universe that includes individuals, partnerships, and local and regional investment companies -- can cut deals faster than bigger players, which appeals to sellers fed up with the growing number of deals that are falling through. They're also more willing to buy properties that need improvement, which can be a lucrative but are often deemed too risky for institutional investors and REITs, says Harvey Green, chief executive of Marcus & Millichap Real Estate Investment Services, based in Encino, Calif.
Another big advantage smaller investors have: Many of them pay primarily with cash. That's a plus in an environment where debt has become more difficult to get, or at least more expensive. "So many investments just don't make sense -- unless you have the cash," says Marsha Slotten, a commercial real-estate broker in Las Vegas.
Despite the Federal Reserve's move last week to cut its overnight interest rate by half a percentage point to 4.75%, many experts believe that small investors still have an advantage when it comes to buying smaller commercial properties. But that advantage could be short-lived if institutional players wade back into the market, which could drive prices up and leave smaller players priced out of the market.
William Hutchinson owns a small Dallas company called Dunhill Partners that buys shopping centers priced between $10 million and $50 million, mostly in Texas, Oklahoma and Louisiana. He says his competitors for these properties until recently often included midsize to large REITs. But these days, Mr. Hutchinson is finding that these firms aren't making as many bids.
He chalks it up to the fact that the shopping centers sometimes include mom-and-pop tenants who don't always have the best credit ratings. In today's credit-sensitive environment, larger investors, particularly ones who have to answer to shareholders, aren't willing to take chances on properties that may seem too risky, he says.
H. Alan Welles, a commercial real-estate broker in West Palm Beach, Fla., acts as a "sponsor" to groups of individual investors who pool their money to buy retail, industrial or office properties, entrusting Mr. Welles with handling the entire transaction, including acquisition, leasing and management. His clients include professionals and retirees in their 50s with a lot of cash.
A few weeks ago, one of Mr. Welles's groups beat out several offers on a $4 million medical-office and retail building in West Palm Beach because they were able to offer all cash and the ability to close with no financial contingencies.
"With us there is no red tape, but the procedures for getting stuff done are so much slower with the larger groups," says Mr. Welles, who deals with commercial properties valued at up to $15 million. "A lot of sellers have gotten burned while trying to hold out for the top dollars, so now they're just looking for fewer headaches."
Leslie Evans, a Palm Beach-based attorney, invests in some of Mr. Welles's groups and will occasionally negotiate their contracts. Because of the opportunities for individual investors right now, he says that more professionals have been calling about investing their money in a group, and the number of these groups has been expanding.
Mr. Evans says the current commercial real-estate market is perfect for the doctors and other professionals in the group who have a high net worth and are taken aback with the stock market's recent volatility. "This is definitely the better opportunity right now for those who are looking to be able to sleep at night a little bit better," he says.
Some smaller investors are even being approached by the larger players for partnerships. John Crossman co-owns a small Orlando, Fla., company that buys area shopping centers priced at between $3 million and $15 million. Not only has he seen the number of bidders on properties drop from around 15 to five in recent weeks; he also says institutional investors are asking him to team up on projects because of his knowledge of the local market.
At a time when taking risks is frowned upon, these larger investors, particularly those making purchases from outside the region, don't want to buy properties without having inside information about the area's rent and job growth and about the local tenant base. "When people get concerned about things, they rely more heavily on the local markets," Mr. Crossman says. "We're seeing an unbelievable amount of people who want to be our operating partner because we have that knowledge."
Mr. Crossman says his experiences were echoed by other smaller investors at a recent conference held in New York by the International Council of Shopping Centers, an industry trade group. "I was in the elevator with a few other small guys like me, and while the speakers at the conference were talking about all these concerns, every single one of us talked about how excited we were about the market because there are opportunities for us," he says.
But the advantage that smaller investors have could be brief as their bigger brethren find solutions to the credit crunch and look to make deals again. "I don't think institutional investors and REITs are going to sit out of any major market any longer than three to maybe six months," says David Illsley, a commercial real-estate broker in Scottsdale, Ariz. "They'll figure out a way to be in the game."
Friday, September 28, 2007
US Congress Moves a Step Closer Towards Amending Tax Code to Relieve Those in Foreclosure As the Ways & Means Committee Approves Mortgage Forgiveness
WASHINGTON – The House Committee on Ways and Means unanimously approved H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, today in response to some of the tax issues that have arisen as a result of problems in the subprime mortgage market. Under current law, debt forgiven following mortgage foreclosure or renegotiation is considered income for tax purposes, resulting in tax liability for individuals and families.
The legislation advanced by the Committee today would provide relief to those families by permanently excluding debt forgiven under these circumstances from tax liability. The bill would also help would-be homeowners secure their investments through a long-term extension of the tax deduction for private mortgage insurance, and would ease restrictions for qualifying as housing cooperative corporations.
Finally, the bipartisan bill would tighten requirements taxpayers must meet to exclude gain from the sale of certain homes that have been used as a vacation home or rental property.
Families dealing with the pain of a foreclosure should not have the double whammy of a large tax bill for terminating their mortgage through no fault of their own," said Ways and Means Committee Chairman Charles B. Rangel. I am pleased the Committee joined together to unanimously pass this critical legislation and I look forward to bringing this measure before the full House."This proposed legislation is supported by both the National Association of Realtors and the Mortgage Bankers Association.
The legislation advanced by the Committee today would provide relief to those families by permanently excluding debt forgiven under these circumstances from tax liability. The bill would also help would-be homeowners secure their investments through a long-term extension of the tax deduction for private mortgage insurance, and would ease restrictions for qualifying as housing cooperative corporations.
Finally, the bipartisan bill would tighten requirements taxpayers must meet to exclude gain from the sale of certain homes that have been used as a vacation home or rental property.
Families dealing with the pain of a foreclosure should not have the double whammy of a large tax bill for terminating their mortgage through no fault of their own," said Ways and Means Committee Chairman Charles B. Rangel. I am pleased the Committee joined together to unanimously pass this critical legislation and I look forward to bringing this measure before the full House."This proposed legislation is supported by both the National Association of Realtors and the Mortgage Bankers Association.
Wednesday, September 26, 2007
Property values still going down? Why?
If you wonder why property values are still 'adjusting' - there's actually a pretty good reason and it's not what you think!
When an owner wants to sell their property and contacts an agent, the agent does what is called a "Comparable Market Analysis" in which they compare the values of properties on the market to the owner's home to determine a fair price for it.
There are however two approaches to this - one is ethical and one is not. Many agents these days, in an effort to get the property sold quickly, drop the asking price on the home below that of all the other homes being sold in the area. Then when an offer comes in, they do everything they can to get the seller to agree to the offer, even if it is far below the low asking price! This, of course, is not the right way to sell a home!
This is happening all over the country! Agents, in an attempt to get the homes sold, are not educating their sellers and explaining that the sale needs time to mature and that they have to be willing to hold out for a fair offer. Instead, they are 'throwing the baby away with the bath water' and pressuring the sellers to agree to the lower price instead. This in turn is causing other listing agents, who are following the same tactics to lower the asking prices even further.
The problem is that the sellers don't understand the importance of time. It is imperative that all sellers stick it out and sell their properties for what is fair - not what is fast. By agreeing to market a home lower, it inevitably hurts the property values in the entire community thereby making it more difficult for everyone concerned to get a fair price for their home.
Agents who undercut other agents in an effort to sell a home quicker are working from a lack of experience, lack of ethics and general lack of concern for the market, their customers and the community. It is important to shop for an agent that is willing to market a home for what it's worth and it is important for the seller to understand that taking less for their home is not the best choice over taking their time.
The reason property values continue to spiral downward is because agents are not using skill, care and diligence as they agree to on their listing agreement, to ensure that their seller is going to get the right price for their home. Instead they are selling the seller short and cutting their losses because they lack the experience to explain to a seller how important it is to wait for the right buyer. If agents and sellers alike adopted this philosophy, the market would be strengthened in the seller's favor and the buyers would have to be more reasonable again.
I have seen many too many buyers take advantage of misinformed sellers and unqualified agents. It is not an agent's job to sell a house - it is the agents' job to market a home and get the fair market price for the home and also create a win-win situation between buyers and sellers. It is unethical and unreasonable to expect a seller to suffer a tremendous loss in order to sell their property. It is time for the sellers to understand how important it is for them to stick to their guns but unfortunately unless all sellers collectively do this, the home that is priced below all the rest is still going to be the home that sells first and the agent who lacks the wherewithal to sell the home correctly will get a shorter paycheck but will be paid ahead of everyone else. Ultimately this is the motivation of an agent who undercuts the value of a seller's property to get it sold. It is all about the money!
When an owner wants to sell their property and contacts an agent, the agent does what is called a "Comparable Market Analysis" in which they compare the values of properties on the market to the owner's home to determine a fair price for it.
There are however two approaches to this - one is ethical and one is not. Many agents these days, in an effort to get the property sold quickly, drop the asking price on the home below that of all the other homes being sold in the area. Then when an offer comes in, they do everything they can to get the seller to agree to the offer, even if it is far below the low asking price! This, of course, is not the right way to sell a home!
This is happening all over the country! Agents, in an attempt to get the homes sold, are not educating their sellers and explaining that the sale needs time to mature and that they have to be willing to hold out for a fair offer. Instead, they are 'throwing the baby away with the bath water' and pressuring the sellers to agree to the lower price instead. This in turn is causing other listing agents, who are following the same tactics to lower the asking prices even further.
The problem is that the sellers don't understand the importance of time. It is imperative that all sellers stick it out and sell their properties for what is fair - not what is fast. By agreeing to market a home lower, it inevitably hurts the property values in the entire community thereby making it more difficult for everyone concerned to get a fair price for their home.
Agents who undercut other agents in an effort to sell a home quicker are working from a lack of experience, lack of ethics and general lack of concern for the market, their customers and the community. It is important to shop for an agent that is willing to market a home for what it's worth and it is important for the seller to understand that taking less for their home is not the best choice over taking their time.
The reason property values continue to spiral downward is because agents are not using skill, care and diligence as they agree to on their listing agreement, to ensure that their seller is going to get the right price for their home. Instead they are selling the seller short and cutting their losses because they lack the experience to explain to a seller how important it is to wait for the right buyer. If agents and sellers alike adopted this philosophy, the market would be strengthened in the seller's favor and the buyers would have to be more reasonable again.
I have seen many too many buyers take advantage of misinformed sellers and unqualified agents. It is not an agent's job to sell a house - it is the agents' job to market a home and get the fair market price for the home and also create a win-win situation between buyers and sellers. It is unethical and unreasonable to expect a seller to suffer a tremendous loss in order to sell their property. It is time for the sellers to understand how important it is for them to stick to their guns but unfortunately unless all sellers collectively do this, the home that is priced below all the rest is still going to be the home that sells first and the agent who lacks the wherewithal to sell the home correctly will get a shorter paycheck but will be paid ahead of everyone else. Ultimately this is the motivation of an agent who undercuts the value of a seller's property to get it sold. It is all about the money!
Tuesday, September 25, 2007
Something Home Buyers Should Consider
This article was just emailed to me. I researched the links and added them to the article for your convenience. It gives a good account of what is actually happening and why sitting on the fence, as I discussed recently, may not be the wisest decision:
Something New To Tell Your Reluctant Homebuyers
By Blanche Evans
September 21, 2007
The government is working hard to make homebuying more affordable for buyers, from Congress working to expand Federal Housing Administration insurance to raising loan buyback limits for Fannie Mae and Freddie Mac. The Federal Reserve has lowered short-term target borrowing rates, which impacts consumer interest rates on credit cards, car loans, and mortgage loans among others. Housing is being widely and unfairly blamed for slowing the economy (the real issue is salaries) until recession has taken over inflation as a national worry. In other words, home buyers are getting what they asked for -- so what are they waiting for?
While mortgage applications have risen modestly on lower mortgage interest rates, many buyers are still being rendered inert by new headlines. "Fed's Bernanke Predicts Further Mortgage Turmoil", posted on MarketWatch, found that "more delinquencies and foreclosures can be expected in the subprime, adjustable-rate mortgage market as borrowers face interest-rate resets," Federal Reserve Chairman Ben Bernanke said Thursday.
To buyers, Bernanke's stance could easily translate as "wait to buy! As more homes come on the market, you could get a better deal!"
Or try this one. "Bush Cites 'Unsettling Times' in Housing Market", an AP story covering President Bush's most recent speech addressing the economy. "President Bush on Thursday cited "some unsettling times" in the U.S. housing and credit markets as he sought to assure jittery Americans that the economy is holding up well despite worries about a recession" read the opening paragraph of the story. The story goes on to say that Bush was asked "about concerns by some economists that the housing slump and higher mortgage costs could lead to a recession even in spite of action earlier this week by the Federal Reserve to cut short-term interest rates by a half-percentage point." He responded, ""There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. "But he said he didn't see that spreading to the broader economy, wrote the AP.
If you were a homebuyer, would you feel reassured?
Then there's this one: "Fed Rate Cut No Quick Cure For Housing Mess" found on MSNBC. "And while the Fed’s rate cuts may have provided a psychological boost to the markets, many analysts and builders think it will take more cuts -- and more time -- before the housing market recovers," writes Senior producer, John W. Schoen.
"Maybe we should wait for more interest rate cuts," thinks the wily buyer.
It's easy to imagine that many buyers may continue to bench themselves in the hopes that interest rates and housing prices will go down, and they can make a killing.
Buyers will behave that way if they believe that the Fed lowered mortgage interest rates, which is not what happened at all.
"Mortgage interest rates are tied to mortgage backed securities or mortgage bonds," explains David Reed, real estate author and Realty Times contributor. "Not the Fed." What makes mortgage interest rates go up or down is the prospect of inflation, not lower borrowing costs for banks. If that were true, why are cash advances on credit cards being charged at 28 percent by Chase and other banks?
"We've had a 48-hour window of lower rates, but they're right back where they were two days ago," says Reed. The reason is that when the Fed dropped short-term interest rates 50 basis points, the mortgage industry responded with an 1/8 of a percent cut in mortgage interest rates, but since then, "everybody sobered up and realized that's also a potential for inflation. Money's cheap, people buy more things, and prospects for inflation go up and that leads to higher rates."
While Reed says he believes rates will drift lower on a slower economy, that's not necessarily a good reason for buyers to wait. "Nobody can predict the future."
So here's what you can tell your buyers:
1. Interest rates may not come down at the right time for you.
2. Interest rates are at near-historical lows now. The only thing that will make them go lower is a recession and nobody wants that.
3. Interest rates may not get low enough for you to buy the home you want. If you want to buy, you should buy in a range that you can get with a fixed-rate loan, unless you know you are going to sell within two to five years. If you get an adjustable rate loan, pay extra on the principal with the savings you achieve on the interest rate. That's about $25 for every 1/8 of a point between the adjustable rate and the fixed rate you could have gotten.
4. There's no guarantee that the home you want will be available at the same time as the lowest interest rate is available to you.
5. Interest rates could sink to all-time lows, making you a genius. But that doesn't mean the home you want won't cost more in the meantime.
Copyright © 2007 Realty Times. All Rights Reserved.
------------------------------------------------------------------------------------
So if your goal is to 'buy low' remember that, although I have a crystal ball on my desk, it is merely to prove the point; there is no way to predict what the market will do. So if you like the house, go for it! The time is now before the people who saw the house you love place an offer and you lose out. Sellers can only go so far on their pricing and it appears they have tolerated all that they will tolerate. Any buyer in today's market that feels that pricing will continue to drop is not using common sense. I have seen communities where homes were given away and the only homes you can buy there now are the ones that weathered the storm and are at a reasonable price. If you love the home, buy it. The difference of a few thousand dollars to buy a home that you don't like as much as the one around the corner is not worth the monthly payment difference. People are settling for less just for the price, but they miss the point that after the negotiations are over, they have to live in the house every day for years to come!
Have a great day!
Denise
Something New To Tell Your Reluctant Homebuyers
By Blanche Evans
September 21, 2007
The government is working hard to make homebuying more affordable for buyers, from Congress working to expand Federal Housing Administration insurance to raising loan buyback limits for Fannie Mae and Freddie Mac. The Federal Reserve has lowered short-term target borrowing rates, which impacts consumer interest rates on credit cards, car loans, and mortgage loans among others. Housing is being widely and unfairly blamed for slowing the economy (the real issue is salaries) until recession has taken over inflation as a national worry. In other words, home buyers are getting what they asked for -- so what are they waiting for?
While mortgage applications have risen modestly on lower mortgage interest rates, many buyers are still being rendered inert by new headlines. "Fed's Bernanke Predicts Further Mortgage Turmoil", posted on MarketWatch, found that "more delinquencies and foreclosures can be expected in the subprime, adjustable-rate mortgage market as borrowers face interest-rate resets," Federal Reserve Chairman Ben Bernanke said Thursday.
To buyers, Bernanke's stance could easily translate as "wait to buy! As more homes come on the market, you could get a better deal!"
Or try this one. "Bush Cites 'Unsettling Times' in Housing Market", an AP story covering President Bush's most recent speech addressing the economy. "President Bush on Thursday cited "some unsettling times" in the U.S. housing and credit markets as he sought to assure jittery Americans that the economy is holding up well despite worries about a recession" read the opening paragraph of the story. The story goes on to say that Bush was asked "about concerns by some economists that the housing slump and higher mortgage costs could lead to a recession even in spite of action earlier this week by the Federal Reserve to cut short-term interest rates by a half-percentage point." He responded, ""There is no question that there is some unsettling times in the housing market and credits associated with the housing market," the president said. "But he said he didn't see that spreading to the broader economy, wrote the AP.
If you were a homebuyer, would you feel reassured?
Then there's this one: "Fed Rate Cut No Quick Cure For Housing Mess" found on MSNBC. "And while the Fed’s rate cuts may have provided a psychological boost to the markets, many analysts and builders think it will take more cuts -- and more time -- before the housing market recovers," writes Senior producer, John W. Schoen.
"Maybe we should wait for more interest rate cuts," thinks the wily buyer.
It's easy to imagine that many buyers may continue to bench themselves in the hopes that interest rates and housing prices will go down, and they can make a killing.
Buyers will behave that way if they believe that the Fed lowered mortgage interest rates, which is not what happened at all.
"Mortgage interest rates are tied to mortgage backed securities or mortgage bonds," explains David Reed, real estate author and Realty Times contributor. "Not the Fed." What makes mortgage interest rates go up or down is the prospect of inflation, not lower borrowing costs for banks. If that were true, why are cash advances on credit cards being charged at 28 percent by Chase and other banks?
"We've had a 48-hour window of lower rates, but they're right back where they were two days ago," says Reed. The reason is that when the Fed dropped short-term interest rates 50 basis points, the mortgage industry responded with an 1/8 of a percent cut in mortgage interest rates, but since then, "everybody sobered up and realized that's also a potential for inflation. Money's cheap, people buy more things, and prospects for inflation go up and that leads to higher rates."
While Reed says he believes rates will drift lower on a slower economy, that's not necessarily a good reason for buyers to wait. "Nobody can predict the future."
So here's what you can tell your buyers:
1. Interest rates may not come down at the right time for you.
2. Interest rates are at near-historical lows now. The only thing that will make them go lower is a recession and nobody wants that.
3. Interest rates may not get low enough for you to buy the home you want. If you want to buy, you should buy in a range that you can get with a fixed-rate loan, unless you know you are going to sell within two to five years. If you get an adjustable rate loan, pay extra on the principal with the savings you achieve on the interest rate. That's about $25 for every 1/8 of a point between the adjustable rate and the fixed rate you could have gotten.
4. There's no guarantee that the home you want will be available at the same time as the lowest interest rate is available to you.
5. Interest rates could sink to all-time lows, making you a genius. But that doesn't mean the home you want won't cost more in the meantime.
Copyright © 2007 Realty Times. All Rights Reserved.
------------------------------------------------------------------------------------
So if your goal is to 'buy low' remember that, although I have a crystal ball on my desk, it is merely to prove the point; there is no way to predict what the market will do. So if you like the house, go for it! The time is now before the people who saw the house you love place an offer and you lose out. Sellers can only go so far on their pricing and it appears they have tolerated all that they will tolerate. Any buyer in today's market that feels that pricing will continue to drop is not using common sense. I have seen communities where homes were given away and the only homes you can buy there now are the ones that weathered the storm and are at a reasonable price. If you love the home, buy it. The difference of a few thousand dollars to buy a home that you don't like as much as the one around the corner is not worth the monthly payment difference. People are settling for less just for the price, but they miss the point that after the negotiations are over, they have to live in the house every day for years to come!
Have a great day!
Denise
Monday, September 24, 2007
Rainy weekend slows the Real Estate Market
Rain throughout the weekend combined with Sunday football seems to have slowed the shopping this weekend. Buyers are not in a hurry as they have demonstrated for the past two years. The streets of Channelside were quiet and although I had an open house at one of my lisitngs at 205 N 12th Street, visitors were limited. This is a gorgeous property though and the people who saw it were impressed! If you are looking this is actually a loft that was featured on HGTV "Rezoned" on August 1, 2007. Worth seeing! This unique property is very valuable and being sold below market for a quick sale. It is worth a lot more!
Short sales are everywhere and buyers have the opportunity to take advantage of the unique opportunity to buy a home for less than the seller owes the bank!
I will be posting short sale information often to allow others to learn about this important opportunity available to both buyers and sellers.
A short sale is an arrangement in which the seller approaches their mortgage lender and notifies them that they wish to sell their home but it is not worth what their loan balance is. This situation arises frequently when home owners who recently took advantage of the low interest rates and refinanced their homes just before the market started to soften and the property values decreased. It is common these days for a homeowner to owe more than their home would appraise for and it is wise for these homeowners to wait out the slow market until they can recover the value in their property.
There are always circumstances that force a homeowner to sell their property even in the worst market. Relocation, rising interest from Adjustable Rate mortgages, increases in taxes, illness, losing a job, and many other issues can force a seller to sell their home at a time that is not conducive to their making any money on such a transaction. It is in this situation that a seller may be forced to sell their home and they discover that their home is not worth the money they owe on it.
If a seller is faced with this situation, they can approach their mortgage holder and ask for consideration to sell the house for its current value and to take less for the payoff. This type of arrangement generally involves a good amount of paperwork and proof to the lender that there are extenuating circumstances.
The bank will request the following information from the homeowner applying for a short sale approval:
Approval from the lenders for short sales:
1. Hardship letter – the sadder the better – Death, lost jobs, sickness
2. Recent bank statements showing no income
3. Last 2 years tax returns or some kind of financial statement even from a CPA
4. Listing Agreements
5. Comparable Market Analysis for each property
6. Current pictures – if any have been vacant showing sign of distress is good too.
7. HUD statement from a title company for estimated closing costs
Much of this is accomplished by hiring a licensed Real Estate Professional. Someone who knows this type of transaction is best - but the opportunity is there to sell a home for less than it is currently mortgaged for.
If you would like to know what consequences are of doing a short sale and how it effects the seller's finances, please check back soon!
Have a great day!
Denise
Short sales are everywhere and buyers have the opportunity to take advantage of the unique opportunity to buy a home for less than the seller owes the bank!
I will be posting short sale information often to allow others to learn about this important opportunity available to both buyers and sellers.
A short sale is an arrangement in which the seller approaches their mortgage lender and notifies them that they wish to sell their home but it is not worth what their loan balance is. This situation arises frequently when home owners who recently took advantage of the low interest rates and refinanced their homes just before the market started to soften and the property values decreased. It is common these days for a homeowner to owe more than their home would appraise for and it is wise for these homeowners to wait out the slow market until they can recover the value in their property.
There are always circumstances that force a homeowner to sell their property even in the worst market. Relocation, rising interest from Adjustable Rate mortgages, increases in taxes, illness, losing a job, and many other issues can force a seller to sell their home at a time that is not conducive to their making any money on such a transaction. It is in this situation that a seller may be forced to sell their home and they discover that their home is not worth the money they owe on it.
If a seller is faced with this situation, they can approach their mortgage holder and ask for consideration to sell the house for its current value and to take less for the payoff. This type of arrangement generally involves a good amount of paperwork and proof to the lender that there are extenuating circumstances.
The bank will request the following information from the homeowner applying for a short sale approval:
Approval from the lenders for short sales:
1. Hardship letter – the sadder the better – Death, lost jobs, sickness
2. Recent bank statements showing no income
3. Last 2 years tax returns or some kind of financial statement even from a CPA
4. Listing Agreements
5. Comparable Market Analysis for each property
6. Current pictures – if any have been vacant showing sign of distress is good too.
7. HUD statement from a title company for estimated closing costs
Much of this is accomplished by hiring a licensed Real Estate Professional. Someone who knows this type of transaction is best - but the opportunity is there to sell a home for less than it is currently mortgaged for.
If you would like to know what consequences are of doing a short sale and how it effects the seller's finances, please check back soon!
Have a great day!
Denise
Sunday, September 23, 2007
Condos, Townhomes and Lofts in Tampa Florida
Tampa Florida has been cited as one of the best places to invest in real estate. Right now the words "Real Estate" seem to raise fear and apprehension in the average person. The market has softened tremendously over the past two years, but the Tampa Florida market is about to take the trip back up at astonishing speed!
Financial Analyst Lawrence Yun, of the National Association of Realtors, has predicted that Tampa is prime for a 'V' market. It has dropped dramatically but we are poised for a very strong recovery, which has already begun. The Fed dropped interest rates by 1/2% this week - which means that buyers need to get moving! If you have been on the fence about buying, the time has come! If you see a few thousand adjustment down over the next three months, it would be a lot - you will be experiencing a minimum of 10% increase in property values in 2008 - at least this is what the experts predict!
I live in the Channelside District of Tampa Florida. The downtown condo/townhome market is the best investment in all of Tampa at this time! With communities like Grand Central at Kennedy, Ventana, The Place, Victory Lofts, the Towers at Channelside, and so much more, the buzz is to get in on it before you miss it! If you are considering a purchase in Tampa, please contact me and I will give you a tour of the city that has been my home for the past 20 years. I know Tampa, St. Petersburg and Clearwater and can help you find just what you want!
I have helped my buyers earn tremendous returns on their purchases with my keen sense of value and my extensive knowledge of real estate and the market. I look forward to hearing from you! You can reach me at www.EXITAlternative.com or you can call me direct at 813-267-5818.
Financial Analyst Lawrence Yun, of the National Association of Realtors, has predicted that Tampa is prime for a 'V' market. It has dropped dramatically but we are poised for a very strong recovery, which has already begun. The Fed dropped interest rates by 1/2% this week - which means that buyers need to get moving! If you have been on the fence about buying, the time has come! If you see a few thousand adjustment down over the next three months, it would be a lot - you will be experiencing a minimum of 10% increase in property values in 2008 - at least this is what the experts predict!
I live in the Channelside District of Tampa Florida. The downtown condo/townhome market is the best investment in all of Tampa at this time! With communities like Grand Central at Kennedy, Ventana, The Place, Victory Lofts, the Towers at Channelside, and so much more, the buzz is to get in on it before you miss it! If you are considering a purchase in Tampa, please contact me and I will give you a tour of the city that has been my home for the past 20 years. I know Tampa, St. Petersburg and Clearwater and can help you find just what you want!
I have helped my buyers earn tremendous returns on their purchases with my keen sense of value and my extensive knowledge of real estate and the market. I look forward to hearing from you! You can reach me at www.EXITAlternative.com or you can call me direct at 813-267-5818.
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