Florida Keys Real Estate Happenings

Top Ten Reasons to Buy Florida Keys Real Estate NOW!

2010-11-12T07:31:00.001-08:00

Top Ten Reasons to Buy Florida Keys Real Estate NOW!
When is the best time to buy real estate? When it is a buyer’s market, right? So, what are you waiting for? The Keys real estate market is a ripe opportunity for investing in real estate, buying your dream home, or buying your retirement home. Here are a few reasons why you should think about buying now!

1. Location! The Florida Keys have a wonderful, WARM desirable location. You’ve heard that old saying about how to select real estate…first and foremost is Location, Location, Location. What more could you wish for than island living and sunny days filled with great outdoor fun like excellent fishing, diving, snorkeling, kayaking, and its all right out your back door. Clear blue azure waters, warm year round climate, small local neighborhoods, low crime rates, and the laid back Keys Island life can be your reality!

2. Selection! For the first time in many years buyers have choices! The Florida Keys have an unusually large supply of inventory on the market, but it seems to have topped out. Excess inventory is what drives prices down, but just as importantly, it gives you plenty of choices. Just two years ago if you could find five homes in your price range, you were lucky, and the escalating prices shut out many eager buyers. Now you can select from several homes. Better selection equals a better purchase. Now that our inventory is beginning to shrink, it may signal that the bottom has already occurred or is very near. Buy now, before the seller’s market returns.

3. Prices are down. Our residential prices are down 40-50% percent from the high of 2005. This is unprecedented and represents a great buying opportunity. Opportunities like this don’t last long.

4. Interest rates are still near historical lows. Ask anyone in the business where interest rates are going to go over the next few years. Everyone believes that rates will go up. For every increase in interest rate, thousands of buyers are shut out of the market. Your dollars will go farther today than they will a year from now. Taking advantage of today’s rates is like buying your house at a discount. Financing guidelines are tightening on a daily basis. This is a sure sign that rate hikes are coming.

5. The baby boomers are retiring and guess where they want to go? They want to retire where it is warm! The Florida Keys offer that and much more. The laid back Keys lifestyle is a dream for most, with days filled with ocean adventures, kayaking, sailing, fishing, scuba diving, snorkeling, where you can kick back, relax, and enjoy that Florida sunshine!

6. Sellers are motivated to sell. Some homes have been on the market for over a year. They have reduced their price again, again, and again. Some are desperate and most are quite motivated. For the first time in many years, sellers are not insulted by low offers and are even offering out incentives to the buyers, such as paying for repairs or even closing costs.

7. Foreclosures and the Short Sale market is a once-in-a-lifetime opportunity. Since many speculators overextended themselves in 2005 our foreclosure and short sale rate has skyrocketed. If you are an investor, this represents a tremendous buying opportunity. Your strategy should be to buy at a discount, hold for a few years, and then sell for a big profit. Put a tenant in the property and allow them to pay down your mortgage for an even greater profit. If you are buying a home to live in, the advantage is even greater.

8. No Bidding Wars! Patience is tolerated and buyers can take their time selecting their dream home without worrying that someone will come in and snatch it right out from under their nose.

9. The Florida Keys real estate market is poised for a quick rebound. It is predicted that our market will experience what’s called a “V” recovery. It was quick to go down and it will be quick to recover. If you are the type of buyer waiting to find the bottom you have probably already missed it. Even if you believe the bottom is still to come, buying today locks in your discount during a historical opportunity, plus the added advantage of low interest rates. Waiting now may only mean paying more in the future.

10. Real financing is available. The "wink, wink" zero-down, no-doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first-time homeowner bond programs, and special loans for teachers or police officers are back in business.
The bottom line: It's a great time to buy real estate!

30 Year Mortgage Rates fall again- to 4.19%

2010-10-15T12:22:00.000-07:00

Mortgage rates hit decades-low 4.19%
Mortgage Rate Trend Index

WASHINGTON – Oct. 15, 2010 – Rates on 30-year mortgages fell this week to 4.19 percent, the lowest level in decades. They were pushed down by lower Treasury bond yields.

Investors are buying up Treasury bonds in anticipation of a move by the Federal Reserve designed to lower mortgage rates and yields on corporate debt.

As a result, the average rate for 30-year fixed loans dropped to the lowest level on records dating back to 1971, mortgage buyer Freddie Mac said Thursday. It’s down from 4.27 percent the previous week. The last time rates were this low was in the early 1950s.

The average rate on 15-year fixed loans fell to 3.62 percent, the lowest on records dating back to 1991, Freddie Mac said.

Rates have fallen since spring as investors shifted money into the safety of Treasury bonds. That demand lowers their yields, which mortgage rates tend to track. The 30-year rate was 5.08 percent at the beginning of April. The 15-year rate was 4.39 percent.

Low rates haven’t helped the struggling housing market, which recorded its worst summer in more than a decade. But they have led to a surge in refinancing.

And rates could fall even further in the coming week.

The Federal Reserve is leaning toward buying more Treasury bonds to drive down loan rates and boost the economy, according to minutes of closed-door deliberations released Tuesday. Economists predict Fed officials will approve a bond purchase program at their Nov. 2-3 meeting.

Two Fed officials in recent remarks have suggested the new purchases shouldn’t exceed $500 billion. That would be smaller than a $1.7 trillion program launched during the recession.

The program would likely push mortgage rates down – possibly lower than 4.0 percent on the 30-year fixed loan.

Some analysts say rates are more likely to hover above 4.0 percent, without breaking that threshold.

“A lot of the impact that you would expect from this program is already priced into the market,” said Mike Larson, real estate and interest rate analyst at Weiss Research. “If there’s any risk, it’s that what the Fed announces turns out to be a disappointment in some way. You might see rates go up a little bit.”

To calculate average mortgage rates, Freddie Mac collects rates from lenders around the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.47 percent, the same as the previous week. Rates on one-year adjustable-rate mortgages rose to an average of 3.43 percent from 3.4 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.8 a point for 30-year and 1-year mortgages. It averaged 0.7 of a point for 15-year and 0.6 of a point for 5-year mortgages.
Copyright © 2010 Associated Press. All rights reserved.

Home Affordability Index- Most affordable in 40 Years!

2010-10-14T05:06:00.000-07:00

Beacon Economics: Housing most affordable in more than 40 years
SAN FRANCISCO – Oct. 13, 2010 – Beacon Economics’ new Beacon Economics Home Affordability Index finds that in August homes were at their most affordable level since data became available (1969). Beacon Economics developed the Beacon Economics Home Affordability Index based on the percentage of income an average family would need in order to make mortgage payments on an average priced home.

The August estimate shows the cost of homeownership (mortgage interest plus principal payments after a 20 percent downpayment) falling to 16.9 percent from 17.1 percent in July. Overall, the Beacon Economics Home Affordability Index has remained below 20 percent for the past twenty-one months.

“Home affordability has reached an historic high,” says Beacon Economics Founding Principal Christopher Thornberg. “Nationwide, prices are down approximately 25 percent from their peak, and mortgage financing rates are at all-time lows.” Moreover, the high level of affordability is likely to drive demand and reduce the stock of excess inventory, ultimately resulting in the need for new housing, a rise in prices, and a pickup in new construction, according to Thornberg.

“While prices may fluctuate modestly over the next several months, we believe the worst of the housing crisis is behind us,” adds Beacon Economics Research Manager Jordan G. Levine. “We expect prices to stabilize around current levels and likely be higher in the next twelve months.”

Thornberg agrees. “Although there could be some modest volatility over the next several months, our research indicates the housing market is at or near the bottom,” he says.

The Beacon Economics Home Affordability Index is intended to help homebuyers and policymakers alike understand the current state of the market.

© 2010 Florida Realtors®

BUY Real Estate Now?

2010-10-07T05:47:00.000-07:00

“If you don’t own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one.”
– John Paulson 9/27/2010

WOW! That’s a powerful statement.

There is no question that John Paulson is a bull when it comes to residential real estate right now. Should we care what Mr. Paulson thinks? Should we listen to him? The answer to both questions is a resounding ‘YES’. Here are several reasons why.

Who is John Paulson?
Paulson is the person who made a fortune betting that the subprime mortgage mess would cause the real estate market to collapse. He understands how the housing market works and knows when to buy and when to sell. What do others think of Paulson?

According to Forbes John Paulson is:

a multibillionaire hedge fund operator and the investment genius who made a killing going short subprime mortgages a few years ago.

According to the Wall Street Journal Paulson is:

a hedge fund tycoon who made his name, and a fortune, betting against subprime mortgages when no one else even knew what they were.

What did other financial players think of his statement?
The Wall Street Journal agrees with Paulson:

Ignore the critics. The odds have to be on his side…It isn’t just that home prices have fallen a long way. It’s also that, if you can get a mortgage, you are basically taking a reverse bet on the bond market. You could be a long-term borrower at fixed rates, instead of a long-term lender. Right now you can borrow for 30 years at around 4.3%. After the mortgage tax deduction, for some people the net effective interest rate is nearer to 3%. That’s going to prove an awesome deal if we see inflation again.

And Forbes said:

As this is the best time in 50 years to buy homes, Paulson advised his listeners to take 30 year mortgages to buy a home as “your debt and interest payments get locked in at record lows, while the price of your home will rise.”

Are others also saying now is the time to buy?
Just last week, we posted that there is a growing number of people saying that NOW is the time to buy, including:

§ The Wall Street Journal

§ Professor Karl Case, founder of the Case Shiller House Pricing Index

§ The wealthiest families in the country and

§ 70% of everyone else in America

Bottom Line
Thinking of buying a home? Are you taking advice from a friend or family member telling you that now is not the time? It may be time to listen to people who better understand the opportunities that exist in real estate today.

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Judges revisiting foreclosure cases may help owners but clog market later

2010-10-05T14:07:00.000-07:00

Judges revisiting foreclosure cases may help owners but clog market
TAMPA, Fla. – Oct. 5, 2010 – On Florida’s west coast, where the housing bust has flooded courts with foreclosure filings, the chief judge of the 6th Judicial Circuit has little sympathy for lenders who have routinely submitted flawed and possibly fraudulent foreclosure cases.

J. Thomas McGrady, whose jurisdiction includes two hard-hit counties with more than 1 million people in the Tampa area, said Monday that foreclosures based on improper paperwork should be tossed out.

Judges “are going to have to vacate that judgment and start over again,” he said.

Across the country, judges facing pressure from homeowners and their attorneys are beginning to reexamine old cases and dismiss pending ones. The trend could lead to overturned evictions, and it could stall foreclosure cases for years and scare away buyers of millions of seized properties clogging the real estate market.

“We’ve never been inundated to this extent with this number of cases alleging fraudulent paperwork,” said Peter D. Blanc, chief judge of the 15th Judicial Circuit Court, in West Palm Beach. “We’re in new territory, and we’re struggling to determine what the proper solution is.”

Judges nationwide have broad latitude in deciding whether to accept new paperwork and whether to charge the lenders with fraud for submitting problematic documents in the first place.

Even before three of the nation’s largest lenders – Bank of America, J.P. Morgan Chase and Ally Financial – announced moratoriums on foreclosures in the 23 states that require a court order to evict a borrower from a home, some judges were beginning to push back against banks with sloppy or fraudulent filings.

The lenders have acknowledged that a handful of employees signing off on hundreds of thousands of files may not have read them, but they have insisted that the problem amounts to a technical issue that can be fixed easily by replacing old documents with new ones. They say that the facts proving that borrowers missed their payments are sound and that the procedural errors might delay foreclosures but won’t change the outcome.

As the situation in Florida shows, it’s unlikely to wind up so simple.

Armies of consumer attorneys and homeowners are seizing on the paperwork issues to try to protect individual homes from foreclosure and bring into question the legitimacy of the millions of foreclosures undertaken since the housing crisis began in 2007.

The recent moratoriums have made life easier for people such as Michael Gaier, a Philadelphia lawyer who has taken on 130 clients hoping to fight their foreclosures.

Before, he said, judges churning through foreclosure cases tended “to roll their eyes, because they’ve heard every story in the book,” he said. But now, “I don’t have to convince them on my own. I don’t have to start from scratch,” he said, because the moratoriums show that the banks “know that something is wrong.”

Gaier and other lawyers say they have been flooded with calls from new clients who had lost hope of keeping their homes but now see an opportunity to stay. In addition, homeowners who had been complaining of flawed or forged paperwork for years feel they are finally getting traction.

“My reaction is, it’s about time. In the past, people thought we were crazy; the judges laughed at us. Now everyone knows there is a serious problem,” said Denise McMillan, 51, who was evicted from her four-bedroom home in Pikesville, Md., in July and has been coordinating online with others fighting foreclosure.

The collective decisions of judges across the country could turn a foreclosure slowdown into a far larger mess if they determine that homes were wrongly seized and resold by lenders. Foreclosed homes accounted for nearly one-fourth of all residential sales in the second quarter, according to a report by RealtyTrac released last week.

That possibility already is driving away potential buyers of bank-owned properties who don’t want to get caught in legal battles between banks and borrowers. At least one company that provides title insurance, Old Republic Title, has refused to work on homes foreclosed by Ally’s GMAC mortgage unit.

Travis John, a broker in central Florida who specializes in distressed sales, said buyers in recent weeks have seen the headlines about problems in the foreclosure process and have shied away.

“If buyers continue to have this fear – if we have even 30 percent less sales – that would be traumatic,” he said. “We’re already in a traumatic market.”

Across Florida, which has the most foreclosure filings of any state, mortgage companies are already submitting formal requests to judges for the withdrawal of documents that they say were “not properly verified.”

Such actions show that the flawed paperwork is “a serious problem,” said veteran circuit court judge Lynn Tepper, who has presided over foreclosure cases in Pasco County, north of Tampa.

“They’ve conceded that the affidavit is flawed,” Tepper said. That means the judgment based on the affidavit must have been problematic as well – and that the decisions should be reversed.

Tepper sent a chill through law firms working for lenders this spring when she threw out a request for a foreclosure and ruled that U.S. Bank perpetrated fraud by submitting backdated documents that purported to show the lender owning the loan at the time of the foreclosure.

The homeowner, Ernest E. Harpster, got his home back despite the fact that he owed $190,000 on the loan. Tepper also ruled that U.S. Bank could not refile the case.

These days, Tepper is plodding slowly through the pending cases, looking closely at signatures and notarizations, making sure the names and numbers look accurate and legitimate.

“You have to be careful,” she said. “It used to be such a pro forma thing; it was a no-brainer. That’s surely not the case now.”

Copyright © 2010 washingtonpost.com

How Much Lower Can Mortgage Rates Go?

2010-09-30T13:03:00.000-07:00

Something to keep in mind as the resurrection of the real estate market kicks into gear- and hopefully sooner rather than later. This might be the time to buy and get in when you can get interest rates at their historic lows. Timing the mortgage rates may be a tough task. Here is a little information from Elizabeth Martinez in Miami to give you some food for thought. Log on to my website to see the latest foreclosure properties in the Keys at www.keystropicalproperties.com. Rhonda

How much lower can mortgage rates go?
Top News
Wednesday, 29 September 2010 17:52
By Elizabeth Martinez

Miami, FL- Just last week, reports from Freddie Mac's weekly survey showed that rates were averaging 4.37%. Rates on 30-year fixed-rate mortgages have dropped more than a percentage point since June 2009. With mortgage rates dropping like this, and the financial situation showing no improvement yet, many have started to wonder how low mortgage rates can really go.

Some analysts in the mortgage industry suggest that mortgage rates could keep going down in the direction of 0%. Rates will receive additional pressure as the Federal Reserve recently indicated that it is willing to take extraordinary steps to keep the economy growing.

"So long as the Fed allows the word 'deflation' to get bandied about, mortgage rates will ease lower," said Dan Green, a loan officer with Waterstone Mortgage in Cincinnati.
It is not unreasonable to say that mortgage rates could keep declining from their current level. Even two years ago when mortgage rates were much higher, very few would have believed that mortgage rates could get down as low as they are now. So, it is very likely due to the current situation that mortgage rates could continue moving down.

"In theory, the only stopping point is 0%—that's where all nominal interest rates have to stop," said Mike Larson, real-estate analyst for Weiss Research.

Larson said that a 0% mortgage could be compared to the 0% financing that has been in place for a long time in the auto industry. In addition, home builders also have been known to pay down mortgage rates for their clients. So, introducing lower rates than the ones we have right now wouldn’t be completely unheard of, at least for a period of time, explains Larson.

“But mortgages are different from car loans. Do I think we will see [0% mortgages] in our lifetimes? No, I don't," he said.

Furthermore, it is not very clear how a 0% mortgage could be funded. Jim Sahnger, a mortgage planner with Palm Beach Financial Network said that in essence, to fund a 0% mortgage, the investor would get a negative return—"unless there were significant fees on the front to compensate for costs to originate, deliver, default, etc."
Although unlikely, if rates do fall to or near 0%, this could bring more first-time home buyers to seek out extremely favorable financing for a house, Mr. Sahnger said. If you get more buyers in the mix, the demand for homes could kick up, thus helping home prices rise, he said.

Assuming that the 0% scenario is possible, the issue will come up with the eligibility for this type of mortgage rates. Eligibility would become an issue as the number of homeowners who are underwater on their mortgages has increased greatly. In addition, borrowers need income and a good credit score to be eligible for a mortgage. Recent studies from Zillow Mortgage Marketplace found that nearly one-third of Americans are unlikely to qualify for a mortgage due to their low credit score. Furthermore, only 47% of Americans qualify for the best rates (these are borrowers with credit scores of 720 or higher).

Because of the difficulty eligibility just mentioned, without the help of a government program, many of those homeowners are not able to refinance.

"We are in an era of historically low mortgage rates, reaching levels not seen in decades. Coupled with four years of home-value declines, homes are more affordable than we've seen for years," said Stan Humphries, Zillow's chief economist. "But the irony here is that so many Americans can't qualify for these low rates, or can't qualify for a mortgage at all."

Home Prices Might Rise Sooner than you think!

2010-09-29T10:03:00.000-07:00

I found this on the web and thought it was interesting enough to add to my blog about prices for home sales in the next few years....

Why Home Prices Might Rise Sooner That You Think
Published on Friday, September 17, 2010, 2:50 PM Last Update: 5 day(s) ago by James Crumbaugh III

I have been arguing that home prices will come back faster and stronger than anyone thinks. I have been making the case for this idea for some time now. I know most everyone thinks I’m out of my mind, including a close friend in the business who we had dinner with the other night.

I’ve been making this argument because I see a serious inventory situation shaping up in this country, and when there is no inventory to buy, prices skyrocket.

I’ve heard every argument - why I’m a fool, a moron, an idiot, my crystal ball has holes in it, and it’s Bush’s fault.

However, with all that said, let me give you another part of my argument of why I see the home values returning faster than anyone imagined – if we ever get Washington in order again and if we get our economy righted.

Today, I read an article that I have read dozens of variations of over the last three years. The article discussed how many homeowners are under water on their mortgages. We are talking about 4.1 million homeowners who are underwater. These are homeowners, for the most part, who aren’t in foreclosure and are making every effort to stay in their homes, with the plan of not moving, and knowing that someday they will have their mortgages paid off.

This is another reason I see the values returning. The sellers can’t sell these homes because they aren’t at this time worth what a homeowner would have to sell for to pay off their mortgage and have enough left over to buy another home. As a result this adds to the inventory shortage.

Also today, I read an article which stated that August 2010 had the highest number of home foreclosures ever in a given month. However, the banks are going to release these homes to the market slowly for the same reason I’ve been discussing. They know that an inventory shortage will cause home values to rise. The banks want to also see an inventory shortage knowing what I know. Prices will rise. This also adds to the inventory shortage.

I read another article today about a community in Southern California where the inventory is between 2 months and 3 months. And Surprise-Surprise, they saw homes values rise 11.4 % this year.

I guarantee you; I did not fall and hit my head. I’m not smoking anything funny, and I’m not blaming President Bush.

This economy will turn around. We will fix Washington, or vote all the bums out, and when we do turn this economy around, I would not be surprised if we weren’t down to a 2 or 3 month inventory in every desirable location in this country.

Only time will tell if I’m the biggest crack pot in this industry. So I ask you to watch this industry for the next two years. If we start seeing a 5% growth rate in this country, if we start getting the country’s debt under control, or at least not add any new debt, we will see the confidence factor for our country go up. When that happens, we will see people buying homes and second homes again, and when that happens we will see the inventory shortage become the next hot story, which in turn will create a demand. In our company, close to 50% of all buyer controlled sales are being bought with cash.

All of this portends a good time for our industry in the not-so-distant future.

Please don’t shoot the messenger.

James A. Crumbaugh III is CEO of Allison James Estates and Homes, a National Internet Based Real Estate Brokerage. You may reach Mr. Crumbaugh at jcrumbaugh@allisonjames.net

HURRY, Higher Loan Limits expire soon for Luxury Home Financing

2010-09-27T12:16:00.000-07:00

Higher conforming loan limits due to expire
WASHINGTON – Sept. 27, 2010 – Unless Congress intervenes, the maximum loan amount the Federal Housing Administration will back, as well as loans backed by Fannie Mae and Freddie Mac, will return to $417,000 in most areas and $625,500 in high-cost areas. The higher loan limits are due to expire Dec. 31, 2010.

Over the last two years, the government raised the limits in some high-cost areas to $729,750.

If Congress doesn’t extend higher limits, home prices would “drop precipitously” because it would be “impossible to finance homes in most parts of Los Angeles and certain other major cities,” said Rep. Brad Sherman, a California Democrat and member of the House Financial Services Committee.

But many economists support the end to higher limits. “We need to think how we are going to exit from a Fannie-and-Freddie world, and this is a very small step toward that exit,” said Richard K. Green, director of the University of Southern California’s Lusk Center for Real Estate. “Dialing it back to $625,500 is a perfectly reasonable thing to do.”

Source: The Wall Street Journal, Nick Timiraos (09/23/2010)

© Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688

Home Construction about to take off!

2010-09-24T10:37:00.000-07:00

MIT prof: Housing demand about to take off
William C. Wheaton, professor of economics at Massachusetts Institute of Technology, argues that the housing market is due for improvement, calling home construction, “a sleeping giant that is about to wake up.”

Wheaton believes because there has been so little construction that demand exceeds the level of building and it will soon absorb excess inventory.

“Housing construction will not only rise, but it will stay high for a while, which didn’t happen in previous recoveries,” Wheaton predicts.

Source: Fortune, Nin-Hai Tseng (09/17/2010)

© Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688

Rent or Own; What are the advantages to home ownership?

2010-09-23T06:14:00.000-07:00

I found this article online at www.HomeKeys.com about the advantages to homeownership as opposed to renting, so I thought I would share it with you today...

7 Reasons to Own Your Home!

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.

2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.

6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Online resources: www.homekeys.com

Luxury Home Purchases Soar

2010-09-21T08:42:00.000-07:00

Hi again, everyone! Well, the news is out that we are supposedly out of the "Recession"- the worst one since the Great Depression! I don't know about you, but it sure doesn't feel like it- at least not yet. Yesterday I included a blog on the potential flooding of the market with bank owned properties or foreclosures. If you read yesterday's blog you would know that this release of the so-called shadow inventory that we have been worrying about for at least a year has never happended. Today I received this artical regarding the Luxury Homes Sales that I think is pertinent so I thought I would include in today's information.
Luxury Home Purchases Soar:
The real estate market has been going through some challenging times this year. The National Realtors Association’s (NAR) last Existing Homes Sales Report showed that sales were down 25.5% from the same time last year. Media headlines screamed that the housing market was screeching to a halt the following day.

There is a segment of the market that is actually flourishing however: luxury homes.

According to NAR’s 2Q Report on Home Sales Statistics, every price ban under $1 million showed a decrease. Here are the numbers:

§ Homes less than $100,000: sales down 17.1%

§ Homes $100 -$250,000: sales down 35.3%

§ Homes $250 – $500,000: sales down 27.9%

§ Homes $500 – $750,000: sales down 12.8%

§ Homes $750,000 – $1 million: sales down 6.7%

At the same time, the sales of homes over a million dollars are UP 6.1%. Many people were shocked that the upper-end market is beginning to recover. It seems that this trend will continue as we move forward.

Unity Marketing, a market research firm specializing in the luxury consumer, just completed their study, Home Is Where the Style Is, which showed that the luxury home buyer has plans to re-enter the market in a big way. When asked if they plan to purchase a home in the next twelve months:

§ 11% responded that they would build a new primary residence (up from 3% in 2008)

§ 11% responded they would buy a new primary residence (up from 6% in 2008) and

§ 11% responded they would buy a second/vacation home (up from 2% in 2008)

Why this sudden resurgence in upper-end purchases?
We think there are three major reasons:

1. The affluent were less impacted by the economy.

An article in the Wall Street Journal reported the number of millionaires is soaring:

“… the number of American households with investible assets of $1 million or more rose 8% in the 12 months ended in June … There now are 5.55 million U.S. households with investible assets of $1 million or more.”

2. The wealthy understand investment cycles.

There is no doubt that the wealthy will have a better feel as to when the market will return. They are more accustomed to the up/down movements in the cycle of any investment. They are seeing value in today’s real estate and acting on what they perceive as an opportunity.

2. Mortgage rates for luxury properties are at historic lows.

Jumbo interest rates have fallen a full percentage point in the last year (from approximately 6% to 5%). The difference in a $1,000,000 mortgage payment from last year to now is $3,216.40/month. The annual savings of over $38,000 may be too good to pass up.

Bottom Line
With property choice almost unlimited, values at pre-bubble prices and interest rates at historic lows, it might make sense to buy the home or vacation spot your family always dreamed of. It appears the wealthy are doing just that.

Bank Foreclosures- what ever happened to the shadow inventory?

2010-09-20T10:33:00.000-07:00

Hi Everyone, For over a year now, realtors have been waiting and worrying about the release of a huge amount of foreclosed properties into the market. Many realtors, sellers, and buyers have feared there were going to be so many that it would hurt the already depressed prices. Where is this shadow inventory? Here is a report that tells a little about what has happened with all of these bank owned properties...

WASHINGTON – Sept. 20, 2010 – For the last year, the real estate industry has been talking about shadow inventory and the coming flood of distressed properties. Where are they?

Here’s what’s happening, according to a recent paper by Alan Mallach, a senior fellow the Brookings Institution:

• Some delinquencies have been resolved through loan modifications or people working out the problems on their own.

• Banks are getting better at managing short sales.

• Investors are aggressively buying up properties, sometimes in bulk, directly from the banks or at courthouse auctions so they don’t hit the market.

The likeliest outcome, Mallach predicts, is a steady flow of foreclosures over a long timeframe that will prevent another crash in home prices – but it will probably lead to low or no appreciation in home prices for a while.

Source: The Wall Street Journal, Nick Timiaros (09/16/2010)

© Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688

Very Low Risk for BP Oil Spill to affect the Keys!

2010-08-04T07:36:00.000-07:00

News and Information From the Monroe County Tourist Development Council

Oil Response Chief: Risk Now ‘Very, Very Low’ for Oil to Travel to Keys Via Loop Current;
Risk ‘Will Go to Zero Once Well is Killed’
The head of the U.S. Government's response effort to mitigate the Transocean/BP oil spill said that with the oil leak capped there is now little chance of oil remnants reaching the Florida Keys and the South Florida mainland.

And when the well is permanently sealed there will no longer be any danger of oil impacts to the region, said retired U.S. Coast Guard Admiral Thad Allen during a news briefing in New Orleans Thursday.

Allen responded to South Florida “Sun Sentinel” reporter David Fleshler’s questions regarding future threats to the Keys and South Florida:

“Once the well is killed we will have secured the source of oil in relation to the (Transocean/BP) Macando well,” Allen said. “For the past several months there has been an eddy (Eddy Franklin) that has broken off from the Loop Current between the wellhead and where the current comes north and turns towards the Straits of Florida.

“So (that) eddy has created a hydraulic barrier between the wellhead and the Loop Current, and the chances that oil will become entrained in the Loop Current are very, very low and will go to zero as we continue to control the leakage at the well with the cap and ultimately kill it,” he said.

Allen said that even with all the oil that gushed between April 20 and July 15, he does not expect significant oil remnants to reach the Keys or South Florida.

“The recent storm, tropical depression Bonnie, drove most of the oil to the northwest,” he said. “This is all moving in the opposite direction where oil would need to be to enter the Loop Current.”

Allen’s comments are being carried in a Quicktime video file on the Florida Keys website at http://www.fla-keys.com/news/news.cfm?sid=7845 or via links off the website’s home page at http://www.fla-keys.com.

###

Spill-related websites, primarily focusing on affected areas, include:

http://www.restorethegulf.gov • http://www.noaa.gov

TDC website with spill-related information for Keys visitors: http://www.fla-keys.com/oilspill

Options for Homeowners on Mortgage Help- Fannie Mae

2010-08-04T06:49:00.000-07:00

Fannie Mae unveils consumer website for borrowers
WASHINGTON – Aug. 3, 2010 – Mortgage company Fannie Mae is introducing a website to help consumers who are struggling to avoid foreclosure learn about ways to get help.

The government-controlled company on Tuesday launched http://www.knowyouroptions.com. It is designed to provide easy-to-understand definitions of mortgage industry terms and online calculators that help consumers determine whether they can qualify for a refinanced mortgage or a loan modification.

The site also describes options such as a short sale, in which the lender agrees to accept less than the total mortgage amount.

Fannie Mae executives say navigating the default and foreclosure process is often stressful and confusing for borrowers.

“We worry about the risks that borrowers will just give up and go to foreclosure,” said Jeff Hayward, a Fannie Mae senior vice president. “We don’t think that’s the right thing.”

Both Washington-based Fannie Mae and sibling company Freddie Mac have been upended by defaults and foreclosures as the housing bust has dragged on. The two companies have needed $145 billion to stay afloat since they were seized by the government in September 2008.
Copyright © 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The Oil Spill and The Florida Keys

2010-05-14T08:57:00.000-07:00

KEYS TOURISM ADVISORY 9 May 13, 2010 • 1:15 PM EDT
News and Information From the Monroe County Tourist Development Council

Revised Q&A Regarding the Florida Keys and the Gulf Oil Spill
In light of new information regarding the Transocean/BP (British Petroleum) oil spill and its relationship to the Florida Keys, the Monroe County Tourist Development Council has updated the Question and Answer document originally transmitted May 4. This should be helpful in the event your staff must field questions from current or potential visitors. It is also published on the Florida Keys website in a special oil spill-related section. Since May 3, that section has received close to 20,000 views, so it is obvious travel consumers are seeking information related to the issue.
I heard that the Keys are in imminent danger of being affected by the oil spill.
The Keys currently are not being threatened by the oil spill and currently the spill is 475 miles away from the Keys. The oil from the spill is positioned in the northern Gulf of Mexico, away from the Loop Current, according to National Oceanic and Atmospheric Administration (NOAA) trajectory analysis. If oil got into the Loop Current, it would require 10 to 14 days for it to migrate into the Keys region. Even then, it is unclear whether the oil would actually impact Keys regions or bypass the area and remain either in the Loop Current or the Gulf Stream (see explanation of Loop Current below).
What is the Loop Current?
The Gulf Loop Current is a clockwise current that carries water from the Yucatan Channel north into the Gulf of Mexico, then back down south off the Florida west coast, past the Dry Tortugas and into the Gulf Stream. In this incident the current plays a crucial role because of concerns that if oil gets into the Loop Current, it could be swept to the south, possibly into or around the Keys and possibly carried by the Gulf Stream to other areas of Florida and the U.S. East Coast.
How can oil get into the Loop Current?
It’s based primarily on wind direction in the northern Gulf of Mexico. A strong wind from the north could push oil toward the Loop Current. Winds from the southern half of the compass help to keep oil away from the Loop Current.
I understand that if oil gets into the Loop Current it will definitely hit the Keys and the impacts will be devastating.
NOAA is still studying potential impacts, but more information is coming to light that the kind of impacts the Keys might experience would likely be different than what is transpiring in the northern Gulf of Mexico. Most oil spill experts say any oil carried by the Loop Current would be more dispersed and “weathered” by the time it gets to the Keys, which is some 475 miles from the spill site. That means it would be highly unlikely that large “rivers” of oil would impact the Keys. More likely, experts said, the impacts would be in the form of tar balls. While arrival of oil in any form is unacceptable, it seems those impacts would be less harmful to the environment and likely easier to mitigate. It is also possible that one area of the Keys could be affected and others not, or that oil could remain in the Loop Current and Gulf Stream and completely miss the Keys.
Can you guarantee me the oil will not make its way into the Keys during my vacation?
Nobody can make a long-term guarantee that residue from the Gulf Coast oil spill will or will not
be in the Keys. But what is known is that NOAA forecasts oil slick trajectory movements within a 72- hour timeframe. As long as the oil is north of the Loop Current, it is not likely to affect the Keys. If it does get into the Loop Current, new studies now show it will take about 10 to 14 days for any oil impacts to migrate down to the Dry Tortugas region (situated about 70 miles west of Key West) before possibly exiting into the Gulf Stream. When making reservations for accommodations and water-related activities, it may be prudent to discuss in advance any cancellation and refund policies in the event oil residues impact the immediate area of activity.
I hear authorities have shut down fishing in the Keys.
That is not true. Earlier, NOAA issued an order restricting fishing in federal waters affected by the oil spill. That area is from Louisiana state waters at the mouth of the Mississippi River to waters off Florida’s Pensacola Bay. No other areas of Florida, including the Keys, are under the order at this time. It also means that Keys-caught seafood has not been affected and is safe to consume.
Is it safe to dive, swim and participate in other water sports in the Keys?
There are no advisories in the Keys currently in effect due to the Gulf oil spill. The Monroe County Health Department is monitoring the situation and would issue an advisory in the event of any healthrelated risk.
I’m apprehensive about traveling to the Keys because I don’t want to lose money if oil comes and ruins my vacation.
Each property has its own cancellation policy. It is prudent to check with the hotel as well as any other travel-related operator in advance to determine cancellation policies and if management will offer refunds or credits in the event oil adversely affects Keys waters.
I hear much of Florida is under a state of emergency.
Nineteen of the state’s 67 counties are under a state of emergency, even though no impacts have been seen in Florida as of Thursday, May 13. The Keys are in Monroe County and a state of emergency has not been declared for Monroe. Many times a state of emergency is designated as a standard
prerequisite to qualify an area for emergency federal funds, before a disaster actually impacts the region.
What happens if oil does affect the Keys?
The U.S. Coast Guard is the lead government agency responsible for oversight of any necessary
cleanup and remediation activities. The Coast Guard works in conjunction with other local, state and federal authorities to enact a 725-page area contingency plan that includes oil spill response actions. Some of the other agencies include NOAA’s Florida Keys National Marine Sanctuary, Florida’s Department of Environmental Protection, Monroe County Emergency Management and other public agencies, as well as area individuals and organizations. All efforts possible would be made to protect the marine environment in the Keys. The agencies have a unified plan in place to address oil spills caused by vessel groundings and have conducted several drills to prepare for such an incident. Since the BP spill began, agencies have met several times to adapt the plan for this unique incident. BP must pay for all response activities.
When will this be over?
Officials don’t know for sure. The outcome and timing depend on when the actual leaks at the well site can be plugged or effectively contained and how effective current mitigation efforts are work in containing the oil already in the northern Gulf of Mexico.
Where can I get more information on the oil spill?
The Keys tourism council is posting information — including official NOAA oil slick trajectory maps — on its website at www.fla-keys.com as well as on Twitter and Facebook.
http://twitter.com/thefloridakeys • http://www.facebook.com/floridakeysandkeywest
Spill-related websites, primarily focusing on affected areas, include:
http://www.deepwaterhorizonresponse.com • http://www.noaa.gov

Waterfront Foreclosure homes in the Florida Keys

2009-08-05T15:27:00.000-07:00

Click on the link below to get the most recent waterfront homes in the Florida Keys that are now bank owned (already foreclosed!)
Follow this link to see the page:

Click to view listing(s)

This link is valid until 9/4/2009.
Please call me with any questions on these or any other properties and don't forget that you can go to my website at www.keystropicalproperties.com anytime and click on the foreclosure button and see the most recent list available!

Downstairs Enclosure Dilemma in the Florida Keys

2009-08-05T15:06:00.000-07:00

Hi Everyone- This article was published in the Miami Herald last week regarding the fight to save the downstairs enclosures that are found throughout the Florida Keys. Please read on....

Florida Keys try to save downstairs rooms in stilt homes
Jul 27, 2009 — The Miami Herald

Cammy Clark

Jul. 27, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Debra and Rory Brown were applying in 2006 for an elevator permit to help their newly paralyzed son get around the Cudjoe Key stilt home they bought three years earlier when they made an upsetting discovery: Their downstairs enclosure is illegal.

And they're not alone in the low-lying Florida Keys. As many as 8,000 downstairs enclosures -- from single rooms to complete rental apartments -- have been built illegally under stilt homes since 1974.

That was the year Monroe County agreed to strict federal regulations that ban most residential below-flood-level construction to join the National Flood Insurance Program.

Some enclosures were constructed on the sly. But many had the county's blessing, with building permits and tax bills. All are jeopardizing the island chain's subsidized flood insurance.

To correct the 30-year mess that the county helped create, the County Commission this month unanimously agreed to send the Federal Emergency Management Agency a limited amnesty proposal they think can save most downstairs enclosures. FEMA runs the flood insurance program.

"We don't want this headache to keep being passed on," Monroe County Mayor George Neugent said. "Let's bite the bullet and provide a long-term solution."

AMNESTY PROPOSAL

The new proposal would award amnesty for all downstairs enclosures built before the inspections began on March 14, 2002. Nobody knows how many homeowners would qualify.

To get amnesty, homeowners would have to obtain an annual, special-use permit. It would include a fee for a debris cleanup fund, which would be tapped if flood waters destroyed the ground-level enclosure. Any future sale of a home in unincorporated Monroe County would be required to be inspected.

But the proposal does not help homeowners who rent their downstairs enclosures. FEMA regulations never have allowed such enclosures to serve as rentals, a common practice in the Keys.

Attorney Richard Bennett -- who represented a group of Keys' homeowners called "Keep Our Downstairs Enclosures" that failed to resolve the issue in the 1980s -- called the commission's new proposal "brilliant" and "our last, best hope."

FEMA is considering it. FEMA spokeswoman Mary Hudek said officials at the Atlanta regional office discussed the draft proposal Tuesday in a conference call with headquarters in Washington.

The proposal, however, has opposition. Citizens Not Serfs, a group campaigning for less regulation, says that the county should determine whether the pilot inspection program has worked -- it's slated to run through 2011 -- before proposing anything new.

"Other coastal communities don't have mandatory downstairs enclosure inspections," said Citizens Not Serfs founder Phil Shannon. "Why does Monroe County have to have a unique, one-of-a-kind program?"

FEMA officials, who battled Monroe for decades over the issue, argue that building anything beneath a stilted home only brings problems when storms hit.

"After Hurricane Ike, at the south end of Galveston, the one house that was elevated and built in a strong way was the house that was left," said Hudek. "That's the picture we like to see."

Commissioner Mario de Gennaro said he wants to move fast on getting approval for the amnesty proposal to prevent any future demolitions and get people to use licensed contractors.

But such relief could come too late for some, such as Joe Stazzone. This month, the county ordered him to remove the two-bedroom, one-bath downstairs enclosure of his oceanfront home on Duck Key by Aug. 20. "I don't know what I'm going to do," he said.

LEGAL BATTLE

Stazzone bought the three-bedroom, two-bath house a decade ago as a vacation home. He said he has spent $15,000 in legal fees to try to keep the downstairs rooms that were built in the mid 1970s, long before he bought the house.

Those who rent their ground-level rooms are in a similar bind.

Bob Haupt, who bought his house 13 years ago with the rental unit and tenant in place, said he is being forced to kick out the now 30-year tenant and probably sell his dream home in Islamorada because of the loss of income. "We were deceived when we bought this place," Haupt said.

U.S. Rep. Ileana Ros-Lehtinen, a Republican whose district includes the Keys, sides with homeowners. "Amidst a national housing crisis, FEMA is taking unjust retroactive enforcement measures against Keys properties," she said.

But because mortgages are tied to having flood insurance, the county can't risk losing the program, said County Commissioner Kim Wiggington.

As of 2008, 20,026 flood insurance policies were in force in unincorporated Monroe County, providing $4 billion in coverage, according to the county.

Flood insurance covered little of the damage to the Browns' downstairs enclosure on Cudjoe Key after the storm surge from Hurricane Wilma in 2005, Rory Brown said.

"We'll take the risk," he said. "All we want is for our son to have a home that is accessible to him. He deserves his independence."

Copyright 2008. All rights reserved.

Great Time To Buy in the Florida Keys!

2008-02-28T10:55:00.000-08:00

Hello Everyone,
I have read over several great reasons to buy real estate in various places throughout our country that have been posted online and decided to create my own for the Florida Keys. After reading it over, I have myself talked into buying and am pursuing purchasing more property on my own! Like my Guru told me, it is during times like this that many millionaires are made! Seriously folks, with the cold, cold winter up north and the lack of hurricanes over the past few years in the Florida Keys, we are having a great start to 2008. I hope you don't wait too long and miss the boat. Interest rates are great and there are lots of properties to choose from, so jump in and see what fits in your price range. Sellers are motivated and offering out many buyer incentives. So read on to...
Top Ten Reasons to Buy Florida Keys Real Estate
When is the best time to buy real estate? When it is a buyer’s market, right? So, what are you waiting for? The Keys real estate market is a ripe opportunity for investing in real estate, buying your dream home, or buying your retirement home. Here are a few reasons why you should think about buying now!

1. Location! The Florida Keys have a wonderful, WARM desirable location. You’ve heard that old saying about how to select real estate…first and foremost is Location, Location, Location. What more could you wish for than island living and sunny days filled with great outdoor fun like excellent fishing, diving, snorkeling, kayaking, and its right out your back door. Clear blue azure waters, warm year round climate, small local neighborhoods, low crime rates, and the laid back Keys Island life can be your reality!

2. Selection! For the first time in many years buyers have choices! The Florida Keys have an unusually large supply of inventory on the market, but it seems to have topped out. Excess inventory is what drives prices down, but just as importantly, it gives you plenty of choices. Just two years ago if you could find five homes in your price range, you were lucky, and the escalating prices shut out many eager buyers. Now you can select from several homes. Better selection equals a better purchase. Now that our inventory is beginning to shrink, it may signal that the bottom has already occurred or is very near. Buy now, before the seller’s market returns.3. Prices are down. Our residential prices are down over 20 percent from the high of 2005. This is unprecedented and represents a great buying opportunity. Opportunities like this don’t last long.

4. Interest rates are still near historical lows. Ask anyone in the business where interest rates are going to go over the next few years. Everyone believes that rates will go up. For every increase in interest rate, thousands of buyers are shut out of the market. Your dollars will go farther today than they will a year from now. Taking advantage of today’s rates is like buying your house at a discount. Financing guidelines are tightening on a daily basis. This is a sure sign that rate hikes are coming.5. The baby boomers are retiring and guess where they want to go? They want to retire where it is warm! The Florida Keys offer that and much more. The laid back Keys lifestyle is a dream for most, with days filled with ocean adventures, kayaking, sailing, fishing, scuba diving, snorkeling, where you can kick back, relax, and enjoy that Florida sunshine!

6. Sellers are motivated to sell. Some homes have been on the market for over a year. They have reduced their price again, again, and again. Some are desperate and most are quite motivated. For the first time in many years, sellers are not insulted by low offers and are even offering out incentives to the buyers, such as paying for repairs or even closing costs.

7. Foreclosures and the Short Sale market is a once-in-a-lifetime opportunity. Since many speculators overextended themselves in 2005 our foreclosure and short sale rate has skyrocketed. If you are an investor, this represents a tremendous buying opportunity. Your strategy should be to buy at a discount, hold for a few years, and then sell for a big profit. Put a tenant in the property and allow them to pay down your mortgage for an even greater profit. If you are buying a home to live in, the advantage is even greater.

8. No Bidding Wars! Patience is tolerated and buyers can take their time selecting their dream home without worrying that someone will come in and snatch it right out from under their nose.

9. The Florida Keys real estate market is poised for a quick rebound. It is predicted that our market will experience what’s called a “V” recovery. It was quick to go down and it will be quick to recover. If you are the type of buyer waiting to find the bottom you have probably already missed it. Even if you believe the bottom is still to come, buying today locks in your discount during a historical opportunity, plus the added advantage of low interest rates. Waiting now may only mean paying more in the future.

10. Real financing is available. The "wink, wink" zero-down, no-doc, adjustable, sub-prime loans are gone. Fixed rates are back. FHA financing, first-time homeowner bond programs, and special loans for teachers or police officers are back in business.

The bottom line: It's a great time to buy real estate!

Avoiding Foreclosure

2007-11-25T06:52:00.000-08:00

In trouble with your mortgage payments?
Many markets are seeing a rise in delinquencies and foreclosures. If you’ve missed payments on your mortgage or are worried about future payments, it’s easy to feel like you’re all on your own. With your house on the line, you may be tempted to hide and merely hope for the best. However, if you face problems quickly and directly you’re much more likely to avoid foreclosure.
It’s important to remember that foreclosure is also an undesirable endgame for lenders. Many mortgage companies would rather attempt to work with a delinquent borrower before resorting to the expense and hassle of foreclosure.
Identify the Timeframe of Your Financial Issues
Generally speaking, mortgage service companies provide one set of solutions for borrowers who have short term troubles and another set for those whose problems are more long term. Before you begin negotiating with the mortgage company, you should know which category your situation falls into.
For example, if you’ve been recently confronted by a costly auto repair, you may be in a crunch trying to meet a mortgage payment or two. Because the repair bill is a one-time expense, the mortgage issue is short term.
On the other hand, a change in employment or earning ability can be a longer-term problem, especially if your financial outlook is unknown.
Respond to Contact
Ignoring a problem rarely makes it go away. Unfortunately, in far too many cases borrowers fail to respond to their mortgage service company (the firm that collects payments and sends notices when payments have not been received). The first step in showing good faith is responding to the calls or letters regarding your delinquency. Many service companies have a foreclosure prevention department that is trained to empathize with troubled borrowers. So make initial contact, but be careful not to agree to any new terms hastily.
Get Outside Assistance
The mortgage company may offer up several different solutions initially, but the last thing you want to do is to agree to something new that may put you into even more of a bind down the road. Before agreeing to any new terms, you should describe your situation to an outside expert. Seek outside help in the form of a real estate attorney, credit counselor or a housing counseling agency.
Document, Document, Document
The most caring mortgage lender in the world still sees things largely in black and white, so it’s important to gather as much information as possible. Begin by collecting all correspondence from the mortgage service company. Keep envelopes when possible, as sometimes the postmark of critical notices can affect a borrower’s eligibility for relief.
Document Income – Collect as much documentation displaying your income as possible. Lenders typically want to see at least one month of income, but get together as many consecutive recent pay stubs as possible. Find your last two to three tax returns and W2 forms. Also include three to six months of bank statements.
Document Expenses – Assemble all bills, paid or unpaid, from the time you began to fall behind in payments until now. Include utilities, credit card bills and auto payments. It’s particularly important to show any of the reasons that you may have fallen behind in the first place (such as unexpected repair or medical bills).
The documents will likely help tell the story of why you fell behind on your mortgage payments. Now it’s up to you to fill in the blanks with the human element. Write down all of the circumstances that lead to your current situation, and you’ll be better prepared to explain yourself to the powers that be.
Possible Solutions
Depending on the number of payments missed, the size of the loan and the financial outlook of the borrower, the mortgage company has a variety of potential solutions that it may offer.
Repayment Plans – If you haven’t missed many payments, the mortgage provider may work with you to form a repayment plan that allows you to pay off the past due amount bit by bit (in addition to your regular mortgage payments).
Reinstatement – Should you be experiencing a temporary shortfall of cash, your lender may provide an extended period of time to pay of the past due amount. In most cases you will still be responsible for any late fees or penalties you’ve already incurred.
Forbearance – If you need temporary relief, the lender may offer a forbearance plan. A forbearance plan suspends or reduces your payments for a set period of time, with the unpaid to be paid later in either pieces or one lump sum.
Loan Modification – Longer term financial problems that affect overall income are sometimes solved by loan modification. Any term of a mortgage may be modified by a lender: the rate, the payoff date, and even the total amount owed. A lender may modify the terms of the mortgage if you cannot make payments under the current agreement, but the lender is reasonably sure that you will be able to consistently make future payments under new terms. Modifications are extreme measures and are used sparingly, but are an option for lenders who conclude that foreclosure would be more costly.
Be Relentless, but Realistic
Most mortgage service companies are essentially divided into two branches. The first tier is the collections department, whose job is to track down delinquent borrowers and recover back payments. The second division is the foreclosure prevention department (sometimes called loss mitigation, delinquency customer service or loan resolution). This second tier is responsible for making the tough decisions.
Getting past the collections agents and to the loss mitigation department is critical. The help of an attorney can be crucial in gaining you such access. When you do get through to a loss mitigation agent, tell your story and answer all questions about your income and expenses, and request an application for forbearance or modification.
While the hope is that the lender will offer mitigation, you should be prepared for the worst case scenario: that you will have to move out. However, if the lender does over loan resolution, they likely will push you to make a quick decision. Instead take time to consider it with an advisor before agreeing to anything.
Reprinted from Re/Max MonthlyNewsletter, November 2007 Issue

Short Sales-What's it all about?

2007-10-12T14:03:00.000-07:00

The real estate market is all "abuzz" about Short Sales. What exactly is this?

In these troubled real estate times with decreasing property values, an ever increasing supply of inventory, and the mortgage market problems, many sellers are faced with tough choices. They can't sell their house or make their mortgage payment and the value of their home has decreased to the point where they owe more than its worth. One answer may be using the Short Sale. This is a alternative method of disposing of your home or property without having the lender foreclose on you. It is an arrangement made with your lender where they will allow you to sell your property for less than the amount of the current mortgage, and (hopefully) forgive the difference.

A Short Sale should be considered only if the other final alternative is foreclosure. It can be a detailed, lengthy, but fairly straightforward process that can work to benefit all parties involved- Buyer, Seller, and even the Lender. The Buyer gets a good price on the property, the Seller gets to avoid foreclosure and the complete destruction of their credit, and the Lender avoids the delay and considerable expense of foreclosing a home they really don't want to own, plus impact their ability to make future loans.

Typically, it is easier to qualify for a short sale IF: the market value of your home has decreased to the point where you are "upside down"; in other words, if you owe more than the current value, AND you have suffered some type of hardship; for example a divorce, loss of a job, health issues, significant pay cuts, or loss of retirement benefits due to restructuring, AND you no longer have any significant assets to bail you out.

Not all lenders will allow a short sale. Their decision depends on a number of factors: location of the property, the loss involved to the Lender, the possibility that a speculator/investor will pay more at a foreclosure sale, a BPO (Broker's Price Opinion) and of course, the seller/owner's particular situation.

The first step is to determine if your situation will qualify as a short sale. You should contact your financial (CPA) and legal advisors first to determine the potential risks. Contact the Lender after you fully understand the risks involved, including potential mortgage fraud. Make absolutely certain that even if the Lender approves a short sale, you will not be obligated to make up the difference, which is called a deficiency.

There still may be tax consequences involved with the forgiven debt of a Short Sale. Under Federal law, when a debt is forgiven, it can be treated as ordinary income on which tax must be paid. You will get a 1099C at the end of the year from the lender for the deficiency. This is considered income even though you did not receive it. Currently they are trying to get this law changed to help relieve the costs involved for the overwhelming number of owners in this situation.

After you are satisfied that you understand the concept and the penalties involved, and are prepared to move forward, you, or your authorized agent, should contact your lender to determine if your Lender will agree to a short sale. Usually, the Mortgage Company has a Loss Remediation Department that handles these matters. Ask to speak directly with the manager of the short sale department. You will get way more accomplished starting at the top.

Once you determine that your hardship case applies and the bank is agreeable to allowing a short sale, the following steps should follow: 1. List your house on the Multiple Listing Service, preferably with a knowledgeable Realtor, 2. Negotiate a Sales Contract from a willing and able Buyer. The sales contract should specifically state that the offer is contingent upon the Lender accepting the purchase price in full and forgiving the Seller the deficiency on the mortgage. 3. Include these with a comprehensive package explaining why you are requesting the short sale and include your Hardship Letter explaining why you cannot continue to pay the mortgage. Also include any supporting documents such as tax returns, bank statements, that will help build your case. Finally, your packet should have information and photos of your property, and a list of comparable homes that have recently sold or are currently on the market. Your proposal should be as specific as possible. And emphasize the hardship. The more documentation you can provide the Lender, the faster the decision will be.

Make sure you go to Closing knowing exactly the terms and conditions on which your lender will accept the short sale, including whether or not you will have to come up with any money at the settlement table. It helps to provide the Lender with a detailed expense sheet or net sheet showing all costs involved, who is paying what, and what the bank will get in the end. It is extremely important that the bank is accepting this as a final settlement of the loan and this should be in writing.

Currently lenders are swamped with these requests, so this process can take up to 2-3 months. Thus, the earlier you can start the process, the better chance you have of getting it approved.

The short sale process works, but is complicated, time-consuming and uncertain. If you can start now -- before you are actually in default -- you will be ahead of the game. Hire a good attorney, a knowledgeable realtor, and consult your accountant to get the best advice to get out of a sticky situation and save your credit rating.

Please consider this as only a simple and condensed guideline on how Short Sales work. All banking institutions and Lenders have their own policies and procedures regarding Short Sales and it is in your best interest to seek qualified advice.

And finally, please, please, please, act as soon as you realize there is a problem. I would much rather help a homeowner avoid losing their home altogether by giving free advice on getting a loan modification from their Lender or some other alternative way other than taking a short sale listing!

Buyer's Incentives for a Slow Market, What Works!

2007-09-30T09:31:00.000-07:00

Selling Tactics: Buyer’s Incentives for a Slow Market
(Reprinted from Remax.com monthly newsletter)
In a slowing market, sellers can find it tempting to believe in magic solutions. With unsold inventories growing in most areas, some sellers resort to offering flashy incentives for buyers. Everything from big-screen TV’s to vacation packages to new cars, are being tacked onto listings in the hope of luring in interested buyers.
In truth no amount of flash or gimmickry will change how buyers feel about your home’s core qualities, but incentives that appeal to a buyer’s wallet can be effective in certain situations. Below are some buyer’s incentives that may help set your home apart from the rest:
Paying Points - The current housing slump has placed mortgage concerns in the minds of many buyers. Sellers who offer to pay mortgage points for the buyer (sometimes referred to as “buying down the mortgage”) are more likely to attract buyers who are nervous about their monthly payments or interest rate. Each point you pay equals 1 percent of the loan amount, so mortgage buy downs lower both the interest rate and the monthly payment.
Down-Payment Aid - One of the biggest hurdles for many homebuyers, especially first-time homebuyers, is the down payment. Help with the down payment may in many cases be more important to the buyer than the actual asking price itself. This incentive works well for those selling “starter” homes that are more likely to draw first time homebuyers.
Closing Costs Help - Legal fees, title insurance, filing fees – closing costs can add up in a hurry for buyers, typically totaling somewhere between 2 and 7 percent of the total loan amount. Sellers who offer to assist with the closing costs will appeal to cash buyers short on cash
Home Warranty - Including a year (or two) of home warranty coverage serves as a peace of mind for the buyer that they won’t have to foot the bill for unexpected repairs in the first year or two of ownership. Most policies include service to the home’s HVAC, interior plumbing, appliances and major fixtures. The low cost of home warranties (typically a few hundred dollars) makes them a low risk-high reward incentive to offer.
Maintenance Fees - Some features of a home that you may consider “selling points” (pool, hot tub, sauna, gas fireplace, AC system, etc) can actually seem like detractions to buyers due to their related maintenance costs. You can assuage a buyer’s concerns by offering to pay for the first year’s worth of maintenance.
Landscaping - Offering to spring for a few additional landscape features can be a nice way to let buyers add personal touches to the property without taking on personal expense. Keep in mind that adding such touches on before putting the home on the market may have a greater impact (provided, of course that your landscaping choices aren’t woefully misguided).
Condo/Homeowner’s Association Fees - In a condominium complex or planned community, homeowner’s dues add to the monthly cost of ownership. If the first year’s worth of dues are taken care of by the seller, potential buyers have one less early-expense to worry about.
Price Reduction - Price reductions don’t usually come to mind when discussing incentive strategies, but really no single factor is more important than the asking price. A well-timed price reduction can indicate to buyers that you are flexible and serious about selling the home.
Upgrades - In most cases major home repairs and touch ups should be completed prior to putting the listing on the market. However, offering to finance certain aesthetic changes, such as new exterior or interior paint, can be marketed as a means for the buyer to add their own personal touch to the home.
Extras - If you’re going to offer a “throw-in” as an incentive, why not tailor the offer to the charms of your home? For example, the antique hutch that perfectly compliments your entryway might be included in the list price. If you’ve invested time and money in a prized back deck, including a premium gas grill could be a logical pairing. Buyers often view wild incentive offers with skepticism, but “thoughtful throw-ins” don’t carry the same air of desperation.

The Risky Side of Selling your Home on Your Own

2007-09-30T09:15:00.000-07:00

The Risky Side of Selling a Home on Your Own
The vast majority of sellers list their home with a real estate agent, but some individuals choose to go through the selling process on their own. Selling a home “For Sale By Owner”, while entirely possible, does come with a list of hurdles and some significant risks.
Un-represented sellers are motivated to save the cost of the agent’s commission. In many cases, however, selling without assistance can result in a lower closing price that negates such gains. In a survey of more than 7,800 buyers and sellers from around the country, the 2005 National Association of Realtors® Profile of Home Buyers and Sellers showed that the median price for homes sold directly by the owner was 16 percent lower than homes sold with the assistance of a real estate professional.
FSBO vs. Direct Sales
In 2005, only 13 percent of home sellers conducted transactions without the help of a real estate professional. However, of these transactions 39 percent were “closely held”, meaning that the two parties knew each other in advance and the home was not fully placed on the open market.
Risks
So just what are the potential downfalls of selling your home by yourself?
Setting the Wrong Price - In the world of real estate, setting a good asking price is absolutely critical. Owners frequently have a difficult time setting a realistic sales price, even if they have paid for an independent appraisal. Impartially evaluating your home and all its shortcomings (and selling points) is a lot to ask. An overpriced listing can linger on the market and necessitate later price drops. An under priced listing can either scare off wary buyers or can result in a closing price significantly below market value.
Under Exposure - Attracting serious buyers requires much more than a classified ad and a sign in the front yard. Many of the marketing avenues that agents utilize are costly or require resources that the average homeowner just doesn’t possess. Between 75 and 80 percent of buyers use the Internet during their home search. Savvy agents come equipped with a strong Internet presence that draws online buyers to your listing.
Lack of Marketing Experience - Most of us are not practiced in the art of promotion, and don’t possess a great deal of knowledge or perspective when it comes to marketing real estate. A skilled real estate professional knows the techniques to make your home competitive with comparable properties in the local marketplace.
Buyer Wariness - Some buyers will avoid a FSBO listing for fear either there is “something wrong” with the property or that the asking price will not be based on current market trends.
Buyer Haggling - A FSBO listing can attract buyers out to find a “deal”. These individuals are more likely to see the listing price of a FSBO property as merely a starting point.
Failure to Disclose - This is a biggie, Folks! Failing to disclose or fully disclose any defects in your home is a huge liability for any seller. Improper disclosure or nondisclosure usually results in lawsuits, an unpleasant prospect for all parties. Licensed real estate agents are required to stay up to date on all mandatory local, state and national disclosure requirements.
Commission to Buyer’s Agents - Nine out of ten homebuyers use a real estate agent in the search process. If a potential buyer is using the services of an agent, their commission will generally be taken out of the selling price.
Lack of Negotiating Experience - One of the most important services real estate agents provide is the negotiation a sale. Working without an intermediary makes it much more difficult to keep emotion out of the process. Sellers without representation can employ the help of a real estate attorney, but their primary function is to ensure that the contract is not marked by errors or omissions.

Lower Keys Real Estate Closings and New Listings

2007-08-09T12:16:00.000-07:00

Weekly Update...
The following are recent closings in real estate market in the Lower Florida Keys. This is from Milemarker 15 to Milemarker 34 or from The Saddlebunch Keys to Big Pine Key. This will be a weekly posting to help update all of you interested buyers and others looking to find out what is happening in the Real Estate Market in the Lower Florida Keys. Click on the link below to find out what has sold the first 7 days of August of 2007. This list will include all vacant land, all residential sales, as well as, any commercial properties.
Click to view listing(s)

The next link will be all new listings in the same area for the first week of August:

The last link will be of all properties with a price change in the same area and the same timeframe. Click on the link below
Check back each week to find out what is happening in the beautiful Florida Keys. Thank you for visiting my BLOG, please check out my website at http://www.keystropicalproperties.com/ for more information. Ta Ta for now. Rhonda Williams, Re/Max Southernmost

Its a great time to buy in the Florida Keys

2007-06-30T14:05:00.000-07:00

For the first time in many, many years, we are having what we call a Buyer's Market in the Florida Keys. This is due to several reasons. Normally, we do not follow the national trends for real estate in the Florida Keys. No matter the economic outlook nationwide, people still want to find their dream home in the warm and sunny islands of the Florida Keys. (Do you blame them?) In the next few years, we have the "Baby Boomers" thinking about retirement and planning for their future. One of their favorite choices has been the Fabulous Florida Keys, with its sunny, warm year round weather, excellent boating, fishing, diving and clear, warm, tropical blue waters.

However, 2006 was a very tough year for us following 2 very active hurricane years, lots of hurricane debris clean-up, and consequently rising insurance costs, and of course, the always rising real estate taxes. “Hurricane Fatigue” set in and many of our Keys homeowners said enough was enough, and decided to cash in on their investments after many years of double digit value increases on their property.

We saw almost 4 times the normal amount of housing inventory come on the market. For the first time in many years, buyers actually had a very nice selection of homes to purchase, thus causing greater competition. Sellers that were desperate to sell dropped their prices or took outrageously low offers. Once our prices started to tumble, buyers were reticent to jump in fearing they were going to buy at the top of the market or at least before the market hit bottom. Throw into the mix, the shaky national economy, rising gas prices, the unknown of our split political arena, the news media claiming a housing slump, and finally those pesky, unpredictable interest rates and you have a pretty good combination of why homes are not selling like they normally do. Some say we are just having a market correction from the rampant increases of the past 3-4 years.

Once buyers feel secure in the knowledge that we have hit the bottom of the down turn, the investors and second home buyers will jump back in. My feeling is that we are at or very close to the bottom of our market. Once we have depleted some of the housing inventory currently on the market, and cleared out the sellers that really need to sell their homes, the prices should resume at a more normal rate increase. In the past few years, this figure was as high as an astounding 48% increase in just one year.

If you have checked around the neighboring states and even in mainland Florida, you know that we are still a very good deal for waterfront property. Where else can you find great boating, fishing, diving, snorkeling, and swimming right out your back door? We have friendly neighbors, low crime rates, beautiful azure colored water, and warm tropical weather year round. We are indeed a good deal! Its a great time to buy in the Florida Keys. Tune in next week to check out statistics on what is selling and great investment opportunities. Please call me if you have any questions or log on to my personal website at http://www.keystropicalproperties.com/ to check out all of the properties for sale in the Florida Keys.