Yep, the million dollar question these days is - how low will our American home prices go? It's interesting to ponder. You could ask ten random people and you'd get at least ten different responses. If you asked a gambler the same question, he might pause and say, "hey, let's take a guess and BET on it!" Those of us who've spent time in Vegas understand - gamblers win some, and they lose some.
Here's my point... in many areas of America homes are now selling at averages that are 10% or more BELOW the median sales prices of two years ago. This means, you can buy a home today, and only pay 2005 prices. Historically, American homes on a year-to-year average, appreciate at a rate of 4 to 7% per year.
Buy today, and you'll still be ahead even if the market drops another 5%. If you hold the home for 5 to 10 years - you will have property that has appreciated and is worth more (4 to 7% per year) than you paid for it.
As a homeowner that has been my experience. As a realtor, I've had the pleasure of watching it happen for my friends and clients.
Thursday, October 25, 2007
Thursday, October 11, 2007
Line of credit on your home? New exotic loan spells disaster...
Last night I heard firsthand (for the first time) of how a two-home owner is funding monthly bills, living expenses, and two mortgages by tapping into a "line of credit" loan he has on one of his homes.
Essentially, the homeowner is allowed to borrow money each month from an equity loan that is tied to his Central Florida home. He uses that money to pay the "interest" on the two main home loans that he has.
I wondered how long this scenario could continue before the home's mortgage levels far exceed the selling and appraisal value of the home. Then I wondered if maybe it wasn't already at that point.
This is a scenario that is contributing to the mortgage default crisis that we're currently in. We will find more and more foreclosures in the Central Florida market in the coming year(s). Keep that in mind - and get your eyes and ears open!!
Essentially, the homeowner is allowed to borrow money each month from an equity loan that is tied to his Central Florida home. He uses that money to pay the "interest" on the two main home loans that he has.
I wondered how long this scenario could continue before the home's mortgage levels far exceed the selling and appraisal value of the home. Then I wondered if maybe it wasn't already at that point.
This is a scenario that is contributing to the mortgage default crisis that we're currently in. We will find more and more foreclosures in the Central Florida market in the coming year(s). Keep that in mind - and get your eyes and ears open!!
Saturday, October 6, 2007
Orlando Home Deals...short sales & foreclosures
In case you're wondering, what the real estate picture is in Orlando - let me relate what I'm experiencing as a real estate agent in the city of Mickey.
Foreclosures and short sales galore!
There are hundreds, perhaps thousands of pre-foreclosure situations in Central Florida. Why? Because there was hundreds of thousands of financed homes in the past four or five years that were financed with adjustable rates, or, were homes that were already financed, that the owners got additional funds out thru home equity loans.
The result is... hundreds of thousands of homeowners who cannot meet the monthly payments for their homes and home equity loans.
How does a short sale work? Basically, you make an offer on a property. And, the bank looks at the offer, and decides if they can take it, or if they need to proceed towards the foreclosure process.
You've heard of a bird in the hand is worth more than a bird in the bush? That's how short sale/foreclosures work. If you've made an offer on a property, the bank looks at it like - a SURE DEAL - and they seriously consider it.
If you'd like to put in a short sale offer on a property, contact me. I know how to make it close, and SAVE YOU MONEY! - Kayonne Riley (407) 625-7356
Foreclosures and short sales galore!
There are hundreds, perhaps thousands of pre-foreclosure situations in Central Florida. Why? Because there was hundreds of thousands of financed homes in the past four or five years that were financed with adjustable rates, or, were homes that were already financed, that the owners got additional funds out thru home equity loans.
The result is... hundreds of thousands of homeowners who cannot meet the monthly payments for their homes and home equity loans.
How does a short sale work? Basically, you make an offer on a property. And, the bank looks at the offer, and decides if they can take it, or if they need to proceed towards the foreclosure process.
You've heard of a bird in the hand is worth more than a bird in the bush? That's how short sale/foreclosures work. If you've made an offer on a property, the bank looks at it like - a SURE DEAL - and they seriously consider it.
If you'd like to put in a short sale offer on a property, contact me. I know how to make it close, and SAVE YOU MONEY! - Kayonne Riley (407) 625-7356
Wednesday, October 3, 2007
With only $1500 down - you can be a homeowner!
You're someone who has paid their bills, worked hard at your job, put in the time, put in the effort. You've got a little bit of money saved and you're starting to think about buying your own home? Maybe paying yourself each month, instead of paying rent?
Now is the time. There are thousands of deals on homes out there - with sellers offering to pay your closing costs, giving you free lawn service contracts, free HOA payments for a year, etc!!
It's never been a better time to be a buyer!! Many sellers are offering incredible deals to purchase their homes!
I have a listing on a beautiful corner-lot 3 bedroom, 1 and 1/2 bath home in Orlando. With a $169,500 purchase price, the buyer will only have deposit $1500 to get into this home!
Seller will finance all of the closing costs! Email or call kayonne@kayonne.com 407/625-7356
Now is the time. There are thousands of deals on homes out there - with sellers offering to pay your closing costs, giving you free lawn service contracts, free HOA payments for a year, etc!!
It's never been a better time to be a buyer!! Many sellers are offering incredible deals to purchase their homes!
I have a listing on a beautiful corner-lot 3 bedroom, 1 and 1/2 bath home in Orlando. With a $169,500 purchase price, the buyer will only have deposit $1500 to get into this home!
Seller will finance all of the closing costs! Email or call kayonne@kayonne.com 407/625-7356
If you're a buyer right now, there are incredible homes at great prices!
I spent another Saturday afternoon viewing a few properties in the Lake Mary / Sanford area. My buyer, that I have been working with for over a year, is looking for a 3 bedroom 2 bath home - she doesn't want a fixer-upper, she does want mature landscaping, and, she's looking for a price tag that's less than $225,000.
Lately, there are starting to be more nice houses that fit that criteria.
In particular, we looked a really nice home in the 1792 & Lake Mary Boulevard area that was a 1980-built, 3 bedroom 2 bath contemporary home with lots of mature oak trees, a huge fenced back yard - and the home was in fabulous shape. The owners were trying to sell it on their own, and they're currently asking $219,000 - just to see what the market will come up with.
My buyer was impressed, but didn't want to write a purchase offer, because - she reasoned, there's another five great houses to look at tomorrow. So - buyers rejoice! There's a world of home choice out there, you can be as picky as you need to be, and the prices and financing, right now, are on your side!!
Lately, there are starting to be more nice houses that fit that criteria.
In particular, we looked a really nice home in the 1792 & Lake Mary Boulevard area that was a 1980-built, 3 bedroom 2 bath contemporary home with lots of mature oak trees, a huge fenced back yard - and the home was in fabulous shape. The owners were trying to sell it on their own, and they're currently asking $219,000 - just to see what the market will come up with.
My buyer was impressed, but didn't want to write a purchase offer, because - she reasoned, there's another five great houses to look at tomorrow. So - buyers rejoice! There's a world of home choice out there, you can be as picky as you need to be, and the prices and financing, right now, are on your side!!
Short sellers usually owe Uncle Sam $$ money... but that may change...
For the longest time, Uncle Sam has considered that any money a homeowner gets from a second mortgage - that isn't paid back to the lending agency - is taxable income. That means, if you default on your home loan - and also never pay the 2nd mortgage - you face getting a tax bill from the IRS asking for income tax to be paid on the amount of money that you received from the second mortgage.
Now the federal government is considering relieving that extra IRS penalty for distressed homeowners. That's good news since short selling is often the most efficient way for a distressed homeowner to relieve themselves of their fiscal problems.
Now the federal government is considering relieving that extra IRS penalty for distressed homeowners. That's good news since short selling is often the most efficient way for a distressed homeowner to relieve themselves of their fiscal problems.
Saved a homeowner from foreclosure this week and got a great deal for a homebuyer!
This week we closed on the sale of a home that was just 30 days away from bank foreclosure!
It felt like a marathon, because there were so many aspects of the deal that had to be navigated. But it's finally over, and we now have a happy seller, AND a happy buyer.
If you're a homeowner and you're facing foreclosure - there are solutions, but they all depend on communicating with your lenders and with your realtor.I f you're already trying to sell your home, and haven't had any buyers at the price you're asking - there are options to reduce your asking price to "short sale" the property. This is a process where a buyer can offer less than the amount that is owed - and the bank's approve or counteroffer the buyer's offer. This will only be considered by the lien-holders if you have already been missing or late on your home payments. If successful you are released from your obligations, and you will not have a foreclosure on your credit record - most financial institutions record only the late or missed payments.
If you're a buyer there are a world of great deals available if you search for pre-foreclosure homes. In the deal that I recently closed - the buyer got a home for $50,000 less than comparable homes in the neighborhood are selling for!
It felt like a marathon, because there were so many aspects of the deal that had to be navigated. But it's finally over, and we now have a happy seller, AND a happy buyer.
If you're a homeowner and you're facing foreclosure - there are solutions, but they all depend on communicating with your lenders and with your realtor.I f you're already trying to sell your home, and haven't had any buyers at the price you're asking - there are options to reduce your asking price to "short sale" the property. This is a process where a buyer can offer less than the amount that is owed - and the bank's approve or counteroffer the buyer's offer. This will only be considered by the lien-holders if you have already been missing or late on your home payments. If successful you are released from your obligations, and you will not have a foreclosure on your credit record - most financial institutions record only the late or missed payments.
If you're a buyer there are a world of great deals available if you search for pre-foreclosure homes. In the deal that I recently closed - the buyer got a home for $50,000 less than comparable homes in the neighborhood are selling for!
Tuesday, October 2, 2007
How to buy a pre-foreclosure home...
Everyday there are more homes advertised as "Pre-Foreclosure" bargains! These are generally situations where sellers are trying to get a purchase offer that covers all or most of the amount that they owe the banks on their property liens. And they're trying to make this happen before the banks initiate the foreclosure process.
I recently participated in the "short sale" of a home in MetroWest Orlando. The buyer made an offer of $150,000 on a property that had mortgages totalling around $210,000. I presented the offers to the two banks for their responses.
The first bank held an FHA loan that required complete payoff - which was $123,000. The second bank said they would accept 25% of what they were owed, which with closing costs made a purchase offer of $157,000 necessary.
The buyer added $7000 to his original offer, and closed on the property last week! He has immediate equity in the home as the comparables are selling at no less than $200,000 and the appraisal came in at $210,000!!
The seller was happy as he avoided a foreclosure on his credit record!
I recently participated in the "short sale" of a home in MetroWest Orlando. The buyer made an offer of $150,000 on a property that had mortgages totalling around $210,000. I presented the offers to the two banks for their responses.
The first bank held an FHA loan that required complete payoff - which was $123,000. The second bank said they would accept 25% of what they were owed, which with closing costs made a purchase offer of $157,000 necessary.
The buyer added $7000 to his original offer, and closed on the property last week! He has immediate equity in the home as the comparables are selling at no less than $200,000 and the appraisal came in at $210,000!!
The seller was happy as he avoided a foreclosure on his credit record!
U.S. House panel OKs debt forgiveness in foreclosures
An interesting story applies to sellers that "short-sale" their home - that may relieve them of tax penalties...
U.S. House panel OKs debt forgiveness in foreclosures
Foreclosed homeowners won’t have to pay income tax on debt forgiven by a lender under a bill that passed a U.S. House panel yesterday. Should the bill become law, the bill would also extend the tax deduction for PMI and change slightly the rules for shielding $250,000 in capital gains from the sale of a second home.
H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, now goes to the full House for a vote.
Debt forgiveness in foreclosures
Currently, homeowners who lose their homes to foreclosure generally have some mortgage debt forgiven by the lender, but the IRS considers that forgiven debt taxable income, charging extra tax to people who just lost their home. H.R. 3648 would provide a permanent exclusion for any discharge of indebtedness (on or after Jan. 1, 2007) that is secured by a principal residence and incurred in the “acquisition, construction or substantial improvement of the principal residence.”
Long-term extension of the deduction for private mortgage insurance
The bill extends the tax deduction for private mortgage insurance for seven years – through 2014.
Gain on the sale of a principal residence
Taxpayers may exclude up to $250,000 ($500,000 if married filing a joint return) of the gain realized on the sale or exchange of a principal residence. H.R. 3648, however, changes slightly the definition of principle residence when it’s applied to second homes. Under current law, a home qualifies for the exclusion if it’s a taxpayer’s principal residence for at least two of the five years preceding a sale ending on the sale, even if the home was initially purchased as a second home.
Under the bill, the timeline changes. A taxpayer may only use the deduction on a home sale after a home becomes his principal residence. Time spent living in the home does not count toward the two-year minimum until the owner officially declares it his primary place of residence.
Qualification changes for cooperative housing corporations
Under current law, a cooperative housing corporation must follow some specific rules, including a requirement that 80 percent or more of the cooperative housing corporation is earned from the corporation’s tenant-stockholders. H.R. 3648 expands that requirement by providing two alternatives to this rule – one based on square footage and another based on cooperative expenditures.
U.S. House panel OKs debt forgiveness in foreclosures
Foreclosed homeowners won’t have to pay income tax on debt forgiven by a lender under a bill that passed a U.S. House panel yesterday. Should the bill become law, the bill would also extend the tax deduction for PMI and change slightly the rules for shielding $250,000 in capital gains from the sale of a second home.
H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, now goes to the full House for a vote.
Debt forgiveness in foreclosures
Currently, homeowners who lose their homes to foreclosure generally have some mortgage debt forgiven by the lender, but the IRS considers that forgiven debt taxable income, charging extra tax to people who just lost their home. H.R. 3648 would provide a permanent exclusion for any discharge of indebtedness (on or after Jan. 1, 2007) that is secured by a principal residence and incurred in the “acquisition, construction or substantial improvement of the principal residence.”
Long-term extension of the deduction for private mortgage insurance
The bill extends the tax deduction for private mortgage insurance for seven years – through 2014.
Gain on the sale of a principal residence
Taxpayers may exclude up to $250,000 ($500,000 if married filing a joint return) of the gain realized on the sale or exchange of a principal residence. H.R. 3648, however, changes slightly the definition of principle residence when it’s applied to second homes. Under current law, a home qualifies for the exclusion if it’s a taxpayer’s principal residence for at least two of the five years preceding a sale ending on the sale, even if the home was initially purchased as a second home.
Under the bill, the timeline changes. A taxpayer may only use the deduction on a home sale after a home becomes his principal residence. Time spent living in the home does not count toward the two-year minimum until the owner officially declares it his primary place of residence.
Qualification changes for cooperative housing corporations
Under current law, a cooperative housing corporation must follow some specific rules, including a requirement that 80 percent or more of the cooperative housing corporation is earned from the corporation’s tenant-stockholders. H.R. 3648 expands that requirement by providing two alternatives to this rule – one based on square footage and another based on cooperative expenditures.
Monday, October 1, 2007
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