Archive for October, 2008
Is everything a foreclosure or a short sale?
Does it sometimes seem like everything is a foreclosure or a short sale? Do not despair. While REO (real estate owned by banks) and short sales (pre-foreclosures) are a new reality in the Tampa real estate market, many homeowners and builders have homes available for immediate occupancy. My business coach talks about “the power of knowing what is true”, so I took a closer look at all listings and closings of single family homes for a sample zip code (33647 New Tampa) in October.
Of the 74 homes entering the market in October, there were: 10 Bank Owned Foreclosures (13%); 17 Short Sales (23%); 6 Builder homes (8%); and 41 homes offered for sale by the homeowner (55%).
After examining the data from the 43 homes that closed between October 1st and October 30th in New Tampa (33647), I count the following: 7 were Bank Owned Foreclosures (16%); 5 were Short Sales (11%); 7 were Builder homes (16%); and 24 were offered for sale by the homeowner (56%).
- by Dale Bohannon
Money Being Invested into Florida Real Estate
Some Eastern Europeans who have amassed great fortunes since the fall of communism are seeing Florida Real Estate as a great place to invest their money. Florida Venture Partners is a newly formed corporation of Russian businessmen who are gobbling up property where they can. Florida Real Estate is noted as being on the down side of the real estate cycle and investors are not only planning on receiving rental income but plan on property values increasing over the next three years as well. Another company, an American held company, Phillips Development is doing the same thing, buying distressed properties knowing that they are undervalued and that large profits stand to be made. If you have money it is a great time to buy, the deals are there and profits will be there in the not-so-distant future.
Interested in Tampa Bay Real Estate?
For a complimentary look at all available listings in the Tampa Bay MLS please visit www.intampaflorida.com. Team Bohannon can be your tool for real estate success, arming you with the knowledge and expertise necessary to make a smart real estate decision. Call Team Bohannon today at 800-373-4708, to learn more about how Tampa Bay Florida is doing and why it might be a good idea for you to take a look.
Should you rent or sell your home?
The decline of Tampa Bay area home values has many wondering: should I sell my home now, or should I find a tenant and rent the home until values increase? As of November 2009, we think that the answer depends upon 3 factors:
- are you financially able to sell today?
- do you want rental property in your portfolio?
- do you think homes will be worth more soon?
Are you able to sell today?
The rapid decline has many Tampa homeowners in a bind - if you purchased with less that 20% down during the boom, or if you re-financed since 2003, then chances are you have little or negative equity. Selling at current Tampa values might require you to take a loss and potentially write a check; whereas becoming a landlord might require you to cover the monthly shortfall between the rental income and the true carrying costs.
Add Tampa Rental Property to your Portfolio?
Owning rental property is an important compliment to long-term wealth building, but there are some disadvantages to consider. Are you ready to become a landlord? Do you have the time and temperament to deal with tenants, repairs, damages, attorneys, statutes, vacancies and evictions? Are you aware of the accounting and legal requirements for landlords? Will you maintain separate accounts for deposits? Property taxes will increase when the home is no longer a primary residence and the homestead exemption is removed. You will need to change the homeowners insurance policy to cover tenants. And be advised that homeowner insurance on vacant homes is exceedingly expensive. It is nearly impossible to sell a home while occupied by a tenant, hence you are committing to the property for at least a year regardless of market conditions or your personal circumstances. Since so many homeowners cannot sell and have offered their home for lease, the excess inventory has resulted in lower rents. Maintaining rental property is a long-term strategy and the true carrying costs must be carefully calculated.
Will homes be worth more or less a year from now?
While there is no crystal ball, several economic forecasts indicate a further decline of 20% from today’s homes prices in Tampa. If you are unhappy with current values, how would an additional 20% loss impact your plans? Hence a home worth $200,000 would decline to $160,000 according to current forecasts. While pricing levels will eventually increase and recover, are you prepared to wait years?
What about 2-3 years from now?
While there are many factors impacting real estate values, let’s look at the “ticking time bomb” of adjustable rate mortgages (ARMs). A large percentage of Tampa homebuyers used various flavors of ARMs to buy more home at a lower payment. Most ARMs featured a low initial rate that was fixed for 3 to 5 years, but would thereafter increase to “market” rate plus a 2%-3% margin. Many of these are tied to the LIBOR, a European index that is not controlled the Fed. The last big wave of ARMs was issued at the height of Tampa’s boom market in 2006. Assuming a 3-5 year period of lower/fixed rates, then many of these loans will adjust by 2009-2011. Rather than paying dramatically increased monthly payments for homes that are worth less, many homeowners are opting for foreclosure. The high default rate on these “sub-prime” mortgages, and the resulting “short sales”/ foreclosures are driving Tampa home values down further. As a result, we do not expect to see prices to return to current levels until theses foreclosures work their way through the system and housing inventories decline, maybe by 2013.
Tampa home prices will eventually rebound. Before they increase however, they will drop further. If you are capable of selling now, then be advised that prices may not reach these levels again for a few years. This may be the top of the market until the next cycle begins. There are some good reasons to buy today; and some very good reasons to sell. What are your thoughts? For more insight and advice, contact Team Bohannon today.
- by Dale Bohannon
Live Oak Preserve Has a Home For Everyone in New Tampa FL
Live Oak Preserve is a gated community in the heart of New Tampa. Comprised of newer homes built by Engle Homes, Southern Crafted Homes and Standard Pacific Homes, the community features a superb clubhouse, resort-style pool and playgrounds. Tampa’s Live Oak Preserve contains “A” rated schools such as Turner Elementary School and Bartels Middle School. Live Oak Preserve is across the street from the “B” rated Wharton High School. Live Oak is close to a Walmart Super Center, Super Target, and a major regional mall – The Shops at Wiregrass.
Engle Homes has just introduced plans for their 2009 homes. The six new plans are for homes that start at about $170,000. The homes area 3 and 4 bedroom homes that are created with families in mind.
If you are interested in looking at New Tampa Real Estate call Team Bohannon today at 800 373 4708. Team Bohannon will give you the service and knowledge necessary to make your real estate decision educated and informed.
Looking to buy real estate in Tampa Bay Florida?
For a complimentary look at all available listings in the Tampa Bay MLS please visit www.intampaflorida.com. Team Bohannon can be your tool for real estate success, arming you with the knowledge and expertise necessary to make a smart real estate decision. Call Team Bohannon today at 800-373-4708, to learn more about how Tampa Bay Florida is doing and why it might be a good idea for you to take a look.
Buying a Short Sale – 16 Things You Must Know
Thought about buying a short sale or pre-foreclosure in Tampa Florida? Savvy buyers have scooped up some great deals, but proceed with caution.
Short sales happen when home value has fallen to the point where a seller cannot payoff the underlying loan. Lacking funds from other sources, a seller will ask their lender to accept less than the loan amount to allow a sale. There are many reasons to consider buying a short sale in the Tampa Bay area, but here are 16 things you should know:
1.) The List Price might be a fantasy number.
Unless a lender has responded to a previous offer, Realtors and sellers have no idea if the lender will accept the list price, let alone anything under the list price. We see this time and again: list prices are set extremely low, and then a buyer offers 50,000 less than list price. This strategy is guaranteed to waste everyone’s time. Lenders will reject these offers after a protracted delay, and eventually the home will sell for within 12% of market value.
2.) Lack of Lender Motivation.
Are you able to pay cash? Can you close in 2 weeks? Most lenders do not care. Lenders are processing so many short sale requests at once that they do not behave like typical sellers. If the offer price is too low, there is little incentive for a lender to cooperate with a short sale.
3.) No Control over Closing Date.
Buyers, sellers and agents have absolutely no control over when a home will close. Lenders take from 60 to 150 days to decide if they will accept a short sale, though 90 days is more typical. Do not expect weekly updates. Lenders may not communicate for months at a time. Impatience and lack of lender communication cause most Tampa buyers to bail out of a contract by the 2nd or 3rd month.
4.) The Homeowner might not qualify.
You might wait 100 days only to learn that a homeowner does not qualify for a short sale. Sellers who are just upset because their home has lost value need not apply. Banks are only considering short sales if a homeowner has a legitimate hardship such as unemployment, divorce, medical emergency, bankruptcy, death, etc. Lenders require complete financial records from sellers before making a decision. Hiding assets from lenders is considered mortgage fraud.
5.) Don’t be a placeholder.
Inexperienced Realtors and desperate sellers often set list prices unrealistically low to attract an offer, any offer. If comparable homes are selling for $200,000 and a short sale is listed at $150,000, there is a reason. Agents will often submit unrealistic offers in order to start the long process with the lender. Once a lender responds to the offer, then the agents knows #1) that the homeowner qualifies for a short sale, and #2) what the bank’s bottom line is (at least on that day). By the time the bank responds, the first buyer is usually long gone. Do not let yourself be used as a placeholder for the second buyer. You can control this by not making unrealistically low offers.
6.) Homes Sell Close to Market Value.
Lenders are not stupid. Lenders will order an appraisal, or a BPO (broker price opinion), to determine the home’s market value. Many lenders are agreeing to prices that are 10% -12% below market value for Tampa homes, but they are not giving these away.
7.) Yours might not be the only offer.
Many Listing Realtors in Tampa submit multiple offers to a bank. We have seen some Realtors submit 10 offers to the bank on a single home, which is a clear signal to the bank that the home was under-priced. Some Listing Realtors keep the home in an “Active Listing” status even though offers have been signed by the homeowner and are pending bank review.
8.) Inexperienced Realtors could kill the deal.
The Listing Realtor might not be qualified to handle a short sale. There are thousands of Realtors in Tampa, and most sell just a few homes per year. Executing a short sale requires a high level of specific skill and experience that is rare among Tampa Realtors. You might waste 90 days waiting for a response from a lender if the Listing Realtor does not have the required expertise or does not submit a complete short sale package to the lender.
9.) Scam Artists Abound.
The risk for short sale fraud is high. Beware anytime you see language about options, assignability, simultaneous closings or flipping. Make sure all transactions are at arms length – do not buy from friends or family. All payments to the seller must be disclosed on the closing statement (HUD); there must not be any side deals for furniture or other assets. Mortgage fraud is a federal crime, and not one you want to be unwittingly dragged into. Tampa is an epicenter for mortgage fraud.
10.) Beware the New “Negotiator”
Most short sales take months to close. At any point in the process, the file may be re-assigned to a new “negotiator” within the bank. The new negotiator’s decision might not be the same as the old negotiator. The average case worker is processing 300-500 files per month. If the short sale package is not submitted with all proper forms, addenda and supporting documentation, then your offer has little chance of approval. Most banks have sold their loans to investors; hence negotiators pick the best short sale packages and meet with the investor to seek approval. There are often many investor groups, each with evolving business requirements.
11.) Last minute changes by a Lender.
Even after a bank has accepted a short sale, most reserve the right to renegotiate the terms until the last minute. The tremendous pressure on banks has resulted in frequent policy changes on short sales. There are no guarantees until the home is closed.
12.) The 2nd mortgage holder might not “play ball”.
If the homeowner has a second mortgage, then the 2nd mortgage holder must agree the short. While most 2nd mortgage holders will accept a few thousand dollars from the primary mortgage holder, some major banks are now requiring the homeowner to carry a deficiency judgment whereby the homeowner must agree to an unsecured note where they eventually repay the balance of the second mortgage. The first and 2nd mortgage holders might have conflicting policies that cannot be worked out by their respective negotiators. While rare, you might wait 3 months for a bank’s decision, only to learn that the homeowner will not accept a deficiency judgment and prefers foreclosure or bankruptcy.
13.) Higher Buyer Closing Costs.
Looking for a home warranty? Lenders will not pay for a home warranty. Want repairs made? A better option is to make an “As-IS” offer is contingent upon your inspections. How about a seller contribution toward a buyer’s closing cost? Lenders are less likely to pay these than a typical homeowner. If you ask for the seller to contribute toward a buyer’s closing costs and pre-paid items, keep the total less than 3%. SOme lenders are even balking at paying doc stamps and title insurance, which are common seller costs in some markets.
14.) Homes Sell “As Is”.
Most lenders will not agree to make repairs; and these homes are sold “As-Is”. You have the right to do an inspection and cancel if you not satisfied with the inspection.
15.) The Bank Might Say no or might counter.
When the bank finally responds to an offer, the answer might be no, or the bank might counter at a higher price. Be prepared to wait a few weeks for the bank to review your counter offer.
16.) No scuch thing as a “Pre-Approved Short Sale”.
Some Realtors advertise “approved short sale” if someone in the customer service department of a lender may have told a homeowner to try a short sale – this is very misleading. Lenders analyze and approve specific short sale offers. There is no such thing as a blanket pre-approval; as all contracts are approved on a on a case-by-case basis. While a recent contract approval might speed the process, there is no guarantee that the lender (or the investor who holds the loan) will approve the next contract due to changes in business conditions and policies.
As daunting as it might seem, informed buyers can benefit from short sales. These homes are usually in much better condition than bank owned homes (REOs), and they can be purchased for below market value. Call Team Bohannon today for more information from a Certified Distressed Property Expert (CDPE) who is trained to help you succeed with short sales. – by Dale Bohannon
New Shopping Center Slated to Open October 30 In Wesley Chapel Florida
The Shops at Wiregrass is going to have their grand opening on Thursday October 30th. The shopping center is a joint project of Forest City Commercial and The Goodman Company. The Shops at Wiregrass is located at SR 56 and Bruce B Downs Boulevard in Wesley Chapel and is an open-air shopping center. With over 80,000 square feet the shopping center will include Williams Sonoma, J. Jill, Talbots, Stride Rite, Pottery Barn and Macy’s to name a few. There will also be many different food opportunities in the new center.
The opening of The Shops at Wiregrass is a positive. The opening represents retail confidence and confidence in Tampa commerce. Tampa Bay Florida is a fabulous place to live and will now have even more fabulous shopping. If you are interested in Tampa Real Estate contact Team Bohannon today.
Interested in Tampa Bay Real Estate?
For a complimentary look at all available listings in the Tampa Bay MLS please visit www.intampaflorida.com. Team Bohannon can be your tool for real estate success, arming you with the knowledge and expertise necessary to make a smart real estate decision. Call Team Bohannon today at 800-373-4708, to learn more about how Tampa Bay Florida is doing and why it might be a good idea for you to take a look.
Downward Pressure from Computer Generated Appraisals
In an effort to cut costs, many lenders have turned to computer generated appraisals over the past few years. While some appraisals include a drive-by, or in home visit, the Automated Valuation Models (AVM) have become increasingly important. A recent press release from Fiserv, Inc. a leading provider of computer generated appraisal services, will add additional downward pressure home valuations in Tampa. Rather than focusing on past sales data, the new computer models will incorporate a 12-month Forecast Value based upon the Case-Shiller® Home Price Index. The Case-Shiller® Tampa forecast is one of the most bearish future indicators, and we expect this to negatively impact appraisals. – by Dale Bohannon
Short Sale Scam Alert
Beware of agents who are out to make a quick buck on “Short Sale/Per-Foreclosures” by flipping option contracts. We have seen some Tampa Bay Realtors (or Short Sale Companies) obtain an “option contract” through a convoluted “Short Sale Listing Agreement”; whereby an agent (or their chosen investor) has the right to buy the home at a distressed price. When the agent finds a legitimate home buyer, they assign, or flip, the option contract and profit on the spread. Tampa homebuyers and homeowners must exercise extreme caution when handling a short sale transaction as the potential for mortgage fraud and title fraud is high. If you are considering buying or selling a short sale in Tampa Florida, avoid these fraudulent scenarios and seek the advice of an experienced advisor. Contact Team Bohannon today for details. by Dale Bohannon
Don’t Just Vacation in Tampa, Live in Tampa
People come from all over the world to visit Tampa Bay Florida, who wouldn’t want to live here? Tampa has great weather, excellent beaches (in fact Tampa is home to the world’s #1 beach Caladesi Island), fantastic restaurants and plenty of cultural and educational activities to choose from, not to mention a fantastic quality of life with a plethora of athletic and outdoor activities. Tampa’s Ybor City provides a cultural flair and is rich with Latin food, art and music. Tampa Bay is also home to some fantastic sports teams.
Thinking about Tampa? Contact Annette Bohannon and her team today at 800-373-4708 . For the best service and knowledge in Tampa Real Estate, Team Bohannon should be your choice, we can fill you in on the best areas to live, the best bargains, the best investments and more.
Interested in Tampa Bay Real Estate?
For a complimentary look at all available listings in the Tampa Bay MLS please visit www.intampaflorida.com. Team Bohannon can be your tool for real estate success, arming you with the knowledge and expertise necessary to make a smart real estate decision. Call Team Bohannon today at 800-373-4708, to learn more about how Tampa Bay Florida is doing and why it might be a good idea for you to take a look.
Hillsborough County Has Done a Great Job Preserving Open Space
Hillsborough County is responsible for having preserved more than 44,000 acres of land. The preserved land has included beaches, woodlands, swamps and grasslands. The Environmental Lands Acquisition and Protection Program (ELAPP tax) began in 1987 and in the 20+ years since a great deal of preservation has been accomplished. Whether these accomplishments continue will be up to the voters in November. Many people in Hillsborough County hope to see the efforts of ELAPP continue and want the program renewed in November’s election.
Hillsborough County is a beautiful place to call home, much due to the efforts of ELAPP. If you would like to explore real estate in New Tampa give me, Annette Bohannon, a call at (813) 979-4963. My team and I have an extensive knowledge of Tampa Bay Real Estate, with the expertise necessary to make your real estate transaction smooth and your decision an informed one.
Looking to buy real estate in Tampa Bay Florida?
For a complimentary look at all available listings in the Tampa Bay MLS please visit www.intampaflorida.com. Team Bohannon can be your tool for real estate success, arming you with the knowledge and expertise necessary to make a smart real estate decision. Call Team Bohannon today at 800-373-4708, to learn more about how Tampa Bay Florida is doing and why it might be a good idea for you to take a look.
