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Overpriced Bank Owned Homes Hit Tampa Bay. Video.

April 16, 2013 By Leave a Comment

The Madness Fire Is On And Banks Pour Oil On It

overpriced_bank_owned_homes_REO_St_PetersburgYesterday James and I went to a listing appointment.  We researched comparable sales and market stats and the market value for the home we will be listing is between 250k and 280k.  And at the high point of this range I would be a little worried about the appraisal.  If you plan on financing a home your deal can easily go south because the appraisal is not high enough, even if both you and the seller agree on the price.
The mad part is a few days before our listing interview with the seller, another home was listed a couple houses down. It is a deed restricted community and all homes are very similar in size and specs.  Well, the “competition listing” is a bank owned property and it is listed for $309k! The condition and market value scream $250k maximum.  So, what’s going on?
Day_on_the_market_REOs_Tampa_Bay

I still very often get requests from prospective buyers to show them foreclosure homes. The truth is the days of when you could get a great deal buying a foreclosed home are gone. We shifted into a seller’s market.

Regardless of how we got there and if it was done artificially, we are there. Inventory is less than 4 months and that is a clear indication of a seller’s market.  The prices are increasing at a rate of 15% annually, in some pockets even faster.  Homes in move-in ready condition receive multiple offers and bidding wars are bringing back the taste of 2005-2006.

Yes, you may get a good deal buying some foreclosures, but you have to buy 20 of them if the asset management company (if you have a connection there) is willing to package them for you.  But trying to make offers on single bank owned homes right now is tough for several reasons:
Bank_Owned_Homes_in_St_Pete- Banks started to list their homes high, often above market price (crazy!)
- Condition is often questionable, no property disclosures are provided and you have to rely only on your personal inspection.
- If repairs have been done they are often done poorly, the cheap way, just to make the property look better (not like a dump), be able to pass inspections, and be able to justify the increased list price.
- You will be bidding along with a dozen or two other investors and buyers who still think bank owned homes are a good buy.
- The amount of paperwork is stupendous

I don’t want to discourage you from buying a bank-owned home.  I am simply frustrated about the road banks are taking in this market.  Taking a quick look at MLS data I can tell you that about 60% of bank owned homes in St Petersburg have been on the market for over 30 days – they are overpriced!  After accepting some bailout money they are now also trying to play the market and help drive the prices up and create a buying frenzy.  Not cool!

So, what’s next?  I don’t have a crystal ball, yall!  But if we continue to see prices rise at 15-25% a year, in 2 years we will be in the same situation we were in 2006.  And you well know what happened next.


Filed Under: Home Buying and Selling Tips, Real Estate For Agents, St Petersburg Foreclosures, St Petersburg Real Estate Video Blog, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay Real Estate Professional Information, Tampa Bay Real Estate Statistics, Tampa Bay Real Estate Video, Tampa Bay short sales, Uncategorized Tagged With: , , ,

Rolling Out Our Monthly Newsletter w/VIDEO

March 18, 2013 By Leave a Comment
Hey! It's Ilya and James - The HOME Team

Hey! It’s Ilya and James – The HOME Team

We are officially starting our monthly newsletter.  Frankly, I don’t know what kind of information would perk your interest on a regular basis, yet we’ll try to provide only high quality content.  We are Realtors, so naturally we want to share news related to real estate in St Petersburg and Tampa Bay area.  But we are human too, so we will share things from our day to day lives, information about local restaurants, parks, neighborhoods and more.  So stick with us and feel free to share your thoughts in comments below or send us a private message.

If you are reading this but did not receive our newsletter in your email, please send us your contact info here and we’ll add you to our email newsletter list.  Close to 2,000 people read it, and so should you!

As always, if you know anyone looking to sell or buy a home, let us know, we’ll appreciate a referral.  Our clients love us!  You can find our reviews on Trulia, Zillow and Yelp.

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Filed Under: Dining in St Pete Tampa Bay, Events in St Pete and Tampa Bay, Home Buying and Selling Tips, Living in St Pete and Tampa Bay, Real Estate For Agents, St Pete Tampa Bay History blog, St Petersburg Foreclosures, St Petersburg Neighborhood Reviews, St Petersburg Real Estate Video Blog, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay neighborhood reviews, Tampa Bay Real Estate Professional Information, Tampa Bay Real Estate Statistics, Tampa Bay Real Estate Video, Tampa Bay short sales, Tampa St Pete Real Estate Technology, Uncategorized, Weekly Real Estate deals in Tampa Bay Tagged With: , ,

The Mortgage Debt Relief Act is Renewed for 2013

January 7, 2013 By Leave a Comment

So Breath Normally, St Petersburg Resident, You Are Good For This Year!

If the Mortgage Debt Relief Act would not have been renewed for 2013, it could have created a serious damper on the real estate market recovery and growth this year.  Fortunately for many home owners planning on going through a short sale this year the Act has been renewed.  Even if you will receive a 1099 form you will not be taxed on that amount. Phew!

Since 2007 when Act was initiated it helped thousands of families to avoid paying taxes on the virtual income they haven’t really received.  The money is lost for the home owner and for the bank.  However, many of the banks got bailed out, the homeowners didn’t.  In some cases (like HAFA short sales) the sellers are offered some cash from the lender, but often the sellers have to bring some money to closing, which can be a challenge for the sellers.

Despite many efforts by lenders to simplify and speed up the short sale process, it remains to be tedious and often very frustrating.  Too often Realtors put tremendous amounts of time and paperwork into processing a short sale only to see a deal fall apart because of un-cooperating lender.

Need more information about processing your short sale?  Call us now:   727-417-4495


Filed Under: Home Buying and Selling Tips, Living in St Pete and Tampa Bay, St Petersburg Foreclosures, St Petersburg Real Estate Video Blog, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay Real Estate Video, Tampa Bay short sales, Uncategorized Tagged With: , , ,

FHA loan – deal maker or deal breaker?

January 3, 2013 By Leave a Comment

Obtaining an FHA loan for purchasing a home in St Petersburg is a huge advantage for home buyers.  The downpayment is very low, only 3.5%, the loan is guaranteed by the government and is assumable by future buyers, which can be a great selling point down the road when rates go up.

At the same time requirements for procuring such a loan are quite strict.  I won’t go into every detail, you can learn about them on the Federal Housing Administration website, but the following issues must be passed by the FHA appraiser/inspector: building codes, durability, safety and security and site hazards.

I’ve had a buyer just recently face insignificant issues like surface termite damage, pealing paint and uncovered electrical outlets, which almost cost them a deal. If it is a traditional sale you are dealing with, very likely the seller is motivated and will address and fix/repair the issues. But if you are working with a short sale or a bank owned property you may very well be down on your luck.

Buyers who are set of using an FHA or VA loan must pay close attention to the requirements and condition of the properties they intend to make offers on.  Consulting with your mortgage broker and real estate agent will save you headaches.  Watch these two videos for our comments.


Filed Under: Home Buying and Selling Tips, St Petersburg Foreclosures, St Petersburg Real Estate Video Blog, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay Real Estate Professional Information, Tampa Bay Real Estate Video, Tampa Bay short sales, Uncategorized Tagged With: , , , ,

Do Short Sale Sellers Have To Accept Your Offer?

December 22, 2012 By Leave a Comment

Things To Remember When Making An Offer On A Short Sale

Recently I’ve submitted an offer on a short sale listing in St Petersburg.  As typical, seeing that the property has been on the market for a couple months, we went a little below the list price, but within reason.  I could find several comparable sales in the area to support my buyer’s offer.  After dealing with countless offers and closed contracts on so many short sales I was sure the seller will simply sign and the listing agent will pass the contract on to the lender for approval or counter.

After chasing the listing agent for nearly a week, she finally told me the seller won’t sign it because it is too low. I was puzzled, I assumed the seller would be interested to get the process going and even if the deal wouldn’t happen at least they’d know the approved value and could market it as such.  My buyers were upset, but decided to offer higher, after a couple more days the listing agent advised she already received a higher offer than mine and it was accepted. I’ll never know if there was something “fishy” or unethical going on on behalf of the listing agent, but the situation did remind me of a few important things:

  1. During the short sale process (or pre-foreclosure) the seller is still the rightful owner of the property and has homeownership rights.
  2. The seller can deny, counter or reject the buyer’s offer without explanation, and your offer will not be submitted to the short sale lender.
  3. We may not know all the details and reasons for the short sale listing, and we often don’t know the motivation of the seller.
  4. There’s a chance the listing agent is not experienced working with short sales and may give the seller advice which will not be in their best interest.
  5. Nothing is guaranteed in short sales.
  6. Many short sales will not close, the seller will be foreclosed on, the house taken away, the owners will be kicked out, buyers will be upset, listing and selling agents will have worked for nothing not making a dime.


Nevertheless, short sales are still good to pursue.  If you have a little time to wait and not in a hurry to close, you will typically buy a home for as much as 10-25% below market value.  So, during this time when the inventory of homes for sale in St Petersburg (and all Tampa Bay) is really low and good quality listings go within days, putting an offer on a short sale may not be a bad option after all.

Filed Under: Home Buying and Selling Tips, Living in St Pete and Tampa Bay, Real Estate For Agents, St Petersburg Foreclosures, St Petersburg Real Estate Video Blog, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay Real Estate Professional Information, Tampa Bay Real Estate Video, Tampa Bay short sales, Uncategorized Tagged With: , , , , , ,

How to do a short sale if you have FHA loan

October 12, 2012 By Leave a Comment

Understand the FHA short sale process

Today, when so many home owners in St Petersburg are still “under water” a short sale may be your only option if you need to sell your home.  But type of loan do you have? Here’s an outline of a FHA loan short sale process.

All short sales are not alike – especially when an FHA-insured mortgage is involved. FHA short sales must advance through a very exact and systemized process. Here’s what you need to know:

Before a short sale can be initiated — The U.S. Department of Housing and Urban Development (HUD) requires that the homeowner be reviewed for all home retention options (modification) before a short sale is pursued.  This 30- to 90-day process seeks to determine whether a legitimate hardship exists and if a short sale is appropriate.  The review also will certify that the home has not been rented for more than 18 months and is being maintained, that there is a marketable title, and that the property has only one FHA-insured loan.

A listing agreement or offer is not required in order for the homeowners to be approved. Once the homeowner is approved to short sell their home, foreclosure is put on hold and the homeowner receives an Approval to Participate (ATP) letter.  Bank of America does not begin negotiating the purchase contract until after the homeowner is approved to participate and has returned a signed “wet ink” copy of the ATP within seven days of the date of issuance.  If the ATP is not returned within seven days, the agreement will be canceled.

Homeowner involvement — FHA short sales must be initiated by the homeowner, not an agent. Instruct your homeowner clients to contact their assigned Customer Relationship Manager (CRM).

The homeowners are also required to actively participate in the short sale process, including returning documents within the required time frames and maintaining contact with the mortgage servicer.

HUD dictates the amount of incentives payable to the seller, and additional short sale relocation assistance incentives do not apply. Seller incentives will be applied to any second liens greater than $1,500, and after the second lien has been paid, any surplus will be paid to the seller.

Agent involvement — As the seller’s agent, you need to work with the homeowner to make sure the following items are organized and completed once the ATP has been executed and returned to us.  First, thoroughly review the Welcome Package with the homeowner.  Then begin gathering the documents necessary for the process, being sure they are signed and dated where necessary. Those include:

  • Pay stubs (dates, amounts, names, institutions)
  • Bank statements (all pages, accounts, and borrowers)
  • Hardship letter
  • Occupancy certificate
  • Marketable title

Important information about the three HUD forms which are key to the FHA short sale process:

1. Approval to Participate – HUD approval for the sellers to short sale their home: HUD – 90045 Form

  • Must be signed and returned within seven days of issuance
  • Lists property at “as-is” value within seven days with a licensed real estate agent who is not related to the seller
  • Incorporates a 120-day marketing period in which the appraisal remains valid
  • Requires an arms-length transaction
  • Certifies property maintenance and occupancy
  • Requires the following language in the listing agreement: “Seller may cancel this Agreement prior to the ending date of the listing period without advance notice to the Broker, and without payment of a commission or any other consideration if the property is conveyed to the mortgage insurer or the mortgage holder.”

2. Sales Contract Review – HUD approval for the buyer to purchase the short sale: HUD – 90051 Form

  • Requires the following language in the purchase contract: “Sale is contingent upon the seller obtaining the prior written approval of Bank of America.”
  • Lists property at “as-is” value within seven days with a licensed real estate agent who is not related to the seller
  • Defines net sale proceeds
  • Requires an arms-length transaction
  • Requires an arms-length transaction
  • Includes the outright sale of premises (not assignable)
  • Permits customary and reasonable settlement costs

3. Closing Worksheet – HUDs approval to close the short sale: HUD – 90052 Form

  • Includes homeowner/seller initials
  • Includes closing agent, listing agent signatures and date
  • Requires that the homeowner/seller be 31 days delinquent
  • Requires submission of clean HUD-1 forms three to five days before close to receive closing instructions
  • Requires borrower(s) to sign Unearned Premium statement

Do you need help doing a short sale?  We will guide you through the process and make it as easy for you as possible.  Call us now at 727-417-4495.

Filed Under: Home Buying and Selling Tips, St Petersburg Foreclosures, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay Real Estate Professional Information, Tampa Bay short sales, Uncategorized Tagged With: , , , ,

Short Sales in Old Northeast and Shift in The Market

September 19, 2012 By Leave a Comment

Is The Lack Of Inventory Causing Changes In The Market?

I just did a quick search and came up with only 2 short sale listings in Old Northeast.  Not too long ago the situation was radically different.  The market was overloaded with short sales and bank-owned homes (REOs).  Even in an established St Pete historical neighborhood like Old Northeast, we observed a split of about 50/50 for traditional and distressed listings.  Things have changed in the last 12 months.  Today there are 2 bank-owned homes and 2 short sales listed for sale in Old Northeast.   And that’s out of nearly 40 properties currently offered for sale on the MLS.

Why such a shift in the market?  There are a few reasons behind this outcome.

1) Low REO inventory.  The reason behind low bank-owned inventory is simple: lenders got smart.  They fed the market with a flood of foreclosed homes creating a buying frenzy among national and foreign investors.  It hurt the home market value for many folks in our area.  But once a large portion of REOs were consumed the lenders reduced the supply.  The continuing demand for flip-friendly homes remained and that started driving the prices back up.

2) Increase in buyers’ confidence.  The buyer’s market that we have experienced in the last 5 years has resulted in increase in buyers’ confidence.  That along with low interest rates and plenty of inventory to choose from resulted in huge consumption towards the end of that buyer’s market season.  Why the end, you might ask?  Because the consumption level is still high but the inventory is drastically reduced.  Call it whatever you want but it is definitely not a buyer’s market any more.

3) There are very few short sale listings.  Why?  When the inventory was reduced buyers, who were hesitant about purchasing a distressed property, saw fewer options and started going into contracts on short sales.  There are plenty of short sales but they are all active with contract, somewhere in the process of negotiation with their lender.

4) There’s hesitation among sellers to list their homes.  Sellers become buyers and when inventory is low they start wondering where they will go after the sale.  Some choose to stay in their homes even if they are in a distressed situation.  Even if payments are not made some lenders drag out their foreclosure process, ultimately, having owners stay at the property for a while.  Lenders may or may not pursue the home owner for deficiency after the sale is finalized.

So, while most move-in-ready and reasonably priced homes got scooped up, the buyers are once again engaging in bidding wars.  They are left to choose from leftovers which often need work and TLC.  So have we transitioned to a seller’s market?  What do you think?

Filed Under: Living in St Pete and Tampa Bay, St Petersburg Foreclosures, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay Real Estate Statistics, Tampa Bay short sales, Uncategorized Tagged With: , , ,

How to buy foreclosures

August 20, 2012 By Leave a Comment

Foreclosure Buying Process 

Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or repossessing the property securing the loan.  Below are some tips for purchasing a foreclosure in St Petersburg or anywhere in Tampa Bay.

Get an estimate of what you can afford, which enables you to act quickly once you locate a property that interests you.  If you approach an owner or foreclosing lender with secured financing, it shows you are serious and ready to buy.

If you’ve never purchased a foreclosed property before it’s beneficial to contact a local real estate agent.  Their professional knowledge of the market can help guide you through the process of buying a foreclosure.

There are several ways to purchase a foreclosure.  Either you can contact the owner pre-foreclosure, purchase it at a public auction, or purchase it through the lender (either the bank or government).

Buying a property in a pre-foreclosure state allows the buyer time to research the title and condition of the property and can allow the owner/borrower a chance to walk away without a bad mark on their credit history.  Purchasing a home in this stage can be difficult because the owner will most likely be in a fragile state.  But if you do your research of comparable homes in the area and submit your research along with your offer to the seller, this will increase your chances.

To avoid direct contact, another option is to purchase the property through a short sale.  These homes are put on the market with the help of a real estate agent at a price lower than what the owner owes.  The only drawback to this is that you’re now competing against everyone else who saw the listing.

If a loan is not reinstated by the end of the pre-foreclosure period, the bank sues to repossess the house where potential buyers can then bid on the property at a public auction.  This can usually offer the best price but doesn’t give the buyer time to research the title or home, and requires they pay a nonrefundable deposit.  If the buyer has the time and is an inexperienced bidder, it’s wise to attend a couple of auctions beforehand so as to come better prepared.

The last stage of the foreclosure process comes after the homeowner is evicted and is known as post-foreclosure.  The bank then hires a real estate agent to place it on the market.  These homes are often listed as lower than what was originally owed on the mortgage, but has little wiggle room to go down, and with many of them abandoned and unkempt, these properties will often stay on the market for months.  A buyer’s best bet here is to again do the research and present this along with a fair offer.

Figure out which stage would be best for you to enter when purchasing or investing in a foreclosure.  To increase your chances of success, it’s important to pick one and become an expert in that particular process.

This article was brought to you by Tom Miller of New Home Source on behalf of BDX. Funded and endorsed by a consortium of the top US homebuilders, Builder’s Digital Experience LLC (BDX) is the first national home marketplace focused specifically on the new home market. A newly constructed home offers consumers a wide selection of styles, locations, options and features that aren’t available in existing homes. BDX’s network of websites, including NewHomeListings.com provides prospective homebuyers with the most comprehensive information and selection of new homes available on the Web.

BDX is a joint venture of Move, Inc. and Builder Homesite, Inc. and is headquartered in Austin, Texas. Builder Homesite, Inc. was formed by a consortium of the nation’s premier homebuilders to improve and enhance the home ownership experience. To learn more about BDX or Builder Homesite, Inc. or the consortium, please visit www.theBDX.com or www.builderhomesite.com.

Filed Under: Home Buying and Selling Tips, St Petersburg Foreclosures, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay short sales, Uncategorized Tagged With: , , ,

High-End Short Sales In Tampa Bay

February 21, 2012 By Leave a Comment

Luxury Short Sales In St Pete and Tampa Bay

For some people the term “high-end short sale” sounds like an oxymoron.  There are definitely more lower and middle price range short sale listings in St Petersburg and all Tampa Bay market.  Typically the homes that are considered luxury start at a $500k price point.  Some real estate companies like RE/MAX even have special luxury “for sale” signs designed for such listings.  While the inventory of the high-end homes listed under distressed circumstances has significantly dwindled in numbers, there are still nearly 150 homes in that category listed as short sales in Tampa Bay.  And about 30 additional luxury Bank-Owned (REO) homes are currently offered for sale as active listings.

During the past year we’ve seen lenders adjusting and fine-tuning their short sale handling systems.  The banks also do not like to sit on the million-dollar listings and often work with the seller and buyer to get the sale done.  Well, often, but not always and within reason (bank’s reason… not yours!).

What It Takes To Close A Short Sale

One of the major components of a successfully closed short sale transaction is the supervision of the logistics process.  Yes, a Realtor is very often as good as their management skills.  Coordinating appraisals, BPOs, inspections, lender-buyer-seller communication together with a smooth flow of documentation is not easy.  The seller has to be cooperative as much as possible, since their lender(s) will often request updated information, tax records, pay stubs, bank statements, hardship letter and more.  No worries, we can help you with this.  A good agent must know how to manage a real estate transaction and even more so if it’s a short sale.

As a team we’ve close short sales anywhere from $30,000 to several million dollars.  The Home Team works like a smooth mechanism where each member knows their role.  Being a part of the most successful firm in the Tampa Bay Area, RE/MAX Metro, helps up keeping our standard of service high and our clients happy.

I don’t mean to dismiss the fact that short sales can be very stressful and frustrating.  But if you as a seller follow our instructions and cooperate with the sale, we can help you sell and move-on with your life in the shortest amount of time and with least consequences.
Do you live in a big house or condo that’s now over your head?  Owe so much and way upside-down on your home that you think you can never get out?  Way behind on your payments?  Feel desperate?  Our services won’t cost you anything and our consultation is free. Call us right now: 727-644-3370 or email: info@hometeamtb.com and we’ll tell you what your options are.  No obligations.

Filed Under: Home Buying and Selling Tips, Living in St Pete and Tampa Bay, Real Estate For Agents, St Petersburg Foreclosures, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay Real Estate Professional Information, Tampa Bay Real Estate Statistics, Tampa Bay short sales, Uncategorized Tagged With: , , ,

When Robots Are Defeated

February 16, 2012 By Leave a Comment

And Who Will Get A Piece Of The Robo-Signing Settlement Pie?

I’m sure that by now you’re heard enough about the settlement between the government and 5 major banks.  The lenders did a naughty thing trying to speed up the foreclosures. Technically a bank can initiate such process by filing a lis pendens on someone who is 90 days behind on their mortgage payment.  They do have to have documents to support their claim.  But, some clerks forged signatures on loans they didn’t even own anymore… anyway, big mess. (watch our video below)

 

I can understand them, somewhat, but “the end result justifies the means” thing just doesn’t work very well in the U.S.  You have to follow the due process, which for some home owners proved to be rather lengthy. I know people who’ve lived in their homes for 2-3 years without making a payment and the lender still hasn’t foreclosed.  The reasons could be many:

  1. home owner hired a very good attorney who found something wrong with the mortgage papers.
  2. the bank sold the mortgage to an investor and simply services the loan but have no right to foreclose. There are no foreclosure instructions from an investor.
  3. The mortgage could’ve been sold 5 times and they can’t track down the end user.
  4. The bank is waiting. You are way upside down and they’d rather have you live there and take care of the house.  When the market shows signs of recovery, then they’ll get on it.
  5. etc, etc, etc.

 

Well, now because they misbehaved Ally Financial, JPMorgan Chase, Wells Fargo, Citigroup, and Bank of America will have to front $25 billion to help and ease the crisis of underwater mortgages.

Will it be enough? Not really, only 1 million mortgage holders will have their debt reduced or be able to refinance at lower interest rates. And around 750,000 borrowers who lost their homes to foreclosure between Jan 1, 2008, and Dec. 31, 2011, will receive compensation checks for about $2,000.  Oh, and of course if your loan is with Freddie Mac or Fannie Mae, which is about 50% chance, you won’t qualify for any of the settlement funds or programs.

 

From what I hear the States will receive direct payments to fund the settlement programs. It is also rumored that it will take up to 12 months to develop a program and decide who and how will get the benefits.  So the allocated funds may be sitting in some account collecting interest.  Just saying…  There’s rarely a program without a benefiting side besides the consumer.


What are your thoughts on this? Let us know in the comments.

Filed Under: Real Estate For Agents, St Petersburg Foreclosures, St Petersburg Real Estate Video Blog, St Petersburg Short Sales, Tampa Bay Foreclosures, Tampa Bay Real Estate Professional Information, Tampa Bay Real Estate Video, Tampa Bay short sales, Uncategorized Tagged With: , , , , , ,
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