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Tampa Bay Real Estate: Nothing Short about a "Short" Sale

If you are trying to buy a Clearwater or Tampa area property that is distressed, such as a short sale, a foreclosure, or a bank-owned property, be prepared to be, well...really patient. As we uncover more information on how short sales operate from start to finish, we have painfully learned that the banks are often "negotiating" with eachother over a final sales price rather than the realtor and the seller negotiating between each other.

Many distressed properties have 2nd and 3rd mortgages attached to the title, and whoever holds the 2nd mortgage often holds very little at the end of the selling day. Second mortgages for example, that may be $25,000 to $50,000, may only see 5% (if that) of the balance of that loan.

All parties tied to that property through taxes, liens, loans, etc...have to sign off on the proposed sales price. When one party says, "No way, we want more money," the deal is off, and negotiations have to start all over again. These dealbreakers are what can cause a short sale to go on into the dessert it seems, drying out the assets of even the buyers, as they have to live and pay for their current shelter while their offer gets approved by the bank.

One couple who waited seven months for the bank to approve their offer almost got a divorce and the realtor almost quit real estate alltogether.

Short sales and bank-owned properties offer great buys at a fraction, sometimes half of what is owed on the mortgage, but you have to do the math before you get involved with the banks...they are not ready to let go of these properties so easily anymore.

When submitting offers, many buyers are now presenting $10,000 to $50,000 on top of the bank's asking price.

When shopping for deals, realize that there are properties out there that are for sale by owner, or are listed by a realtor on behalf of just the seller---no banks in the picture.

Florida Existing Homes Sales Rise As Home Prices Keep Falling

The combination of fallen home prices, record low mortgage rates, and the IRS's New Home Buyer Tax Credit of $8000 seems to be the perfect recipe for the rise in home sales we've seen in Florida over the past seven months. Check out the fast facts bullets below:

FAST FACTS Increases in home & condo sales

• Existing home sales rose 30% last month, compared to the month of February in 2008
• Condo sales rose 25% in March of this year, compared to year-ago level
• In one month: Condo sales rose 37.2% in March 2009 over February 2009

Downside: Decreases in median sales price offer distorted values to buyers and sellers. In March of this year, Florida's median sales price fell 30% from that of last year's. In March 2008 the median sales price was $201,700 compared with this past March of $141,300. Due to the large number of foreclosures, median sales price data this year does not carry the same weight as it did in years past. Half of this year's sold homes were bought at discounted prices and much less than the median sales price.

The latest report from the National Association of Realtors (NAR) confirmed that entry-level buyers are seeking bargains. The sale of distressed properties---those in short sale or foreclosure status, as well as bank-owned---accounted for almost half of February 2009's home/condo sales.

Condos suffered more of a decrease in median sales prices than that of homes. Condo median sales prices averaged a 37% decrease: last year they would sell, on average, for $172,300; this year they sold for, on average, $108,700.

These figures are very unsettling for Sellers who want or need to sell fast, recoup their investments or remodeling efforts, etc. For Buyers on the other hand, it's a great time to buy.

The Truth Hurts, But It's Still The Truth: Florida Ranked As 1 of 4 States With Worst Foreclosure Rates In Nation

The truth hurts, but it is still the truth, and this truth, these facts, are what we all need to make sound --- and often difficult --- decisions about the buying and selling of real estate.

In Florida, the Cape Coral-Ft. Myers area is ranked highest in the nation for foreclosures, alongside Las Vegas and Merced, California. Within the top ten cities highest in foreclosures were Phoenix and again, Florida's Port St. Lucie.

Brace yourself: the number of Americans threatened with losing their homes rose 24% in January, February, and March of this year. Lenders are taking a temporary break, but are expected to restart another cycle of new foreclosures, causing a further rise in the number of distressed properties.

On the bright side, literally, we are still the Sunshine State. Florida is surrounded by both the beautiful Gulf of Mexico on our west coast, and we overlook the vast Atlantic Ocean on the east coast.

The Buyers will be coming to Florida, just as soon as they can sell their properties. What Buyers and Sellers are experiencing right now --- Homeowners too --- is not pretty. It's painful...but it's our current reality.

Florida’s existing home, condo sales rise in February 2009

Florida’s existing home sales rose in February, making it the sixth consecutive month that sales activity showed increases in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). February’s statewide sales also increased over January’s figures in both the existing home and existing condo markets.Existing home sales rose 20 percent last month with a total of 9,858 homes sold statewide compared to 8,181 homes sold in February 2008, according to FAR. February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.

Florida Realtors also reported a 15 percent gain in statewide sales of existing condominiums in February, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 25.1 percent over the total units sold in January.

Thirteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in February while 11 MSAs also showed gains in condo sales. It marks the eighth month in a row that a number of markets have reported increased sales.Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less. The national median sales price for existing single-family homes in January 2009 was $169,900, down 13.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $254,350 in January; in Massachusetts, it was $321,000; in Maryland, it was $244,820; and in New York, it was $205,000.

Significant variations in local markets continue, according to NAR’s latest housing outlook, which also notes that it will take time for the impact of the economic stimulus to show in housing data. “Some markets appear to have reached the tipping point of accelerating home buying,” said NAR Chief Economist Lawrence Yun. “Improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates.”NAR analysts estimate the impact of the federal economic stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. By the end of the year, NAR expects inventory to fall below an eight-month supply, which would be consistent with home price stabilization.In Florida’s year-to-year comparison for condos, 3,198 units sold statewide compared to 2,785 sold in February 2008 for a 15 percent increase. The statewide existing condo median sales price last month was $109,300; in February 2008 it was $173,900 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $174,400 in January 2009.

Interest rates for a 30-year fixed-rate mortgage averaged 5.13 percent last month, down significantly from the average rate of 5.92 percent in February 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written. Among the state’s medium-size markets, the Fort Pierce-Port St. Lucie MSA reported a total of 372 homes sold in February compared to 263 homes a year ago for a 41 percent increase. The existing home median sales price was $122,100; a year ago, it was $172,900 for a 29 percent decrease. In the year-to-year comparison for the existing condo market, a total of 71 units sold in the MSA last month, up 22 percent compared to 58 condos sold the previous February. The market’s existing condo median price was $116,700; a year ago, it was $126,700 for an 8 percent decrease.

Painful Realities Unveiled Of Buying Bank-Owned Properties

Bank-owned properties can be great opportunities to buy a home at a fraction of the original or desired asking price----sometimes as high as 50% less than what is owed on the mortgage, and often as high as 30% less than the appraised value.

Bank owned properties and the journey one may take to arrive at the closing date is not for the impatient or light-hearted. The Buyer must know, expect, and be prepared for delays, complications and miscommunication.

We've read horror stories of these banks delaying the closing date by months---notifying this new delay on the scheduled closing day! We've heard about Buyers that have moved into their newly purchased bank-owned homes, and coming home from work one day to find a notice taped to the window and the locks changed---all due to misscommunication between the bank and the home's county or city courthouse.

Banks are often nowhere near the homes they have taken over, and they don't or fail to understand the life-rearranging that many couples and families undertake to purchase these homes. Often the necessary steps to an efficient sale and movement of these distressed properties becomes diluted and postponed.

The nation needs to overcome the foreclosure crisis in order to rebuild, but with an overwhelming workload on the part of the banks and lenders---often doubled or tripled---paperwork gets 'misplaced', work is duplicated, and deadlines and closing dates are extended.

Bank-owned has it's advantages, but you have to consider that time is money. How much time will it take to 'hopefully' close on this bank-owned property, and how much money too?

Buying through a Realtor, who has a Seller of a non-distressed property may prove itself in the long run---to be the short run.

Florida Seeking To Advance New Buyers $8000 Tax Credit

Florida and New York are seeking legislation that will advance the $8000 New Home Buyer Tax Credit to first-time buyers---so they can apply it towards their down payment---instead of having them wait for the credit when they file or amend their tax returns.

This is great news for potential and credit-worthy first time buyers that want to buy a home they can now afford, but just don't have the down payment---3.5% for FHA backed mortgages, 20% down for Conventional---needed to secure the property.

Florida Governor Charlie Crist supports this initiative brought forth by the National Association of Realtors (NAR). Missouri is the first state to approve and move forward with the upfront tax credit to first-time home buyers, and New York is following suit.

As Clearwater and Tampa Bay Real Estate grows with the addition of more distressed properties---we hope this legislation will succeed and allow for more prospective buyers to purchase homes they otherwise would not have considered.