Orlando Home News and Other Musings

REALTOR® Magazine-Daily News-Homebuyer Credit Gets New Life

2009-10-30T14:09:00.000-04:00

REALTOR® Magazine-Daily News-Homebuyer Credit Gets New Life

Bourbon Street Balcony Dining

2009-07-28T12:27:00.000-04:00

Fwd: Road Trip Episode 2

2009-07-27T20:45:00.002-04:00

I-10 West MM 27, just outside Mobile, Alabama

Because, of course, episode 1 was written while still in Florida.

Well, The Panhandle is drier this time of year than is Central Florida.

I have only seen one Alabama license plate.

No palm trees.

Drivers here SUCK. Aggressive, darting between lanes like they're driving a mini when in fact their vehicle is a motorhome trailering a jeep. Passing lane hogs. Drive as fast as possible to the rear bumper of the car in front then slam on the brakes. Florida's mañana attitude has been left far behind.

I was not expecting heavy traffic.

Road trip Episode 1

2009-07-26T10:26:00.001-04:00

I-10 Mile Marker 247 (or thereabouts).

Three hours into the annual Esmond family pilgimage back to The Big
Smoke (that's Toronto for anyone but a Torontonian... More on that
later).

This year we've decided to make the drive a little more worthwhile. We
did the math with google maps and found that it takes almost exactly
the same time to drive from Orlando to Toronto as it does from New
Orleans. So, as we've been saying for years and years "we should visit
New Orleans," we are adding 3 days to our itinerary and travelling
west. After 20 years of making, at least, annual drives either to
Florida or to Toronto, this marks the first time we have ventured west
of I-75.
Ah, how exciting. Except that I-10 looks a lot like I-75, or I-95, or
all those other Is I've seen. Perhaps a few more hours will serve up
some difference? I'm not holding my breath though. I think that will
take getting OFF the interstate system. So, the plan is to get to
Nola as quickly as possible, spend a few days learning a new city,
then taking some roads less-travelled to get up north.

What are some problems with short sales?

2009-05-29T23:08:00.000-04:00

Uniform process for short sales will help struggling homeowners, say Realtors

2009-05-20T16:45:00.003-04:00

WASHINGTON – May 20, 2009 – Help is on the way for many homeowners facing foreclosure, thanks to new details under the Making Home Affordable Program announced by the U.S. Treasury and the U.S. Department of Housing and Urban Development (HUD).

Read the whole story

Big Improvement to First-Time Buyer Tax Credit

2009-05-15T16:12:00.003-04:00

Under a new FHA rule, lenders can allow first-time home buyers to use the $8,000 tax credit as a down payment. Otherwise, buyers wouldn't get the money until they receive their tax return.

Read More...

Have you been pre-approved?

2009-04-07T13:58:00.002-04:00

It used to be that the steps for purchasing a home were as follows:

1. Look around to see what kind of homes and neighborhoods you like.
2. Find a real-estate agent.
3. Make an offer on the house you like.
4. Negotiate.
5. Enter into a contract to purchase.
6. Apply for financing.
7. Get financing.
8. Close on your new house.

We all know that times have changed, and the main change is that getting financing is no longer a "given". Many, many people are just not going to qualify for any form of financing, and most people are going to find that they are simply just not going to qualify for as much of a loan as they would like to.

Step ONE in shopping for a house to purchase is getting yourself pre-approved by a direct lender. This means having your credit run and submitting proof of income and expenses to the lender. This means having a piece of paper that you can hold in your hands that states how much you can borrow, the type of loan, your credit score and that this offer to finance is from a direct lender. Nothing less is going to be good enough.

What is the point of looking at homes you can't afford and getting your heart set on one? If you look within your price range exclusively, you are bound to find a little gem that you will fall in love with. A home that is too expensive for you will have fixtures and finishes that are to die for. There is nothing wrong with appreciating a nice home, a fancy car, a designer purse or pedigreed dog, but you are only setting yourself up for frustration and disappointment if you set an unattainable standard for yourself.

But this is not just a lecture on emotions. Getting pre-approved is a requirement at this time because home sellers are requiring that you submit proof that you are able to pay for what they are selling. Sellers are refusing to accept an offer to purchase unless proof of funding is part of the offer! The time-period from contract to closing is a long time to waste if the buyer cannot obtain financing. The longer a home is on the market, the more the price should be reduced! Even worse for the seller, while the house was under contract, they may have been missed by a buyer who really could purchase the home but bought another instead.

Get thee pre-approved!!!! It's nothing personal. We are asking it of everyone, we did not look at you and say "this guy looks sketchy, let's see if he can put his money where his mouth is." It's just a good business practice that has become a requirement. It's information we're going to have to get out of you at some point, why would you have a problem putting your cards on the table now instead of later?

Happy house-hunting. There's lots of bargains out there!

The banks have a new way of messing with the RE marketplace

2009-03-20T22:52:00.002-04:00

Nobody can argue the statement that it was lenders, unscrupulous or otherwise, that led us into the real estate meltdown. And, really, lenders equals banks. They led us down the garden path, and now they are reaping what they sowed. They've foreclosed on their defaulted properties and now they have ownership of homes that are losing value by the day.

Nobody can argue, either, that the bank-owned and pre-foreclosure properties' sales have been driving down market value everywhere. Every time a bank has approved a "fire sale" priced home in order to get it off their books, that sale has created a statistic that drags down the price an owner can expect to receive from their home.

But, things were starting to move. Sales stats were ticking up. Loans were being approved and actually financed. Buyers with good credit and a down payment were able to qualify for the lowest interest rates available in years.

Now the banks have changed their game plan again. Now, they are LISTING THEIR PROPERTIES FOR LESS THAN MARKET VALUE. Significantly less. And are hoping to start bidding wars. A full-priced offer goes without a response. An offer for twenty thousand dollars over listing price contingent on financing is rejected over a cash offer for the list price.

I'm all for a competitive marketplace. It's what a free market is built on, but a family home is the lynch-pin of the American dream and these banks are, once again, screwing with peoples' ability to make that dream a reality. Because, now, potential home owners are being lied too. It looks like they can actually afford to buy a home. They go and get pre-approved (and take the hit to their credit report), make an offer, and then are out-bid. It's just not right.

Bad Dog

2009-03-10T22:08:00.002-04:00

Rayne is used to exercising every morning. A 4+ mile run/walk with me or a 5+ mile run with John, either followed with 15 minutes of chasing ball in the golfcourse pond. On Sunday, if she's lucky, we all pile into the car for the drive to the Winter Garden dog park where she can run amok in the shade of a canopy of Live Oak. Today, however, she was not such a lucky dog.

John's usual theater work schedule of noon 'til eight was replaced, today, with him having to be there at the ungodly hour of 9 AM. I had an appointment at 10:15, so no dog walk this morning. As I locked the door the last thing I saw was a confused dog.

When I returned a couple of hours later to take pity on her and take her for her usual outing, this is what I found:

They say that a tired dog is a good dog. I guess in our house a dog who hasn't exercised is a vindictive bitch who ate Mom's shoes.

It's Spring In Orlando

2009-03-10T21:25:00.002-04:00

It was just over a week ago that we Floridians were shivering in our not-quite-fashionable warm clothes. Yes, those of us who care about these things have purchased the latest winter wear, but we don't buy a lot of heavy clothes, only a few outfits. So, when we have an extended cold snap, some of the older warm clothes come out and we just don't have that look. This year our jeans are a little bit too light-coloured (because, really, when the sun hits dark denim you are gonna sweat), there's entirely too many babydoll tops (how DID looking pregnant become fashionable anyway?) in my closet and my one long sleeved blouse is looking very tired.

So, I welcome the return of the good weather (knock on wood, no, really, KNOCK ON WOOD) with a smile and SPF55 sunscreen. Hopped on the motorcycle in jeans, T-shirt and flip-flops and let the wind fill my lungs. People on the road were happy. I had a nice conversation with a dude on a Harley while stuck in traffic. Nobody cut me off, everyone seemed hypnotized by the clear blue sky and I had to concentrate on keeping the wide smile off my face because bugs in the teeth is a very unattractive look.

I think this is the best time of the year here. Not too hot in the daytime, cool enough at night to open the windows and enjoy a cool breeze instead of basking in the flow of the air conditioner. Running in the morning with the dog is enjoyable exercise instead of an all-out sweat-fest. My antiperspirant works. No pop-up thunderstorms in the afternoon. Although I love watching a good storm, having a virtual bucket of warm water thrown on you while loading groceries is a bit of a downer. If you live here, you know what I mean. If you don't live here and are only seeing the brush fires on CNN, keep in mind that Atlanta is jealous because it is still winter there and they are trying to keep you away. HAH!

Why are all the listings bank-owned or short-sales?

2009-03-06T10:02:00.002-05:00

I had a client ask the other day why we can't find any listings in her price range that are "normal".

You know, Person A wants to sell his home, he lists it with an agent on the MLS, Person B sees the pretty house, offers to buy the house, they negotiate a bit, come to an agreement and move smoothly to closing with no delays.

Instead, it feels like every promising listing that comes up is either bank-owned or a short-sale. Short-sales can take a very long time to negotiate, a buyer can expect a 30 to 45 day wait for a response to their offer or counter-offer. Bank-owned homes have a reputation for being slow to close and rife with endless addenda and forms and paper... you know what I mean. Not 100% true, but it is certainly a fact in many transactions.

So where have the normal sales gone? In my opinion, they are going to be few and far between for the next year or so. Let's consider a few facts. Everything is based on that magical thing called "market value", i.e. what the buyer's think your home is worth. How is market value measured? By comparing one house to others like it, near it, that have sold in the recent past. Well, the banks are dumping these foreclosed properties for pennies on the mortgage paper they are writing off. So these fire-sale prices are sucking down the market value of every house around them. My MLS system tells me today that 2443 homes were sold in the three months between December 1, 2008 and February 28, 2009. 1112 of those homes were flagged in the system as Bank-owned or Corporate-owned. Forty-five percent of the homes potentially sold significantly under market price! The fact is, right now the market value of the homes in Orlando is at the same level they were back in the early 1990s!

So now we have to figure in how people bought their homes. In this crazy market of the past decade, very few people have held onto the same property they bought back in 1990. Why would they when they could sell it for a big profit and re-invest their money in a bigger and better house? Did they purchase these homes with a conservative conventional mortgage putting 20% down and financing 80%? No siree, why would they when they are qualified for 3% down, or nothing down, or even closing costs financed? No need to worry, real estate values always increase, right? Even people who didn't take a second mortgage or one of those crazy home equity line of credits for up to 125% of a home's value have had to sit back and watch their home's value spiral away down below what they owe the bank. Any home financed since the late 90's for any percentage over 80% is going to be upside-down unless the purchaser has been making payments over the payment schedule.

Absolutely, there are homes listed for sale that are not short-sales, pre-foreclosures, foreclosures or bank-owned. Some are the new flips: homes purchased at auction or from the bank, cleaned up a bit and put right back on the market. Most are homes that are listed for more than their market value and the owner's cannot afford to drop their asking price or else they slide down into a short-sale situation.

Here's the rub, though. Unless there's a buyer with cash to pay an above market value price, there is a lender in the mix. And lenders are appraising homes at 90% of market value! If your house doesn't appraise to meet the financing, the sale falls through. So everyone's time and money has been wasted and that is why I think that the "normal sale" is not going to be seen very often for quite a while.

Foreclosures drove up 2008 U.S. home sales

2009-03-05T15:56:00.002-05:00

WASHINGTON – March 5, 2009 – Foreclosures drove U.S. home sales up 7 percent in 2008 after a 40 percent plunge the prior year, with eligible buyers lured by deep discounts and low loan rates, according to real estate data company Radar Logic.

So-called “motivated sales,” or foreclosed houses sold at auctions or by financial institutions, surged 177 percent last year while all other sales in the 25 metro areas tracked by Radar Logic fell by 17 percent.

“The market seems to have migrated to the point where motivated sales have become a far more constant part of the housing sales market,” Michael Feder, chief executive of Radar Logic, told Reuters.

These distressed transactions represented as much as a third of all activity last year, he said.

The housing market has swooned from 2006 record highs, glutted with unsold homes, including foreclosed properties and empty new construction.

“Buyers recognize that those are at significant discounts versus what all other people are asking for homes and are migrating to those first,” Feder said. Ultimately, that could be a positive for housing, suggesting there is a price point that has been reached that is attracting buyers, he added.

Prices sank in all 25 metro areas, pushing the Radar Logic composite index down 22 percent for the year.

The biggest sales gains were in areas with the largest annual price declines: California, Nevada, Arizona and Florida.

In California, motivated sales accounted for 47 percent of total sales in December, up from 23 percent a year earlier, based on Radar Logic data.

Falling mortgage rates bolstered sales, with Freddie Mac’s 5.1 percent average 30-year rate in December the lowest since the home funding company started keeping records in 1971.

Lower mortgage rates curb monthly payments, but do little to help potential owners come up with the increasingly large down payments that lenders require, Feder noted.

There is reason for optimism that President Barack Obama’s $275 billion home stability program will kick-start the worst housing market downturn since the Great Depression, though a dearth of specific details makes it unlikely a turnaround will be swift, Feder said.

The program aims to reduce foreclosures and press mortgage rates down.

In the latest sign of housing sickness, pending sales of existing homes slid sharply in January as the recession deterred buyers, based on a National Association of Realtors index that fell to a record low. The measure, based on contracts signed in January, tumbled 7.7 percent to 80.4, the lowest since the trade group started the series in 2001.

Feder contends that three major problems still darken the picture: the oversupply of unsold homes, restrictive access to mortgage credit and reticence of non-distressed home sellers to slash their asking prices.

“We get a turnaround in all three of those and I think we’ll have a housing recovery,” he said.

Access to mortgage money remains limited, with lenders battered by record foreclosures stemming from years of looser lending practices.

“We hear anecdotally that there are a lot of deals that are cut, but then buyers can’t get mortgages for more than 60 percent of the purchase prices, even though it’s at this ‘motivated’ price level,” Feder said.

“The mortgage money simply isn’t providing the capital necessary,” he added. “If the stimulus package begins to help make mortgage money available at numbers more like 80 to 85 percent loan to value, that’s going top help a lot.”

House prices are unlikely to rise before the supply imbalance improves.

To get that, “We’re going to need to have some balance between the absorption of motivated sales and a capitulation by non-motivated sellers to the new price levels,” Feder said.

©Copyright 2009 AFX News Limited. All rights reserved, Lynn Adler (New York). Editing by Dan Grebler.