Wednesday, June 28, 2006
SW Florida Market Trends
UNITS SOLD
1568 Jun 05
1206 Jul
1282 Aug
1201 Sep
1013 Nov
1022 Dec
838 Jan 06
853 Feb
1106 Mar
1080 Apr
1036 May
ASKED TO SOLD PRICE RATIO PERCENT
98.4 Jun 05
98.6 Jul
98.5 Aug
98.3 Sep
98.0 Nov
97.7 Dec
97.5 Jan 06
97.1 Feb
96.9 Mar
96.6 Apr
96.6 May
AVERAGE SELLING PRICE
329,762 Jun 05
333,761 Jul
333,721 Aug
328,709 Sep
338,854 Nov
338,538 Dec
329,571 Jan 06
346,275 Feb
310,866 Mar
328,755 Apr
344,115 May
As you can see the prices are not going down as the cost of construction is increasing, however, many listing asking prices were based on a expected appreciation that is not happening. Therefore, the sold price is only 96.6% of the original asking price. The number of units sold is more normal now.
Tuesday, June 27, 2006
Collier County Lowers Taxes For 2007
Monday, June 26, 2006
Real Estate Foreclosure Tips
Real Estate Foreclosures Tips & Techniques
The first step in working with foreclosures is to develop a financial and strategic plan. Determine your goals. Decide if you are going to use your purchase as a private residence, for rental income and/or to fix up and sell for a profit, often called flipping.
The second step is to identify your finances. Determine how you are going to finance your purchase. Even if you have the cash, many times it is wise to utilize a loan and use cash flow or appreciation to grow your net worth, while using your disposable cash to control another property. Decide if you want to use partners.
The third step will be to choose which stage of foreclosure you want to concentrate on. We recommend the pre-foreclosure or post foreclosure stages. See below.
The final step is to be physically present in the area where you wish to acquire foreclosed property. Time is of the essence and due diligence cannot be accomplished remotely.
Stages:
Pre-foreclosure- a foreclosure action is the legal procedure that a lender initiates to reclaim ownership and possession of a property after the borrower fails to repay the loan in accordance with the contract terms. At this step the borrower is unable to work out an alternative payment plan to satisfy the past due amounts. The lender will notify the mortgagors of the default and file a complaint in the court (notice of default) in the county in which the property is located. TIP: We have ways of finding pre-foreclosures.
NOTE: Learn how to approach a borrower before the property goes to auction. We can help. Benefits- assume existing mortgage, offer to pay past due balances to eliminate bad credit for the borrower, obtaining owners equity at a discount allowing the owner to walk away with some cash and eliminate the negatives found under foreclosures below.
Foreclosure- a summons is issued to the borrowers and this initiates the foreclosure process. A notice is sent to all parties having an interest in the property. The court date and time is set for the auction. A court appointed trustee is assigned. Creditors will appear in court but the borrower does not have to appear. If the bids are not sufficient to recover the outstanding loan balance, the lender may bid and buy back the property. The lender can sue the debtor to collect any deficiency. TIP: We suggest that you attend several foreclosure sales to get a sense of how things occur.
NOTE: When you buy a foreclosure on the courthouse steps, you have to pay cash, property taxes, be responsible to evict the property owner, pay home owner association dues, pay for insurance, make property repairs, become a landlord, and possibly pay mortgage expenses. Additionally, there is only a brief time to inspect the property and you are bidding against other full time investors.
Post foreclosure-The lender has purchased the property at the auction and placed the property up for sale (REO or real estate owned). TIP: Contact a real estate agent who handles them in your area. (Jim Wiedl at Brenner Realty 800-358-4552)
Florida foreclosure filings jumped by 6 percent from April to May,
according to a study by RealtyTrac Inc., a California-based foreclosure
listing Web site. That's one new filing for every 821 Florida households,
and one of the highest foreclosure rates in the nation, second only to
Texas.
New Projects
Majestic Palms
Fort Myers
Under Construction
$206k - $320k
Musa at Daniels
Fort Myers
Rental Conversion
$140k - $230k
Greens at Gateway
Fort Myers
Rental Conversion
$139k - $220k
Malibu Lakes
Naples
Rental Conversion
$230k - $375k
Orange Blossom
Naples
Pre-Construction
$375k - $450k
HUD Voucher Program
Findings include:
• 85 percent of the PHAs provide pre-purchase counseling to program participants.
• In most programs, VHO purchasers have access to additional funding sources to help them buy homes.
• Only 4 percent of PHA respondents reported any foreclosures.
• VHO purchasers were primarily female heads of household (61 percent) with children (74 percent) and/or members of a minority group (58 percent).
• VHO programs serve a substantial proportion of people with disabilities at 32 percent.
For more information on local agencies that offer the housing vouchers, contact a local HUD office. A directory of Florida locations is published on HUD's Web site at: http://www.hud.gov/localoffices.cfm#FL
Wednesday, June 21, 2006
Real Estate Purchase Contract Tips
1. Closing Date: You may be able to adjust this date based on your financing or sale of existing property issues. For pre-construction the builder may not be flexible.
2. Financing: Often you can pay points to "buy down" the interest rate.
3, Property Modifications: Make sure you understand the deadlines regarding choosing paint color, carpet, tile, etc.
4. Access to Property Before Closing: This is rare, but I have done it. Remember if you are selling and allow the prospective owner to move in before closing and something happens where you do not close, it can be very difficult to remove the prospective owner.
5. Fees: If the property has an association, know exactly when the fees start.
6. Assignability: If you are an investor, it is beneficial to be able to assign the property to another entity or individual, especially during rapid price inflation, however, this is becoming more rare now.
7. Title: Know who's name or LLC will be on the title. It is best to have it correct on the offer contract because it may be difficult to change later.
8. Conditions: Be aggressive in stating your wishes in the contract. If the seller agrees to shampoo the carpet before closing, state it in the contract and do a walk through before closing. Other clauses to use: This contract is conditional on buyers acceptance of the inspection results. This contract is conditional on buyer being able to acquire insurance.
9. Price: For new construction the builder may not want to sell a property for less than he did to the first buyer in a project, however, you can still negotiate credit back at closing or additional upgrades.
Tuesday, June 13, 2006
New "Flipping" Rules
WASHINGTON - Housing and Urban Development Secretary Mel Martinez today announced a new initiative in efforts to crack down on predatory lending. HUD published a final rule today in the Federal Register addressing property "flipping" on mortgages insured by the Federal Housing Administration (FHA).
Property "flipping" occurs when a recently acquired property is resold for a considerable profit with an artificially inflated value. Martinez said, "This final rule represents a major step in our efforts to eliminate predatory lending practices."
Predatory lending results when home purchasers become unwitting victims of lenders, sellers and appraisers, often working together. The unsuspecting homebuyers either purchase homes with sales prices far in excess of the fair market value, or are substantially overcharged with costs associated with obtaining a mortgage.
The final rule, "FR-4615 Prohibition of Property Flipping in HUD's Single Family Mortgage Insurance Programs makes recently flipped properties ineligible for FHA mortgage insurance. It also allows FHA to better manage its insurance risk by requiring additional support for a property's value when a significant increase between sales occurs.
Features include:
Sale by Owner of Record: Only the owner of record may sell a home to an individual who will obtain FHA mortgage insurance for the loan; it may not involve any sale or assignment of the sales contract, a procedure often observed when the homebuyer is determined to have been a victim of predatory practices.
Time Restrictions on Re-sales:
Re-sales occurring 90 days or less following acquisition will not be eligible for a mortgage to be insured by FHA. FHA's analysis disclosed that among the most egregious examples of predatory lending was on "flips" that occurred within a very brief time span, often within days. Thus, the "quick flips" will be eliminated.
Re-sales occurring between 91 and 180 days will be eligible provided that the lender obtains an additional appraisal from an independent appraiser based on a re-sale percentage threshold established by FHA; this threshold would be relatively high so as to not adversely affect legitimate rehabilitation efforts but still deter unscrupulous sellers, lenders, and appraisers from attempting to flip properties and defraud homebuyers. Lenders may also prove that the increased value is the result of rehabilitation of the property.
Re-sales occurring between 90 days and one year will be subject to a requirement that the lender obtain additional documentation to support the value to address circumstances or locations where HUD identifies property flipping as a problem. This authority would supersede the higher expected threshold established for the above-mentioned 90 to 180 day period and will be invoked when FHA determines that substantial abuse may be occurring in a particular locality.
Other recent actions to protect homeowners from predatory lending and promote homeownership include:
A proposed rule making lenders accountable for appraisals on mortgage insured by FHA.
A recent plan announced by HUD to expand protection of homeowners by proposing performance standards for appraisers of FHA-single family homes under its Appraiser Watch Initiative. Under Appraiser Watch, some 25,000 appraisers will be held accountable for faulty appraisals, which too often lead to default and foreclosure. FHA will monitor appraisers' default and claim rates and will levy sanctions - including removal from its list of approved appraisers - against those whose rates are excessive.
A proposal to reform the regulatory requirements of the Real Estate Settlement Procedures Act (RESPA) that would make the process of buying and refinancing a home significantly simpler, potentially less expensive and would protect consumers from unscrupulous lending practices.
The "Homebuyer Bill of Rights," which requires greater disclosure of costs associated with buying a home, allows consumers more choices in choosing providers of closing services, limits excessive settlement fees and encourages innovation and competition in the marketplace.
HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly, people with disabilities and people living with AIDS.
Saturday, June 10, 2006
Cape Coral Florida Tax History
• 2002: $651.77 at a 6.5177 millage rate, $26.10 lower than 2001.
• 2003: $637.45, at a 6.3745 millage rate, $14.32 lower than 2002
• 2004: $610.49, at a 6.1049 millage rate, $26.96 lower than 2003
• 2005: $575.98, at a 5.7598 millage rate, $34.51 lower than 2004
• 2006: $539.06, at a 5.30906 millage rate, $36.92 lower than 2005— Source: Capecoral.net
