Watkins Talk - The Real Deal on Real Estate

Which are best?? Short Sales, Foreclosures, REOs, HUD Homes, etc...

As we finish this incredible year and get ready to capitalize on next year, I want to share some insight and experience.  I hear people all the time say they only want to look at foreclosures.  They want a good deal so they think foreclosures are there only path.  There are also the people that only want "Short Sales" at 50% of ARV (After Repaired Value.)  The good news is there are Realtors promoting themselves as Foreclosure and Short Sale specialists.  Also, one in four houses on the market right now fall in this category.  The bad news is these are usually not the best deals!!! 

Before I go further, let's make sure you understand the difference.  A Pre-Foreclosure is a situation in which the bank is foreclosing through attorneys but the deed is still in the owners name.  If there is equity, the seller can sell and pay off the bank.  If there is not equity, the bank can choose to accept less than the payoff so the bank doesn't have to foreclose.  The bank will also pay the Realtor fees and closing cost.  This is a "Short Sale." The bank accepts "Short" of the notes value.  If the bank does foreclose and take the deed to the house, this is a "Foreclosure. This bank owned property is actually called an REO (Real Estate Owned.)

Okay, so now you know the three main types of distressed deals in our market.  Here is the scoop.  When banks list properties, they almost always list them at fair market value.  The problem is houses which sell in a buyers market at fair market value are usually in top shape.  A house that has been in foreclosure is usually always neglected.  It's not updated, it wasn't kept up and its being sold as is!!  Yet the bank wants the same as the beautiful house down the street.  If it doesn't sell, the bank will lower the price slowly until it does.  All the while sitting there vacant getting in even worse condition.  Okay, that is the supply side (yes of course we are back to supply and demand.)  Now the market (the buyers) is looking for deals and they think foreclusures and short sales are the way to go.  So a lot of times there are multiple offers on these "distressed" properties which drive the prices up..  So many Realtors are struggling so they just want deals..  A lot of them honestly don't know what a good deal is..  Remember, the average Realtor sells two houses a year.  So how did we capitalize on this all year?  By finding the best houses in the best neighborhoods which are still owned by sellers w/ equity. Then using all of this criteria to persuade the other side to take our lower offers.  My clients bought nice houses this year at discount prices.. 

I could go on with many examples and scenarios but just call me and we can discuss your best path.  Also, if you are selling your house we can find the people to pay top dollar!!  They seem to be everywhere.  We did this all year as this is our best year in real estate!!  Forget the media!!  Get around the successful people and look at the numbers.  Don't follow the crowd as the main ingredient to success is doing the opposite of the majority.   Please warn your friends and family as we are still working by referral and sincerely appreciate our clients.

P.S.  A recession is a terrible thing to waste!!! 

HOMEBUYER TAX CREDIT RULES CLARIFIED

WASHINGTON, D.C. (Realtor.org) – IRS eligibility guidelines for the homebuyer tax credit when co-borrowers purchase a property have been spelled out.

When a homeowning parent of an adult child co-signs for a mortgage and both names appear on the note, the first-time homebuyer can qualify for the whole amount under some circumstances.

The IRS says the parent doesn’t qualify for any portion of the credit, but if the child hasn’t owned a home during the three years preceding the current purchase and can qualify based on income, he or she can be allocated the entire $8,000 credit.

When unmarried individuals co-purchase a home and only one of them is eligible for the credit, then the full $8,000 can be allocated to the eligible buyer.

Real Estate Sales Soar in Collin County

October sales of homes in Collin County and surrounding areas are projected to be 23 percent higher than in October 2008, reports the Collin County Association of Realtors (CCAR). In addition, "under contract" listings also increased by 27 percent from a year ago.

"This is a tremendous rebound for real estate sales in this area, especially for this time of year," says Steve Haid, CCAR member services director.

The CCAR Pulse, which delves into the real estate markets of 36 local communities, also reports that the time it took to sell a home in October decreased 8.2 percent from 100 days a year ago to 92 days.

Year-to-date, median sales price is approximately 1 percent less than the same time last year, which is mostly due to the large number of sales of foreclosure listings.

"As we continue to absorb the large number of lower-priced foreclosure properties that were listed earlier in the year, we can expect those sales to continue to impact the overall median sales price," notes Haid. "However, sales prices have held pretty steady because the prices of non-foreclosure listings has increased and offset the impact of the foreclosure sales."

In addition, buyers continue to enjoy record low mortgage interest rates and very affordable homes. In fact, the Housing Affordability Index is up 18.4 percent over the same time a year ago. This means that most people in this area could afford to purchase the median priced home -which is not the case in many other parts of the country.

Collin County and surrounding areas remain in an overall balanced market, as has been the case all year. However, there is a shortage of homes priced below $200,000 and an oversupply of houses priced above $500,000.
 
"Overall, we are enjoying a strong rebound in our local market," says Haid. "Closed sales and homes going under contract are very brisk for this time of year. And, homes in the area are very affordable with low mortgage interest rates. These are the right ingredients for a strong local real estate market."

TEXAS BOUND FOR FAST RECOVERY?

NEW YORK (Forbes.com) – Texas’ four major metros are in the top ten fastest-recovering cities nationwide, according to Forbes magazine.

Forbes ranked San Antonio the second fastest recovering city in the country, Austin the third, Dallas–Fort Worth–Arlington the sixth and Houston–Sugar Land–Baytown the eighth.

The magazine attributed their relatively quick recovery to San Antonio’s and Austin’s high number of municipal jobs, Dallas’ thriving technology industry and Houston’s energy sector, as well as the state housing market’s ability to remain stable while other states’ markets crashed.

“Texas didn’t have as big of a boom,” said Dr. Jim Gaines, research economist at the Real Estate Center at Texas A&M University. “So we’re not having anywhere near the kind of bust.”

El Paso and McAllen-Edinburg-Mission were also placed within the 100 fastest-growing MSAs, ranking 43rd and 48th, respectively.

Forbes ranked the country’s 100 largest MSAs according to each area’s September unemployment rate and foreclosures, gross metropolitan product, home prices and sales rates.

Financial Reasons to Buy

 

There are a number of personal and emotional reasons to buy a home. But there are also some strong financial reasons to make the investment. Here are just a few of those reasons:

Increase Net Worth: Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.

A Big Tax Deduction: One of the largest tax deductions available is the amount of interest paid on a mortgage. In fact, a $150,000 home at a 5.50% interest rate can add up to approximately $8,000 in first year's interest. This amounts to a significant savings – effectively reducing the amount of a homeowner's monthly mortgage payment.

Long-Term Appreciation: Over the last few years, home prices have corrected and become more affordable. While that's good news for potential buyers, it has overshadowed the long-term appreciation of a home's value. The reality is, despite market ups and downs between 1950 and 2002, US home prices appreciated at an annual growth rate of 4.8%. Even if you calculate a modest appreciation of 3%, a home purchased today for $150,000 will grow in value to $364,000 over 30 years.

In addition, don't forget that the government is offering an $8,000 tax credit for first-time buyers and a $6500 Step-Up Buyers through June 30, 2010,

Homebuyer Tax Credit Extended!!

Plus, New Tax Credit for Existing Home Owners!

It’s official! President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. In addition, the extension also opens up opportunities for others who are not buying a home for the first time.

To help you understand what the new tax credit details mean to you and your clients, we’ve put together a concise overview of the new tax credit deadline, income caps, and more.

Read the Plan Details Now

Last Call!!! Don't Miss Out!!

FREE FOOD!!

http://enews.ntta.org/DrivingForward/November2009/LaMadPromoNov2009DF

La Madeleine congratulates the NTTA on the opening of the newest portion of the Sam Rayburn Tollway.   To celebrate, La Madeleine invites you to visit any of their Dallas/Fort Worth-area restaurants for a free petite salad or cup of soup.

Just print this offer and present it on your next visit.  The offer expires Nov. 15, 2009. 

The offer is good for one time use only, and it is not valid with any other offers. The offer is of no cash value, and it is valid only at participating D/FW area locations. One offer per person, per visit. © 2009 La Madeleine de Corps, Inc.

Rates at bottom heading up!! Last Chance!!!!

Some good economic news shows the economy is starting to recover and the Fed is buying less mortgage backed securities which means that rates have seen their lows... probably for a long, long time. A melt down in the stock market would give us a brief reprieve, but rates are headed up... BANK on it.

More importantly, for our buyers who need mortgages to buy homes, is the issue of disputed credit accounts. Since credit has tightened, there has been a proliferation of 'Credit Repair' companies. The standard practice is to dispute all accounts (whether the bad credit is correct or not) and hope to catch the creditor on a technicality and get the bad credit removed. NO MORE! NOW, Fannie and Freddie will NOT underwrite any loan that has trade lines reported as 'disputed'. So, while credit repair might remove some of the bad accounts, if any of the trade lines still show up as disputed, YOUR BUYER can't get a loan! Yep, my guess is that the credit card companies had better lobbyists than they credit repair people. So, BEFORE you send your buyers to credit repair, SEND THEM TO US. Credit repair is now VERY tricky and time consuming when it comes to getting a mortgage. Don't loose a buyer by letting them go at it alone.

This week, rates are back up in the 5's ranging from 4.875%  - 5.25% depending on credit and points. Have a great weekend.

First Time Buyer - Last Chance for FREE MONEY!!!

You can still get 8k if you qualify as a first time buyer.  This means you haven't had a house in your name in the last three years.  We must move quick now though!!  It has to close by the end of November and the title companies are already getting booked.  This means we have to find the house, get it under contract, inspect it, get our loan and etc..  New laws are causing delays as well from the appraisal side so time is of the essence.

If you know any first time buyers, please let them know this.  If it's you, stop waiting!!!  I have helped a lot of first time buyers this year find beautiful homes at serious discounts.  They love this as well as the check in the mail for 8k which they don't have to pay back.