Florida Mortgage Lenders and Florida Realtors

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I had the opportunity to be a guest blogger for a well-respected Florida mortgage broker.

While Brian Forrester is vigilant about everything that impacts borrowers and the mortgage industry, he really remains connected to what is happening in the real world and what home buyers and sellers and Realtors face every day.

If you need an excellent Florida mortgage lender, let me know and I’ll be happy to connect you…here’s a link to my guest post about this buyers’ market!

Don’t Sell Yourself Short

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In any buyers’ market, the quest for the best deal is foremost on the property seeker’s mind. But there are many misconceptions about what constitutes a great opportunity.  Just because a home is listed as a “short sale in Trinity!” does not mean it is your best option. And the same goes for bank owned properties; on all fronts, buyers need to be very sure about what they are getting themselves into.

Short Sales in Trinity – Pricing vs. Value

For instance, a “short sale” does not mean it is listed at a better price than other homes in the neighborhood. The lender wants to recover as much of the money owed to them as possible, so the amount they agreed to accept from a buyer is typically pretty much in step with fair market value.

Besides, there are a ton of motivated sellers on the market whose homes are priced as well as any short sale. The difference to the potential buyer is that these sellers are adjusting their prices commensurate with market fluctuations. Today’s short sale property could potentially be worth less after the three, six, twelve months that it can take to get the contract to the closing table.

Property Condition

A short sale property may not be receiving the best care. Since the seller is likely encountering financial difficulties, they may be prohibited from consistently maintaining  it.

And if you go down the road of a bank owned home, you won’t have benefit of a real live seller with whom to negotiate repairs; and the pool, roof, and lawn may not be in the best condition. You are instead dealing with a financial institution that is backed by a battery of attorneys; your list of repairs and your concerns are inconsequential.

Short sale or bank owned — you may not just be capitalizing on someone else’s misfortune; you may very well be inheriting a headache, tread cautiously.

Short Sales Specialists

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flowers

While being a specialist was once a term reserved for the medical profession, it now applies to the real estate industry. And the simple reason is that it has become complex.

Success in the short sale and foreclosure arena demands an understanding of the laws and the negotiation tactics specific to these transactions.  

Typically, buyers and sellers select an agent based on reputation and compatibility; but if you’re dealing with a short sale or a foreclosure or are looking to obtain advice on how to proceed with either, you need to make sure that the Realtor you select has the appropriate accreditations.

Realtors who seriously want to offer effective short sale and foreclosure services now pursue a focused course of education to earn approval as a Certified Distressed Property Expert.

Realtors with CDPE accreditations are specifically trained in all the issues that can derail these types of transactions and how to keep them on track. They also receive education in the techniques that allow them to operate as a true advocate to guide their client through the intricacies of these unique processes.

Don’t Sell Your Home, Exchange It!

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st george in trinity

A tremendous tax advantage that is often overlooked when buying property is the tax deferred opportunity commonly known as a 1031 Exchange. While the guidelines are very specific, they are relatively simple to manage.

Basically, a 1031 exchange allows the buyer to strategically sell a qualified property and buy another within a specific timeframe. Since the IRS views the transaction as an “exchange” and not a sale, it permits the taxpayer to defer the capital gains tax on the property they sell.

We are seeing more and more clients taking advantage of this opportunity; it is not a complicated process, it just has its own set of ironclad rules.

When can you do a 1031 Exchange?

  • If you plan on acquiring a replacement (or what is commonly referred to as a “like kind”) property after selling an existing investment property
  • If the total purchase price of the “like kind” property is equal to or greater than the total net sales price of the existing property you are selling
  • If all the equity that you receive from that sale is used to acquire the replacement “like kind” property

How are the monies handled?

The proceeds from the sale of the investment property must be held by a “qualified intermediary” and do not get handed over to you or your Realtor. These funds are in a sense “escrowed” pending application to the purchase transaction.

What are the 1031 Exchange Timelines?

There are two:

  • The Identification Period – You must identify a selection of other replacement properties that you wish to buy. This period is exactly 45 days from the day that you sell the property; no exceptions.
  • The Exchange Period – This period ends exactly 180 days after the date that you close on the sale of the home (or is the due date that your federal tax return for the year in which the transfer of the property has occurred, whichever situation is earlier). This is the time period you have to finalize your new purchase transaction.

Please note that while none of these time frames are negotiable, it is a very clear cut process that can save you an extraordinary amount of money and even adds more appeal to this buyers’ market.

Trinity Foreclosures

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fla home

 The homes for sale inventory may offer a large selection of foreclosure opportunities, but sometimes an inexpensive home can cost you plenty.

We’ve heard stories from other agents about home buyers who have had to make offers on a number of different homes because the home inspection reports came back full of high ticket repair items. These issues ultimately made the cost of the home not only prohibitive, but quickly took the “great” out of the “deal.” (Besides, many REO (real estate owned) properties carry an “As Is” status, so you can’t even negotiate repairs.)

Great neighborhoods and gorgeous homes can harbor some overwhelming issues like leaks that have gone unattended creating structural and mold damage, and a host of other little things that turn into big things when a home is abandoned.

Oftentimes a distressed home owner has other priorities that don’t include conducting their property maintenance checklist and spending money on things like gutter cleaning, window caulking, roof repairs, pool upkeep, and other run of the mill repairs.

The other reality is that people who are planning their strategic foreclosure or are filing bankruptcy are not necessarily going to be concerned about the future value of their home. They’ve already deemed it without value as they no longer intend to pay their mortgage; so therefore, they don’t tend to the property.

In this market, sometimes you really do get what you pay for and a $300,000 home for the price of $100,000 may be worth just that and you’ll need to pump a lot of money into the home to repair and restore it to its former glory.

Regardless of an incredible opportunity, always have a thorough home inspection conducted by a trusted professional and don’t start measuring for window treatments until you have assurance that your new home is what it seems.