My New Year Resolution is the same as last year’s…”Spend Time Wisely”.  I made more money last year than any previous year simply because I selected my customers very carefully and only spent time working for qualified Sellers and Buyers.

Home-Sellers: The inventory of available homes is still high.  Real estate boils down to Price, Condition and Location…Sellers control the Price and Condition. If a Seller will not price a home correctly, I will not work for them for free.  However, I will list a home for an unrealistic Seller if they pay me upfront for my excellent services.  But I prefer to earn a full-service, listing broker commission while working with a realistic Seller.

Home-Buyers:  I only work with QUALIFIED Buyers because my time is my most precious asset.  I will continue to politely refer Buyers to other Realtors whenever they refuse to get prequalified…Unless a Buyer is paying cash and can show “Proof of Funds”, THERE IS NO EXCUSE for Buyers not to get prequalified before shopping for a home!

FOUR FACTS ABOUT GETTING PREQUALIFIED FOR A (MORTGAGE) LOAN: 

1.)  Shopping for a mortgage cannot reduce your credit score (Federal Law).

2.)    Going online at www.SunCoastHomeEquity.com to prequalify takes less than 10 min.

3.)    It is secure/confidential and

4.)    It is FREE !!!!

According to a recent Los Angeles Times article, low mortgage rates are likely to continue through 2012.  But the 30-year fixed-rate mortgage is expected to inch up to an average 4.5 percent for 2012 and increase to 5.4 percent in 2013, according to Freddie Mac economists’ forecasts.

Home-Buyers that require financing need to know what interest rate they qualify for so they know what they can afford based on their monthly payment budget.  Many prospective Buyers have been unable to take advantage of the low mortgage rates.  Lenders’ tighter underwriting standards for loans following the housing crisis shut out some Buyers who have poor credit, low downpayments or unsteady employment.  Therefore, it is more important than ever to get prequalified before spending any time with your Realtor. 

I really have this business down to a science.  I am having so much fun doing what I do so well that I plan to continue to the same good things that I did last year.  So, I really don’t have a business New Year Resolution.  I have my cake and I am eating it too!  Now, if I could only stop eating cake, I could look better…there it is!  I found my New, New Year Resolution.

Even if you think you can easily qualify for a loan to buy a home, it is EXTREMELY IMPORTANT that you get pre-qualified before you go out with your Realtor to look at homes.

A.)    It’s FREE to get prequalified at www.SunCoastHomeEquity.com

B.)    It takes about 10 minutes

C.)    It cannot effect/reduce your credit score (Fed Law)

D.)   Your information is secure/confidential

Once you are pre-qualified, you will receive a “Mortgage Letter” that lets sellers know you are a “real” prospective buyer. If you are paying cash to buy your next home, you will need to provide “Proof of Funds” (such as a bank statement or other proof that you have the cash to buy).

If you find a real estate agent that allows you to go see homes without proof that you are a qualified buyer, you are working with a less experienced (or worse “desperate”) agent. That inexperienced agent is not likely to help you find the best home and negotiate the very best price possible…a mistake that will cost you $1,000’s!

Don't Touch That Button

The 2011 Sarasota Chalk Festival theme, was the ‘History of Street Painting’. Click here to see a photo review.  Local artists and artists from around the world travel to Sarasota to transform South Pineapple Avenue in Burns Square (Downtown Sarasota) into a walking performance art museum of art history.

“Sales are up and the inventory of available homes for sale is shrinking” according to the Sarasota Association of Realtors report published today. Click here to view the report and statistics.

Even though a newly built home will cost buyers more than buying a pre-owned home, buyers who can afford the premium price, are better off.

New homes are built “greener” than previously enjoyed homes. It’s appealing to people who are concerned about energy costs and future longer-term efficiency. If you buy a new home, the “green” energy features will be worth more down the road.

New homes also maximize usability space and offer modern amenities. However, new-homes have become a tough sell. The median sales price of a new home in July was $222,000. On the other hand, the median sales price of an existing home in July was $171,200, according to the National Association of Realtors®.

Besides price, appraisals are also a big issue hurting the new-home market. In many cases, appraisals come in lower than the cost of construction. Therefore, low appraisals cause many deals to fall apart.

Foreclosures continue to flood real estate markets across the country, and buyers are looking to cash in on what they view as some of the best real estate deals. While some foreclosures are a great purchase, buyers need to be cautious before jumping in. Make sure you’re really getting a bargain.

Here are some mistakes to avoid:

1. Don’t judge a house by looks alone. A home inspection prior to purchasing a property can help buyers determine if they might be getting in over their head. Remember that vacant homes can deteriorate rapidly.

2. Don’t focus on price alone. Do not to assume that a previous owner’s financial problems caused the foreclosure. Buyers may focus on the ultra-low price so much that they forget to factor in other qualities, such as the home’s school district, view, location and local crime rate.

3. Don’t be tempted to “flip.” Purchasing a home at bargain price, updating it and trying to sell it for a lot more may seem tempting. However, unless the buyers are pros at house flipping, they’ll likely run into several novice mistakes in trying to make fast money on flipping a foreclosure. Always consult a real estate professional, home inspector and contractors before considering a flip.

4. Don’t go over budget. Foreclosures often require some fixes so buyers need to make sure they have the money to afford needed repairs. I always recommend that buyers have at least half of the money in cash for needed repairs. Buyers will want to avoid taking more loans than needed, particularly private loans, because the interest on them will slowly chip away at the initial foreclosure bargain.

Everyone seems to have an opinion on where home prices are headed. Housing bulls are saying prices may start rebounding as early as later this year. Some housing bears are saying that prices may still drop another 10-15%. What actually is going to happen? No one knows for sure.

For the latest S&P/Case-Shiller U.S. National Home Price Index survey press release, click here

However, Macro Markets, a financial technology company, actually surveyed 108 economists, real estate experts, and investment and market strategists for their June 2011 Home Price Expectations Survey. They then averaged all 108 opinions. Here is what the report says about house prices over the next five years:

• 2011: prices will depreciate 3.52%
• 2012: prices will appreciate .46%
• 2013: prices will appreciate 2.18%
• 2014: prices will appreciate 2.92%
• 2015: prices will appreciate 3.47%

Accumulative appreciation (including this year’s projected depreciation) will stand at 5.71% in 2015.

Bottom Line

The experts say home prices will begin to see appreciation next year and return to historic levels of annual appreciation by 2015.

 Siesta Beach in Sarasota, Florida

With the finest, whitest sand in the world, takes the top spot in World Rankings this year. The foremost authority for World-wide beach ranking, Dr. Beach, designed a beach rating scheme to provide an objective appraisal of major public recreational areas. Fifty criteria with a sliding scale from 1 to 5 are used to measure the quality of swimming beaches. View the criteria here.

Siesta Beach attracts sand collectors from all over. Siesta Beach has clear, warm waters that serve for ideal swimming. The beach is hundreds of yards wide in the shape of a crescent, due to anchoring of onshore rocks to the north and a unique underwater formation of coral rock and caves, providing for great snorkeling and scuba diving. This beach is great for volleyball and other types of recreational fitness.

Click here to see videos of Siesta Beach and click here to see other related beach area videos.

 There are a lot of really good deals on vacation homes at the moment. In many second-home hot spots, prices remain close to five-year lows. I am seeing some home prices are still down 47 percent from their peak in 2006.

A buyer looking to cash in on vacation- or second-home values should consider the following:

1. Is it rentable? Even if a buyer isn’t planning to rent, he or she may still want to consider the rental aspects of the property, particularly since a home’s rental potential can affect its resale value.  Buyers should check with their real estate broker to ensure that short-term rentals are allowed.

2. How do you plan to use the home? The loan rate depends, in part, on how the property will be used. For example, if buyers intend to use the property primarily as a second home, they’ll pay about the same mortgage rate as a primary residence. However, if they plan to get rental income from the property, the property will be treated as an investment, which means they may need to pay as much as 25 percent of the buying price for the downpayment and up to one percentage point more in interest.

3. Don’t count on rental income to pay your bills  Unless you buy in Sarasota on Siesta Key or Longboat Key where vacation rentals often cash flow positive (that is turn a profit), the typical property rents out just 17 weeks a year. Plus, you’ll need to pay for cleaning, maintenance, insurance, and maybe management fees (at least 15% of income).

According to real estate agents, HGTV and other cable channels have made today’s buyers more knowledgeable about home design, and some worry that such programming also has given buyers unrealistic expectations.

You can’t have the big yard, the top-line updates, and all that in a starter home. You’ve got to compromise somewhere or else you’ll never buy anything.

Finding a “move-in ready” home was important to 87 percent of 300 first-time buyers recently polled. Some agents say first-timers are being more selective; and some are even turning away from well-priced homes because they do not have granite countertops, need a new carpet or have wall colors not to their liking.

Zillow says higher downpayments and stricter underwriting standards mean today’s buyers want to ensure their homes need few – or at least inexpensive – improvements.

The Obama administration came out with a score card on its anti-foreclosure program last week, and there’s just one word for it: Minimal…According to this article from Realty Times, “Of roughly 1 million financially-distressed home owners who’ve been given mortgage payment reductions through three month “trials” under the HAMP program… just 116,000 have ended up with permanent loan modifications from participating lenders.”

Rates on fixed mortgages dipped for the second straight week as Treasury yields fell.  Freddie Mac said Thursday the average rate on the 30-year mortgage dropped to 4.71% this week from 4.77% the previous week.  Rates had hit a 40-year low of 4.17% early in November.

The average rate on the 15-year loan slipped to 4.08% from 4.13%.  It reached 3.57% in November, the lowest level on records starting in 1991.

Rates had been rising since November.  Investors shifted money out of Treasurys and into stocks on expectations of faster economic growth and higher inflation.  Yields tend to rise on inflation fears.  Local home sales were up 27% in December from November even as rates rose “as high as” 4.75% during that period.  It would appear that any rate below 5% still seems extremely attractive to most home buyers.

Many struggling homeowners turn to a short sale transaction as way to resolve a mortgage debt and avoid foreclosure.  However, after the transaction, some homeowners may continue to experience collection activities.

The collection of a short sale deficiency where a lender forgave the mortgage debt is the collection of an illegitimate debt and a violation of the Florida Consumer Collection Practices Act (FCCPA).  Another common consumer protection issue following completion of a short sale is improper credit reporting.  It is a violation of the FCCPA for a creditor to knowingly publish false information about a consumer’s creditworthiness.  It is not uncommon for completed short sale transactions to be improperly and falsely reported to the various credit reporting bureaus.

If you are interested in financing the purchase of a home in Florida and haven’t been prequalified, just contact me.  We can review your credit report and correct anything that might be derogatory so that you can buy the home of your dreams.

The conscious decision by a finacially able homeowner to default on the loan is known as a “strategic default.”  In today’s real estate climate, it has become more and more common for financially able homeowners to stop paying their mortgage loans when their property is worth less than their mortgage balance. 

This recent trend has sparked concern on the part of Fannie Mae, which recently stated it would “lock out” homeowners from receiving a new loan for a seven-year period if it is determined that the borrower is guilty of strategic default.  The lock-out period replaces the previous five-year period adopted in 2008.  Other lenders, such as Freddie Mac, also punish defaulters with lesser lock-out periods.

Fannie also plans to more aggressively pursue deficiency judgments by executing on borrowers’ assets, as well as monitoring and studying delinquent loans to identify cases that should receive extra attention.  It is important to note that Florida is a recourse state that allows lenders to pursue deficiency judgment post-foreclosure.

Fannie’s new measures were adopted to prevent the increasing number of losses that may result if borrowers continue to strategically default on loans.  It has been estimated that 12 percent of defaults have been strategic.  With almost 25 percent of homeowners currently “underwater,” continued strategic default would most certainly exacerbate lenders’ mortgage losses.  Executives of Fannie believe if the use of strategic default grows, it could worsen the already depressing conditions of the housing market.

Although Fannie has sharpened its penalties, it is also preparing to reduce the lock-out periods for borrowers experiencing legitimate hardships who cannot avoid foreclosure.  The previous waiting period of five years was applied to all borrowers who went into foreclosure across the board, regardless of the borrower’s circumstances.

Under the new plan, borrowers experiencing legitimate hardships will receive a two-year lock-out period if they exercise the option of transferring their homes to the lender through a “deed in lieu of foreclosure” or completing a short sale.  In the absence of a deed in lieu or short sale, if the borrower can provide documentation of extenuating circumstances or show that an effort was made to negotiate with the lender, the lock-out period may be shortened to as little as three years.

Special Financing Available on Certain (Fannie Mae) Bank Repos .

The program is called HomePath and the benefits include:

• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
• You may qualify even if your credit is less than perfect
• Available to both owner occupiers (minimum 3% down payment) and investors (minimum 10% down payment)
• Down payment can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• No mortgage insurance
• No appraisal fees
• Also eligible for HomePath Renovation Mortgage
• HomePath Mortgage financing is now readily available

Navigating today’s real estate market can be a real challenge.  To make it easier, hire an experienced real estate broker.  Here is a podcast to help you along the way.  Listen today to learn more about Fannie Mae and this evolving market.

Contact me with any finance or real estate questions (941-552-6877).