Now that you're hearing so much about them, you may be wondering what exactly a "short sale" is. In most cases, it is a property for sale whose owner is facing foreclosure and trying to preserve his/her credit rating.
Short sales are different from other property sales. Instead of only involving two parties, the buyer and seller, a short sale also involves the holder of the mortgage loan. The seller has approached his or her mortgage holder requesting to sell the property for less than the balance owed on the mortgage, thus the expression “short” sale. The mortgage holder may reject that request and proceed into foreclosure, but many banks are ready now to accept less money for a property than is owed on it because a short sale will likely cost the bank less than putting the property through foreclosure. A short sale can be a good deal for the seller and it can also make the property a good deal for a buyer.
If you are a buyer looking for a great deal, a short sale properties can be an attractive option although you need to understand the differences between a normal real estate purchase and a "short sale." In a short sale, the buyer and seller negotiate and agree on a price as with a normal real estate transaction. The differences are as follows. You will have to offer to buy the property "as is." The seller is very unlikely to agree to pay for any repair needs uncovered during a home inspection. You also will not be able to stipulate any contingencies. At this point, the process moves out of the seller’s hands to the bank’s loss-mitigation department.
To increase your chances of a successful offer, make your offer price reasonable and include a substantial earnest money deposit. If you plan to use a mortgage to pay for the home, include a lender approval letter with your offer.
A buyer's offer usually takes about 30 or more days to get through the bank's loss mitigation process. Mortgage holders seldom make counter-offers and some banks will not notify you or your Realtor if the offer has been rejected... only if it is accepted.
If you are a prospective short sale buyer, any licensed Florida Realtor will work with you to get you the best possible deal.
Thursday, July 2, 2009
Saturday, June 20, 2009
$1.8 Billion In Stimulus Funding Coming to Florida
The U.S. government just released $1.8 billion in stimulus money for education to Florida, two weeks after the state applied for a waiver required because the state underfunded education in previous years.
"The $1.8 billion Florida will receive today is part of the single largest boost in education funding in recent history," Secretary of Education Arne Duncan said in a statement. 'Florida can now utilize these funds to save jobs and lay the groundwork for a generation for education reform."
Although the money is expected to plug holes in school-district budgets to save jobs, South Florida's school districts might still see layoffs. Some observers fell, however, that contrary to all the rhetoric about `how it's to save all these layoffs, the reality is it's only going to help the state have fewer layoffs.
School districts won't be getting the funds directly from Washington. Florida law makers, confident the state would get the money, allocated funds to shore up the education portion of the 2009-10 budget the Legislature approved last week. That means that legislators could tout a small increase in per-student spending in Florida. But they reshuffled and reduced other parts of the education budget to do so, leaving school districts with less money than they had last year.
In addition to the $1.8 billion in so-called state stabilization funds, Florida has received almost $600 million in education stimulus dollars -- including about half the money the federal government designated for low-income schools, programs for disadvantaged students and other grants. Another $891 million in stabilization money will also become available this fall.
To receive the funds, the state had to assure the federal government that it would closely track education statistics, including annual student improvements, the effectiveness of state standards and assessments, and interventions in turning around under performing schools.
Florida will also have to report how many jobs will be saved using the stimulus money, how the funds are used and what state and local tax increases are avoided because of the federal dollars.
"The $1.8 billion Florida will receive today is part of the single largest boost in education funding in recent history," Secretary of Education Arne Duncan said in a statement. 'Florida can now utilize these funds to save jobs and lay the groundwork for a generation for education reform."
Although the money is expected to plug holes in school-district budgets to save jobs, South Florida's school districts might still see layoffs. Some observers fell, however, that contrary to all the rhetoric about `how it's to save all these layoffs, the reality is it's only going to help the state have fewer layoffs.
School districts won't be getting the funds directly from Washington. Florida law makers, confident the state would get the money, allocated funds to shore up the education portion of the 2009-10 budget the Legislature approved last week. That means that legislators could tout a small increase in per-student spending in Florida. But they reshuffled and reduced other parts of the education budget to do so, leaving school districts with less money than they had last year.
In addition to the $1.8 billion in so-called state stabilization funds, Florida has received almost $600 million in education stimulus dollars -- including about half the money the federal government designated for low-income schools, programs for disadvantaged students and other grants. Another $891 million in stabilization money will also become available this fall.
To receive the funds, the state had to assure the federal government that it would closely track education statistics, including annual student improvements, the effectiveness of state standards and assessments, and interventions in turning around under performing schools.
Florida will also have to report how many jobs will be saved using the stimulus money, how the funds are used and what state and local tax increases are avoided because of the federal dollars.
Monday, June 15, 2009
You Can Control the Energy Cost of Heating & Cooling Your Home
As we enter the warmer part of the year in Florida, it is useful to remember that as much as 50% of the energy used in your home goes to heating and cooling. If you are trying to save money or you're trying to embrace a "greener", or more eco-friendly lifestyle, do you know enough about the nature of heat transfer to make the right decisions? Let's review the basics of how "heat" works.
Heating and cooling your home are both instances of "heat transfer." First, let's dispense with the notion that heat always rises. That is true in only one form of heat transfer. In general, heat energy flows in all directions equally. There are three different ways in which heat is transferred; conduction, convection and radiation.
Conduction is the form of heat transfer through a material, for example, the walls of your home in summer and winter. For any given amount of in-wall insulation, measured in its R-value, conduction is what accounts for the heat loss (or for cooling, heat-build-up) through the walls and roof.
Convection heat transfer occurs when heat travels in a moving fluid or gas, for example the heat energy that moves along with the passage of air. The "wind chill factor" you hear about in northern state weather reports is a measure of how much heat energy is transferred by convection when you're outside due to the effect of wind.
The third form of heat transfer is radiation. Radiation is the transfer of heat energy through empty space, or the way the sun warms the Earth. Radiant heating is not affected by being in contact with a solid material the way conduction loss does, or by moving along in a fluid or gas the way convection does. Radiant heat transfer is what warms your home when the sun is out.
You can use your knowledge of these 3 forms of heat transfer to make your home building or remodeling project more energy efficient.
You can reduce the amount of heat build-up or conversely, cooling loss due to conduction through your walls by increasing the R-value of the insulation in the walls by adding more. Installing double pane windows and sliding glass doors, if your home wasn't built with them originally, will reduce conductive loss of those items. The gases between the two panes of glass (like argon and krypton) along with films and coatings (like "low-E") can increase the insulating value of your doors and windows from R-2 to R-6 or more.
Caulking or using foam insulation material to seal crevices or openings around doors, windows and electrical outlets will reduce convection heating or cooling loss caused by air infiltration.
Fireplaces are a big source of convective heat transfer as air continuously flows up the chimney if the flue damper isn't air-tight. If you have, or are planning, on a fireplace put air-tight glass doors in front of it and keep the flue damper closed when the fireplace is not in use. But, beware, don't forget to open that damper before your start the fireplace. Just remember to close it again when the fireplace has cooled back down.
Many sources of heat build-up (or cooling loss) are affected by more than one form of heat transfer. Since windows and sliding glass doors suffer from both conductive and convective heat transfer, consider using high energy-efficiency Energy Star doors and windows for any building or remodeling project. As another example, while radiant heat transfer is why a home with a roof exposed to the sun gets warmer due to radiation, you can use convection to your advantage to alleviate part of the problem. Installing a heat-activated fan system in your attic will use convection to blow the heated air in your attic out through vents preventing it from transferring its heat energy, through conduction and convection, into your living space below.
If your home is in a particularly sunny locale, you may want plant large deciduous trees, such as river birch, on the south side of the home for shade from the sun in the summer. Equally, you can avoid radiant heat build-up from the sun by closing drapes and blinds on the southern side of your home in the summer, yet take advantage of the sun's radiant heat transfer by keeping the drapes and blinds open during the day to allow sunlight to enter and warm your home during cooler months.
If it's time to replace your heat pump or any appliance, look for Energy Star-rated appliances. Energy Star-rated appliances like clothes washers, dryers, refrigerators, dishwashers and dehumidifiers not only use less electricity; they also transfer less heat into your home through all three forms of heat transfer, conduction, convection and radiation.
Pay attention to smaller changes that offer big savings, many of which are more efficient because of their lower heat transfers. Use energy-saving compact fluorescent lamp bulbs. Turn off all lights when not in use; lights generate radiant heat. Keep shrubs and other obstructions from blocking free air flow around your external heat pump unit which relies upon convection to dissipate its heat build-up. And, change your furnace filter every 3 months. A dirty filter slows down air movement reducing the effectiveness of the convection heat transfer your air conditioning system relies upon.
Understanding the different kinds of heat transfer and how to use that knowledge to reduce your home's energy consumption can save you a serious amount of money as well as make your home more comfortable to live in.
Heating and cooling your home are both instances of "heat transfer." First, let's dispense with the notion that heat always rises. That is true in only one form of heat transfer. In general, heat energy flows in all directions equally. There are three different ways in which heat is transferred; conduction, convection and radiation.
Conduction is the form of heat transfer through a material, for example, the walls of your home in summer and winter. For any given amount of in-wall insulation, measured in its R-value, conduction is what accounts for the heat loss (or for cooling, heat-build-up) through the walls and roof.
Convection heat transfer occurs when heat travels in a moving fluid or gas, for example the heat energy that moves along with the passage of air. The "wind chill factor" you hear about in northern state weather reports is a measure of how much heat energy is transferred by convection when you're outside due to the effect of wind.
The third form of heat transfer is radiation. Radiation is the transfer of heat energy through empty space, or the way the sun warms the Earth. Radiant heating is not affected by being in contact with a solid material the way conduction loss does, or by moving along in a fluid or gas the way convection does. Radiant heat transfer is what warms your home when the sun is out.
You can use your knowledge of these 3 forms of heat transfer to make your home building or remodeling project more energy efficient.
You can reduce the amount of heat build-up or conversely, cooling loss due to conduction through your walls by increasing the R-value of the insulation in the walls by adding more. Installing double pane windows and sliding glass doors, if your home wasn't built with them originally, will reduce conductive loss of those items. The gases between the two panes of glass (like argon and krypton) along with films and coatings (like "low-E") can increase the insulating value of your doors and windows from R-2 to R-6 or more.
Caulking or using foam insulation material to seal crevices or openings around doors, windows and electrical outlets will reduce convection heating or cooling loss caused by air infiltration.
Fireplaces are a big source of convective heat transfer as air continuously flows up the chimney if the flue damper isn't air-tight. If you have, or are planning, on a fireplace put air-tight glass doors in front of it and keep the flue damper closed when the fireplace is not in use. But, beware, don't forget to open that damper before your start the fireplace. Just remember to close it again when the fireplace has cooled back down.
Many sources of heat build-up (or cooling loss) are affected by more than one form of heat transfer. Since windows and sliding glass doors suffer from both conductive and convective heat transfer, consider using high energy-efficiency Energy Star doors and windows for any building or remodeling project. As another example, while radiant heat transfer is why a home with a roof exposed to the sun gets warmer due to radiation, you can use convection to your advantage to alleviate part of the problem. Installing a heat-activated fan system in your attic will use convection to blow the heated air in your attic out through vents preventing it from transferring its heat energy, through conduction and convection, into your living space below.
If your home is in a particularly sunny locale, you may want plant large deciduous trees, such as river birch, on the south side of the home for shade from the sun in the summer. Equally, you can avoid radiant heat build-up from the sun by closing drapes and blinds on the southern side of your home in the summer, yet take advantage of the sun's radiant heat transfer by keeping the drapes and blinds open during the day to allow sunlight to enter and warm your home during cooler months.
If it's time to replace your heat pump or any appliance, look for Energy Star-rated appliances. Energy Star-rated appliances like clothes washers, dryers, refrigerators, dishwashers and dehumidifiers not only use less electricity; they also transfer less heat into your home through all three forms of heat transfer, conduction, convection and radiation.
Pay attention to smaller changes that offer big savings, many of which are more efficient because of their lower heat transfers. Use energy-saving compact fluorescent lamp bulbs. Turn off all lights when not in use; lights generate radiant heat. Keep shrubs and other obstructions from blocking free air flow around your external heat pump unit which relies upon convection to dissipate its heat build-up. And, change your furnace filter every 3 months. A dirty filter slows down air movement reducing the effectiveness of the convection heat transfer your air conditioning system relies upon.
Understanding the different kinds of heat transfer and how to use that knowledge to reduce your home's energy consumption can save you a serious amount of money as well as make your home more comfortable to live in.
Tuesday, April 21, 2009
Foreign Nationals Are Finding Florida Homes Attractively Priced
While there have been many contributors to the decline of home prices and home sales in Florida, an increase in the number of foreign national home buyers has limited the damage. The National Association of Realtors (NAR) conducted a survey in 2008 of over 4,800 Realtors who had completed over 4,000 real estate transactions involving a foreign buyer. They found that foreign national buyers recognize U.S. real estate as desirable, profitable and secure investments.
The U.S. credit crunch and the flood of homes and condos for sale in Florida has created some outstanding opportunities for foreign nationals. According to Cheryl Stimac, a Tampa Florida real estate broker, "Snowbirds from Canada and the United Kingdom are flocking to the warmer climate particularly in Florida." "The relative weakness of the dollar, she said. "along with reduced prices have given 'snowbirds' who have dreamed of owning a second home in Florida the opportunity to fulfill their dreams."
If you are a Canadian or other foreign national, before you purchase your get-away spot, though, you would be well-advised to understand the differences between your own local and U.S. home buying processes, as well as the tax implications of owning a second home in the U.S.. An experienced Sarasota Realtor like Rich Stover, can help you understand the Florida real estate buying process and its implications.
Focus on Existing Properties in Established Developments
Real estate consultants have been recently advising foreign nationals to give preference to existing properties in established developments. This avoids the problems associated with unsuccessful developments where the nature of the development and the surrounding area can change quite dramatically if the original developer goes into default and the property is taken over by a different developer. While this may mean that you the buyer miss the opportunity to buy at so-called "pre-construction" bargain prices, nut the reduction in risk may prove well worth the slightly higher price you'll pay.
Qualifying to Buy
Since it is more difficult to track down foreign nationals in case of a mortgage default, Florida lenders require more up-front evidence of financial stability from their foreign national buyers. Some lenders require that buyers place closing costs plus 12 months of principal, interest, taxes, and insurance (PITI) in a U.S. bank account. They may also require foreign nationals to put more money down, as much as 25 - 30% and demonstrate that they have liquid reserves available to cover three to six mortgage payments.
Financing and Closing Costs
Begin the loan pre-approval process before you begin searching for a home or condo in Florida> In this way, when you find the that dream second-home you’ve been searching for, you will be negotiating price with the seller from a position of strength. The seller will know upfront that you are fully prepared and "qualified" to buy.
Expect the length of your mortgage loan to differ from what you may be used to. For example, rather than the Canadian standard of one to ten-year mortgages, U.S. mortgages are typically written for 15 or 30 year terms.
It may take more time to complete a real estate sale in the U.S. Be prepared to wait three to five weeks or more to close on your Florida real estate property once you have a signed purchase contract. During that period, all of the third-parties involved (inspectors, appraisers, insurance companies, title companies, etc.) will be conducting their portions of the transaction.
Minimizing Your Taxes & Protecting Your National Health Benefits
Understand that even though you are a citizen of Canada or other nation, you may be treated as a U.S. citizen for tax purposes if you spend too much time at your Florida get-away. In general, limiting your time in Florida to less than six months each year minimizes your tax implications and may not compromise your national health care benefits.
If you rent your Florida property for the portion of the year that you spend in your own country, you will need to file a federal U.S. income tax return. You will have to declare your rental income, but you may be able to deduct expenses such as maintenance, utilities or mortgage interest. Since Florida doesn’t have a state income tax, income from the property will only be taxed by the federal government.
Property Taxes
Be aware that non-residents of Florida do not get all of the property tax advantages granted to permanent residents of Florida, so be sure to inquire as to the difference this will make in your on-going costs. Again, a competent Realtor can explain these restrictions to you.
Property Insurance
Property insurance in Florida can be expensive. One way to limit this is look for properties built after the most recent set of building code updates, mandating that structures be able to withstand higher winds. Insurance companies charge less to insure properties that meet the latest code requirements. Homes and condos that are not located directly on or adjacent to the waterfront or in designated "flood zones," cost less to insure.
Avoiding Estate Taxes and Probate
Foreign nationals can reduce their exposure to U.S. estate taxes. For example, one of the best ways for Canadians is by placing a non-recourse mortgage against the property. A non-recourse mortgage gives the mortgage-holder recourse only against the property, itself, not against any other assets of the borrower.
The U.S. probate process of transferring property to beneficiaries can be lengthy and costly. Putting the deed to your Florida home in the name of a Cross Border Revocable Living Trust (CBRLT) rather than in an individual's name may offer several advantages. Properties held by a CBRLT are exempt from Florida probate and thus have no filing requirements for U.S. or Canadian tax authorities, for example.
There may be other benefits under U.S. or your own country's rules to avoid estate and probate costs. Check with a Florida-based attorney to see what benefits may be available to you. A competent Florida Real Estate professional like Judie Berger can help you identify a competent attorney who deals with cross-border property investments.
In summary, as a foreign national considering buying a home or condominium in Florida there are things you need to understand. Nonetheless, there has never been a better time to buy that seasonal or second home you've been dreaming about, especially here in the Tampa Bay and Sarasota areas.
Wednesday, April 8, 2009
The Seller Can Help You Buy Your New Home
If you and your family are ready now to buy your first home, but you're not sure you have enough cash stashed away, there are ways in which a home seller can assist you in buying his home. A competent Realtor can review all of your options but here are a few examples.
FHA MORTGAGE WITH SELLER FINANCED CLOSING COSTS
An FHA mortgage requires as little as 3.5% of the purchase price as a down payment. These mortgages have been available for years. Your Realtor, working with the home seller and an FHA-approved mortgage provider, can structure a mortgage loan so that the seller pays all or nearly all of your closing costs. The seller cannot assist you with the 3.5% down payment, but can pay just about everything else at your closing. In the current market environment, many home sellers are willing to participate in this type of arrangement to get their home sold.
BUY DOWNS – There are many variations of "Buy Downs," Some are permanent, where the interest rate is reduced over the full life of the loan. Others are temporary, allowing you to reduce the interest rate, and therefore your monthly payment, for the first 1 - 3 years. The most popular is what's known as a "3-2-1 Buy Down." Here's how it works. For the first year your rate is 3% below the market interest rate; the second year 2% below, and for the third year the interest rate you pay is 1% below the agreed-upon interest rate. This allows you to grow into your loan payments over 3 years. If you expect your family income to grow over that period by enough to cover the eventual cost, this may be an attractive option for you. "Buying down" your first 3 years of loan payments in this manner will cost the seller about 4.5% of the loan amount. Here is an example on the purchase of a home with a $225,000 mortgage with a fixed rate of 6.5%. The full monthly rate on this mortgage would be $1,422.15/month. Using a 3-2-1- buy down, the first year's payments would be $1,010.35, the second year's is $1,140.04, the third year's - $1,277.53, and then for the remaining 27 years, $1,422.15. The "buy down" of the first 3 years payments saved you, the buyer, over $10,000 in mortgage payments in addition to making your payments more affordable for those first 3 years.
SELLER FINANCING – Less frequently, but occasionally, there are sellers who own their home outright (no mortgage on the property) who will agree to assist you by holding your mortgage. In this case, you do not have to qualify through the normal bank financing route. In effect the seller, instead of a bank or other mortgage company, becomes your mortgage provider. Such a mortgage can be written with essentially any terms and conditions that you and the seller agree upon ranging from financing 100% of the purchase price to requiring a minimal or larger down payment, with or without a "balloon payment" at some point in the future, and for a term of 10, 15, 25 or 30 years.
Such private lenders frequently charge a higher interest rate and may want to use this approach to get the highest possible price for their property so you need to deal with a competent Realtor who can negotiate your way through this option for you. But, if cash on hand is the problem you are dealing, this approach may be an option.
The point of this discussion is this. If you have a decent credit rating (FICO score) and you're ready to buy your first home, don't be scared off because you don't think you have enough saved up yet. The price of homes and the interest rates available are as low right now as they have been in a long time. Meet and discuss your options with a competent Realtor like those listed in this directory of Florida Real Estate professionals. You may be closer to your dream of home ownership than you have dared to hope.
Sunday, March 29, 2009
Planning to Sell. - Focus on Your Kitchen
When it's time to put your home on the market, many real estate experts recommend that you focus on the kitchen first. For many potential buyers, especially the wives, the kitchen is the most important room in the home. The condition and appearance of the kitchen has the power to make or break an offer.
So, if you want your home to sell quickly at a good price, do everything you can to enhance it before you start showing the home to buyers. Remember however as you appraoch this task that the money you spend is a cost of selling. Don't do a complete remodelling unless the kitchen really needs it. A good Realtor, like Judie Berger, Sarasota real estate expert, or Brian Ward who focuses on Bradenton FL real estate can give you advice on the extent of remodeling that you should invest in.
Start by creating space. You want you kitchen to look large, light and roomy. Clear the counters of all clutter. Take everything you can out of drawers and shelves and move it into storage. Remove all those magnets from the refrigerator and if the refrig looks scratched, give it a fresh coat of porcelain paint. What you want them to see is a warm, open and inviting space, not your old pots, pans and toaster.
Consider fresh paint. Paint is the most profitable improvement. A fresh coat of light, neutral colored paint on your kitchen walls will make them look spotless and new. Exactly the look you want.
Pay particular attention to the sink. If your faucet looks old and dated, replace it with a new one. It will go a long way towards improving the look of the whole kitchen, for very little money.
If your counter tops look old and tired, you should consider new ones. Today you can buy corian or even granite countertops at reasonable prices. Talk to your local Home Depot or Lowe's hardware satore. Remember to stick with neutral colors, nothing too flashy.
Check the stove and oven. The oven should be spotless. If the stove is a glass-top mmodel, scrub it until there is no residue at all on it. A sparkling range looks great. A dirty one laeves the prospect wondering if the rest of the house is any better maintained. Don't let them even "go there".
Freshen up the cabinets. Replacing cabinets is expensive and seldom makes a good investment. But you can paint them, or put new, modern looking pulls on them for very little money. A fresh rub-down with a good cleaner-polish will give them a fresh look.
Check the windows. You'd be amazed how many people forget to wash the window over the sink or the sliding glass doors next to the dining area. if the trim looks dull, a fresh coat of paint there will also add sizzle.
Finally, a trick that works amazingly well. Just before prospective buyers come, bake a fresh batch of cookies in your oven. And, yes, leave the cookies out for them to sample.
In short, buyers will quickly notice any shortcomings in your kitchen, so do everything you can to freshen it up and give it a modern, open, airy and spacious and "inviting" look.
Saturday, March 14, 2009
Come to Bradenton Florida - Homes are Selling Again
While home sales volumes and prices in many other parts of the U.S. have fallen for more than 6 months in a row, the Bradenton - Sarasota Florida real estate market is the fourth highest selling market in all of Florida.
Home sales for January, 2009 rose by 4% over the same month in 2008 largely because of a reduction in the median price of homes in this market. The median price in Bradenton, for example, has fallen to $144,800 from $246,300 just a year ago. This is the lowest it has been since November, 2001.
The decrease in home prices has meant that home ownership is once again affordable for the average family. So, more families, young couples with children as well as single professionals and senior citizens, are looking at homes in the Bradenton Florida area. There are currently about 2,650 existing homes for sale and another 1,800 homes working their way through foreclosure in Bradenton at this point so there are plenty of exisitng homes to consider.
When people started looking at homes here, they also learned something else very appealing. Mortgage interest rates are at an all-time low. QuickenLoans.com, for example, is currently quoting a 30-year fixed rate mortgage at 4.75% (APR 4.967%) and a 15-year fixed rate mortgage at 4.25% (APR 4.622%).
For those with more limited down payment funds, an FHA Express 30-year fixed rate mortgage can be had for 5.00% (APR 5.185%). With an FHA Express loan, your down payment can be as low as 3.5% of the price of the home and first-time buyers, defined as anyone who has not owned a home in the past 3 years, are eligible for an income tax credit of 10% of the purchase price of the home, up to a $8,000 credit.
If you are a young family that has been wishing homes in Bradenton Florida were more affordable so you could bring the pleasures and benefits of home ownership to your family, it's time to start looking.
If you are a senior looking for a warmer clime in which to retire, or maybe just a seasonal golf course or waterfront home or condo to escape the harsh northern winters, Bradenton Florida may be the right place and this may be the right time to make your move to the Florida SunCoast.
If you would like more information on the Bradenton Florida area, you may want to visit Rich Stover's Sarasota and Bradenton real estate website or Bob Henley's Sarasota real estate website. Both sites provide information on the many golf course and waterfront communities in the Sarasota - Bradenton area, all of which offer an absolutely delightful Florida SunCoast lifestyle.
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