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Cutting the Lenders out of the market. Why not?

12-04-09

Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc

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Office: (407) 870-9003

Mobile: (407) 873-2747

Recently I was asked “How will property values ever come back up if the appraisers keep discounting values for the declining market and the cash Buyers want the lowest price possible?”

The answer of course is…..get the Lender out of the equation. No Lender. No appraisal needed. Higher sales price. What you talkin’ bout Willis?

Let me explain. REOs and short sales still dominate the market in my area and are still bringing values down. What’s strange about this is the fact that inventory is very low and sales are at an all time high but values are still being depressed by…….Lenders.

So…the “No Qualifying Owner Financing” is making a comeback. Investors are realizing that Buyers will pay a premium not to have to deal with Lenders. And the Investor can get a much better return on their money by holding a mortgage than they can renting the property out.

In fact, in my market, you can expect to get 10% to 15% more for your property if you’re willing to “hold paper”. How do I know this? Because my sellers are doing it.

Here’s an example of how this works out for a Seller.

Seller paid $85,000 cash 4 months ago. The intent was to rent it out for $1,100 a month. After expenses he would net about $750 a month. After 5 years the property may be worth…….well we don’t know do we? We do know if it were rented with no vacancies and no repairs (like that will ever happen) he would have received $45,120 in income. Roughly a return of 53% over 5 years.

Instead, what if he sold it for $120,000 with $25,000 down @ 8.75 with a 5 year balloon? By the way this property would appraise for $110,000 to $115,000 right now. It was purchased right because my buyer made offers on 14 properties at the same time. He ended up getting a deal on this one,

OK back to my example. With Owner Financing the payment would be $750 a month (same as the Net rent). After 5 years the balloon payment is $91,000 AND he would have received $41,500 in interest payments. $25,000 + 91,000 + 41,500=$157,500!! This a profit of $72,500 or a return of 85%. Roughly 30% better than renting AND he doesn’t own the property which means no maintenance or management.

Now folks these figures are not exact but they give you a real good idea of how owner financing works for the Seller.

And the Buyer? Well they can get a good house with a non qualifying mortgage and very minimal closing costs. It’s a win all the way around. The only loser? …Lenders!!

What say you?

15 Comments

Kissimmee Homes for Sale -- Cypress Reserve - Close to The Loop!

12-04-09

Rick Belben - Orlando Real Estate - RE/MAX Gold Partners

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Mobile: (407) 341-1706

Rick Belben | RE/MAX Gold Partners | (407) 341-1706

2520 Harwich Dr, Kissimmee, FL

Minutes to all Orlando Attractions!

3BR/2BA Single Family House

offered at $175,000

Year Built	2007
Sq Footage	1,733
Bedrooms	3
Bathrooms	2 full, 0 partial
Floors	1
Parking	2 Car garage
Lot Size	4,748 sqft
HOA/Maint	$264 per month

DESCRIPTION

Former Model! Loaded with upgrades. Granite Counters! Tile and Wood Floors! Luxurious master bath with jetted garden tub and separate shower This Tranquil Community is beautiful and features a community pool just yards from the property as well as basketball courts, tennis courts, children's area, and much more for the family to enjoy. The Loop shopping area is within walking distance and this convenient location allows easy access to all that Central Florida has to offer. Don't miss out on this great opportunity

see additional photos below

PROPERTY FEATURES

- Central A/C	- Central heat	- Tile floor
- Family room	- Dining room	- Breakfast nook
- Yard

ADDITIONAL PHOTOS

Photo 1	Photo 1
Photo 1	Photo 1
Photo 2	Photo 3

Contact info:

Rick Belben

RE/MAX Gold Partners

(407) 341-1706

For sale by agent/broker

Equal Opportunity Housing

Posted: Dec 4, 2009, 10:06am PST

0 Comments

WILL YOU HAVE AN $8000 STOCKING STUFFER? SALES EXPECTED TO SPIKE DURING HOLIDAY SEASON

11-30-09

Allison Stewart BROKER/ASSOC/REALTOR ®St. Cloud Florida

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Office: (407) 892-0040 x14

Mobile: (407) 616-9904
Secondary: (407) 545-8002

HOME SALES ARE EXPECTED TO SPIKE DURING THE HOLIDAY SEASON. Experts agree that the Holiday season tends to put buyers inthe right mind set for making offers on homes. It has a simialr effect on sellers who tend to be more flexible during the holidays. A charitable mindset allows for compromise, and compromise he key to achieving a successful sale.

THERE IS NO LIKE HOME FOR THE HOLIDAYS...

Sweetening up sales this holiday season is the added benefit of the $8000 tax credit for first time home buyers

HOME PURCHASED BEFORE DEC 31, 2009 CAN DEDUCT CLOSING COSTS

Parents can contribute GIFT Money upto $10,000 without a tax penalty.

The holidays are a time when more people tend to be out looking at neighborhoods- it is also a time when offers have the greatest chance of acceptance.

THINKING OF BUYING OR SELLING?

NOW MAY BE THE BEST TIME TO MAKE YOUR MOVE.

Happy Holidays!

Allison Stewart, Real Estate Broker Assoc

Serving St. Cloud Florida and All of Osceola County

3 Comments

Is Purchasing A Bank Owned Property in December a Good Idea.

11-23-09

Mark Horan P.A. "The Resident Chef"

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Office: (407) 301-0312

Mobile: (407) 301-0312

Why is Purchasing a Bank Owned Property in Kissimmee and Saint Cloud, Florida in December a good idea? There are many reasons, First, interest rates are not going to get lower and will eventually start to increase. Next Inventories are starting to build, so there are many homes to choose from. If you can utilize the tax credit, that is a great way to purchase.

But more importantly, December is traditionally to lowest home sale month of the year. What this means is, there will be less competition because of the limited buyers. If you have been paying attention to the market, then you are aware that many Bank Owned Properties are being bid by multiple offers that rise the sell price. Eliminate the competition, the sale prices go down.

So, if you are on the fence and are just going to wait until after the holidays, this may cost you thousands of dollars. Find a Realtor and get started today.

Mark Horan

"The Resident Chef"

Broker

Resident Team Realty, LLC

Phone: 407-301-0312 Fax: 407-426-1101

Email: ResidentTeamRealty@yahoo.com

Website: www.ResidentTeam.com

2 Comments

What's price got to do with anything?

11-23-09

Bryant Tutas Broker/REALTOR(R) Tutas Towne Realty, Inc

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Office: (407) 870-9003

Mobile: (407) 873-2747

Hi folks, Have you noticed that the contract price means absolutely squat these days? Nada. Zilch. It used to be that once a purchase price was negotiated you could be fairly certain that was the price the property would close at.

Not anymore.

Properly pricing real estate has always been one of my strong points. I know the price is right. The Buyers and Sellers know the price is right. The ones having the problem are the Lenders.

It doesn't even matter what side of the transaction the Lender is on. If they are the Short Sale lender they want more money and if they are the Buyer's lender they want to lend less money. Now this really gets interesting when it's the SAME lender!

Recently. I had one of my Short Sales under contract at $100,000. Based on recent comparable sales the agreed purchase price was spot on market value. The Short Sale lender was Bank of America. The Buyer's Lender was also Bank of America.

After waiting for several months Bank of America finally agreed to the Short Sale but only if the purchase price was raised to $107,000. The Buyers, who really wanted the property, had no problem with this so we raised the contract price to $107,000 and both parties signed off on it.

Bank of America then gave us the written Short Sale approval and we moved towards closing. The following week the appraiser came out for the Buyer's mortgage company (Bank of America) and appraised the property at......$107,000. All was well. Until......Bank of America ordered an appraisal review. The value was changed to $97,000!!

After another couple of weeks of negotiating we were able to get Bank of America to agree to do the Short Sale at $100,000 and the Buyer agreed to bring the extra money to closing to get the deal done at.....$100,000. We were right back where we started from. Maybe they just should have accepted my price to begin with. %$#&*^s!!

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com