Joe Harris

Many Thousands of Americans have had to sell their house through a short sale in the past few years. Who would have guessed a few years back that prices would plummet like they did? Here in Brevard County, home prices in some areas have been more than cut in half.

If you had to sell your house short, more than likely the credit report will show a mortgage settled for less than owed. If you go to apply for a mortgage, there are new rules surrounding this type of derogatory credit. The new rules for Fannie Mae says that it must be 2 years from the completion of the short sale, with no exceptions. This is fairly straightforward. If you had a short sale in the last two years, you are ineligible for a loan which is bought by Fannie Mae (that is all conforming loans, or anything that is not government).

US Department of Housing and Urban Development (HUD), who determines the rules for FHA loans, has not made a ruling on short sales as of when this article was written. While this may sound promising, the majority of the lenders are treating short sales on FHA loans like they do on conventional loans. However, there are a few lenders out there that will entertain a short sale if there are extreme extenuating circumstances prior to two years. Otherwise, like on a conventional loan, you must wait two years.

So here is the long and short of it: if you have recently experienced a short sale, you will be ineligible for a conventional loan for at least 2 years; you may be eligible for FHA financing, however, you will have to prove that there were extenuating circumstances. These extenuating circumstances could include loss of job, death of a wage earner, hospitalization, or some of these sorts. Additionally, you cannot have had any mortgage lates in the last year. For a loan to be considered prior to 2 years, it must be strong.

There is life after short sales, however, it seems as though for loan qualification purposes, it starts after 2 years for most. This is really not that long of a time, and there are probably some people who went through a short sale a few years back that are ready to buy again. For more information, contact Joe Harris.

First Time Homebuyers...The Clock is ticking...

Uncle Sam wants you to buy a house! If you are a first time homebuyer, he is even willing to give you an $8000 tax credit to do so. Time is ticking away...this deal only lasts through November of 2009. With rates still low, many properties to choose from that are aggressively priced, it really is the time to take advantage of the deals and get $8000 from Uncle Sam.

As I have outlined before, the program is simple, however, if you have any questions, you may want to check with your accountant or CPA. You can also check on the IRS's website. However, here is an outline of the program:

• Must be first time homebuyer - That means you haven't owned a home in the past three years, and your spouse hasn't either if you're married.

• Purchase home before December 1^st 2009

• File an amended return on your 2008 tax return, or wait to file on your 2009 tax return

• The credit is for 10% of the purchase price, up to $8000

• The credit amount starts phasing out if you make more than $75,000 or $150,000 if you're filing a joint return.

• Enjoy the benefit of an $8000 tax credit

Again, with interest rates at historic lows, homes being aggressively priced, and an $8000 tax credit, now is an outstanding time to be a first time homebuyer! But don't forget, this offer does have an expiration date. To be eligible for this money, you must purchase before December of this year. So call a Mortgage Professional, get pre-approved, and go out there and find your dream home!

Another Great month For Brevard County Real Estate!

Here is a powerful and positive little fact: sales for single family residences for Brevard County are up over 22% for July of 2009 verses July of 2008. That is an astounding year over year number. Additionally, new listings are down slightly over 20% this July verses last July. So, it looks like sales are up and inventory is down; this is a strong sign that the market is improving, and we are bottomed out. If we continue on this track, this current real estate "sale" could end.

There are no real surprises in the market data from July against that of June. Sales continue to show strong numbers, and inventory is decreasing. With 78% of the sales being under $200,000, buyers are really looking for the bargains. One thing that we have found is that these "bargains" are going fast, as 36% of July sales sold in less than 30 days. That means that if the price was right, the house sold fast!

With 66% of homes being financed in the Brevard County area, buyers are still taking advantage of the historically low interest rates. With the majority of the financing being done through FHA and VA loans, many are enjoying the benefits of these government insured and guaranteed loans. With the $8000 First time Home Buyers credit still being offered, first time homebuyers are rushing to the market to find their dream home.

All in all July's Brevard County mortgage and market data proved to be in line with the theme that the market is improving. Sales are up, inventory is down, rates are still low, and with incentives to purchase for first time homebuyers, it is an amazing time to be purchasing real estate! So, make sure that you speak with a mortgage professional to get an idea of you purchasing power and financing options, and then go out there and get yourself a deal before the "sale" is over!

The FHA is a great loan as it gives home owners a very low down payment option, allows features that conventional loans do not (a conventional loan is any loan that is not a government loan), and has historically very low interest rates. Currently the FHA will allow a loan amount up to $291,250 for a single family residence in Brevard County, Fl. Right now this limit is good through the calendar year 2009, however, there is talks of extending the limits into 2010.

Just to recap, here is a list of some features of the FHA loan:

Source of Down Payment Flexibility

Great Rates and Low Monthly Mortgage Insurance

Low Down payment option - Minimum of 3.5% of the purchase price

Seller Paid Closing costs - seller can pay up to 6% of the purchase price towards closing costs and prepaids

No penalty for lower credit scores -, you are not penalized for having a lower qualifying score, however, most lenders have a minimum of a 620 credit score.

Rehabilitation loan option - there is even an FHA loan that will allow you to finance repair or updating into the loan.

While there are many great loan options still available in Brevard County, the FHA is not right for every person and borrower. This is why it is imperative to contact a mortgage professional to help you find the product that best fits your situation.

Joe Harris

Mortgage Professional

www.joeknowsmortgages.com

According to the Brevard County MLS, 30% of the single family residence sales, year to date, are marked as bank owned properties. I am not sure of the exact amount that are short sales, however, these are also dominating the market. While we may be reaching the bottom of the market, these transactions are not going away anytime soon.

With the continual arrival of new foreclosed properties in the market place, I thought it would important to review and dispel some myths about bank owned properties from my personal experience. This information comes purely from personally experience, and has not been derived from things I have read, or things that are taking place in other markets. This information has come from the purchase of Real estate Owned (REO) in Brevard County.

Myth 1) Banks will not pay any closing costs.

Banks look at the bottom line. They are holding onto a depreciating asset, and are motivated to sell properties in order to mitigate future losses. With this in mind, they are willing to do what a normal seller would do in this buyers market; this includes paying closing costs, contributing down payment and closing costs to a gift fund, and sometimes even paying for repairs.

Myth 2) I can low ball an offer on a foreclosure.

While there are many great deals out there, banks are looking to get as close to market value on their listings as possible. Before a foreclosure is listed a BPO is done, as well an appraisal. The bank has a good idea of the real market value of the property in its current condition. Also remember that foreclosures are usually listed on the low end of market value, so there may be many parties interested in the property. You may not have the ability to go back and forth with the seller. You may only have one shot to give your highest and best. Make sure your offer is strong.

Myth 3) You're the only party interested in that foreclosed property.

In many cases I have seen multiple offers on the same property. I have even seen foreclosures sell above the list price. I have also seen over 30 offers in on the same property. Granted the property was a great deal, it just shows that others are out there looking for that great foreclosure deal. Again, make sure your offer is strong.

Myth 4) This is like any other real estate transaction.

For the most part the above statement is true, however, it can become slightly more complicated. Remember, the seller you are dealing with has an oversupply of product, and an undersupply of staff. Things can take longer than expected, and have the capability of becoming slightly more complex. Most issued are solved, and most transaction close as long as all parties are in agreement. It is always best to work with people who understand the process.

Myth 5) The foreclosure property will be move in ready.

While foreclosures remain an excellent way to get a great deal on a property, there may be some downside. Many of these properties may have been vacant for months, poorly maintained, damaged, vandalized, and in some cases gutted. If the house has been poorly maintained, and there is apparent damage, it is possible that the house may not qualify for conventional or standard government financing. These properties may be excellent candidates for rehabilitation or construction financing.

While you may hear that this is a buyer's market, once you start looking, you may find that is not the case. With properly priced properties moving at a decent pace, it may take a couple of offers on different properties before you actually come to an agreement. With some outrageous deals out there, interest rates still low, and the first time homebuyer incentive is still in effect, it is a great time to be a homebuyer. Don't wait, you may just find that you missed your window of opportunity!