Janice Petteway

Maybe you have heard so much about the $8,000 first time homebuyers credit that you don't even listen any more. But if you are in a position to buy an Orlando home right now it is time to listen up: the tax credit is about to expire on November 30. Since processing your loan, appraisal, and paperwork for the home takes longer these days, October 15, or to be safe, even October 1, is the deadline. Only those who have closed on their homes before December 1 can claim the credit.

You know the basics of the credit: you can get up to $8,000 or 10% of the value of the house for your purchase. Did you know though, that the credit is good on a variety of single and multipurpose dwellings, including mobile homes? Maybe your first home is not what you want in the long run, but all you have to do is live in it for three years. You can sell it and apply the equity toward the downpayment on your next home.

At the moment in Orlando, there are plenty of bank owned properties up for grabs. If you want to buy them, renovate them, and flip them, the credit is not for you. But if you buy one, you can use the $8,000 credit in conjunction with a 203K loan to renovate a primary residence where you will live for three year before you sell it or rent it out. If you want to be a landlord, you can buy a two family now, live in one suite, and convert the other to rental property in three years.

In general, homes are affordable. Recent figures from the Orlando Board of Realtors indicate that the median sales prices in Orlando is $128,000. The affordability index is now 193% which means that a family earning $52,535 can afford to buy one the 8,964 selling for up to $257,142. For first time homeowners, the index is 137.5%. First time homebuyers with a median income of $35,724 can buy one of 5,629 homes in the MLS. Home prices are 36% lower than in August 2008.

As a new homeowner, $8,000 can help you in many ways.

Since you have to claim it as a credit, the $8,000 in cash will help you get the things you need for your home and subsidize your first few mortgage payments. Cash is often tight when you move in. Who wouldn't like to have Uncle Sam buy new drapes, put on a deck, or re-landscape the yard? Or who wouldn't like to transition from an apartment to a home with a cushion of money?

Knowing that $8,000 is enroute can help you get more home than you planned. It is never a good idea to buy more home than you can comfortably afford, but the credit can effectively bring down the cost of the home so you can buy a home at the upper end of your price range. Since many lower-end homes are going quickly in Orlando, it is to your advantage to be able to look at a wider price range of properties. Since many homes are already priced to sell at incredible prices, you can still plan on lowering your total lower cost by $8,000 when you apply this credit to the principle.

If you need the money toward a down payment, there are several ways to do use it for this purpose. As a result of a new policy change announced in May, 2009, you can have the credit monetized for any part of your down payment over the3.5% required by FHA or can use it toward closing costs. You can also go to a state housing agency, certain non-profits, or certain lenders to have the credit monetized via a bridge loan or second mortgage to be repaid when the credit comes back. If you are short on your down payment or need help with closing costs, the credit could help you now.

Need a home? Have questions? Janice Petteway and the Exit Results Real Estate can show you the best properties in Orlando and other Central Florida cities.

Imagine buying your Orlando dream home and experiencing a string of problems with it before you've even written the first few mortgage checks. The house has a funny smell and your wife and kids have had headaches and nosebleeds ever since you moved in. After you've lived there awhile you notice that the copper pipes, electrical wiring, and air conditioners are corroding as well as your microwave, phones, & computers. You fear that the drywall could be a fire hazard.

Imagine being a builder in the midst of one of the worst times in recent history for new home construction. You had built a few hundred homes in Florida just as Hurricane Katrina rebuilding was in high gear, and drywall supplies were short, so you used Chinese drywall to finish the job. Now, a couple years later, complaints are flowing in about peculiar things happening in the homes. Your inspections find that the wall board used in the home could be causing the problem, so you sue a major foreign supplier along with drywall suppliers and installers. Choosing to be pro-active in fielding customer complaints, you set aside $40 million to fix the 400 homes involved. Your action solicits a similar response for some other builders, but not all.

The scenarios described above are real life horror stories for builders and homeowners throughout the U.S. Some 500 million pounds of Chinese drywall was imported and installed in 100,000 homes between 2006-2007. Half to two thirds of the supply was used in Florida, but consumers from 23 states have complained to the Consumer Product Safety Commission, which set up a Drywall Information Center. Fixing the problem - replacing the drywall and the corroded systems - is expected to run over $100,000 per home. These figures might not include any additional costs for the homeowners to paint or wallpaper the wall surfaces or for other personal property destroyed by the chemicals in the drywall, or for health care for drywall-induced illnesses.

The Environmental Protection Agency (EPA), U.S. Consumer Product Safety Commission (CPSC) and the Florida Department of Health (FLDOH) are all testing samples of the drywall to discern the dangers it poses. No one questions that the homes smell but the issue at hand is whether the drywall is poses a verifiable health hazard or other safety risk. On August 22, the CSPS and FLDH released a report that declared the drywall did not emit dangers levels of radioactivity.

Knauf Plasterboard Tianjin, the manufacturer named in the lawsuit by builder Lennar Corp., concedes that its drywall emits carbon disulfate and carbonyl sulfide, but not as levels that could harm health. They say the health complaint are "non-specific" and could be caused by a number of things. FLDOH and CPSC tests are evaluating these claims while pondering the question of whether it is safe for people to stay there in the meantime.

Attorneys for Knauf have conceded that the sulfate gasses emitted do corrode metal but do not pose a fire hazard. They have ruled out their method of extracting gypsum for the wallboard in the manufacturing process and have localized the smelly drywall. They believe that one mine in Shandong Province produces a foul smelling off-color gypsum used on some product. The CPSC is trying to figure out why this drywall is emitting more sulfur-compound gases that domestic drywall

Knauf supplied only 20% of the drywall shipped in the U.S. between 2004-2007, but did not ship any after October, 2006. They are examining ways to remedy the problem without tearing out all the drywall. Regardless of what they come up with as a way to make things right for their customers, that leaves the responsibility for fixing the other 80%.

As the testing continues and the lawsuits pile up, consumers wait. Even if all the testing somehow determines that the drywall does not pose a health or safety issue, the homes still smell. No one want a pricey home that smells like a sewer. Hence, our final scenario:

Imagine owning a home that smells, causes respiratory distress, and cannibalizes the systems that make your home function - regardless of what the government tests conclude. You want to sell in a market that is already problematic, either to get away from this home or because you've been transferred out of state. You're already prepared to take a beating on your $320,000 home due to the market, but your online research indicates that if you disclose the problems in the home (a legal and moral requirement), the value could drop to $20,000. Your builder won't help you, your homeowners' insurance doesn't cover construction defects, you can't afford to get the house stripped of bad drywall and replace corroded systems or relocate while the home is renovated. You are strongly tempted to walk away from the home mortgage...

The way this drama plays out will have a big impact on the housing market in Florida and throughout the country. Stay tuned for updates from Janice Petteway. In the mean time, want to make sure the home you buy is free of Chinese drywall problems? Call Janice at Exit Real Estate Results for trouble-free Central Florida homes.

This warm but rainy August day offers a good chance to look over the highlights of Orlando real estate happenings. In a nutshell, sales are up, prices are down. Foreclosures are skyrocketing, which may assure future sales and affordable prices. At the moment, 84% of the nearly 17,000 homes for sale are foreclosed properties.

Sales are up. Single family sales in Florida rose 23% in the second quarter of 2009, while condo sales rose 29%. In the Orlando area, the increase was 36% for homes and almost 300% for condos. This is a vote of confidence for the Orlando area and living proof of how affordable housing sells.

Prices continue to fall. Spurring increasing sales were decreasing prices. Median sales prices statewide are $143,600 down from $203,200 a year ago. Condo prices are $111,000, down from $179,800. For Orlando, the figures for median home sales are $144,400 from $216,000 last year, while condos dropped to $52,000 from 127,000, a 59% drop. These trends mean that housing is very affordable, especially to first time buyers. According to area appraisers, property values are back to 2003 levels, when the Florida market was steady. This is good news to sellers who won't have to continue to decrease their asking price, while buyers feel confident that their new home won't lose much value.

Foreclosures continue to rise: The sunshine state was second only to Florida in July foreclosures, as nearly 57,000 homes were in some stage of the process. This is up 37% since last July. Orlando County showed a 41.9% increase, Seminole 67%, and Lake 50%Only nearly Osceola dropped by 19%. This may be a devastating circumstance for displaced homeowners but buyers have steady variety of homes.

Days on the market down. An average central Florida home is on the market 3.47 months or 104 days, a 2007 level. Though this means that successful sellers have to price their home right (which may mean less than they would like) this means buyers will have a fresh supply of homes as older ones drop form the market.

High percentage of cash sales. Nearly 43.5% of May and June home sales were cash transaction, while 26.2% were financed via conventional loans and 21.6% FHA. Less than 1% are ARM adjustable loans. This reflects increasing confidence that housing is a good enough investment to tie up money in. Unlike much financing in the past, the new sales are equity based.

Right now, first time homebuyers still have a couple months to take advantage of the $8,000 tax credit. Getting free money is always a great deal but when you can use it to reduce your housing costs, that's even better. Fulfilling a dream like home ownership is a wonderful achievement but it's better if you can get more for your money like you can right now.

Janice Petteway of Exit Real Estate Results can show you new and pre-owned homes, including foreclosure and bank owned bargains in Central Florida.

In trouble with your mortgage payment? If your trouble is short term, you may see the day when you can get back on track, if only your house payments were a little lower. You like your Orlando home and really don't want to move. If this is your story, you want to prevent foreclosure, but aren't interested in a short sale. Your strategy in this case might be to discuss a loan workout with your lender.

You might ask them for a reduced interest rate and a lower payment. Aside from loan modification, other remedies they might be willing to negotiate include waiving penalties and fees, deferring payments to the end of the loan and making it longer, applying past due amounts to the loan balance and slightly increasing each monthly payment, holding a fixed rate on a loan ready to adjust, lengthening an introductory payment or interest rate, or even granting temporary forbearance to stop the payments.

If loan modification is what you seek, there is plenty of good help available in Orlando, as well as plenty of questionable firms who will take your money and do nothing. Florida Attorneys Saving Homes (FLASH) will consult with you at (866) 607-2187 and see through the loan modification process. HUD -approved housing counselors are also on hand to assist you and can direct you to a reputable company that might help you work with your lender, possibly for a fee.

Make sure to visit the government Making Home Affordable website, where you might find that you are likely to qualify for the loan modification program set up as part of President Obama's housing rescue plan. If you currently have the monthly cash flow to make a lower payment, you may be able to resolve your situation through this program, though perhaps not quickly.

At this point, about 400,000 troubled homeowners have been offered modifications, while 230,000 have been started. The Obama Administration expects banks to increase the pace of loan modifications so that 500,000 modifications are in place by November 1, 2009. Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan recently contacted the CEO's of lenders participating in the program and called for them to increase the hiring of staff to process the modifications. These lenders were advised in a face-to-face meeting with Administration personnel that the government was developing better metrics to track customer satisfaction with the buying process and also authorizing Fannie Mae and Freddie make to audit declined applications.

Whether you go through the government program or approach your lender personally, you need to make a good case for yourself to make the lender confident that this will stop further loss. As is true with all credit issues, contact your lender at the first sign of trouble. Your steps might include:

• Explain why you are in trouble and why you think the problem is temporary. If a change in the interest rate is causing your payment to adjust upwards, you need to show evidence you paid in a timely manner before the change. If your problems were caused by job loss, illness, or family circumstances, you need to show that it is likely you will have a job soon or that the crisis has passed.

• Make sure you have all your documentation together, including pay stubs, tax returns, and any other documents the lender asks for.

• Be prepared to show proof that you have been trying to work things out on your own, through job hunting, part time jobs, or by reducing your living expenses.

• Present a specific proposal to the bank, with alternatives, both verbally or in writing. If you do not know what to propose, you might seek ideas from a non-profit housing counselor, a real estate attorney, CPA, or other qualified source. A typical request might suggest lengthening the loan, making it fixed not adjustable, and lowering the interest rate. If your proposal will lower your payment by $500 per month, you need to show how this will help you catch up and be on time in the future. What will increase the chance of your proposal being accepted if you are way behind is to present least a month's payment.

Good preparation will increase the chance that the lender will accept your proposal. Make sure to discuss with the lender representative how the new agreement will affect your credit record. Your goal is to have your new payments reported to the credit bureau as "Pays as agreed, " but make sure you understand any credit implications before you finalize the terms.

At Exit Real Estate Results, we are prepared to help you buy or sell your Orlando home. If you need help with any real estate issue in Central Florida, call Janice Petteway today. We can help you beat the clock and move on.

The common wisdom these days if you want to sell your Florida home is to underprice your competition. Sellers hate this advice from their Realtor®, but in a tough market, an attractive price may provide a competitive edge when several properties up for sale in a neighborhood. A recent analysis by ZipRealty indicates underpricing is not a one-size-fits all tactic especially in the Orlando area.

Agents typically provide sales prices of comparable homes in the neighbor to sellers to give them an idea of how to price their home. Working face-to-face with an agent is preferable to just depending on an on-line analysis as the agent can figure in factors such as the condition of the home, special features, and sales figures from a much more local area than software alone can do. What agents should offer sellers are figures on the difference between the selling price and asking price. In neighborhoods where there is a big difference, pricing the home lower than the neighbor's might make sense; where sellers tend to get close to what they originally asked, there is no need to lowball.

In general, housing values in the Orlando-Kissimmee region showed the sixth highest decline among metropolitan areas but there is a lot of variation among specific neighborhoods. As reported in the Wall Street Journal, the ZipRealty study noted that in upscale Orlando neighborhoods like Winter Park sold for 89.4% of the listing price, while neighborhoods like Kissimee, dominated by lower-priced housing, sold for 97.2% of the asking price. This reflects what is happening with lower-cost housing in many markets: first time buyers and investors are grabbing up the bargains and even engaging in bidding wars, while high cost housing linger on the market.

Other things to consider are the supply of homes for sale within a one-two mile radius within the same school district. As supply falls, demand will rise to mandate higher prices. Another measure of how supply and demand are at play is days on the market (DOM.) Fewer days on the market indicate increasing demand.

If you feel the agent wants to go too low, you can insist on a higher price. You can even call on a third party like an appraiser, though that may set you back $500. However, your Realtor® is usually the best guide to pricing your home as he or she is relying on the numbers and their expertise, not your memories or your remembrance of what you put into the house. If the house is priced too high in many markets, you can always lower the price if it doesn't sell. However, if you are in a hurry to sell, this can eat up valuable time.

At Exit Real Estate Results, we are prepared to help you sell your Orlando home quickly - a the right price based on neighborhood data. If you need help with any real estate issue in Central Florida, call Janice Petteway today. We can help you beat the clock and move on.