Joe Murphy

This month President Obama is announcing a new program to help homeowners who want to refinance their home loans to today's lower interest rates but have been unable to do so due to being underwater.

One of the most recent frustrations I am dealing with in closing short sales here in Bradenton, FL has been created by associations that are unwilling to bend on outstanding HOA and Condo fees. Has anyone else had an association attorney prevent a sale of a home over delinquent fees?

Banks that foreclose on homes in Florida, and are part of a HOA or condo association will get 12 months of fees paid upon the sale.

In two current short sale files I am representing the HOA fees are over 12 months in arrears, and as part of the negotiations with the seller's lender(s) they will agree to pay 12 months of the hoa fees. Their rational is that since this is all the HOA would get in a foreclosure sale, then they should be satisfied with the same amount with a short sale.

This is a common sense and rational conclusion.

Two association attorneys are unfortunately not willing to bend off the total amount of the back hoa fees, and the extensive attorney's fees, and penalties.

In both cases the attorney that represents the home owners association has taken the position that if you want the deal to close, then the entire amount that is owed shall be paid. In both cases the sellers are not in a position to pay these charges, and the buyers are either unable, or unwilling to pay these additional fees.

In one case the sale is around 100,000, and the total outstanding hoa, condo, and assocation attorney fees are in excess of 18,000! The lender in this case has agreed to pay the association/attorney 12,000.

This lender has stated "the buyer should pay the fees, or the real estate agents should."

I will say that the lender has taken almost 8 months to finally approve the short sale which in itself has really caused the charges to run up.

I find that it makes no sense that these home owner's associations are doing their residents any justice. By preventing the sale they are ensuring that they net the same or less money. They are also most likely going to cause that property to sit vacant, longer, and probably foreclose and sell for less money than the home's current value. Furthermore, there is all the lost revenue from having a new owner move in and start paying. The neighbors may not want to offer a break to seller who is short selling because they either don't care, or are made that they are selling but the net effect is lost revenue for the neighborhood, and a decrease in the value of the properties.

I am amazed that the HOA associations residents would allow this extortion to be allowed. Here is Sarasota and Bradenton there are in excess of 25,000 homes in some state of foreclosure. And this does not include those that are delinquent, and not yet filed. Everyone needs to get on board to help fix this crisis in housing, including the attorney's and the hoa/ condo boards that they represent.

I believe that the law that required foreclosing banks to have to pay outstanding HOA fees has done more damage to the short sale process. It was well intended, but the effect that it has had with Short sales is regrettable.

My best advice to my short sale customers is to keep paying the HOA fees to the best of their ability otherwise run the risk of putting in a ton of effort for no effect. My hope is that this is an isolated incident, and will not become a trend for more associations to pursue hardball negotiations in short sales.

www.manateemoves.com

real estate for sarasota and bradenton

The numbers for the month of September 2011 have come in and inventory has stayed stable. The total amount of listings was up slightly to 3,500 units, up from 3488.

525 homes went pending in the month, and 431 homes were sold in the month of September.

This is typically the slowest time of the year for Real Estate for sale in Bradenton, and Sarasota Markets. However I think that it has been brisker than last year, and homes for sale that have gone pending has increased by 8% from last September 2010.

1. How long do you plan to stay put?

Renting has one major advantage over buying a home. Mobility. If you want to move across town, or around the country, simply pack up and go when your lease is up. Owning a home is not quite as simple. You will have to sell your home which can take time. If you are planning to live in the area for at least 3 years minimum, then buying a home may make more sense then renting.

If you are not sure if you like the area, have a need or desire to move soon, then buying a home is probably not a good idea. One thing to keep in mind as a home buyer is if you had too could you rent the home for more than your cost to own? This is a basic premise for any real estate investor. Buying something that does not cash flow does not make any sense. So if you buy a home in Bradenton for 150,000 a good estimate of your payment will be 1,100-1,300 a month. Right now, that price range home gets about that or more for an average rent.

2. How is your Credit?

Interest Rates are so low right now! I had a customer lock in a FHA home loan at 3.75% last week (Sept, 2011)!! That was for a 3.5% down, 30 year FIXED mortgage. Low interest There are three considerations if you are considering renting verse buying a home in bradenton, fl. ates translate to lower payments, and increase the amount of money you can qualify to borrow. If you are even slightly considering buying the very FIRST step is talking with a reputable,local lender.

I have many that I can recommend that can qualify you in as little as an hour. Once you know what you can afford, and it doesn’t make you fall out of your chair, it’s time to start shopping. If you qualify for a payment that feels uncomfortable, I would make sure to keep to a manageable number. Remember that as a home owner now you will have maintenance and repairs that can come up. Plus, you might want to upgrade those carpets, or paint those walls.

This home was bought by an investor to be rented sold for 180k rents for 1,900 a month

I had a customer call me this past week interested in getting a new rental home. They are a young couple that have never owned a home, and have been renting for their whole independant lives.

The property they like was snapped up the moment it hit the market. The rental market here in Bradenton and Lakewood Ranch is very, very fast! Rent prices have been steadily rising as well.

For example a single family home in Heritage harbour that 3 years ago rented for 900 now will get 1200 or more. They were going to need to have first, last, and security deposit, pet fee, background checks etc. They would need 4,100 dollar just to move into the rental. I was able to qualify them for a 150,000 loan for less than1,100 a month TOTAL PAYMENT. Plus they are able to move in to their brand new home with less than 1,700 dollar TOTAL OUT OF POCKET!! That’s 2,400 less than renting a home.

If you find out that your credit is not that great then you can at least know what needs to happen to improve so that you can qualify in the future. Credit scores are really important right now, and if you have great credit, and a stable income, qualifying for a loan shouldn’t be an issue.

3. Are you ready for the responsibilty of home ownership?

This home could be bought with 5,000 out of pocket, and have a payment less than $950 a month. It would rent for 1,600 a month

This question is not meant to insult anyone, but I too once rented an apartment. My situation was unique in that I had already owned a home before renting. It was nice to be able to just call down when there was an issue with something in the apartment. For me, after enjoying having my own home, and the privacy of no neighbors right next to me, and above me, and below, I was ready to buy another home in the Sarasota Bradenton area within a few months.

Buying a home is usually one of the largest purchases that someone makes in their life. Home ownership gives you a feeling of pride, stabality, and has the benefit of price appreciation too. Instead of paying someone else mortgage, you are paying off your own.

In conclusion, I think that if you are renting right now, and you have good credit, want to stay put for a few years at least, and are up for the challenges and joys of your own home this is the best time to buy.

Prices have dropped in the Sarasota Bradenton area to the prices that homes for sale back in 2000 and before. The entire real estate market is on sale. Interest rates are at all time lows as well. That makes what you can afford increase so you can get more home for your money. On top of that rental rates on investor owned homes in Sarasota and Bradenton have seen major increases in rental rates.

There is a lot of cash buyers out in our sarasota/bradenton real estate market that are snapping up all the good investment properties as quick as they come up. Maybe it’s time for you to jump in too.

If you are interested in getting pre qualified, and talking buying a home. Give me a call, we have upcoming first time home buyer workshops that we can give you information about. Call me anytime phone/text/email I am ready to help you! Joe Murphy Expert Real Estate agent for Sarasota and Bradenton

http://www.manateemoves.com/blog/can-owning-be-less-expensive-then-renting-3-considerations/