Lisa Spalding, REALTOR, CDPE

For those working with me or soon to work with me, YES, foreclosures/bank-owned properties CAN be a good deal and short sales CAN be nice houses and good deals but if you are a first-time buyer or if you are getting an FHA loan, PLEASE, PLEASE think first before you consider writing an offer on them.* Just because YOU believe a bank-owned home, short sale, or pre-foreclosure is a good deal--or a STEAL--doesn't mean it's the home for you.

What I mean is, those deals are PERFECT for the right Buyer. Cash Buyers that are true investors are good Buyers for these homes. Buyers that don't have to move quickly may be appropriate (many times, there are extensions to a contract and if you're needing to move now, it can get tricky). Buyers that have at least 5% down or more are potentially good buyers for these homes. Buyers that can stand to lose a couple bucks for inspections (if there is even any utilities turned on), have the guts to waive inspections completely (NOT a good idea for buyers, usually), or have their $1,000 of escrow money held up indefinitely can be good Buyers.

However, if you are a first-time buyer, are using any state, federal, or city/county-sponsored down payment program or if you want to utilize AmeriDream or Nehemiah, or if you just need your closing costs paid for you, then the bank-owned/short sales are probably completely inappropriate for you. They are typically inappropriate for financing with an FHA loan, especially if you are going to use Nehemiah or ask for any closing costs be paid for you by the seller (unless you're using the FHA 203K/"Rehab" loan).

I'm SO sorry, but that is typically the case. Banks won't pay closing costs and they won't make repairs.* They are NOT in the real estate business; they are in the loaning money business. Short sales don't work with these types of loans b/c the owner doesn't have any money to make repairs and they owe the bank more than the house is worth. Sometimes, pre-foreclosures can work if the homeowner has equity in the property but many times, the listing agent or the Seller may not understand the process and can slow it down so much that the pre-foreclosure becomes a short sale.

The good news is that there are a lot of other homes that are for sale in my area, so you can still get a good deal on something in spite of a lot of homes not being appropriate for you.

So, basically, if you don't have the 5% down payment or if your credit score isn't what it needs to be to qualify for a conventional loan and you have to get an FHA loan, it's cool to buy a single family home, as long as it's not bank-owned and the owner can't be in trouble with their mortgage. If it's a townhome ownership, that's cool and the association fees are very small usually with townhome ownership. If it's a condo that you're looking into buying, then you should make sure your real estate agent is ONLY showing you FHA-approved condos.

A leading real estate broker in my market gives his view of foreclosures and short sale properties:

http://activerain.com/blogsview/423281/The-Dark-Side-of Take a look. He's a great writer and obviously care about those he works with.

I hope this helps.

* Waiver: I am not, nor have I ever been a short sale specialist, loan officer, etc. The information contained in this blog is only my own thoughts, beliefs, and interpretations and may/may not be accurate according to some people. :)

Whether you are a real estate agent, mortgage loan officer/lender, appraiser, notary, home inspector, whatever--

Do YOU take a day or two off during the week? I don't mean just SAY you take a couple days off, but REALLY turn off your cell phone (maybe, get someone to cover for you or leave a voicemail saying you'll call back the next day) and take the full day off? Maybe take the day off just to sit and appreciate a nice picture or enjoy the site and smell of some nice flowers... (Isn't this picture a nice one of the Downtown Longwood clock?)

Or, do you wind up working virtually 24/7 throughout the week?

Many jobs, careers, or businesses get by or even do wonderfully well with posted business hours (whatever those hours are) but it seems that the public thinks that in anything having to do with real estate, we are expected to jump when someone else says, "Jump!," answer our phones whenever someone calls, and generally just BE AVAILABLE for EVERYONE ALL THE TIME.

For me, I (try to) take off on Wednesdays and either Saturday or Sunday, depending on how many people I'm working at any one time and what their schedules are. Wednesdays, I usually do pretty well during the day with not conducting business, mostly because I keep my youngest son home that day and sometimes, when I'm feeling ambitious, I even keep my other son home, too.

I found that, when I was a new agent, I myself expected that as a real estate agent, I'd work all the time and not take a day off because I might (horror of horrors!) lose out on a customer. Within about 6 months, I was so run-down physically and so mentally burnt-out that I had to re-evaluate my business hours. So, after a LOT of thought and mentoring, I decided I'd need 2 days out of my week to stay sane, while still being 100% present with customers but being able to re-charge on those 2 off-days. I find that I'm not only happier but I am MORE productive working 4 or 5 days a week than when I worked all the time. Go figure. But, everyone is different and I still talk to people in the industry that have a much different idea than me about what is right for them and their business in terms of their schedule.

How about you and your business? What do you find works best for you?

And NOW for Some Good News...

If you are planning on buying a home in Central Florida, the good news is that FHA has increased its loan limits and we have the actual numbers as of last Thursday.

So, basically, if you are planning to buy a home in Orange or Seminole counties, your Buyer can get an FHA loan for up to $353,750. Woo hoo!

What this means to SELLERS:

Sell a home with near-100% financing (almost 3% down)

FHA allows the Seller to pay up to 6% towards buyers closing costs and pre-paid items (This isn't necessarily good news for Sellers that are not committed to selling...)

It may be in your best interest to pay for a home inspection AND a WDO (Wood-Destroying Organism) inspection so that you can have your house in top shape to capture the few ready, willing, and ABLE Buyers

Your home must be in the under $350,000-ish price range to qualify

WELCOME BACK, FHA LOANS! (Not that they ever went away, we just had other loans that mimicked them that seemed as good.)

With SOOO many properties to choose from here in Central Florida (say about 25,000 plus or minus a thousand), a first-time Buyer may lose FOCUS on what they want and need and on what they can actually purchase. Here is basically an e-mail that I just sent to a prospective Buyer that e-mailed me a few properties that she is interested in: (Keep in mind that I have not yet met with this lady but we've had a few good phone conversations and she's e-mailing me the out-of-state lenders info this weekend so I may contact them on Monday--the lender of course doesn't work on the weekends!):

"Well, a few of these are mobile/manufactured homes and I only know of one lender that'll lend money on them b/c they depreciate in value (b/c they are a vehicle, not a house). Plus, you usually need 25% down in order to qualify for that specific loan (if that loan is still even available). Those mobiles are the ones listed on XXX. XXX is bank-owned but it's a big house. If they have the utilities turned on, maybe we can see inside. But banks do not typically pay any of a Buyer's closing costs unless you go over/above whatever they have it listed for. With your lender, I can ask on Monday if you guys need any help with down payment. Do you qualify for any of the Down Payment Assistance programs? XXX is a short sale, meaning they paid $XXX,000 for it and owe more for it than it's worth at this time. It can take a long time for the Seller's lender to say whether or not they'll even accept less than what they are owed for a property; otherwise, the Seller needs to bring money to closing or the bank won't approve the sale. And the Seller's bank DOES need to approve the sale. Yikes!

There are a LOT of preforeclosures, short sales, and bank-owned properties on the market right now. But, if we are choosy, we can probably get as good a deal from an actual Seller that has some equity in their home and can sell their home in a timely manner." Then, I go on to send the inquired-about listings and I'll follow-up tomorrow of course.

So--I am talking with so many Buyers that believe these homes (pre-foreclosures, bank-owned, and short sales) are GOOD deals (and they can be!) but most of the Buyers I come in contact with are totally inappropriate as Buyers for these specific properties. Pre-foreclosures are great, actually, if the owner has equity in the property and can actually sell the property quickly, has no utility liens or other liens on the property, has the utilities turned on so the Buyer can have inspections, etc. They can be quick transactions and everyone is happy. More often than not, though, a pre-foreclosure quickly turns into a "short sale," in which the owner owes more than the property is worth. The tricky question with these is "Does the owner QUALIFY for a short sale HARDSHIP?" In order for the bank to accept less than they are owed, the owner needs to have had a HARDSHIP such as a death in the family, loss of job income, or some other really catastrophic occurence for the bank to just give up on money owed them.

I mean, come on--if someone owed you thousands or tens of thousands of dollars (or more!), YOU would want the money, too, right?? In terms of already bank-owned properties--at least the bank can get back to you quicker if they already own the property, which is good. But they are choosy about not wanting to pay a Buyer's closing costs and the utilities may or may not be turned on; that really depends on the listing agent. And don't even get me started on mobile homes. I live in Florida and, even though it's a personal choice of people to either buy or not buy a mobile home, I personally think it's a bad idea to buy a mobile home due to hurricanes, etc. (That's just my opinion.)

So, if you are a Buyer looking for a deal on a home--and aren't we ALL doing that--please keep the focus on what you want, need, and like so that you can buy a home to live in and not waste your precious time, energy, inspection money, and get your hopes up to buy a home that ultimately just will not work out. Use an agent that will help you sift through all the properties available to find the homes that you WILL be able to purchase. I'm not saying that purchasing certain properties isn't a good idea; what I'm saying is that it takes the right person, couple, or investor to have the time, energy, and patience to buy certain properties. I'm evening seeing CASH Buyers having difficulty in purchasing certain homes, but that's another story.

Take a look at Mark Organek's recent post for more Problems with "Deals": http://activerain.com/blogsview/412648/The-Problems-You-Get

Also, here is Mark's take on why these "Deals" are actually deals: http://activerain.com/blogsview/412652/The-Beautiful-Happy-Joyful

Again, use an agent that has experience in COMPLETING pre-foreclosures/short sales/bank-owned properties and use a lender (or buy with cash) that has experience, too. Good luck!

It's not what we DO in life that we regret so much; rather, it's usually what we DON'T do in life that we seem to regret...I almost missed out on a great day at the Magic Kingdom!

So, if you know me at all, you'll know that I have posted hours to work at real estate on certain days. I take real estate VERY seriously. So seriously, in fact, that when I'm working, I'm 100% THERE for my customers. (On the other hand, when I'm not working and I'm with my family, if you call me, you'll usually get a voicemail about what I'm doing and when I'll call you back.) I usually take two days off per week; one day on the weekend and one day during the week. My one day off during the week is Wednesday. I take Wednesday off to be with family. I keep my youngest son home on Wednesdays and we usually have a great time. Sometimes I keep my oldest son home, too, when I'm feeling ambitious. My husband usually works (he is a 7:30-3:30 hourly employee for a major pharmaceutical company) during the week, so is usually working on Wednesdays.

However, this past Wednesday, we had scheduled to go to Disney's Magic Kingdom as a family. Oh, what fun we were planning. We have planned this for a few weeks. So, too, if you know me well, you'll know I'm a bit clumsy at times. On Tuesday, I just fell while walking to my car. Yep, I'm a goof. Well, I twisted my ankle pretty badly. Ordinarily, I wouldn't care but twisting my ankle the day before a marathon of walking at the Magic Kingdom made me pretty mad at myself.

I had a dilemma as to stay home and nurse my ankle or to go to the theme park with my family. Of course, you can see my problem--possibly injure myself further through walking for HOURS on my ankle or MISS OUT on seeing the kids having fun.

So, what do you think I did??? (Scroll down to see!)

I would have regretted missing out on the PERFECT day at Disney's Magic Kingdom.