First Time Home Buyers

Buy v Rent- Never before have the benefits been this great!

noreply@blogger.com (RealtorTracy) — Mon, 03 Aug 2009 18:36:00 +0000

Rent v Buy Calculator: Traditionally, these calculations are done using a min 5 year comparison because it would customarily take that long to see any real return on investment. But in this unique market, 1 year is plenty of time to see a return on your investment!

The following chart assumes:
FHA loan
Purchase price: 100,000
down 3500
loan amount 96,500
annual hoa $600
tax bracket 15% (approx $67,500 for married filing jointly)
This would have monthly payments of approx $976/mo.

rental assumptions
monthly rent payment $1000.

additional monthly fees $0.

monthly renter's insurance premium $35.

purchase assumptions
purchase price of home $ 100,00

percent annual appreciation rate 5%

amount of loan $96,500.

percent annual interest rate 5.3%

term (in years) 30

annual homeowner's insurance premium $ 1200

annual property taxes $ 2200.

annual maintenance cost $ 50. (HOA dues)

other assumptions
number of years for comparison 1

marginal tax bracket 15%

You would save approximately $8,086 by buying a home, rather than renting, over the 1year timeframe you have entered.
The above calculator doesn’t include the $8000 tax incentive that expires Nov 30. If you haven't owned a home in 3 years, add that to your first year savings. KEEP IN MIND THAT SHORT SALES ARE TYPICALLY TAKING 4+ MONTHS TO CLOSE. IN OTHER WORDS, IN ORDER TO CLOSE IN TIME TO TAKE ADVANTAGE OF THE TAX CREDIT, YOU’D HAVE TO OFFER FOR A SHORT SALE THIS MONTH.

During this opportunistic time, $100k could buy you a 3 BR/2 BA home in good condition.
Don't delay! Call right away! 813-453-5273

If you'd like to play with your own numbers, visit:
http://realestate.aol.com/buy-vs-rent-calculator?calcType=bvr&rent=1000.0&adfee=0.0&rtins=35.0&incr=0.0&price=100000.0&aprct=5&loan=96500.0&rate=5.3&term=30&hmins=1200.0&ptax=2200.0&mntfee=600.0&years=1&taxbr=15.0&rsbt=0.0&infl=0.0&calcType=bvr&calcSubmit=Calculate

The Skinny on Types of Home Sales

noreply@blogger.com (RealtorTracy) — Fri, 31 Jul 2009 18:12:00 +0000

This unique market has made the playing field pathetically even for any kind of sale. In a healthy market, most homes are selling at value. The few that fall to foreclosure will sell for significantly less. These days, almost all the sales ARE distress sales, so that's where the bar has settled for now. People tend to love "buzz words" like "foreclosure," but these days, buying a foreclosure will have little, if any impact on the price paid for the home. Here's the skinny on types of sales during this market in the Greater Tampa Area:

1) SHORT SALES: These are the most common sales these days. I'll find it hard to limit myself to a few lines on this because there's so much to tell, but I'll try my best.
What is it? A house with a mortgage higher than what can be garnered from a sale. The lender does not base their decision on the loan balance. Their decision is based on the current value of the home.
Why does our area have so many? The simplest answer: We had a tremendous real estate boom that inflated prices and spurred a lot of sales. At the same time, there were mortgages awarded for as much as 125% of those inflated values. Many of those mortgages were misunderstood and many were even predatory. Now people are upside down and can't afford the homes.
What is the positive side of buying a short sale? First of all, to avoid all short sales, you'd be very limited in the number of homes to choose from, since they make up the majority of the market. It's more a matter of not being able to avoid them than purposely choosing one. Secondly, short sales are generally better cared for than foreclosures that oftentimes get trashed and gutted. Lastly, of course, is the fact that you save a lot of money because of the short sales, whether you buy one or not. There are many people who go through the short sale process, and after the agonizing wait and uncertainty, are rewarded with the house of their dreams for a fraction of what the value would be in a normal market. It's an opportunity, not a fun one, but it can be worth it.
What is the process of a short sale? This will be the hardest for me to explain in few words, so I'll start by stating that there are many, many details in the short sale process. A Realtor who is well-trained and experienced in short sales is invaluable throughout the short sale process. The following is a very limited description:
a) An offer is made on the house and the sellers (who won't be getting any money) sign it, making it a contract. Sometimes you can wait to give an earnest money deposit until after the bank's approval. Other times, you'll be asked to give a deposit so that you won't have to compete with other offers.
b) The contract is submitted to the bank along with a huge packet of financials from the seller, a closing statement showing the details of the offer, and the offer itself. If this 40-60 page packet is NOT in order before the offer, it can delay the process for weeks.
c) The banks are totally overloaded with short sales and it can take 2 weeks- 2 months just for a set-up person to put their hands on the file to be sure that it is complete for the negotiator. Once that's done, a realtor who is not involved in the transaction will be sent to the property for a Broker's Price Opinion (BPO).
d) Once the BPO gets back to the negotiator, she'll look everything over to see that the offer meets their general guidelines. If it doesn't, she'll negotiate terms so that they fit or the buyer can back out and get deposits if any. If the terms do meet the guidelines, she'll pass it on for approval.
e) Oftentimes, there are 2 loans in these instances. The first lender has the biggest stock in the property and has specific ratios to meet. The secondary lender often takes a small amount between $3,000-$5,000. This is added on to what the first bank will accept.
A note on price: value is value. People have many misconceptions about what a bank will accept. As I mentioned, distressed sales are now the rule, not the exception. Banks will only allow so much loss. My husband is in construction and we've seen a flood of homes getting rehabbed by banks in order to rent and then sell 3-5 years from now. A good Realtor should be able to tell you the approximate value of the home and have an idea what the bank will accept. Offers below the mark simply won't be awarded the home. Period. The banks have strict guidelines and they will rent instead of sell if those guidelines aren't met.

2) Regular Sales: Oh, blessed regular sales!! It makes me lightheaded to think of them. People who've taken care of their homes, have equity, and can sell in a dignified, up-front manner! They are few and far between. If you find one you love, you should jump on it! They have to compete with all the distress sales, so you'll still save gobs of money. Most sell for exactly what their short sale counterparts sell for; however, If they're asking for a bit more- maybe 3% or less, you'd do very well to pay the bit extra with a smile. You send an offer, you'll usually get an answer within a week, and poof!! You're a homeowner. Let's contrast that with a bad short sale scenario: You find a house you love and give an offer. You wait 4 months for an answer, while picking out drapes, planning your life, etc, only to be dumped at the last minute because the bank won't accept your offer. Then, you have to start from the beginning again. Avoiding that when possible is awesome and rare!

3) Bank-owned properties. These are homes that have already been foreclosed on. You can usually expect an answer within a week or two. Since the house is already foreclosed, there will not be a second loan to satisfy with an extra $3,000 either. The time part and the deal part of these are great. There are much fewer bank-owned properties than short sales.
The down side: Because they're so much easier to buy, there are often several offers getting to the bank at once. You have to give "your highest and best offer" the first time or risk being outbid by someone else. Many bank-owned homes also have been damaged or stripped, so it's harder to find one in good condition. If you find one, send in your best offer!

4) Foreclosures: Everybody LOVES this word! In normal markets, people with CASH have been able to buy foreclosed properties on the courthouse steps. First of all, notice that I said CASH. Most people don't have access to that kind of cash. Secondly, once it's bought, it's bought. You won't have the opportunity to inspect it later. In the 3 options above, you give an offer, then upon acceptance, you schedule a home inspection that costs between $350-$500. If the home doesn't meet your standards, then you can get out of the deal. On a foreclosure, you'd have to do your inspections BEFORE knowing if you'll win the bid. On top of it, there are very few homes with equity to make these sales possible.

Lately, there's a new kind of auction market going on which is more a gimmick than anything else. These homes can be bought using loans because they're not the same as buying at the courthouse. They are more to give a sense of urgency to the buyer than to get a better deal than you would from a normal or short sale. In fact, they have the audacity to auction short sale properties!!! That means that you'd have to:
1) Make a decision in haste
2) Pay for an inspection ($350-$500) on a home that you may not win the bid on OR forgo the inspection altogether.
3) Give a 5% NON-REFUNDABLE deposit within 24 hours of winning the bid.
3) Wait for 3-6 months for an answer from the banks who have liens on the property, just to learn that your winning auction bid will not satisfy the bank!
4) If you are awarded the property, the price is going to be about the same that you would pay on any of these other sales AND you'll have to pay an auction fee on top of it!
It's honestly ridiculous.

In short, bank-owned and regular sales are the best, followed by short sales which are nearly impossible to avoid. Many buyers gripe, but I find it kind of silly. If it weren’t for these challenges, they’d be paying up to twice as much for these same houses. We don’t have to enjoy the process, but if it makes it possible to get such great deals, it’s well worth it! They could have bought during the boom, and now they’d be looking for a rental.

What the New $8K Credit Up-front Is Likely To Do

noreply@blogger.com (RealtorTracy) — Sat, 06 Jun 2009 11:45:00 +0000

What the New $8K Credit Up-front Is Likely To Do
(Sales must be finalized by Nov 30 to qualify!)

Most of you have already heard about the $8,000 tax credit that is currently being offered by the government to new homeowners or to those who haven’t owned a home in at least 3 years. The purpose of the credit is to boost the housing market and help the economy. A combination of very low prices and this incentive have already helped us “turn the corner” in April. Sales and offers have increased dramatically, and, though prices remain low, they also stopped declining 4 months ago. The problem with the credit is that many people cannot access $8,000 up-front and wait until the following year for the credit. New legislation is making it possible for new homeowners to access the credit UP-FRONT. Though this opportunity is not ready just yet in FL, it is coming very soon. When it does, the loan market will be flooded with more new applicants than they can handle in a timely fashion! If you’ve been considering buying a home, but you’ve been waiting to apply for a loan- DO NOT WAIT! Apply NOW! Even if you don’t buy right away, it is simple enough to renew a pre-approval, instead of applying all over again. If your credit “isn’t ready,” it can be if you start right away. Most credit issues can be resolved in less than a year. The longer you wait to contact a professional, the longer it will take and the more opportunities you’ll be missing.

Lastly, if you don’t need the $8,000 up front or don’t qualify for the credit, but you’ve been considering buying, please understand that you will have many other buyers with which to compete if you wait until the up-front goes into effect – MANY more- and it’s likely to go into effect within a month. You have a much better chance of getting the best deal before that happens. In the current state of our economy, it’s not likely that we’ll see prices make a big jump up any time soon; however, we are already seeing selection and inventory go down, and even an increase of $20K can make a difference in the affordability of a home. Everyone who knows me understands that I’m far from a pushy salesperson, but I want to be sure that everyone understands what’s going on in this market. This is literally a once-in-a-lifetime kind of a market. Do not lose the opportunity!

Visit my web site for great Tampa real estate deals!

Don't Miss out on rates UNDER 5% and $8000 tax rebate!

noreply@blogger.com (RealtorTracy) — Thu, 30 Apr 2009 12:55:00 +0000

Tampa real estate is finally turning the corner!

**Sales have increased for 6 consecutive months
**20% increase in sales from Last March to this March
**Prices have held steady for 3 months
**Multiple offers are coming in on properties

DO NOT MISS THIS OPPORTUNITY!!

Even if you're unsure of your ability to borrow, there are great opportuntities out there!
I'd be happy to guide you!

Check out these 3 BR / 2 BA starter homes in great Tampa suburbs starting at only $90K!!

http://mfr.mlxchange.com/Pub/EmailView.asp?r=1802077397&s=MFR&t=MFR

Gorgeous, new, large homes starting at only $132k!!!

http://mfr.mlxchange.com/Pub/EmailView.asp?r=1237821780&s=MFR&t=MFR

This is literally a once in a lifetime opportunity! DON'T MISS OUT!

Home Buying Step 2: Financing

noreply@blogger.com (RealtorTracy) — Fri, 23 May 2008 01:03:00 +0000

After you've found a buyer's agent who you can trust, you'll want to get started working on financing. There are many types of loans out there and the current mortgage crisis illustrates the fact that getting a good loan is imperative to being able to afford your home. Your neighbor or that talkative person you met at the networking event may or may not be the best person to use. If you have developed a relationship with your Realtor, she should be able to look over possible loans and explain them to you.

Here are some of the basics:

*P&I: This is your actual loan payment. Principal is the amount you borrowed. Interest is the money you pay the lender for lending you the money.

*T&I: This stands for taxes & insurance. As a homeowner, you’re also responsible for property taxes and home owner's insurance. Most lenders require you to set up an escrow account to pay monthly, from which they make these annual payments.
*The taxes paid by the seller have little to do with what your tax bill will be. Ask your real estate professional to give you an estimate for the property you’re considering.

*PITI (principal, interest, taxes, insurance): This is your total monthly payment. This is the most important number for you to be concerned with when considering affordability.

*Beacon score: This is an average of the scores from 3 major credit reporting agencies. Do not give permission to have your credit pulled to too many people because this can have a negative effect on your credit. The better your credit, the better interest rate you can get, which means lower payments. There are professionals who can help you build your credit.

*Be Credit Conscious: Don’t make any large purchases until you close on your home. Don’t change jobs. Don’t close credit cards or lines or credit (pay them, but don’t close the accounts). The fewer monthly payments you have, the better. Hold off on getting into car payments if possible. You could get the car loan after you've closed on your house. Don't go crazy trying to fix your credit before you speak with a lender or broker. They will know the best way to help you do this.

*Earnest Money Deposit or deposit: You must have money for a deposit (commonly between 1%-2%) in order to make an offer on a home. Even if you are getting 100% financing and the seller is paying closing costs, you will still need to give a deposit to be held by the title company until the closing. If anything is owed to you, it will be refunded at that time. If the deal doesn't go through, but your agent has kept track of your contingency periods, you should be able to get your deposit returned to you. Ask about these details.

*Inspections: Whether the home is old or new, you should always get an inspection! The home inspection will cost between $290-$400 and it is paid at the time of service. You will also need a termite inspection which typically costs between $60-$90. Your agent will coordinate these appointments and be there with you. These are done for your protection. There are usually "contingencies" (or ways to escape) that are in most sales contracts that will protect you if these inspections show anything you're uncomfortable with. Be sure that your Realtor has made sure that you are protected and that she keeps track of the time table for these protections.

*Loan to Value (LTV) & Down Payments: This is the ratio of the loan to the purchase price of the home. For example, if you're purchasing a home for $200,000 and you have 3% or $6,000. as your down payment, then your LTV would be 97% because the lender is lending you 97% of the purchase price. I strongly recommend saving at least 3% for a down payment. During certain markets (like this one), sellers will pay for your share of closing and/or prepaids, but if not, you'll have to plan on approximately 3% for that too. Down payments are paid at the time of closing.

*Private Mortgage Insurance (PMI): If you're asking for a loan with an LTV over 80% (in other words, you don't have 20% down), then most lenders will require you to pay a percentage of your principal balance each month as insurance for the bank in the event that you default on the loan. This varies form lender to lender, but for an FHA loan for $200,000., you would pay about $80 a monthon top of your PITI. This is paid each month that you own the home until you own about 24% of the home's value. For many people, this is inevitable because 20% down is a lot of money.
There are some programs through credit unions that have no PMI on loans with LTV's of up to 97%. They aren't easy to find (I only know of 1 credit union) and they aren't easy to qualify for, but it's worth asking.

*80/20's and 85/15/5's: These numbers again refer to your LTV. In order to avoid paying PMI on a loan with less than a 20% down payment, some brokers encourage having more than 1 lender fund your purchase. In an 80/20, which is the most common, bank 1 would fund 80% of your purchase, and bank 2 funds 20% of your purchase. There are a few things that make this not such a great situation: 1. too many cooks spoil the broth. If you later have a problem, you've got 2 lenders to deal with and it can get sticky. 2. The second loan is usually at a significantly higher interest rate, which can eliminate a good part of the savings from not having PMI. 3. The second loan also usually carries a pre-payment penalty which would mean you'd have to pay extra if you decide to sell or refinance during a certain time frame. Be sure you understand what you're getting into.

*prepayment penalties: Some loans have you "locked" into holding the loan for a certain period of time, or else you have to pay a prepayment penalty in order to sell or refinance.

*FHA Loans:FHA stands for Federal Housing Authority. In an effort to make home ownership accessible to more people, the FHA "secures" loans by making the lessening the lender's risk. What this means to you is that there is a better chance for you to get financed even if you don't qualify for a "conventional loan." Although it didn't have the best reputation in the past, they currently are offering excellent loans. It's worth looking into.

*ARMS v.FIXED RATE: Fixed rate loans have a fixed interest rate for the life of the loan, so if you have a 6.5%, that's the rate you keep. ARMS or adjustable rate mortgages do change, but they are not necessarily bad. Some, in fact, are great loans. It depends on several factors like how long it's fixed (3 years? 5 years?) before it can adjust, how frequently it can adjust (like 1 year) and how much it can adjust by (1%? 1.5%?). What's most important is that you fully understand what's being offered and its risks and benefits.

Use a reputable lender & be sure you fully understand your loan!!

*GFE's: Anything that sounds too good to be true usually is! Ask lots of questions about the loans you’re being offered, and have your real estate professional look over them as well. A GFE is a good faith estimate. It is a legal document stating the terms of your loan and the estimated costs to close. Don’t use a lender who is unwilling to give you a GFE!

Check back soon or register for my feed so that you can read Home Buying Step 2: The Search.
Be sure to check out my web site for deals, FREE MLS search, and more.
http://www.tracysellstampa.com/

Home Buying Step 1: Choose a Buyer's Agent

noreply@blogger.com (RealtorTracy) — Fri, 22 Feb 2008 20:00:00 +0000

In my last blog, I explained the benefits of using a buyer’s agent to represent you when buying a house. However, choosing the wrong buyer’s agent would not help you at all. How to choose?

Would a rose by any other name smell as sweet?
There’s Coldwell Banker, Keller Williams, Century 21, and various other “big name” real estate companies. There can be benefits to using some big names. Some, not all, of the big name companies have excellent training and supervision for their agents. They also foster networking which may lead to agents who are well informed. However, it is important to understand that each realtor is usually an independent contractor. That means that just because an agent works for a company that has many listings, it doesn’t mean that the realtor is as good as the other realtors who work for that brokerage. Your service will only be as good as the actual Realtor who is serving you.
Some of the larger brokerages spend a great deal of energy recruiting as many Realtors as possible. Sales is a numbers game. The more Realtors in a brokerage, the higher the chance that the brokerage will make more money. This motivates some brokerages to recruit as many Realtors as possible. The greater the number of Realtors under a broker, the more watered down the supervision of those Realtors becomes. If a Realtor works for a big name brokerage, but the broker there has little time to supervise the office’s transactions, then the advantage of the name means significantly less. This doesn’t mean that you shouldn’t hire a Realtor from a large brokerage, but it does mean that you should only give that fact as much weight as it deserves considering the circumstances.

Who is earning most of the commission?
Not everyone is aware that most Realtors are associates, which means that they have to pay something to their broker from each commission earned. “Broker splits” vary from as much as 63% of commission earned going to the broker to as little as a flat fee per transaction. There are advantages and disadvantages to these arrangements. Most of the brokerages that take a higher commission split offer more support to the realtors in the form of classes, supplies, advertising, etc. Some don’t. Realtors who opt for brokerages who take the lowest portion of each commission must do almost everything on their own. A new associate in this environment is less likely to give the best service. A seasoned associate in this environment may have somewhat more opportunity to offer clients rebates or other incentives without compromising service.

Will a realtor with many listings make the best buyer’s agent?
The number of listings (or homes for sale) held by a Realtor has no bearing on her service as a buyer’s agent. There are agents who list many homes, who have the time and/or staff so that they can still give their buyers the attention they deserve. And there are also Realtors who prefer to use a hands-on approach with all of their clients, and prefer to work with buyers. The number of listings held by a Realtor is not a good indicator of that Realtor’s service to buyers.

Interview Your Realtor.
The best way to get the measure of someone is to have a conversation with them. In most situations, this is when your gut instinct and rational mind can meet and help you determine who will be the best fit for you. Here are a few things to look for:
Services offered.
Some realtors will bring you to a home and with little or no comment, write an offer, and then show up at closing. This would be little or no help to you. Your Realtor should be willing to advise you on financing, familiarize you with important aspects of a neighborhood, educate you on comparable sales in the area of the home you’d like to put an offer on, negotiate the best possible price and terms for you, be sure that your best interests are protected in the contract, and most especially, be sure that you fully understand the contract and its risks and benefits. After you go to contract, your Realtor should closely supervise the many aspects necessary for a smooth and successful closing. For example, there is an inspection period. You must have the inspection completed and your wishes known before that time expires or lose the protections stipulated in the contract. Most contracts contain a financing contingency. Again, there will be a time frame that must be adhered to for your protection. There are many other responsibilities behind the scenes to prepare for closing, and a good buyer’s agent will keep abreast of all of this so that you don’t have to. Your buyer’s agent should also be prepared to give you information on utilities, community resources, moving and more. When you interview your Realtor, be sure that she intends to represent you fully.
Knowledge is power!
You most definitely want your Realtor to be knowledgeable. If your Realtor is not knowledgeable, you may as well represent yourself. Just because someone passes the original Realtor licensing exam, DOES NOT mean that she is knowledgeable! Encourage conversation that will show you if your Realtor knows enough to be an effective advocate for you.
Avoid a hard sell!
It doesn’t take much to recognize that tingling feeling you get when someone calls you on the phone to sell you a travel plan. It’s important to have a winning personality, and pleasant to be complemented. But if your Realtor is pouring it on thick, the insincerity shouldn’t be hard to spot. Another give away is a Realtor who is so pushy that she’s not listening to your wants or needs at all. Don’t confuse this with a Realtor who is offering expertise. That is, after all, what you want. Choose someone to guide you, not someone to push you. I always tell my buyers that I don’t want to “sell” them a house. I want to facilitate the purchase of their home. It’s too important a decision to be hampered by someone who wants to earn the fattest and fastest commission as opposed to someone who will educate, guide, and protect.
Do your personalities match?
Some people forget that they will likely spend a great deal of time with their Realtor during the process of buying their home. Although knowledge, service, honesty, and integrity are all important, personality can play a big part. You may be very laid back, and like to take things slowly. A high-strung Realtor might give you a headache. If you want to find a home quickly, and you’re driven to search for long hours, the elderly lady who tires after 3 homes won’t be of much help to you. Although this is not THE most important aspect of choosing a Realtor, it still warrants consideration.
It may take more than one meeting to feel confident of your choice in Realtors. If you meet your Realtor for the first time, and on your second interaction, you notice that you’re not a good fit, let him know. If you’ve signed an Exclusive Buyer’s Brokerage Agreement, it usually only takes a brief letter mailed to the brokerage to end your relationship. No need to feel badly. As I’ve said over and over, this is too important a life choice to work with someone whom you feel will not best represent you. Once you’ve chosen “the one,” please be loyal! A good Realtor puts in far more time for you than you ever see. If you choose not to buy now, she’ll likely be willing to wait for you to earn her commission. If you decide on a whim to buy without her, you’ve literally robbed her of her salary. Imagine if your boss decided not to pay you for a few weeks’ worth of work? Finding a good and trustworthy Realtor is like finding a good and trustworthy mechanic. You shouldn’t let that professional go!

Use Your Tax Return for a Down Payment!

noreply@blogger.com (RealtorTracy) — Thu, 31 Jan 2008 17:41:00 +0000

This is a very unique market- prices are down, sellers are paying closing costs, and there are so many houses to choose from! The sub-prime mortgage crisis will surely be added to new history books. Do NOT miss this opportunity to own a home- and an investment! Even if you only want to start with a 2 bedroom condo, you won’t be wasting money on rent, you’ll build a strong credit history, and in a couple of years you can sell and use the profit for a down-payment on your next home. And interest rates are DOWN again!!
It’s a courageous step to buy your first home, which is why I love to work with first time buyers. I worked as a teacher for 10 years, so it is in my nature to educate, guide and protect. Even by guiding you with your loan, I could literally save you tens of thousands of dollars. It’s risky business to put your trust in someone who wants a quick sale. You don’t need a sales person, you need an advocate. From learning about the market and applying for a loan, all the way through the process of closing and beyond…I am on your side all the way!
I can sell you ANY house on the market, regardless of which realtor lists it (including new home!), and my services to you are F-R-E-E!! Sellers contract a set amount to pay buyer’s agents from the time their house goes on the market. I’m on YOUR side, not theirs, so I’ll get you the very best deal possible.
Drop me an email or give me a call so that I can discuss with you some of your options. Never an obligation or a rush. Visit my web site to search the FREE MLS. www.TracySellsTampa.com