Buying Homes Online
Published by chris on
Wednesday, July 2, 2008 - 22:05:08
- Filed under Market News
Right now we are seeing spike trends in home searches online. Our analysis tools and various connections with entities, such as Realtor.com and the Carolina Multiple Listings Service, are showing that week to week there have been sudden spikes in web views of property search results. Then the next week we are seeing spikes in the showings on our listings and declines on web searches. This is happening all over the Charlotte Market Region.
A recent study showed that 97% of all Home Buyers began the search for their home online. Legislation has also been put in place to endorse electronic transactions and electronic signatures. How far away are we really to being able to buy property without leaving the comfort of our home or even a coffee shop?
Short Sales
Published by chris on
Tuesday, June 24, 2008 - 18:13:09
- Filed under Tips, Buying, Investing, Market News
With all of the negative news about foreclosures in the news, I wanted to try to put a different spin on some of this information. Many homeowners who are facing foreclosures use a short sale as a last resort. This presents a great opportunity for potential home buyers and real estate investors. The short sale can be a drawn out process and I will try my best to explain the risks and rewards of the transaction.
A short sale is a legally binding agreement to allow a home to be sold for less than the amount that is owed. Short sales are not by any means common but because of increasing inventory levels and foreclosures, lenders are becoming much more eager to negotiate with borrowers who are having difficulties in paying their mortgages. For potential homebuyers, a short sale is a great opportunity to purchase property at a discount.
However, don’t expect a lot of help from the lender unless you provide a sales contract from a qualified buyer and other information required by the lender’s loss mitigation department. They will review this carefully because lenders are not looking to bail out “flippers” who have over-extended themselves. In most cases, the current homeowner must have suffered a serious financial hardship that caused them to become delinquent on their mortgage.
For the seller, they receive the benefit of being able to sell their home without a foreclosure taking place and the lender avoids large legal expenses. The Mortgage Forgiveness Act of 2007 also prevents the seller from having to pay taxes on the benefit their lender gave them by reducing the amount owed. In other words, the difference between what is owed on a mortgage and the actual amount settled is considered taxable income to the homeowner. This Act temporarily waives that tax burden until 2009.
Communication and patience is the key to this process because it takes negotiations from all parties and if there are multiple lien holders, all of those parties will need to get involved. This is why experienced agents such as yourself and a good mortgage professional become so valuable to this process.
Separating ourselves from the competition is more important than ever these days.
Rob
Cash Is King Part 2
Published by chris on
Friday, June 20, 2008 - 12:02:16
- Filed under Tips, Investing, Market News
Chris put it best in his last posting. Being liquid these days gives you the edge on the street. Having available lines of credit is quite important should an opportunity come along that requires some fast footwork. Many of the local banks including ourselves are offering promotions on their equity lines. In fact, some are offering fixed rate equity lines as well. The available lines of credit will have varying limitations for each scenario but generally the equity loans are being limited or capped at 90% Combined Financing. What that means is the banks will take 90% of the appraised value, subtract the balance of the first mortgage thus leaving the amount available to borrow. If you already have an equity line, that balance would have to be paid using a portion of those proceeds.
Many of the investment property purchases will soon require 20% down due to the PMI companies withdrawing their interest in insuring these loans. Unfortunately we have seen the progression of Zero Down to 5% to 10% and now 20% down on investment property purchases. With that said, you can see the value of having a good cash source at your fingertips.
Rob Sadoff, Executive Vice President
Omni Mortgage Corporation
704-372-1633
Cash is King….
Published by chris on
Friday, June 13, 2008 - 17:08:30
- Filed under Tips, Investing
Trying to build a healthy real estate portfolio can be a tall order. Cash crunches happen and the best performing deals get missed along the way. One thing my clients have started doing is using other kinds of leverage to acquire the best deals when they come by. The goal is to use other cash sources to acquire property, and then use it’s equity as your down payment. Here is the process:
1) Get preapproved from a long term lender! Learn what they need regarding income/asset verification and documentation. This is key because long term financing is your exit door in this process!
2) Get a CASH source! Whether it is a line of credit, CASH, or a Joint Venture Capitalist to “rent” the money from. (Hard money will work as well, but with any of these types of relationships we should be careful. It is not pretty when we get stuck borrowing short term money for a long period of time.)
3) Get property under contract and close
4) Renovate. Try to wrap renovation costs into the deal somehow. It really helps on the refinance results. (Rate and Term Loan not using Cash-Out)
5) Get a renter with a lease in hand
6) Refinance the property. Good goals: 75-80% Loan to Value (LTV); and get it all done in less than 60 Days.
Essentially what was accomplished by this was:
- Buy property without conventional loan restrictions
- Use the equity as your downpayment to reduce monthly cash liability and maximize cashflow
Buying is Believing
Published by chris on
Wednesday, June 4, 2008 - 16:57:53
- Filed under Market News
I am sure you have seen the “anonymous” ads around town, “Smart People are buying now” or “Buy low- its that simple.” Though caddy as they may seem, that is the reality in this market! Right now there is such an abundance of properties for sale on the CMLS, 25,832 to be exact (as of 6/4/08 sfr/condos). In April, we saw 2,632 SOLD’s with about the same number, give or take, in active listings. In May, 3,264 properties were SOLD! After doing the math you can see that our inventory has gone from about 9 months in April to 7.91 months as of today! These numbers do show an increase of demand. The trend that is still emerging under the media radar in Charlotte is that people do believe in this market!
Yes, the Big Banks have taken a beating in this finance center we call Charlotte. And Yes, there has been a lack of demand due to fear in the national/global market over the past few months. People are tightening up on their dollar. But, the people who lay hold of this opportunity, that won’t be sticking around for very much longer; I believe, will see a substantial return on their investment in the Charlotte Economy.
Chris Allen
