Posts Tagged ‘Real Estate’

Tips for buying a Short Sale home

Thursday, September 23rd, 2010

If a seller sells a house that they owe money on – more money than the house is worth – it is called a short sale. Since the bank is going to end up taking a loss, they need to approve the sale. Interestingly, often to buy a short sale home you have to be both patient and extremely fast. You might make an offer, wait for months, and then hear that you have 2 weeks to get all the paperwork done.

(1) Do your homework – check the land records in the town where the property is located. Is there a pending foreclosure? How many short payoffs will be required to obtain all necessary releases. If you are trying to do a short sale on a property that is already in foreclosure and you need to get a release of two mortgages and 7 judgments liens you may want to pass.

(2) Make sure the seller is completely on board. Have your agent consistently check up with them to see if they have an update. Frequently sellers become disinterested and ignore the bank’s request for updated financial information. The bank may be ready and you may be ready but you cant get far without the seller.

(3) Have all your ducks in a row regarding financing. If it is a property that needs work and you intend on getting an FHA insured loan you may lose your short sale approval during the time it takes to get your loan commitment. It is best to be preapproved and be ready immediately upon acceptance for appraisal, inspections, etc. A lender is loath to hold a short sale approval open for too long.

Still, the experience may not be smooth. One guy made an offer on a short sale property which the seller accepted. He had to put $3k down as earnest money. The seller’s real estate company said his was the only offer but what they didn’t tell me is that even though the house is pending approval the seller and/or the bank can accept other offers: “We never got more than a “keep waiting, it should be only a couple of more weeks.”

After about 3 months he wanted to pull the offer and start looking at other places, but they said he would have to eat the $3k if he did that. After 4 months they tell him the bank accepted another offer – he waited all that time for nothing.

You might be thinking that the bank treated this guy unfairly but keep this in mind. They are losing money on the sale – would you rush into a deal that was losing you money? So it’s not uncommon for short sale buyers to feel powerless or abused as they wait. Go into any short sale transaction with patience.

Commercial real estate losing value

Monday, September 14th, 2009

This article talks about how commercial real estate is falling in value. The article gives a few reasons to be pessimistic about the economy. One of them:

“We expect construction activity to continue to pull back over the next 18 months,” as “property values still face significant further declines.”

real estate taxes doing what needs to be done to stimulate the economy?

Monday, April 20th, 2009

This article talks about how the new 10% tax incentive (up to $8,000 max) makes it a good time to buy a first home.

That’s from now until Nov. 30 or Dec.1 depending on which newspaper article you believe. In the article linked above, one couple amended their 2008 return and are expecting a check in a few weeks. They say that needs to be done by April 15th so I guess now you’d have to wait till you pay your 2009 taxes.

Anyway, this article says things might be working and real estate may be ready to lead a US economic recovery. It’s possible but I’m not sold that we’re in a recovery right now.

Vacation home sales are off but for how long?

Thursday, April 16th, 2009

This article talks about how vacation home sales are on the decline and how prices are coming down. But the conclusion is that retiring baby boomers will start buying vacation homes and retiring in them.

I know a few retiring baby boomers, and some bought a place near Disney that could be considered a vacation home by some but most of the ones I know prefer to stay near their friends / kids. So I’m not convinced that baby boomers will be driving the market in places like Costa Rica.

There’s also a personal finaince lesson here. One that I’ve mentioned about saving for unforseen medical expenses (because you can’t trust the insurance companies) and one that I shouldn’t have to mention about interest only mortgages:

But so far, no buyers. While she has dropped her price on the property, with its rambling five bedrooms and nearby rain forest, from $2.35 million to $1.5 million, she is experiencing firsthand just how dismal the market has become for vacation homes. She has enough money to pay her interest-only mortgage of $3,800 through July, but after that, there are no funds left.

She decided to sell the property because of unforeseen financial problems, such as medical expenses. “We’re about to lose it to the bank.”

A good time to get started in real estate?

Thursday, March 19th, 2009

Here is my situation. I work in Manhattan and a make a decent living. I am renting an apartment in Westchester with my girlfriend and I can’t help but want to own my own place and rent it out. I have about $25,000 available to put towards a downpayment, taxes, closing costs, etc. When my lease is up this fall I plan on moving back home to Stamford, CT to save money towards my first home purchase.

I know over the next year or 2 the market will be down and I want to capitalize on it since I have some money, I am young, and I can capitalize on the first time home owners loan (I have great credit as well). I would love to buy a place and rent, or buy a place close enough to NYC that I can commute from if I can’t find a tennant. Any suggestions on how to approach this? I know the first line of business is getting approved for a loan, but what other suggestions have you got?

Answer: How about picking an area with an upside and getting in touch with a local real Estate agent about purchasing a two family investment property where you can live and rent out either a finished basement or an upstairs pad. I think that would be a good start because this is clearly a buyers market and there should be a whole lot for you to choose from. Also making the rental your primary residence helps lower the necessary down payment.

Also keep in mind as more and more people are losing their homes to foreclosure, rental properties will be on the upside for years to come and don’t worry about those folks being bad risk just because they lost their homes as they still needed a stable roof over their heads.

NYC real estate might begin to see more pressure

Wednesday, October 1st, 2008

Here’s a good article on NYC real estate.

The Stuy Town project certainly has potential, but given the market and the need for their fellow investors to receive immediate gains, they are really hurting right now.

Compared to the rest of the economy however, real estate prices in nyc have only gone down 3% since the last quarter. However, the two main things that pose risk now are:

1) Lack of wall street bonuses and new jobs, creating vacancies in luxury apartments
2) Lack of lending for developers

Advice on investing in Malaysia

Friday, September 26th, 2008

Interesting article here on investing in Malysian real estate. I like the idea that about 50 grand can buy a nice proprty 15 minutes from KL.