With today’s considerably lower Miami Beach real estate prices, the large inventory of foreclosures and bank owned property the question becomes more of what kind of property is worth investing in than anything else. For purposes of this article, we’ll focus on bank owned properties, also known as REO (real estate owned) property.
A home becomes real estate owned if it doesn’t find a buyer during a property auction. Since banks aren’t necessarily designed to function as Miami Beach real estate property-owners, they’re usually very eager to get rid of them which can result in considerable discounts. However since an REO is not the same thing as a foreclosure, lenders can still earn a profit from them so don’t expect as deep of a discount.
A perk of buying a Miami Beach real estate REO is that there’s much less of a risk of dealing with liens, taxes and other unforeseen costs that come with a foreclosure since lenders will take usually deal with them before the sale is closed. However an REO can still be in bad condition like a foreclosure so it remains important to get a home inspection or check the home out yourself, lenders are not at all obligated to make any repairs on the property but they will allow you to back out if something is seriously wrong.
Posted at 10:24:21 AM
Thursday, March 5, 2009
Examining the Interior of a Home
If you’ve been browsing through Miami Beach real estate on the internet, you’ve more than likely come across numerous resources thoroughly explaining how important it is that you carefully consider where the home is located, the values of neighboring homes, etc. If you’ve done your homework, perhaps it’s time to narrow down your assessment to the home you may soon be living in by giving the interior a meticulous examination.
Perhaps you’d like to start off with the electrical wiring. Depending on your familiarity, you may wish to leave this to a professional or have it done as part of the home inspection report, should you request one. Always check this part out regardless of whether the home was built ten years ago or five years ago.
The plumbing is a little easier. Leakage can often be discovered just by taking a look behind sinks since that’s the spot where mold has the best conditions for accumulating. A leaky sink could be an indicator of bad pipes and thus plumbing, something you likely want to bring to the appropriate person’s attention before signing off on the dotted line on your Miami Beach real estate purchase.
Not all homes come with an addict but if there is one, you may wish to make it your first stop. If you want to examine the roof, the attic is the best spot to do so. If there’s wood that shows wear and tear, this could lead to leakage later on.
Posted at 11:00:29 AM
Wednesday, November 26, 2008
Compiling Comparable Sales
With the advances in technology and the widespread availability of the World Wide Web, there is more real estate information available than ever. Realtors have a number of resources available to help them with their seller and buyer assistance efforts and among these, it’s important to have a good idea of average sales prices in any given neighborhood, officially known as comparable sales and often referred to simply as comps.
Depending on the state where the realtor is doing business, obtaining information on comps can be done by simply heading over to the local courthouse and browsing through public records or reading newspaper listings to get a glimpse of recent sales figures. However this method means that such services need to actually be provided in order to make use of them.
The most readily available resource is the internet since there are many websites available which can be used for finding comparable sales information while removing the need to do a lot of unnecessary and possibly fruitless legwork. Keep in mind though that there is no guarantee as to how current this information may be. A similar approach is to subscribe to service companies which can mail or offer this information via other means besides the internet. Even so, the same problems of encountering outdated information are still there.
The MLS can be extremely useful and if the person using it is already a licensed realtor then they have access to a wealth of information on multiple listings which is more often than not kept up to date.
At the end of the day however, perhaps the best way to have the sharpest knowledge on comps is to take the self research approach and focus on a certain neighborhood and staying abreast of sales.
Posted at 4:43:12 PM
Friday, October 31, 2008
Existing Home Sales Rose Nationally Last Month
While the economy seems bleak with the stock market fluctuating daily and a steady amount of major companies going bankrupt or merging, the real estate market seems to be headed down a different path. Month-after-month the real estate market has slight improvements. Experts think the worst declines in the real estate market have already past while the economy still has a while before it stabilizes.
Recent reports from the National Association of Realtors (NAR) show an increase in existing home sales. Home sales were up 5.5 percent with a total of 5.18 million units sold across the country in the month of September which was higher than the previous month by 1.4 percent. Lead economist for the NAR Lawrence Yun suggests this is part of “a sales turnaround which began in California several months ago…” and “is broadening now to Colarado, Kansas, Minnesota, Missouri and Rhode Island”.
The cause of this influx of real estate business, according to NAR President Richard F. Gaylord is “low home prices and low interest rates”. The nearly thirty percent discounts in home prices in major cities and rural areas have attracted buyers back to the real estate market in certain areas of the country. Richard F. Gaylord is optimistic about recent gains and thinks the real estate market is on its way to recovery.
Lawrence Yun, while also optimistic about the recovery of the real estate market, warns of “market disruptions” on the road to real estate market recovery. The credit markets have a significant impact on the real estate market and as they experience tough times it may have averse effects on the real estate market. But that aside, the NAR is predicting that the worst for the real estate market is over and that it will recover sooner than the economy itself.
Posted at 10:53:28 AM
Friday, September 5, 2008
Global warming, damaging fuel emissions, they’re all more of a concern on people’s minds these days as they become more and more aware of their long term effects on the environment and how important it is to try and incorporate “green practices” into your daily lifestyle whether that means doubling up your recycling efforts or reducing the amount of time you spend sitting idly in traffic.
In real estate, many developers have taken into account how they too can make homes “greener” and many have made use of natural resources to create environmentally friendly condo buildings like Ten Museum Park which uses its glass design to allow tons of natural sunlight to come into the building, thus reducing the need to flip on artificial lights, at least during the day.
The Ten Museum Park condo is only a small part of a bigger picture. Its home, downtown Miami is recognized not only by its sweeping business and condo skyscrapers, but also the numerous and elaborate light displays that bring the city to new life during the evening. Obviously all this visual eye candy, while certainly nice to look at does not do the environment any favors. Thus, to reinforce the message of how important it is to turn off nonessential lights whenever possible, Ten Museum Park and all those other high rises in downtown Miami’s will turn off their own unimportant lights on March 29 in a global effort to encourage environmental awareness.
Regardless of whether you live in a Miami single family home or a luxury condo, the efforts required by you to help out the environment even a little are that simple: turn off lights when you leave a room, drop a plastic water bottle or soda can into a recycling receptacle instead of the trash. It may seem useless but it’s always good to know you’re doing your part in making the world you share with everyone else that much more pleasant.
hat require little to no repairs. Don’t get caught up in the fierce competition without having a limit of how far you’re willing to bid, always remember the winning bid is only a component of the other fees that follow. As you learn the ropes, you’ll eventually get a feel for how real estate auctions work and who knows, if you become good at it, they may become your preferred method of buying Florida real estate.
Posted at 2:50:44 PM
Tuesday, June 24, 2008
International Florida Real Estate Assistance
To some degree the foreclosure situation has transitioned from how to prevent foreclosures to how to get rid of the hundreds of foreclosure properties already available on the market. South Florida homes are among the highest in foreclosure filings, contributing to an already overcrowded housing glut. The answer to appeasing the situation may lie beyond the U.S. borders.
Strategic Real Estate Advisors is an asset management firm situated in London that plans to raise $1 billion dollars in order to purchase luxury property like Miami Beach oceanfront condos currently owned and being sold by the banks through the Florida Prime Residential Opportunity Fund.
Itâ€™s interesting to note that not only is Strategic Real Estate Advisors located outside of the United States, the majority of the funds which will go towards the purchase of all these luxury properties will be coming from well to do investors and funds located throughout Europe and the Middle East. Recent reports have consistently pointed towards international investors and buyers as integral towards maintaining interest in Florida property investments and sales.
Critics may see Strategic Real Estate Advisorsâ€™ initiative as ineffective since they wonâ€™t be making a profit. The firm actually plans to buy and then hold onto these properties for next six years or so, a move that may cost considerable funds as the market fluctuates but which should bring considerable profit by the time it decides to sell them off as a residential property investment or something else entirely.
Within a seven year timeframe home values and the real estate market in general will certainly be in much better shape and buying activity will likely have increased so in a sense Strategic Real Estate Advisors are providing a worthwhile short and long term solution. Is this just another flash in the pan or is it a viable strategy?
Posted at 12:30:39 PM
Wednesday, May 28, 2008
Homes Are Selling Again
Amidst the doom and gloom of housing market reports comes a recent report suggesting the real estate market is showing strong signs of life. In these tumultuous times it's easy for people to think that the economy is headed for recession or even a crash. Despite current market reports that suggest we are beginning to see slow signs of recovery there are still those who would rather build a bunker under their homes to prepare for an apocalypse then invest in real estate.
The last half dozen months have not seen much progress in the way of homes sold. The highest percentage of drop in home sales occurred during that period leading many to believe that the market would eventually begin to recoverâ€”and it did. In April homes sales increased slightly, which wasn't enough to ease all tensions in the housing market but enough to show that the market is on the right track to recovery.
Property value also rose slightly across the nation showing encouraging signs of the real estate market's enduring strength. Though the median home value is comparably low to just four years ago the fact that property value is stabilizing across the country is a sign that things will return to normalcy sooner than later. When property values experience steady rise it will be more practical for people to sell homes and to convince investors to buy homes.
So, how should one react to recent reports of trends reversing in real estate? Real estate transactions rising are a sign that demand for property is still alive. Prices are almost at a low enough level that many people sitting on the fence on whether or not to invest will soon become active. As sales increase, so will home values and soon real estate investments will become stable enough to return to business as usual.
Itrsquo;s what you donrsquo;t know about real estate that could cost younbsp;when buying or selling.
bull; First-time buyers usually havenrsquo;t seen enough houses or condominium units to fully understand where real estate value lies.
They may not have been caretaker of a house and, therefore, donrsquo;t notice subtle signs of damage, sloppy construction, poor maintenance, or worn-out elements. Those who have visited friendsrsquo; houses will ra>
bull; First-time-in-a-longtime buyers may not realize that they are out of touch with advances in materials, modern design approaches, or evolving life>
This can lead them to under- or over-value new houses or condominium units.nbsp;For example, quartz kitchen countersnbsp;have gained popularity over marble and granite for several reasons. Open-concept design is preferred by those with small children or those who live to entertain, but not by those who are untidy, >
bull; First-time sellers who base resale value on their total costnbsp;of acquiring and maintaining real estate ownership, plus expectednbsp;profit, have missed the point.
Emotions, including pride of ownership, can get in the way and prove expensive. Sellers may believe that their cost of buying and transforming the property into their home, plus money spent on maintenance and upgrades, plus profit and the cost of selling, including commission, add up to their actual ldquo;bottom linerdquo; for resale value. Problems arise for sellers when this must-have sale price is not in line with market value, which is value determined by the real estate market - current buyers and previous sales. When the seller expects more than market value, this ldquo;over-priced listingrdquo; may take longer to sell, may eventually sell for less, or may fail to find a buyer. First-time sellers may lack experience evaluating how their property compares with local property values and appraising their property from the perspective of current active buyers.
Value determination and marketing - or communicating action-enticing value to potential buyers - represent two different professional real estate selling-skill sets, neither of which are usually possessed by sellers.
bull; Empty-nester and downsizing sellers may decide, in theory, that smaller and cheaper are the characteristics they desire in their next property, but some discover itrsquo;s a different story in practice.
When faced with the actual move to a smaller house in a cheaper location, they may find the mental leap too great. Downsizing is often wrongly considered me>
Many faced with wanting a change find they lack the real estate knowledge and planning expertise to make the shift gracefully acceptable and financially successfully.
bull; Newbie real estate investors may believe that crunching numbers to determine how much profit they want and what it will cost to achieve this profit is all it takes.
Creating an offer to purchase, which entices a property owner to sell for the buyerrsquo;s desired price, requires special professional expertise. Then, offering the property for profit-generating rent that will attract qualified prospective renters involves a different set of professional skills. Many new investors possess neither skill set, which are both common in real estate professionals.
The emotional element regarding what sellers will sell for and what renters will pay to live in the resulting investment property can influence financial gain and bottom-line projections. Skill and experience is essential to investors taking all this into account to create profit.
What you donrsquo;t know about property ownership and real estate transactions can cost you when buying or selling, wherever you fit in on the list of buyers and sellers above. Do you have experience with contracts, financing, interior design, renovation, conflict resolutionhellip;? Then, therersquo;s marketing - both using it to persuade others and personally fending off its effects when yoursquo;re making decisions.
What you donrsquo;t know about real estate, real estate professionals do. They are committed to studying and keeping up to date on what matters. Most have spent years on the job perfecting their expertise and learning local markets.
Would you surgically operate on yourself or drill your own teeth? Itrsquo;s that extreme an issue when you donrsquo;t engage available professional skill and knowledge to work for and with you.
Concentrate on learning what the right real estate professional cannbsp;help you achieve.
Not the least of which is discovering what you donrsquo;t know about buying and selling. When you think, my goal is ldquo;buy my dream homerdquo; or ldquo;sell at my dream price,rdquo; understand what will have to happen and what you must do to achieve the desired outcome.
If you donrsquo;t know where to start, no problem.
Real estate professionals are trained to know what needs to be done for prospects and clients every day, every offer, every transactionhellip;. Do you know what yoursquo;ll gain with professional help? How determined are you to achieve real estate goals and exceed your expectations, as quickly and hassle-free as possible?
To continue learning about buying and selling real estate, checkout more Realty Times articles by PJ Wadenbsp;The Catalyst:
bull; 4 "Big Regrets" to Avoid When Buying a Homenbsp; bull; Trends Cost Sellers Money bull; Ready to Talk About Real Estate?
ldquo;Fixer-uppers list for an average of 8 below market value,rdquo; said LearnVest. If yoursquo;re on a budget or are being priced out in your market, this is a way to get a literal foot in the door. How much depends greatly on the location. ldquo;Fixer-uppers in Phoenix have the smallest cash discount, saving buyers just 1,000 off list price. But you can save a lot of money in expensive markets like San Francisco, where fixer-uppers are discounted an average of 10mdash;giving homebuyers 54,000 in upfront savings for renovations on the median home.rdquo;
You may be able to finance your renovation
One of the major drawbacks of buying a home that needs to be fixed up is having to come up with the cashmdash;especially after yoursquo;ve just put so much money into your down payment and closing costs. There are a few different types of loans that package the mortgage with funds for renovations, and they often come as a surprise to buyers who have only focused on FHA and 30-year conventional loans.
ldquo;Whether you need a new roof or your kitchen is outdated, there is a mortgage thatrsquo;s right for your fixer-upper,rdquo; said Bankrate. Fannie Maersquo;s Home>
It gives you the opportunity to build value
With an already-updated home, ldquo;If a seller has redecorated or improved the whole place, that seller is reaping the benefit,rdquo; said Forbes. ldquo;If the homes value has been raised, the buyer is paying for it. Also, consider this reality: A seller who re-does a whole house in order to sell is not likely putting in the highest-quality materials. Theyre cutting costs to maximize profit. But if you buy a fixer-upper, you might be able to secure an undervalued property, improve it and get the benefit of the extra equity. Its a core real estate concept. If you can find the right property, this could mean thousands of dollars almost immediately.rdquo;
You can do renovations over time
There may be a few things you canrsquo;t live with in a fixer-upper, like the grungy carpet and cruddy plumbing fixtures, but no one other than design shows says your place has to be perfect the day you move in. Taking your time to make updates as yoursquo;re able gives you the opportunity to save money and recover from all the expenses of buying the home and moving in.
It allows you to put your stamp on it
When you buy a home that was lived in and fixed up by someone else, it reflects their taste and >
ldquo;One of the primary reasons people buy fixer-upper properties is for the opportunity to make the space their own,rdquo; said Green Residential. ldquo;Instead of purchasing a home in which someone else designed the layout, chose the materials, and dictated where different elements were placed, you can buy a basic structure and then take charge. Itrsquo;s like building your own home without having to go through the lengthy process of drawing plans and constructing it from the ground up.rdquo;
ldquo;An NAR survey of 2,211 members found 75 percent had no impact to their contract signings or closings. However, 11 percent did report an impact on current clients and 11 percent on potential clients,rdquo; said the National Association of Realtors. Among those impacted by the shutdown, 17 percent had a closing delay because of a USDA loan.rdquo;
The most impacted areas of the market surround:
Consumer confidence is always a topic of conversation when it comes to real estate, and with rising interest rates and a roller coaster stock market, a government shutdown only makes the issues that much stickier. According to the NAR study, ldquo;The most common impact, at 25 percent, was the buyer decided not to buy due to general economic uncertainty, though they were not a federal government employee.rdquo;
Loan approvals/Closing delays
Whether or not your loan and/or closing is impacted by the government shutdown largely depends on the type of loan you are getting. ldquo;If youre getting a Federal Housing Administration or Department of Veterans Affairs loan, its likely you can expect delays in the underwriting process, and its possible your closing date will be pushed back as well,rdquo; said the Dallas Morning News.
HUD has said that while new FHA loans will be endorsed during the shutdown, ldquo;Some delays with FHA processing may occur due to short staffing.rdquo; In addition, new Home Equity Conversion Mortgages HECM, more commonly referred to as reverse mortgages, are on hold for now.
While the White House has insisted that the Internal Revenue Service IRS process tax refunds during the shutdown, itrsquo;s made no such mandate in regards to helping consumers who need info because theyrsquo;re buying a home. That means that buyers wonrsquo;t be able to requests tax return transcripts, which may be required by lenders, thereby delaying the purchasing process.