Florida Treasure Coast Real Estate Resource

The home was in one of Palm City's better neighborhoods, a leafy gated community with a variety of home styles. My clients were seeking a pool home under $250,000 and we had looked at several, all at the top of their price range. I suggested a short sale or foreclosure as an option, but they did not want to take on a renovation. When I spotted this Freddie Mac foreclosure I knew it could be just right for them.

As we pulled up to the home I warned them about what could be lurking inside: missing appliances, fixtures ripped from the walls or even owner inflicted vandalism. We entered the house and my concerns evaporated as I realized the house was largley in tact. Sure, the appliances were gone and the water heater was missing, otherwise it appeared to need only patching and painting. It had 20" tile laid on the diagonal and plantation shutters throughout the entire house.

Outside was a screened pool and a large private backyard. But the pool was green and the deck covered in mold. I assured them that it would clean up easily and judging by the water depth from recent heavy rains it looked like it was holding water. Upon closer inspection we discovered that the pool pump was missing and the owner had severed the air conditioner lines in a failed attempt to remove it.

But at $169,000 this was obviously a good deal and the couple decided to make an offer. I urged them to go in at full price or slightly above as banks will dismiss low offers. I also discovered there were already two offers in ahead of us, so I suggested we go in with an offer of around $172,000. To my surprise they offered $174,000, which the bank accepted the next day.

It gets better. My buyers were planning on wrapping the repairs into a 203K mortgage when I received a call from the listing agent telling me Freddie Mac would be contributing $6,000 towards closing costs, fixing the pool, A/C, and water heater and throwing in a two year home owners warranty for good measure.

So we are on our way to a successful closing. Barring any unforeseen inspection or financing issues, these transplanted Northerners will be enjoying their Florida dream home in just a few weeks.

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Contact Eric Slifkin for information about Fannie Mae or Freddie Mac foreclosures and special financing programs.

With a myriad of distressed properties on the market and more looming, many home buyers are clamoring to purchase foreclosed homes. But you need to be aware of the potential pitfalls in purchasing a distressed property, especially the risk associated with the cost to repair any deficiencies that a buyer assumes in an as-is foreclosure transaction.

Here are 10 areas to watch out for when considering a foreclosed home:

1. No power to the house. If the home has been without power for some time then chances are it has not been properly air conditioned. With our hot humid Florida climate prevailing most of the year, there is a good chance the house may have mold issues. Most banks are now requiring their asset managers maintain power to the house but it may still have sat vacant and powerless for several months prior to foreclosure.

2. Peeling or discolored paint, swelling in walls or ceilings, stains around windows or baseboards indicate water damage and possibly the presence of mold.

3. Mold growth or stains inside cabinets, behind drawers and built-ins. This is another sign that water damage may have occurred.

4. Missing sinks, toilets and other fixtures- check on repairs needed to replace any fixtures that were improperly ripped from walls and floors.

5. Plumbing or wiring issues. Check for blocked drains, broken or stripped pipes and wiring.

6. A cracked foundation, sagging roof or other structural issues may require costly repairs. Lenders may deny loans on such properties.

7. A "re muddled" home or a home with extensive renovations. Check for code violations and that permits were pulled.

8. A malfunctioning water heater, A/C unit or other mechanical equipment (pre-closing repairs may be required to satisfy FHA loan requirements).

9. Owner inflicted vandalism. Acts of vengeance by the former owner can be expensive to fix. Seemingly simple repairs can morph into a major renovation. Some banks are now addressing these issues and may perform the repairs when they acquire the "asset".

10. Air quality issues- testing should be considered with your home inspection, especially when water damage is observed or there is a musty odor in the house.

These and other pitfalls can be minimized by employing a qualified home inspector to assess the structure's soundness and uncover potential problems.

As an out of town buyer, identifying suitable Stuart area property listings can be daunting when it comes to using the myriad of online search tools currently available. Evolving Web 2.0 technologies have made it it easier than ever to learn about, buy, sell, or rent properties. While your search preferences may range from Realtor.com, to Zillow or Trulia, each has its pluses and minuses when it comes to finding the right home for you.

I have found the clients I work with typically use several real estate search engines to "triangulate" on properties and areas of interest. My online home search pages offer a blend of some of the best search tools currently available to find homes in Stuart, Florida, including links to our Multiple Listing Service (MLS Search) and The Home Buyers Scouting Report.

Online home search tools will generate a number of properties for your consideration. But it is raw data and not always accurate or up to date. That's when it's time to involve a local REALTOR®, who can provide expert knowledge of Stuart area homes and neighborhoods and represent you in your transaction (my out of town clients typically forward hundreds of property listings to me every day in order to gain feedback and guidance in selecting the best properties to see when they arrive).

As a Web savvy REALTOR® serving South Florida's Treasure Coast, I can quickly filter your property selections through our MLS system, providing you with currently available listings. More important, as an agent with local expert knowledge, I will help you see past the "fluff" and recommend homes you will want to visit when it is time to schedule a tour.

The soft real estate market here on the Treasure Coast is attracting a wave of primary and second home buyers who have been sitting on the sidelines waiting for an opportunity to buy a first home, "snowbird" retreat or retirement home. Their patience is being rewarded with an abundance of readily available distresed properties at prices well below the $150,000 mark. These homes are typically short sales and foreclosures, which raises several questions about which type of sale to pursue and at what price.

Short Sale vs Foreclosure
Simply put, a short sale occurs when the seller's lender agrees to a sale for less than the mortgage balance. It is the lender's goal to minimize their loss on the sale. Unless they pre approve the listing price, it can take weeks or months to get an answer on your offer while they perform their due diligence. In the case of a foreclosure, the bank has taken possession of the property and lists it for sale on the MLS. The advantage here is that the bank has established a price; buyers can make offers just like any other home for sale and expect to close with no prolonged waiting period while they consider your offer. Whether a short sale or foreclosure, these homes are sold "as-is" and the bank is only interested in their bottom line.

Negotiating a Pre Aprroved Short Sales or Foreclosure
A pre approved short sale can be as good if not better than a foreclosure. Often the "pre approved" price was derived from a prior offer that fell apart, which may give the buyer a good idea of the bank's expectations.

There is no emotion in negotiating a pre approved short sale or foreclosure. The " pre approved" price is based on the bank's best estimate of value, and is typically determined with a BPO (broker price opinion).  BPO's are provided by real estate agents the bank hires for just this purpose (note: a BPO is not an appraisal).  That said, the bank does not care about inspections or cost of renovation, just getting the best price for the market.  Whether a short sale or foreclosure you are buying the home as-is.  

There are tremendous opportunities today in buying a distressed property as your primary, getaway or retirement home. While there is always risk in any investment, with the proper contingencies you can confidently make an offer knowing that if the house does not appraise or fails inspection you can cancel the deal and get your deposit back.

Buying a home is both a science and an art requiring not only accurate and current local market knowledge, but a definitive strategy customized to your particular situation. In the past this task fell to the REALTOR®, who would offer potential homes to a client based on the agent's research and recommendations. Today the Internet has made this a relatively straight forward process, providing a wealth of tools and information to help buyers do their own research on local homes and neighborhoods. As a result the need to have a REALTOR® represent you as a home buyer has been questioned, but there are compelling reasons why you should include a liscenced real estate professional who is Web savvy in your home hunting arsenal.

Working with an agent will keep you focused.
I frequently get calls and Emails from buyers about one of my on line listings only to find they have downloaded dozens of listings from various sites that were already under contract, in questionable areas, or totaly undesirable. My first step is to weed out the best ones and contribute listings that will best fit the buyer's wants and needs. Together we establish a base of neighborhoods to work with and focus on listings within those areas.

Leveraging an "Internet REALTOR®" to consolidate your on line search.
Zillow, Trulia and Google, are just several amongst dozens of real estate search engines available to home buyers. I provide my clients customized "one-stop" on line search tools, which provide accurate and timely listings without having to search all over the Web.

A real estate professional will walk you through the entire transaction.
You've found a home you love so what's next? Your agent will guide you through every step of the way. This includes everything from submitting an offer to inspections, mortgages and insurance. Your agent will be on top of every detail (and there are many), allowing you to go about your daily business.

As real estate technologies evolve, buyers are seeking out agents who can help make sense out of all the listing information the Web has to offer. So next time you Google "your city real estate" you may want to search for "your city realtors" as well.

I have been asked by a number of clients about the new tax credit that was included in the recently passed economic stimulus bill. The following overview will help to explain what the new credit is all about:

Qualifying For The Credit

1. To qualify for the credit the home purchase must take place between 1/1/2009 through 12/31/2009.

2. The 2009 tax credit is an $8000 refundable tax credit or 10% of the purchase price. This means that if the purchase price of a home is $80,000, then you will hit the maximum of $8,000.

3. Refundable means that if you owe a tax liability of less then $8,000 the IRS will send you a refund of the difference. If you do not have a tax liability that is larger then $8,000, you will get a cash refund.

Exceptions to The Credit

1. There is a phase out range for this tax credit. For Joint tax filers it is $170,000 and single tax payers it is $95,000. If the home is purchased from a close relative such as spouse, parents, child, grandparents or grandchild, you are not entitled to the credit.

2. The home is not a primary residence. A primary residence is one where you spend the majority of you time (over 50%). Condos, single family and town houses are acceptable. No second or vacation homes. For new construction, the purchase date must be prior to 12/31/2009.

3. The recipient of the tax credit sells their home before the end of a full three years of ownership. If the home is sold prior to the three years of ownership the tax credit must be repaid.

4. The tax credit can be claimed on your 2008 or 2009 Tax Returns.

5. Nonresident alien's are not eligible.

6. A first time homeowner means that they did not own another primary residence at any time during the three years prior to the new purchase. If they are joint tax filers they both must meet the above criteria to qualify. This credit does not have to be repaid, which is different then the one passed last year.

Income Limits

1. Single filers $95,000

2. Married filers $170,000

3. The phase out for the income limit of $95,000 starts at $75,000 and for married at $150,000. A phase out means that the credit is proportionately reduced between the $75,000 and the $95,000, and the $150,000 and the $170,000.

I hope that this helps to explain about the new credit. For more information about the tax credit, first time home buyer programs or home loans please contact Wayne Katz, Senior Mortgage Advisor at Group One Mortgage, 561-791-0000 or contact me with any questions you may have about buying a home on the treasure Coast.