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As the East Central Florida market continues to lag Buyers are feeling pretty confident being in the driver’s seat. Inventory (homes for sale) continues to climb faster than properties closing and prices remain rather stagnate. This is just the nature of real estate and in fact, the nature of all things…”what goes up must come down”. Real Estate is cyclical. We have Sellers markets (more Buyers than there are Sellers i.e., less homes for sale that Buyers have to choose from) and Buyers markets (more Sellers or homes for sale than there are people to purchase the homes). In case you aren’t aware of it, East Central Florida is in a Buyer’s market.

For those of you selling your home, please know there are Buyers out there. What I’m finding is that there are many people “just looking”. They would like to buy your home but maybe they have to sell theirs first or they don’t have the funds for a down payment or their credit scores are too low or … the list goes on.

Then there are the Buyers who are looking, ready, willing and able to buy. But instead of making offers 5% or 10% less than the asking price they are lowballing at 50% or more. This is not a bad thing. Everyone wants to get a good deal and there is nothing wrong with that. But Buyers beware of the Seller. So a word to…

    …the Buyers: When making very low offers you risk offending or insulting the Seller. It signals to some that you aren’t serious about making a deal. You must remember that in most cases the Seller is very attached to their home emotionally. They’ve created memories in that home. They have put their blood, sweat and tears into that home. They are mortgaged out their eyeballs in that home. Many Sellers took advantage of the out-of-control, skyrocketing prices a few years ago and took the equity out of their homes for remodeling, vacations, school, grown up toys, etc. And for others they were seduced by lenders who offered a fantastic interest only loans or ARM’s which are now coming back to bite the Sellers in the backside. (Note: I have nothing against the interest only and ARM loans under certain circumstances and for the right people but more on that another day) So remember, if the Seller doesn’t respond to your low offer at all or counters you near their asking price it may be because they were either insulted or don’t have a choice. There is no way they can come up with the chunk of change that is required between what you’ve offered and what they owe the bank. With that said, as the Buyer you need to effectively explain how and why you’ve offered such a low price. The best information is black and white and on paper. Ask your Realtor (and I hope you have a sharp one) to give you ammunition in the form of the history of prices, the current inventory on the market, how many days homes in a particular community are staying on the market, comparables, etc. Also know that your Realtor has a duty to present ALL offers in a timely manner (even low ones).

    …the Sellers: Don’t get insulted! In a market like this an offer is an offer. It means that someone is interested. Your best bet is to calmly discuss the offer with your Realtor (and again, I hope you have a sharp one) and decide how to structure the counteroffer. You don’t have to respond but it is to your advantage to do so. This is what I call starting a dialogue, opening the channels of communication. If you aren’t talking to one another the relationship will never make it. Hopefully you will be able to come to a meeting of the minds but if not say Thank You and move on. Another tip…be realistic. Mr. or Ms. Seller this is a different market than the one we were experiencing a few years ago. You are not going to get what you would have in 2004 or 2005. If you continue to receive offers in the same price range then follow the advice of your sharp Realtor and work with it if you can. And listen to the feedback from other Realtors showing your home and their Buyers.

Stay positive and keep looking up. Real estate is always good for somebody. It might be best for Buyers right now but the Seller’s day will come around again. Enjoy the ride.

If you have a story to tell, an experience to share or tips of your own please feel free to post to this blog or email me at Michele@EastFloridaRealEstate.com. 

If you are staring down that inevitable date where your interest rates go up and you face a substantial increase in your monthly payment you can take some preemptive action to help soften the blow. Did you know that you can contact your lender to discuss restructuring your existing loan thereby avoiding a possible foreclosure because you can’t make the payments? Federal regulators are encouraging lenders to be more flexible in that they want the lenders to work with you to remedy your situation and not just let it fall into the abyss.

You may need to sell your home but you might have quite a hard time doing it on your own. It may have been easy to sell your home yourself a couple of years ago because buyers were knocking each other over, almost fist fighting like a couple of mom’s who spotted the last cabbage patch doll on the shelf. (or last Christmas it would have been a Wii system) Nevertheless, that is not so any longer. Now it’s a buyers market, the buyers are in control and they know it! They are looking for a deal and there is plenty to choose from. So if you’re thinking of sticking a sign in the front yard and expecting someone to ring your doorbell with a fabulous offer, well that would be like Osama bin Laden ringing your bell to let you know he was going house to house apologizing for all the pain and suffering he has put each and every American through and his terrorism days were over. Ok, maybe that’s a bit of a stretch but my friend the point is, times have changed. If you need to sell your home you need to have a real estate professional on your team. One who works in the business full time and can help you market your home in many different ways. Someone you can trust, who will listen to you, conduct themselves in an ethical and professional manner, knows your market, one who understands what’s most important to you and what your situation is. And always remember, all Realtors are licensed to sell real estate but not all real estate licensees are Realtors. Realtors belong to the National Association of Realtors and pledge to follow the strict code of ethics.

Then there is the option of the “short sale”. Many of those under the gun are opting to go this direction of selling the property for less than what is owed negotiating with the lender to “forgive” the amount between what was due and what it sold for. That is if your particular lender agrees. But remember, the IRS is not going to let you off quite so easily. The IRS considers debt forgiveness as income! Yes, income meaning you will pay income taxes. And there is no guarantee that a lender who accepts a short sale will not pursue the borrower for the difference through legal means. If you are considering this route then email me and request my FREE Short Sale Report which details what steps you need to take and what you’ll need to provide.

If you are currently in the market to purchase a home please contact me and I will put you in touch with lenders who will work with you to find the best possible program for you.

The buzz these days is all about FORECLOSURES.  As a result of adjustable rate mortgages (ARM's) and the subprime lending situation, several million people are in jeopardy of losing their homes to foreclosure and see no way out. 

Most are just sitting around waiting for the final notification from the lender thinking that there is really nothing that can be done.  But there are a few things that one can do to work it out and be able to stay in one's home.

Quite frankly, lenders don't really want your house.  It actually costs them quite a bit of money to foreclose and they aren't in the real estate business.

So if you or someone you know can't pay the mortgage payments here are some tips.

1.  Call the lender right away.
As soon as you realize that there might be a problem call the lender.  If you put forth the effort and be upfront and honest with them the two of you can usually come up with a solution.  The sooner you call, the more options that are available to you to work out a solution.  The longer you wait, the harder it becomes to get something done.

2.  Speak to the "Loss Mitigation" Department
These folks help borrowers determine which options they qualify for to work out a solution to the problem.  Sometimes lenders will give their collections department the ability to advise the mortgagee so they may send you directly there.  But that's ok...you're still putting forth the effort to do something about it.

3.  Be prepared to review your situation with your lender in detail.
They will most likely ask you alot of questions.  They have their checklists to follow so you need to be upfront and clear about your current financial situation.  They can make determinations about which option will work for you rather quickly over the phone in most cases.  So make sure you are organized with all your bills, etc. in front of you when talking with the lender.  Be prepared.  Do not make your situation look too rosy otherwise you will be defeating your purpose of working out payments that you can handle and will benefit you.  And do not make the situation sound too dire and therefore make the lender think that there is nothing that can be done to help you and they subsequently decide you should liquidate immediately.

4.  Know how the lender can help you avoid foreclosure.
The lender can offer you ways to keep your house or ways to help you sell and get you out of it without going into foreclosure.

Ways to keep your home:

• Forbearance:  This lets you pay less than the full amount of your monthly mortgage payment for a temporary period.
• Repayment Plan:  A form of forbearance where you pay the outstanding amount in installments over a specific period of time.
• Reinstatement:  You pay the lender the total amount outstanding by a specific date.
• Loan Modification:  Your interest rate and/or term of loan is altered.

Ways to help you sell and avoid foreclosure:

• Short sale:  When you get an offer that is less than the amount you owe, the lender could consider it a settlement.
• Deed in lieu of foreclosure:  This allows you to voluntarily transfer your home to the lender.
• Assumption:  A qualified buyer takes over your mortgage.

If you have an FHA loan there may be additional options available to you.  Contact your lender to find out what they might be.

5.  Know where to turn if you aren't getting the help you need.
The Homeownership Preservation Foundation is a HUD-certified, non-profit organization that offers advice and resources.

You can reach them at (888) 995-4673.

6.  Know the foreclosure process.
Stage 1 - Redemption:  Lender's attorney contacts with you a deadline or what's called a cure date.  All missed loan payments must be paid back in full by the cure date to avoid foreclosure.

Stage 2 - Default:  If you have not tried to make contact with the lender or have done nothing by the cure date the lender posts a notice of default.

Stage 3 - Foreclosure:  If the delinquency is not cured after the default notice has been posted the lender takes possession of your home.  If you are still living there the lender will get a court order and have you evicted.

Stage 4 - Sale:  The home is sold at public auction.

A foreclosure will absolutely ruin your credit rating and make it extremely difficult, if not impossible, to purchase another home, let alone anything else, for years to come.

Take a few minutes right now to dig out your mortgage paperwork and find out exactly what kind of loan you have, if you don't already know.  Do you have an ARM?  Will your interest rate be changing in the near future?  Do you think you might have difficulties meeting those mortgage payments?  If so, contact your lender right away.  Don't wait.  The sooner you resolve the issue the better off you'll be.

Hopefully you are in a good position and do not have to worry about foreclosure but chances are you may know someone who needs to take action immediately.  Please feel free to call me if I can answer any questions or help you or your family, friends and/or associates in any way.

Info gleaned from Yahoo Financial article.

The word on the street is...NOW is the time to Buy! 

The University of Florida conducted a study and found that the state's single family residential housing market has stabilized after a year of declining sales and the price is right.  They've discovered that prices are staying even with inflation.  That means we are in a kind of equilibrium stage and indications are that the market is stabilizing or leveling off.

Unfortunately for those of you with condos to sell, the study found that the condo market is overbuilt and prone to speculative investors.

How do you feel about that?  Send me your comments to post on this blog.