Manatee and Sarasota County Real Estate News. Information and articles about the changing market. Posted by Joe Murphy Real Estate Associate with Coldwell Banker Residential Real Estate. www.manateemoves.com
I have been working with a buyer this week, and after seeing all the resale inventory including short sales, and foreclosures they decided on a new build. What is amazing to me is that the deal they got with the local builder is BETTER than any of the comparable resales in that area.
A resale home that was essentially the same home as they purchased was an option, BUT it was 45,000 dollars more, and a SHORT SALE too. The new construction will take 8 months to close, but a short sale can take 90-180 days to close. Plus the new home has all the features and upgrades that they want.
This perplexed the buyers. The new home Should be More, but in a falling market, I explained, that Bank owned, and new builds pull the market down, since they HAVE to Sell.
A builder is not a builder if he is not building, so, he has to stay competitive in the market.
Bank owned properties have owners that want to get rid of them asap.
Short sales, and "regular" sales have a major disadvantage since they have to follow the market and are constrained to appraisal issues.
It was front page news that the number of foreclosures filings here in Manatee County has had 5687 foreclosure filings to date this year, which is an increase from last year. This is a lot of homes and as an active agent it made me wonder where are all the bank owned inventory?
The Statistics show two big things.
Factor in that there are foreclosure filings from prior years that have not been completed. Many foreclosures I am aware had a foreclosure filing well over a year ago and have not gone to auction.
Also, some of foreclosure filings that are also homes that are currently listed as short sales.
Some of the foreclosure filings can also be filed from second position lien holder,s and homeowner associations that have a low probability of actually forcing a sale. These type of filings maybe inflating the numbers somewhat.
So there are under 2000 homes short sale homes, active and under contract. This means that there are around 4000 homeowners that are either attempting a loan modification, or have given up on either a short sale, or some type of work out solution.
I would estimate that if there are 2000 homeowners short selling, than there is at least that many attempting or considering a loan modification.
Activity in Manatee County has significantly increased in the past few months. Prices have continued to drop except in the 200,000 and under market where prices have leveled. Multiple offers are much more common for bank owned homes.
Why is there only 5% of the total inventory bank owned when there is more homes in foreclosure than all active and pending sales on our local MLS?
1. The slow pace of foreclosures is due to the flood of files, and the increasing willingness for lenders to agree to short sales, and loan modifications.
2, Anyone that has a bunch of inventory to sell realizes that if they flood the market it will drive down prices.
I am hopeful that the lien holders will come to realize it is better to keep homeowners that want to stay in their home if at all possible. Less inventory will create price stability.
The question remains when will all those foreclosures will come on the market? I guess it is really in the lien holder's hands.
Finally! Home owners, Realtors, Lenders, and home buyers are all going to benefit from these new guidlines. The faster and easier the process becomes the closer offers will come to being fair market value. This will lead to reduced inventories, and market stabilization. The Treasury department created a 46 page guide for major lenders to follow with regards to short sales, deed in lieu, and loan modifications. The frustrating process was in need of standardization, and streamlining.
Short sales can take months to close, andtend to go pending with prices that are below market value since the buyer(s) brace themselves for the long drawn out process with no guarantee that their offer will be accepted. New homes, regular sales, and bank owned homes can be closed in a normal time period, and there is little uncertainity IF you are going to close. When short sales can be conducted in the same time frame, they will not have this huge disadvantage.
These guidelines go into effect in April of 2010. Hopefully, most lenders will become early adopters of the new guidelines.
One major point of the guidelines is that the lender has to offer a plan to help the borrower with a loan modification ahead of entertaining a short sale, or deed-in-lieu.
This is a great requirement, since I see many people that would rather keep their current home, but are having a tough time making the payments, or they are so far "underwater" that they question the rational of paying on a mortgage that is much higher than the actual value.
I think that one aspect that was missing was creating an incentive for the lend ers to "cram-down", or reduce the principle balance to the actual value of the home. Many borrowers would work to keep their homes if they had equity, or at least didn't have negative equity.
LINK to Home ownership retention guide https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf
If you are looking for help with a short sale or loan modification for a home located in Manatee or Sarasota Counties I would be happy to help you understand your options. I have helped dozens of homeowners either sell or assist to modify their home loans. I can help you too with no cost. For all your real estate needs I am ready to go to work for you!
Joe Murphy 941-780-3260
This entry discovered a great site that Bank of America uses to evaluate home value.
If you ever wondered what Bank of America thinks your home is worth, you can just type in the address and there you go!
It's surprising why they need to do so many appraisals and BPOs on their short sales when they have this program that gives them a number on the fly.
Looks can be deceiving
It could be possible to live in one "unit" and rent out the other. Not a bad idea to really lower your overhead!
Typical rental rates in the area would suggest around 900-1000 for the 3/2 side and 500-600 for the 2/1
Built in 1979, the home is being sold by the original owner. It's not perfect, but it is a functioning, and with a little bit of work has tons of potential. Being sold AS-IS with right to inspect for the convenience of the seller. All inspections are welcome here. The seller does not know of any major defects.
The main home has 3 bedroom and two baths. Inside utility room, decent sized kitchen and the master has it's own private bathroom.
The living room has a wood burning fireplace it hasn't been used in years though.
Fenced in yard, and some mature trees too. Could use a little clean up, but it's fenced, and there is no deed restrictions here.
The 2nd unit is a 2 bedroom efficiency with a full bath and a small kitchen. A little el;bow grease, paint, carpet, landscape clean up. This place could shine!
The roof was replaced about 10 years ago and has a decent amount of life in it. A/C systems work fine., water heater looks recent too.
This home actually sits on two lots, so compared to the area, it has quite a spacious lot, again it's completely fenced too.