Fed Aid Sets off a Rush to Refinance and Purchase

The Federal Reserve's attempt to stabilize the housing market set off a chain reaction across the U.S. on Tuesday, dropping interest rates and quickly spurring a burst of refinancing activity by borrowers eager to lower their mortgage costs.(more)

The Simple Truth about Short Sales and Foreclosures in N. Texas

My team and I have noticed that in today's market, everyone is interested in learning more about short sales and foreclosures. They seem like such a great bargain! Our Accounts Manager has been getting 1 - 3 calls a day on this subject alone. Now, you can find out the simple truth about Short Sales and Foreclosures in N. Texas.

Short Sales - A short sale is a home that has not been foreclosed upon yet. The seller has been delinquent on payments and has worked out an agreement with his/her lender to allow the home to be sold for less than what the seller owes on the house in order to avoid foreclosure proceedings. Even though the lender will be receiving less money than they are owed upon the sale of this home, they will be saving money in the long run by avoiding the expensive costs that go along with foreclosure proceedings including court costs, attorney fees, etc. The seller avoids being locked out of their home and possibly losing some or all of their possessions. They also will only have delinquent payments on their credit score and not a foreclosure.

What's in it for you? The fact that the home is a short sale generally equates to the home being under market value. Since the N. Texas market is fairly stable, without drastic plunges, that could mean instant equity for you! Also, a short sale home typically has an owner/seller that wants to get the home sold, not one that is bitter that the home is being taken away from them. This means that the home is generally in better shape overall than a foreclosure.

So what are the negatives? A short sale, just like a foreclosure, is typically sold "as is", meaning you should still have a right to an inspection (which is HIGHLY advised by this REALTOR), but don't plan on the seller or lender paying for any repairs. They are already losing money. This means if the home needs new flooring or needs air conditioning work YOU will be footing the bill. One nice thing is that FHA is now offering a new loan called a 203K Streamline Rehab. This allows you to finance in the cost for a lot of repairs into your mortgage. Speak to your favorite lender about this or contact my team for a lender recommendation.

The other big negative in some cases with a short sale is the time it takes to get a response. In a majority of cases, there will be multiple offers on a short sale property because they are such good deals. However, most lenders can take weeks to get back to potential buyers and their agents with a response. If you have the time and patience, this can work to your advantage as most buyers typically lose patience and move on to other properties. Remember though, it does take patience. In some cases, the home will go into foreclosure before you even get a response! However, a good buying agent and a good selling agent can stop this MOST of the time with cooperation from the bank.

All and all, a short sale property is a good deal for you if it needs little repair or you have the funds/capability to handle the repairs needed and you have time and patience, which can be tough to come by when planning to purchase a home.

Foreclosures - One of the most common questions asked to our Accounts Manager about foreclosures is "Do I have to pay any back taxes if I buy a foreclosure?". The answer is NO. The lender that owns the property is responsible for paying all back taxes. Make sure that an owners' title policy is issued at closing. This ensures a good title. Your title company will issue this insurance policy. This is a policy that guarantees good title even if an unknown lien surfaces after closing. You will not be responsible for any past liens on the property that occurred before you purchased. The story is different if you were to go and buy a home in a courthouse steps auction, but in the case of a foreclosure listed by a real estate agent, the facts above are true.

What are the advantages to you for purchasing a foreclosed property? Foreclosures, like short sales, can be a good deal. However, the bank does want to avoid as much loss as possible. They will list a foreclosure at market value and only knock the price down after the home has set on the market for a certain amount of days. Also, they will only negotiate down substantially regarding the same situation. However, it never hurts to try to get a good deal on a foreclosed property because after all, it is all just a numbers game. In most cases you do not run the chance of offending the seller, which is the lender. Unlike dealing with an emotionally tied owner/occupant, if the numbers work for the lender they work. They will counter if the numbers don't work. However, outrageously lowball offers can be outright rejected, such as an offer for 50% of the asking price. I have seen this happen. Remember, the bank, just like any other seller, could list and sell the home for more than 50% of market value. They will not be that taken advantage of and can afford to hold on to the property until a more reasonable buyer comes along. If that means dropping the price by 10% - 15% to find that buyer it is still more advantageous to them than giving it away at 50% of market value.

What negatives should you expect? Just like with a short sale, a foreclosure is sold "as is". You are buying the property just the way you see it. Be smart and get an inspection! You do not want to get trapped in a money pit. Also, foreclosures are typically more beat up than other homes on the market. The previous owner may have taken out their angst on getting foreclosed upon on their soon to be foreclosed upon property. I have seen foreclosures with all the door knobs taken out as well as the appliances. Most need the flooring replaced and a good paint job too. Bathrooms can be a nightmare as well. You can luck out and buy a foreclosed home that is only a year or two old that needs very little work, but these are not on the market very often.

When it comes to short sales and foreclosures in general, a good real estate agent is key. Your agent can advise you on the actual market value of the property, recommend vendors for quotes on repairs, and should know how to negotiate with the banks and handle any issue that may arise. My team has a plethora of experience in both short sales and foreclosures and we are happy to consult with you and make sure you get the best deal possible with the least hassle on a home you love. Contact us today and lets get started! 1-800-720-2197

DFW Market Statistics for October 2008 Year to Date

Nobody said that our market was golden right now. However, it is not as dire as the media portrays it. The latest research has come out from the North Texas Real Estate Information System that shows the statistics of our market year to date from October 2008. The number of sales for this year is down from last year but the average sales price in most areas of DFW has either gone up or stayed the same. For example, Frisco's average sales price is up 2% over last year and Coppell's average sales price is up 8%. Average days on market is generally 90 days or less with Coppell having one of the lowest average days on market of 54 days. Grapevine's average days on market is only 50 days. People are still selling and buying in the N. Texas area! Please look at the spreadsheet I've compiled below below for more detailed information.