Archive for March, 2010
Monkey See, Monkey Do? Strategic Mortgage Defaults…
March 31st, 2010 categories: Foreclosures, Tips for Sellers, Worth Sharing, short sales
There is a World of Difference Between a Real Distress Situation and a Strategic Default.
I don’t mean to be disrespectful but I am always scared of “Trends” when they involve financial decisions. Strategic Mortgage Defaults reminds me too much the times when everyone was an investor expecting to flip a property for a huge profit.
How many people did their due diligence?
How many people could afford the worst case scenario?
How many people did it because “everyone is doing it”?
I understand that a Strategic Default can be a preventive measure expecting to protect other assets a homeowner may have. Let’s say the Mortgage, Taxes and Insurance on a Property add up to $ 2,500.00 a month and the same property can be rented for $ 1,600.00 this means reducing annual expenses by $ 10,800 a year that are probably being taken out from the homeowners savings account. The worst is the uncertainty of when the property will recoup the lost value.
My main concern is the downward spiral it creates. As more properties hit the Market as Short Sales or Foreclosures prices may tend to decrease.
In reality this is one of those situations that are a catch 22…there is no wrong or right answer. The most important thing is to make an informed decision understanding the many consequences it may bring and that probably the unpaid balance will not disappear and the credit score will end taking a hit.
Some related articles:
Fed-Up Homeowners who can pay their mortgage, Don’t - RISMEDIA
Strategic Defaults lessons fromthe great depression – THE NEW YORK TIMES
Walking away from your mortgage has consequences – USA TODAY
What might happen if you walk away from your mortgage – MONEY
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Are Properties in South Florida Undervalued?
March 30th, 2010 categories: General RE Info, Great Deals, Market Update, Tips For Buyers
Miami and Fort Lauderdale Metro Area Report
As I was reading this article in the South Florida Business Journal Biz I started to play with numbers assuming two What if? scenarios… The article is based on a report prepared by IHS Global Insight and PNC Financial services Group released in March 2010 up to the 4th Quarter of 2009. The study comprises 330 Metro areas including Miami and Fort Lauderdale Metro Areas.
In the Summary they conclude:
- “Two years of relentless house price depreciation finally ended in the Summer of 2009. (…)”
- “We ended 2009 with no extremely overvalued metros, (…)”
- “For the Country as a whole, the housing market is now slightly undervalued. (…)”
Miami Metro Area:
2005 Q4 Price: $ 281,300 Overvaluation 49.4
2009 Q4 Price; $ 180,500 Overvaluation -15.6 (undervalued)
Fort Lauderdale Metro Area:
2005 Q4 Price: $ 259,400 Overvaluation 41.9
2009 Q4 Price; $ 146.600 Overvaluation -24.0 (undervalued)
Average Sold Price* for Miami and Fort Lauderdale Metro Areas: What if?
Based on average sold price I made calculations assuming the potential price increase that could have occurred if the real estate market had performed as expected (approx. 5% annual increases) or assuming properties would increase in price based on the average Inflation rate of the last 10 years (approx. 2.57%). If we take into consideration the projection based on a 5% annual increase in both Metro Areas the actual median price is below the projected price. If we compare it with a projected 2.57% annual increase in Dade the values are very close and in Broward the actual Average sold Price is significantly below the projection.
If we compare the data provided by the IHS Report and the data obtained from the MLS (trendgraphix), we can conclude that even though at some point prices in Dade were more overvalued than in Broward today we may say that Broward’s properties could be a better deal!
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Thinking of selling your home? Now might be a good time to put it on the market when the inventory of great properties for sale is low. For a FREE market analysis of your property call me at (954) 588-7260 or contact me.
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I Leased a Property and It Is Being Sold as a Short Sale or Foreclosed…What should I do?
March 23rd, 2010 categories: General RE Info, Rentals, Tips for Sellers, short sales
- Image by Getty Images via Daylife
The Answer is: Consult an Attorney…
From several conversations with attorneys I have gathered the following information. You particular circumstances may differ so please do your due diligence before making any decision.
Is the Property being sold as a Short Sale or being Foreclosed?
If the Property is being sold as a Short Sale and the Lease is current the new owner must honor the lease term. Very often, by the time the Short Sale is approved, the original lease has expired and the tenant is living in the property with on a month to month lease. Beware of oral agreement since they are harder to enforce than written contracts. In some cases the Tenant lives in the property until the amount given as advanced rent and security deposit is exhausted. It is advised to have a written agreement with the owner because the owner’s default in paying his mortgage doesn’t give the tenant the right to default in his rental payments. One of the most common complaints from tenants when they keep paying their rent is either the lack of maintenance to the property. Attorneys always advice their clients to keep paying the Association/Condo dues while the Short Sale is being processed.
A good landlord/tenant relationship is key to ensure a smooth transition. Being it to grant access to prospective buyers and be able to commit with a closing date or transferring the lease to the new buyer.
If the Property is Foreclosed the new owner has the right to request the Tenant to vacate the property. Tenant is normally aware that a foreclosure is taking place well in advance. The new owner can provide the Tenant with a “3 Day Notice” and if the tenant doesn’t leave most likely an eviction will take place. Under some circumstances the new owner offers incentives to ensure the property is left in good conditions and the tenant vacates without the need of being evicted.
If the Property is a Fannie Mae Foreclosure you may get some Help!
Some Qualified renters may be offered month to month Leases and even help to relocate. For additional information:
Fannie Mae Support for Renters
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Thinking of selling your home? Now might be a good time to put it on the market when the inventory of great properties for sale is low. For a FREE market analysis of your property call me at (954) 588-7260 or contact me.
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Free Marketing Seminar in Weston March 24th. @ 5:30PM
March 21st, 2010 categories: Events, Worth Sharing
Open to the Public!
To RSVP: garcia.i@ewm.com or (954)588-7260
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Weston Short Sales Market Update-Single Family Homes
March 10th, 2010 categories: General RE Info, Market Update, short sales
Weston Short Sale Inventory is Leveled
Weston Single Family Homes Short Sales available for Sale have been decreasing by a couple of points as time goes by. It’s not a significant number but the good news is that the percentage has not increased.
Regarding Short Sale Properties there are Pending Sales input as under contract as far back as April 2008. We never know if the information is totally accurate because not always the information is updated in the MLS in a timely manner as it should.
There are as of Today 8 Active Short Sale Listings in the MLS over $1,000,000.
Thinking of selling your home? Now might be a good time to put it on the market when the inventory of great properties for sale is low. For a FREE market analysis of your property contact me.
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Weston Single Family Homes Sold in Weston on February 2010
March 10th, 2010 categories: General RE Info, Market Update
There were 37 Closed Sales in Weston during the month of February, 2010.
Of those Sales:
15 were paid Cash (40.5%)
5 FHA Financed (13.5%)
17 Conventional Loans (46%)
The number of cash transactions is still very high and competing against cash buyers when presenting offers may be challenging. On the other hand it’s encouraging to see that some FHA’s went through.
Almost 70% of the sales were regular sales and 30% of the sales were distressed sales (5 short sales and 6 Foreclosures/REO’s).
Thinking of selling your home? Now might be a good time to put it on the market when the inventory of great properties for sale is low. For a FREE market analysis of your property contact me.
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