October Tampa Home Sales

In October 2011, the Tampa Bay real estate market experienced modest reductions in both the number of homes for sale, and number of homes that closed.

The supply of homes has been relatively stable for the past few months but the percentage of closed sales has been trending downward. In general, we are seeing more demand in lower price ranges as first-time buyers and investors spot opportunity.  The move-up and luxury segments are slower, as measured by: inventory levels, closed transactions and “days on the market”.

While the percentage of toxic assets (short sales and bank owned properties) for sale has declined, the foreclosure pipeline is increasing once again. We expect to see more bank owned homes and short sale hit the market soon.

There are positive signs for buyers, sellers and investors if they know where to look. See this October 2011 Hillsborough Single Family Report.

 

– Dale Bohannon

Can’t Afford Your Mortgage? Here are new options…

Are you at a crossroads? In the midst of a massive economic downturn, the asset we assumed we could always fall back on has become a financial liability for some.

A large percentage of Tampa Bay homes are now worth less than their loan balance.  Low prices, reduced incomes, high unemployment and uncertain forecasts have led many homeowners to seek a dignified exit strategy.

Why are some banks and federal agencies offering qualified owners debt forgiveness and financial incentives up to $20,000 to do a short sale? Foreclosure is a disaster for the bank, for the homeowner, and for the community.

While thousands of Tampa Bay residents are in some stage of foreclosure, relatively few reach out for help. A combination of denial, frustration and mistrust can sometimes cause homeowners to avoid taking action.

Don’t walk away. The long-term financial impact of delay cannot be underestimated. Foreclosure can: become public record, lower credit scores, impact credit reports for years, hamper loan qualification for years, challenge current / future employment, hinder security clearance, and allow lenders to pursue debts for an indefinite period of time.

Wondering where to turn? Team Bohannon has secured over 150 Short Sale Approval Letters from banks, but a short sale is not the only option. You have the right to choose between 11 alternatives to foreclosure if you act in advance. As Certified Distressed Property Experts (CDPEs), our mission is to help homeowners reduce stress, save time and move on to the next chapter of their lives.

Specifically, we see lenders offering:
#1) Underwater Refinancing – No Appraisal Restrictions / Low Rates!
#2) Debt Forgiveness – You Walk Away Debt Free!
#3) Financial Incentives – The Bank May Pay You to Short Sell!

Now is the time to reach out for help. Now is the time to preserve your financial security. You have heard about the scams, the shysters, the pitfalls of working with people who do not really know their stuff.

It is critical to identify trustworthy experts who are tapped into major lenders, government programs and the local real estate market. While programs change and not everyone qualifies, it is worth the effort of making a phone call.  Contact Annette, Doug or Dale Bohannon for solutions.

 

– Dale Bohannon, #CDPE since 2008

Why So Few Homes for Sale?

The number of Tampa Bay homes for sale is down 31% since January 2011. The median sales price has declined slightly over the past couple of months.  Here is a chart comparing inventory -vs- price for single family homes, townhouses and condos in the Tampa Bay market:

 

 

 

 

(See Complete Chart & Table)

Why are so few homes for sale?

#1) Sellers are unable to sell.
Many people would like to sell, but they owe more than their homes are worth and are cannot bring cash to close. While a large percentage of Tampa Bay homeowners are underwater, relatively few attempt a short sale, deed-in-lieu or other solution.

#2) Sellers unwilling to sell.
We find many would-be sellers hesitant to sell at today’s pricing levels. The number of expired and withdrawn listings indicate that many homeowners have given-up on the idea of selling. Potential sellers may be hoping for a bailout, a new program, or a period of price increases.  Those who can wait, will wait.

#3) Banks are reluctant to foreclose.
Especially with higher priced properties, we have seen many cases where banks delay the foreclosure process for whatever reason.

#4) Delays in legal system.
Florida’s overwhelmed court system has been slow to process foreclosures. The average transition rate from delinquency to foreclosure takes over 700 days.

#5) Banks are holding back inventory.
The transition from foreclosure to bank-owned (REO) for sale often takes several months. We can all point to bank owned properties that have been sitting for years without entering the market.

The combination of lower inventories and generally stable list prices is usually a positive signal. However, the Tampa Bay real estate market remains fragile. The chart of homes for sale does not reflect the “shadow inventory” of homes in some stage of foreclosure, but not yet for sale as bank-owned homes. The current stock of deteriorating properties in the shadow inventory will continue to impact pricing and confidence. The large numbers of seriously delinquent borrowers, high levels of negative equity, and high unemployment rate means more price declines are in our future.

On the bright side…..we continue to help buyers find outstanding homes they can purchase for less than the price of renting; we continue to help sellers obtain top dollar in the current environment; we continue to help distressed homeowners complete short sales; and we continue find properties for investors that provide excellent cap rates and cash flow.  If you will be buying or selling real estate, now more than ever, it is critical to identify trustworthy experts who are tapped into major lenders, government programs and the local real estate market.  To make an informed decision, you need experienced advice, not a market cheerleader.

– Dale Bohannon

 

Help for Underwater Homeowners: Refinancing Changes

The White House announced an executive order revising the Home Affordable Refinance Program (HARP) last week designed to help homeowners who are underwater refinance. If your home is worth less than the mortgage balance and you are current on payments, then you may qualify to take advantage of today’s interest rates.

The previous iteration of this program excluded homeowners who were more than 25% underwater. The revised program removes appraisal issues and the 125% loan-to-value cap, hence the current market value will not factor into the loan underwriting.

Will you qualify? Will lenders comply with the executive order? Federal regulators will provide the revised HARP guidelines to lenders by Nov. 15.

A HARP Short-Refi, however, is just one of 11 options that may offer relief. Should you refinance, sell, deed-in-lieu, deed-or-lease, modify, etc? What about a short sale? As Certified Distressed Property Experts, Team Bohannon has had over 150 short sale approval letters from banks. Our mission is to help homeowners reduce stress, save time, navigate the choices, and successfully move on to the next chapter in their lives.

What is the best option for you? In the midst of this economic downturn, the asset we assumed we could always fall back on has become a liability for many homeowners. Low prices, reduced incomes and unemployment have led many homeowners to seek a dignified exit strategy. You may have some attractive options, if, and only if, you act in advance. See ShortSaleMoves.com for more information

Comparing Real Estate Investments Using Cap Rate

Are you thinking about investing in residential real estate? Real estate has consistently proven to be a better long-term investment than the stock market, even when taking into account the recent housing crisis.

Many first-time investors are intrigued by eye-popping, low prices on Tampa Bay condos, townhomes and single family homes. The combination of low purchase prices and a strong rental market offer some opportunities, but how can you make the right decision? How do professional real estate investors compare properties with different valuations?

In this first post, we will look at Capitalization Rate, or CAP Rate. Capitalization rate is the rate at which your property earns money. The CAP Rate values on a property based on the income it generates in relation to the purchase price.

To calculate CAP Rate, you need to first understand how much income the property generates after expenses (Gross Rent – Gross Expenses = Net Operating Income).

The math for CAP Rate is straight forward: Annual Net Operating Income / Purchase Price = CAP Rate

For example, let’s say you find a property that generates $500 per month after expenses, or $6,000 per year. If you pay $100,000 for the property, you would have a 6% CAP Rate, or a 6 CAP. If you pay $50,000 for the property, you would have a CAP rate of 12%! The CAP Rate allows you to quickly compare different types of investments and identify top performing properties.

I have helped real estate investors buy, sell and rent over 100 properties in the Tampa Bay area. As a Certified Investor Agent Specialist (CIAS), I have the training and tools to help you success in today’s market. To learn more about real estate investor metrics and investment properties, contact Dale Bohannon.

Short Sale Without Missing Payments

 

Do you need to miss payments in order to qualify for a short sale? What if you have good credit and have not had any late payments?

If a homeowner has already missed payments of any kind, then lenders can look at credit reports for a clear pattern of financial distress. If payments have not been missed, however, lenders need some evidence that a financial hardship is on the horizon. What has changed, or what will change, that would cause you to miss payments or face a future foreclosure? The fact that a Tampa Bay area home has declined in value is not enough.

Imminent Default
What if you are current on payments but you foresee a train wreck in the future? Maybe you can make payments now, but you expect a loss of income, change of job, divorce, medical bills, forced company relocation, dwindling cash reserves or other event that will cause financial stress in the months ahead. The mortgage industry refers to this situation as “Imminent Default”.

Burden of Proof
Since these borrowers do not have a public record of missing payments, they must document the reason for the imminent default or expected financial challenges. The lender will ask for a hardship letter, financial worksheet, asset disclosures, tax returns and account statements to verify the situation.

As a Tampa real estate agent with over 100 short sales accepted by lenders, I have had many short sales approved where the homeowners have not missed payments. We have examples of hardship letters and other documents to provide evidence of imminent default. We suggest creating both before and after financial worksheets that clearly show the bottom line numbers that validate the hardship.

Who Decides
Short sales are evaluated on a case-by-case basis. Unless you have a portfolio loan, each approval must pass through several steps and multiple companies. For example, while you may think of Wells Fargo as your lender, behind the scene Wells Fargo has likely sold your loan to an investor. Some loans have multiple investors. If you had put less than 20% down, a then you likely carry mortgage insurance (MI). The MI investor is responsible for the first 20% of the loss on your loan, hence they must also approve the terms of a short sale. In this scenario, we must have approvals from the servicer (Wells Fargo), the investor(s), and the mortgage insurer.

If you have a second mortgage or a home equity line (HELOC), the number of players may double. A homeowners must also negotiate the release other liens on the property such as: home owner associations, back taxes, medical, child support, etc.

Predicting The Outcome
Will your short sale be approved? Can you walk-away from closing without future obligation? Will the bank reserve the right to file for a deficiency judgment after closing? Will they ask you to sign a promissory note or a make a cash contribution at closing?

Nobody can accurately predict what all the parties will eventually decide, but we can share our experiences and allow you to see examples of past approval letters. Each Servicer, each Investor, each Mortgage Insurer, and each government agency have different sets of policies. For example, Bank of America works with over 500 investors who set their own terms. Short sale approval guidelines keep changing as the mortgage crisis, business requirements and governmental regulations evolve.

Your Decision
Rest assured, however, that you will have the opportunity to accept, reject or counter the terms offered for the short sale approval. You can decide if language in the short sale approval letter makes sense for your future. You have the option to cancel the short sale.

Qualified Assistance
As Certified Distressed Property Experts (CDPEs), Annette, Doug and Dale Bohannon have been trained to assist homeowners in these difficult situations. We have helped over 100 families confirm eligibility for HR 3648 The Mortgage Forgiveness Debt Relief Act and Debt Cancellation that allows qualified homeowners to exclude income from the discharge of debt on their principal residence. See ShortSaleMoves.com for more information.

Deciding on which route will be best for you and your family’s future is the most important decision you can make. Get started today. Enjoy the feeling of having made a decision and taking positive steps toward a better tomorrow. If anyone you know might benefit from more information, contact the Bohannons for a confidential review.

IMPORTANT NOTICE
Team Bohannon is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

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