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Buying Distressed Properties

by Team Maxx Real Estate

Buying Distressed Properties

Many of the homes for sale today - as many as half in some markets - fall under the category of "distressed properties."

These are homes that have either gone through foreclosure or are being marketed as "short sales." In a short sale, the homeowner can't afford to maintain the mortgage, but the lender - rather than foreclosing - agrees to the sale of the property for less than the balance of the loan.

These types of sales have different dynamics than traditional sales - with more paperwork, often a longer transaction process and, in some cases, more frustration. For these reasons, many buyers shy away from foreclosures or short sales.

However, if you understand the potential pitfalls of purchasing a distressed property - and work with an agent who has a thorough knowledge of this market - you can get a great home at a great price.

Thousands of RE/MAX agents have been specially trained in working with foreclosures or short sales through the Certified Distressed Property Expert class or a similar course. They can guide you through the process and help you locate and purchase just the right home for you.

This is an outstanding time to buy a home - distressed property or not. With historically low interest rates, and a glut of homes on the market in most areas, there are bargains to be found. And the U.S. tax credit of up to $8,000 for first-time buyers - good for a home purchased before Dec. 1, 2009 - makes purchasing a home even more attractive.

Is a distressed property for you? Here are pros and cons of buying one.

 

Advantages of Buying a Distressed Property

First, you'll be dealing with a highly motivated seller – either a bank in the case of a foreclosure, or in a short sale, sellers who are in financial trouble and very interested in getting out of a mortgage they can no longer afford.

These types of sales take much of the emotion out of the process. You won't be insulting anybody, for instance, if you make an offer that's lower than the asking price. (That's not to say that the low offer will necessarily be accepted, of course.)

Lenders are extremely interested in getting these homes sold and off the liability side of their balance sheets. Many foreclosed properties can be purchased for only a percentage of what they would have commanded five years ago. (This situation is beginning to change, though; bidding wars are breaking out on some foreclosed properties these days, especially those that are moderately priced. Your RE/MAX agent will know what's going on in this area and will be able to help you arrive at a reasonable strategy for making an offer.)

If you're looking at a short sale, you're not likely to get quite as good a deal as on a foreclosure. But there are definite advantages to purchasing one of these homes. For one thing, since the homeowners want to get the home sold quickly, they are likely to keep it well-maintained and in good move-in condition.

 

Disadvantages of Purchasing a Distressed Property

If you're looking for a "steal," you're probably not going to find it. The market is heating up, with more and more buyers jumping into the market. If you're purchasing a home to live in, you'll often be competing not only against buyers similar to yourself, but against investors. More competition inevitably leads to higher prices.

The transaction process for short sales or foreclosures often takes longer than for traditional transactions. It's sometimes not clear which lending institution actually owns a mortgage loan, and it can take time to get it all sorted out – especially if there's a second mortgage involved, which is often the case.

Some foreclosed properties are also in rough condition. Many have sat idle for a long time with minimal or no maintenance. The departing owners may have sold off fixtures, or damaged the property.

Interested in searching for foreclosures in your area? Access the Foreclosed Properties database here on remax.com.

 

Purchasing Tips

It's critical to have the home professionally inspected before you make an offer or put down earnest money. The inspector will assess the structure's soundness and may uncover problems that would be very costly to repair. Banks usually sell foreclosed homes as-is, meaning they won't make any allowances for repair. And even in a short sale, they likely won't make any such allowances, because they're already losing money on the transaction.

You should have your financing in order before pursuing a foreclosure purchase. Pre-approved buyers have the best chance of getting the property in case of multiple offers. Also, banks generally aren't interested in contingencies (for instance, needing to sell your current home before purchasing another).

You might also consider hiring an appraiser who'll tell you what the house is worth. A RE/MAX agent can also perform a Comparative Market Analysis.

To guide you through the process - from obtaining a loan to identifying a home, to negotiating with the sellers (whether homeowners or banks), to closing - contact a RE/MAX agent.

 


Distressed Properties and FHA Loans

If you're a first-time homebuyer, a federally insured FHA (Federal Housing Administration) loan might be a good option. The FHA has a program to help you repair a fixer-upper. You can get one loan that combines the mortgage with the repair costs. The amount of the loan is based on the projected value of the property once repairs are made.

FHA loans only require a 3.5 percent down payment – compared to 20 percent with conventional loans – and the down payment can come from an employer, family member or charitable organization. FHA loans also have lower closing costs than conventional mortgages.

Since the federal government insures these loans, you'll get a competitive interest rate and lenders may be willing to give you terms that make it easier to qualify for a loan. If you have less-than-perfect credit, it's easier to obtain an FHA loan than a conventional mortgage.



About HUD Homes

FHA-insured homes that go into foreclosure are acquired by the U.S. Department of Housing and Urban Development (HUD). HUD homes are offered for sale through Internet sites managed by management companies under contract to HUD.

Real estate agents who register with HUD can submit offers on behalf of their clients. HUD pays the agent's commission.

HUD homes are sold as-is, without any warranty. HUD doesn't make repairs nor pay to correct any problems. Again, that makes it critical to have homes inspected before making an offer.

In designated revitalization areas, law enforcement officers, K-12 teachers, firefighters and emergency medical technicians can purchase a home at 50 percent off the listing price.

 

Sandbridge Real Estate - 2584 Sandfiddler Rd

by Team Maxx Real Estate

1513 MYRTLE AVE

by Kirk Greer & Team Maxx Real Estate

FANTASTIC HOME, MADE SOME FANTASTIC IMPROVEMENTS THAT OPEN THE FLOOR PLAN.  UPGRADED FLOORS & LIGHTS, TASTEFUL KITCHEN UPDATES. SPACIOUS ROOMS & GORGEOUS GAS FIREPLACE. THIS HOME HAS LOTS OF CLOSET SPACE WITH  A WALK IN CLOSETS &  FLOORED ATTIC.  INVITING BACKYARD PATIO & DETACHED GARAGE. GREAT LOCATION, EASY ACCESS TO SCHOOLS, BASES & ENTERTAINMENT.

http://www.teamaxx.com/property/1513-MYRTLE-AVE-Chesapeake-Virginia

 

Sandbridge Houses (SBH) April News Letter

by Kirk Greer & Team Maxx Real Estate

April has come in with a true feeling of Spring/Summer, as I write this article; today’s temperature is expected to be close to 90 degrees! Easter weekend was wonderful. On Saturday the sandbridge Beach Civic League hosted an Easter egg hunt at Little Island Park. It was a huge success with close to 100 children attending from ages 2-13 years of age. There was even a live appearance of the Easter bunny! Great time had by all with help from many members of the community.

   
Photos courtesy of Cindy Graf

On the real estate side of things, we have had several properties sold within the last few weeks. See link for details. The property located at 2221 Bluebill sold for $551,000, it's the latest bank owned sale in the community. It was an attractive price that received multiple offers. There are several more of these properties in the process of going on the market, if you are interested in finding out more information, just send me an email or call.

It’s looking like a busy summer season ahead, I hear that vacation rental demand has been strong and is significantly better than last year at this time, a true sign that our economy is beginning to recover.

That’s it for now.

By Pat Barton

Sandbridge Houses (SBH) March News Letter

by Kirk Greer & Team Maxx Real Estate

We have had several more properties go under contract in the last few weeks and four closings within the last 30 days. It seems that the low interest rates and a good supply of homes for sale have motivated some folks to become sandbridge Beach property owners. See this PDF for pending sales and this one for recently sold properties. Historically our most active time of the year begins in March and goes through May which should hold up for 2010.

I have recently listed a few properties with good locations for investment property, second home or a primary. See following properties at www.sandbridgehouses.com: Blue Lagoon, Giants Treasure and Port O’ Call. As a sandbridge Beach resident it has been encouraging to see more interest in purchases for primary homes. I think this is due to a few things: one is more affordability on homes and the other is the good school district and proximity to shopping. Red Mill Commons just added a good Thai restaurant called Tida Thai. I went there with several friends this past Saturday and had a great meal.

March came in with a roar with a thankfully short lived Nor Easter. Let’s hope it goes out like a lamb. I know everyone is looking forward to saying “good bye” to the winter of 2010. It’s been rough for many parts of the country and we are all looking forward to warmer days ahead.

by: Pat Barton

CMA of Your Home (Hampton Roads)

by Kirk Greer & Team Maxx Real Estate
CMA Analysis of Your Home's Value Emailed to Your Inbox.
 
Service Area: Hampton Roads
Years of Service: 10
Service Type: Real Estate
 
 Complete the required information on your home and you will receive a complimentary Computer Analysis, indicating your home's approximate present value on the market today. You will receive this information, by email and without having to speak with an agent.
 
 
http://www.myhomesworth.info
 
Kirk Greer
kirk@teammaxx.com
7574729642
Kirk and Tina Greer, along with their team of real estate professionals, offer individualized attention to your needs as a seller. They can provide you with the greatest time, money, and frustration-saving house selling experience.
Powered by vFlyer.com VFLYER ID: 3163092
All information in this site is deemed reliable but is not guaranteed and is subject to change

Virginia Beach Townhouse (End Unit)

by Kirk Greer & Team Maxx Real Estate
END UNIT TOWNHOME (Virginia Beach) - $193,000
Main Photo
Bedrooms: 3
Bathrooms: 2
Year Built: 1982
Subdivision: Kempsville Lake
Attached on: 1 Side
School District: Kempsville
Square Footage: 1239
Agent Name: Kirk Greer
Broker: RE/MAX Allegiance
MLS #: 1008108
Price: $193,000
Flexibility: List Price
4786 Marlwood Way
 
Virginia Beach, VA 23462
  • Range/Oven
  • Dishwasher
  • Sink Disposal
  • Fireplace
  • Fenced Yard
  • Grass Lawn
BEAUTIFUL ONE STORY END UNIT TOWNHOME JUST ACROSS FROM THE PARK AND TENNIS COURTS OFFERS NEWER WINDOWS & SLIDING GLASS DOOR, NEWER HVAC SYSTEM, NEW DISHWASHER, TRACK LIGHTING, CERAMIC TILE, 4 OUTSIDE HARDWIRED ELECTRIC LAMP POSTS.
 
Kirk Greer
kirk@teammaxx.com
7574729642
Kirk and Tina Greer, along with their team of real estate professionals, offer individualized attention to your needs as a seller. They can provide you with the greatest time, money, and frustration-saving house selling experience.
Powered by vFlyer.com Equal Housing Opportunity VFLYER ID: 3152925
All information in this site is deemed reliable but is not guaranteed and is subject to change

Sandbridge Real Estate

by Kirk Greer & Team Maxx Real Estate

http://www.teamaxx.com/Properties/Sandbridge

sandbridge, a strip of land approximately fifteen miles in length between Back Bay and the Atlantic Ocean, has been home to farmers, surfmen, fishermen, hunters, vacationers, and permanent residents for over one hundred years. Deeds dating to 1850 reveal that the original name of this beach was Sand Ridge.

In the late 1800's, the U.S. Congress authorized the U.S. Lifesaving Service to construct stations along the coast to assist ships in distress. Dam Neck Mills and Little Island Station protected sandbridge. Six surfmen and a keeper manned each station. They and their families lived nearby. These stations continued, as a part of the U.S. Coast Guard, in to the nineteen thirties.

During the late eighteen and early nineteen hundreds numerous duck hunting clubs were located on Back Bay and its environs, a part of the Atlantic Flyway. sandbridge Beach was formerly the property of the Sandbridge Gunning Club. That club was active in to the 1950s. Sandbridge developer James Kabler named several streets for the club's duck blinds, e.g. Porter's Island and Molly Cooper.

In 1952, Harvey Lindsay, a Norfolk real estate businessman bought a portion of the five mile oceanfront to develop a second home community. Lots were platted in an offset pattern for unobstructed oceanfront and semi-oceanfront views. James Kabler constructed the first house in 1953.

The community that had continued to grow throughout the 1950s was devastated by a storm on March 7, 1962, the Ash Wednesday Storm, that brought tides up to 8.9 feet. The storm whipped the sea, splintered houses, and washed away dunes. The owners cleaned up the residue and rebuilt sandbridge. Subsequently, houses had to be constructed upon pilings.

The decade following the Ash Wednesday storm was one of rapid growth. sandbridge was extended to within a mile of Back Bay Wildlife Refuge. Plans for further expansion were curtailed with the passage of the Federal Wet Lands Act. However, houses continued to sprout along Sandpiper and Sandfiddler Roads.

By the late 1970s and early 1980s sandbridge was expanding into a year-round community. Today Sandbridge is complete with a new firehouse, rescue squad, condominiums, luxury homes, churches, general store, fishing pier, restaraunts and as much wildlife as ever! Plus, with sand replenishment on track for 2007, the community will continue to evolve for many years to come.

Virginia Beach Home For Sale

by Kirk Greer & Team Maxx Real Estate
FANTASTIC FOUR BEDROOM HOME - $265,000
Main Photo
Bedrooms: 4
Bathrooms: 2
Year Built: 1988
Subdivision: OCEAN LAKES
Garage Size: 1
School District: OCEAN LAKES
Square Footage: 1956
Agent Name: KIRK GREER
Broker: RE/MAX ALLEGIANCE
MLS #: 1004902
Price: $265,000
1808 BLAIRMORE ARCH
 
Virginia Beach, VA 23454
  • Range/Oven
  • Full Refrigerator
  • Dishwasher
  • Sink Disposal
  • Fireplace
  • Security System
  • Patio
  • Fenced Yard
  • Grass Lawn
  • Tool Shed
FANTASTIC FOUR SEASON ROOM/FAMILY ROOM! GREAT FOR RECREATION, DINING OR JUST HANGING OUT. COBBLESTONE PATIO W/PERGOLA. FIREPLACE & LAMINATE FLOOR COMPLIMENT FORMAL LIVING ROOM. GRACIOUS EAT IN KITCHEN IMPROVED BY CERAMIC TILE FLOOR. ALL BATHS VERY NICELY UPDATED. CLOSING COST ASSISTANCE NEGOTIABLE.
 
Kirk Greer
kirk@teammaxx.com
 757 472 9642  757 472 9642
Powered by vFlyer.com Equal Housing Opportunity VFLYER ID: 3119688
All information in this site is deemed reliable but is not guaranteed and is subject to change

Announced FHA Policy Changes

by Kirk Greer & Team Maxx Real Estate

The other day FHA announced several other upcoming changes that they hope will be put into effect by spring to early summer.  It is important to note that these changes ARE NOT IN EFFECT RIGHT NOW so if you plan to buy a home you could be affected.   

Announced FHA Policy Changes:   

Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending. 

The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.

If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.

This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing

The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring. Update the combination of FICO scores and down payments for new borrowers.   

New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.

This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.

This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer. Reduce allowable seller concessions from 6% to 3%.   

The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.

This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

 

By:Samuel Meekins III

Direct:    757.286.6225

email: SMeekins@MonarchMTG.com

Displaying blog entries 1-10 of 73

Contact Information

Photo of Tina Greer Real Estate
Tina Greer
RE/MAX Allegiance
828 Greenbrier Parkway, Suite 100
Chesapeake VA 23320
(757) 513-9683
(757) 217-2901
Fax: (757) 213-9180