Thankfully, Congress extended the MFDR Act. It was a close call that caused a great amount of anxiety among owners who are in the short sale process.
As you’ll recall, sellers who sold in a short sale situation could have received a 1099 for the amount that the bank forgave. This would have sent many into bankruptcy.
Now that this crisis has passed, let’s get to work on clearing out these homes that are underwater. If you know of someone who owns a home that has dramatically lost its value, urge them to talk with a professional. The hit to your credit rating is not as bad as it used to be. And for heaven’s sake don’t be embarassed. It’s important to take control of your finances in a business-like manner. Take the emotion out of it!
Take a break from the frenzy and enjoy! Besides the lovely homes, check out the most expensive Christmas Dinner at $200,000!
Are you itching to renovate your home and use the fact that you may sell it later as a justification? By all means your updates will help sell your home. Recouping all of the costs? Doubtful.
Kitchen remodels jumped 36% in 2011 as many potential sellers found that their homes are not selling for what they want. They may have to stay longer and are putting in a new kitchen to enjoy while they’re there.
Good plan, but don’t set your expectations too high.
Before making any definite decisions, check out the Cost vs Value report at:
The St. Pete Times article in the Sunday paper told us that inventory (#houses on the market) is low so it is becoming a Seller’s market in some areas. We have about 6 months worth of homes on the market, and that is the definition of a healthy market.
It also discusses the ‘auction’ effect some sellers are getting when they list their homes and get multiple offers. This is true, and an excellent pricing strategy. What the article didn’t stress was that these sellers priced their homes extremely low to make this happen. Pricing at top of market levels won’t bring an auction atmosphere within a week.
In fact, there are so many buyers active now that if you put your home on the market and don’t have a good level of traffic and one offer within the first three weeks – reduce the price.
CoreLogic – the Santa Ana, CA analytics firm – has announced that homes are now selling at the 2001-2002 prices. When distressed (short sale and bank-owned homes) properties are included, the prices have dropped 3.1% since last January. When distressed sales aren’t included the drop was .9%.
They concur that we are at or near the bottom of the market. As I’ve said before, it’s a ‘rocky bottom’ so we’ll bounce around for a while reflecting seasonal variances.
CoreLogic says that when comparing the top of the market (2006) to 2012 the market has declined 34%. If you exclude distressed sales the decline is 24%, but in reality you can’t exclude those short sales and foreclosures. They are a real part of our market.
Wow – is there ever confusion over what ‘as-is’ means. To many sellers it means that they can call a Realtor and list their home this afternoon – just as it is with clutter galore and the breakfast dishes in the kitchen sink. WRONG!
An “As-Is” sale is one where the seller is not promising to make any repairs to the home. The home is sold in the condition it is in on the day the contract is signed. Note: if this condition changes like appliances break or the roof leaks, the seller must bring it back to the condition it was in on the day the contract was signed.
Repair Limits: Before the early 2000′s most sales included a specific repair limit. The standard in the Florida contract at that time was 1.5%. The seller agreed to make any repairs up to that price level. If the home inspection found that the repairs would total more than that either the seller could make additional repairs, the buyer would accept the home with the agreed upon limit and make the rest of the repairs himself, or either party could provide notice that they wanted out of the contract.
Then the “As-Is” contract became popular as the market became a seller’s market
A contract written with the “As-Is” verbiage means that buyer and seller would agree on a price level for repairs needed. If the home inspector found that more repairs were needed, the buyer and seller could negotiate as above. But the buyer could legally dissolve the contract because the home needed more repairs than he thought. The key is that the seller did not agree to make any repairs.
What we see today is seller who got accustomed to the hot market when they only had to stick a sign in the yard and offers came pouring in. Not the case anymore!
If you want to sell your home “As-Is” go for it. This is still standard in the Tampa Bay area of Florida. But you still have to clean the house up, get rid of the clutter, paint, … and whatever else is needed to make a buyer choose your home over another home on the market.
If this sounds a lot like the preparation you would do if you weren’t selling your home “As-Is” you are right.
“As-Is” relates to the contract NOT to your preparation in getting your home on the market.
This USA Today report talks about the the foreclosure market in the Tampa Bay area, where almost 25% of the sales area short sales or foreclosures.
HOWEVER, these are predominantly in the low end single family home areas. Very few foreclosures on the beaches or in seasonal areas. The prices are low enough that buyers jump at them as short sales and the bank never takes the property back.
Seen in Ernest Hooper’s column in today’s St. Pete Times (oops – now it’s the Tampa Bay Times): His sister is moving here and mused about living in Tampa. Ernest suggested that she might like the ‘vibe’ in downtown St. Pete better! He thinks that – although Tampa offers a lot – she might like downtown St Pete better.
The good thing is that you don’t have to choose. It’s only a bridge away to access the cultural events, shopping, restaurants, sports… on either side of Tampa Bay.