Orlando’s existing housing market shows improving conditions in June 2008
Author: Jerry | July 24, 2008
In the Orlando Metro area last month there was a total of 1,641 homes sold in June compared to 1,595 homes a year ago for a 3 percent increase. The existing home median sales price was $219,500; a year ago, it was $258,100 for a 15 percent decrease. A total of 172 existing condos sold in
Topics: Housing |
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Buying a Short Sale in Orlando - What you should know
Author: Jerry | July 22, 2008
I currently have 10 properties Listed for sale and 6 of them are short sales. I am finding that nearly 25% of the market right now in the Orlando, Windermere, Winter Garden Florida area is either a short sale property, a foreclosure property or Bank owned property. Buyers in Orlando can find a good home and purchase it at a discount, IF they work with a Realtor that know how to deal with short sales, Like Myself. Feel free to contact me at any time with questions about short sales and how to purchase a short sale at jerry@JerryLaRose.com or visit my Website at http://JerrySellsOrlando.com
Everyone involved in a short sale transaction needs to know what to expect. Orlando buyers of short sale properties need to understand what they are getting into. Some buyer’s believe that they are going to be able to “steal” a property and make a killing by reselling it. The days of Flipping homes is long gone. They have heard the stories that investors tell and think it’s a piece of cake to buy a property at 50% of the value.
While that may be the case on rare occasions, it is not the norm and should NOT be expected. Remember, the lender wants to sell the property as close to market value as possible. In fact, most lenders have pretty rigid guidelines as to how far below market value they will sell for. I have heard that some banks no matter what will not go below 15%-20% of market value. Beyond that point, they will take the house back in foreclosure. So let’s do the math, a $200,000 valued property may go for $160,000 - $170,000. Now, this same property was probably valued at over $300,000 just 3 years ago.
So, the bottom line is that if you have patience and are looking for a home in Orange county or the Orlando area you may end up saving 15%-20% of market value on a home. However, I am also finding that there are now plenty of homes that are Not Short Sales but the Homeowner needs to get out for some reason, (such as relocating) and has priced their home as low as a short sale. This is probably the ideal situation because typically the home is in great shape.
What buyers need to know?
- Patience, Patience, Patience. It may take 3-4 months to complete the transaction once you’ve written a contract on the property.
- Buyers must be be pre-approved before submitting an offer. The borrower’s lender is going to require proof of funds if it’s a cash deal or a commitment letter if there is financing involved. A buyer offering to close quickly with a substantial down payment is more attractive than one seeking 90% financing.
- Buyers may not want to spend money on a home inspection or appraisal until after the short sale is approved, otherwise you’re wasting your money. Why spend hundreds on a inspection and have the bank not approve the deal.
- Buyers should expect to buy the home in it’s “AS-IS” condition. The seller doesn’t have any money to make repairs and the lender is going to require an as-is offer. Therefore, your realtor should be using an “AS-IS” contract.
- I recommend to all of my short sale buyers that we do NOT put up a deposit in escrow until acceptance of the offer by the bank. We’ll give a promissory note in lieu of.
- I recommend the buyer work with a short sale expert, like myself. Working with Realtors that don’t know the short sale process and the pitfalls to look out for could kill a potential deal.
Feel free to contact me at any time with questions about short sales and how to purchase a short sale at jerry@JerryLaRose.com or visit my Website at http://JerrySellsOrlando.com
Topics: short sales |
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Short Sales in Orlando Florida – What’s Needed?
Author: Jerry | July 21, 2008
When you go through the short sale process your lender will require certain documentation. Remember, the lender does not want to take the home back through foreclosure. That is a last resort for both the homeowner and the lender. The lender would rather accept a short sale as long as the borrower can show an inability to pay the mortgage.
Each lender has their list of required documentation. Therefore, the first step is to give your Realtor signed authorization to speak with the lender about your account.
Your Realtor will then request a “short sale package” from the lender. Most lenders require the following documentation.
- Exclusive right of Sale Listing Agreement
- A copy of the executed “AS-IS” Sale and Purchase contract
- Letter of Authorization to the bank to release Information.
- HUD-1, which is the estimated net sheet from a title company. The settlement statement will show all of the expenses related to the sale with the seller receiving zero.
- Hardship letter. A handwritten letter may be better to explain the borrower’s situation and requesting a short sale. It should describe why the borrower cannot make their mortgage payments and their fear of possible foreclosure. It should be a plea for the lender to consider a short sale. Document to support Hardship (termination of employment, substantial medical bills, disability letter, etc.
- Personal Financial Statement form 1126, which includes current debt, payments and a household budget.
- Two years of tax returns and W-2’s. Remember to provide signed copies of tax returns.
- Two most recent bank statements and retirement account statements. Be sure to copy both side of double-sided statements.
- Two most recent pay stubs
- A current Comparative Market Analysis (CMA) from a real estate broker or appraiser
- Buyers proof of Funds or Loan Approval letter
- Lastly note on the submission package that they need to order the BPO immediately and a negotiator needs to be assigned.
Make sure that when you submit the package it is COMPLETE. Some times it may be better to wait a day and ensure that it’s complete than to submit an incomplete package. Remember the Loss Mitigator is deal with possibly hundreds of files at a time.
Lastly Note: With a short sale your Realtor should negotiate for the lender to waive their right to file a deficiency judgment. **IMPORTANT**
Topics: short sales |
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Orlando Financing Solutions
Author: Jerry | July 14, 2008
For first-time buyers, often the first thought that comes to mind is, “I need a down payment.” This is often followed by the question, “Now, where do I get that down payment?”
Depending upon the loan type, a home mortgage typically requires 3 to 5 percent down. If you have the money, then you’re set. But what if you don’t? What if you’re renting? You can afford a mortgage within your means, but coming up with the down payment money needed to begin the transaction can be challenging. So, where can you turn?
One of the most overlooked sources of down payment funds is likely right under your nose-in the form of government bonds and local grant programs.
These programs either provide outright monetary grants for down payment or money to buyers in the form of a forgivable loan. In essence, the government will help you buy your home and you typically only have to pay back the money if and when you sell that same property.
In the past it was challenging to find these special programs, but now all you need is your agent, a computer, an Internet connection, and a search portal such as Google or Yahoo. Enter the search terms “down payment assistance (followed by your city, state or province)” and see what pops up! It might just be the answer to helping you buy your first home.
Topics: Economy, Financing, Grants |
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Orlando Fl. Real Estate Outlook: Inflation and Mortgage Rates
Author: Jerry | July 1, 2008
The national economy keeps plodding along, but even that slow pace is better than what the experts predicted last year — that we’d be knee-deep into a serious recession by now.
Well, we’re not. And top forecast economists like the Mortgage Bankers Association’s Orawin Velz say there’s a good possibility we’ll avoid a significant recession this year, and see much stronger economic growth by early next year.
But there’s also an ominous development taking shape that could spoil that scenario: Interest rates are beginning to spiral upwards on fears of rising inflation.
Core inflation is running at about three percent year over year — the highest rate we’ve seen in more than a decade.
Rising prices in turn, are worrying not only the Federal Reserve, but investors in the global bond markets whose decisions govern home mortgage rates.
Last week, thirty-year fixed rates hit 6.60 percent — up from 6.25 percent the week before. A month ago, you could easily find thirty year money in the mid-five percent range. Not a chance of that this week.
Last week’s were some of the highest rates we’ve seen in nearly nine months — and they’re definitely not helpful in getting the real estate recovery rolling.
So we’re in a bit of a delicate situation: On the one hand, a new University of Michigan poll finds “record numbers of consumers now think there are very attractive prices on homes for sale,” according to survey director Richard Curtin.
Pent up demand is out there. Consumers recognize that prices are down, supply is up, and that for people who need to move or buy a house, the timing looks pretty good.
On the other hand, mortgage costs are changing the affordability equation. At some point, those higher financing expenses start squeezing potential buyers out of the market, despite enticingly low prices.
Maybe that process has already begun: The Mortgage Bankers Association reports that new loan applications to buy houses using conventional loans dropped last week by seven point two percent.
Home purchase applications involving FHA — by far the hottest segment of the market — jumped by just four percent. The week before FHA applications were up by double digits.
The upshot of all this for anyone who’s thinking about buying or selling any time soon: Get off your duff. Rates are moving up, and nobody can guarantee where they’ll stop.
If you see the house you want at the right price, make your offer sooner rather than later, and lock that rate.
Topics: Inflation, mortgages |
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Orlando Real Estate - Is Inflation Ahead?
Author: Jerry | June 30, 2008
“I NEVER WORRY ABOUT ACTION, BUT ONLY ABOUT INACTION.” Winston Churchill. These words proved especially true last week, as the big story was the Fed’s lack of action following their recent meeting, or decision to leave the Fed Funds Rate unchanged - but is the Fed’s decision a cause for worry? The financial markets seem to think so. The Fed is in a tough spot with the economy performing sluggishly, the housing market still struggling to stabilize, consumer confidence being low, and food and energy costs going up seemingly every day. They made the decision to hold rates steady for now, but looking forward, what does all this mean for Bonds and home loan rates?
While the Fed made a smart move to cut its benchmark rate back in September to stimulate the economy, the continued string of cuts has considerably weakened the US Dollar against the Euro. And since oil is priced in Dollars, the decline of the Dollar has pushed oil prices to rise, even though consumption in the US is down. Prior to the Fed starting their recent string of cuts in mid-September, oil was trading at a then staggeringly high $73/barrel, and it took $1.35 to buy 1 Euro. And after nine months of Fed rate cuts, the Dollar has weakened to where it takes $1.57 to buy 1 Euro…which has greatly influenced oil prices to top $140/barrel. And because oil is involved in so much of what we purchase, prices have gone up on everything.
The bottom line: A stronger stance against inflation by the Fed - which would mean rate hikes ahead - could help strengthen the Dollar, combat high oil prices, and cause Bonds and home loan rates to improve in turn, as inflation is the arch enemy of both. It will be important to see what the Fed decides to do about the Fed Funds Rate at their next meeting in August, so stay tuned!
About the author:
Jerry LaRose is an Orlando Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of real estate in Orlando, Windermere, Winter Garden Florida or any place in the country. Jerry has created a team of professionals throughout Orlando and the country to ensure that you enjoy a smooth transition to your new area. Please visit www.JerrySellsOrlando.com for your real estate needs. Please give me a call if you have questions about the Orlando and Central Florida real estate market.
Jerry LaRose, P.A., ABR, GRI, e-PRO, CLHMS, REALTOR® 407-580-7011
(Copyright © 2008 By Jerry LaRose, P.A. All Rights Reserved.)
Topics: Economy, Inflation |
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Goog 411 - Free Phone Number Search Hooks You Up In Orlando FL
Author: Jerry | June 18, 2008
GOOG-411 is Google’s new 411 service. It is completely free and really easy to use. If you are looking to call a Orlando Fl. business or residential phone number simply call 1-800-GOOG-411, say where you are and what you’re looking for. GOOG-411 will find and connect you with the business you choose for free.
Topics: Goog 411 |
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Orlando Real Estate - Interest Rates creep up
Author: Jerry | June 16, 2008
A recent survey and a rate increase could mean more competition for homes
Recent indication is that first time home buyers are getting tired of sitting on the sidelines. According to a recent online poll taken by the National Apartment Association, 17 percent of renters plan to make the jump to home ownership in the next year; 41 percent of the 2,041 respondents planned to be home owners within two years. Only 31 percent planned to still be paying rent five years from now.
Another factor that could very soon contribute to an increase in home buying could be rising mortgage costs. Fixed-rate mortgage rates rose to 6.32 percent, the highest it has been since October. After months of aggressively dropping interest rates, many lenders are worried that the Fed will be forced to raise rates back up. As interest rates rise, so do mortgage rates. According to a press release on freddiemac.com, Frank Nothaft, Freddie Mac vice president and chief economist said that, “Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman [Ben] Bernanke and Vice Chair [Donald] Kohn, expressed concern over a threat of inflation.” We may very well be seeing the beginning of the end of the super-low mortgage and potential buyers may realize that with rising rates, now may be the time to jump in. Nothaft added, “Moreover, pending home sales for April unexpectedly rose by 6.3% and mortgage applications for home purchases … were also up last week.”
Topics: Interest Rates |
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Orlando Short Sale FAQ’s
Author: Jerry | June 12, 2008
A short sale is when the lender will accept less than the full amount due on a mortgage when a property is sold. Usually, the lender will accept the short sale to avoid the time and expense of a foreclosure. Financially the lender is actually ahead after a short sale.
In simple terms: The homeowner has not been making the mortgage payments, and it is the action the financial institution can use to take the house back. The homeowner borrowed money using the house as collateral with the agreement that if they could not pay it back, then the lender could take the house.
What is involved to do a Short Sale?
In order to start negotiating the Short Sale the lender will usually require the homeowner to submit verification that they are qualified in order to consider the short sale. The information required and documentation necessary is provided as well as training on the entire process.
Will the bank come after the homeowner for the difference?
I will always negotiate with lenders to “Not seek a deficiency judgment” against the homeowner.
Is the seller going to get hit with a tax bill or a 1099 if you do a short sale?
Upon successfully closing a short sale, lenders will always report a loss to the IRS and issue a 1099. However, the Mortgage Forgiveness Act of 2007 was signed into law on
This was the subject of much media attention and led to many questions and concerns from Sellers wondering whether or not they were going to get “hit with taxes” on the Short Sale.
The new law, however, temporarily waives these taxes for debts forgiven (as high as 35%) from the beginning of 2007 to the end of 2009.
This will effectively put an end to the question from Sellers… will I be taxed on the Short Sale discount. The definitive answer (at least until the end of 2009) is NO!
For a copy of the Mortgage Forgiveness Debt Relief Act of 2007, go to:
http://www.govtrack.us/congress/bill.xpd?bill=h110-3648 or http://www.whitehouse.gov/news/releases/2007/12/20071220-6.html
Will the homeowners credit be affected?
If the homeowner has to short sale their home they’ve most likely missed payments already. That in itself has already adversely affected their credit. The key here is to stop the devastating affect on your credit that a Foreclosure causes. A Foreclosure is the most damaging record on your credit report – its even worse than bankruptcy.
By working with Jerry LaRose you give yourself a fighting chance of avoiding foreclosure and start towards the “Rebuilding” process. With our help, your credit will recover quickly if you keep your other lines of credit in good standing. With Jerry LaRose you have an experienced team of professionals that will help you through these tough times.
Mortgage lenders are increasingly willing to work with borrowers faced with a financial hardship to accept a discounted payoff on a mortgage. If you are faced with a hardship, and are unable to meet your obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through foreclosure.
As you consider the option of pursuing a short sale, remember your lender is looking to limit any potential loss on your loan. By completing a short sale, your lender has arrived at a solution that is, for them, much better than a costly foreclosure.
What sort of hardship would my lender consider legitimate?
To some extent, that will depend upon the mortgage company considering the short sale request. Generally, as long as the hardship is real and the mortgage company believes the loan is likely to become delinquent as a result, the short sale request will be processed by the Loss Mitigation Department. A big key to getting Loss Mitigation to accept a hardship is to submit a strong hardship letter. The hardship letter sets the tone for the entire file.
Will the lender approve a Short Sale even if the homeowner is current on their mortgage?
Yes we have successfully negotiated and received an approval on a short sale even when the homeowner was current on their payments.
Why would a mortgage company agree to accept a short sale?
There are actually several reasons why a mortgage company would approve a short sale payoff, including the following:
• Legal Concerns: Mortgage lenders have come under legal pressure to work with borrowers to equitably resolve situations where borrowers are unable to meet their mortgage obligation, particularly when the borrower makes an effort to arrive at a compromise solution.
• Wall Street is Watching Mortgage lenders rely heavily on their ability to package and sell bundles of loans on the secondary mortgage market. They need to sell these bundles of loans in order to put the funds back to work by loaning the money again and collect loan fees along the way. If mortgages perform poorly after they are sold it could impact the lender’s ability to sell their loans on the secondary market. A successful short sale gets the loan payoff resolved quickly.
• Asset Management Expenses- If a lender acquires a property through foreclosure, the property will be managed until it is repaired and resold. It is expensive to manage real property assets - homes – spread throughout the region, the state and possibly even the nation. Keeping properties maintained, keeping utilities on, making repairs and the administrative costs attached to these activities are all costs the lender would prefer to avoid. A successful short sale eliminates most of these costs.
• Reserve Requirement- Delinquent and non-performing loans place another burden on mortgage lenders. For all delinquent and non-performing loans lenders must set aside funds in reserve to deal with potential losses. These funds cannot be put to work generating new loan fees until the bad loans are resolved. A successful short sale lets the lender put their money back to work.
Can I still short sale my home even if I have 2 loans?
Yes, it doesn’t matter how much you owe. The lender will evaluate what the current market value is and then decide how much they will accept.
Yes. Lenders are more motivated to do a short sale on a property that needs work than on a property that doesn’t. Lenders know losses start to skyrocket when they foreclose on a property that needs a lot of repair work. Lenders are in the business of lending money not property management and home repairs.
If I am behind in my payments and can’t afford closing costs what can I do?
Topics: short sales |
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Taming the Jumbo Mortgage - Financing Solutions for Orlando Real Estate
Author: Jerry | June 11, 2008
The Orlando Real Estate Voice is happy to offer a great article on jumbo loans from David Reed - the author of Mortgage 101 and Mortgage Confidential:
| Written by David Reed Author of Mortgage 101 and Mortgage Confidential. Visit Reed’s Website |
Topics: mortgages |
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