The Real Estate "Safe Buy"1/30/2011
How many people remember the Real Estate Market of the early 90's before the Internet and Technology Advancements? Man, housing was Cheap and unfortunately Money was tight. What a great time to invest. Now fast forward to 2011. There are striking similarities and money to be made. Just look around you! For Instance- In 2004-2006, if you asked someone to owner finance a property, they would stare at you, like are you crazy. Housing was selling so fast, no one would ever owner finance a property. Man how things change, deals are everywhere. Banks offering special incentives, owner financing packages, 5 year notes, Rent to Owns, Lease Purchases, $100 dollar Hud Programs, escrow holdouts for repairs. If you are currently renting and can qualify to purchase, do so now. Interest Rates are Great, Prices are Great, plus it will help your local economy. What is a Safe Buy! I had a customer ask this question, and one that requires much thought. This would be my response. Buy in a community that has strong neighborhood covenants or Restrictions. Adjoining Properties have great effect and influence on subject properties and restrictions are a good way deter negative appearances. See Lake Meadows for Example, Great Policies in Place. You have heard this one before, as far as price of property, it's always best to be the cheaper property in your community. This will allow potential for extra equity down the road. This one might surprise you. Buy inside City Limits. Why! prices in the county are cheaper! The economy is changing and small businesses are taking hits with the market decline plus rising gas prices. Consumers needs are changing wanting to be closer to their business as well as closer to material needs. The main reason is the Foreclosure Influx. Foreclosure's will effect the county more than the city. Why is That? Inside the City, Appraisers have a larger pool to select from when using Foreclosures as comps on similar properties inside the city, in return property values are not as vulnerable. In the County, Lets take Gray for instance, One Foreclosure could effect an entire Price Bracket because their are not enough comps to support otherwise. Buy a house in a price bracket supported by FHA Guidelines and meets FHA Standards. Right Now FHA is KING and there is no Queen. Last but not Least- "Get a Realtor". Do not, I repeat Do not, buy a property without a realtor or at least get a realtor's opinion before purchasing. Do not go into a transaction blind, because the market is very unstable. Many people have had problems with realtors in the past on transactions but its very important to grab an agent for support because this is a Huge Investment. Interview agents and pick who you are comfortable with. Most By Owners will work with Buyer Agents on transactions. Thank you for Reading. Brad Workman Remax Checkmate
The Antidote for Dropping Condo Sales1/30/2011
East TN Condo Associations in Johnson City, Kingsport, and Bristol take notice. Take steps to protect your investment. The Condo Market is steadily declining due to the recent overconstruction, loan modifications, and lagging economy. What can we do about it! Let's face it, you can always drop the price drastically to get rid of it. Not the best Solution, especially for your friends selling the condo next to you. Why not take a proactive step in Protecting your Investment and apply for PUD ( Planned Unit Development). This will insure that FHA loans be granted in your community allowing a buyer to apply 3 1/2% down payment on a condo purchase rather than the customary 20% conventional loan. This step takes up to 60 days to complete and be recorded. My friends at Nationstar Mortgage and Reliable Title are willing to help with this procedure for free. Right now only 6 condo Associations are registered for approved FHA loans in Johnson City. We need more involvement! I would be happy to provide the paperwork to start the process. Contact me for more information. Thanks for reading
Fast Paced Lifestyles influencing Declining Condo Values?1/12/2011
I admit sleeping thru the mobile home/mortgage loan spasm of 2009 till present. Making it almost impossible to get any kind of loan on singles, doubles, triple wides, and even modulars. Banks tightened up for good reason, they are a foreclosing/depreciating nightmare for banks. "I understand that."
Next comes the Banking Industry Crackdown on Large/Estate Homes priced over $417,000, Now we call those Jumbo Loans, causing the best of buyers, a higher interest rate, and by all means a higher credit score in order to participate for these jumbo loans. In other Words, "If you want a Jumbo House, we will give you a Jumbo Rate" The Real Estate Market feels the effect.
Thirdly I have the deepest sympathy for Condo Owners across the U.S. especially those in heavily populated tourist areas. Why is that you Ask? Have you ever been on Vacation and then suddenly boom a flat tire. Condo Owners in Miami, Gatlinburg, Charlotte, Detroit have all received that flat tire and did not see it coming. Will Johnson City, TN get as bad as the areas mentioned, probably not, actually I am positive it will not.
What has caused the recent decline in condo sales in Johnson City and the Tri-Cities? Let me set the stage
1) The Powerful Mortgage Brokers, Fannie Mae, Freddie Mac, and of course the U.S Government. Banks want 20% down unless your a PUD (Planned Unit Development) which most Condo Associations in this area are not. They have also raised the credit score limit on purchasing a condo
2) OverConstruction of Condo type Subdivisions/Patio Homes by Local Builders.
Mainly these two problems began the decline which leads to number 3, 4, and 5
3) Added Inventory to Condo Market with seller's desperate to sale
4) Builder's slashing prices on the development of their created Condo Association, where many residence reside that paid top dollar a year or two earlier
5) The Added Inventory of Desperate Seller's needing to sell leads to Foreclosure.
Johnson City, TN and the Tri-Ciites are unfortunately entering stage 5 of this equation.
Condos are nice in alot of ways. Have Associations do the lawn care, travel to places without worry of lawn needs, Social Atmospheres, Sometimes swimming pools and tennis courts, more time to do other objectives. Builder's picked up on this need and spent 2005-2009 as a primary goal to build as many condos as possible. At the time, nobody was thinking about the banks tightening up their money and locking the safe. Which makes my point!
Busy Lifestyles > Overdevelopment > Tighter Banking Guidelines > Foreclosure
It's time for Banks to do Damage Control and loosen up the Condo/Loan Guidelines or it's going to be a long ride.
Thanks for Reading and Visit us on the web at www.yourjohnsoncity.com
Team Haynes/Workman REMAX Checkmate
Be Cautious about Refinancing to a Lower Rate1/11/2011
This Really Only Applies to Sellers who purchased their homes during the boom years, Lets say from 2004-2008. As a Real Estate Professional, Clients come to me weekly, and say those magic words "Im either going to sell my home or Refinance my existing home. Refinancing to a super rate seems pretty harmless and sometimes a no brainer. Refinancing a home may cost $5,000 in extra closing costs in order for you to save $200 bucks a month. So that's $200 x 12 month= $2,400 year in savings. After 2 years that $5,000 is Recovered. For Example Purposes Lets say you currently owe $150,000 with a 27 year term left on your mortgage. You decide to Refinance from 6% to 4%. Your payment rate drops from $929 to $740 Dollars a month. Your new term is $155,000 based on 30 years. News Outlets in New York and Los Angeles claim stronger Real Estate sales in their corresponding markets. Florida reports an increase in Real Estate Transactions across the state. Our Community hears the same reports about what's going on in bigger markets and begin to feel better about the Economic Future. "What does this have to do with the area I live In" So why should we worry about the prospects of refinancing in this great community. I Truthfully believe this is the best place to live and a great community and make no joke about that. What these media outlets do not always report is that although sells are slightly up in these major markets, the average price tag has fallen sharply. Meaning Avg. Price of Homes have fallen for 2010 but Real Estate Transactions are Increasing. This is what the influx of Foreclosures will do and continue to do in the next several years. Im Seriously thinking possibly until 2016 or beyond. My point is no community can hide from the Foreclosure Movement and if you are considering refinancing and in great financial standing. Would you rather have a lower monthly payment or lower overall Principal Amount owed to the bank. In other words are you planning on staying in your home until after 2016. No one can predict whats going to happen in the future, but right now the average price in our community is declining and housing will no way increase like it did from 2002-2007. This explains why Banks quit giving Cash Outs during Refinancing. In Fairness to Refinancing, there are also some positives- Putting extra money in your pocket, lowering your payment making it easier to lease your home if needed, switching from an adjustable rate to fixed rate, (Sorry, adding an inground pool or purchasing a vehicle does not apply here.) Before you make the decision to refinance, reflect on what your needs will be in the next five years. I have witnessed alot of hardship over the last couple years from refinancing, and wanted to give a different perspective. I hope this helps. Visit me on the web at www.yourjohnsoncity.com.
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