With so much being written about foreclosures nationally, it is time to put aside rumors and report exactly what is happening with foreclosures in Tallahassee. Rather than talk in general, this blog will report exactly what has occurred in Tallahassee, thus far this year. Read the rest of this entry
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For those of you who have been following the trend of Tallahassee foreclosures and the bevy of short sales in Tallahassee, you will want to know that Fannie Mae has introduced several new and updated policies regarding bankruptcy, foreclosures, short sales, and principal residency conversion in a document titled Fannie Mae Announcement 08-16.
If you click on the link to the Fannie Mae Announcement 08-16, you will find the details on these changes. I have written this blog as a brief summary in an effort to point out a significant occurrence at Fannie Mae and what might be a huge market influencer in the next six months.
The biggest issue addressed in the Fannie Mae Announcement 08-16 is that Fannie Mae will finally establish a policy for short sales (or what they refer to as “preforeclosure sales”). Fannie Mae explained that a preforeclosure sale “involves the sale of the property by the borrower to a third party for less than the amount owed to satisfy the delinquent mortgage, as agreed to by the lender, investor, and mortgage insurer.”
So, now that they’ve defined it, what is all the big fuss about? Well, Fannie Mae has stated that “due to the increased incidence of preforeclosure sales, Fannie Mae is establishing a 2-year elapsed time period for reestablishing credit following completion of the action.” I believe this means that families that must endure a short sale today will have their credit restored in only two years. This is a far better outcome than foreclosure, which has actually gotten worse!
If somebody goes through foreclosure, the old Fannie Mae policy required a 4-year time period from the date of the foreclosure sales was completed (”completion date”) for reestablishing credit. Unfortunately, the Fannie Mae Announcement 08-16 changes this policy to a 5-year time period from the completion date.
So, as you can see, a family working through a certified short-sale company can put themselves in a position to restore their credit much quicker than if they allow their home to be foreclosed. I think this is very solid news from Fannie Mae and will help speed the recovery of the real estate market.
While this blog article has only scratched the surface of this very timely Fannie Mae announcement, you can download the full announcement by through the link to the Fannie Mae Announcement 08-16, where you will find the details on all of these changes.
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Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.
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It doesn’t seem long ago that finding a foreclosure in Tallahassee was a rare occurrence. Nowadays, however, foreclosures are everywhere and foreclosures are the talk of the media. As with all “great deals” we must continually warn “Buyer Beware.”
Some people think that the only way to get a great deal in buying real estate is for the owner to be in trouble or that the owner be getting a bad deal. This zero-sum mindset is a shame and is rarely the case. I mention this purely as the last “disclaimer” before entering the meat of this discussion, but I urge the reader to understand that there are plenty of great real estate buys in Tallahassee that are not foreclosures!
So you’re hell-bent on buying a foreclosure! If so, this real estate blog submission is the perfect “to do” list for you to use as guidance as you enter a market full of opportunity, surprises, pitfalls and rewards.
The last thing you want to do is to go shopping for “a deal” and not be able to trust somebody for expert, correct advice. Hire a real estate company that is willing to put its buyer-services in writing and settle compensation issues up front. When your real estate company knows that it is getting paid, it will show you everything available (and many things not available).
This is a huge point and it is why I’ve listed it in the first position. Most real estate agents and companies will work with you without such an agreement. I believe it creates a conflict of interest. If they know Property A will pay them 4%, and Property B will pay them 2.5%, and Property C will pay them 3%, do you really think that they will not be tempted to push the benefits of property A? It is not a factor if they get paid the same, regardless of what property is purchased!
In a foreclosure situation, you are not dealing with a wife and husband who are going to make an emotional decision. For a bank or financial institution, the bottom line is everything. Don’t be tempted to “low ball” and then let them use your offer to shop for others. This happens all the time. Low-ballers rarely get the buy, and when they do, they are always concerned that they over-payed.
Make the real estate company do the homework. Determine what the property is worth and then make an offer that you are willing to stick with. Be willing to buy the house or walk-away from it, don’t become a victim of emotion yourself.
Remember, the bottom line is the most important thing to the Bank. Since time is money, a quick-closing is far more desirable to the bank than a long, drawn-out transaction. Additionally, a short-closing minimizes the risk from the Bank’s standpoint. If you fail to close, they would rather it happen sooner than later. They already have owned the property longer than they wanted!
It never ceases to amaze me when buyer’s offer to purchase a foreclosure, yet they ask the bank to warrant the condition. The bank is holding an asset that it has no opinion regarding condition, so it certainly will not warrant something that it is clueless about. By making the offer “as is,” you are making it easier for the bank to accept. Just make sure that you have properly inspected the property and you are comfortable with its shortcomings.
While it is realistic that you will borrow money to purchase the home, there is no reason that you cannot have this secured ahead of time. Considering that the best buying opportunities in the market will have multiple offers, an offer that is not contingent upon financing will be viewed as stronger than those requiring the buyer to get financed. From the Bank’s standpoint, you should appear as if you are making your offer with a bag of cash in your hands.
Placing contingencies on an offer to purchase a foreclosure is like telling the Bank (the seller) that you are not really serious. The bank then can use your offer to make the other buyers feel like they need to increase their bids. Why would a bank or financial company consider accepting an offer if it knows that you can back out of the deal? [The answer is they will only do it if you are the only buyer.... read that to mean that you are paying top dollar!!]
The only contingencies that I would recommend would be for an acceptable appraisal, an acceptable site survey, title work, and a short 7-day or less inspection period.
The moral of the story is make it easy for the Bank or financial company to accept your offer. If you look strong and you look prepared to close, your offer will shine above others (even a few that might be higher priced offers).
As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible.
Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.
If you like this Article then please subscribe to my blog through a full RSS feed. You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.
Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.
If you'd like to forward this post to someone you think might be interested, simply click on the "Share This" link and click "E-mail."
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