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All the information you need to know about the Real Estate Market in South Jersey
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For those of you who waited until this year to purchase a first home, you might have made a great decision! While many first time home buyers ran around scooping up all the great properties last summer and fall, we were able to clear up much of the inventory. Many people were so excited to just BUY a property, they didn't care so much about condition, location, or what they really wanted. That tax credit was so exciting that many irrational purchases were made only to not miss out on the $8,000 tax credit. The great news for you, is that with the new year beginning, many people will not be out looking for homes in January and February. Historically, the best deals are in the coldest months. Since the tax credit expires this April 2010, you have a 60-day window with almost NO competition and your pick of the best properties. For first time home buyers, the tax credit is still $8,000 and for second time home buyers, they have added a $6,500 credit as well. (For more details on qualifications, contact me) If your mortgage is a FHA, you will only have to put down 3.5% and will be able to ask for a seller concession up to 6%. What this means, is that you could buy a home that is $150,000 for an out of pocket cost under $8,000, and then a few months later, get back your tax credit of $8,000! So.... it is almost like buying homes for No money down! It has been MANY years since buyers/investors were able to do this! It is an exciting time, and the best time to get out there is when no one else is looking.... right now. Narrow down what you like, where you want to live, and be realistic as to how much time, work and improvements you may want or need to put into a property. Many first time home buyers get excited about the thought of buying a foreclosure for the savings. However, banks normally want cash offers, and they need a lot of work. I have a ton of listings right now that are under $200,000 and are in Burlington and Camden county that are perfect for the first time home buyer. For example, who wouldnt' want to live in a beautiful 2 bedroom condo in Mt Laurel for $155,000 or a Single Family Home in Pennsuaken for $170,000? Both of these properties can be purchased with VERY little up front costs. The best thing you can do as a first time home buyer is sit down with a mortgage professional and see what your options are. Let him/her know the questions you have so that they can put you in the best program out there. With rates at an historical low, now is the time to get out there are start making those new years resolutions of home ownership come true!
Mortgage Contacts For Reference: Tom VanAuken - Coldwell Banker Mortgage 609-417-1098 Jeramiah Phillips - First Mutral Corp - 609-760-9234 Bill Sandvig - Wells Fargo - 908-295-5324
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There have been many changes in real estate over the past couple of months including the extention of the tax credit as well as allowing current homeowners the advantage of also getting a tax credit should they decide to purchase again before April 2010. However, one of the most overlooked improvements made has been with the banks. The closer we get to the end of the year, the better the chances on getting a good deal on a Bank Owned, REO or Foreclosure property. While everyone else is out shopping, on vacation or just too cold to go out looking at houses, the real investors are out picking up all the inventory. Why? Because banks DO NOT want to carry inventory into the new year. A bank is more likely NOW more than ever to let go of properties they have been carrying all year round. They are ready to consider more offers, lower offers just to get rid of these properties. In the last 3-4 months the foreclosure market has been so busy with buyers racing around trying to put in offers before the tax credit was extended. Now that they have discovered it has been extended, they almost are waiting until after the holidays, putting you, in a great spot. Keep in mind, a bank wants to get these properties off the books. They are in the business of getting paid for offering financing (mortgage) for a buyer. They are not in the business of holding assets, trying to collect late payments or attracting buyers to the leftover assets that have not sold in an auction. Right now is the time to strike. If there is a property that you have been considering, now might be the time where you can find a property and close relatively quickly. As many of you know, this year, I have become a "Certified Foreclosure Specialist" Not only has this helped me understand the process better and the inside information, but it has put me in a good place with the banks and asset management companies for my buyers who are looking to find that deal out there. So for those of you that are sitting on the fence, call your realtor and get the offer in while you have more leverage now!
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After getting several emails about how to buy a HUD Home, I thought it would be a good idea, to give some more information. HUD homes first became popular many years ago when people were looking to buy homes from the governement, fix them up and live in them. Ideally, HUD likes to have the homes given to buyers that plan to live in the home, but if they are unable to sell them, they will then consider investors. Now, with foreclosures harder to get, close on, and finance, there has been a popular demand for HUD homes again. So here is how it works.... First, you need to find a realtor that is registered and trained on how to sell HUD homes. There are only a small percentage that are, so make sure you ask, "Are you and your agency registered to sell HUD" Unlike most real estate, you HAVE to use a realtor (the is the process from HUD). The realtor can give you the list of what is out there, will submit your bid for you online, take your deposit check and fill out contracts with you. With HUD homes, you cannot avoid using a registered HUD realtor by submitting a bid yourself, since you are not dealing with a homeowner or bank. This is the one type of real estate transaction where you cannot knock on the door for the owner or call the bank direct and get the information. Placing a Bid as an Owner Occupant: How HUD works is they offer the properties for sale in an auction format. For the first 5 days of the "auction" it is open to Owner Occupant. What this means, is a buyer who will be living in this home as a primary residence for the next 12 months will have those first 5 days to bid as a priority. Also, as an owner occupant, you are given special financing options. With FHA financing, you are able to ask for 3% of your closing costs to be paid for, and only have to put 3.5% out of pocket as a down payment. In addition, you can apply for Streamline K (loans under 35k) or 203K loans (loans over 35K) which will help you pay for any types of construction or improvements that need to be made. Placing a Bid as an Investor: Assuming, that there are no acceptable offers given from the Owner Occupants in the 5 days when it is first offered, HUD will then open the bidding up to Investors. The process is still the same, only you DO NOT need to sign the form where you agree to live in the home for 12 months as a primary residence. Buying the home as an investor will allow you to fix it and flip it, rent it or hold until the market turns around. You have entire flexibility. How is a Bid Accepted HUD will look at all the bids that come in and take the bid that has the highest NET (meaning highest amount of money offered after you look at any consessions made. Example: Buyer offers 100K, but also asks for a 3% seller consession for closing costs, would be an offer of 97K) Keep in mind, if the offers that come in are all NOT acceptable to HUD they will continue the bid process of open bidding until they get an offer they like. Another tip, you do not get to make multiple offers throughout the day. You get one shot, and much like an ebay auction, you do not know what the bids are until after the auction. I have seen people WIN a bid where they offered full asking price and there were no other bidders, BUT I have also seen someone LOSE a bid over a hundred dollars! Deposits and Settlement Time Frames The amount of money that you need to put as a deposit varies depending on the purchase price of the property. Normally, it is 1,000 to 1,500 and the check MUST be certified and given to your HUD realtor at the time of your bid. If you do not win the bid, your check is returned. Also at the time of your bid, you will sign contracts. If you decide to choose a HUD home, you must close/settle in 45 to 60 days and if you need an extention, there is a daily fee of $10-$25 dollars that needs to be paid, so make sure you plan out your timeline of moving accordingly. Hopefully, I helped clear up any questions you had about HUD deals, and if you have more specific ones, feel free to post a comment or just email me directly!
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Everytime you turn on the TV, all you hear about is how high the foreclosure rate is in our country, especially in New Jersey. What is frustrating is knowing there are deals out there to be made, but first time investors, not really knowing where to start. Here are a few things to consider when purchasing a foreclosure property: 1. There are deals everywhere, in every market. Sometimes, you might just find a desperate seller who is willing to give more of a discount versus a greedy bank. Its best to search all the deals and put in offers to really determine a seller's motivation. Some also great Deals are HUD properties. These properties close in 45 days, offer great financing, and usually have deeper discounts than foreclosures. 2. Foreclosure properties are great deals, but hard to finance. The banks are looking for larger deposits to hold the properties, and larger down payments. With a regular property you can put as little as 3.5% down, but not so with a foreclosure property. The best thing to do if you do not have the cash (which most people don't, is to talk to a mortgage professional. If you need the name of some good ones, email or IM me) 3. With most deals, sellers are happy to hear that you are willing to close in 2 weeks. It gives you an edge in the market, because you have the flexiblity/finances to close quick. However, the banks have NO sense of urgency. I have some deals where I am the REO/Foreclosure agent and it has been 9-12 months, and we still have not closed on the deal! You would think that the banks are excited to have someone get them out of a mess quick, but they are a government agency like anything else, and therefore go through all the motions. 4. Chances are settlement will be set up, then cancelled, set up again, then cancelled.... The point I am making here, is foreclosures are great, for an INVESTMENT property, not for a primary residence! There are so many people out there that are living in hotels because they tried to get the family a good deal, and they still don't know when settlement is! 5. When you buy a foreclosure, you must take the property in "AS-IS" condidtion. This does not mean you cannot have a home inspection. It if your legal right to have an inspection, the only difference is there is no "seller" to fix any issues you find. With that being said, foreclosures are a great opportunity for an advanced investor with a team of contractors already in place. 6. The bank is only allowed to consider one offer at a time. This is good and bad, depending on how you look at it. What typically happens is the agent representing the property will accept all of the offers and ONLY present the best and highest offer to the bank. For example, if the asking price is $200K and the offers are $150K, $179K and $190K, the bank will only know that one offer of $190K was it. Even if weeks pass an another buyer comes along willing to pay $200K, the bank will not even see it, protecting the buyer with the first offer of $190K. Its good because it protects you as the buyer if you had the highest offer, its bad because the foreclosure properties usually go for the asking price. 7. Not every agent has experience in dealing with foreclosures. Of course they will tell you that they are, and it is important that the agent you are working with is REO Certified, has dealt with these types of properties and understands the difference in negotiating with a bank versus a private seller. Most people are under the impression that its best to call the agent whose name is on the property. That couldn't be further from the truth! By doing that you now have someone negotiation for you that knows both yours and the opposing parties bottom lines! Of course, this is just a basic overview of how to find a foreclosure property...so if you need more info, just post a comment or email me directly.
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If you are looking for a great Investment come be an owner in North Wildwood where I and several other investors have become owners. For more infomation go to my personal website www.jerseyshore-condo.com Low Taxes, Fully Furnished, New Everything, Great Rental Income!
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