Real Estate Recharge

Well, it's been a very busy couple of months, both personally and professionally

Between Thanksgiving, Hanukkah, Christmas, New Years, my daughter's fourth birthday, my wife's 40th birthday, and finally my birthday, I've eaten too much food and spent way too much money. At least we had fun along the way.

It took a while but I'm finally recharged and ready to go.

I mentioned in my last blog that I would write a 2009 year end review. Now that it's the middle of February, I'm thinking that it may be too late for that. Simply put, however, last year I had to work twice as hard to earn half as much. With prices down around 50% from the two previous years, so was my bottom line.

No doubt about it, the best time to buy REO's was in the first half of 2009. During this time there was the most amount of inventory at the cheapest prices. I sold three REO's in six months. After that, however, the word got out and it became, and still is difficult to get a contract accepted.

Looking ahead now to 2010, it's nice to know that I have several customers already with plans to come down and start looking for second homes.

Most of my buyers are from the Northeast. They have the cash and are finally ready to buy. Most of them are looking to buy properties priced at or under 200k.

Throw my new buyers in with my new sellers, and maybe I'll have a decent year.

It does seem like the market is moving. With prices low and opportunity high, there are those taking advantage of the current market. Short sales are still dragging down the market and foreclosures still dot the landscape, but mortgage rates are still very low. and lending has loosened a bit.

Nothing stays the same forever, and as RUSH's Niel Peart would say, "Constant change is here to stay." Hopefully the market will continue to work itself out, and sooner rather than later we'll have a recovery.

So with that I'd say, that even though 2009 could have been better, I'm still optimistic about 2010.

Thanks for reading!
Aaron Glassman, Broker/Owner

A-1 REALTY GROUP, INC.

http://www.A1RG.net/

**Picture of fireworks taken at Disney World.

THE "NEW" MARKET

Let's just say this, at least there is a market.

Prices may be down, less people maybe buying, however even in this down market people are finding a way to close deals.

For a while there, real estate was a sad, down trodden state of affairs. Simply put, prices were too high. Lending was difficult, damn near impossible, and if you were looking to get a jumbo loan, you could forget it.

Now that prices have come crashing down, in some cases fifty percent off their highs, people feel it's safer to buy. Let's face it, if you walk into a department store and see a 50% off sale, don't you feel inclined to buy? Sounds like a great deal to me.

RADIO CHECK. The highest activity in the market is at prices under 300k. This price range is very active, especially with investors and first time home buyers. What's seems to be happening here, is that people are seeing other people buy, and feel that it's now safer to buy. Have you tried buying a foreclosure lately? Get in line.

Also, I'm starting to see more and more deals close above 450k. Not that I'm closing any of them personally, (that would be nice). Our title company, however, has recently had several deals close in this price range.

What's going on, you ask? What I think is, people who have the money to buy nicer and more expensive homes are finally starting to do so. They may not be able to qualify for the $8,000 tax credit, due to their income, but they do have excellent credit and more importantly, the cash to put down a large enough down payment to bring the mortgage down into the conventional range, (under $417,000). Rates in this range have been hovering around 5% for a long time and they won't stay this low forever.

Another important aspect of the "New Market" is, of course, the short sellers, Let's face, most people who bought within in the last five to seven years are now underwater. In order to sell their homes, they have no real alternatives other than to modify their mortgage or bring cash to the table. Unfortunately, most of the short seller's don't have the cash to bring and don't qualify for a modification and hence short sell their properties.

Now, normally when someone sells a house, they turn around and buy another one. Not in the case of the short seller. Short sellers receive no money at closing, and then cannot turn around and buy again. That's a pretty large segment of people who are no longer participating in the re-purchase arena. What they are doing, however, is renting.

RADIO CHECK: I recently read in an article somewhere, which noted that more people renting is not such a bad thing for the economy. Investors buy up the foreclosures at reasonable prices, that provide a good return. Now that the homeowners become renters, they have less monthly expenses. This leaves extra cash in their pocket to spend with, pay down debt or dare I say, save.

To sum it up, investors are buying foreclosures, short sellers are renting from the investors and first time home buyers are enjoying record low rates, and an $8,000 tax credit from Uncle Sam. Let's not forget about the "Financially Healthy" individuals who are able to put down enough money to take advantage of the historical low rates.

The main point is ,that even in this tough real estate climate, one way or the other people are finding ways to buy, sell and rent. To me, that's what real estate is all about, and today that's the "New Market".

Coming up next time on "Real Estate Radio" my year in review.

This is Awesome A! signing off.

Thanks For Reading!

Aaron Glassman, Broker/Owner

A-1 Realty Group, Inc.

yoursouthfloridarealtor@gmail.com

954.326.2663 . cell

**Photo taken the first night of Chanukah. Happy holidays to everyone! Have fun and stay safe.

http://www.a1realtygroup.net/

http://www.a1titleandescrow.com/

http://www.lglassmanlaw.com/

Foreclosure Frenzy

So you want to buy a foreclosure?

In the beginning of the year, between January and June, I was approached by several people looking to buy a foreclosure for investment. I searched, we saw, they bought.

The story is no longer the same. Now it's more like, I search, we see , they put in an offer and someone else buys it.

Why has it become so difficult? Simply put, there are more fisherman fishing, with bigger hooks and better bait, (all cash).

Basically, foreclosures on the MLS have become quasi auctions. Listing agents never intend to sell their properties for the list price. With so many buyers, corporations, and individual investors chomping at the bit, competition for foreclosure is fierce. I've heard that in some cases, a foreclosure has had over 30 offers at once.

So what to do? Here are some tips:

1.) Be prepared to bid above the asking price, sometimes way above. Take a look at the recent comps in the area and you will see in many cases, foreclosures are selling for higher than the asking price. Be sure to bid accordingly.

2.) Pay all cash if possible. If you are, however, going to get a loan, you should try to put down at least 30%. Some banks consider 30% down the same as all cash. Also, if you are getting a loan, and are making a bid above the appraised value, you will have to come to the closing with cash. The bank is only going to lend on the appraised value.

3.) Determine what the other guy is paying and pay more. Figuring this out is not too difficult, but still tricky. An investor's rule of thumb is to get at least 1% of the purchase price as monthly rent. If the house will rent for $1,500 then the investor doesn't want to spend for than $150k after repairs.

RADIO CHECK: Sometimes an investor is willing to break this rule if they think the property will have a better back-end return. The investor may accept a smaller cap rate up front in order to get a better return after the property appreciates over time.

Overall, buying a foreclosure is not impossible, it's just not as easy as it was earlier on in the year. The word is out and there are now many people in the foreclosure market to compete against. Banks prefer to work with all cash buyers, or those putting down large down payments. My suggestion for the average buyer, if they cannot afford to pay cash, need FHA financing, or don't have a full 30% to put down, is too take a serious look at a short sale. Short sales can still be a "Great Deal", they just take longer to get approved by the bank. Read my previous blog "What's the hold up" to learn more about the short sale process.

Well, that's our show for today. Join us next time when we talk about the "New Market." We'll examine what's happened to the real estate market over the past year and how it is different from what some may call a "Normal Market." With new rules and guidlines for buying and selling, todays' real estate market is much different from a year ago. So stay tuned.

So for now, that's all there is, there is no more. This is Aaron Glassman signing off. Thanks for Reading!

http://www.a1realtygroup.net/

http://www.a1titleandescrow.com/

http://www.lglassmanlaw.com/

**Photo taken from internet. I Had trouble finding something suitable to post in my own collection.

What's The Hold Up?

When I write my blog, my inspiration mostly comes from the issues that I find my self dealing with on a daily basis. Recently, I find myself dealing with a very slow but steady short sale market. Typically I'm asked the question, when are things going to turn around? I usually say that things have turned and we are through the worst of it. Just look at the closed and pending sales this year.

The bigger question is: what's holding up the short sale market? We can easily be further through these tough times if the banks just figure out a way to get through the short sale glut. There are a tremendous amount of pending short sales on the market right now, and if these could just get processed in half the time it is currently taking, we'd be through these hard times twice as fast!

Simply put, the banks are holding up the real estate market! There are many reasons for this, but for the most part, nobody is truly sure why. It could be because the banks want to wait for a specific fiscal quarter to take a loss, or maybe they only approve short sales once a month, Again, nobody knows for certain, but many people I talk to also say that the banks are simply overloaded and can't get through the contracts fast enough. I mentioned in a previous blog that this should change for the better, sometime soon. Then again, not soon enough.

Either way, the short sale market is like a clogged drain. Unfortunately I'm not a plumber and I don't seem to have any liquid draino around.

For some extra value I offer these few points when buying a Short Sale:

1.) Ask if it's an approved or unapproved short sale? Typically, an approved short sale can take up to half the time as an unapproved short sale! This is because, in order to get the approved status, a short sale must go through the BPO process and be approved by the bank. What tends to happen is that the initial buyer who got the short sale process started, got tired of waiting and took their contract off the table. In the meantime the process went forward without the buyer, and now there is a small window of opportunity for a new buyer to put in a contract after all the processing has been done. A buyer can still get a discount off the price, but if the BPO is current, then the bank would want to get a price close to asking.

2.) How the Seller's Realtor handles the short sale is very important. Each Realtor has their own way of processing a short sale. This one of of the reasons for the overall delay when dealing with a short sale; there is no one, uniform way of processing them. Either way, as a buyers agent I like for the seller's Realtor to put the listing into either back-up or pending status. This should keep prospective buyers away from your listing, as it is no longer showing up as "Active". If the other Realtor is entertaining your offer along with several others, than it becomes a bidding war and like a foreclosure, a quasi auction. This is good for the seller, but not for buyers. Either way, it is important to a have a cooperative Realtor on the other side handling the processing.

3.) Find out who is responsible for selecting the escrow agent and title company. Many people don't understand this part of the transaction, however, it is probably one of the most important parts of the entire process. With whom you put your money with, and how much you will get charged for closing costs is a tad on the important side. The seller may say that they are going to select the title company and pay for the title insurance premium, but there still are some closing costs you will be responsible for paying for.

RADIO CHECK: No longer is the buyer in Broward and Dade county responsible for selecting the title insurance company, at least not for a short sale or foreclosure. What's happening is that the seller will offer to pay for the title, in order be able to get the short sale processed for free. The seller doesn't actually have to pay for anything, because it's the banks who truly pay for it. This enables the title company or lawyer who is processing the short sale to eventually get paid for their work. The buyers don't care, because they don't have to pay the title insurance premium. I don't even think the banks know that they are not customarily supposed to pay for the title insurance policy, but they don't care either, because they'll just short the Realtors commission by a percent to pay for it. Either way, my title business is getting crushed by, what I think is an unlawful practice and a violation RESPA. The buyer will still have to pay for some of the closing costs and never gets to pick the company charging them for those fees.

That's it for now. Feel free to call me to discuss all of your short sale needs.

This is "Awesome A!", signing off. Thanks For Reading!

Aaron Glassman, Broker/Owner
A-1 REALTY GROUP, INC.

http://www.a1realtygroup.net/
http://www.a1titleandescrow.com/
http://www.lglassmanlaw.com/


***Picture taken from the stern of the Carnival Imagination, sailing South from Miami to Key West.

BON VOY-A-GI

As I sit here in front of the computer, hastily typing away, I feel the long toll of the day pulsating throughout my feet. They hurt! I must say that getting ready for my mom's 70th birthday cruise has wiped me out. With so much to do, I can't believe I've found the time to write. Well if you call a quarter to three in the morning the time to write.

It is, however, my duty to bring you, my readers, a constant, consistent and cohesive chapter of today's real estate world. If it were a book it we be called, "The night of the living real estate market." You know that's kinda catchy, not too mention that last Saturday was Halloween.

In my slight state of exhaustion, I jest. It is true, though, that today's real estate market is alive and well. In fact there are several areas of real estate which have been very busy. Foreclosures, which on the the MLS is more like a quasi auction, are having a huge impact on the market.

Short sales, as slow and tiresome as they are, do eventually close.

RADIO CHECK: The short sale process, if you have the time to wait, is a good option for all three parties invloved. It allows the bank to get more than they would if the property went into foreclosure. It allows the seller to be released from the mortgage, while having a lower impact on their credit score than a foreclosure would, and it allows the buyer to tpically buy a property at a discount. Although that may start to change as new comps begin to show up and a base/bottom is developed.

Also, Don't underestimate the power of the traditional sale. I know what you're thinking, "They still have those?" Yes, they do. I, myself, just closed on two properties where neither of the sellers were in distress. The buyer in one deal, in fact, had excellent credit and brought twenty percent down, while the buyer in the other deal paid all cash. In the last year, actually, most of my deals have been either all cash or a lot of cash down. In one case, actually, the seller's brought almost a 100k to the table!

One more thing, while doing some research for a prospective seller in a upscale condo, I saw that in the past four months there were at least a dozen sales in her complex. The closed sales ranged from 600k to 1.45 million. There is definitely money out there, and it's definitely being put to work in the South Florida real estate market!

Buyers, now may be a good time to take advantage of rates close to five percent. Seller's, this may be a good opportunity to list your home for sale. For those of you who still have some equity left in your properties, there are many people actually shopping right now.

So as I set sail into the sunset today, I bid you Avior. Know that I leave South Florida with an optimistic attitude, toward today's real estate market. Yes, while that attitude can quickly and easily change to cynical or pessimistic, know that I am encouraged by the fact that there is a lot of business waiting for me when I get back. Each day brings a new sunrise and with it a new Pina Colada!

This is your host, Awesome A, signing off, and as Bugs Bunny would say, Bon-Voy-A-Gi!

Thanks for Reading!

P.S. I will update today's picture after I get back from my cruise. I should have a more appropriate shot by then. For now you are looking at one of the amazing water slides at Aquatica, in Orlando at Sea World.

Remember to check out our other websites: http://www.a1titleandescrow.com/ & http://www.lglassmanlaw.com/

Also you feel free to e-mail me at : yoursouthfloridarealtor@gmail.com

Short Sale Syndrome

Earlier this week, while at a short sale seminar, I learned several things. I learned that sellers no longer have to be delinquent on their mortgage in order to short sale their property. I also learned that buyers and sellers should not be charged an upfront fee by a Realtor or another third party to negotiate the short sale with the bank, (attorney's excluded). Most importantly, I learned that the short sale process is about to go through some major changes.

The talk is that the banks are going hire large, third party asset management companies to process the back log of short sales that the banks are facing. This should mean that short sales, which for the passed year have had a negative stigma, might finally be the ideal vehicle for buyers, sellers and the banks to move unsold houses off the market.

Explaining a short sale is quite simple. It's when a bank allows the borrower to sell their house for less than what's owed on the mortgage. Explaining the process, however, is not so simple. It seems that every Realtor has their own set of rules, as well as the banks. It's truly one of the main reasons why short sales have such a negative stigma. There is just not a set standard of rules dictating the process.

So, how do we cure the syndrome. It's good news to hear that some changes are coming to the system to alleviate the banks of their back log. Hopefully this will standardize the process and makes things move a lot quicker. So if you are thinking about buying or selling your home as short-sale, you still need to be patient. In time, however, the short sale process will begin to mean what what many people believe it to mean; a quick closing.

The big question is: Will the changes really make a difference? It really depends on what truly changes. There is a lot that both, the banks and Realtors, need to do to make a short-sale a viable buying/selling option. If we can come together and establish a system that is fair and balanced, then, yes I do believe it will make a difference.

Here are some other quick pointers I picked up at the short sale seminar. I like to call them Radio Checks.

RADIO CHECK: The word is, that if you can afford to pay your mortgage then do so, even while going through the short sale process. It should help protect your credit in the long run.

RADIO CHECK: Those who sell their house as a short sale will get a 1099 from the bank for the difference, creating "Virtual Income". Make sure your accountant knows how to properly handle this issue so you don't get stuck paying taxes on money, you didn't really earn.

RADIO CHECK: It may be a violation of RESPA for the seller to force the buyer into using the seller's title company. The buyer may not have to pay for the title policy, however, there are still charges that the buyer will have to incur, and without anyway of negotiating those charges.

RADIO CHECK: - With regards to those of you interested in buying a foreclosure, just because a property is listed for 150k doesn't mean that it will sell for 150k. If the current comp in the area is 200k, you best make sure your offer is in that range. Basically, what the banks have done is created an auction. In where the highest and best offer wins. They price the house super low, get dozens of bids, and then voila, SOLD!

I know that the short sale process is complicated and nerve racking. Please feel free to call me anytime to discuss your short sale at length. I'd be happy to help you list or buy.

This is Aaron Glassman, signing off! That's all there is, there is no more. Have a great day everybody!

http://www.a1realtygroup.net/

http://www.a1titleandescrow.com/

http://www.lglassman.com/

On Fire!

The phone rings. It's a buyer. He wants to put in an offer on a foreclosure. He bids higher than the asking price. I tell him that his bid is still not high enough. I know this, not only because I just went through the same scenario with a another buyer, but because I have an email on my blackberry from the listing agent telling me she has offers way higher than the asking price. She asks me, "Are you sure this is his highest and best offer?" I confirm with the buyer and guess what? His offer is not accepted. A cash offer, instead, for "Way Higher" was selected by the seller.

Simply put. the market is filled with cash investors, snatching up bargains before a first time buyer can get their hands on them. I have, in fact, reports that show many houses selling for more than the list price. This is a great trend for the market, but bad news for first time home buyers, even with twenty percent down.

Pointers:

If you can come up with an additional 10 percent down and have at least a total of 30% down, then the banks may seriously consider your offer instead of an all cash offer. I know that's easier said than done, but if you actually have some extra cash, it may worth be using it to beat out the big boys.

If you have the time to wait it out, then take a look at short sales. It may take a while, but buyers are getting pretty good deals on short sales these days. If you don't have a lot of time to wait, then try finding an approved short sale, or one that has had a buyer recently walk away. This can be a great entry point for a buyer.

Persoanlly, if I can't find the buyer a foreclosure, I ike trying to find non short sales, or what I like to call a normal deal. These are not as easy to come by as one might think. There are not many sellers that actually have equity in their houses. I'm in the middle of a deal where the seller is bringing over 75k to the table. That's not easily done for a whole heck of a lot of people. But if you can find this type of transaction, it usually leads to a seller who is happy to sell in this market, and a buyer who is still probably getting a good deal.

Conclusion:

Recently the market for me has been on fire. Prices are affordable and rates can be had for under 5%, (with points). To me this is encouraging, and with the winter season around the corner, I predict things are going to get even hotter.

Thanks for reading and have a great day!

Aaron Glassman, Broker/Owner

A-1 REALTY GROUP, INC.

http://www.a1realtygroup.net/

yoursouthfloridarealtor@gmail.com

954-326-2663 . cell