Check out the home that sold that was on my foreclosure list: 6 bedroom, 3 bath, 3 car garage, 3,649sf of heated space with a pool in Dunedin sold for only $251,000! I have more. Send me an email with your name and what you’re looking for to Bud@BudCooke.com
House that sold "From Foreclosure List"
Your Home Search
Are you looking for that perfect home for 2011? The search online is just the beginning. Yes, I provide cutting edge tools like ListingBook which can help keep you organized. But that’s just the start.
I’ve bought many homes during my life but the one I remember most was a pool home in Hillsborough County. I looked at some 10 to 15 homes before finding the one I really liked. I tried to keep notes about all of the homes. Most had the same basic configuration, including a pool. However, even pools can have multiple features. One that I really liked was to have a light in the pool because I really like swimming at night. The one thing I didn’t keep detailed enough was the features “features.” I bought a home thinking that it had a light when it did not. I had not lost my mind but good notes would have saved some minor confusion.
Today the market is so saturated with homes that the average buyer wants to view 20 to 30 homes before buying. As a buyer, making your decision will be much easier if you will follow three easy rules.
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You should have evaluated the schools, taxes and local area sales using the tools in ListingBook prior to setting up showings with your Realtor® so this will help you further refine your list. Remember, home sales are picking up and if you have two pretty perfect homes on your list already, they may be gone before you look at another batch of seven to ten homes, just to find a few more perfect homes. And with inflation climbing (note almost $3/gallon gas), interest rates are also edging up. Every increase in the interest rate of even ½ percent will add thousands of dollars to your debt if you are borrowing. It’s wise to be organized. It will save you money!
If you are looking for a home in the West Central Florida area, and you would like to know more about ListingBook or get one of my free ListingBook accounts so you can search like an agent, visit http://www.Buying-Pinellas.com today.
I had a lady call me today and she was asking for another Charles Rutenberg Agents number on on a listing. We discussed her situation and she thought it would be best to go straight to the listing agent. I explained to her that the listing agent is trying to get the most for the home possible for the seller and that by hiring another agents with motivation to do a good job and help her to pay the least, she might want to reconsider, especially since it doesn’t cost her more to do so.
While we all act for the good of the transaction, it just makes sense that the bond developed by the listing agent to the seller will cause him or her to want to have a client that thinks he or she did a good job. That agent can certainbly convince the seller that they had no choice but to submit this offer for 85% of the list price they suggested, but in the end, if the seller agrees, what will their opinion of the agent be? Either they sold me on a list price that was unrealistic, or they were not a negotiator for the seller.
Many buyers don’t understand how the commission works. They believe by going to the seller’s agent, they will get a lower price because there’s less commission to be paid. The truth is that the seller agrees to the total commission and in fact pays it. All they end up doing is helping that agent, which has a conscious or subconscious predilection for getting the highest price possible for the home.
There are all kinds of reasons wishful buyers might be having trouble getting loans. Low credit scores can be helped by seriously working with a specialist, like my friend Will Merritt. I’ll be happy to provide his information. Just drop me a note at Bud@BudCooke.com. Will helps to create a credit repair plan and can have you on track more quickly than you may think.
However, there are other more complicated situations that may just prevent you from getting a loan in the normal channels. I have a friend that is now single and because her husband has the home but her name is still on the mortgage, she’s unable to get a conventional loan.
With markets in a less than stable condition, many doctors and lawyers would like to get a better return on their money without the risk involved in the markets. If your job is very secure like my friends, and your income will justify a loan, you may find a willing source of funds for your new home. My friend’s doctor/employer was willing to loan her the money for her new home. Yours just may be interested in a nice secured investment as well. I’m just saying…
Bud Cooke
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Fax: (866) 848-3718
Bud@BudCooke.com
http://www.BudCooke.com
So you are the buyer of a short sale home and you’ve got a firm contract on that property with signatures by both the buyer and seller. All that’s needed now if the approval of all of the banks or lenders, right? Be aware that most of the approvals that finally are made by the lenders in these situations are not for the amount you and the seller agreed on.
I know, you went by the book, had the patience of Job and should not have to worry about your agreed upon contract being changed by an outside party. That’s what we would all like to believe. However, even though the bank is not a direct party to the contract, they do have the ability to block the sale.
This brief caution is only meant to save you from sitting for six to nine months waiting for that blessed approval and finally getting a surprise. The caution does not cover all possible legal challenges and I should caution you, I’m not an attorney, but what I’ve described occurs far more than you may be aware. I’m just saying…
Bud Cooke, Realtor®
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com
Many first time buyers of bank owned homes are convinced that they can offer a ridiculously low ball offer since, “they really need to sell theses homes, right?” Generally, banks use local comparable sales to determine the fair market value for their homes. The comparables used include other foreclosure sales as well as normal sales. They normally list the homes under that fair market value. The price that is listed is already discounted and is normally a pretty fair price.
If you are using an agent that is independent from the selling side, they should be providing you with comparable sales before you make your offer. Since the listing price has already been discounted from the fair market value, the bank expects to sell the home for no more than 5-7% below their list price, at most.
By offering a ridiculously low price, the bank will still only counter with 5-7% below and will require that you put up a much higher escrow deposit than normal with no contingency for inspections. You won’t get another chance to negotiate with the bank because they will not take you seriously.
My advice? Consult a knowledgeable real estate professional like myself and anticipate the 5-7 rule and make your offer accordingly.
Bud Cooke, Realtor®
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com
2010 was an interesting year in real estate. The market has been led by banks selling foreclosures and permitting short sales on pre-foreclosures. 52% of all homes in the area were distressed sales. This included foreclosed homes reaching 30% of sales and “short sales” accounted for 22% of sales. The balance was “regular sellers” who struggled to compete with the fair market value being adjusted by distressed sales.
Appraisals on homes sold forced fair market value to new lows
for the area. This has prompted many buyers to believe that they should look but wait for even lower prices. This is a poor strategy since sales have actually picked up and buyers are competing for many of these deals. While there is a lag between increased sales and increase prices, it is certain that one follows the other. As I’ve watched my ListingBook buyers add homes to their favorites, I’ve also watched as these “favorite” homes change status from Active to Pending. Just as we cannot accurately “time” the bottom of security or stock prices, housing price cycles are also an imperfect science.
Economists generally predict that as the U.S. borrows and prints money, inflation will rise. As it does, mortgage interest rates will rise and as foreclosed homes (inventory) are sold off, prices will again begin rising.
With prices on home now near or at the bottom of the real estate price cycle, serious buyers should consider looking at those “favorites” now and selecting the home that meets their needs.
Next time, I’ll discuss the idea of “low-balling” bank prices. Stay tuned!
Bud Cooke
GRI, SFR, ABR®, e-PRO®
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com
I always believed that I was a strong negotiator. Recently an experienced property investor reminded me that we’re never too old to learn new tricks!
Let me preface my comments with a discussion about “purchase attitude.” Although there may be more than three, generally property buyers maintain three types of attitude.
First, they are looking for a house to live in and thus most of their decision making comes from an emotional place. Nearly all of us grew up in some type of home with family and love and all that goes with it. We look for a home that either meets those good expectations or replaces bad memories we would rather forget. Emotion plays a big part of our home search. These folks begin with the least negotiating leverage. While the Real Estate professional is able to recommend strategies that are logical, those recommendations are often overridden by fear of losing the deal if no compromise is reached.
Second, those that are focused purely on the money involved tend to be less emotional and most logically motivated. These buyers tend to be very focused on the “bottom line.” For instance, an investor knows that she wants a certain amount of return on the dollars being directly invested into the project. If that return cannot be met through the price, terms and reduction of buying cost, holding costs and operational expenses, then the deal MUST be walked way from.
Finally, the average family in search of a home in today’s market with low interest rates, a sea of distressed and other properties seeks to buy a home at a good price but still may have more emotion than logic involved with their buying process.
Recently I was working with an astute investor by the name of Kelly and her husband, purchasing a local bank owned triplex in the low $40,000s. She had calculated all of her costs and felt that the deal could work. We had wrestled with the seller and their representatives to make sure that outstanding liens would be paid prior to the closing.
The title company, located in south Florida prepared the closing HUD1 documents and sent them over the day before the scheduled close. Part of the terms agreed upon included that seller picking the title company and paying for title. When we reviewed the closing statement, it included a $600 charge to the seller for closing services and $400 to the buyer for closing services. Kelly called the title company to question this charge and other issues with liens and was told that “they worked for the seller.” Later, the title company called to find out why the closing statements had not been signed off on by the buyer. Kelly called them back and informed them that since they “worked for the seller” she would not be paying $400 for title services. Although they tried to push back, Kelly finally agreed to pay only $150, saving herself $250 on charges normally paid by buyers without question.
I must tell you, I learned a valuable lesson from Kelly. If you have the right attitude and the willingness to say no, you can be a great negotiator and save real money. Millions are made $250 at a time!
Real Estate – Knowing A Real Deal
Property Information Sheet Buds
With so many foreclosure homes on the market, how do you know if that great deal you have your eye on, really is a good deal?
I often work with buyers that want to look at foreclosures because of the low prices. In many cases, the condition of the home frightens the buyer and they get frustrated by what they perceive as too big a project.
The problem in this case involves two areas. First, you cannot be emotional about investment homes. They are simply an inventory for producing income. Secondly, every investor needs to creat a project plan and budget. Are you planning to rehab and flip the home? Or, do you plan to make it livable and rent it out. The strategies and their costs for each are very different.
As in any investment, you must get a fix on what properties in average to good condition sell for in the area you are considering. This is called, determining the “fair market value.” The place to start this process is with a CMA or comparative market analysis.
Most CMAs are prepared by taking all of the comparable properties and adjusting the values in each to make the home’s value based on features, comparable to the subject property. Most Realtors include all of the features but miss one critical element. The CMA should compare not only bedrooms, baths, pool/no pool, square footage heated and garages, but also the condition of each home. I use a scale of 0 to +3. Obviously my wife and I preview a lot of homes. We also get information directly from the listings. My criteria used for establishing my grading system includes, from top to bottom:
Homes that have roof leaks, heat and air systems that are at the end of their useful lifespan and no other upgrades, should not be used to determine fair market value. I apply the following values to the grading system and make the appropriate adjustments to the CMA:
To determine if the home is a good investment requires that once you determine what fair market value for the home’s general area is that you determine a purchase price that will yield the profit you want. The investors I work with normally plan to make a minimum amount of $20,000 after factoring in their time, materials, contracted work and buying and selling costs.
Example:
$100,000 Fair Market Value
-$40,000 – Home cost
-$ 3,120 – Purchase costs
-$30,000 – Rehab costs
-$ 3,250 – Selling Costs
$23, 630 PROFIT
They normally stick to “bread and butter” homes because they sell faster and can yield more profit. A “Bread and Butter” home is normally considered to be a 3 bedroom, block home with more than 1,000 square feet of heated space. The market for these homes if much greater than for smaller homes. Many of these homes are available from $30,000 (or less) and up in the Pinellas County area.
How do you clearly decide what the rehab costs might be? Experienced investors know. They use a form to break down these costs. I’ve attached a copy of the form I use.
Keep in mind, the calculations for an investor depend on their “exit strategy” or plans for the method of making income on the property. That is information for another blog, but the same strategy can be used for someone wanting to buy a home at a good price and not get burned. As an experienced real estate investor and Realtor®, I use the form for all distressed homes as I do my own investing or when I assist a home buyer or seller.
I’m willing to share. If you are in the Pinellas County area and would like to work with a Realtor® that knows investing and understands making profit on investments, give me a call at 727-459-5460. I can help you, too!
[photo:listing:3754681]
Unbelievably Low Price
• 1,904 sq. ft., 2 bath, 3 bdrm two story – 
MLS® $210,000 – Great Buy!
Sun Lit Shores, St. Petersburg - Recently renovated 3 bedroom 2 bath home (1,904 sq. ft.)with 2-car garage! You will love the Cathedral ceilings! Enjoy the beautifully updated kitchen with granite counters, Custom tile and soaring vaulted ceiling add charm to the dining room. You will love all of the natural light the high windows provide for the living room.
There’s an abundance of beautiful hardwood floors that highlight all of the large rooms in this beautiful home.
There are several views of the water from this well updated home. The large 1st floor Master Suite is highlighted with beautiful hardwood flooring, volume ceilings, and water views of Sun Lit Cove. The Master Bath is completed to perfection boasting Dual Sinks, Custom Tile Work, and charming Soaking Tub. The home has a wonderful floor plan with optional downstairs 4th bedroom complemented with built-in book shelves and is currently used as an office. The fenced-in backyard with large patio viewing Sun Lit Cove is perfect for relaxing or entertaining. Locate in a great area, close to everything, and surrounded by Weedon Isle canoe and kayak trails, Riviera Bay and Waterfront Homes.
