Hampton Roads Real Estate Ramblings

2012-01-13T13:08:00.000-05:00

Hello Hampton Roads,

I trust everyone is getting settled into the new year, and it’s just in time for the holiday weekend—whew, we needed a break, right?

I thought folks might be interested in an article in the January 12, 2012 Virginian- Pilot Online entitled “Foreclosure filings hit a three-year low” by Josh Brown.

On the Local Front:
Foreclosures were at a record high in 2010, but have been falling throughout 2011. The number of December foreclosures is up to 812 notices sent from the 2011 low of 635 notices sent in November. However the 812 in December 2011 is down from the 1004 sent in December 2010. These numbers are three-year lows for Hampton Roads.

For the year 2011, the number of foreclosures fell to 6,988, down 45% from 2010, when there were 12,815. According to the article this suggests that foreclosures may be easing. In fact, an economist at ODU, James Koch, said we are through the worst of it.

On the National Front:
Foreclosures also fell 34% nationally in 201; 1.9 million properties received notices, which is the lowest level of foreclosure activity since 2007.

These numbers are provided by RealtyTrac's and its president had this to say:
"There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010."

This may mean that there is a light at the end of the tunnel for homeowners, but that foreclosure activity may still be high. There will still be good real estate deals out there, and there is evidence that if you are a homeowner in financial distress, there are more opportunities available now for you to work it out with your bank.

I specialize in selling distressed properties sales and in helping home buyers and investors alike in this market.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

How a HAFA Short Sale Can Benefit YOU!

2011-11-16T19:30:00.001-05:00

Hello Hampton Roads,

A HAFA Short Sale is a government assisted short sale that is more streamlined, easier, and faster to process than a regular short sale. HAFA offers a faster timeline than a traditional short sale and provides monetary incentives to distressed homeowners, servicers and subordinate lien holders to make the process mutually beneficial to all parties.

Here are some of the highlights:

A pre-approved selling price or acceptable sales proceeds amount
A minimum of 120 days to market the property-maximum 360 days and the foreclosure process is stopped during this time!
A 10 day time frame to respond to offers to purchase the home
Debt is eliminated--there is NO deficiency judgment
A homeowner may not even have to claim the forgiven debt as income per the Mortgage Forgiveness Debt Relief Act of 2007 (H.R. 3648)--but HURRY as this expires in Dec. 31, 2012!
No promissory notes or cash is required to close from the homeowner
$3000 in relocation assistance to the homeowner
$2200 to the servicer for a successfully closed short sale
Up to an aggregate total of $6K to subordinate lien holders to release their liens

Over 80% of primary residences in distress are eligible for HAFA short sales. If you or someone you know is considering a short sale or other foreclosure option, feel free to contact me! If I list your home as short sale, my services to the homeowner are FREE. Let me know how I can help!

Thanks for reading,

________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

The Local Hampton Roads Real Estate Market and the National Outlook

2011-11-12T14:14:00.001-05:00

Hello Hampton Roads,

The weather has been beautiful recently, and it is a beautiful time to buy real estate!

On the local front home sales are up and prices are down.
According to an article in today's Pilot Online ( http://hamptonroads.com/2011/11/home-sales-jump-prices-decline-last-october), real estate prices continue to fall while home sales are on the increase compared with October last year, up 12.6%, but down 8.2% from September.

Distressed sales in all of Hampton Roads still played a major factor in the market last month, accounting for 33 percent of October's sales. Those sales include foreclosures and short sales (sales by homeowners whose homes are worth less than the balance of their mortgage). REIN, the Virginia Beach-based multiple listing service also reported that the median priced home was $181,000 in October, down 10.6% from a year ago.

On the national front, at the recent NAR annual convention, Dr. Lawrence Yun, Chief Economist of the NAR, and Dr. Richard Peach, Senior Vice President of the Macroeconomic and Monetary Studies Function at the NY Federal Reserve Bank presented their findings:

Investors are supporting the market where cash sales account for between 30%-35% nationally.
Mortgage rates are expected to rise: 4.5% by 2012, 4.8% by 2013 and 5.5% by 2014
Forecasted REO inventory is set to rise over the next 2 years

Read the entire “Economic and Housing Market Outlook” presentation for more insight and information. These are interesting times we are living in and real estate can present an incredible opportunity! Please contact me with any questions regarding buying or selling your home.

I would be honored to help you.

Happy home hunting!

Thanks for Reading,

_____________________________________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Protect Your Home from Declines in Value

2011-11-12T13:28:00.001-05:00

Hello Hampton Roads,

Wouldn't it be great if you could protect your home against declines in value? There's a new kind of insurance out there called Home Value Insurance offered by the Home Value Protection Company which protects homeowners against losses in their primary residence when they sell. Steve Cook wrote a great article about this in the November 10, 2011 issue of Consumer Confidence, Consumer Reports.

Currently the company is only offering this insurance in Ohio and if successful, will expand to other states. So how does it work? For a monthly premium of $35-$45, a homeowner can recoup a loss on the sale of a home based upon the insured value of the home or the drop in local home values as measured by the Fiserv/Case-Shiller Single Family Home Price Index. Claims are limited to a maximum of 25% of the insured value, and there is a deductible during the first two years. In addition, for the policy to kick in, the insured home must sell for less than its protected value and local home values must have decreased during the policy period.

Will this program come to this area? We will see, but a company representative said, "Ten years ago people didn’t believe they needed coverage on the valuation of their real estate. Before 2007, prices had never fallen on a year-over-year basis. Today owners want to protect themselves against future losses."

Have a wonderful day!

Thanks for Reading,

________________________________________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Baby Boomers and Real Estate

2011-10-19T13:59:00.001-04:00

Hello Hampton Roads,

I thought I would share this interesting article with you about investing in real estate.
In his article, "Boomers are Betting on Real Estate," Steve Cook (see full article here: http://www.realestateeconomywatch.com/2011/10/boomers-are-betting-on-real-estate/) indicates that many baby boomers are looking to the real estate market for investment properties, second homes, and even retirement homes. Many are not looking to flip houses, but rather to buy with cash and use rental income as a better return on investment than they could find in the stock or bond markets, or in other investment areas. In an shaky economy, many people turn to hard assets like real estate to preserve value.

Cook bases his findings on information gleened from a national survey of Coldwell Banker agents. Essentially the large majority of surveyed agents said they have baby-boomer clients looking for property due to the incredible value they can find.

There are great deals locally, too. Just for example, I have 2 HUD properties currently available: In Virginia Beach, check out 1020 Autumns Woods--it just had a price reduction to $68,000, and the current assessed value is $107,100! This is a 37% discount to the assessed value!

In Chesapeake look at 217 Shore Side Road, priced at $216,000, but assessed at $270,600--a 20% discount!

To look at all HUD homes in Hampton Roads (and nationwide!) go to www.hudhomestore.com and use the search function. If there are any homes you are interested in, please give contact me to arrange a viewing!

Happy Home Hunting!

Thanks for Reading,

______________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Interesting Foreclosure Statistics

2011-09-13T09:52:00.001-04:00

Hello Hampton Roads,

I hope everyone is having a nice beginning to the week, ready to go after the 9/11 anniversary weekend, plus the first NFL weekend, US Open tennis, World Rugby Championships, etc...

I ran across a very telling article by Steve Cook, "Foreclosures Now Take 20 Months."
It is kind of a good news/bad news article. On the one hand, first-time foreclosure starts were at three-year lows in June, and first-time delinquencies accounted for 25% of new delinquent inventory. Both these indicate a slow-down in the number of properties headed into foreclosure--this would be the good news...

But, because there is so much inventory it will take a long time for all the foreclosed homes to sell--the absorption rate in judicial foreclosure states is 111 months (nine years, three months) given the same sales rate as now. In non-judicial states it would still take long, but not nearly as long as the judicial states, 32 months (two years, eight months). Just so you know, in judicial foreclosure states, the foreclosure must go through the courts, but not so in non-judicial states (Virginia is a non-judicial state). All this is the bad news because it looks like foreclosure properties will be a major factor in real estate sales for the next three to nine years!

Steve also reports some dizzying numbers about US home loans--at the end of June 4.1 million loans were either 90 or more days delinquent or in foreclosure, and foreclosure starts outnumbering sales by a factor of almost three to one--you can see that sales are not keeping up with inventory, so the inventory of foreclosed homes is increasing.

Steve also writes "Also, payments have not been made on the average loan in foreclosure in a record 599 days, or 20 months. Of the nearly 1.9 million loans that are 90 or more days delinquent but not yet in foreclosure, 42 percent have not made a payment in more than a year with an average delinquency of 397 days, also a new record."

It looks like distressed properties are going to be with us for a while. If you need help trying to sell your home, are having difficulty making payments, or want to buy a home, please contact me--I can help!

Thanks for reading and have a great day!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

How's the Hampton Roads Real Estate Market?

2011-09-10T19:30:00.000-04:00

Hello Hampton Roads,

I hope everyone is healthy and happy--I looked outside and hey, it's not raining!

There is a very interesting article in today's Virginia Pilot by Josh Brown--he reports on home sales in South Hampton Roads (includes Chesapeake, Norfolk, Portsmouth, Suffolk, Virginia Beach).

Here are the findings in a nutshell:

Year over year sales are up but the median sales price is down.
Median sales price has declined for the last 9 consecutive months when compared to the same time last year.
Distressed property sales (foreclosures and short sales) have increased from 25% last year to 29% this year.

There were 1080 homes sold last month (up 2.5 percent from July and 18.6 percent from August 2010) at a median price of $199,900 (down 7 percent from August 2010). Also the total number of homes sold this year through August is up from the same period last year.

The volume of homes being sold is certainly better and this can be attributed to investors coming into the market and buying and flipping homes. The lower end of the market is certainly active but there are deals that can be found in every price point! Whether investing or looking for a great deal on your primary residence, the profit or equity potential is made when you buy.

As always, I am available to help you with your housing needs. Feel free to contact me and let me know how I can be of service!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

First Time Home Buyers Grants for the Military

2011-09-08T16:16:00.001-04:00

Hello Hampton Roads,

I hope you all weathered Irene okay and are transitioning easily from summer to fall!

I wanted to pass along a great opportunity for active duty personnel, veterans, retired military, or homeland security employees-- up to $5,000 in grant money for first time home-buyers!
Essentially, the funds can be used for down payment and closing costs, and in addition to being in the military and being a first time home buyer, there are income limits which must be met. Gross income can be no more than $55K/yr or no more than 80% of your community's median based income, based on family size.

For our area, FY 2010 Income limits are a median income of $68,200 and an income limit of $54,550 for a family of four. This holds true for all seven cities of Hampton Roads.

The way it works is that an applicant must contribute at least $500 of his or her own funds and the Dream Makers Grant will match those funds 3 to 1. The applicant's down payment with the Grant must equal to a 3% down payment based on the purchase price. Another great thing about this grant is that it can be used with any 30yr fixed rate mortgage from a financial institution of your choice!

You can apply online or download an applicantion and fax or email it.
http://www.pentagonfoundation.org/site/PageServer?pagename=dream_index

Interest rates are as low as ever and now is a great time to take advantage of this opportunity!

If you need help or have any questions, please contact me.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

What is a QRM (Qualified Residential Mortgage) and What Does it Mean to Me?

2011-06-13T17:58:00.000-04:00

Hello Hampton Roads,

A QRM or "Qualified Residential Mortgage" is a mortgage that fits the following criteria:

The lender does not have to hold 5% of the loan amount they originate on their books
The loan can be securitized--meaning it can be sold on the secondary market

In order for a loan to have QRM status and the crux of the controversy is the proposal for a 20% down payment requirement which would not bode well for the housing market. This is problematic because it will force those who can't meet this stringent requirement to get more expensive loans or exit the market entirely. Research has shown that a large down payment doesn't correlate with loan default. A better way to insure loan repayment is to have good underwriting rules.

Additionally, requiring a 20% down payment affects lower income borrowers more, and since minorities are over represented in lower income groups, it will unfairly affect these groups.

First-time home buyers would also be negatively affected--87% of first-timers put down less than 20% over the past five years. But repeat buyers are also affected--65% put less than 20% down.

Data shows that it would take the average family 14 years to save 20% down for the average home (see white paper below).

The QRM rules don't affect FHA or VA loans, so these loans will likely become more popular, which means the government will be more involved rather than less.

The new rules will come into effect one year after they are passed.

You can learn more by reading the white paper, found on the NAR's website or by watching the following video:

Video:

Banking regulators' proposed rules for defining a qualified residential mortgage would devastate the housing market, NAR research shows:

http://link.brightcove.com/services/player/bcpid1785312249?bclid=1740033302&bctid=973945347001

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

How's the Real Estate Market in Hampton Roads?

2011-03-15T17:04:00.001-04:00

Hello Hampton Roads,

Whether you own a home or are thinking about buying, everyone wants to know how the real estate market is doing. The article about area home sales and foreclosures in The Virginian-Pilot today sums it all up. The author, Josh Brown, wrote that the number of existing homes (as opposed to new home construction) sold in February was up about 3% from January, to approximately 700 homes. This number is up 20% from January 2010. Also, almost 3 of 7 homes, or 42%, were either bank-owned (REO) or sold for less than the seller owed on the mortgage (short sale).

These numbers account for the highest percentage of distressed property sales (REO and short sale) ever for South Hampton Roads. Last month had the previous record of 39%. By comparison, in February 2010 the percent was 25.

Other market indicators include the median sale price, which was $184,900, essentially the same as January 2011, but down 5.8% from February 2010.

The total number of homes on the market for February was 14,170, up about 1% from January and 1.6% from February 2010. That number indicates about 10 months of inventory, while 6 months is considered normal. Distressed properties, which includes REO and short sale homes, comprised 23% of all homes for sale.

What does this all mean? Simply put, foreclosures and short sales continue to bring prices down and while these homes accounted for 23% of homes on the market, they were over-represented among homes sold--42%. If you are a buyer, there will continue to be bargains out there, and if you are a seller, you are competing with short sale and foreclosure homes, and your home may be on the market longer than normal.

If you want to talk with a professional with lots of experience in the "normal" resale market, and in REO and short sale homes, please call me, Liz Schuyler, at 757-235-0274 begin_of_the_skype_highlighting 757-235-0274 end_of_the_skype_highlighting, or email me at liz.schuyler@rmxtalk.com. I am happy to talk with you about your real estate needs!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Why You Should Buy A Foreclosure Home in Hampton Roads

2011-03-02T13:36:00.003-05:00

Hello Hampton Roads,
There are Bargains to be found in today's market! Check out the video below and be sure to sign up for your FREE List of Foreclosure properties and bank owned homes in Hampton Roads.

Are you ready to find your next home?

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Can I Get a Mortgage After a Short Sale?

2011-02-11T18:08:00.000-05:00

Hello Hampton Roads,

Can I get a mortgage after a short sale?

Not to keep you waiting too long, the answer is "yes", but since a short sale will damage your credit, you will need to do what you can to help improve your credit score and continue paying your other creditors. It's a good idea to get a copy of your credit report from all 3 credit rating agencies and do what you can to lower your debt to income ratio. The better your score, the better your rate and the more likely you will be able to purchase again.

Let's take a look at the time frames you will have to wait after a short sale; this varies by the type of loan.

For example, you need to wait two years before you can buy another home if you use VA financing.

For an FHA loan, the wait is three years.

For a conforming (within the loan limits) conventional loan, it is two years if you have a maximum of 80% loan to value, five years if you have between 80% and 90% loan to value, and seven years if you have greater than 90% loan to value (loan to value is the amount of the loan compared to the value of the property).

For conventional non-conforming (anything over the Fannie Mae or Freddie Mac loan limit-$458,850 in Hampton Roads, VA) loan, the wait is seven years.

For comparison, if you foreclose on your home, to get a VA or FHA loan the wait is the same as if you sell short, two and three years. For conventional loans, you must wait seven years after foreclosure.

If you want more information about foreclosures or short sales, whether buying or selling, please contact me. I look forward to helping you meet your property transaction needs!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

New Homes in Virginia Beach Under $200,000

2011-01-12T15:54:00.001-05:00

Hello Hampton Roads,

Are you looking for new homes in Virginia Beach under $200,000?
In this buyer's market it seems like everyone is looking for a bargain and affordable new construction is one of the most sought-after. Although there aren't many homes that match this criteria, there are a few. To give you an idea of what is currently available check out the listings below:

Note: click on the pictures to get an enhanced view

The new construction in South Moor in Ridgley Manor fits the bill--new condos priced well below $200K.

If you are willing to look at condos that are 3 years old you can live in the heart of Towne Center at Studio 56 for less than $200K. There are 2 properties available now.

For detached single family homes we have to look at new construction, 5 year and newer and we see just 2 homes avaible for sale for under $200K.

If you would like information about any of these homes or others, please feel free to contact me! I'm happy to help.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

The Hampton Roads Real Estate Market At The End of 2010

2011-01-09T21:19:00.000-05:00

Hello Hampton Roads,

How did the Hampton Roads real estate market do at the end of 2010? When I look at the Hampton Roads housing market, I like to consider the indicators below to gauge the temperature of the market and advise my clients on the best strategy whether they are buyers or sellers. Let's take a look at these indicators:

Inventory
Median Sales Price
Absorption Rate
Distressed Property Sales

Our MLS recently released statistics from the end of last year; let's take a look at each.

Inventory
The Inventory of Listings includes number of Active, Pending & Sold listings compared from the same time last year. The number of homes for sale has increased as has the number of pending homes (homes under contract) but the number of homes sold has decreased.

Median Sales Price
For the year 2010, the median sales price for homes in Hampton Roads declined 1.38% while comparing December 2010 to December 2009, the decline is steeper at 5.5%.

Absorption Rate in Months
The Absorption Rate--the amount of time it would take to sell all the homes on the market if no other property was listed. In all of Hampton Roads there is currently about 9.7 months of inventory on the market which is an increase of 19.6% from December a year ago (2009). See the table below for current absorption rates for each of our 7 cities:

In each case the absorption rate has increased from December a year ago. When we start seeing a decrease in these numbers more towards a 6 month absorption rate we will know we are in a balanced market but with increasing time frames, the buyer's market is holding firm.

Distressed Property Sales
The presence of Distressed Property Sales are those sales which are foreclosures or short sales. The percentage of distressed property sales accounted for 35.3% of all homes sold in the region and 25% of all homes actively listed.

With the shadow inventory (foreclosed homes that are not yet on the market) from banks expected to come on the market, this current trend will probably continue in 2011. However, it is important to remember the real estate market is cyclical and no matter where you are in the cycle there is always opportunity for those ready, willing and able to take advantage of it.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

What is the Best Inflation Hedge?

2011-01-06T13:34:00.000-05:00

Hello Hampton Roads,

What is the best inflation hedge you ask?

Today more and more people are talking about inflation--we can see it already in the higher prices for food (and smaller sizes--heck, the 7-Eleven Big Gulp is 4 oz smaller!) and gas (crude is over $90/barrel) and not to mention, the stellar rise in price of gold and silver. The best hedge against inflation is to buy tangible assets, and since this is a real estate blog, that would be buying houses.

Buy the best house that you can afford. It's value will likely keep pace with inflation over the long term and the interest on the mortgage is tax deductible. Billionaire John Paulson, famous for betting against the housing market in 2007, also shares this sentiment. In a recent speech at the University Club in New York City, Paulson is quoted:

"If you don't own a home, buy one." Paulson said. "If you own one home buy another one, and if you own two homes, buy a third and lend your relatives the money to buy a home."

Buying a home today will lock in debt at low levels of interest while being paid back with cheaper, devalued dollars (see Sidebar below). In the short, intermediate term, I believe housing prices will fall due to the glut of inventory on the market and downward pressure from distressed property sales, but in the long term, prices will rise again.

Sidebar: Regarding interest rates, the 30-year fixed-rate mortgage average declined to 4.77% from 4.86% last week, and the year-ago average was 5.09%. Also all this QE (Quantitative Easing) increases the money supply making each dollar worth less.

Thanks for Reading,

_________________________

Serving your Hampton Roads and Virginia Beach Real Estate needs.

REO Real Estate Agent Virginia Beach

2011-01-03T15:00:00.000-05:00

Hello Hampton Roads,

Are you looking for an REO real estate agent in Virginia Beach?

With delinquency rates above their historic average in both prime and sub-prime markets, REO and Short Sales still dominate the market. The process for purchasing a foreclosed home is very different than purchasing a regular re-sale home and it is important to have an experienced REO real estate agent to guide you and I can help!

From my experience in both listing and selling REO homes, I can provide you with foreclosure listings and the steps needed to take in order to buy one.
Be sure to read my post entitled: Things I Should Know About Purchasing an REO Home

Currently in Virginia Beach alone, there are 397 REO and Government Owned Homes listed. Click this link to receive your free Foreclosure List.

Thanks for Reading & Happy New Year!

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Free Listings of Foreclosed HUD Homes

2010-12-27T20:16:00.000-05:00

Hello Hampton Roads,

Are you looking for free listings of foreclosed HUD homes in Hampton Roads?
Foreclosed HUD homes represent another great source for properties for both home buyers and investors. HUD foreclosures are homes that were obtained by an FHA mortgage where the homeowner has defaulted on payment and the ownership of the home has reverted to HUD. Just like bank owned foreclosures, HUD homes can represent exceptional values and they are also sold "As Is", which means the home is sold in its current condition.

HUD has a very specific procedure for bidding on homes and the bidding must be done through a HUD registered broker--I am qualified to sell HUD homes. If you do not have a broker, I can guide you through the process from searching for a home through closing.

If you would like to do your own search, the first place to look is on the HUD Home Store site. New properties can come on the market daily and it is simply a matter of finding homes that match your criteria. You can search for a specific home or do a general search within a particular city. If you find a home and would like more details, please contact me and I can email you the listing. If you would like to have listings emailed to you, you can fill out the form below:

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Advice On Getting a Mortgage

2010-10-20T18:42:00.002-04:00

Hello Hampton Roads,

The only thing we can count on in this market is change, and with that I'd like to talk about changes in the mortgage industry and offer advice on getting a mortgage. It's a lot harder to get a loan now and there's definitely some things that as a buyer, you should not do when applying for a loan. I learned some great information today from our company's in house lender, Brad Shoemaker with Southern Trust Mortgage .

The only constant is change, continuing change, inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be. --Isaac Asimov

First, here's a few highlights on how the getting a mortgage has changed:

No more stated income loans
No more NO DOC loans
Very limited 100% financing options (VA, VHDA, FHA Plus, & special grant programs)
Minimum 620 credit score (Many institutions are now requiring 640 minimum)

Next, here's some sage advice on what NOT to do when you are getting a home loan:

Don't change jobs
Don't change banks or move money around
Don't make major purchases
Don't close credit card accounts or apply for new credit
Don't deposit cash that can't be documented

If you have any questions about home buying in general, feel free to contact me and I'd be happy to help!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Relationship Between Treasury Notes & Mortgage Rates

2010-10-16T18:34:00.000-04:00

Hello Hampton Roads,

It's no secret that the Hampton Roads housing marking is advantageous for today's home buyer! Inventory is aplenty and mortgage rates are at incredible lows. The average mortgage rate on a 30-year fixed loan dropped to 4.19% this week, down from 4.27% last week, according to Freddie Mac. The average rate on a 15-year mortgage is also down to 3.62% from 3.72%. With rates this low a buyer can buy a lot more house for the money or a current home buyer may be able to save more by refinancing.

Speaking of interest rates, have you ever wondered about the relationship between treasury notes and mortgage rates? I knew you had! The answer is that they follow the same trend--when treasury yields are higher so are interest rates on fixed rate mortgages.

Here's the scoop: Treasury notes are sold via auction by the US Treasury Department. Treasury notes and bonds are denominated by number of years; one of the most popular is the 10-year note (notes are 10 years or fewer). Treasury bonds usually have a 30-year term. The 10-year note affects 15-year conventional loans, while the 30-year bond affects 30-year conventional loans.

How?

As investors seek higher yields they look to investments that generally have higher risks. Thus enters the mortgage backed security for investors who want to invest in higher yielding mortgages. As treasury yields rise, in order to attract investors, the rate on the mortgage backed security also rises which means higher rates for the borrower. The opposite holds true as well.

Treasuries (notes and bonds) are sold at a set face value and interest rate. If the auction goes well and there is a high demand for the treasuries the yield is low whereas if auction activity is sluggish, buyers will pay less than face value of the treasuries and yield is higher. If note or bond prices rise this means yields are low and interest rates on mortgages will be low. Buying a home becomes more affordable for most buyers--first time home buyers and move up buyers. Conversely if note or bond prices fall, this means higher yields and therefore higher mortgage rates. Housing affordability will drop and it will be more expensive to buy either first homes or move-up homes.

In summary, treasury yields and fixed mortgage interest rates move in the same direction. If treasury yields increase then mortgage rates increase, and if yields drop, look for interest rates to go down in the future.

Thanks for taking the time to read this post and if you have any questions please feel free to contact me!
Happy Home Buying!

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Bank Loan Interest Rates for Home Loans

2010-09-08T16:26:00.000-04:00

Hello Hampton Roads,

Let's talk about bank loan interest rates for home loans! Interest rates are at historic lows and according to Bankrate.com , rates currently sit at 4.50% for a 30 year fixed mortgage. Rates this low provide us with the ability to buy more house with the same income—it's almost like getting a raise if you are in the home buying market!

Here is a quick example:

Lets compare today's rate of 4.50% for a 30 fixed loan, with that of a 6.5% rate (a rate which many of us were more than happy to have—maybe some of you remember the 10% plus rates a few decades ago!) for a $176,900 mortgage. The $176,900.00 amount is used because it is the national median sales priced home in the U.S.

At 6.5%, your monthly mortgage payment of principal and interest (not including taxes and insurance) would be $1,018.13.

At 4.5%, your payment would be $896.33! That is a difference of $121.80 a month or $1,461.60 a year! Or put another way if you can afford a payment of $1018.13 for principal and interest this is like buying a home priced at about $200,000.00.

Who would have thought that the biggest housing crash in history would coincide with the lowest interest rates for home loans?

If you need to buy a home now may be the perfect time to do so and get the biggest bang for your buck! It may be time to consider buying a new home while these low interest rates allow you to buy more house than perhaps you thought possible. However, don't buy to speculate on housing prices hitting a meteoric rise like they did prior to the housing bubble. Prices are likely to remain flat in the near future.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

FHA MIP

2010-08-17T14:47:00.001-04:00

Hello Hampton Roads,

An FHA loan allows buyers who have good credit but who may not neccessarily have the 20% downpayment required for a conventional loan to purchase a home. For this benefit, HUD charges an upfront MIP (mortgage insurance premium) that buyers are required to pay when they get an FHA loan. These funds are pooled in FHA's Mutual Mortgage Insurance Fund which is used to protect investors against default since HUD guarantees FHA loans and protects a percentage of the lender's investment. Due the number of defaults, this Mortgage Insurance Fund is undercapitalized and the rules for the FHA MIP are changing to help shore up the fund.

As of Oct. 4, 2010 buyers will pay a smaller upfront mortgage insurance premium, but higher monthly premiums effectively paying more in the long run. Under the new rules, assuming a 30-year fixed rate FHA mortgage with a minimum of 5 percent down:

Upfront MIP drops to 1.000% of the amount borrowed from 2.250% (100 basis point decrease)
Annual MIP increases to 0.850% of the amount borrowed from 0.500%

For example, for a $100,000 mortgage, the upfront MIP falls to $1,000 from $2,250; monthly MIP jumps to $70.83 from $41.67. The FHA expects the change will yield an additional $300 million in premiums monthly.

A great article to read more on this is Look What’s Happening to FHA Mortgage Insurance!

If you are considering buying a home in this market, if may benefit you to do so before the rules change.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

How do I find a HUD home in Virginia?

2010-08-05T08:10:00.000-04:00

Hello Hampton Roads,

HUD homes are a popular choice in today's market. Perhaps you have wanted to know more about them and how to find them in your area. "How do I find a HUD home in Virginia, or specifically in any of the cities of Hampton Roads?

First let's start by defining what a HUD home:
HUD homes are foreclosured homes that were insured by an FHA mortgage and are now owned by the Dept. of Housing and Urban Development (HUD). Like other foreclosed properties, these homes can be terrific values and are attractive to both home buyers and investors alike.

Finding a HUD home in Virginia is easy:
You can ask your Realtor as these listings are typically found in the MLS and you can also check directly on HUD's website . Simply select your city of interest to view a list of all available properties along with the property details provided by HUD, including any type of property condition report or environmental report that may be attached. Since HUD homes are sold strictly "AS IS WHERE IS" without warranty as to condition, please note that these reports are for informational purposes only. In addition, new listings are posted weekly on Friday mornings so you know exactly when to check for new inventory!

Your Realtor can show you any available homes and can assist you with submitting an offer.
It is important that you work with a Realtor who is familiar with HUD homes and the home buying process as HUD has very specific instructions about submitting bids and paperwork. Any delay or mistake could cost your offer to be bypassed as HUD has no qualms about moving to the next bid if there are mistakes or if paperwork is not received on time.

If you are interested in finding out more about HUD homes in general or would like to view HUD properties, please contact me at 757-235-0274.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

How Much Should Your Gross Monthly Income Be to Buy a House?

2010-06-21T12:22:00.001-04:00

Hello Hampton Roads,

How much should your gross monthly income be to buy a house?

Well that depends on on the price range of the house you want to buy. Let's look at housing prices in Hampton Roads and how it compares to the median income for our area.

The current median home price for the Virginia Beach-Norfolk-Newport News metro area for 1st Qtr 2010 is $195K while compared to the US as a whole, the median home price for 1st Qtr 2010 is much less at $166,733.

Sidebar: The metro area includes the following coverage areas: Chesapeake city, Currituck County, Gloucester County, Hampton city, Isle of Wight County, James City County, Mathews County, Newport News city, Norfolk city, Poquoson city, Portsmouth city, Suffolk city, Surry County, Virginia Beach city, Williamsburg city, and York County

For a more specific look at each of the 7 cities independently, according the the latest MLS statistics from May 2010, you can view median sales price in my post, The Latest Hampton Roads Market Update, you will see that Virginia Beach, Chesapeake, and Suffolk all have median sales prices well above $195K.

According our local MLS, Real Estate Information Network (REIN), a little more than a 1/3 (about 37%) of homes listed for sale are priced below $200K with 18 percent of those homes priced under $150K.

Next looking at income, according to Housing Opportunities Made Equal, their Virginia Quick Facts Guide shows the 2008 median household income for Hampton Roads to be $57,122.00, while the Hampton Roads Economic Development Alliance (HREDA) shows the following for each specific city:

How does one measure affordability? What percentage of household income can be reasonably used towards a home purchase?

According to HUD's website, "The generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing. Families who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care."

However for all intents and purposes, lenders use debt to income ratios to determine how much one can afford and these ratios are the front ratio and back ratio. The front ratio is gross income (before taxes) including housing payment of principal, interest, taxes, insurance, and applicable PMI or home owner association dues. The back ratio is the same as front except it includes consumer debt. For example,the ratios for FHA loans are 29/41. If your gross income is $5000/mo or $60K/yr, your maximum housing costs would be $1450/mo, and your monthly housing cost including consumer debt can be no more than $2050/mo.

For the 2008 median household income for our area, a family earning $57,122.00 could purchase a $207K home using an FHA loan assuming the following: No debt, having the required 3.5% down payment, 5% interest rate & 30yr fixed term.

For your own specific situation, what you qualify for and what you can spend are usually 2 completely different situations. Your monthly recurring debt load, your cash on hand for downpayment and closing costs, your loan type and your interest rate will all play an important factor in what you can and are willing to spend. For a general idea of what you can afford based on your gross monthly income or yearly income, you can visit the loan calculator on Ginnie Mae's site which will show you an estimate of what you can afford to spend on a home for either an FHA loan, VA loan or conventional loan product.

If you have any questions or if I can help with your real estate needs, feel free to contact me!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

FHA Loans for Condos: What You Need to Know

2010-06-14T11:47:00.003-04:00

Hello Hampton Roads,

Are you considering buying a condominium with an FHA loan? There are a lot of beautiful condos in our area particularly by the beach, but it is important to find out whether the property you are interested in buying is FHA approved.

More than 50% of all new mortgages today use FHA financing. FHA loans make a lot of sense in today's challenging real estate market. With more homes for sale than active buyers, the more options available to finance a property, the greater its chances of being sold. The beauty of FHA financing is the low down payment requirement of just 3.5%. This opens the door to a wider audience of buyers who don't necessarily have the higher down payment requirements of conventional loan products.

But, FHA financing rules for condos have gotten more stringent and there are several things you should know:

If you are looking at new construction, FHA won't insure buildings where less than 50% of the units have sold (temporarily eased to 30%)
A minimum of 50% of the units must be owner occupied or sold to those who intend to owner occupy them
No more than 10% of the units can be owned by a single owner or investor
No more than 25% of the condominium can be non-residential (ie mixed use/commercial)
No more than 30% of the units can be purchased with FHA financing (FHA doesn't want the risk of insuring more than 30% of the units should there be a default) for condominiums consisting of 4 units or greater
No more than 15% of the units can be delinquent on their condo dues

For more detailed information, you can read HUD's "Temporary Guidance for Condominium Approval" and you can also check to see if your condo is approved by visiting HUD's approved condo list.

Your lender should also be able to tell you specifically if the condominium you are interested in is FHA approved. Should you have any questions or need help with your home purchase, feel free to contact me!

Thanks for Reading,

PS If you are purchasing a single family home and want to know more about whether the condition of the home will pass FHA approval, be sure to read my post, "House Requirements for FHA Loan."
_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Hampton Roads Foreclosure Activity May 2010

2010-06-13T14:23:00.000-04:00

Hello Hampton Roads,

According to a recent Pilot article, the Hampton Roads foreclosure activity has slowed down yet still remains high. Last April showed 1738 foreclosure filing while there were 1563 in May. a decrease of about 10%.

For all 7 cities, foreclosure activity increased slightly in Virginia Beach and fell for the rest. In terms of numbers of foreclosures, Portsmouth and Chesapeake showed the most while foreclosures were least prevalent in Newport News.

According to RealtyTrac & US Census data, Hampton Roads shows the following trends:

Virginia Beach
Total # households: 175,553
1 in every 429 housing units received a foreclosure filing in May 2010

Chesapeake
Total # households: 82,685
1 in every 342 housing units received a foreclosure filing in May 2010

Norfolk
Total # households: 95,642
1 in every 400 housing units received a foreclosure filing in May 2010

Portsmouth
Total # households: 43,073
1 in every 293 housing units received a foreclosure filing in May 2010

Suffolk
Total # households: 32,869
1 in every 383 housing units received a foreclosure filing in May 2010

Hampton
Total # households: 60,151
1 in every 425 housing units received a foreclosure filing in May 2010

Newport News
Total # households: 78,792
1 in every 497 housing units received a foreclosure filing in May 2010

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

The Latest Hampton Roads Housing Market Update

2010-06-08T15:26:00.001-04:00

Hello Hampton Roads,

How's the Hampton Roads housing market looking you ask? Well, let's take a look at the housing numbers according the the latest statistics from our MLS, the Real Estate Information Network (aka REIN). These numbers are the most recent data collected from May 2010.

As we can see from the table above, it's no surprise that given the absorption rate, we are still in a seller's market with month's supply of inventory ranging from a low of 7.58 months in Virginia Beach to a high of 10.68 months in Norfolk. Six months of inventory is a balanced market and anything less than that would make it a buyer's market and anything more would be a seller's market.

Looking at the median price for homes sold, and comparing this to Hampton Roads home sale prices back in March 2010, we can see that the median sales price increased for 3 cities (Virginia Beach, Norfolk, and Suffolk) while prices decreased for the other 4 cities.

If you'd like to more about your neighborhood or what you home is worth now, feel free to drop me a note and I'll send you a free comparative market analysis!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

House Requirements for FHA loan

2010-05-31T11:25:00.004-04:00

Hello Hampton Roads,

Many home buyers and home sellers have wondered, "What are the house requirements for FHA loans?"

FHA loans are a popular low-down payment loan of choice for buyers and in our market, many buyers have used these loans. It is helpful to have an idea if the home you are buying or selling may meet the minimum requirements for FHA qualification.

HUD's website provides good information about property FHA qualifications by letting us know what an appraiser will look for; this information and more can be found under their Homeownership Center Reference Guide . By having an idea what to expect in advance, sellers can pre-empt issues by taking care of them upfront and buyers will have an idea of the items that may need to be addressed in order for them to obtain an FHA loan on the property.

Some examples of what is required for a home to pass an FHA appraisal are as follows:

Property must be free of Hazards and Nuisances--that may:

Affect the health & safety of occupants,
Affect the structural integrity of the property
Affect the customary use and enjoyment of the home

Required Repairs
These are repairs that are necessary to preserve the property and it's occupants are known as the 3 S's:

Safety---repairs required to protect the health and safety of the occupants
Security--repairs to protect the security of the property/security for the FHA insured mortgage
Soundness--repairs to correct physical deficiencies that affect structural integrtiy

Utilities Must Be On
The appraiser is required to test the mechanical, plumbing and electrical systems of a house and the utilities must be on in order to do this. These systems must be in working order and if an appraiser cannot determine if a system is not working properly, then he or she may call for a certification of the system.

Roofs
Roofs must prevent moisture from entering dwelling and there should be no damage or leaks. The roof should also provide future utility--the roof should have a remaining physical life of atleast 2 yrs. Regarding re-roofing FHA will allow a max of 3 layers. If there are 2 layers and repairs are required, then all old roofing must be removed prior to re-roofing.

Attics
Attics must be accessible and inspected

Crawl spaces
Crawl spaces must be accessible and inspected. They must be free and clear of debris, not excessively damp and adequately ventilated.

These are just a few common examples of house requirements for an FHA loan but they should give you a good idea as to what to expect regarding the the condition of the property.

I can help with your real estate needs, please feel free to drop me line and Happy Memorial Day weekend!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Do I Have to Pay Capital Gains Tax on My House?

2010-05-22T00:30:00.002-04:00

Hello Hampton Roads,

Have you ever wondered, "Do I have to pay capital gains tax on my house?"

When referring to real estate, capital gains tax is the tax paid on capital gains, which is the net profit one makes from the sale of a house. If you are fortunate enough to make a profit, you may not necessarily have to pay capital gains tax on your house.

According to IRS Publication 523: Selling Your Home (from the website www.irs.gov), here are the rules for exclusion basis:

For single individuals, you can exclude up to $250,000 of the gain on the sale of your main home if all of the following are true:

Owned the home for at least 2 years (ownership test)
Lived in the home as your main home or at least 2 year (use test)
During the 2-year period ending on the date of the sale, you did not exlcude the gain from the sale of another home.

Exception: If you owned and lived in the property as your main home for less than 2 years, you can still claim exclusion in some cases (eg. individual disability, previous home is destroyed etc). However, the maximum amount you may be able to exclude will be reduced.

For married persons, the exclusion can be up to $500,000 that is $250,000 for you and your spouse if a joint tax return for the year of sale is filed and one spouse meets the ownership and use tests. In order to qualify for the capital gains tax exclusion, the following must be true:

You are married and file a joint tax return for the year
Either you or your spouse owned the home for at least 2 years (ownership test)
Both you and your spouse lived in the home as your primary residence for at least 2 years (use test)

If you don't meet all the home sale exclusion tests, there are still certain circumstances where you still can acquire a tax break. Some of the reasons are as follows:

You may be able to get a reduced exclusion when you need to sell your home due to a change in health condition or a long distance relocation because of change in employment or unforeseen circumstances. If this applies to you, you would calculate the exclusion based on the time you lived in the home. For example if you were in the home for half the time and were relocated to another state you would be able to claim 12 out of the 24 months of exclusion or half the amount of the exclusion ($125,000).
There is also a special provision for people in the armed forces. The law instituted in 2003 now exempts military personnel from the two-year use requirement for up to 10 years, letting you qualify for the full exclusion whenever you must move to fulfill your service commitments.

If you have capital gain that cannot be excluded, it is automatically taxable. This should be reported on Schedule D or Form 1040. But if you are able can exclude all of the gain then you do not need to report the sale on your tax return.

Otherwise, you can also opt not to take the exclusion by including the gain from the sale in your gross income on your tax return for the year of the sale. This choice can be completed or cancelled before the expiration of a 3-year period beginning on the due date of your return for the year of the sale.

You refer to IRS Publication 523: Selling Your Home for specific explanations and examples and you may use its worksheet 2 to figure the amount of your exclusion and your taxable gain, if any.

This post is general information only and not intended as tax advice. The best thing to do is to consult your own tax advisor about your specific situation.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

First Time Home Buyers Grants

2010-05-11T14:29:00.001-04:00

Hello Hampton Roads,

For those first time home buyers who may have missed out on the $8000 tax credit, there are still other options for first time home buyers grants! Specifically, I am referring to the first time home buyer's grant offered by Federal Home Loan Bank Atlanta (FHLBank Atlanta).

FHLBank Atlanta is one of 12 district banks in the Federal Home Loan Bank System, and as of April 30, 2010 has FHP (First Time Home Buyer Program) Funds available in the amount of: $10,562,538.

FHLBank Atlanta has member banks in the state of Virginia which offer eligible buyers, on a first come, first served basis, a first time home buyer's grant up to $7,500.00 per household.

But if you are interested, you better hurry because the money ran out last year in about 4 months!

The grant is awarded on a 5:1 basis meaning that as long as eligbile home buyers contribute $1500 of their own money, they can received $7500.00 in available grant funding.

The grant money is essentially a silent second mortgage which is forgiven over a 5 year time line--1/5 of the amount is foregiven for every year that the house is the buyer's primary residence.

There are several member banks in Hampton Roads:

ABNB Federal Credit Union
Monarch Bank
1st Advantage Federal Credit Union
BayPort Credit Union
Virginia Company Bank
Bank of Hampton Roads
Bank of the Commonwealth
Heritage Bank and Trust
Northern Star Credit Union, Inc.
Towne Bank
Xenith Bank
Bank @LANTEC

The FHP grant funds can only be for a downpayment or closing costs and must be shown on the HUD 1 settlement statement. The funds cannot be used to refund earnest money or to pay the buyer cash at closing. For more information please feel free to contact me for your housing needs and I will put you in touch with a reputable lender!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

HAP Program

2010-05-07T10:28:00.000-04:00

Hello Hampton Roads,

The HAP Program (Homeowners' Assistance Program) was created in 1966 by the Dept of Defense and it is run by the Army Corps of Engineers for all branches of the military. The HAP program helps distressed homeowners who are either eligible military or federal civilian employees by offering them financial help should they face a loss from the sale of their primary residence in a declining real estate market.

Military personnel and federal civilian employees affected by base closure or realignment and as well as those who have been permanently reassigned may be able to get HAP support.

For HAP support the following must be met:

The property must be owner occupied
The property must have declined at least 10% in value
Retiring personnel are only eligible if their positions are moved or eliminated
The service member is permanently re-assisgned
Relocation distance must be at least 50 miles away
The property must sell between July 1, 2006 and September 30, 2012 (the property must have been purchased before July 1, 2006)
The home owner must not have previously received HAP benefits
The purchase price cannot exceed Fannie Mae/Freddie Mac conforming loan limits (these loan limits range from $417K-$729,720 and for homes in Virginia Beach, the limit is $458,850.00)

Who is Eligible for HAP?

In addtion to personell affected by base realignment and closure (BRAC) and service members who have been permanently reassisgned, HAP benefits also extend to the following:

Military and Civilian Employee Wounded

Wounded, ill or injured service members or federal civilian employees with a disabilility (a disability rating of 30% or more) due to injuries incurred in the line of duty who need to relocate for treatment or rehabilitation

Surviving Spouses

Surviving spouses of service members and federal civilian employees who spouse died while deployed in the line of duty (on or after Sept. 11, 2001 and who relocate from their spouse's primary residence within 2 years of the death of their spouse

For those who qualify the benefits are substantial.

Benefits to homeowners include the following:

Reimbursement for the homeowner for part of the loss of selling his or her primary residence (home must be sold at fair market value)
Homeowner assistance if the funds for the sale are insufficient to pay off the mortgage.
If the home doesn't sell within 120 days, the government may elect to purchase the home by paying off the mortgage thus avoiding foreclosure. This is paricularly important for those with security clearance as they are able to avoid foreclosure and keep their security clearance.
Homeowner assistance if he or she defaults on the mortgage

It is also important to note that the homeowner must actively sell his home even after application for the HAP program. For eligible home sellers it is important to market your home aggressively with the widest market exposure in order to sell your home at it's current fair market value.

It would be beneficial to retain the services of a skilled Realtor to help you sell the home and document all marketing activities. If it appears that the home was sold below market value, then HAP eligibility could be lost.

If you think you may be eligible for the HAP program, visit http://hap.usace.army.mil/ for more information and to download a complete application.

Thanks for Reading,

_________________________

Serving your Hampton Roads and Virginia Beach Real Estate needs.

How Do Short Sales Work?

2010-04-19T20:08:00.002-04:00

Hello Hampton Roads,

How do Short Sales Work?
First let's define what a short sale is before going into the details of how short sales work! A short sale occurs when the property is sold for less than the mortgage amount (it is sold short the mortgage) with the approval of the lender. A short sale must have lender approval because even though the buyer and seller may agree, if the lender doesn’t approve the sale, it won’t happen. The short sale process can be long and arduous but the with advent of the HAFA (Home Affordable Foreclosure Alternatives) program, recently in effect since April 5, 2010, the time lines for eligible short sales are greatly reduced! A short sale is a foreclosure alternative with benefits for the homeowner, the lender, and the community as a whole.

The homeowner avoids the stigma of foreclosure and as well as the negative impact to his or her credit. The lender will recover more than if the property goes into foreclosure—for some lenders the recovery loss from a short sale may be 60% while the recover loss from a foreclosure is just 30%. The community benefits as well because homes being sold as short sales tend to be better kept than foreclosure properties since in many cases, the homeowners are still living in the house and the properties are not a scourge on the neighborhood. Additionally, the US Treasury estimates that each foreclosure decreases the value of surrounding properties by 9%, therefore every foreclosure avoided helps stabilize communities towards a faster recovery.

_____________

Sidebar: In addition, is important to understand the pros and cons of Foreclosures vs Short Sales .
_____________

Now let’s look at the short sale process.

In order for a bank to consider a short sale, these considerations must be met:

The seller must have a verifiable, bona fide hardship
The seller owes more on the home than it is currently worth
The seller is either behind on payments or will be behind on payments in the near future.

(Note this is usually for primary residences only—many banks will not allow a short sale on an investment property)

The next step is to request the short sale package from the bank which essentially documents the seller’s financial situation. Each bank has their own guidelines and lists of required paperwork, but examples of standard requested documentation are as follows:

Letter of authorization, which lets your agent speak to the bank.
Pre-liminary HUD -1 Settlement Statement or Net Sheet
Seller’s financial statement
Seller's hardship letter
2 years of tax returns
2 years of W-2s
Recent payroll stubs
Last 2 months of bank statements
Comparative market analysis or list of recent comparable sales

Once the seller has obtained an offer to purchase from a qualified buyer then the following events take place:

The buyer’s offer is submitted to the bank along with other documentation such as a copy of the listing agreement, required addendums, buyer’s pre-approval letter(s), copy of earnest money check and the seller’s short sale package. If the package is incomplete, the bank will not look at it.
If there is more than 1 lien holder involved the package must be sent to each one who will be effected by the short sale.
Follow up with bank to confirm receipt of file. This can take a week or more.
File is assigned a Negotiator. This can take 30-60 days
BPO is ordered—this can take up to another 30 days
File is reviewed –this can take up to 2 wks to another 30 days
The bank issues short sale approval or rejection.

If you or someone you know owes more on a home that it is now worth, feel free to contact me if you have any questions or need any help!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Hampton Roads Home Sales Rebound in March 2010

2010-04-17T00:32:00.005-04:00

Hello Hampton Roads,

Hampton Roads Home Sales Rebound! Could we be seeing an uptrend in housing sales? REIN (Real Estate Information Network) our local MLS, just released its housing data for the Hampton Roads Real Estate Market for March 2010. The good news is that real estate sales up from a year ago!

According the numbers above, an increase is seen in almost every category except for the Median Sales Price of residential homes in Hampton Roads. In this case we see a slight decrease of 1.64% from $213,500 to $210,000. Below is a table showing the Median Sales Price of residential homes per city:

Although the median sales price of residential homes may have dropped slightly, the absorption rate or months of inventory has decreased! Months Inventory indicates how many months it would take to sell the current number of homes on the market at the current sales rate—this figure helps determine whether it is a buyers or sellers market; a sellers market has a Months Inventory less than six, and a buyers market is greater than six. The numbers show that it is still a strong buyers market.

If you are looking for a new home, now is a good time to buy—distressed property sales continue to exert downward pressure on prices, and loan rates continue to be at historic lows, although they have been increasing slightly over the last month. The Federal Reserve chairman Ben Bernanke has indicated that the Fed will keep interests rates low for the next six months or so, but many analysts believe rates will rise.

If you have been considering buying a home, now is good time to do so. Feel free to contact me and I will be happy to help you with your next real estate purchase.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Help Prevent Foreclosure

2010-04-14T23:54:00.002-04:00

Hello Hampton Roads,

How do you Help Prevent Foreclosure?
With a wave of foreclosures on the rise, if you find yourself having trouble paying your mortgage, you may want to consider ways to help prevent foreclosure. To find the best solution for you, start by keeping track of your financial records:

Evaluate your budget to eliminate unnecessary, discretionary spending and prioritize expenses like your mortgage payments.
Determine if you can set aside extra earnings to save your home.
Check your mortgage to see if there are any disputes to resolve or taxes to pay. Settle those while you still can in order to prevent accumulation and higher payments.

Doing the steps above will help you to avoid your lender filing a Notice of Default (NOD). This document is filed in public records and says that the borrower is behind the mortgage payments and the lender will seize the home unless the loan is brought current.

However, if it appears that you’ll unable meet your mortgage obligation, you should talk to your lender as soon as possible and seek approval for any of the ways listed below to help prevent foreclosure:

Forbearance

If you still have the means to catch up on loan payments (e.g. you got a new job, expecting a bonus or tax refund), forbearance will allow you to make partial payments, or postpone payments, as long as that the lender agrees.

After forbearance, the loan may be reinstated generally if a lump sum payment (penalties, fees, back payment) is made to bring the loan current. Otherwise, a repayment plan may be offered; this is when you may not be able to afford the reinstatement lump sum payment but can start making payments to catch up; the lender may let you pay an additional amount each month until you are able to fully pay your mortgage.

Loan Modification

Loan modification is when the lender allows the terms of a loan to be changed such as a reduced interest rate or an extended loan maturity date or to add past due payments to the balance of the loan.

Deed in Lieu of Foreclosure

When your lender accepts a deed in lieu of foreclosure, the property reverts to the lender in exchange for having the lender cancelling/ forgiving the debt. Sometimes, you may be required to list your home for a short period of time before the lender will accept a deed in lieu of foreclosure.

Short Sale

A short sale is when a lender is willing to accept a discounted payoff on a mortgage thus selling the home “short” the mortgage amount, and avoiding the legal expenses of foreclosure, and has the benefit of the owner avoiding the credit blemish due to foreclosure. This option may or may not relieve the owner from the obligation of a deficiency judgment; meaning that the owner may still be liable to pay for any losses.

Re-Finance or Sell Your Home

If you have equity in your home, refinancing or selling your home may be viable ways to help prevent foreclosure. However, refinance loans may be difficult to qualify for given today’s tight credit market or may even result in higher monthly payments.

File for Bankruptcy

Filing for bankruptcy, Chapter 13 can be used to temporarily suspend the foreclosure process since foreclosure is suspended until you are discharged from bankruptcy. However, Chapter 13 still requires a repayment plan and there will be a bankruptcy on your credit.

Again contacting your lender early in the process is the best way to help yourself and ensure the greatest number of options are open to you. You should also seek legal and professional advice. Furthermore, the US Dept of Housing and Urban Development (HUD) has a link on it’s site with offers for free “Foreclosure Avoidance Counseling”

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

The Upside Down House and What It Means

2010-03-28T00:12:00.004-04:00

Hello Hampton Roads,

The Upside Down House--Are you upside down on your house?

Upside down means that you owe more than your home than it is currently worth. If so you are not alone; according to research done by American Core Logic, there are 11.3 million mortgage holders or approximately 1 out of 4 people who are upside down on their homes. According to the bar graph below, 36.3 of the 47 million mortgage holders owe less than their home is worth, and 2.3 million have less than 5% equity in their homes.

Why should anyone care whether or not they are "upside down?"
Why does it matter?

These are very good questions. First it's important to know that just like the stock market the housing market has ups and downs-- and being upside down on your house today doesn't mean it will be like that in the future; you could be up when the market changes. Just like in the stock market, the real importance is related to whether or not you have to sell, and if so, how soon. If you can wait for the market to rise, or if you plan to be in your home for the rest of your life, then most likely it will not make a difference as long as you continue to make your payments. However, if you have to sell due to financial hardship or an imminent move, you may end up with a loss. If you are in this situation, it may be in your best interest to see if you can sell your home as a short sale.

How does the number of those who are upside down on their homes correspond to the number of homes in foreclosure and in default?

For the 4th quarter in 2009 approximately 1in 6 homeowners are not making their mortgage payments. The numbers are:

In foreclosure                        4.58%
In default (30+ days late):      10.44%
Total:                                   15.02%

Broken down by loan type we see:

Prime Loans

In foreclosure: 3.31%
In default (30+ days late): 6.73%
Total: 10.04%

Sub-Prime Loans

In foreclosure: 15.58%

In default (30+ days late): 25.26%
Total: 40.84%

FHA Loans

In foreclosure: 3.57%

In default (30+ days late): 13.57%
Total: 17.14%

VA Loans

In foreclosure: 2.46%

In default (30+ days late): 7.41%
Total: 9.87%

(To view our area, check out the latest foreclosure numbers in Hampton Roads)

Do you notice the trend in these percentages?

The percentage of homes in foreclosure is significantly less than the percentage in default. That is, there are more homes in default than are actually being foreclosed on. According to a recent article in the Wall Street Journal, for every new foreclosure, 7.1 mortgages are delinquent (in default).

Thanks for reading!

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Foreclosures vs Short Sales

2010-03-26T15:11:00.005-04:00

Hello Hampton Roads,

Let's take a look at Foreclosures vs Short Sales.
Do you know the difference between a Foreclosure and a Short Sale?

Our real estate market has both kinds of distressed sales, and today, we’ll take an in depth look at both.

A foreclosure is a process that occurs when the lender or creditor takes possession of the property because of the borrower’s failure to pay. A foreclosure property is also known as an REO, or Real Estate Owned (by the bank). To recoup their losses, the bank lists these properties with a qualified Realtor® to sell. Since banks are not in the business of owning real estate, these properties can be a source of potential bargains. (Check out my post on How to Buy Bank Owned Homes) However, foreclosures are devastating to the financial well being of a borrower with effects that can be long lasting.

A short sale, on the other hand, is an increasingly popular tactic for financially troubled homeowners to possibly avoid foreclosure. Short sales occur when the lender or creditor agrees to sell the property for less than the mortgage amount. When the bank agrees to accept less than the pay off amount, the balance is “short” the amount owed, so hence we have the term, short sale. Short sales are essentially pre-foreclosures. The owner of the home has a financial hardship and has either missed mortgage payments or can no longer continue to make them so the property is on its way towards foreclosure.

Here are some of the pros and cons of both:

Foreclosure

Pros

Bank has set the price so there is no guessing concerning the bank’s approval the sales price
Bank has cleared liens in foreclosure
Closing is relatively quick, usually within 30-60 days
Generally the bank’s preservation company maintains the lawn and takes care of safety issues or other issues that may degrade value or cause damage

Cons

Lower sales price re-sets the price point in the neighborhood which lowers assessed value and reduces the tax base
Ruins the owner’s credit—there is usually a 250-300 point drop in credit score and the foreclosure remains on credit history for 10 years or more
Very damaging to those who have a security clearance and can be grounds for termination or reassignment
Seller is eligible to receive a Fannie Mae backed mortgage after 5 years –a much longer term than with a short sale.

Short Sale

Pros

Less damaging to seller’s credit especially if seller is current on all other payments and a short sale is not reported on credit history
Not a challenge for owner’s with security clearance
In most cases property will sell for a higher price than if the property were foreclosed, thus keeping neighborhood property values higher than a foreclosure sale
Seller is eligible to receive a Fannie Mae backed mortgage after 2 years

Cons

Can take an extremely long time to close—in some cases over a year
According to Fannie Mae, in 2008 for every one short sale, there were eight foreclosures
Bank may not agree to the price buyer and seller have agreed upon and the price may have to be renegotiated
Seller may be liable to pay a deficiency judgment (the balance of the loan amount) to the bank if the bank agrees to the short sale
Generally if the seller cannot make mortgage payments, he or she may also not be able to properly maintain the house

Both short sales and foreclosures have their own set of complexities and these sales are currently a driving force in our market as well as nationally. Any buyer or seller in this market would be wise to seek the guidance of a Realtor® experienced in distressed property sales. If you have any questions or are considering buying an REO or short sale, or selling your house as a short sale, feel free to contact me.

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

The Skinny on Re-Hab Loans: FHA 203K Streamline and Full Rehab Loans

2010-03-23T15:13:00.003-04:00

Hello Hampton Roads,

Do you need to renovate your home or investment property?

Let’s face it, with all the homes for sale in our market, there are more than a few properties out there that need work to make them really shine! If you find a home to buy that fits this bill and are wondering how you can afford to purchase it and make the needed renovations, then look no further than the 203K Streamline or Full Renovation Re-hab loans. Both the purchase and renovations can be financed into one loan.

Re-Hab loans such as the 203K Streamline and the full renovation loan are perfect for any home in need of repairs as well as for bank owned homes and foreclosures, and for Housing and Urban Development Foreclosures (HUD homes). In a nutshell, these loans can be used to purchase and renovate a home or refinance and renovate; however, they are designed strictly for owner occupants and each loan has their own specific guidelines for qualification.

To start with, the FHA 203k Streamline is only allowing repairs costing a minimum of $5,000 up to a maximum of $35,000, while full Rehab loans are for repairs costing more than $35,000.

The 203K streamline facilitates purchase transactions in which the home needs basic repairs identified in a pre-purchase home inspection or an FHA appraisal. Such improvements may include the following:

Repair / replacement roofs, gutters and downspouts
Repair / replacement / upgrade of existing HVAC systems
Repair / replacement / upgrade of plumbing and electrical systems
Repair / replacement of existing flooring
Minor remodeling that does not involve structural repairs, such as kitchens
Exterior and interior painting
Weatherization, including storm windows and doors, insulation, weather stripping, etc.
Appliances, when at least $3,000 of basic home repairs is involved. Appliances may include free-standing ranges, refrigerators, washers/dryers, dishwashers and microwaves and may not exceed $2,000 in total cost.
Improvements for accessibility for persons with disabilities.

In addition, the 203K streamline does not require a consultant for repair specifications, nor any plan reviewer or architectural exhibits. The work immediately starts after 30 days of loan closing and this helps save the buyer a lot of time!

Full Rehab Loans on the other hand, are intended for properties that require major structural rehabilitation. But unlike the 203K Streamline, it is necessary to involve both an appraiser and a consultant. The consultant will prepare the work write-up and cost estimate. Also, an architect, engineer or home inspector will then need to inspect the property to ensure the following:

There are no rodents, dry-rot, termites and other infestation
There are no defects that will affect the health and safety of the occupants
The existing structural, heating, plumbing, electrical and roofing systems are adequate and
The completion of thermal protection upgrades (where necessary).

As such, on a standard FHA 203(k) loan, the process is often as follows:

Contact lender for pre-approval
Locate property & make offer
Get Your Offer Accepted
Peform the Home Inspection
FHA 203K HUD Consultant
Contractor bids and contractor selection
Submit the loan to underwriting
Clear any loan conditions
Property closing
Repairs Begin/ Final Inspection when finished

In addition to the qualifications or guidelines above, the full rehab loan can be applied in three ways:

1. To purchase a dwelling and the land it sits on and revitalize or rehabilitate it. In this case, the mortgage must be a first lien on the property and the loan proceeds must be available before the rehabilitation begins. Therefore, for condos, only the interior repairs may be financed, no outside construction to the dwelling can be financed.

2. To purchase a dwelling on another site and move it onto a new foundation on the mortgage property and rehabilitate it. In order to do this, the mortgage must also be a first lien on the property but the loan proceeds for moving of the dwelling can't be made available until the dwelling is attached to its new foundation.

3. For refinancing of existing dwelling and rehabilitating it.

Although both the 203K Streamline and Full Rehab Loans seem to entail a lot of official procedures and higher closing costs than a regular purchase mortgage, they are still considered to be a good source of house renovation financing. They can help save both time and money and in addition to turning that diamond in the rough into the perfect dream home!

Not every lender is knowledgeable about these types of loans and if you think that this may be a good product for you, feel free to send me an email and I can put in touch with a qualified lender!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Telling It Like It Is: The Latest Foreclosure Numbers in Hampton Roads

2010-03-12T19:56:00.022-05:00

Hello Hampton Roads,

What are the latest foreclosure numbers in Hampton Roads? How does Hampton Roads compare with the national numbers for foreclosures?

In a effort to keep you better informed about our area as well as national real estate scene, I give you the following:

The National Picture:

This past February, First American Core Logic came up with some interesting national figures that said at the end of 4th Qtr 2009, 11.3 M homeowners owed more than their home is worth and that this represents 24% of all residential properties with mortgages! Nationally, 1 out of 4 homeowners are underwater, meaning that they have negative equity. Equity is the current market value of the house less any financial obligations/loans owed on the property.

Furthermore, First American goes on to state that once this negative equity becomes greater than 25% (of the home's value) or the mortgage balance is $70,000.00 more than what the property is currently worth, then homeowners have the same likelihood to default as investors. (Typically, investors are known to have higher default rates than homeowners because they do not inhabit the property and have less vested emotionally.)

According to RealtyTrac.com, total foreclosure filings for February were 308,524--this represents a 2% decrease from January but a 6% increase from February last year.

The Local Picture:

Foreclosure filings in our area stood at an all time high in February with 1305 in number up from 1074 in January.

Courtesy of RealtyTrac and the US Census data, we see the following foreclosure rate per city: The foreclosure rate is for month of February 2010.

Virginia Beach
Total # Households 175,553
Foreclosures 1 in 527
Chesapeake
Total # Households 82,685
Foreclosures 1 in 398
Norfolk
Total # Households 95,642
Foreclosures 1 in 474
Portsmouth
Total # Households 43,073
Foreclosures 1 in 366
Suffolk
Total # Households 32,869
Foreclosures 1 in 442
Hampton
Total # Households 60,151
Foreclosures 1 in 431
Newport News
Total # Households 78,792
Foreclosures 1 in 533

Are you interested in finding out more about foreclosures where you live? Sign up to receive your FREE Foreclosure list!

Thanks for Reading,

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Mulling Over Recent Tax Assessements in Virginia Beach

2010-03-11T13:12:00.013-05:00

Hello Hampton Roads,

Virginia Beach tax assessments just arrived for 2010!

Like every other home owner in Virginia Beach, we received our annual tax assessment and not suprisingly found that the tax assessed value had decreased from last year. Given the economic environment, this lead me to ponder about the rest of the city and the numbers are interesting: 88% of all properties decreased in value, 8% stayed the same in assessed value and 4% actually increased in tax assessed value.

Looking at the average appreciation/depreciation figures for residential apartment and commercial/industrial properties we find the following:

All the residential neighborhoods in Virginia Beach are divided into 5 districts, Bayside, Beach, Centerville, Kempsville, Lynnhaven, Princess Anne and Rose Hall. Looking at these districts individually we can see which neigborhoods had the highest and lowest assessed values

Bayside

Broadmeadows Condos has a median assessed value of $99,500.00

Bayside has a median assessed value of $831,400.00

Beach

Tapo Mobile Homes has a median assessed value of $28,500.00

Croatan Beach/Atlantic Ave. has a median assessed value of $1,839.900.00

Centerville

Level Green Townhouses at Pinewood Village has a median assessed value of $126,300.00
Emerald Forest has a median assessed value of $771,200.00

Kempsville

Queen City has a median assessed value of $71,150.00

Rivercrest Landing has a median assessed value of $715,000.00

Lynnhaven

Page Ave-Shore Dr Pages Shores has a median assessed value of $91,300.00

Residences at the Westin has a median assessed value of $1,706,200.00

Princess Anne

Salem Court condos has a median assessed value of $128,300.00

Ashville Park/Whilshire VLG PH1 has a median assessed value of $761,150.00

Rose Hall

Princess Anne Plaza TH/SEC 1 has a median assessed value of $95,150.00

Brigand's Quay has a median assessed value of $323,200.00

Interested in finding out how your neighborhood fared? Drop me a line!

__________________

Serving your Hampton Roads and Virginia Beach Real Estate needs.

Hampton Roads January 2009 Housing Numbers

2010-02-26T14:07:00.007-05:00

Hello Hampton Roads,

With the start of the new year past us, many are wondering what the 2010 housing market is doing compared to last year. According to the latest press release from REIN (Real Estate Information Network) our local MLS, the housing numbers show mixed results. Both instances of growth and decline can be seen: The number of listings under contract and closed increased but there was a decrease in the number of active listings.

How It All Looks Comparing January Year Over Year Figures:

Decrease
-1.8% Active Residential listings from 13,490 (Jan 2009) to 13.253 (Jan 2010)
-7.4% Median List Price for Active Residentail Properties *downward pricing pressure is due to both an influx of distressed property sales and sellers bringing their homes down to market value.

Increase13% Under Contract/Pending Sales for Residential Properties from 1116 (Jan 2009) to 1262 (Jan 2010)
5.4% Total Residential Sales

Lastly Hampton Roads has 8.57 months of inventory on the market still representing a buyer's market. A seller's market would be less than 6 months of inventory and balanced market would be 6 months of inventory on the market.

__________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

VIRGINIA BEACH REAL ESTATE HOME PRICES

2009-09-15T16:08:00.006-04:00

Hello Hampton Roads:

How are Virginia Beach Real Estate home prices doing?

According to the lastest MLS statistics for Virginia Beach Real Estate , home sales for August 2009 totaled 521 in number with a median sold price of $245,000. Current month's supply of inventory for Virginia Beach stands at 8.38 months.

Here is a breakdown for boththe median list and sold prices of homes by type for the month of August:

Detached Single Family Homes
Total # Sold: 307
Median Sold Price: $272,500
Median List Price: $279,900

Townhouses
Total # Sold: 110
Median Sold Price: $165,200
Median List Price: $169,900

Condos--Detached
Total # Sold: 19
Median Sold Price: $364,500
Median List Price: $349,900

Condos--Attached
Total # Sold: 85
Median Sold Price: $220,000
Median List Price: $227,500

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

HAMP Mortgage Modification Program

2009-08-05T17:44:00.006-04:00

Hello Hampton Roads,

HAMP (Home Affordable Modification Program) is the government's $75 billion dollar plan to help homeowner's facing foreclosure by having mortgage service providers lower borrowers' payments.

How is this program working so far?

The Treasury Department released the first monthly progress report showing that only 9% of eligible homeowners received modifications; the total number of trial modifications started was 235,247. The goal is to help 4 million eligible borrowers.

In order to reach this goal, banks will need to modify more loans, more aggressively.
Of the larger banks, Bank of America had 27,985 modifications out of a possible 796,467--approximately 4% and Wells Fargo has 38,673 modifications out of a possible 329,085--approximately 6%.

To view the full table:
Note: N/A indicates a newly signed servicer who has not yet started reporting.

American Home Mortgage
Servicing Inc	7/22/2009	153,097	NA	NA	NA	NA
Aurora Loan Services, LLC	5/1/2009	72,838	25,965	36%	15,320	21%
Bank of America, NA	4/17/2009	796,467	99,649	13%	27,985	4%
Bayview Loan Servicing, LLC	7/1/2009	4,425	225	5%	148	3%
Carrington Mortgage Services ,
Carrington Mortgage Services ,
LLC	4/27/2009	14,128	988	7%	597	4%
CCO Mortgage	6/17/2009	3,818	402	11%	237	6%
J.P. Morgan Chase Bank, NA	4/13/2009	394,075	117,259	30%	79,304	20%
CitiMortgage, Inc.	4/13/2009	185,418	38,673	21%	27,571	15%
Citizens First Wholesale
Mortgage Company	6/26/2009	26	8	31%	7	27%
Farmers State Bank	7/17/2009	8	NA	NA	NA	NA
First Bank	7/29/2009	848	NA	NA	NA	NA
First Federal Savings and Loan	6/19/2009	16	1	6%	1	6%
GMAC Mortgage, Inc.	4/13/2009	61,326	20,924	34%	12,540	20%
Green Tree Servicing LLC	4/24/2009	5,228	451	9%	209	4%
Home Loan Services, Inc.	4/20/2009	33,193	0	0%	0	0%
IBM Southeast Employees’
IBM Southeast Employees’
Federal Credit Union	7/10/2009	72	4	6%	4	6%
Lake National Bank	7/10/2009	1	0	0%	1	100%
Mission Federal Credit Union	7/22/2009	34	NA	NA	NA	NA
MorEquity, Inc.	7/17/2009	2,196	NA	NA	NA	NA
Mortgage Center, LLC	7/22/2009	235	NA	NA	NA	NA
National City Bank	6/26/2009	37,126	92	0%	4	0%
Nationstar Mortgage LLC	5/28/2009	25,690	11,443	45%	4,854	19%
Ocwen Financial Corporation,
Inc.	4/16/2009	55,516	6,502	12%	2,517	5%
PNC Bank, National Association	7/17/2009	724	NA	NA	NA	NA
Purdue Employees Federal
Credit Union	7/29/2009	11	NA	NA	NA	NA
Residential Credit Solutions	6/12/2009	1,304	301	23%	265	20%
RG Mortgage Corporation	6/17/2009	3,309	72	2%	0	0%
Saxon Mortgage Services, Inc.	4/13/2009	84,130	30,817	37%	21,130	25%
Select Portfolio Servicing	4/13/2009	57,450	11,404	20%	1,849	3%
Shore Bank	7/17/2009	223	NA	NA	NA	NA
Technology Credit Union	6/26/2009	10	0	0%	0	0%
Wachovia Mortgage, FSB	7/1/2009	62,852	2,028	3%	1,356	2%
Wachovia Bank, NA	7/29/2009	2,593	NA	NA	NA	NA
Wells Fargo Bank, NA	4/13/2009	329,085	38,673	12%	20,219	6%
Wescom Central Credit Union	6/19/2009	136	40	29%	38	28%
Wilshire Credit Corporation	4/20/2009	3,411	621	18%	20	1%
Other GSE Servicer		314,283	-	-	19,071	6%
Total		2,705,302	406,542	15%	235,247	9%

According to the progress report, 85% of mortgages are covered by HAMP participating servicers. 38 servicers have signed a participation agreement to modify loans, and approximately 2300 participants service loans owned or guaranteed by Fannie Mae or Freddie Mac --these servicers automatically participate in HAMP.

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Latest Market Statistics for Hampton Roads Real Estate

2009-07-22T14:02:00.003-04:00

Hello Hampton Roads,

The most recent stats are derived from the REIN (Real Estate Information Network) MLS and portrays the state of the Hampton Roads housing market June 2009 sales information to that of the previous year:

City	Jun-08	Jun-09

Virginia Beach
Avg List Price	$470,462.00	$462,107.00
Median List Price	$327,482.00	$315,000.00
Avg Sales Price	$318,937.00	$293,382.00
Median Sales Price	$250,000.00	$243,750.00

Chesapeake
Avg List Price	$361,432.00	$329,627.00
Median List Price	$328,900.00	$305,950.00
Avg Sales Price	$288,368.00	$270,431.00
Median Sales Price	$280,000.00	$249,900.00

Norfolk
Avg List Price	$322,591.00	$310,044.00
Median List Price	$249,000.00	$229,900.00
Avg Sales Price	$259,514.00	$223,649.00
Median Sales Price	$200,000.00	$195,900.00

Portsmouth
Avg List Price	$216,701.00	$196,167.00
Median List Price	$187,000.00	$178,000.00
Avg Sales Price	$197,209.00	$168,013.00
Median Sales Price	$185,000.00	$163,000.00

Suffolk
Avg List Price	$360,842.00	$329,564.00
Median List Price	$309,900.00	$282,450.00
Avg Sales Price	$311,898.00	$254,336.00
Median Sales Price	$278,500.00	$234,900.00

Hampton
Avg List Price	$255,984.00	$233,993.00
Median List Price	$224,876.00	$199,900.00
Avg Sales Price	$207,299.00	$190,897.00
Median Sales Price	$192,000.00	$187,500.00

Newport News
Avg List Price	$243,308.00	$221,751.00
Median List Price	$224,000.00	$199,900.00
Avg Sales Price	$210,151.00	$187,397.00
Median Sales Price	$202,000.00	$189,000.00

What this shows us is that both list price and sales price for each city is down compared to a year ago. The lowest average sales price can be found in Portsmouth where the the average sold price is just above $168,000.00. The highest average sold price is in Virginia Beach, where the average sold price stands at $293,382.

The downward price trend is great news for buyers and investors alike. To view bargain properties feel free to visit http://www.HamptonRoadsRealEstate.us.

_________________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

HUD Homes Virginia Beach

2009-06-21T14:29:00.006-04:00

Hello Hampton Roads,

Have you ever wondered about buying HUD homes in Virginia Beach? HUD Homes, Government Owned Homes and Bank Owned Foreclosure are all options buyers should consider.

HUD Homes are homes which have been foreclosed on and are now owned by the US Department of Housing and Urban Development (HUD). Just like bank owned foreclosures, HUD homes are sold "AS -IS" and can be bought at attractive prices. The difference between HUD Homes and Bank Owned Homes is that HUD homes are offered to an owner occupant first and then after an obligatory period, if the home does not sell, then it is offered to all buyers including investors. Other differences are that HUD may also offer priorty and discounts to buyers with special needs such as disaster victims (no downpayment mortgages and up to 100% discounts), and to Good Neighbor Next Door participants --ie teacher, police officers, firefighters and EMTs (50% discount for homes in revitalization areas).

All available HUD homes are posted on the internet for the public to see. For example, here are current listings for HUD homes in Virginia Beach. If you would like more information about any of these homes or are interested in viewing them, please feel free to contact me.

If you are interested in purchasing a HUD home, I can guide you through the process!

Visit my website to expand your search and view all homes for sale in Virginia Beach and throughout Hampton Roads.

_____________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Houses For Sale Virginia Beach, VA

2009-06-14T23:07:00.017-04:00

Hello Hampton Roads,

There are many great houses for sale in Virginia Beach, VA that represent fantastic buying opportunities for the savvy home buyer or investor. If you are in the market to buy a home in Virginia Beach you want to keep your eyes open for bargains. Feel free to search my site at http://www.virginiabeachrealestate.us/ or you can sign up for a Free Foreclosure List or email me for a more tailored search!

For example, below are a few of the homes currently for sale in the market today.
132 Osage, Virginia Beach, VA

Perfect Ranch Starter Home with Large Yard!
3BR/1Bth
Approx. 1008 SF
For Sale: $180,900

2637 Gaines Mill, Virginia Beach, VA

Spacious Family Home in Glenwood Area
4BR/2.5Bths
Approx. 2172 SF
For Sale: $237500

2704 Nicewood Ct., Virginia Beach, VA

Charming Colonial with Wrap Around Porch in Bentley Gate
4BR/2.5 Bth
Approx. 2728 SF
For Sale: $320,900

Each of the above homes for sale is BANK OWNED and is being sold at a discount compared with assessed value! For more information on buying bank-owned homes please see my earlier post "Things I Should Know About Purchasing an REO Home".

If you are interested in any of these homes or would like a complete list of bargain homes for sale in Virginia Beach, please contact me. No matter where you are in your home search, if you work like more information about bank owned homes or re-sale homes in our area, I look forward to the opportunity to work with you!
_______________
Serving Your Hampton Roads and Virginia Beach Real Estate Needs

Who Qualifies As A First Time Home Buyer?

2009-06-07T17:27:00.006-04:00

Hello Hampton Roads,

There is good news for home buyers and especially good news for those who qualify as a First Time Home Buyers! Record amounts of inventory make for a buyer’s market--according the latest Multiple Listing Service statistics from May 2009, Virginia Beach has 8.89 months of inventory on the market, which means that at today’s rate of home sales, it would take 8.89 months for all these homes to sell if no other homes came on the market (six months of inventory and more is considered a buyer’s market). Homebuyers have more properties to choose from and can therefore negotiate more to their benefit. First time home buyers are also rewarded by being eligible for the 2009 $8,000 tax credit!

Could an $8,000 windfall be in your future?

First let’s see if you qualify: “Who qualifies as first time home buyer?”

A first time home buyer is a buyer who has not bought a principal residence for the past three years. For married couples, this three-year period applies to both the husband and wife. Ownership of a vacation or rental property does not disqualify one as a first time home buyer since these properties were not used as a primary residence.

___________________
Serving your Hampton Roads and Virginia Beach Real Estate needs.

Sidebar: For More Information about the First Time Home Buyer Tax Credit of 2009, please email me and I will be happy to email you a handout with more details.

Tips On Buying Investment Properties

2009-01-12T21:04:00.002-05:00

Hello Hampton Roads,

Today's market is ripe for tips on buying investment properties. There are many bargains to be found and you can find deals in both the re-sale and bank-owned homes market. Given the fact that prices have dropped in the last year, and mortgage rates are at an all time low, this allows you to buy more house per dollar. One of the ways to take advantage of this market is to
buy investment properties either to resell or to rent.

To be successful in buying investment properties you really need to accomplish two things--the 1st is finding the right properties and the 2nd is getting the right financing.

Finding the Right Properties

To find the best bargains, make sure you sign up for my Free Foreclosure Lists in Hampton Roads. These properties are bank owned and represent a great place to start looking for homes. Many of these homes are priced at attractive prices below similar homes in the same neighborhood. My lists are sorted by city and are updated twice a month so be sure to contact me and make sure you have the latest list.
For more up to the minute response, sign up to Search the MLS for free and view both bank owned as well as regular resale listings. Homes which meet your criteria are immediately emailed to you within minutes of when a listing enters the MLS.
In choosing your investment remember the three most important things
in real estate: location, location, location. In Hampton Roads we are fortunate because of the strong military presence we have which insulates us from the severe market swings seen in other areas. People are still re-locating here and they still need places to live. Look for areas that have a high demand for housing or places within easy access to bases, hospitals, commerce, and industry. Also, don't forget about the water, one of the major attractions in our area is the proximity to the bay, beaches, and rivers. A nice beach or shore rental, or 2nd home or vacation home can pay for itself.
Don't overpay. For every property you are considering purchasing have your Realtor do a Comparative Market Analysis (CMA) to help you determine fair market value and base your negotiations on the condition of the home and what the market will bear.

Getting the Right Financing

Make sure you have your financing in order if you are not paying cash. The better credit and less consumer debt you have, the better rate you will be able to obtain. Let me help by putting you in touch with a great lender who can help you find the best loan at the best rate for your needs.
Since properties vary in condition, some properties may need re-hab financing, FHA 203k and you want to make sure your lender is able to do these types of loans.

When buying investment properties, the goal is to maximize passive income (rental income) and potential value (growth in equity). If you have the means, you can increase the amount of rental income you make by purchasing a few low cost units where the rent will cover the mortgage, or by buying multi-unit properties like duplexes, triplexes, or quads. If you have family or friends who are interested you can also pool your resources to making buying your investment properties more affordable for each party.

Last, be prepared to cover any repairs, maintenance, upkeep, and vacancy
expenses associated with the property before you rent or re-sell it.

If you have any questions or if I can help with your home search,please feel free to contact me.

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For Your Real Estate Needs Visit: http://www.HamptonRoadsRealEstate.us

Can Bankruptcy Stop Foreclosure?

2009-01-11T18:24:00.010-05:00

Hello Hampton Roads,

Can Bankruptcy Stop Foreclosure?

Given that the repercussions of the real estate bubble continue to manifest itself in record numbers of foreclosures, many consumers left with no other options are considering bankruptcy to stop foreclosure.

Side Bar: Rick Sharga, EVP of RealtyTrac estimates there will be an increase to 1 million REOs (foreclosed homes) from as many as 880,000 in 2008.

But which bankruptcy? Chapter 7 or Chapter 13?

Chapter 7 is the most common bankruptcy filing; it is a liquidation where the debtor’s non-exempt property is sold to pay creditors and remaining debts are discharged. Depending on your state law, certain property may be exempt including tools of your trade, and limited equity in a car and home. Chapter 7 does not guarantee you will save your home.

Chapter 13 is also known as "a wage earner's plan"; debtors with regular income develop a plan to pay al or part of their debts over three to five years. Chapter 13 does offer the opportunity to save one's home from foreclosure by allowing one time to cure delinquent loan payments. The benefits of Chapter 13 over Chapter 7 is that it allows one to keep most of his or her property, co-signers may be protected, and creditors don't have to agree to the re-payment plan as long as it is court approved.

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For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/

FHA Qualification

2008-11-30T18:10:00.003-05:00

Hello Hampton Roads:

"What do I need for FHA qualification?"
This is the question many buyers are asking in today's real estate market.

FHA loans are a popular choice among first time home buyers as well as seasoned home buyers. As long as a person qualifies, anyone may use an FHA loan as long as he or she does not have more than 1 FHA insured loan
at a time.

Basic FHA qualification guidelines are as follows:

Consistent, steady employment for 2 yrs preferably with same employer.
Last 2 years Income should be steady or increasing.
Credit report should typically have less than two "30 day lates" in last 2 years.
Bankruptcy's must be at least 2 yrs old, with good credit since.
Foreclosure's must be at least 3 yrs old, with good credit since.
Your new mortgage payment should be approximately 30% of your gross income.

FHA is a popular choice among consumers because it offers the following:

Lower Downpayment and Closing Costs

3.5% down payment (which can be gifted to the buyer)
100% Financing option are available
Seller can contribute up to 6% to buyer's closing costs

Easier Credit Qualification Guidelines

No minimum FICO score or credit score requirements
Higher debt ratios than other loan programs allowed
Seasoning for bankruptcy 2 yrs
Seasoning for foreclosure 3 yrs

If you are interested in finding out more about what FHA loan financing or purchasing a home in the Hampton Roads area, please feel free to contact me.

___________________
For Your Real Estate Needs Visit: http://www.HamptonRoadsRealEstate.us

Things I Should Know About Purchasing An REO Home

2008-11-02T17:25:00.020-05:00

Hello Hampton Roads,

As a buyer in today's real state market you may be asking, "What are things I should know about purchasing an REO home?" REO homes or bank owned homes offer great opportunities to purchase at attractive prices. Since the condition of these homes can vary, one can find a diamond in the rough, or a gem in plain sight.

A major benefit of purchasing an REO home is that banks tend to be motivated sellers. Banks are not in the business of owning real estate, but rather are in the business of making loans to consumers. REO homes have a negative effect on a bank's balance sheet, thereby lowering the amount of money they are able to lend. As a consequence, don't be afraid to make an offer and be prepared to negotiate.

In purchasing these kind of homes, some important things your should know are the following:

REO homes are sold "AS IS WHERE IS"--there are no guarantees as to it's condition
Owners of REO homes are exempt from Seller Disclosure/Disclaimer
Title conveys by Special Warranty Deed. This type of deed only warrants against title defects or claims during the time the property was owned by the bank. In other words, the grantor does not warrant against title defects before the grantor owned the property. Buyers are encouraged to purchase title insurance to protect themselves.
Special Addenda and/or Modified Contracts are required. The Bank usually has required addenda or a modified contract which they will require from all purchasers. The addenda will prevail over the traditional purchase contract.
In terms of closing, "Time is of the Essence." This means that any delay in the specified closing date will be grounds for cancelling the agreement.
Per Diem Fees. If closing is delayed and the contract is not cancelled, many banks charge a per diem fee to the buyer until the property closes--this fee is determined by the bank and some banks charge $100/day.

Knowing what to expect when purchasing an REO home puts you ahead of the competition and will make the "purchasing to closing" process easier for you. It is extremely important to work with a competant REALTOR who can properly guide you. If you are interested in obtaining a free list of REO homes in Hampton Roads, please feel free to contact me.

___________________
For Your Real Estate Needs Visit: http://www.hamptonroadsrealestate.us/

Why is Real Estate a Good Investment?

2008-10-26T15:37:00.009-04:00

Hello Hampton Roads,

When you ask yourselves the question, "Why is real estate a good investment?", consider fact that real estate has been the main avenue for wealth for many people in this country. A survey by Citi Smith Barney found over 50% of millionaires and 40% of affluent investors believe real estate is a good investment.

In addition, two notable facts are: 60% of the average home owner's wealth comes from their home equity. The average renter's net worth is $4,800 while the average home owner's net worth is $171,000.

Real estate, while being a tangible, immovable asset, provides it's owner with a sense of security. Real Estate appreciate over the long run, provides tax benefits, depreciation, and potential cash flow. Let's explore these reasons which make real estate a good investment.

Appreciation--Since 1968, houses averaged an appreciation rate of 6.34% a year and real estate has often been considered a hedge against inflation. Click the following link to view this historic trend of housing sales prices: USA Real Estate Median Sales Prices of Existing Homes since 1968. In addition, both appreciation and amortization of the mortgage increase the equity position in the property which is realized when the property is sold.

Tax Benefit--Whether used as a primary residence or investment property, real estate provides tax benefits in the form of deductions in interest payments, taxes, and points paid for a mortgage. In addition, investment properties may enjoy other tax benefits such as deductions in condo and home owner association dues.

Depreciation --Many people believe depreciation to be the best reason why real estate is a good investment. Residential income property is depreciated over 27.5 years on a straight-line basis. Commercial property is depreciated over 39 years on a straight-line basis.

Depreciation of Personal Property in Investment Real Estate-- Personal property used in operating the property, such as appliances, is depreciated over shorter periods, typically between 5-10 years. Also automobiles and trucks used in the investment operation can be depreciated over their useful lives.

Cash Flow -- Investment real estate can provide positive cash flow to owners and in the best case scenarios, can be structured so that the rents fully support the property and is not subsidized with out of pocket cash from the owner.

No matter where you are in your home search, if you would like more information about purchasing your first home or investment property in our area, please feel free to contact me.

___________________
For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/

Descriptions of Home Owner Association Board Positions*

2008-10-25T15:17:00.022-04:00

Hello Hampton Roads,

Homeowner associations provide leadership to the communities they serve. In order to assist with this, association board members have responsibilities as a board and as individual board members, especially those who have board positions. The board positions of typical homeowner associations comprise the president, vice-president, secretary, and treasurer. Descriptions of these homeowner association board positions follow:

The president of an association has all the responsibilities generally given to the chief executive officer of a corporation. Specific by-laws may vary, but generally he or she presides at all board and membership meetings. The president of a homeowner’s association executes contracts, orders, and other documents as the agent of the association. The president has general day-to-day administration responsibilities of the association and has authority to act to further board policies. The president is also the spokesman for the board in most matters relating to general association business.

The vice-president has all the powers needed to perform the president’s duties in the president’s absence and may act for the president only when the president is actually absent or otherwise unable to act. The vice-president may take on other duties as defined by the board of directors. Sometimes the vice-president will chair one or more committees like architectural review or rules.

The secretary of the homeowner’s association board of directors is responsible for recording meeting minutes and keeping a record of all board and association membership meetings. The secretary is also the custodian for most of the official records of the association. The position of secretary is not simply a clerical position and sometimes the secretary does not actually record or keep the minutes of the meetings, but is responsible for getting someone who will. Lastly, the secretary is responsible for insuring member and member agent access to meeting records.

The treasurer is the warden of the funds, securities, and financial records of the association. If the association has a manager or management company that handles the funds on a daily basis, the treasurer's duties include overseeing the appropriate people to insure that financial records and reports are properly kept and maintained. Unless the by-laws state differently, the treasurer is responsible for managing the development of the proposed annual budget and for preparing and giving the annual financial report to the association.

Similar to the association's secretary, the treasurer need not perform the day-to-day financial record keeping when this responsibility is transferred to a management company, but the treasurer is responsible for insuring that financial records have been maintained properly according to sound accounting principles.

To find more specific information about both home owner associations as well as condos in the Hampton Roads Area, please visit, http://www.DPOR.com .

*Most of the information contained in this article was gleaned from www.associationtimes.com.

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For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/

Questions to Ask a Realtor When Buying Your First Home

2008-10-19T14:26:00.019-04:00

Hello Hampton Roads,

Whether the economy is doing poorly or well you may have reached the point when it’s time to buy your first home. In fact, because the housing market is on a downswing it can be an excellent time to buy your first home for a few reasons—housing prices are dropping; the increased number of homes on the market means more inventory to choose from, and home sellers and their agents will be actively seeking your business (which means you can bargain more aggressively than in the near past); and you will have your pick of real estate agents to help you with your new home search.

How do you find a real estate agent to represent you and your interests? How do you know what questions to ask a Realtor when buying your first home? I can help you by providing a few guidelines. These questions can fall generally into two categories:

1) Questions related to qualifications and experience of the Realtor, and
2) Questions related to the home that you potentially wish to buy.

Let’s talk first about questions you want to know about getting a Realtor and then cover information about the home.

So what questions do you want to ask a Realtor about buying your first home? In order to determine if a Realtor is qualified and wants to work with you, consider the Realtor’s answers to the following questions:

How much real estate experience do you have in this area (where you want to buy your home). That is, how many years have you worked here?
How many homes have you sold as the seller’s agent, and how many homes have you sold as the buyer’s agent in the last year? Last 3 years?
What price range of homes do you work with? Are you comfortable working in my price range?
Why should I work with you and not another agent? Why should I work with an agent from your company?
How can you save me money on my home purchase while still providing excellent service?
Talk to me about your honesty and integrity. Do you have references?
What special services do you offer for a first time home buyer?

Next, let’s consider questions to ask your Realtor about your first home purchase.

Is this home priced fairly compared with other homes in the neighborhood--is it a good value?
What is the sales history of this home?
How long has this home been on the market? Have there been any price reductions?
Has the seller disclosed any information about the home regarding needed repairs, and if so, what are they?
What is the potential resale ability of this home?
What are the utility costs of this home?
Are thre any condo or homeowner's association fees?
What kind of negotiating strategy do you recommend for buying this home?

Of course with each particular situation, there would be more specific questions to ask. In addition to getting the answers you are comfortable with, it is more important that you are comfortable with your Realtor and that you view him or her as a trusted advisor. If I can answer any questions regarding this topic or any other topic relating to real estate, please feel free to contact me.

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For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/

First Time Home Financing

2008-10-13T18:42:00.004-04:00

Hello Hampton Roads,

First time home financing need not be a chore! It will require some effort, but the beauty is that you will be rewarded for your efforts. It can actually be fun once you realize that your snooping can save you thousands of dollars to save for a rainy day or put you ahead of the game for your holiday shopping.

As a home buyer, first time home financing has it’s advantages.

First, there are several federal and state programs for you. If you are a veteran like many our area residents, you can get home financing through The Department of Veterans Affairs (VA). The beauty of these loans is that you can finance 100% of the home’s sale price with no downpayment. To find out more information about VA loans, please visit http://www.homeloans.va.gov/ or to pre-approved for a VA loan contact Rick Eaheart, the VA loan expert.

If you are not a veteran and like the 100% financing option of the VA loan, there is another great loan product, FHA Plus option which is VHDA (Virginia Housing Development Authority) financed and FHA (Federal Housing Administration) insured.

Here are some of the FHA Plus loan details:

Combo loan with 2 mortgages, the 1^st mortgage is 97.75% and the 2^nd mortgage is 5%
Both mortgages are 30 year terms
First time home buyers only
No minimum credit score
1% of the sales price verified in reserves
For the Norfolk/VA MSA the household income limit for 2 of fewer people is $86,900 and for 3 or more people is $100,000.
The maximum sales price/loan limit for properties in the Norfolk/VA MSA is $352,600

Second, as a first time home buyer needing financing, some loan companies often provide special loan programs and special rates for qualified buyers. Contact your local lender for more information or fee free to contact me and I will put you in touch with a reputable lender who will be happy to discuss the best options for you. Don’t forget to consider mortgage insurance and taxes when determining monthly costs!

Third, the U.S. Department of Housing and Urban Development (HUD) offers lots of free information for first time buyers. Please visit the website at http://www.hud.gov/buying/index.cfm.

Finally, a good realtor can help you get started by suggesting known mortgage lenders and helping you to navigate the process. I am happy to help you and can provide my experience and expertise to help save you money on your first time home buyer financing!

___________________
For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/

Listings of Recent Home Sales

2008-10-13T17:51:00.002-04:00

Hello Hampton Roads,

In today’s real estate market, both buyers and sellers alike are interested in listings of recent home sales. Recent home sales listings are a good indication of the strength or weakness of the real estate activity in a particular neighborhood. How many homes have sold in the past 6 months? How many have sold year to date? How close is the sales price to the original list price? How long is the average days on the market? What is the absorption rate in the neighborhood?

Knowledge is power and the answers to these questions can help both the buyer and seller.

For buyers, it gives them an idea of whether a home is under-priced or overpriced for the neighborhood. If a home has been on the market for a longer than average time, it gives buyers some leverage to negotiate.

For the seller, this knowledge allows them to accurately price their home to sell and also the average days on the market, gives them a time frame to anticipate. Also, knowing what other comparable homes are selling for, gives the seller an edge on the competition and what he or she must do to make their home more appealing.

If you are in the market to buy or sell and would like up to date information on listings of recent homes sales in your area including a Free CMA (Comparative Market Analysis) of your home, feel free to contact me.

___________________
For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/

What is Flipping in Real Estate Terms? --Tax Consequences in Flipping Property

2008-08-05T15:27:00.006-04:00

Hello Hampton Roads,

What is Flipping in Real Estate Terms?

Flipping in real estate terms means buying property and then quickly selling it for more than what you paid. Though a handsome profit can be made on the back end, real estate investors will tell you money is made when you buy. The key to flipping real estate is acquiring properties for less then market value so you can assure yourself a profit when you sell.

Tax Consequences in Flipping Property

A major consideration in flipping houses is the tax consequences. Many people are aware that they can make money flipping homes, but few realize that taxes can reduce their profit. Investment profit from the sale of stocks and the sale of real estate is considered a capital gain and is taxed either as short-term capital gains or long-term capital gains. Short-term capital gains apply for property held less than 1 year and can be as high as 35% ,while long-term capital gains apply for property held longer than 1 year can be as low as 15%.

If several flips are completed in a short period of time, the IRS may choose to view these transactions as a business or trade rather than an investment property. If the IRS determines that your real estate transactions are a business, then instead of paying capital gains, you will have to pay ordinary income taxes, plus 15.3% in self-employment taxes.

There are ways to pay less in taxes, and maximize profit.

The easiest way is to hold onto property for longer than a year so long-term capital gains with their lower rate will apply.

Another thing to do is move into investment property so it becomes a primary residence and live there for a total of 2 years (730 days) out of the last 5 years (and it does not have to be sequential days). Once this criteria is met and you sell the property, you can exclude up to $250,000 in capital gains if you are single and twice that if you are married.

Keep good records to claim real estate tax deductions. The cost of improvements you make on the property can be a deduction.

In today’s market, the possibilities to find bargain properties are plentiful. Fore more information about purchasing a home or investment property in Hampton Roads real estate, please fee free to contact me.

___________________
For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/

Government First-Time Home Buyers Initiative

2008-08-03T20:49:00.008-04:00

Hello Hampton Roads,

The government first-time home buyers’ initiative I am referring to is the “Federal Housing Tax Credit for First-Time Home Buyers.” This tax credit is part of the Housing and Recovery Act of 2008 which the President recently signed into law at the end of last month. It offers a fantastic opportunity for first time home buyers to purchase a home and receive up to $7500 as a credit on their taxes.

The tax credit is a dollar for dollar reduction in the amount of taxes owed and since the tax credit is refundable, this means it can be claimed even if the taxpayer has little or no income tax liability to offset. For example if a tax payer’s liability is $1500 and he or she qualifies for the full credit of $7500 then he or she would receive a check for $6,000! Though the tax credit must be re-paid over a 15 year period, it is essentially an interest free loan.

Note: The tax credit does have a time limit and is only valid for homes purchased from April 9, 2008 to June 30, 2009.

Other qualifications to claim this credit include the following:

It is for first-time home buyers only. (A first-time home buyer is defined someone who has not purchased a residence during the 3 year period prior to their purchase.)

It is for homes purchased as a primary residence only.

Income qualifications for the full tax credit are up to $75,000 for single persons and up to $150,000 for married couples. Partial credits are phased out completely for single persons with incomes over $95,000 and married couples with incomes over $170,000.

The credit must be re-paid without interest over 15 years or when the house is sold provided that there is sufficient capital gain from the sale. If there is not sufficient capital gain from the sale then the credit is forgiven. The repayment period begins 2 years after the credit is claimed.

Another benefit of this tax credit is that eligible first-time home buyers may purchase any home as a primary residence including regular re-sale homes or bank-owned homes encompassing both single family residences and townhouses/condos.

If you would like more information about this tax credit, or for more information about purchasing Hampton Roads real estate in general, please fee free to contact me.

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For your real estate needs, visit my website at http://www.hamptonroadsrealestate.us/