Who doesn’t love a bargain? For the thrifty capitalist, investing in HUD foreclosures—residential properties owned by the U.S. Department of Housing and Urban Development—appears to be exactly that. Furthermore, the possibility that HUD foreclosure homes might become increasingly available in the coming years should pique renewed interest among investors; however, investors should be aware of limitations in the process of purchasing HUD foreclosures that may or may not fit their personal aims for the investment.
A HUD foreclosure, or HUD home, is a single family or multi-family residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage, according to hud.gov. In the wake of the subprime lending crisis, FHA-insured mortgage loans are becoming more popular among homebuyers who experience difficulty in qualifying for traditional bank loans. An increase in the number of FHA-insured loans distributed to homebuyers is likely to be accompanied by an eventual increase in HUD foreclosures. As a result, investors could stand to reap high profit margins resulting from the affordability and availability of HUD homes on the market.
Most HUD properties are hardly dream homes, however, and are almost never found in high-cost urban areas. FHA-insured mortgages for properties in high-cost areas such as New York and Los Angeles must not exceed a maximum loan limit of $362,790, according the FHA.com—a prohibitively low amount when compared to the actual selling prices of most homes in those areas. Furthermore, all HUD homes are sold as is, and selling prices are discounted based on the extent of repairs and renovations that need to be done.
The process of buying a HUD foreclosure is significantly different than that of purchasing a traditional home. HUD homes are sold through a bidding process that puts investors in line behind intended owner-occupants. During the first 10 days that a HUD home is listed for sale, only owner-occupants are permitted to place bids; if a successful bid is not accepted by the time the initial priority period has elapsed, bidding is opened to investors as well.
HUD homes for sale are posted on Internet listing sites by special HUD-contracted management companies. Bids for HUD homes must be placed through a HUD-registered broker or agent and are usually submitted electronically.
In addition, HUD will pay for some closing and sales commission costs. According to Harrington, Moran and Barksdale, Inc. (HBMI), a company that markets and manages HUD single family homes for several states, HUD will pay up to 5 percent for broker commission costs and up to 3 percent for standard closing items, excluding the closing agent fee. HUD will pay the entire closing agent fee if buyers use HUD closing agents; conversely, buyers who choose to use a non-HUD agent must pay the fees and work with a HUD agent on some legal items.
Although HUD will pay broker commissions and other closing costs, the amount that HUD has to pay is subtracted from the net worth of the bid. Therefore, a bid offer that includes a broker commission of 2 percent would be viewed as more favorable than the same bid amount that includes a 5 percent commission.
Consumers must provide an earnest money deposit to their real estate broker by the time of electronic bidding; deposits can be as low as $500 for properties selling for less than $50,000, according to ForeclosuresToGo.com. Earnest money deposits for winning bids are immediately submitted to the HUD closing agent.
Once a bid is won, the purchaser must close within a time period specified by the closing agent and the correct sales contract must be submitted quickly—within 48 hours for most states. A strict settlement deadline is set, usually 30 to 60 days from the date of the accepted contract.
Investing in HUD foreclosures offers affordability and potential for good returns, but investors, as always, should do their research and exercise patience when dealing with a bidding process that generally caters to owner-occupant buyers. For more information on purchasing HUD homes and internet listing sites, email J.J. at JJ@JJChapa.com .
Tuesday, April 29, 2008
Monday, April 28, 2008
The Value of Successful Home Staging
The Value of Successful Home Staging
by Debra Allen
Have you ever walked into a beautifully decorated model home and been captivated by it? Did you find yourself dreaming of bathing in that spa-like bathroom, cooking meals in the gourmet kitchen or curling up with a book in that luxurious reading nook? If so, then you have been the successful target of the secret weapon called staging.
As a real estate agent, you know that staging your real estate listings will result in a faster and more profitable sale, but who can you trust to manage this important process for you.
You want the best possible price for your home, but do not want to pay more than your return to achieve this. You need expert and objective home staging guidance that comes from experience and a highly trained eye in order to compete in a buyers market. What you seek is the experience of an Accredited Staging ProfessionalTM (ASPTM).
Staging can entail simple tasks like removing clutter. Clutter eats equity. Stagers aren't maids or house-cleaners; they don't do repairs or paint. Rather they create a neutral, harmonious, spacious, and beautiful environment. They often set tables for dinner so that a prospective buyer can envision themselves in the property having a family dinner.
Think of staging like detailing a car. A smart auto seller would detail a car before selling it to add value. That's precisely what staging can do for a house. As a REALTOR®, I think that staging helps; it makes the property stand out. In turn, good staging can determine which properties sell fast and which do not. It is no longer a market where staging helps the property sell for more. In today's market, it enables the property to have more potential of selling at all. It's a buyer's market, so make your home stand out by creating a sophisticated ambiance.
While some sellers may be hesitant to spend more money on staging in a down market, this is the winning way to get a property sold; and often for a higher asking price.
Professional stagers can see your house as buyers will, and they'll set the scene so that buyers can imagine living there. They're likely to simplify or streamline the furniture in a room for better traffic flow and to enhance its spaciousness. They may neutralize a too-personal color scheme or add touches of color or accessories where needed. In vacant homes that feel cold and lack visual landmarks, stagers often bring in rental furniture to create warmth. This helps Buyers mentally move in and feel that when it's time for them to move in, thy will be able to kick back and relax.
REALTORS® and sellers can hire stagers by the hour or the room. Homeowners typically pay from $200 to $3,000 depending on the level of service required. But the pay-off in time saved and higher sales price can be nice. If all your listings looked like model homes, do you think you'd have an easier time selling them? And do you think they might command a higher selling price? Statistics show this to be true.
Buying a house is largely an emotional decision because people are not just purchasing a home; they are buying a dream ... a lifestyle. If you can help them with their vision so they don't have to rely completely on their imagination, you positively impact how they feel in the home, which will be reflected in the sales price and number of offers you receive. All human beings want comfort, excitement, prestige and love, and all these are at work in the psychology of the home purchase. Effective staging maximizes those feelings, creating an atmosphere that makes people want to linger and imagine themselves living in the space. Ultimately, staging creates a home the prospective buyer will not be able to live without.
People today have busy lives, they want to walk in and look at a home and say, "This is mine. I can move into this home without doing anything."
Published: February 27, 2008
Born in Bremen, Germany, Debra Allen brings a unique international perspective to the Arizona real estate market.
In just three years with Prudential Arizona Properties, one of the fastest growing real estate firms in the U.S., Debra has distinguished herself from the pack. An outstanding professional, Debra is committed to attaining the highest levels of education and real estate specific training. Her industry designations include the following: ABR (Accredited Buyer Representative), GRI (Graduate, Real Estate Institute), ASP (Accredited Staging Professional), Relocation Specialist, and the e-Pro (Internet Real Estate Professional) designation awarded by the National Association of Realtors®.
Her access to professionals around the world has led Debra to be a Multi Million Dollar Producer since 2004, averaging $3.8 million in sales annually and anticipating lucrative business opportunities in a shifting market. Prudential Arizona Properties recognizes that it has a "winner" in Debra. As such, the company recently awarded Debra for her sales performance and client service in 2006.
by Debra Allen
Have you ever walked into a beautifully decorated model home and been captivated by it? Did you find yourself dreaming of bathing in that spa-like bathroom, cooking meals in the gourmet kitchen or curling up with a book in that luxurious reading nook? If so, then you have been the successful target of the secret weapon called staging.
As a real estate agent, you know that staging your real estate listings will result in a faster and more profitable sale, but who can you trust to manage this important process for you.
You want the best possible price for your home, but do not want to pay more than your return to achieve this. You need expert and objective home staging guidance that comes from experience and a highly trained eye in order to compete in a buyers market. What you seek is the experience of an Accredited Staging ProfessionalTM (ASPTM).
Staging can entail simple tasks like removing clutter. Clutter eats equity. Stagers aren't maids or house-cleaners; they don't do repairs or paint. Rather they create a neutral, harmonious, spacious, and beautiful environment. They often set tables for dinner so that a prospective buyer can envision themselves in the property having a family dinner.
Think of staging like detailing a car. A smart auto seller would detail a car before selling it to add value. That's precisely what staging can do for a house. As a REALTOR®, I think that staging helps; it makes the property stand out. In turn, good staging can determine which properties sell fast and which do not. It is no longer a market where staging helps the property sell for more. In today's market, it enables the property to have more potential of selling at all. It's a buyer's market, so make your home stand out by creating a sophisticated ambiance.
While some sellers may be hesitant to spend more money on staging in a down market, this is the winning way to get a property sold; and often for a higher asking price.
Professional stagers can see your house as buyers will, and they'll set the scene so that buyers can imagine living there. They're likely to simplify or streamline the furniture in a room for better traffic flow and to enhance its spaciousness. They may neutralize a too-personal color scheme or add touches of color or accessories where needed. In vacant homes that feel cold and lack visual landmarks, stagers often bring in rental furniture to create warmth. This helps Buyers mentally move in and feel that when it's time for them to move in, thy will be able to kick back and relax.
REALTORS® and sellers can hire stagers by the hour or the room. Homeowners typically pay from $200 to $3,000 depending on the level of service required. But the pay-off in time saved and higher sales price can be nice. If all your listings looked like model homes, do you think you'd have an easier time selling them? And do you think they might command a higher selling price? Statistics show this to be true.
Buying a house is largely an emotional decision because people are not just purchasing a home; they are buying a dream ... a lifestyle. If you can help them with their vision so they don't have to rely completely on their imagination, you positively impact how they feel in the home, which will be reflected in the sales price and number of offers you receive. All human beings want comfort, excitement, prestige and love, and all these are at work in the psychology of the home purchase. Effective staging maximizes those feelings, creating an atmosphere that makes people want to linger and imagine themselves living in the space. Ultimately, staging creates a home the prospective buyer will not be able to live without.
People today have busy lives, they want to walk in and look at a home and say, "This is mine. I can move into this home without doing anything."
Published: February 27, 2008
Born in Bremen, Germany, Debra Allen brings a unique international perspective to the Arizona real estate market.
In just three years with Prudential Arizona Properties, one of the fastest growing real estate firms in the U.S., Debra has distinguished herself from the pack. An outstanding professional, Debra is committed to attaining the highest levels of education and real estate specific training. Her industry designations include the following: ABR (Accredited Buyer Representative), GRI (Graduate, Real Estate Institute), ASP (Accredited Staging Professional), Relocation Specialist, and the e-Pro (Internet Real Estate Professional) designation awarded by the National Association of Realtors®.
Her access to professionals around the world has led Debra to be a Multi Million Dollar Producer since 2004, averaging $3.8 million in sales annually and anticipating lucrative business opportunities in a shifting market. Prudential Arizona Properties recognizes that it has a "winner" in Debra. As such, the company recently awarded Debra for her sales performance and client service in 2006.
Saturday, April 19, 2008
Average Joe Still Can't Afford a House
Article attributed to Bankrate.com
Between 2000 and mid-2007, the median home price soared 64.9% to $229,200. The median income, meantime, rose just 16.6%. For would-be buyers, the math doesn't work.
One of the worst things about today's real estate market is that there doesn't seem to be any silver lining in that big black cloud.
Normally, you'd think dramatically falling prices would make homeownership possible for more moderate-income families.
But even with homes more affordable, the median price in many markets is still out of reach for a median-income family, according to "Paycheck to Paycheck: Wages and the Cost of Housing in America," a study by the Center for Housing Policy, or CHP, in Washington, D.C.
Comparing housing costs in 210 metropolitan areas with the wages earned by workers in 60 occupations, the study found that homeownership is often unaffordable for workers in each of the five-fastest growing occupations -- registered nurses, retail salespeople, customer-service representatives, food-preparation workers and office clerks. Registered nurses, who typically have high salaries, were unable to purchase a median-priced home in 108 of the markets.
"Even with the housing downturn, the drop in prices still just isn't enough for many workers in traditional backbone occupations to afford houses," says Rebecca Cohen, a CHP research associate.
In many parts of the country, housing increases have outpaced wage growth for almost a decade. Census data released in 2006 revealed that between 2000 and 2005, the burden of housing costs grew sharply.
The Housing Affordability Index measures the cost of housing against median family income. The National Association of Realtors, or NAR, which calculates the index, considers that the typical family makes enough money to buy the typical used home, assuming a 20% down payment and a traditional 30-year mortgage.
In 2000, the NAR pegged the index at 129.2, meaning the typical family had 129% of the income necessary to pay for the typical used house. That figure dropped to 104.9 in June 2007, even though the 2000 median family income of $50,732 rose to $59,157 during the period.
That's because the median price of a home in 2000 was $139,000, but by June 2007 prices peaked at a whopping $229,200. In those seven years, the median price of homes increased 64.9%, while median incomes rose just 16.6%.
Between 2000 and mid-2007, the median home price soared 64.9% to $229,200. The median income, meantime, rose just 16.6%. For would-be buyers, the math doesn't work.
One of the worst things about today's real estate market is that there doesn't seem to be any silver lining in that big black cloud.
Normally, you'd think dramatically falling prices would make homeownership possible for more moderate-income families.
But even with homes more affordable, the median price in many markets is still out of reach for a median-income family, according to "Paycheck to Paycheck: Wages and the Cost of Housing in America," a study by the Center for Housing Policy, or CHP, in Washington, D.C.
Comparing housing costs in 210 metropolitan areas with the wages earned by workers in 60 occupations, the study found that homeownership is often unaffordable for workers in each of the five-fastest growing occupations -- registered nurses, retail salespeople, customer-service representatives, food-preparation workers and office clerks. Registered nurses, who typically have high salaries, were unable to purchase a median-priced home in 108 of the markets.
"Even with the housing downturn, the drop in prices still just isn't enough for many workers in traditional backbone occupations to afford houses," says Rebecca Cohen, a CHP research associate.
In many parts of the country, housing increases have outpaced wage growth for almost a decade. Census data released in 2006 revealed that between 2000 and 2005, the burden of housing costs grew sharply.
The Housing Affordability Index measures the cost of housing against median family income. The National Association of Realtors, or NAR, which calculates the index, considers that the typical family makes enough money to buy the typical used home, assuming a 20% down payment and a traditional 30-year mortgage.
In 2000, the NAR pegged the index at 129.2, meaning the typical family had 129% of the income necessary to pay for the typical used house. That figure dropped to 104.9 in June 2007, even though the 2000 median family income of $50,732 rose to $59,157 during the period.
That's because the median price of a home in 2000 was $139,000, but by June 2007 prices peaked at a whopping $229,200. In those seven years, the median price of homes increased 64.9%, while median incomes rose just 16.6%.
Friday, April 18, 2008
Todays Dallas Morning news
According to NTREIS, the downtown continues to spread with home sale prices continuing to slump.
Additionally, the foreclosure outbreak is beginning to affect higher end homes.
Links to article click here
Additionally, the foreclosure outbreak is beginning to affect higher end homes.
Links to article click here
Thursday, April 10, 2008
Wednesday, April 9, 2008
Dallas Morning News Reports; DFW area home sales slide by 25%
Dallas-Fort Worth sales of pre-owned homes drop 25%
11:29 PM CDT on Monday, April 7, 2008
By STEVE BROWN / The Dallas Morning Newsstevebrown@dallasnews.com
North Texas pre-owned home sales slid 25 percent in March from a year ago.
Last month's decline in home sales – one of the steepest so far – was enough to put the entire first quarter into a double-digit downturn, according to preliminary statistics released Monday by the North Texas Real Estate Information System.
During the first three months of 2008, pre-owned home sales in North Texas dropped by 18 percent from the same period last year, according to sales through the Realtors' multiple listing services.
Even so, median prices remained relatively unchanged – down only 1 percent during the quarter.
And the number of single-family houses on the market dropped 5 percent in March.
Real estate agents say business has increased in recent weeks, and they hope that the spring home sales season won't be a bust this year.
"Traffic has definitely picked up, and showings have picked up," said Jim Fite, president of Dallas-based Century 21 Judge Fite Co. "A lot of inventory is being bought up from the foreclosures, and that's a good thing."
At the end of March, about a 6.4-month supply of homes was listed for sale in the Dallas area.
Six months is widely considered a balanced market.
Much of the decline in home sales is being attributed to tougher lending standards that have locked some potential buyers out of the market.
Investors who had purchased thousands of houses are also on the sidelines.
The first-quarter drop in pre-owned single-family home sales – while significant – was less than the 30 percent-plus decline in new home sales in Dallas-Fort Worth during the same period.
Sales of condominiums and townhouses have fallen even further – down 40 percent in March from a year earlier, according to the latest Realtor numbers.
The outlook for the period ahead is clouded.
Pending house sales were down 30 percent last month from a year earlier.
The number of pending condo and townhouse sales was down 37 percent.
Economists don't expect a quick rebound in the local housing market.
"My best guess is no real market improvement until latter 2009," said Dr. James Gaines with Texas A&M University's Real Estate Center. "This year and next will be trying for everybody.
"2009 probably may show some slight improvement, but nothing to get real excited about," he said. "It'll take that long to work through the excess new home inventory plus sell off all the foreclosures, which won't slow down until later next year."
11:29 PM CDT on Monday, April 7, 2008
By STEVE BROWN / The Dallas Morning Newsstevebrown@dallasnews.com
North Texas pre-owned home sales slid 25 percent in March from a year ago.
Last month's decline in home sales – one of the steepest so far – was enough to put the entire first quarter into a double-digit downturn, according to preliminary statistics released Monday by the North Texas Real Estate Information System.
During the first three months of 2008, pre-owned home sales in North Texas dropped by 18 percent from the same period last year, according to sales through the Realtors' multiple listing services.
Even so, median prices remained relatively unchanged – down only 1 percent during the quarter.
And the number of single-family houses on the market dropped 5 percent in March.
Real estate agents say business has increased in recent weeks, and they hope that the spring home sales season won't be a bust this year.
"Traffic has definitely picked up, and showings have picked up," said Jim Fite, president of Dallas-based Century 21 Judge Fite Co. "A lot of inventory is being bought up from the foreclosures, and that's a good thing."
At the end of March, about a 6.4-month supply of homes was listed for sale in the Dallas area.
Six months is widely considered a balanced market.
Much of the decline in home sales is being attributed to tougher lending standards that have locked some potential buyers out of the market.
Investors who had purchased thousands of houses are also on the sidelines.
The first-quarter drop in pre-owned single-family home sales – while significant – was less than the 30 percent-plus decline in new home sales in Dallas-Fort Worth during the same period.
Sales of condominiums and townhouses have fallen even further – down 40 percent in March from a year earlier, according to the latest Realtor numbers.
The outlook for the period ahead is clouded.
Pending house sales were down 30 percent last month from a year earlier.
The number of pending condo and townhouse sales was down 37 percent.
Economists don't expect a quick rebound in the local housing market.
"My best guess is no real market improvement until latter 2009," said Dr. James Gaines with Texas A&M University's Real Estate Center. "This year and next will be trying for everybody.
"2009 probably may show some slight improvement, but nothing to get real excited about," he said. "It'll take that long to work through the excess new home inventory plus sell off all the foreclosures, which won't slow down until later next year."
Friday, April 4, 2008
sign of market pickup
When builders begin to give fewer concessions to sell their homes, this can also be a sign of an accelerating real estate market.
Thursday, April 3, 2008
A sign of a housing market pickup
Job creation is a good sign that the housing market is on the upswing. Typically, for every two new jobs created, one new home-owner is created.
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