Market News

Mortgages are to real estate as pieces are to a puzzle.  Each of the monthly payments slowly builds towards the completion of the puzzle (i.e.: paying off the real estate home loan in full) and as everyone knows, a couple of those pieces that go “missing” leads to a word nobody likes to hear: foreclosure.

For first time buyers seeking to apply for a mortgage loan in order to buy South Florida homes, mortgages can be quite straightforward and opportune, provided these potential borrowers know about the extra fees that are, for the most part, not publicized during the application process.

Situations vary by mortgage lender but don’t be surprised if, once all the number crunching and financing has been laid out, a few fees mentioning something along the lines of “credit check” and “processing” have been thrown in to the final amount.  These are considered closing costs and are a common stipulation in real estate contracts.  It’s not easy to have these closing fees removed if borrowing for the first time but it’s not impossible either.

Just like businesses depend heavily and strive to encourage loyal clientele, so do mortgage lending companies.  Therefore, the next time a borrower is considering a new South Beach condo or Miami Beach home, it could work tremendously in their favor to do business with the lenders they consulted the first time around.  As a reward of sorts, lenders will be much more lenient not only in reaching favorable financing terms but will also go the extra mile and waive some of those pricey fees that were charged the first time around.

Any real estate agent will explain the legal responsibilities on behalf of the lending company and one of those requires a “good faith” estimate laying out the interest rates, the payments expected, basically the entire mortgage contract.  Any fees that border on useless or excessive can theoretically be eliminated as long as a borrower’s credit history makes a strong case about their financial responsibility.

At the end of the day the most important goal to focus on is obtaining the best rate available.  Closing costs are comparably trifling with the thousands of dollars that are saved when a low rate is locked in.

One of the great perks of owning South Florida homes is being able to accessorize, customize and otherwise give the place you come home to every day the touches that define who you are and your individuality.  Extensive home renovation often necessitates hiring a professional but many choose to go the do-it-yourself route in order to save money and learn for themselves.   If you happen to be one of those people, make sure you’re aware of the following.

Obtain the permits.  Yes they can be a hassle and perhaps even expensive but look at it this way: homeowner insurance, regardless of whether you live in a Miami Beach condo or single family waterfront home is a requirement and unless you’ve obtained these permits, installing certain items within your home will not be covered so really, it’s worth the time, money and safety.

Buy high quality materials in large quantities.  If you’re a home renovation novice, there’s a good chance you’ll make mistakes when it comes to precise measurements so it’s always important to keep extras on hand.  Also remember that these materials are going into the development of the place you live in so if you’re buying budget items, you’re basically creating a budget home.

Do some preparation and research.  You don’t want to find little spots on the walls here and there after you paint because you failed to properly sand down the walls and clean them up.  With that in mind, don’t just buy the first paint cans you see with the intended colors.  There are different types for different situations (e.g.: interior and exterior paint) and using the wrong kind on an outside surface could lead to early chipping and fading.

Always use safety.  Tools and building apparatuses are more sophisticated and safer than ever but you should still use all the precautions necessary when dealing with tools like a buzz saw or a ladder that hasn’t been placed on a hard, firm surface.  If you run into a situation that seems out of your control or you’re not sure how to go about it, ask someone.  The severe injuries that can occur are not worth trying to do it all alone.

As more and more property for sale sits idly and the values of unoccupied South Florida homes continue to fall, some people have been putting off their dreams of moving into their own dream homes and are waiting it out until things to start to improve again.

Playing it safe is arguably the best way to go, especially when there’s no hard evidence that the South Florida housing market is going to improve and everyone is basing their outlook and assumptions on predictions.  As a result, almost every South Florida neighborhood has gone down in price, and that also includes vacant lots in these neighborhoods.

Empty land is now much more affordable and so is building materials like drywall which has gone down about forty percent, largely due to the relative collapse of the "building boom" of three years ago.  While everyone remains fixated exclusively on the housing market and the difficulties it’s experiencing, future homeowners should know they can build the homes they’ve always envisioned for thousands of dollars less.  On top of that, developers have more properties and vacant lots than they know what to do with and are offering deep discounts for anyone willing to take it off of their hands.

While home building now is considered by many a better time than ever, future house builders should still be mindful of some important factors, the foremost being the enormous commitment of time and resources involved in constructing a property from scratch.  You should also know that unless you’ve done extensive research and have developed a viable blueprint and budget, the entire process can quickly become a headache, to say the least.

Budget and meticulous planning are the key steps before you decide to call up a contractor or head to Home Depot to buy the materials.  As long as you stick by it, the thousands of dollars you saved will seem trifling when compared with the finished result that completely represents your unique vision.

Foreclosures ominously appear in South Florida on a daily basis overwhelming the real estate market with investor pessimism. No matter what your opinion is to the cause of this market slump, everyone agrees something needs to be done. Deep pocketed investors and philanthropic organizations from around the country are gathering together to restore normalcy to the fledgling economy. Their efforts are anything but "token" and they are serious about restoring what is a brighter future for all of us.

The Ford Foundation is interested in committing over $11 billion in assets to assist and create programs where distressed homeowners can have the capital to create leverage on their current deals with loan institutions. This might provide a situation where down payments are paid by these corporations, relaxing the interest rate homeowners need to pay on their mortgages.  

Living Cities is an organization that has assisted impoverished communities in the inner city. They are interested in stepping up and creating a similar program to the Ford Foundation along with acquiring property that has been left behind after foreclosure to hopefully make use of it. They have raised $10 million and hope to raise more to fight poverty in the city.

More groups are entertaining the prospect of loaning money to states with high abandoned properties and foreclosure rates to fight the trend of property loss. Some of these corporations have considered finding affordable housing for former homeowners to increase property ownership and stimulate the market

Understanding the unfavorable situation many South Florida homeowners are currently going through, philanthropists support toward distressed homeowners is one of many actions that needs to be taken to recover from the slump. With the vigilant compassion displayed by giving companies and charitable organizations it's no wonder most people still believe South Florida real estate is a good long term investment.

Several efforts have been made recently to try and encourage people to not only spend during a time when buyer confidence has decreased but to also assist homeowners in managing their property taxes.  One of these as you’ve probably read about and has been covered thoroughly in news reports is the intended income tax rebate that’s on the brink of being passed.  The others you might be aware of are the recent passing of Amendment 1 and the Fed interest rate cuts.

Selling a Miami Beach home in the current real estate market climate is tough, that’s already been well established.  Let’s instead focus on the homeowners who may have been entertaining the thought of selling but were hesitant for fear of being slapped with a substantially higher property tax.  Amendment 1 actually reduces annual taxes and ensures that should a homeowner move to a new place, they won’t suddenly find themselves paying higher taxes.

Consider senior citizens who have children that have since moved out and found their own place.  These people may have wanted to downsize to something not quite as large but have resisted due to incurring higher taxes.  The home they choose will more than likely cost less and what’s more, they’ll be paying the same amount as if they had never moved.

Anyone with a home equity line of credit will also see their rates lowered significantly, a great relief to anyone that may be struggling with making monthly payments and trying to avoid foreclosure.  The tax rebate can also be used towards such payments or put away for some other big life investment like buying a new car, accruing money for a Miami Beach condo down payment or keeping around for any unforeseen emergency situations.

Tax cuts and rebates, interest rate reductions, they all go a major way towards restoring faith in the Miami Beach real estate market as well as throughout the country.  This year may finally be the one where things slowly begin to point a much better 2009 market climate.

Foreclosures have tripled since last year and are more rampant than ever, with over 300,000 homes being returned to lenders since August of this year per Foreclosures.com figures.  While this news may not bode well for homeowners already straining to make their mortgage payments, it does present worthwhile prospects for investors.  Before going all foreclosure gung ho, make sure you know exactly what you’re getting yourself into.

What’s an REO and a foreclosure?  An REO (real estate owned) property is one that no longer carries a mortgage, has failed to sell and now belongs to the lender.  If you’re just getting your feet wet, the latter may prove easier than the former since you’ll be able to not only view the property, but also receive a title insurance policy.  With foreclosures the chances of seeing what you’ll be buying are hit or miss and you’ll also be up against other investors who may have a better grasp on playing the auction arena.  Each type comes with its negative and positive aspects, find which one works best for you.

Where should I begin?  Chances are you can either browse through the MLS or contact a realtor who knows about foreclosures directly and ask them about foreclosures in a precise area since banks tend to join forces with them in order to get rid of them.

Am I getting a good deal?  Lenders, despite having a glut of properties to contend with, are still looking to make a decent profit, although some of them can be persuaded to sell them at up to a sixty cent per dollar loss.  Also keep in mind that the property was likely purchased at a higher amount, with the former buyer intending for its value to increase.  A property that was once $100,000 is now considered a steal at its foreclosure price of $50,000.  Thus, you’re already making a profit regardless of whether or not the property appreciates.  However, be aware that with a foreclosure property, you’re running the risk of receiving a dilapidated eyesore since most likely the previous owner was unable to afford the upkeep due to loan payments.  That inexpensive cost may become a moot point since you’ll end up paying potentially exorbitant fees in remodeling and repairs.

Are there other options besides cash?  For the most part, foreclosures require cash since they’re considered uninsurable and usually require some work done.  While there are a couple of institutions that may be willing to offer you some financing options, there are plenty of other venues you can pursue such as home equity loans and private investors to help you find the necessary funds.

What’s the foreclosure outlook?  The real estate slump actually creates a positive effect on foreclosures which will likely continue to experience a healthy growth for the next couple of years.  Despite the travails lenders are experiencing, real estate--housing slump aside--is still one of the most worthwhile and fruitful investments you can make.

In real estate, people want variety which is why some choose to move into a traditional home while others opt instead for the comfort of a posh condo unit.  The debatable benefit of living in a condominium is you can live in affluent areas like Miami Beach and Aventura for a much more economical price than what it would cost you if you decided to go the traditional route.

The niggling problem is that South Florida is brimming with condominium buildings which makes choosing your future home a little more of a hassle than it really needs to be.  Use the following as a tip guide to ease the process.

Find an agreeable association.  Every condominium has an association that establishes the rules and guidelines its residents are expected to follow, some more stringent than others.  Pets can be particularly troublesome because many associations simply don't allow them.  Take some time to read up on what's expected of you before you find yourself butting heads unnecessarily with the higher-ups.

Get your money's worth.  A perk of living in a condo is you get extra features like a swimming pool and exercise facility.  Keep in mind though that those two in particular are extremely common.  If a condo carries a lofty price tag, it may be to your benefit to ensure you have access to extra bells and whistles like room service or a spa.

Be pleased with your parking.  Some condos have secure garages while others forego the security.  Some come with one space per residence, others have two.  If you own more than one car, consider the vehicle accommodations being offered.  You don't want to find yourself hunting for a parking space outside of the building, especially if you're considering a Miami Beach condo.

Enjoy your surroundings.  The same way you shouldn't judge a book by its cover, don't be followed simply by aesthetic.  If you're looking for a private condo with glorious tranquil views of the Atlantic, living next to Aventura Mall may not be your cup of tea.  Apply the same rules you would use if you were looking for a regular home in a new neighborhood.