Home-Fish Blog

Housing Crisis - Charleston, SC

2010-05-10T23:24:52-06:00

Charleston, SC is the second biggest city in South Carolina, and as such, should be a good indication of what is happening in the South due to our current housing crisis.

150 Bee St Apt 402

A Bee Street Loft offers a modern design with high end comforts. Open floor plan with high ceilings, gourmet kitchen with granite counters and stainless appliances. Bee Street Lofts is a secure gated building with 24 hour surveillance. Unit overlooks the courtyard and city. This unit includes two parking spaces 94 & 95. Move-in condition!!!

This condo looks lavish - granite countertop and modern steel appliances. What a great investment opportunity, right! Wrong, let’s look at the last sale price of this condo:

Price: $374,900
Last Sale Price: $638,375 in 08/2007

Are you kidding me? In three years, this condo lost over $250,000 worth of value? How is this even possible? I’m really at a loss for words here, I expected that this post would be a ‘oh, everything is ok elsewhere’ post, but it clearly is not.

One thing that is clearly not mentioned is the HOA fees. If you are going to look into buying any condo, please be sure about what the HOA fees are each month, and be sure that the bank is up to date with it’s portion of the HOA fees. If you don’t, you could be facing some serious foreclosure hell.

208 Ashley Ave Apt C

Fantastic spacious condo located one block from MUSC campus and walking distance to Charleston’s finest restaurants, fabulous night life, and historic landmarks. Beautiful heart of pine floors, 10’ ceilings, private entrance, new carpet and paint, and huge 2nd floor balcony overlooking Ashley Ave are just a few of the features of this great home.

The MUSC stands for the Medical University of South Carolina, so this property is near a school that produces doctors, surgeons, and tons of other highly specialized practitioners. The going price for this property must be through the roof.

Price: $239,900
Bedrooms: 3
Bathrooms: 2
Full Baths: 1
Half Baths: 1
Living Area Size: 1,699

Wow, that isn’t very bad, especially when you consider that this condo has over 1600 square feet of space! Let’s check the price history:

03/15/2010 Price change* $239,900 -7.7%
02/12/2010 Listed for sale* $259,900 -8.8%
01/19/2010 Price change* $284,900 -5.0%
12/26/2009 Price change* $300,000 0.0%
12/09/2009 Price change* $299,900 5.2%
08/31/2009 Price change* $285,000 –
08/29/2009 Listed for sale* – –

Wow, there has been some serious trouble selling this property. I’m guessing that they were looking to sell before the $8000 tax credit came to an end. Obviously, they were not successful. Why did they have to knock 20% off the asking price in 6 months?

As it turns out, the median income for this area is $21,907. People generally cannot afford a home that is more than 3 times their income - you would need to make $80,000 a year to afford this property.

1845 Hazelwood Dr

Price: $139,900
Bedrooms: 3
Bathrooms: 3
Living Area Size: 2,403

This ranch-style house is what southern properties are known for. It’s huge in square footage, the price is cheap and the pictures show that the property is in somewhat of a working condition. Let’s look at the sell price:

Last Sale Price: $169,950 in 11/2006

That doesn’t seem like that big of a drop in price. Wait, let’s stop looking at the 30,000 difference and calculate percentage lost: ~17.5%. This is definitely not as bad as the condos we’ve seen in vegas, or even the ones we’ve seen in Charleston. Remember though, this is a single story ranch style house in the south. If realtors are to be believed at all, this property should be the least hit by this recession. I would not call a 17.5% drop in value over four years a small hit - and this is happening all across the U.S.

Conclusion

To be quite honest, before writing this article, I was expecting to write a fluff piece on how great the southern economy is. How the low housing prices weren’t touched by the Tsunami that is Option ARM resets, or the raging excess inventory from California. The housing crisis is happening everywhere, in our own backyards (literally), and on our street corners.

View Charleston SC foreclosures to find foreclosures in Charleston or check out all South Carolina foreclosure listings. Don’t let this post discourage you, great deals still can be found. Be cautious, however, as these nightmarish properties do not have good endings for the former owners.

Crime is up, inflation is up, government incentives are about to go away for new home buyers, interest rates will rise, and giant sharks will learn how to skateboard and attack suburban homes in rebel gangs. Some of that may not be true, actually, let’s hope all of it is false.

Finding your foreclosed home in Las Vegas

2010-05-03T13:59:06-06:00

Las Vegas is ripe with foreclosures, and there are many different caveats to be aware of. The steps you will need to take are, briefly, finding a foreclosure, finding a real estate agent, and finally, bidding on the property. It can be a hairy process, full of potholes to avoid, and things to consider. Buying a foreclosed home is not an easy process, and should be undertaken with caution, after all it is one of the biggest financial decisions you will make.

Find your foreclosed home in Las Vegas at Home-Fish, a free foreclosure listing site devoted to helping home buyers find properties.

Las Vegas and the housing recession

”… people are convinced that the best investment decision one can make in today’s recession is to stay away from the real estate market. Only a few people are financially intelligent enough to actually see the opportunity in this housing crash to make money and become wealthy.” – Rich Dad Wisdom - How to Profit from This Housing Crash

It’s amazing how the housing landscape can change in just a few short years. Las Vegas used to be a cornerstone of the housing boom, with new home constructions happening on a massive scale, and old home values skyrocketing. Now, it is an absolute wasteland of foreclosures. What happened? Are we at the bottom? Is it safe to invest?

Obviously these are all questions you must ask yourself, but our opinion at home-fish is, roughly yes. While it may take much longer to come back from this housing recession due to (inevitable) raised interest rates, the end of the $8000 tax credit, and the large amount of foreclosure inventory, and the ARM resets of 2010/2011, purchasing a foreclosed property can be a financial boon. At the very least, you can live in a nice home for pennies on the dollar of what it would have cost in 2006.

As a word of warning, be comfortable for buying and living in your foreclosed home for at least 2 years. Overnight flips raking in tens of thousands of dollars are a thing of the past, maybe the future, but definitely not the present.

How to find your foreclosed home

”… terms such as Real Estate Owned, Auction and Short Sale. These terms are used by many Realtors more for marketing purposes because people associate those particular words with good value. However, this is not always the case. Home evaluation should be done on a case by case basis.” – Types of Foreclosures

Your first step to find a foreclosed home in Las Vegas is to determine how much home you can afford. A good rule of thumb for this is to buy a home that is less than three times your yearly gross income.

This means that if you earn $45,000 yearly salary, you shouldn’t buy a home that is more than $135,000. Doing so may be possible with good credit, but it doesn’t mean that you should. Option ARMs, and other forms of interest only loans are the reason we are in this housing crisis. Obviously, different situations call for different measures, and different loan types will have different monthly payments. Consult a mortgage calculator, factor in PMI, HOA fees, and insurance. Talk with a financial planner to ensure you aren’t getting in over your head.

Finding a foreclosed home is your second step. Free foreclosure listings are available at Home-Fish for REO properties. Auctions and Short Sales are much tougher to get right, and you should consult a realtor if you would like to look into purchasing one of these properties.

Finding a Real Estate Agent

“Real Estate agents can be a huge help in locating good investment properties. Knowing who to look for will save an investor time and money.” – Using an Agent to Buy Foreclosed Properties

When you choose a Real Estate Agent, you are hiring a contractor to work for you. Almost all realtors will claim to be familiar with the real estate purchase process, but finding one who actually is familiar with purchasing a foreclosure is tough. Interview your potential Real Estate Agent like you would a new hire for your company, or a doctor for open heart surgery.

Here are a few questions you can ask the Agent:

Have you facilitated the sale of a Foreclosed Home in Las Vegas?

An answer of no means nexting on the candidate. Ask this over email, or phone as this is the prescreening process.
Which banks / government agencies have you worked with?

HUD, FannieMae, and each bank all have separate processes - this can be a frustrating long experience, and there are tons of cautionary tales. Having someone who is familiar with the process means everything. Relevant Articles: Purchasing a HUD Owned Foreclosure
What loan types could you recommend for me and my financial situation?

FHA loans are available on HUD properties, other loan types are available on other foreclosures. Your realtor should at least know what type of loans are out there, although a broker or lending agent will help you secure the loan.

Of course, this is just the tip of the iceburg. Finding the right Real Estate Agent can mean the difference between making a large profit on a foreclosure, and buying a depreciating property that will haunt your finances for years.

Foreclosure Dangers

“Be very careful about what liens you are taking on when you buy a condo - Banks are not very good about paying HOA fees once they take possession of a house or condo.” – Housing Collapse in Las Vegas

HOA fees, and secondary liens on foreclosed properties can destroy any potential savings. Make sure that when you purchase a bank owned property, you have all of the information about that property. This means checking financial records, vacancy rates in the neighborhood, past purchase prices, similar foreclosed property prices, crime rates, etc. All of these will effect the long term value of your foreclosed home in Las Vegas.

A great free resource for finding your foreclosed home can be found here. Check with your real estate agent regarding each property, double check the HOA fees, and never fly blind. You will need a real estate agent well versed in foreclosures.

Article by Mikkel Garcia

The Housing Collapse - Las Vegas

2010-04-27T20:14:00-06:00

The recent downturn in real estate has meant that homes selling for ludicrous prices in 2006 are now available at huge discounts in the form of real estate owned foreclosures. This new series focuses on the worst of the worst. Homes that were bought for tons of money and now are only worth a fraction of the price.

9413 Abalone Way

Bedrooms: 4
Bathrooms: 2
Living Area Size: 2,203
Price $187,900
Price in 2006 $339,000

This foreclosed property has lost 44.5% of it’s value in the past four years. The median income for this area is $65,889, so this is still only at the very brink of affordability if you go by the 3x rule (The buying price should be no greater than three times your income).

4575 Dean Martin Dr

Wow fantastic views, fantastic floorplan, and fantastic condition!! Just an overall wonderful unit, clean, move in ready, with partial solar film, neutral flooring, modern granite counters with breakfast bar, modern flat panel cabinets with stainless steel accents, undermount sink at island, and so much more!! Buyer to verify all info.

Bedrooms: 2
Bathrooms: 2
Price $259,500 Estimated payment on 30 year loan with good credit: $1,377
HOA Fees $878 per month!

The crazy thing about people who go into foreclosure in they usually stop paying ALL of their bills related to the house. This means the HOA has to make up for the missing dues by increasing paying members dues. When the HOA Fees are almost as bad as the 30 year loan, we are in serious trouble.

What we learned

Be very careful about what liens you are taking on when you buy a condo - Banks are not very good about paying HOA fees once they take possession of a house or condo. This may leave you with huge fees tacked on to your purchase as secondary liens.

I’d go into foreclosure too if paying off a property is guaranteed to put me $100,000 + into debt. With bombs like these detonating in almost every US city, I dont see an end to our housing slump anytime soon.

Article by Mikkel

Purchasing HUD Owned Foreclosure - Home Buyers and Investors

2010-04-18T20:14:00-06:00

Overview

“there will be plenty of HUD homes for sale over the next few years.” – Ilyce Glink

A HUD home, or HUD foreclosure, is a 1-4 unit residential property acquired by U.S. Department of Housing and Urban Development (HUD) as a result of foreclosure on an FHA-insured mortgage. The Federal Housing Administration (FHA) is the part of HUD that provides federal mortgage insurance. If a foreclosed home was bought with a FHA-insured loan, the lender can claim the balance due to the mortgage. FHA settles the lender’s claim then hands over the property to HUD, which then sells the home.

HUD home advertising

HUD homes are normally advertised through weekly newspaper adverts in the real estate classified pages. Another major source of listings is the local Multiple Listing Services (MLS). Any realtor who has subscribed to an MLS can access available listings and HUD home foreclosures in their area. HUD also list their homes at www.gud.gov, and HUD home foreclosures can also be accessed at Home Fish. HUD home foreclosure listings on the internet are maintained by a number of management companies all contracted by HUD. However, buying a home is only possible via an offer presented by a HUD-approved real estate broker.

Procedure of buying

“If you are a first time buyer, it is advisable that you work with somebody who has dealt with purchasing HUD homes in the past” – FHA info

The process of purchasing a HUD foreclosure differs significantly with that of buying a traditional home. HUD homes are sold through a process of bidding that places the investors in line behind the intended owner-occupants. In the course of the first 10 days that a HUD home is scheduled for sale, only owner-occupants are allowed to place bids. If there is no successful bid by the time this period elapses, bidding is now opened to investors.

Financing

Even though HUD is not a lending organization, buyers of HUD homes may be eligible for FHA-insured mortgages. However, the buyer is not required to use FHA-insured mortgages. The buyer could go for conventional financing with an adjustable-rate-mortgage or a fixed rate. Alternatively, the buyer could apply for an FHA-insured loan, enabling the buyer to use a low down payment. The U.S. Department of Veteran Affairs offers VA loans, which guarantee the lender against loss as a result of the borrower’s default. Finally, the buyer may qualify to take over the existing loan on the HUD home, which means paying the same mortgage payments the former owner was making prior to the foreclosure.

Bidding

Bids for HUD homes must be channeled through a HUD-approved agent or broker and are usually submitted electronically. At the time of electronic bidding, the potential buyers must avail an earnest money deposit. Deposits for winning bids are then quickly surrendered to the HUD closing agent. Once the bid is won, the purchaser is required to close within the time period specified the closing agent. The correct sales contract must be issued quickly – within the first 48 hours for most states. A stringent settlement deadline is set, normally 30 to 60 days after the date of the accepted contract. Investing in HUD foreclosures has the benefits of affordability and potentially good returns. But investors, however, should do their research well and exercise patience when going through the process that often favors owner-occupant buyers.

Article by Charles Mburugu

Foreclosures - Real Estate Owned, Auctions, and Short Sales

2010-04-11T11:41:38-06:00

Due to the struggling economy and real estate market, there are several homes on the market that are experiencing some form of ‘distress’. With reduced income or job loss, distressed sellers may lose the ability to pay their mortgage. This means foreclosures may be inevitable. Foreclosure is the process that financial institutions use to sell off (auction) mortgaged property to recover debt. Normally, a foreclosure notice is issued after three of four gaps in the repayment program. The foreclosure procedure by the bank (lender) begins after getting a go-ahead from the borrower. The agreement between the lender and borrower is called a ‘deed of trust’.

There are many unclear and confusing terms today regarding ‘distressed properties’. These include terms used in Real Estate such as Real Estate Owned, Auction and Short Sale. These terms are used by many Realtors more for marketing purposes because people associate those particular words with good value. However, this is not always the case. Home evaluation should be done on a case by case basis.

Real Estate Owned Properties

“A depressed housing market can be bad news for homeowners but good news for homebuyers.” – Tina Brown

When a property does not sell at an auction, all liens are removed from the foreclosure, and the bank now owns the property. These properties are referred to as Real Estate Owned (REO). A home that has been ‘foreclosed’ and is then listed by real estate agents. This gives the property broad exposure to the market, maximizing the possibility of a sale. REO property are usually sold on an ‘As Is’ basis. Generally, lenders are very eager to sell these properties because REO’s tie up their capital reserves and hinder their ability to lend money. In addition, the management of these properties can be very costly.

These properties are usually the most accessible to new home buyers interested in purchasing a foreclosure. See http://www.home-fish.com for a free map of foreclosed properties.

Short Sales

”… as it as it stands today, short sales remain an extremely time-consuming and frustrating process.” – Mark Roth

A short sale occurs when the owners sell their property for an amount less than they actually owe the lender. This happens when the value of a home has depreciated so much that a sale is not able to pay off the mortgage. The short sale is conducted with the consent of the loss mitigation department of the bank. However, the lender reserves the right to approve or disapprove a proposed agreement. Short sales, in most cases, are the first step to avoid foreclosure. The cost of foreclosing on a property could be more than what the bank loses by taking a short sale. By accepting a short sale, the lender saves considerably on expenses associated with the foreclosure process.

Auctions

“Don’t even bother attending public foreclosure auctions unless you’re a pro.” – Real Estate Weblog

Though auctions, short sales and REO’s are all ‘distress sales’, they are distinctly different from each other. In the case of a short sale, the home owner’s name is still on the title of the property and they are the rightful owners who are trying to sell the property. In a foreclosure (auction), the lender takes the possession of the property and the homeowner is no longer involved in the sale. Unlike REO’s, foreclosed properties are not sold by real estate agents. Properties which are foreclosed are auctioned at a Trustee Sale at the Court House in the County where the property is located. A foreclosed property is normally expected to be paid for in full at the time of the auction.

Article by Charles Mburugu