REALizeUtah.com Real Estate

Is now a good time to buy a foreclosure?

This is a very common question from both real estate professionals and prospective buyers. Obviously, because local market conditions vary, the answer is different from market to market. But there are questions that buyers in any market should be asking before they make an offer on a property in foreclosure.

What’s the first step buyers need to take?

You need to be preapproved for a loan before shopping for a foreclosure. If you’re thinking of buying a foreclosure as an investment or second home, you need to understand that financing the home will be more difficult and more expensive than financing a primary residence. Lenders typically charge higher interest rates and require a larger down payment for investment or second homes.

How can you tell a bad foreclosure from a good one?

Certainly there are great deals in many markets for both investors and buyers looking for a primary residence. But making a sound deal can be tricky. Buyers need to be wary of unpaid liens, including mortgage debt, taxes, construction loans, home equity lines of credit, and possibly a second or third mortgage. Any or all of these financial obligations could become your responsibility when you purchase a property in foreclosure. Unless the property goes through a foreclosure auction and becomes a bank-owned REO, the outstanding foreclosure liens and fees could be simply transferred to the new owner-you.  Don’t fall into the same financial trap as the previous owner.

What are the costs of buying a foreclosure?

It takes money to make money. The best opportunities are for buyers with cash. If you are planning to rent out the property or even resell it for a quick profit, make sure you consider the carrying costs, including sales commissions, marketing costs, vacancies, taxes, insurance, and maintenance costs. Once you’ve calculated all the expenses, add on another 10 percent to 15 percent. If you don’t build in a “surprise fund,” you might be the next foreclosure statistic.

How does choice of neighborhood affect foreclosure investments?

If you’re looking for a good investment you should generally avoid neighborhoods overrun with foreclosures, particularly newer subdivisions in overbuilt exurban areas. Investors will be tempted to buy foreclosures in these areas because they offer the steepest discounts-but they also carry the most risk of further depreciation. Look in well established neighborhoods with good schools and transportation. If you’re in a market where prices are still falling, factor the falling prices into any offer you submit on a foreclosed property.

Source : NAR

Please feel free to call me if you have any questions.  If you’d like to see a list of foreclosed properties in your area, I have access to lists of foreclosed and short sale properties anywhere in the state of Utah.

After swimming along with mortgage interest rates at ALL TIME LOWS for a couple of months we were shocked back into reality about 10 days ago when they started climbing rapidly. In a period of 5 business days our best conventional loan rates went from 4.5% up to 5.25% and FHA loans rose from 4.875% up to 5.5%. WHEW. Of course these were still fabulous rates compared to historical trends, but we were all shocked anyway!!

Well, in the next 5 days the dramatic rise sopped and rates have again slipped back down a little – and today our best conventional rates are at 4.875% and FHA loans can be priced at 5.375%. No one expects these low rates to stick around forever and every forecast we see has rates rising significantly over the next 12 months. Buyers should take this into consideration and get their bargains now – a difference of just 1.0% increases the cost of ownership of a $300,000 property by $15,000 in the first 5 years. And anyone with a fixed rate of 5.5% or more should consider refinancing to lock in a lower rate NOW.

With the weather warming up, and ski season over, everyone is thinking about summer activities. One of the great things about Park City in the summer is the wide variety of things to do, and one of my favorites is the summer concerts at Deer Valley! They are on Wednesday afternoons, and are completely FREE! You can stop by the farmer’s market at the Canyon’s resort on the way up, and pick up some fresh fruits, maybe a pizza from Volkers bakery, bring a 6-pack of beer or a bottle of wine, and enjoy a nice afternoon in the great mountain outdoors! Please see below for the free concert series schedule. They begin on Wednesday, June 24th!

2009 Summer Concert Schedule

Wednesday, June 24, 2009
6:00PM – 8:00PM
Rich Wyman

Wednesday, July 1, 2009
6:00PM – 8:00PM
The No Name Jazz Band

Wednesday, July 8, 2009
6:00PM – 8:00PM
Fat Paw

Wednesday, July 15, 2009
6:00PM – 8:00PM
Soul Survivors

Wednesday, July 22, 2009
6:00PM – 8:00PM
Swagger

Wednesday, July 29, 2009
6:00PM – 8:00PM
Mary Beth

Wednesday, August 5, 2009
6:00PM – 8:00PM
Dr. Bob

Wednesday, August 12, 2009
6:00PM – 8:00PM
Sin City Soul

Wednesday, August 19, 2009
6:00PM – 8:00PM
Coverdogs Featuring Tony Oros

Wednesday, August 26, 2009
6:00PM – 8:00PM
The Detonators

Please check back to future posts – I’ll be featuring Deer Valley’s “Big stars, bright nights” series, as well as the free concerts at The Canyons Resort!

If you missed the previous post about the $8000 tax credit - check it out!

In addition to that -there is a $6000 grant available from the state of Utah – The “home run grant”. In a nutshell – The Home Run Grant is a mortgage assistance program that grants $6,000 to home buyers who purchase a newly-constructed, never-occupied, primary, single-family residence in Utah. Buyers do NOT need to be first time buyers under this program! CLICK HERE for full details on the program, including how to apply, income restrictions, and limitations. There are only 1600 of these $6000 grants available – when they’re gone – they’re GONE, so if you’re considering new construction, now’s the time.

What does this mean to you? If you’re a first time buyer, AND are considering new construction, there’s $14,000 in ‘free money’ out there for you! With sellers and developers ready to negotiate, and mortgage rates still at historic lows – There has never been a better time to buy!

With the ski season coming to an end, some sellers are more anxious than ever to get their properties SOLD, and they are making some INCREDIBLE deals! Some are seller financing as well, and for people who are first time buyers, or who haven’t owned in 3 years, there is the extra incentive of an $8000 federal tax credit! Now is the perfect time to invest in Real Estate! There are many income-producing properties available in Park City, and throughout the Salt Lake Valley! It used to be that you had to pay out of pocket every month to own an investment property in Park City – But there are a lot of properties available now, and they are priced RIGHT to cash flow. Please contact me if you want any more information on properties for sale in Park City and Summit County, Salt Lake City, and the Heber Valley!

In today’s challenging market, more and more sellers are offering seller financing for buyers in order to help sell their home! There are a lot of benefits for both buyers and sellers!

Buyers: Maybe you’re self-employed, and can’t prove all of your income. Maybe you have some dings on your credit due to the challenging economy. Maybe you had a previous foreclosure, and you’re looking to downsize into a more affordable home. Even if you’re just lacking a down payment – Seller financing might be a great option! AND – for first time home buyers (or people who haven’t owned a home for 3 years) the $8000 federal tax credit is STILL AVILABLE TO YOU! If you buy a brand new home (never lived in) you may also be able to apply for an additional $6000 grant from the state of Utah!! The bottom line is – with seller financing, you COULD, NOT ONLY BUY A HOME, BUT POCKET UP TO $14000 if you qualify for both programs!!! Call me for more details! I’m happy to help you buy a home with seller financing!

Sellers: Can’t sell your home? Consider offering seller financing. There may be significant tax benefits to doing so, AND, you can make a great return on your money! There is a way around most obstacles, please feel free to contact me if you have questions about this process!

Everyone can take advantage of the current market.

If you’ve ever wanted to own a ski in/ski out home or condo, now could be your best chance! Prices have come down in Park City over the past few months, and with incredible financing rates now available, there’s never been a better time. Some sellers are starting to get more desperate to sell with the season coming to an end, and are more and more willing to negotiate.

Visit my new Ski In/Ski Out Real Estate Page to check out listings that are currently available for sale! CLICK HERE. You will find listings for homes and condos at all 3 resorts, so whether you’re looking for a luxury second home residence, or an income producing condo, you should definitely check it out.

Do you have a child who is a college student or recent college grad? Or are YOU a college student or recent grad who would rather own than pay rent? FHA loan programs allow for a parent/grandparent/family member to cosign on a loan for another person, in order to help them show enough income to qualify, and the time has never been better! FHA loans will allow a buyer to borrow up to 96.5%, and with the new $8000 tax credit for first time buyers, borrowers in many cases can get into a new home with almost NO money down! Rates are excellent, as low as 5% in some cases, and with so many houses available on the market, it’s a great time for buyers to get an excellent value on their first home. There are some real “deals” available, and sellers are very motivated.

Please call or EMAIL me if you would like more information. I would be happy to send you my first time homebuyer information packet, which contains more details on the program above, as well as many others, and tons of other great information to get you started on the path to home-ownership.

As part of the stimulus package recently approved, there is an $8000 tax credit for first time home buyers!  A first time home buyer is defined as anyone who has not owned a home in the past 3 years.

Unlike the previous $7500 package, this is a real TAX CREDIT, and does not need to be paid back, as long as the home is the buyer’s primary residence for at least 3 years.

With rates around 5% for a 30-year fixed, and some loans requiring as little as 3.5% down, the time has never been better for first time home-buyers to begin their path of financial stability through equity in their home.

FHA Loan terms also allow for a non-occupant co-borrower (Like a parent or grandparent) to help their younger family members qualify to buy a home at this incredibly opportune time, and have payments, in many cases, less than rent!

Here are a few of the main points about this tax credit.

• The tax credit is for first-time home buyers only.
• The tax credit does not have to be repaid.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

A great resource for the full details on this tax credit is http://www.federalhousingtaxcredit.com/

Please contact me with any questions.  I would love to help you take advantage of this amazing opportunity, and find the perfect home!