What DAYTONA BEACH Short Sales Involve

Short Sale Strategies Take Vigilance

Following some legislative changes, successfully navigating a DAYTONA BEACH short sale has become a little easier, but is still a transaction that takes care and vigilance. A short sale -- the arrangement between seller and mortgage lender that allows the seller to sell the property for less than what is owed – can be quite involved.  It requires negotiation directly with the lender, and contractual arrangements that can carry over into the future. If you are considering short selling your house, or simply want to know more about what it would entail, these are a few pointers to bear in mind:

Seek Financial Advice

A short sale is not always the best solution.One alternative, for instance, may simply include opening a discussion with the lender to see if a revised payment plan would allow you to continue residence.  On the other hand, if the financial situation precludes less stringent measures, a short sale may save you from declaring bankruptcy by causing in the remainder of the debt to be forgiven. The Mortgage Forgiveness Debt Relief Act can relieve a short seller from some or all of the taxes otherwise due from the gain realized through such forgiveness – but that’s not certain (and another reason to consult a financial expert). Even with a short sale, you may still end up owing the lender quite a bit of money.  Speaking with a financial advisor and understanding your potential financial liability is absolutely key before committing to a short sale.

Choose an Experienced Short Sale Agent

Every bank is different, and so is every short sale transaction.  Hiring an experienced agent to list your home – one who has successfully closed previous short sales -- will help arm you with the guidance you and the buyer will need to successfully complete the sale.  Don’t hesitate to ask any potential agent how many sales he or she has actually guided to completion. 

Be Patient --But Proactive!

Once the lender has approved a short sale, marketing can begin.  However, you must be prepared to wait. Every decision that you and your buyer make has to be approved by the lender. This takes time – as much as 4-6 months or more. It can be maddening, but it’s not uncommon to lose several offers along the way.  Whatever you do, do not stop paying your taxes or HOA fees if applicable.  Keep in mind that short sales are all about cash: if you have waited 6 months to get approval from your bank, and your buyer finds out at the last minute that you owe hundreds (or thousands) to other entities tied to the property, that buyer may balk – putting you back to Square One!

If you are thinking about the applicability of a short sale for your DAYTONA BEACH home, contact me to discuss a winning strategy. I have the experience to help – and I’ll be happy to put that experience to work for you.

ORMOND BEACH REOs Tempt Veteran & New Investors

REO Investments: Cash Cow or Cash Drain?

ORMOND BEACH REOs Can Pencil Out as Tempting Investments

Novice and professional investors find themselves in competition over ORMOND BEACH REO and foreclosure opportunities. The goal of building a long-term, profitable investment is the same for both groups, but the professionals have an institutional advantage. They have systems in place and experienced personnel who bring a high degree of confidence to their estimates of the financial tradeoffs for any candidate property. Novices have to rely on their own calculations.

For readers unsure of that  ‘REO’ expression, it’s an acronym that is short for ‘real estate owned.’ Not very illuminating, is it? Better is what most people mean when they describe a Omonnd Beach REO: a property whose ownership has reverted to a lender.

Whether buying with cash on the courthouse steps or taking advantage of record low mortgage rates, every investor needs to boil down the cash flow versus potential net return when evaluating any Omond Beach REO’s potential. First step: consider the ongoing out-of-pocket expenses:

·         Leasing costs

·         Management cost

·         Capital costs

While leasing and management fees are fairly predictable, a REO home often requires more deferred maintenance attention than does a typical occupied home (which means higher upfront capital expenditures). These expenses help offset the tax burden future income would create – and there are more:

·         Insurance

·         Taxes

·         Lawn care

·         Tax return preparation fee

New investment property owners might assume that everything they do on their property is a write-off.  However…not so fast! The IRS has a different opinion. Appropriate tax-deductible repairs can include painting, fixing a broken sink or replacing a faulty lock.  Improvements, on the other hand, add value to your property – and that means they are not immediately deductible. Investors must instead recoup the cost of improvements by depreciating that cost over a number of years. Improvement examples include new kitchen counters, a new deck or a garage addition.  Perhaps the biggest write-off for investors who opt to finance the investment comes once mortgage payments begin.  The Form 1098 “Interest Paid” amount is usually fully deductible.

Once costs and deductions have been projected, the investor can determine whether rental rates being charged for comparable homes are adequate to support the purchase price being contemplated. So, whether it’s your 1^st or 50^th investment, income properties should be evaluated with the long term in mind.  Today’s foreclosure and REO market offers tempting record low prices, but careful analysis still needs to be done.  If you are considering buying a REO in Ormond Beach, call me anytime.  Whether buying or selling, with the right tools it is possible to produce a valuation model accurate enough to assist your decision-making process.

Time to Sell Your Daytona Beach House?

Daytona Beach House Sales Fall into Two Categories

Control the Timing for Your Daytona Beach House Sale

Every homeowner can have all sorts of reasons for selling their Daytona Beach  house. Those in the boomer generation can be in one of the traditional phases of retirement (planning, transitioning, initiating) or perhaps in one of the newly-popular phases (postponing, rejecting).

For them and everyone else, the decision about whether to sell the house falls into one of two categories: those triggered by economic pressures -- or all the other reasons. In all cases, being in control of the timing of your house sale will put you in control of the process. That pays off.

Even if the money factor doesn’t rule, it’s vital to first do some hard-nosed dollars-and-cents calculations before putting your house on the market. Find out what a realistic listing price range will be. I or another experienced real estate professional can be a major asset in establishing this: you can count on a complimentary consultation that will offer comparable current values for Daytona Beach’s house sales.

Then consider current rental rates for a house like yours. Sometimes you will be surprised to find that the most beneficial course would be to rent your house for an interim period, especially in light of some evidence that a market rise is just beginning. When you are penciling out these factors, be sure to include realistic maintenance expenses and, if you are moving out of the area, property management fees. I can help here, too.

If financial pressure is the key motivating factor, make sure you have weighed the alternatives before sealing the decision to sell your house. If you haven’t done so already, find out if refinancing is an option. The first answer isn’t necessarily the final one: check with other financial sources as well as your current mortgage holder. Mortgage rates are lower than ever, and if unmanageable mortgage payments are at issue, this could be the most direct route to reducing that outflow and giving you time to sell on your own timetable.

Being methodical and patient when deciding about any house sale can make a big difference in the bottom line. I’m here to provide current Daytona Beach information and guidance that will help make that possible.