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Category Archives: David’s picks!

Short Sale investors flipping homes – Good or Bad?

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Over the past couple of years since “Short Sales” have been the hot topic in the real estate market I’ve been contacted by several mortgage brokers and investors/firms looking to get access to my clients who need to sell properties and who are upside down in their homes value.

These people offered to help my clients by making an offer on their home. (Banks are only willing to talk about a short sale if we have an offer) They will negotiate the short sale on behalf of the client and purchase the home (if they can get a good deal).

I was quite interested when I heard this the first time, because I know how hard it can be to find a buyer who is willing to wait 3-9 months before they can close on a home (these mortgage brokers who weren’t making money by financing homes now wanted to make a living from people’s hardship) It was pitched to me that I would make the commission on the listing side and on the buying side. After the bank approved the sale I would then market the home below fair market value to find a buyer quickly. (Banks typically give us 30-60 days to close the transaction once they have given us their approval) I would then get the commission on the listing side and maybe the buying side for the investor. WOW that could be as much as 12% commission for one deal! Who wouldn’t be interested in that?! (not me if it’s hurting someone)

After further questioning, I discovered these “white knights” looking to help my sellers get out of their homes make offers at 65% below fair market value minus repairs and tie up the home for several months negotiating with the bank. They had no intention of buying the home unless they can sell the bank on accepting this lowball offer, then finding an end buyer who will pay market value for the home. Once they find an end buyer they use a “Hard Money Lender” to close on the property, then resell the home the same day to the end buyer making a huge profit.

If no end buyer can be found or the bank doesn’t accept the low ball offer the seller could end up in foreclosure, plus during the time the home was under contract with the investor any real buyers miss out on these homes. These investors are not helping the turn around of the real estate market they are just taking advantage of desperate sellers and banks, ultimately you and I as tax payers are fitting the bill for these guys because its our tax paying money that has been bailing out the banks from their losses.

Example: At the end of last year a client of mine made an offer on a home in Crescent Heights, we received a counter offer where the sellers name was scratched out and an investment firms name was in its place. The investor had gotten the seller to sign a contract which allowed the investment firm to control the sale as described above. We did come to terms on a sales price after going back and forth for a couple of days. At the closing the investor walked away with over $13,000. The seller could still be on the hook for any unpaid balance of the mortgage.

I feel the banks and/or the government need to set rules to prevent these investors from taking advantage of our down turned real estate market.

The Waterford town homes in Clearwater FL

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David Price with Coldwell Banker is pleased to announce 2525 Harn Blvd #5, Clearwater, FL 33764. A 2 bedroom 1.5 bath town home listed with Coldwell Banker and The Price Group.

First time home buyer and investors! This like new townhouse built in 2004 is light bright, open and has a very functional floor plan with high ceilings. Huge living and dining room, large kitchen w/island for the gourmet cook, wood cabinets and great storage. Inside laundry room on the 2nd floor. Covered front porch for morning coffee and an open back patio for the BBQ. You are walking distance to the Morningside pool & recreation center & the Trail, the perfect place to bike, roller blade & walk.

This property qualifies for FHA financing with a low 3.5% down payment. First time buyers may be eligible for the $8,000 tax credit. You would need to be under contract before 4/30/10 and close by June 30th 2010. Close to Clearwater beach just 8 miles away, malls, medical facilities, Starbucks and local restaurants. 20 minutes to downtown St. Pete. Not a short sale! So no waiting for 3-6 months to close, you could be living in this home in just 3 weeks.

For a private showing call David Price 727-851-6189 anytime.

Fed survey shows U.S. recession may be over

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WASHINGTON (AP) – Sept. 10, 2009 – The recession is ending and the U.S. economy is finally growing again.

That’s the message implicit in the Federal Reserve’s latest survey of businesses around the country, which found economic activity stabilizing or improving in most regions.

Economists warn the expansion is fragile and will have staying power only if consumers start spending more money. Rising unemployment that keeps Americans cautious could make for a plodding recovery in the months ahead.

The Labor Department will report on Thursday the number of new jobless claims filed last week, which could indicate whether the incipient recovery is slowing the pace of layoffs.

Wall Street economists expect that first-time claims for unemployment insurance benefits fell to a seasonally adjusted 560,000 from 570,000 the previous week, according to a survey by Thomson Reuters.

Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies’ willingness to hire new workers.

While the figures are volatile, first-time claims have trended downward in recent months. Initial claims topped 600,000 for most of this year, until falling below that level in early July.

The total number of people receiving benefits, meanwhile, is expected to drop by about 30,000 to 6.2 million. The figures on so-called continuing claims lag initial claims by a week.

All but one of the Fed’s 12 regions, meanwhile, indicated economic activity either was “stable,” showed “signs of stabilization” or had “firmed,” according to the Fed’s survey. The one exception was the St. Louis region, which reported the economic decline is “moderating.”

Businesses in most Fed regions said they were “cautiously positive” about the economic road ahead. The survey, known as the Beige Book, does not include precise figures.

Analysts predict the economy is growing in the current quarter, which ends Sept. 30, at an annual rate of 3 percent to 4 percent. That’s mostly because businesses, which had slashed investments during the recession, are spending more.

Auto sales have been lifted by the government’s recently ended Cash for Clunkers program. Manufacturing and the battered housing market, which led the country into recession when it collapsed, have also shown signs of improvement.

The problem for the economy is that the expected growth this quarter comes mainly from the auto companies and other manufacturers, which are refilling their depleted stockpiles.

Those inventories had dwindled as factories and retailers sought to bring what they had more in line with reduced sales. Any robust growth in the economy might be short-lived if shoppers don’t step up their spending.

In the Fed survey, most regions of the country reported that the clunkers program had boosted sales. Other merchants struggled. And consumer spending remained soft in most places.

Still, the assessments of businesses on the front lines of the economy were brighter than those they provided for the last edition of the Fed survey in late July.

At that time, most regions of the country reflected only that the recession was easing its grip. “That’s a pretty significant change in tone from the previous Fed report,” said Brian Bethune, economist at IHS Global Insight.

The survey’s findings will figure into discussions when Fed Chairman Ben Bernanke and his colleagues meet Sept. 22-23. The Fed is expected to keep interest rates at record lows, probably for some time, to help nurture the recovery.

“There are presently some signs that the economy is stabilizing and even reviving in certain areas, despite mixed signals,” Richard Fisher, president of the Federal Reserve Bank of Dallas, said in a speech in Texas.

The market for homes is still weak — though it flashed some signs of improvement. In most places, buyer demand was stronger for cheaper homes, and in and around Philadelphia, sales were up for more expensive homes, too.

Fed regions credited a tax incentive for first-time homebuyers with increasing sales. Home prices kept falling in most parts of the country, though in the Dallas and New York regions, the survey found prices “firming.”

In a sign that lenders’ efforts to help troubled mortgage holders may be helping, the number of U.S. households threatened with losing their homes held steady last month, RealtyTrac Inc. reported Thursday.

The number of foreclosure-related filings — including default notices, scheduled auctions and bank repossessions — remains 18 percent higher than a year ago.

There was plenty of bad news in the survey. In the commercial real estate market, demand stayed weak, and construction fell in all parts of the country. And the job market was still sickly all over the nation.

The nation’s unemployment rate, which stood at 9.7 percent in August, could top 10 percent this year. Fisher, of the Dallas Fed, called for “uncomfortably high unemployment” as businesses keep cutting costs.

Reports show economy mending

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WASHINGTON – July 30, 2009 – Economic indicators keep saying what investors have known for months: Things are getting better.

The latest government report to reinforce a more positive view of the economy’s health was the Federal Reserve’s “beige book,” released Wednesday, which indicated many parts of the nation are seeing economic stability. Earlier in the day, President Obama told spectators at a town hall meeting in Raleigh, N.C., “We may be seeing the beginning of the end of the recession.”

And the July update of the USA TODAY/IHS Global Insight Economic Outlook Index predicts the economy will grow October through December, the first increase since September 2008.

“The evidence (of recovery) is building every day,” says Jim Paulsen of Wells Capital Management. “It’s settling and gives people more faith in what they’ve seen” from stock and bond markets.

The reports echo what stock prices have been predicting since March. The Standard & Poor’s 500 index has soared 44 percent from its March 9 low, despite falling 0.5 percent Wednesday.

While the latest pieces of economic data provide some comfort, they by no means signal a return to the boom times. Economic experts say they still are on the watch for information about:

• Clues on when a meaningful recovery is firmly underway. The beige book indicated the economy is still far from robust, because five of the Fed’s 12 regions – Boston, Philadelphia, Richmond, Atlanta and Dallas – were “subdued” or “weak” and Minneapolis was faltering.

“There may be a bottom, but where’s the bounce?” says Doug Roberts of Channel Capital Research. “There’s still a significant level of weakness in the economy.”

• Signs of health in the commercial real estate market. The beige book sounded concerns about the demand for office buildings, retail space and manufacturing facilities, says John Canally of LPL Financial. The fact commercial real estate remains soft could be a sign that employment, too, will be weak until early 2010, he says.

• Evidence of the federal stimulus kicking in. Much of the future hinges on how stimulus spending steers the economy, Roberts says, which won’t be known until next year. Some additional clues, though, will be released this week with reports on jobless claims today and GDP on Friday.

“There’s a lot of information that supports the idea we’ve turned a corner,” Paulsen says. “But there’s still a lot of doubt.”

MLS stats

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Check out these stats. Then ask the queston, has the real estate market in Pinellas County hit the bottom?

6-09_condo_quarterly_median_price_2001-2009

Single family median price 2001-2009

Sure looks that way, wouldn’t you say.. If I was a buyer who had been waiting for the bottom, I’d be getting out into the market to buy me a home. Call me today or visit www.PriceGroupRealtors.com and signup for a free account to access the MLS.

Go Green – Water Your Lawn Less and Reap the Eco-Benefits

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RISMEDIA, April 8, 2009-(MCT)-With Earth Day just around the corner (April 22), many of us are thinking of ways in which we can live a greener lifestyle. Now that spring has arrived, one of the best ways to go green at home is to use less water in both your yard and garden. 

April brings showers and showers revive grass, but soon thereafter, people start showering their lawns.

The average lawn rarely needs to be watered, said Bruce Augustin, chief agronomist for Scotts Miracle-Gro Co., a garden products company. Many homeowners think they have to water their lawns because everybody does it, Augustin said. Yet federal research shows only about 15% of homeowners actually do, and the other 85% still have lawns. Here’s why – even if you and your grass are completely hooked on the sprinkler – you can (and should) start weaning your lawn.

For example, the Chicago area gets about 36 inches of rain a year on average; its grasses need about 43, Augustin said.

Overwatering is bad for your grass. It encourages weak, stunted roots that can’t keep the grass alive when the weather gets dry. It fosters fungus diseases and provides a perfect home for root-munching grubs.

Too much watering also pushes grass to grow faster. Lay off the sprinkler and you can mow less often.

What happens to water that your grass doesn’t need and can’t soak up? It runs off into storm drains and, combined with sewage, increases the load on treatment plants. If you’re also overfertilizing, as many people do, the runoff can carry nitrogen and phosphorus that pollute rivers and lakes.

There are other environmental costs that come with watering your lawn too much. The water from your outdoor faucet had to be taken from either a lake or a well; filtered; treated with chemicals to make it safe enough to drink and pumped to your house, at a cost in energy as well as tax dollars. Using potable water for lawns is wasteful, and “your lawn doesn’t really need fluoride,” said Debra Shore, commissioner of the Metropolitan Water Reclamation District of Greater Chicago.

In a world in which fresh water is growing ever more scarce, those of us blessed with an abundance of it “have a moral obligation to show that we are using it wisely and carefully and respectfully,” Shore said.

Here are some tips to keep your lawn happy and be conscious of the environment at the same time: It’s the single most powerful thing you can do to get a lawn that uses less water, has fewer weeds and needs less fertilizer: Set your mower as high as it will go and leave it there.

Mow it high –

Short grass is weak and needy. Taller grass – 3 to 4 inches – grows deep roots that absorb water and nutrients efficiently, collects more life-giving sunlight and shades or crowds out many weeds. Taller grass doesn’t mean you will have to mow more often, but when you do, leave the clippings on the lawn to return moisture and nutrients to the grass.

Get a rain gauge – Knowing how much rain has fallen will reassure you that you don’t need to water. When tempted to water your lawn, get a trowel and dig out a plug of lawn. If the soil is moist within the plants’ root zone, 3 or 4 inches down, leave the sprinkler in the garage.

Get sturdy grass – Fescues are tough and thrifty with water. Usually fescue seed is mixed with bluegrass, which is less drought-resistant but finer and spreads to knit the lawn together. Use a fescue-rich mix to seed or overseed. If your lawn is all bluegrass, overseed yearly with fescue.

Establish grass well – The only time to water your lawn every day is when you have scattered seed, in early spring or early fall, and are waiting for it to sprout. A brief sprinkle will do, just enough to keep the seed moist. Spread mulch to hold the water around the seed.

Embrace summer dormancy – Grass naturally quits growing and dries out in the hottest part of summer, then revives and greens up when fall rains come. Go with the flow rather than watering to force the grass to stay all-green, and you’ll save water and escape mowing under the hot August sun.

Water long and deep – When you do water your lawn, run the sprinkler long enough to lay down the equivalent of 1 inch of rain. (Use a rain gauge to check). Don’t water again until your trowel test tells you the grass needs it.

Fertilize, but not too much – A good lawn does not require the heavily advertised five-times-a-year fertilizing schedule. An application of slow-release fertilizer once in spring and once in early fall is enough.

Work on the soil – Top-dress the soil with screened compost at least once a year to foster the rich ecosystem of underground organisms that delivers nutrients to roots and makes soil great.

Home Warranty May Come In Handy

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You are about ready to close your real estate transaction on a home; did you consider a home warranty?

“It is not mandatory in any state that you have to get one. But in some states it’s mandatory that it is offered on a purchase agreement of the real estate contract,” says David Sobel, VP of Sales, for Home Warranty of America.

Depending on where you live, you may have heard about a residential service plan or home warranty from your real estate agent. How important are these warranties? What do you really get? Let’s explore.

Why a home warranty?

Sellers want peace of mind that buyers won’t be calling them after the sale of their home, with problems about items in the home breaking down and expecting the sellers to pay to fix them.

Buyers want to know that the home they’re buying is going to be protected and not cost them a lot of money once they move in. The home warranty helps both sides achieve their goals.

Also, in these tough economic times, Sobel says sellers can take comfort in knowing that the home warranty can help. “It does help sell homes,” says Sobel. He says that when buyers are faced with a choice between two similar type houses with a comparable price point, the house with a warranty is usually preferred.

What’s covered by a home warranty?

The plans differ from company to company but, generally speaking, the home warranty covers major mechanical systems and appliances such as furnaces and air conditioning, plumbing and electrical items, and appliances.

“It’s a repair or replacement warranty,” says Sobel. When something malfunctions, the homeowner calls the home warranty company. A technician is sent to look at the problem. The homeowner pays a flat fee for the service call. “Then the warranty company either repairs or replaces the [warranty] covered item,” says Sobel.

When to buy a home warranty?

The best time to purchase a home warranty, according to Sobel, is during the actual real estate transaction. This is because “not all companies offer it later.” Sobel adds that what’s offered later is often not as good, “Those prices [for the home warranty] after the transaction typically increase and the coverage usually decreases,” says Sobel.

He says this is because if there is no real estate transaction then there is no due diligence being done. “No inspection was done. The seller didn’t disclose if things were working,” explains Sobel.

What does a home warranty cost? Sobel says they average about $400 across the nation with a flat service fee ranging anywhere from $50 to $100 per call.

Who pays for it? This can vary from state to state, depending on market conditions. “In today’s environment, the buyer has more leverage so we’re seeing the seller pay for it more often,” says Sobel.

Know before you buy.

A few key steps can help you decide which company to use to purchase a home warranty.

      

  • Make sure the company is licensed in the state that the home is in. 
  • Verify that the company is real — sounds obvious, but lots of scams occur when some consumers find the company online and then don’t bother to confirm that the company is more than just a website. 
  • Call the company and ask for referrals. Find out what other customers are saying about their experience with the company. 
  • Don’t fall for gimmicks. “If a company is giving you all the coverage that other companies are offering at a discounted rate of 50 percent off, run as fast as you can — it’s too good to be true,” says Sobel. He says all the national companies selling home warranties offer plans that are within a five-to-10-percent price range of each other. 
  • If a company offers a gift card or incentive to buy the home warranty, “that’s not a real company. It’s illegal to give incentives to buy warranty.

How to Use Your Time Wisely

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RISMEDIA, Nov. 15, 2008-What is it you want to get done faster-zip through your to-do list, secure a business loan, land a job? Like me, author Samantha Ettus wants to do almost everything faster. She calls herself “time crunched.” She walks fast and talks fast and says technology now requires her to respond fast. Struggling to find work/life balance has led Ettus on a passionate search for how to do things more efficiently. “I feel like if you do things better, they take less time,” Ettus explains to me.

Which is why Ettus has called in the experts. In her book, “The Experts’ Guide to Doing Things Faster,” big names like Virgin Group founder Richard Branson and real estate maven Barbara Corcoran share their strategies for being more efficient in every aspect of life-from home and work to romance and health. Some useful work chapters are “Reduce the Length of Meetings,” “Return Phone Calls” and “Pick Up a Foreign Language.”

One of the busiest people I know of, sports guy Joe Rose, can relate to America’s obsession with efficiency. Rose appears on Miami radio station WQAM-560 in the mornings and TV station NBC6 in the evenings and squeezes in coverage of Miami Dolphins games on weekends.

He says he often feels overwhelmed. What does he want to do faster and better? Use technology, of course. “I would love to use technology to be more efficient and organize myself.”

Rose also wants to reclaim some family time, which gets sacrificed between work responsibilities and charity events. “It’s really hard for me to say no.”

Looks like Rose could use the chapter “Say No” by Tim Draper, founder of a venture capital firm that has heard more than 100,000 business pitches. Draper’s top tip: Depersonalize it, be decisive, do it now!

One of my favorite chapters is Branson’s on “Getting a Loan.” You might remember Branson as the billionaire/adventurer who owns an airline and music megastores.

What you might not know is as a young entrepreneur, he got a loan from an aunt that helped launch his music empire. If you can’t get money from banks, a fast way to pursue your dreams is borrow from people you know, Branson says.

His guidelines include finding someone who supports what you are trying to accomplish and can afford to help. He says you must have a plan for how you’re going to repay the loan, document the debt and repayment plan, make payments on time and keep accurate records.

“Your lender wants you to succeed and will likely be more flexible than a bank to accommodate any misfortunes, as long as you are really trying.” he says.

Now, this may seem like a trivial thing, but surely one of the most inefficient uses of our time is looking for things-a lost pen, elusive car keys, an important document. Ettus tells me the chapter “Find a Lost Object” is one of her favorites.

Personally, I’m amazed by Michael Solomon’s title: findologist.

His advice is to never look for something when you are agitated. He says wait until you are prepared to search systematically by using his 12 steps, one of which is “objects tend to travel no more than 18 inches from their original location.” So, measure 18 inches and search it meticulously.

I admit that often, I feel harried from juggling my coveted responsibilities.

Around me I see families like mine squeezing more and more activities-soccer games, karate lessons, religious school-into their schedules, seeking to fill their lives with more fun and meaningful experiences. The challenge is to maintain a sense of control.

To pull it off, most of us make to-do lists. My obsession with these lists has created a booming business for Day-Timer.

Of course, the chapter “Tackling Your To-Do List” changed my approach. Kate Gosselin, the star of “Jon & Kate Plus 8,” says clear your mind each day before you write your list. Write down main groups of activities or events to accomplish. Highlight the time-sensitive items and start with those. Keep a running list in each category and cross things off as they are completed. Use your to-do list to determine where you can involve other people. (I would bet this is where most of us go astray).

Thrilled with advice from experts, I started to wonder, why are so many people struggling with personal efficiency? I asked Julie Morgenstern, a productivity expert and author of “Making Work Work,” “Never Check E-Mail in the Morning” and “Organizing from the Inside Out.”

“It’s all connected to our ambitiousness,” she says. “We are trying to fit 80 pounds of stuff into a 60-pound bag.”

Now, she says, we have to add being frugal to our already crowded schedules. People have to spend more time balancing their checkbooks and bargain hunting. Morgenstern says she is spending more time teaching people how to prioritize.

I asked Morgenstern if American workers may be too focused on efficiency.

“You don’t want your whole life to be operating at a fast speed,” she says, adding “You want to cherry-pick some things to do quickly so that other things you can enjoy for the quality of the experience.”

Cindy Krischer Goodman is a workplace columnist for The Miami Herald and weekly television.