Major deal for key parcels shows new growth opportunities in current market
MIAMI, Feb. 25 /PRNewswire-FirstCall/ -- Lennar Corporation (NYSE: LEN and LEN.B) – In a deal between one of the nation's largest homebuilders and one of the nation's premier real estate investment firms, Lennar Corporation announced today that it has closed a deal with Starwood Land Ventures LLC to acquire or option more than 2,700 homesites in 38 communities across Florida. These land holdings constitute one of the most desirable real estate portfolios to come to market in years.
The homesites are part of the extensive Florida holdings formerly held by TOUSA Inc. that Starwood acquired at auction in late January. The Florida homesites are located in first-time homebuyer, master planned, active adult and premier golf course communities in the Tampa, Orlando, Jacksonville and Southeast Florida markets where Miami-based Lennar plans to build single-family homes, townhomes and garden villas priced from the low $100,000s.
"We are very pleased to work with Starwood on this transaction and we view this deal as a major step forward for Lennar's growth in the State of Florida," said Fred Rothman, Regional President for Lennar. "These new communities will complement our existing operations. We have great designs and floor plans in place for each of the communities and our team is ready to build beautiful new homes at great prices that will appeal to savvy buyers."
Mike Moser, East Region President of Bradenton-based Starwood, said "Starwood chose Lennar as its preferred Florida homebuilder because of Lennar's proven track record for performance and quality."
"Lennar is one of the nation's premier homebuilders and we trusted their ability to help us maximize our return on investment," Moser said. "Lennar's geographic diversity and depth of operations throughout Florida was aligned perfectly with the portfolio we purchased in the bankruptcy auction."
Jim Bavouset, Lennar's Regional Vice President for Acquisitions, said "Lennar was pleased to work with Starwood on the transaction as their position and expertise in the residential real-estate market had made the firm one of Florida's most prominent real estate investors."
"Lennar's unwavering commitment to the State of Florida is enhanced by Starwood's market-changing acquisition," Bavouset said. "We are excited to continue to grow our business in Florida and look forward to a long relationship between all the Starwood and Lennar associates whose hard work brought this transaction together."
Lennar Corporation, founded in 1954, is one of the nation's leading builders of quality homes for all generations. The Company builds affordable, move-up and retirement homes primarily under the Lennar brand name. Lennar's Financial Services segment provides primarily mortgage financing, title insurance and closing services for both buyers of the Company's homes and others. Previous press releases and further information about the Company may be obtained at the "Investor Relations" section of the Company's website, www.lennar.com.
Starwood Land Ventures, LLC is a Bradenton, FL, based residential real estate investment firm focused on land acquisition, development and financing nationwide. The firm is primarily funded by an affiliate of Greenwich, Conn. based Starwood Capital Group Global, a privately held international real estate investment firm founded in 1991. Starwood Land partners with builders, developers, lenders and landholders and provides creative solutions to recapitalize assets with both debt and equity. The firm also purchases debt and specializes in the acquisition, entitlement and development of large, master-planned communities, which may include mixed-use components. Through its platform of partnerships with leading development firms across the country, Starwood Land and its experienced team aim to be the capital partners of choice to land owners, developers and builders. For more information about Starwood Land, visit www.starwoodland.com.
Starwood Capital Group is a private, U.S.-based investment firm with a core focus on global real estate. Since the group's inception in 1991, the firm, through its various funds has invested more than $6 billion of equity capital, representing $21 billion in assets. Starwood currently has approximately $13 billion of assets under management. Starwood maintains offices in Greenwich, Atlanta, San Francisco, Washington, D.C., London, Mumbai and Tokyo. Starwood has invested in nearly every class of real estate on a global basis including office, retail, residential, senior housing, golf, hotels, resorts and industrial assets. Starwood and its affiliates have successfully executed an investment strategy that includes building enterprises around core real estate portfolios in both the private and public markets. For more information about Starwood Capital Group, visit www.starwoodcapital.com.
Some of the statements in this press release are "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described under the caption "Risk Factors" in Item 1A of our Annual Report on Form 10-K for our fiscal year ended November 30, 2009. We do not undertake any obligation to update forward-looking statements, except as required by Federal securities laws.
Source: http://www.prnewswire.com/news-releases/lennar-and-starwood-land-ventures-completes-strategic-deal-on-prime-homesites-across-florida-85403472.html
The Criscitos has been selling South Florida luxury and commercial real estate for over a decade and has sold over $1 billion dollars of property. They work as a multi-lingual team speaking english, Spanish, Italian and Portuguese. They carved out a niche as a leading boutique real estate company with two distinct divisions -residential and commercial- both personally overseeing by Marcela and Anthony Criscito.
Friday, February 26, 2010
Thursday, February 25, 2010
Tips for first-time homebuyers
Time is running out for potential homebuyers to take advantage of the First-Time Homebuyer Tax Credit.
So we solicited tips from five experts in the field to help potential homebuyers navigate what can be a complicated market.
Real estate agent
Role: The Internet can be a great tool for a potential homebuyer, but Willinette Cohen, a Realtor with Prudential J.R. Carucci Real Estate Inc., said it is helpful to work with a real estate agent.
Tip 1: Cohen recommended that potential homebuyers work with lenders to become pre-qualified. “It makes your offer a stronger offer,” she said.
Tip 2: “I would always ask to see a property disclosure.”
The disclosure will list all attributes the real estate agent knows about the house.
“As a Realtor, there’s nothing that we’re aware of that we would not tell a potential buyer,” she said.
Banker/lender
Role: “There are still avenues for financing,” Judy Rowlands, a senior mortgage consultant with First Niagara, assures first-time homebuyers.
But lenders have become more conservative. Rowlands said she looks for applicants with credit scores of 680 or better, an employment history of at least two years and savings.
Tip 1: When applying for pre-approval, potential homebuyers should ask about their loans, Rowlands said, such as if there is a penalty for prepaying principal on the loan.
Tip 2: Rowlands said potential buyers should also ask about programs that may be available to them. First Niagara, for example, has a First Home Club open to first-time buyers who make less than $52,240 annually.
Lawyer
Role: A purchaser’s attorney is essentially an advocate for the buyer going into the closing, said William Calli Jr., an attorney with Calli, Calli & Cully.
Tip 1: Not hiring an attorney could save you some money in the short run, said Calli, but if problems arise in the closing process, it could cost more to fix the problems later.
Tip 2: The main misconception is assuming the lawyer representing the bank is representing the buyer as well, Calli said.
Home inspector
Role: Don Archer, a home inspector with Advanced Home Inspection Service, said the role of the home inspector is to educate potential homeowners. A basic inspection typically evaluates structural integrity, as well as the electrical, plumbing and heating systems.
Tip 1: Most often, Archer said, problems found by a home inspector will not need to be immediately addressed, but occasionally a serious issue is discovered.
Tip 2: Having a home inspection is optional, but Archer said the report is valuable. “I think it’s very important to have the education to pass on to our clients – what is normal wear and tear and what may need to be improved,” Archer said.
Tax adviser
Role: Filing for the credit is something homeowners can do on their own, but Peter Brown, a tax adviser with H&R Block, said, “You might want to have somebody walk you through it.”
Tip 1: New homeowners don’t have to wait to take advantage of their credit, Brown said. “They can file an amendment against their 2009 taxes and get the credit now.”
Tip 2: Brown suggested new homeowners invest at least $4,500 of the credit back into the house in green updates. The first $4,500 in environmentally friendly improvements can be deducted from the 2010 taxes.
About the Tax Credit
To apply for the First-Time Homebuyer Tax Credit, a binding contract must be entered into on or before April 30, 2010, and the closing must take place before June 1.
To qualify, a single homeowner must make less than $125,000 a year and homeowners filing jointly must make less than $150,000 annually. The purchase price of the home cannot exceed $800,000.
The credit allows first-time homeowners – those who have not owned a principal residence for the past three years – to claim 10 percent of the purchase price, up to $8,000.
Additionally, on Nov. 7, 2009, the First-Time Homebuyer Tax Credit was expanded to include a tax credit for 10 percent of the purchase price of the home – up to $6,500 – for homeowners who have lived in their homes continuously for five out of the previous eight years.
Source: http://www.uticaod.com/business/x1487806368/Tips-for-first-time-homebuyers
By LISA KAPPS
Observer-Dispatch
For more information about the First-Time Homebuyer Tax Credit, visit www.federalhousingtaxcredit.com.
So we solicited tips from five experts in the field to help potential homebuyers navigate what can be a complicated market.
Real estate agent
Role: The Internet can be a great tool for a potential homebuyer, but Willinette Cohen, a Realtor with Prudential J.R. Carucci Real Estate Inc., said it is helpful to work with a real estate agent.
Tip 1: Cohen recommended that potential homebuyers work with lenders to become pre-qualified. “It makes your offer a stronger offer,” she said.
Tip 2: “I would always ask to see a property disclosure.”
The disclosure will list all attributes the real estate agent knows about the house.
“As a Realtor, there’s nothing that we’re aware of that we would not tell a potential buyer,” she said.
Banker/lender
Role: “There are still avenues for financing,” Judy Rowlands, a senior mortgage consultant with First Niagara, assures first-time homebuyers.
But lenders have become more conservative. Rowlands said she looks for applicants with credit scores of 680 or better, an employment history of at least two years and savings.
Tip 1: When applying for pre-approval, potential homebuyers should ask about their loans, Rowlands said, such as if there is a penalty for prepaying principal on the loan.
Tip 2: Rowlands said potential buyers should also ask about programs that may be available to them. First Niagara, for example, has a First Home Club open to first-time buyers who make less than $52,240 annually.
Lawyer
Role: A purchaser’s attorney is essentially an advocate for the buyer going into the closing, said William Calli Jr., an attorney with Calli, Calli & Cully.
Tip 1: Not hiring an attorney could save you some money in the short run, said Calli, but if problems arise in the closing process, it could cost more to fix the problems later.
Tip 2: The main misconception is assuming the lawyer representing the bank is representing the buyer as well, Calli said.
Home inspector
Role: Don Archer, a home inspector with Advanced Home Inspection Service, said the role of the home inspector is to educate potential homeowners. A basic inspection typically evaluates structural integrity, as well as the electrical, plumbing and heating systems.
Tip 1: Most often, Archer said, problems found by a home inspector will not need to be immediately addressed, but occasionally a serious issue is discovered.
Tip 2: Having a home inspection is optional, but Archer said the report is valuable. “I think it’s very important to have the education to pass on to our clients – what is normal wear and tear and what may need to be improved,” Archer said.
Tax adviser
Role: Filing for the credit is something homeowners can do on their own, but Peter Brown, a tax adviser with H&R Block, said, “You might want to have somebody walk you through it.”
Tip 1: New homeowners don’t have to wait to take advantage of their credit, Brown said. “They can file an amendment against their 2009 taxes and get the credit now.”
Tip 2: Brown suggested new homeowners invest at least $4,500 of the credit back into the house in green updates. The first $4,500 in environmentally friendly improvements can be deducted from the 2010 taxes.
About the Tax Credit
To apply for the First-Time Homebuyer Tax Credit, a binding contract must be entered into on or before April 30, 2010, and the closing must take place before June 1.
To qualify, a single homeowner must make less than $125,000 a year and homeowners filing jointly must make less than $150,000 annually. The purchase price of the home cannot exceed $800,000.
The credit allows first-time homeowners – those who have not owned a principal residence for the past three years – to claim 10 percent of the purchase price, up to $8,000.
Additionally, on Nov. 7, 2009, the First-Time Homebuyer Tax Credit was expanded to include a tax credit for 10 percent of the purchase price of the home – up to $6,500 – for homeowners who have lived in their homes continuously for five out of the previous eight years.
Source: http://www.uticaod.com/business/x1487806368/Tips-for-first-time-homebuyers
By LISA KAPPS
Observer-Dispatch
For more information about the First-Time Homebuyer Tax Credit, visit www.federalhousingtaxcredit.com.
Wednesday, February 24, 2010
Veteran Consultant Cautions Banks' Dumping Foreclosed Condos Are Ruining Downtown Miami Real Estate Market
(MIAMI, FL) -- Jack Studnicky, an internationally known real estate consultant, lecturer, trainer and workout specialist for 50 years, warns the current dumping of financially distressed residential condominiums in the Greater Miami axis, could damage the development and financing in the luxury condo market for years to come.
In a specially prepared White Paper, he states:
"There are some great deals on condominiums in downtown Miami right now. Some banks holding foreclosed condos in luxury high rise buildings along Biscayne Bay from the Rickenbacker Causeway north are offering door buster prices.
"These 'below cost' of construction prices are great for homebuyers who seek an amenity rich, knockout-view lifestyle. But the fire sale prices banks are setting now will play a critical role in the decline of the downtown real estate market.
"This downward spiral may be so steep; it could take years for the market to come back strong enough represent the actual cost of building the condos.
"To stop the downward trend, banks need to draw a line in the sand on pricing.
History repeats itself
"I've seen the Brickell Avenue effect, the pressure to sell below cost, when I entered the business of marketing foreclosed condos. In the 1970s, Chase Trust gave me an opportunity to blow out 175 Maryland beachfront condos.
Brickell Avenue skyline
"I had to hustle because with winter approaching, the selling season was nearing a close. In less than six weeks I sold every unit.
"The bank was thrilled. I had a pocket full of gold and my phone was ringing off the hook with requests from other financial institutions to help them dump their foreclosed properties.
"But the downside of the blowout pricing was drastic. It took more than a decade for that market to recover.
"Homeowners who purchased their condos when they were priced above the cost of construction saw their home values plummet.
"New development became stagnant because the market was saturated with underpriced homes.
"Economic reality dictated that no developer would start any new building in the area while existing condos were selling below construction costs. Loan officers would not lend under those conditions, so commercial banking became anemic.
Why the giveaway?
"Downtown Miami condominium supply and demand is way out of balance. Supply is high while normal demand is non-existent.
"This is facilitating panic selling. On top of that, real estate agents are more than happy to support any bank's lowball pricing.
Rickenbacker Causeway
"These agents, understandably, want a commission check now, not next holiday season.
"Fire sale pricing is encouraging bulk buyers to swoop in like vultures to snap up blocks of condos. These latest flippers are also going for the quick buck.
"The great deals in downtown condos are attracting Latin American buyers who are purchasing for a home away from home.
"They realize this is an excellent time to obtain a second home in the U.S. capital of Central and South America. But there's not enough of them to create a seller's market.
"The continued panic selling and bulk buying will result in the stagnation of future financing and development of Miami's luxury condo market.
"Banks holding boatloads of foreclosed Miami condos need to take a deep breath and stand firm on realistic pricing, which should be at least cost of replacement.
"There is no need to comply with an archaic and misdirected appraisal process as these bargain hunters are paying cash."
Jack Studnicky has been a member of the Institute of Residential Marketing since 1988. As a spokesperson for the National Association of Home Builders, (NAHB), he has testified before Congress and appeared on national TV.
Studnicky has provided training and lectured at most of the major home builder conventions in America. He has been published or written about in many of the top newspapers and trade publications in the United States.
In his career to date, Studnicky has directed the sales of over $2 billion dollars worth of residential real estate. He is an industry-acknowledged REO Specialist and has completed over 50 successful workouts.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-miami-condo-sales-brickell-avenue-condo-sales-jack-studnicky-miami-condo-foreclosures-chase-trust-institute-of-residential-marketing-2072.php
In a specially prepared White Paper, he states:
"There are some great deals on condominiums in downtown Miami right now. Some banks holding foreclosed condos in luxury high rise buildings along Biscayne Bay from the Rickenbacker Causeway north are offering door buster prices.
"These 'below cost' of construction prices are great for homebuyers who seek an amenity rich, knockout-view lifestyle. But the fire sale prices banks are setting now will play a critical role in the decline of the downtown real estate market.
"This downward spiral may be so steep; it could take years for the market to come back strong enough represent the actual cost of building the condos.
"To stop the downward trend, banks need to draw a line in the sand on pricing.
History repeats itself
"I've seen the Brickell Avenue effect, the pressure to sell below cost, when I entered the business of marketing foreclosed condos. In the 1970s, Chase Trust gave me an opportunity to blow out 175 Maryland beachfront condos.
Brickell Avenue skyline
"I had to hustle because with winter approaching, the selling season was nearing a close. In less than six weeks I sold every unit.
"The bank was thrilled. I had a pocket full of gold and my phone was ringing off the hook with requests from other financial institutions to help them dump their foreclosed properties.
"But the downside of the blowout pricing was drastic. It took more than a decade for that market to recover.
"Homeowners who purchased their condos when they were priced above the cost of construction saw their home values plummet.
"New development became stagnant because the market was saturated with underpriced homes.
"Economic reality dictated that no developer would start any new building in the area while existing condos were selling below construction costs. Loan officers would not lend under those conditions, so commercial banking became anemic.
Why the giveaway?
"Downtown Miami condominium supply and demand is way out of balance. Supply is high while normal demand is non-existent.
"This is facilitating panic selling. On top of that, real estate agents are more than happy to support any bank's lowball pricing.
Rickenbacker Causeway
"These agents, understandably, want a commission check now, not next holiday season.
"Fire sale pricing is encouraging bulk buyers to swoop in like vultures to snap up blocks of condos. These latest flippers are also going for the quick buck.
"The great deals in downtown condos are attracting Latin American buyers who are purchasing for a home away from home.
"They realize this is an excellent time to obtain a second home in the U.S. capital of Central and South America. But there's not enough of them to create a seller's market.
"The continued panic selling and bulk buying will result in the stagnation of future financing and development of Miami's luxury condo market.
"Banks holding boatloads of foreclosed Miami condos need to take a deep breath and stand firm on realistic pricing, which should be at least cost of replacement.
"There is no need to comply with an archaic and misdirected appraisal process as these bargain hunters are paying cash."
Jack Studnicky has been a member of the Institute of Residential Marketing since 1988. As a spokesperson for the National Association of Home Builders, (NAHB), he has testified before Congress and appeared on national TV.
Studnicky has provided training and lectured at most of the major home builder conventions in America. He has been published or written about in many of the top newspapers and trade publications in the United States.
In his career to date, Studnicky has directed the sales of over $2 billion dollars worth of residential real estate. He is an industry-acknowledged REO Specialist and has completed over 50 successful workouts.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-miami-condo-sales-brickell-avenue-condo-sales-jack-studnicky-miami-condo-foreclosures-chase-trust-institute-of-residential-marketing-2072.php
Monday, February 22, 2010
Obama sets aside more money for underwater home owners
South Florida homeowners who lost their jobs or owe more than their property is worth could be in line for a big new dose of federal housing aid.
President Barack Obama on Friday unleashed $1.5 billion to help homeowners in Florida and other states hit hardest by unemployment and a flood of foreclosures.
"It's going to allow lenders to help homeowners who are underwater," Obama said, referring to those whose houses are worth less than their mortgages. "And it will help folks who've taken out a second mortgage modify their loans."
The announcement raised hopes that the aid could be used to help homeowners avoid foreclosure by making payments affordable.
Four of every 10 owners of single-family homes with a mortgage in South Florida owe more than the property is worth, according to Zillow.com, a real estate research firm based in Seattle.
While Florida's property values have plunged, the unemployment rate statewide has soared to nearly 12 percent.
State officials were delighted by the unexpected burst of federal spending and began devising plans to apply for it.
"The exciting thing about it is that we are looking at actual help, real money on the street, for a fair number of people who are in a difficult situation," said Cecka Rose Green, spokeswoman for the Florida Housing Finance Corp.
The money will not flow for weeks or months, however.
The Treasury Department will decide over the next two weeks how to dole out the $1.5 billion among Florida and at least four other states – California, Nevada, Michigan and Arizona. State housing agencies will then submit plans for how to use it to meet local needs.
The Florida Housing Finance Corp., a state-funded group, cannot refinance loans, Green said, but may be able to bring in other agencies and partners to help homeowners.
Some analysts foresee short-term loans at no interest or low interest or deferred payments to help unemployed Floridians keep their homes until they find jobs.
"It could be used to pay off second loans so that whoever holds the first mortgage can refinance it," said Mike Larson, a housing analyst with Weiss Research in Jupiter.
"This is an add-on program targeted at those states where the crisis is most acute, and Florida is at the top of the list," Larson said. "It's not some huge game-changer, but another way to help."
Source: http://articles.sun-sentinel.com/2010-02-19/business/fl-obama-housing-help-20100219_1_florida-housing-finance-corp-obama-sets-federal-housing-aid
William E. Gibson can be reached at Wgibson@SunSentinel.com or 202-824-8256.
President Barack Obama on Friday unleashed $1.5 billion to help homeowners in Florida and other states hit hardest by unemployment and a flood of foreclosures.
"It's going to allow lenders to help homeowners who are underwater," Obama said, referring to those whose houses are worth less than their mortgages. "And it will help folks who've taken out a second mortgage modify their loans."
The announcement raised hopes that the aid could be used to help homeowners avoid foreclosure by making payments affordable.
Four of every 10 owners of single-family homes with a mortgage in South Florida owe more than the property is worth, according to Zillow.com, a real estate research firm based in Seattle.
While Florida's property values have plunged, the unemployment rate statewide has soared to nearly 12 percent.
State officials were delighted by the unexpected burst of federal spending and began devising plans to apply for it.
"The exciting thing about it is that we are looking at actual help, real money on the street, for a fair number of people who are in a difficult situation," said Cecka Rose Green, spokeswoman for the Florida Housing Finance Corp.
The money will not flow for weeks or months, however.
The Treasury Department will decide over the next two weeks how to dole out the $1.5 billion among Florida and at least four other states – California, Nevada, Michigan and Arizona. State housing agencies will then submit plans for how to use it to meet local needs.
The Florida Housing Finance Corp., a state-funded group, cannot refinance loans, Green said, but may be able to bring in other agencies and partners to help homeowners.
Some analysts foresee short-term loans at no interest or low interest or deferred payments to help unemployed Floridians keep their homes until they find jobs.
"It could be used to pay off second loans so that whoever holds the first mortgage can refinance it," said Mike Larson, a housing analyst with Weiss Research in Jupiter.
"This is an add-on program targeted at those states where the crisis is most acute, and Florida is at the top of the list," Larson said. "It's not some huge game-changer, but another way to help."
Source: http://articles.sun-sentinel.com/2010-02-19/business/fl-obama-housing-help-20100219_1_florida-housing-finance-corp-obama-sets-federal-housing-aid
William E. Gibson can be reached at Wgibson@SunSentinel.com or 202-824-8256.
Friday, February 19, 2010
Should you buy a home that's been vacant?
A for-sale house that's been vacant may look like a bargain, but buyers should be cautious because expensive problems often lurk inside homes that have been unoccupied for some time.
A home can become vacant due to a marriage, job relocation, death or other life event. But vacancies today are more often due to a bank foreclosure or short sale in which the lender accepts less than the mortgage balance. It's these bank-owned properties, sometimes called "real estate-owned," or REOs, that tend to be "problem homes," says David Tamny, owner of Professional Property Inspection in Columbus, Ohio, and 2010 president of the American Society of Home Inspectors in Des Plaines, Ill.
Vacant homes can suffer from a wide variety of ills due to neglect, deferred maintenance on the part of the prior cash-strapped homeowner and vandalism, Tamny explains. Broken water pipes, stolen copper wiring, damaged appliances and unhealthy molds are but a few examples of the potential problems that may await buyers of these homes.
The risks for buyers are front and center since the number and percentage of for-sale homes has increased during the housing slump. More than 2.2 million for-sale houses in the U.S. were vacant in 2008, according to the U.S. Census Bureau. That figure was more than double the 1 million vacant for-sale homes in 2000. Vacant homes exist throughout the country, but the percentage of vacancies in 2008 was higher than the national average in the South, Midwest and West, and lower in the Northeast.
Turned-off utilities limit home inspection
Homebuyers typically hire a professional to conduct a visual inspection of the home and prepare a report on its condition. That's a wise precaution, but not even a well-qualified and thorough home inspector can see inside walls. Nor can an inspector assess the condition of a home's plumbing, electrical wiring, heating-and-cooling system or major appliances if the water, gas or electricity has been shut off.
"Buyers often don't understand that if there is no electricity, they are going to get a very limited inspection," Tamny says. "You could end up with a lot of surprises if you don't have those systems turned on prior to the inspection."
Swimming pools, which naturally are more common in such states as California, Arizona, Nevada and Florida -- where foreclosure rates have been high -- are also a special concern if a home has been vacant. Some inspectors won't include a pool as part of a basic inspection. Others will include the pool, but again, it may be impossible for the inspector to check out the equipment if the utilities have been shut off in the vacant home.
"You probably will have to accept the pool (as-is because) it's unlikely that you'll be able to get the whole thing up and running just for the purpose of an inspection and then shut it back down," Tamny says. "You could have thousands of dollars in repairs."
As-is home purchase can be risky
Some banks have procedures in place that allow prospective buyers to turn on the utilities, but the buyer may be required to pay a deposit to the utility company and put his or her own name on the account, even though he or she doesn't own the vacant home. That inconvenience may prompt some buyers to forgo parts of the home inspection that can't be performed unless the utilities are on.
That can be risky because unanticipated repairs can cost thousands or even tens of thousands of dollars, and the buyer typically will have no recourse to the bank. That means the buyer will be stuck with whatever problems the house has.
"Buyers are attracted to a house because it's discounted from what it sold for a number of years ago and they are hoping to get a bargain. They don't always understand that sometimes the problems make up the difference between the cost of the house and what they are getting for a discount," Tamny says.
Vacancy may affect homeowners insurance
Homebuyers also should know that insurance companies may decline to issue a homeowners insurance policy until the agent looks at the vacant home, according to Dick Luedke, a spokesman at State Farm in Bloomington, Ill. The agent's once-over isn't the same as a professional home inspection, but can mean extra expense if the home is in poor condition.
"If the home is uninsurable, we wouldn't write the policy. If the problems just increase the risk of the potential of a future claim, then that might increase the premium," Luedke says.
A homeowners insurance policy also may require a vacancy endorsement, again at an extra charge, if the home will continue to be vacant for more than 30 days after the sale. If the vacancy is due to major repairs, a dwelling-under-construction rider may be necessary as well.
A home can become vacant due to a marriage, job relocation, death or other life event. But vacancies today are more often due to a bank foreclosure or short sale in which the lender accepts less than the mortgage balance. It's these bank-owned properties, sometimes called "real estate-owned," or REOs, that tend to be "problem homes," says David Tamny, owner of Professional Property Inspection in Columbus, Ohio, and 2010 president of the American Society of Home Inspectors in Des Plaines, Ill.
Vacant homes can suffer from a wide variety of ills due to neglect, deferred maintenance on the part of the prior cash-strapped homeowner and vandalism, Tamny explains. Broken water pipes, stolen copper wiring, damaged appliances and unhealthy molds are but a few examples of the potential problems that may await buyers of these homes.
The risks for buyers are front and center since the number and percentage of for-sale homes has increased during the housing slump. More than 2.2 million for-sale houses in the U.S. were vacant in 2008, according to the U.S. Census Bureau. That figure was more than double the 1 million vacant for-sale homes in 2000. Vacant homes exist throughout the country, but the percentage of vacancies in 2008 was higher than the national average in the South, Midwest and West, and lower in the Northeast.
Turned-off utilities limit home inspection
Homebuyers typically hire a professional to conduct a visual inspection of the home and prepare a report on its condition. That's a wise precaution, but not even a well-qualified and thorough home inspector can see inside walls. Nor can an inspector assess the condition of a home's plumbing, electrical wiring, heating-and-cooling system or major appliances if the water, gas or electricity has been shut off.
"Buyers often don't understand that if there is no electricity, they are going to get a very limited inspection," Tamny says. "You could end up with a lot of surprises if you don't have those systems turned on prior to the inspection."
Swimming pools, which naturally are more common in such states as California, Arizona, Nevada and Florida -- where foreclosure rates have been high -- are also a special concern if a home has been vacant. Some inspectors won't include a pool as part of a basic inspection. Others will include the pool, but again, it may be impossible for the inspector to check out the equipment if the utilities have been shut off in the vacant home.
"You probably will have to accept the pool (as-is because) it's unlikely that you'll be able to get the whole thing up and running just for the purpose of an inspection and then shut it back down," Tamny says. "You could have thousands of dollars in repairs."
As-is home purchase can be risky
Some banks have procedures in place that allow prospective buyers to turn on the utilities, but the buyer may be required to pay a deposit to the utility company and put his or her own name on the account, even though he or she doesn't own the vacant home. That inconvenience may prompt some buyers to forgo parts of the home inspection that can't be performed unless the utilities are on.
That can be risky because unanticipated repairs can cost thousands or even tens of thousands of dollars, and the buyer typically will have no recourse to the bank. That means the buyer will be stuck with whatever problems the house has.
"Buyers are attracted to a house because it's discounted from what it sold for a number of years ago and they are hoping to get a bargain. They don't always understand that sometimes the problems make up the difference between the cost of the house and what they are getting for a discount," Tamny says.
Vacancy may affect homeowners insurance
Homebuyers also should know that insurance companies may decline to issue a homeowners insurance policy until the agent looks at the vacant home, according to Dick Luedke, a spokesman at State Farm in Bloomington, Ill. The agent's once-over isn't the same as a professional home inspection, but can mean extra expense if the home is in poor condition.
"If the home is uninsurable, we wouldn't write the policy. If the problems just increase the risk of the potential of a future claim, then that might increase the premium," Luedke says.
A homeowners insurance policy also may require a vacancy endorsement, again at an extra charge, if the home will continue to be vacant for more than 30 days after the sale. If the vacancy is due to major repairs, a dwelling-under-construction rider may be necessary as well.
Thursday, February 18, 2010
Simon Could Corner South Florida Mall Market
MIAMI-Simon Property Group's $10-billion bid for General Growth Properties could be a game-changer for South Florida more than other major retail markets statewide. Simon owns 41 malls, outlets and shopping centers throughout Florida, while General Growth has just 15.
Merging the portfolios of the two companies would give Simon an unparalleled position in South Florida's retail sector, experts say. "Simon would be the most dominant player in the region,” says Thomas Godart, managing director of Fort Lauderdale real estate firm Godart Florida Real Estate Investments.
The acquisition would also give Simon the upper hand in a South Florida retail market where tenants are getting rent relief and other concessions from cash-strapped landlords. By eliminating a major competitor in General Growth, Simon would exert even more influence on national tenants who are trying to expand into South Florida.
Simon would gain leverage over multi-center tenants, observes Jim Soble, an attorney and partner at Ruden McClosky who represents retail developers and heads the firm's real estate department. "If a tenant is in one of Simon's centers but not in one of the General Growth centers, it might have to be in both to stay" in the preferred retail space, Soble says.
Simon's largest malls in South Florida include Sawgrass Mills in Sunrise and The Galleria at Fort Lauderdale, along with a minority stake in Aventura Mall. General Growth's presence in the region includes Kendall Town Center, Mizner Park in Boca Raton and Pembroke Lakes Mall in Pembroke Pines.
Elsewhere in Florida, both companies have a somewhat fragmented presence. In Orlando, for example, Simon has the Florida Mall and Orlando Premium Outlets, while General Growth has Altamonte Mall and Festival Bay Mall at International Drive.
Simon's biggest malls around the state include Edison Mall in Fort Myers, Tyrone Square Mall in St. Petersburg and Pier Park in Panama City. General Growth dominates middle markets with malls such as Lakeland Square, Governor's Square in Tallahassee and Regency Square Mall in Jacksonville.
Beyond the strategic benefits of purchasing one of its major competitors, Simon would also gain substantial leverage over its tenant base in a South Florida market where landlords are struggling to maintain occupancy and fill vacancies, Godart says.
"Simon has certain assets that national tenants want to be a part of," he says. "They can use [the General Growth acquisition] as leverage to put those tenants in secondary locations as a condition for leasing space in a class A, strong location. This would also allow them to go aggressively after a bunch of different tenants."
The acquisition could also help Simon strengthen its position in a tenant-driven marketplace. The deal would force tenants to evaluate South Florida malls they occupy space in and where they want to be long-term, more than potential short-term issues like rent relief and sales performance, Soble says.
"Tenants will look again at the future of a particular mall and whether they want to stay in it," he says. "A lot of that depends on the strength of the recovery of Florida, which has always been known as a retail state."
Requiring prospective tenants to occupy space in less-desirable shopping malls in order to lease space at higher-quality centers is a commonly used tactic by major retail landlords like Simon, says Edgar Jones, vice president of Rockefeller Group Development Corp. RockGroup is currently building the Miramar Town Center, a mixed-use project, in partnership with retail REIT Kimco Realty, which specializes in shopping centers.
By gaining the leverage to apply the conditional leasing strategy, Simon would be able to significantly boost the value of its entire portfolio, Jones says. That, along with the presumed discount Simon would get on a per-property basis, could put Simon in a position to make some of its properties more competitive with reduced asking rents.
"This lets Simon reset the rents and be more attractive to tenants," Jones says. "This is a big win for Simon that raises the values of all of its properties."
(Carl Cronan of GlobeSt.com contributed to this story.)
Source: http://www.globest.com/news/1601_1601/florida/183599-1.html
Merging the portfolios of the two companies would give Simon an unparalleled position in South Florida's retail sector, experts say. "Simon would be the most dominant player in the region,” says Thomas Godart, managing director of Fort Lauderdale real estate firm Godart Florida Real Estate Investments.
The acquisition would also give Simon the upper hand in a South Florida retail market where tenants are getting rent relief and other concessions from cash-strapped landlords. By eliminating a major competitor in General Growth, Simon would exert even more influence on national tenants who are trying to expand into South Florida.
Simon would gain leverage over multi-center tenants, observes Jim Soble, an attorney and partner at Ruden McClosky who represents retail developers and heads the firm's real estate department. "If a tenant is in one of Simon's centers but not in one of the General Growth centers, it might have to be in both to stay" in the preferred retail space, Soble says.
Simon's largest malls in South Florida include Sawgrass Mills in Sunrise and The Galleria at Fort Lauderdale, along with a minority stake in Aventura Mall. General Growth's presence in the region includes Kendall Town Center, Mizner Park in Boca Raton and Pembroke Lakes Mall in Pembroke Pines.
Elsewhere in Florida, both companies have a somewhat fragmented presence. In Orlando, for example, Simon has the Florida Mall and Orlando Premium Outlets, while General Growth has Altamonte Mall and Festival Bay Mall at International Drive.
Simon's biggest malls around the state include Edison Mall in Fort Myers, Tyrone Square Mall in St. Petersburg and Pier Park in Panama City. General Growth dominates middle markets with malls such as Lakeland Square, Governor's Square in Tallahassee and Regency Square Mall in Jacksonville.
Beyond the strategic benefits of purchasing one of its major competitors, Simon would also gain substantial leverage over its tenant base in a South Florida market where landlords are struggling to maintain occupancy and fill vacancies, Godart says.
"Simon has certain assets that national tenants want to be a part of," he says. "They can use [the General Growth acquisition] as leverage to put those tenants in secondary locations as a condition for leasing space in a class A, strong location. This would also allow them to go aggressively after a bunch of different tenants."
The acquisition could also help Simon strengthen its position in a tenant-driven marketplace. The deal would force tenants to evaluate South Florida malls they occupy space in and where they want to be long-term, more than potential short-term issues like rent relief and sales performance, Soble says.
"Tenants will look again at the future of a particular mall and whether they want to stay in it," he says. "A lot of that depends on the strength of the recovery of Florida, which has always been known as a retail state."
Requiring prospective tenants to occupy space in less-desirable shopping malls in order to lease space at higher-quality centers is a commonly used tactic by major retail landlords like Simon, says Edgar Jones, vice president of Rockefeller Group Development Corp. RockGroup is currently building the Miramar Town Center, a mixed-use project, in partnership with retail REIT Kimco Realty, which specializes in shopping centers.
By gaining the leverage to apply the conditional leasing strategy, Simon would be able to significantly boost the value of its entire portfolio, Jones says. That, along with the presumed discount Simon would get on a per-property basis, could put Simon in a position to make some of its properties more competitive with reduced asking rents.
"This lets Simon reset the rents and be more attractive to tenants," Jones says. "This is a big win for Simon that raises the values of all of its properties."
(Carl Cronan of GlobeSt.com contributed to this story.)
Source: http://www.globest.com/news/1601_1601/florida/183599-1.html
Wednesday, February 17, 2010
Good real estate news: Home equity is rising again
With all the bad news about underwater homeowners and strategic walkaways, you might think that American homeowners' equity holdings are in the tank. But the least-publicized recent statistic on real estate is that, despite these scary reports, home equity is again on the rise.
Is that some piece of rosy propaganda put out by housing lobbyists to stimulate more home buying? Not unless you consider Federal Reserve economists to be shills for the real estate industry. The Fed conducts massive research into mortgage balances and home-value changes in hundreds of local markets around the country and reports its findings quarterly.
According to the Fed's most recent "flow of funds" survey, homeowners' net equity grew by nearly $1 trillion from the recession's nadir in the first quarter of 2009 through the third quarter. From June 30 to Sept. 30, net equity rose by $418 billion.
That's not all that impressive compared with the quarterly increases during the hyperinflationary housing boom years, but it could signal something important: After three years of unprecedented shrinkage in home equity -- and three years of rapid expansions in the number of underwater borrowers with negative equity -- there are signs that the down cycle may be shifting.
Last week, online real estate valuation researcher Zillow.com released its latest quarterly numbers on negative equity in major markets. The findings were sobering, but the study also offered some hints of modest improvements for housing. The overall negative-equity rate among American homeowners remained flat in the fourth quarter, at 21.4 percent. But like the Fed's numbers, that ratio represented a slight decrease from the first two quarters of last year, when 22 percent and 23 percent of owners owed more on their mortgages than the estimated market value of their real estate.
Zillow's study found that in dozens of housing markets -- including the District, Los Angeles, San Francisco, Detroit, Miami, San Jose, Seattle and Tampa-St. Petersburg -- the percentage of homeowners with negative equity appears to be on the decline. In the Washington area, 27.5 percent of homeowners had negative equity in the fourth quarter. That was down from 29.6 percent in the third quarter and 33.5 percent in the second.
Some of the largest declines occurred in cities hardest hit by the recession and the housing bust: Ann Arbor, Mich. (a decrease of 9 percentage points); Riverside, Calif. (-5.7); and Phoenix (-2). Florida markets that have struggled with major price devaluations also saw significant improvement in negative-equity rate in the fourth quarter, such as Fort Myers (-5.4), Miami (-5.1), Naples (-4.5) and Tampa-St. Petersburg (-1.4).
On the other hand, Zillow's study found historically high rates of negative equity continuing to prevail in key cities. In Las Vegas, for example, 81.3 percent of homeowners -- 256,000 households -- were underwater on their mortgages in the fourth quarter. This number is down from 82.5 percent in early 2009, but that's no consolation to the affected borrowers.
In Phoenix, 61.5 percent of borrowers were in negative territory. That's two percentage points lower than in the previous quarter but still scarily high.
Which major markets have the lowest underwater rates? As you might guess, they tend to be areas where the equity boom never quite boomed and where toxic mortgages and fog-the-mirror underwriting by lenders were never the rage: Tulsa, Okla. (4.2 percent); Harrisburg, Pa. (5.7 percent); Binghamton, N.Y. (5.6 percent); and Peoria, Ill. (8 percent).
Negative-equity rates are crucial barometers of local housing markets' propensity to experience high rates of mortgage default, foreclosure and strategic walkaways. Communities with single-digit negative-equity rates tend to have fewer walkaways and foreclosures.
The reverse is the case in areas where large numbers of underwater homeowners see no economic rationale for continuing to send in their monthly mortgage payments on properties worth tens of thousands, even hundreds of thousands, of dollars less than the principal balance owed to the bank. They feel they are throwing away money on real estate that might take a decade or more to be worth what they paid for it during the boom.
Mortgage market analyst Laurie Goodman, senior managing director of Amherst Securities, recently warned lenders to be especially vigilant about borrowers in markets where negative-equity ratios are high because, in her view, they are prime candidates to walk away from their loans. Once underwater borrowers miss a payment on their mortgage, Goodman said, there is a 75 to 80 percent probability they will chuck the whole deal.
Borrowers with even minimal positive equity, on the other hand, are far less likely to do the same.
Source: http://www.washingtonpost.com/wp-dyn/content/article/2010/02/11/AR2010021105251.html
Is that some piece of rosy propaganda put out by housing lobbyists to stimulate more home buying? Not unless you consider Federal Reserve economists to be shills for the real estate industry. The Fed conducts massive research into mortgage balances and home-value changes in hundreds of local markets around the country and reports its findings quarterly.
According to the Fed's most recent "flow of funds" survey, homeowners' net equity grew by nearly $1 trillion from the recession's nadir in the first quarter of 2009 through the third quarter. From June 30 to Sept. 30, net equity rose by $418 billion.
That's not all that impressive compared with the quarterly increases during the hyperinflationary housing boom years, but it could signal something important: After three years of unprecedented shrinkage in home equity -- and three years of rapid expansions in the number of underwater borrowers with negative equity -- there are signs that the down cycle may be shifting.
Last week, online real estate valuation researcher Zillow.com released its latest quarterly numbers on negative equity in major markets. The findings were sobering, but the study also offered some hints of modest improvements for housing. The overall negative-equity rate among American homeowners remained flat in the fourth quarter, at 21.4 percent. But like the Fed's numbers, that ratio represented a slight decrease from the first two quarters of last year, when 22 percent and 23 percent of owners owed more on their mortgages than the estimated market value of their real estate.
Zillow's study found that in dozens of housing markets -- including the District, Los Angeles, San Francisco, Detroit, Miami, San Jose, Seattle and Tampa-St. Petersburg -- the percentage of homeowners with negative equity appears to be on the decline. In the Washington area, 27.5 percent of homeowners had negative equity in the fourth quarter. That was down from 29.6 percent in the third quarter and 33.5 percent in the second.
Some of the largest declines occurred in cities hardest hit by the recession and the housing bust: Ann Arbor, Mich. (a decrease of 9 percentage points); Riverside, Calif. (-5.7); and Phoenix (-2). Florida markets that have struggled with major price devaluations also saw significant improvement in negative-equity rate in the fourth quarter, such as Fort Myers (-5.4), Miami (-5.1), Naples (-4.5) and Tampa-St. Petersburg (-1.4).
On the other hand, Zillow's study found historically high rates of negative equity continuing to prevail in key cities. In Las Vegas, for example, 81.3 percent of homeowners -- 256,000 households -- were underwater on their mortgages in the fourth quarter. This number is down from 82.5 percent in early 2009, but that's no consolation to the affected borrowers.
In Phoenix, 61.5 percent of borrowers were in negative territory. That's two percentage points lower than in the previous quarter but still scarily high.
Which major markets have the lowest underwater rates? As you might guess, they tend to be areas where the equity boom never quite boomed and where toxic mortgages and fog-the-mirror underwriting by lenders were never the rage: Tulsa, Okla. (4.2 percent); Harrisburg, Pa. (5.7 percent); Binghamton, N.Y. (5.6 percent); and Peoria, Ill. (8 percent).
Negative-equity rates are crucial barometers of local housing markets' propensity to experience high rates of mortgage default, foreclosure and strategic walkaways. Communities with single-digit negative-equity rates tend to have fewer walkaways and foreclosures.
The reverse is the case in areas where large numbers of underwater homeowners see no economic rationale for continuing to send in their monthly mortgage payments on properties worth tens of thousands, even hundreds of thousands, of dollars less than the principal balance owed to the bank. They feel they are throwing away money on real estate that might take a decade or more to be worth what they paid for it during the boom.
Mortgage market analyst Laurie Goodman, senior managing director of Amherst Securities, recently warned lenders to be especially vigilant about borrowers in markets where negative-equity ratios are high because, in her view, they are prime candidates to walk away from their loans. Once underwater borrowers miss a payment on their mortgage, Goodman said, there is a 75 to 80 percent probability they will chuck the whole deal.
Borrowers with even minimal positive equity, on the other hand, are far less likely to do the same.
Source: http://www.washingtonpost.com/wp-dyn/content/article/2010/02/11/AR2010021105251.html
Monday, February 15, 2010
Lennar Looks to Unlikely Helper: Bad Loans
The recovery of the home-building market promises to be slow and rocky, but builder Lennar Corp. has found what it thinks will be a way to juice its earnings: buying distressed real estate loans.
The Miami builder's shares surged nearly 9% on Thursday after it announced late Wednesday winning an auction for a portfolio of about 5,500 residential and commercial real estate loans from 22 failed banks. Lennar agreed to pay $243 million for a 40% stake in the portfolio. The rest will be held by the Federal Deposit Insurance Corp.
"I think this is a home run" for Lennar, said Ivy Zelman, chief executive of Zelman & Associates, a research firm. She said the return on capital should be at least 20% and could be far higher. Lennar is likely to make more such investments, though not immediately, and may raise capital to increase its capacity for them, she said.
Lennar, the fourth-largest U.S. home builder in terms of sales last year, has long been known at least as much for its financial skills as its ability to put up drywall. After the real-estate slump of the early 1990s, it pounced on assets being sold by lenders at knockdown prices.
In today's bidding for such assets, Lennar is mostly up against private-equity firms and asset managers including Och-Ziff Capital Management Group. In October, for instance, a group of investors led by Starwood Capital Group bought $2.77 billion of construction loans, many of them to condominium developers, made by Corus Bank of Chicago before regulators shut it down.
Analysts at Citigroup Inc. said they expect the latest transaction to add as much as $15 million in earnings in the fiscal year ending Nov. 30, followed by $20 million to $30 million the next year.
Lennar, the fourth-largest U.S. home builder in terms of sales last year, has long been known at least as much for its financial skills as its ability to put up drywall. Abivem a Lennar home construction entrance sign is displayed at one of its developments last month in Homestead, Fla.
.The loans have an average balance of $555,000, and 90% of them are classified as nonperforming, Lennar said. One-third of the loans in Georgia, while 19% are in Nevada and 11% in Arizona. One-fourth of the loans cover partially developed land, while 24% are on residences. The package also includes retail, office and industrial loans.
Lennar said it did "extensive due diligence" over four months, including a review of loan documents and local real-estate conditions. The company said it might foreclose on some loans and then sell the property or develop and operate it. In other cases, Lennar said it might be able to get borrowers to pay off loans for more than it paid for them.
Lennar and the FDIC are supplying $1.22 billion of capital to purchase the portfolio, which has a face value of $3.05 billion. Lennar is putting up $243 million in cash and $22 million of working capital, the company said, and its maximum loss is limited to that equity and working capital. The FDIC is to contribute $365 million in equity and $627 million of debt financing at 0% interest.
"It sounds like a good deal, but the jury's out," said Josh Levin, a home-building analyst at Citigroup Inc. "We'll only know a few years from now how good of a deal of it was."
Lennar's bid shows that "the land rush is on again," said Tony Avila, a San Francisco financial adviser to home builders who manages the $100 million Encore Housing Opportunity Fund. Mr. Avila said his fund and a private-equity firm jointly bid "substantially less" than Lennar did for the loan package.
Source: http://online.wsj.com/article/SB10001424052748703382904575059262041851780.html#articleTabs%3Darticle
By DAWN WOTAPKA And JAMES R. HAGERTY
Write to Dawn Wotapka at dawn.wotapka@dowjones.com
The Miami builder's shares surged nearly 9% on Thursday after it announced late Wednesday winning an auction for a portfolio of about 5,500 residential and commercial real estate loans from 22 failed banks. Lennar agreed to pay $243 million for a 40% stake in the portfolio. The rest will be held by the Federal Deposit Insurance Corp.
"I think this is a home run" for Lennar, said Ivy Zelman, chief executive of Zelman & Associates, a research firm. She said the return on capital should be at least 20% and could be far higher. Lennar is likely to make more such investments, though not immediately, and may raise capital to increase its capacity for them, she said.
Lennar, the fourth-largest U.S. home builder in terms of sales last year, has long been known at least as much for its financial skills as its ability to put up drywall. After the real-estate slump of the early 1990s, it pounced on assets being sold by lenders at knockdown prices.
In today's bidding for such assets, Lennar is mostly up against private-equity firms and asset managers including Och-Ziff Capital Management Group. In October, for instance, a group of investors led by Starwood Capital Group bought $2.77 billion of construction loans, many of them to condominium developers, made by Corus Bank of Chicago before regulators shut it down.
Analysts at Citigroup Inc. said they expect the latest transaction to add as much as $15 million in earnings in the fiscal year ending Nov. 30, followed by $20 million to $30 million the next year.
Lennar, the fourth-largest U.S. home builder in terms of sales last year, has long been known at least as much for its financial skills as its ability to put up drywall. Abivem a Lennar home construction entrance sign is displayed at one of its developments last month in Homestead, Fla.
.The loans have an average balance of $555,000, and 90% of them are classified as nonperforming, Lennar said. One-third of the loans in Georgia, while 19% are in Nevada and 11% in Arizona. One-fourth of the loans cover partially developed land, while 24% are on residences. The package also includes retail, office and industrial loans.
Lennar said it did "extensive due diligence" over four months, including a review of loan documents and local real-estate conditions. The company said it might foreclose on some loans and then sell the property or develop and operate it. In other cases, Lennar said it might be able to get borrowers to pay off loans for more than it paid for them.
Lennar and the FDIC are supplying $1.22 billion of capital to purchase the portfolio, which has a face value of $3.05 billion. Lennar is putting up $243 million in cash and $22 million of working capital, the company said, and its maximum loss is limited to that equity and working capital. The FDIC is to contribute $365 million in equity and $627 million of debt financing at 0% interest.
"It sounds like a good deal, but the jury's out," said Josh Levin, a home-building analyst at Citigroup Inc. "We'll only know a few years from now how good of a deal of it was."
Lennar's bid shows that "the land rush is on again," said Tony Avila, a San Francisco financial adviser to home builders who manages the $100 million Encore Housing Opportunity Fund. Mr. Avila said his fund and a private-equity firm jointly bid "substantially less" than Lennar did for the loan package.
Source: http://online.wsj.com/article/SB10001424052748703382904575059262041851780.html#articleTabs%3Darticle
By DAWN WOTAPKA And JAMES R. HAGERTY
Write to Dawn Wotapka at dawn.wotapka@dowjones.com
Friday, February 12, 2010
CitiMortgage launches program for distressed homeowners
Distressed Florida homeowners whose loans were financed by CitiMortgage may be able to stay put for a while and avoid the pain of foreclosure proceedings under a new program, the company said Thursday.
The deed-in-lieu program – which, beginning Friday, will be tested in Florida and five other states – allows those facing foreclosure to remain in their homes for six months, in exchange for signing over their property deeds to CitiMortgage at the end of the period.
It is designed “to help homeowners make a smooth transition into the next chapter of their lives,” according to a news release.
Deed in lieu of foreclosure is a process in which homeowners give away their property to the lender, which then sells it to retrieve a part or all of the loan balance owed.
While it may be welcome news for those facing the loss of their home, Weston-based foreclosure attorney Roy Oppenheim questions the timing.
“We are two years into the crisis, and now they are trying to get creative? This was the kind of stuff we wanted to see a year ago,” he said.
The program comes with several caveats: The homeowner must hold the first mortgage with a clear title owned by CitiMortgage and be at least 90 days delinquent. There can be no second mortgage.
Borrowers must maintain the property in its current condition and pay utility costs. Other costs, such as homeowner association and escrow fees, are to be determined on a case-by-case basis, depending on the homeowner’s ability to pay.
They also must agree to bi-monthly meetings with relocation counselors.
CitiMortgage will provide a minimum of $1,000 in relocation costs to help borrowers.
So, what’s in it for CitiMortgage? For one, it spares the lender the expense of going through a foreclosure, which is lengthy and expensive, noted Mark Rodgers, Citigroup’s director of public affairs.
Second, because the home must be maintained, its value is not diminished.
“Once the owner moves, we get the property that’s in better condition, so we can immediately market it,” Rodgers said. “It’s much more likely to sell quickly in good condition than in bad condition.”
Scott Coloney, of the Foreclosure Response Team in Fort Lauderdale, said he’s been hearing a lot about deed-in-lieu programs among those in the banking industry, but he doesn’t think it’s going to solve the overwhelming problem plaguing the real estate market – the glut of foreclosures.
“The idea is to create transactions,” he said. “To get the economy going, you need movement.”
CitiMortgage hopes that, by allowing homeowners to stay put for a while, it will keep more homes from being added to the existing backlog.
“If we can get them out in a more measured way, we can hopefully avoid that,” Rodgers said.
On Thursday, RealtyTrac reported that one in every 187 homes in Florida received a foreclosure notice in January.
Before borrowers can enter the program, they will be evaluated for a permanent mortgage modification. If they don’t qualify for that, a short sale, in which the company might accept a buyer’s offer for less than the outstanding amount of the loan, will be considered.
If that is unfeasible, the next step would be the deed-in-lieu program.
The program, however, may prove to be only a drop in the bucket when you consider how many homeowners nationwide face default.
Rodgers said that, within the entire six-state pilot program – which includes Texas, Illinois, Michigan, New Jersey and Ohio – the company expects just 20,000 may be eligible and only about 1,000 will actually participate.
However, he noted that it is a pilot program and, for it to work, it will have to achieve some scale.
“We are looking to see if this is successful, then maybe others will join us,” Rodgers said.
In November, Fannie Mae announced a Deed for Lease Program that lets borrowers who don’t qualify for loan modifications transfer their property to Fannie Mae in exchange for a lease.
Under that program, borrowers pay rent, which, in most cases, is lower than the mortgage payment.
Source: http://southflorida.bizjournals.com/southflorida/stories/2010/02/08/daily40.html?s=industry&page=2
The deed-in-lieu program – which, beginning Friday, will be tested in Florida and five other states – allows those facing foreclosure to remain in their homes for six months, in exchange for signing over their property deeds to CitiMortgage at the end of the period.
It is designed “to help homeowners make a smooth transition into the next chapter of their lives,” according to a news release.
Deed in lieu of foreclosure is a process in which homeowners give away their property to the lender, which then sells it to retrieve a part or all of the loan balance owed.
While it may be welcome news for those facing the loss of their home, Weston-based foreclosure attorney Roy Oppenheim questions the timing.
“We are two years into the crisis, and now they are trying to get creative? This was the kind of stuff we wanted to see a year ago,” he said.
The program comes with several caveats: The homeowner must hold the first mortgage with a clear title owned by CitiMortgage and be at least 90 days delinquent. There can be no second mortgage.
Borrowers must maintain the property in its current condition and pay utility costs. Other costs, such as homeowner association and escrow fees, are to be determined on a case-by-case basis, depending on the homeowner’s ability to pay.
They also must agree to bi-monthly meetings with relocation counselors.
CitiMortgage will provide a minimum of $1,000 in relocation costs to help borrowers.
So, what’s in it for CitiMortgage? For one, it spares the lender the expense of going through a foreclosure, which is lengthy and expensive, noted Mark Rodgers, Citigroup’s director of public affairs.
Second, because the home must be maintained, its value is not diminished.
“Once the owner moves, we get the property that’s in better condition, so we can immediately market it,” Rodgers said. “It’s much more likely to sell quickly in good condition than in bad condition.”
Scott Coloney, of the Foreclosure Response Team in Fort Lauderdale, said he’s been hearing a lot about deed-in-lieu programs among those in the banking industry, but he doesn’t think it’s going to solve the overwhelming problem plaguing the real estate market – the glut of foreclosures.
“The idea is to create transactions,” he said. “To get the economy going, you need movement.”
CitiMortgage hopes that, by allowing homeowners to stay put for a while, it will keep more homes from being added to the existing backlog.
“If we can get them out in a more measured way, we can hopefully avoid that,” Rodgers said.
On Thursday, RealtyTrac reported that one in every 187 homes in Florida received a foreclosure notice in January.
Before borrowers can enter the program, they will be evaluated for a permanent mortgage modification. If they don’t qualify for that, a short sale, in which the company might accept a buyer’s offer for less than the outstanding amount of the loan, will be considered.
If that is unfeasible, the next step would be the deed-in-lieu program.
The program, however, may prove to be only a drop in the bucket when you consider how many homeowners nationwide face default.
Rodgers said that, within the entire six-state pilot program – which includes Texas, Illinois, Michigan, New Jersey and Ohio – the company expects just 20,000 may be eligible and only about 1,000 will actually participate.
However, he noted that it is a pilot program and, for it to work, it will have to achieve some scale.
“We are looking to see if this is successful, then maybe others will join us,” Rodgers said.
In November, Fannie Mae announced a Deed for Lease Program that lets borrowers who don’t qualify for loan modifications transfer their property to Fannie Mae in exchange for a lease.
Under that program, borrowers pay rent, which, in most cases, is lower than the mortgage payment.
Source: http://southflorida.bizjournals.com/southflorida/stories/2010/02/08/daily40.html?s=industry&page=2
Thursday, February 11, 2010
Financing troubles loom for commercial real estate
While the real estate industry in South Florida and across the country may be showing some glimmers of hope, there still is likely to be more pain in 2010 -- particularly when it comes to commercial real estate financing.
That was the consensus Tuesday from a variety of local and national industry leaders gathered for the Urban Land Institute's South Florida Economic & Development Outlook.
``We are starting to see the bottom,'' said Eric Swanson, executive vice president of Flagler, a Coral Gables real estate firm, and chair of ULI's Southeast Florida/Caribbean Council. ``It's probably not going to be a great year, but it's going to be a better year than 2009. The mood is pretty optimistic for 2011.''
One of the major problems looming is a commercial real estate finance crisis, as commercial mortgages come due for refinancing on projects that are underwater.
Delinquencies on Commercial Mortgage Backed Securities are expected to steadily increase from the current level of about 4 percent, hitting a peak in late 2012 at 12 percent.
``This crisis could have a long tail,'' said Stephen Blank, senior resident fellow in finance for ULI. ``The aftershocks could go on forever.''
The issue is what the industry has dubbed the game of ``extend and pretend.'' That refers to a tendency by lenders to extend the term of a loan in order to avoid writing down the value of the asset, which could have seen as much as a 50 percent decline.
Some speakers blamed the government for failing to do anything about the problem and propping up the banks with federal support.
NO CATALYST
The question is whether what happened during the savings and loan crisis -- when properties were sold off at fire-sale prices by the Resolution Trust Corporation -- would have yielded better results.
``There is no catalyst today for things to move,'' said Merrick Kleeman, managing partner of Wheelock Street Capital, a real estate private equity firm. ``Last time the government was the enforcer. This time they're the bartender.''
Troy Taylor, president of Algon Group, which specializes in distressed asset workouts nationally, says the key to a successful workout is getting both lenders and owners to accept the new reality of what projects are worth.
Until that happens on a large scale, any recovery is going to be hampered.
``You're not going to see the bottom until you blow through all this stuff,'' Taylor said. ``Let's go have surgery and put it behind us.''
The worst thing a property owner can do, said Taylor and other speakers, is use available cash to keep making interest payments on a project that is already underwater. Taylor said that workouts are more effective if a firm such as his comes to the table before the final hour because a major restructuring can take six months to a year.
Cyril ``Sid'' Spiro, chairman and chief executive officer of Regent Bank, agreed that one of the biggest problems is borrowers who don't recognize issues ``quickly'' and bring them to the attention of lenders.
CROSSROADS
On a broader economic perspective, an executive with the Federal Reserve Bank of Atlanta suggested the economic recovery stands at a crossroads. The question is whether the recovery is a quick one (shaped like a V) or long and ``painful.''
Dr. David Altig, senior vice president and director of research at the Atlanta Fed, said he tends to take the more pessimistic view but wouldn't be surprised to see things go the other way.
What concerns Altig most is the level of unemployment, which is higher in Florida than the U.S. average. ``If the unemployment rate doesn't come down significantly, the lifting of the fog is not going to happen,'' he said.
Source: http://www.miamiherald.com/classifieds/real-estate/story/1471529.html
That was the consensus Tuesday from a variety of local and national industry leaders gathered for the Urban Land Institute's South Florida Economic & Development Outlook.
``We are starting to see the bottom,'' said Eric Swanson, executive vice president of Flagler, a Coral Gables real estate firm, and chair of ULI's Southeast Florida/Caribbean Council. ``It's probably not going to be a great year, but it's going to be a better year than 2009. The mood is pretty optimistic for 2011.''
One of the major problems looming is a commercial real estate finance crisis, as commercial mortgages come due for refinancing on projects that are underwater.
Delinquencies on Commercial Mortgage Backed Securities are expected to steadily increase from the current level of about 4 percent, hitting a peak in late 2012 at 12 percent.
``This crisis could have a long tail,'' said Stephen Blank, senior resident fellow in finance for ULI. ``The aftershocks could go on forever.''
The issue is what the industry has dubbed the game of ``extend and pretend.'' That refers to a tendency by lenders to extend the term of a loan in order to avoid writing down the value of the asset, which could have seen as much as a 50 percent decline.
Some speakers blamed the government for failing to do anything about the problem and propping up the banks with federal support.
NO CATALYST
The question is whether what happened during the savings and loan crisis -- when properties were sold off at fire-sale prices by the Resolution Trust Corporation -- would have yielded better results.
``There is no catalyst today for things to move,'' said Merrick Kleeman, managing partner of Wheelock Street Capital, a real estate private equity firm. ``Last time the government was the enforcer. This time they're the bartender.''
Troy Taylor, president of Algon Group, which specializes in distressed asset workouts nationally, says the key to a successful workout is getting both lenders and owners to accept the new reality of what projects are worth.
Until that happens on a large scale, any recovery is going to be hampered.
``You're not going to see the bottom until you blow through all this stuff,'' Taylor said. ``Let's go have surgery and put it behind us.''
The worst thing a property owner can do, said Taylor and other speakers, is use available cash to keep making interest payments on a project that is already underwater. Taylor said that workouts are more effective if a firm such as his comes to the table before the final hour because a major restructuring can take six months to a year.
Cyril ``Sid'' Spiro, chairman and chief executive officer of Regent Bank, agreed that one of the biggest problems is borrowers who don't recognize issues ``quickly'' and bring them to the attention of lenders.
CROSSROADS
On a broader economic perspective, an executive with the Federal Reserve Bank of Atlanta suggested the economic recovery stands at a crossroads. The question is whether the recovery is a quick one (shaped like a V) or long and ``painful.''
Dr. David Altig, senior vice president and director of research at the Atlanta Fed, said he tends to take the more pessimistic view but wouldn't be surprised to see things go the other way.
What concerns Altig most is the level of unemployment, which is higher in Florida than the U.S. average. ``If the unemployment rate doesn't come down significantly, the lifting of the fog is not going to happen,'' he said.
Source: http://www.miamiherald.com/classifieds/real-estate/story/1471529.html
Wednesday, February 10, 2010
How to Think About: Underwater Mortgages
Real estate prices have dropped about 30 percent since their peak in 2006. As a result, something like ten million American homeowners owe the bank more than their houses are now worth. More than half of them are stuck with mortgages that are more than 20 percent higher than the value of their homes. They could simply walk away from the home, stop paying the mortgage, let the lender foreclose, and be better off. More and more people are taking this option. Is it moral?
It may not even be legal. Your mortgage contract says that you "promise to pay" the bank however much you borrowed from it. Many states have laws allowing mortgage lenders to pursue your other assets to get their money back. But that can be difficult and expensive. You may even be able to live in your house payment-free for months while the bank goes through foreclosing on you. Then you can rent another house—possibly one the bank unhappily repossessed from someone else who walked away.
There are other practical problems: your credit rating will be trashed, and you won’t be able to get another mortgage for a few years. Don’t be surprised if your former neighbors don’t take kindly to the effect you have on property values. And there are the hassles of moving under any circumstances: new schools for the kids, and so on. But the main deterrent is honor and shame. If you literally can’t make the payments and still feed your family—that is, if you’re bankrupt—then these things don’t matter. But increasingly, people are walking away from underwater mortgages who could keep paying but choose not to. These cases are called "strategic defaults." Can there really be any justification other than necessity for ratting on a promise and keeping money that you owe to others? (For a firm and eloquent “no,” see our colleague Megan McArdle’s post.)
Perhaps surprisingly, the answer is "yes." There are strong arguments that any feeling of shame or dishonor about walking away from a mortgage is misplaced. Whether these arguments are persuasive is up to you.
First, the bank may not be wholly innocent. Traditionally down payments are supposed to prevent this situation from arising. The larger the down payment, the more a “walker” is walking away from. But in the recent real estate bubble, banks demanded smaller and smaller down payments for larger and larger mortgages to less and less qualified buyers. They encouraged people to take second mortgages every time their house value increased. There was no gun to the head of the home buyer, but there was no gun to the head of the bank, either. It was a folie a deux. Both sides of the deal were foolish. Why shouldn’t both sides suffer when the deal goes bad?
Lenders cannot claim to have been blindsided by defaults. Generally, lenders require borrowers to purchase Private Mortgage Insurance if the loan is greater than 80 percent of the property’s value. This is precisely to off-load some of the risk they are voluntarily taking on.
In the financial world, companies and individuals default on loans all the time, with no stigma. Recently the purchaser of an 11,000-unit housing complex in Manhattan turned the keys over to its creditors and walked away. Tishman-Speyer had paid $5.4 billion for the property late in 2006. It is now worth $1.8 billion. Dan Gross offers several other juicy examples in Slate.
In fact, enabling business people to walk away from debts is vital to capitalism. The corporation was invented to facilitate this very thing. The essence of a corporation is "limited liability." By doing business in corporate form, the shareholders are putting everyone on notice that their liability for the corporation’s debts is limited to the amount they have invested. No matter how much money they may have, and no matter how much the corporation may owe, they can never be asked for more. No one even suggested that "honor" required the shareholders of General Motors, their equity already wiped out, to reach into their own pockets to make good on GM’s obligations.
On the other hand, if many of those 10 million Americans whose mortgages are underwater choose to walk away, it would be a catastrophe for the housing market and probably for the economy. Some people feel that paying your mortgage—even if the house you used it to buy is worth less than what you owe-- is not just honorable but a patriotic duty.
Source: http://www.theatlanticwire.com/opinions/view/opinion/How-to-Think-About-Underwater-Mortgages-2422
It may not even be legal. Your mortgage contract says that you "promise to pay" the bank however much you borrowed from it. Many states have laws allowing mortgage lenders to pursue your other assets to get their money back. But that can be difficult and expensive. You may even be able to live in your house payment-free for months while the bank goes through foreclosing on you. Then you can rent another house—possibly one the bank unhappily repossessed from someone else who walked away.
There are other practical problems: your credit rating will be trashed, and you won’t be able to get another mortgage for a few years. Don’t be surprised if your former neighbors don’t take kindly to the effect you have on property values. And there are the hassles of moving under any circumstances: new schools for the kids, and so on. But the main deterrent is honor and shame. If you literally can’t make the payments and still feed your family—that is, if you’re bankrupt—then these things don’t matter. But increasingly, people are walking away from underwater mortgages who could keep paying but choose not to. These cases are called "strategic defaults." Can there really be any justification other than necessity for ratting on a promise and keeping money that you owe to others? (For a firm and eloquent “no,” see our colleague Megan McArdle’s post.)
Perhaps surprisingly, the answer is "yes." There are strong arguments that any feeling of shame or dishonor about walking away from a mortgage is misplaced. Whether these arguments are persuasive is up to you.
First, the bank may not be wholly innocent. Traditionally down payments are supposed to prevent this situation from arising. The larger the down payment, the more a “walker” is walking away from. But in the recent real estate bubble, banks demanded smaller and smaller down payments for larger and larger mortgages to less and less qualified buyers. They encouraged people to take second mortgages every time their house value increased. There was no gun to the head of the home buyer, but there was no gun to the head of the bank, either. It was a folie a deux. Both sides of the deal were foolish. Why shouldn’t both sides suffer when the deal goes bad?
Lenders cannot claim to have been blindsided by defaults. Generally, lenders require borrowers to purchase Private Mortgage Insurance if the loan is greater than 80 percent of the property’s value. This is precisely to off-load some of the risk they are voluntarily taking on.
In the financial world, companies and individuals default on loans all the time, with no stigma. Recently the purchaser of an 11,000-unit housing complex in Manhattan turned the keys over to its creditors and walked away. Tishman-Speyer had paid $5.4 billion for the property late in 2006. It is now worth $1.8 billion. Dan Gross offers several other juicy examples in Slate.
In fact, enabling business people to walk away from debts is vital to capitalism. The corporation was invented to facilitate this very thing. The essence of a corporation is "limited liability." By doing business in corporate form, the shareholders are putting everyone on notice that their liability for the corporation’s debts is limited to the amount they have invested. No matter how much money they may have, and no matter how much the corporation may owe, they can never be asked for more. No one even suggested that "honor" required the shareholders of General Motors, their equity already wiped out, to reach into their own pockets to make good on GM’s obligations.
On the other hand, if many of those 10 million Americans whose mortgages are underwater choose to walk away, it would be a catastrophe for the housing market and probably for the economy. Some people feel that paying your mortgage—even if the house you used it to buy is worth less than what you owe-- is not just honorable but a patriotic duty.
Source: http://www.theatlanticwire.com/opinions/view/opinion/How-to-Think-About-Underwater-Mortgages-2422
Monday, February 8, 2010
Miami Residential Real Estate Sales Rise While Prices Fall
Miami residential real estate transactions maintained their three year high in December 2009, even as median sales prices for new and resale homes and condos declined from December 2008. While new home sales continued to remain a low percentage of overall sales, December 2009 sales of existing condos increased significantly from November 2009 and from December 2008.
Miami metro area home sales remained at a three-year high in December as sales of existing condos, whose prices have fallen most sharply from peak levels in 2006, continued to claim a higher-than-average share of transactions. The median price paid for all new and resale houses and condos combined didn't budge from November and declined from a year earlier by the lowest amount - 22.5 percent - since late 2008, a real estate information service reported.
In December, 8,259 new and resale houses and condos closed escrow in the metro area encompassing Miami-Dade, Palm Beach and Broward counties. That was up 19.1 percent from November and up 41.3 percent from 5,846 in December 2008, according to MDA DataQuick of San Diego, Calif. The firm tracks real estate trends nationally via public property records.
Total escrow closings were the highest for a December since 2006, but they were still the third-lowest for that month since 1997, when DataQuick's complete Miami-area stats begin.
December's increase in total sales from November was normal for the season, though the 19.1 gain was below the average November-to-December increase of 29.6 percent since 1997.
December marked the tenth consecutive month in which the region's overall sales rose on a year-over-year basis. Existing (not new) single-family detached house and condo sales have risen year-over-year for 13 consecutive months, while new-home sales in December fell below the year-ago level for the 42nd time in the last 43 months.
The December 2009 new-home tally rose nearly 31 percent above the November level but was still the lowest for the month of December since at least 1997. New-home sales, which have suffered as builders struggle to compete with low-cost foreclosures, made up 8.6 percent of total December sales. That compares with the new-home market's monthly average of 20.3 percent of total sales over the past decade.
The 3,611 sales of existing condos in December marked a gain of 18 percent from November and 61.5 percent from a year earlier, to the highest level for a December since 2004, when condo resales totaled 4,407. Condo resales made up 43.7 percent of total Miami-area home sales in December, compared with 38.2 percent a year earlier and a monthly average of 31.5 percent over the past decade.
Propelled by strong condo sales, December sales of all homes priced $50,000 to $150,000 shot up 98.5 percent from December 2008. The $50,000 - $150,000 sales represented 47.5 percent of total home sales in December, up from 33.9 percent in December 2008 and 15.2 percent in December 2007.
Sales also picked up in December at the opposite end of the price spectrum: The number of homes sold for $1 million or more rose to 243 in December, up 51 percent from 161 in November and up 28.6 percent from 189 in December 2008. The figures are based on an analysis of public property records, where there was a purchase price or purchase loan amount of $1 million or more. During all of 2009, sales of $1 million-plus homes totaled 2,061, down 32.3 percent from a 2008 total of 3,044. The peak month for $1 million-plus home sales was in June 2005, when 583 sold, and the peak year was 2005, when 5,452 homes sold for $1 million or more.
The median price paid for all new and resale houses and condos sold in December was $155,000, the same as in November but down 22.5 percent from $200,000 in December 2008. It was the smallest year-over-year decline for the overall median sale price since the median fell 22.2 percent, to $210,000, in November 2008.
December's median was 46.6 percent below the peak $290,000 median in June 2007. The Miami area's median price has fallen on a year-over-year basis for 27 consecutive months.
The median price paid for resale condos in December held steady at $105,000 - the same as in November but down 23.7 percent from a year ago and down 54.8 percent from the peak $219,000 resale condo median in July 2006. The resale condo median hit a cycle low of $99,000 in September 2009.
The median paid for resale single-family detached houses rose slightly in December to $188,000, up 1.7 percent from 184,800 in November but down 14.5 percent from a year ago and down 44.1 percent from a June 2007 peak of $340,000.
Another price gauge analysts watch, the median paid per square foot for resale single-family detached houses, held steady in December at $109, the same as in November but down 11.4 percent from $123 in December 2008. It was the lowest year-over-year decline for any month since November 2007. The December 2009 median paid per square foot stood 48.3 percent below the region's $211 peak in summer 2006. The measure has fallen year-over-year for 39 straight months.
A popular form of financing used by first-time home buyers - government-insured FHA loans - accounted for 42.5 percent of all home purchase loans in December, down from 48.5 percent in November but up from 35 percent a year ago and 5.4 percent two years ago.
Absentee buyers purchased 29.3 percent of all homes sold in the Miami area in December, up from 28.8 percent in November and 26.6 percent a year ago, according to public property records. Absentee buyers are often investors, but could include second-home buyers and others who indicated at the time of sale that their property tax bill would be sent to a different address.
About 2.8 percent of the homes sold in December had been "flipped" within a three-week to six-month period, meaning they had been bought on the open market and then re-sold within that window. That's down slightly from a flipping rate of 3.1 percent of all sales in November but up from 1.7 percent in December 2008, based on public records. Flipping rates were higher before the housing market correction: In December 2005 the Miami-area flipping rate was 4.5 percent, while it was 5.0 percent in December 2004.
Buyers who appear to have used cash to purchase their homes accounted for 54.0 percent of all December sales, and those buyers paid a median $120,000 for their homes. Specifically, these were transactions where there was no indication of a purchase loan recorded in the public record at the time of sale. Some of these "cash" buyers could have used alternative financing arrangements outside of a typical purchase mortgage, and in some cases these buyers might be taking out mortgages after their purchases. All-cash deals are popular in markets where prices have dropped sharply and sellers favor the relative speed and certainty of cash transactions.
The use of adjustable-rate mortgages ("ARMs") to buy homes was steady in December at 5.7 percent of all purchase loans, the same as in November but up from a decade low of 4.4 percent in May 2009. However, December's purchase ARM level was down from 6.9 percent a year earlier. Miami's monthly average for ARM use over the past decade is 49.7 percent of purchase loans. In December, the median ARM purchase loan amount was $280,000.
Source:http://www.nuwireinvestor.com/articles/miami-residential-real-estate-sales-rise-while-prices-fall-54588.aspx
This article has been republished from DQNews. You can also view this article at DQNews, a real estate research and news site.
Miami metro area home sales remained at a three-year high in December as sales of existing condos, whose prices have fallen most sharply from peak levels in 2006, continued to claim a higher-than-average share of transactions. The median price paid for all new and resale houses and condos combined didn't budge from November and declined from a year earlier by the lowest amount - 22.5 percent - since late 2008, a real estate information service reported.
In December, 8,259 new and resale houses and condos closed escrow in the metro area encompassing Miami-Dade, Palm Beach and Broward counties. That was up 19.1 percent from November and up 41.3 percent from 5,846 in December 2008, according to MDA DataQuick of San Diego, Calif. The firm tracks real estate trends nationally via public property records.
Total escrow closings were the highest for a December since 2006, but they were still the third-lowest for that month since 1997, when DataQuick's complete Miami-area stats begin.
December's increase in total sales from November was normal for the season, though the 19.1 gain was below the average November-to-December increase of 29.6 percent since 1997.
December marked the tenth consecutive month in which the region's overall sales rose on a year-over-year basis. Existing (not new) single-family detached house and condo sales have risen year-over-year for 13 consecutive months, while new-home sales in December fell below the year-ago level for the 42nd time in the last 43 months.
The December 2009 new-home tally rose nearly 31 percent above the November level but was still the lowest for the month of December since at least 1997. New-home sales, which have suffered as builders struggle to compete with low-cost foreclosures, made up 8.6 percent of total December sales. That compares with the new-home market's monthly average of 20.3 percent of total sales over the past decade.
The 3,611 sales of existing condos in December marked a gain of 18 percent from November and 61.5 percent from a year earlier, to the highest level for a December since 2004, when condo resales totaled 4,407. Condo resales made up 43.7 percent of total Miami-area home sales in December, compared with 38.2 percent a year earlier and a monthly average of 31.5 percent over the past decade.
Propelled by strong condo sales, December sales of all homes priced $50,000 to $150,000 shot up 98.5 percent from December 2008. The $50,000 - $150,000 sales represented 47.5 percent of total home sales in December, up from 33.9 percent in December 2008 and 15.2 percent in December 2007.
Sales also picked up in December at the opposite end of the price spectrum: The number of homes sold for $1 million or more rose to 243 in December, up 51 percent from 161 in November and up 28.6 percent from 189 in December 2008. The figures are based on an analysis of public property records, where there was a purchase price or purchase loan amount of $1 million or more. During all of 2009, sales of $1 million-plus homes totaled 2,061, down 32.3 percent from a 2008 total of 3,044. The peak month for $1 million-plus home sales was in June 2005, when 583 sold, and the peak year was 2005, when 5,452 homes sold for $1 million or more.
The median price paid for all new and resale houses and condos sold in December was $155,000, the same as in November but down 22.5 percent from $200,000 in December 2008. It was the smallest year-over-year decline for the overall median sale price since the median fell 22.2 percent, to $210,000, in November 2008.
December's median was 46.6 percent below the peak $290,000 median in June 2007. The Miami area's median price has fallen on a year-over-year basis for 27 consecutive months.
The median price paid for resale condos in December held steady at $105,000 - the same as in November but down 23.7 percent from a year ago and down 54.8 percent from the peak $219,000 resale condo median in July 2006. The resale condo median hit a cycle low of $99,000 in September 2009.
The median paid for resale single-family detached houses rose slightly in December to $188,000, up 1.7 percent from 184,800 in November but down 14.5 percent from a year ago and down 44.1 percent from a June 2007 peak of $340,000.
Another price gauge analysts watch, the median paid per square foot for resale single-family detached houses, held steady in December at $109, the same as in November but down 11.4 percent from $123 in December 2008. It was the lowest year-over-year decline for any month since November 2007. The December 2009 median paid per square foot stood 48.3 percent below the region's $211 peak in summer 2006. The measure has fallen year-over-year for 39 straight months.
A popular form of financing used by first-time home buyers - government-insured FHA loans - accounted for 42.5 percent of all home purchase loans in December, down from 48.5 percent in November but up from 35 percent a year ago and 5.4 percent two years ago.
Absentee buyers purchased 29.3 percent of all homes sold in the Miami area in December, up from 28.8 percent in November and 26.6 percent a year ago, according to public property records. Absentee buyers are often investors, but could include second-home buyers and others who indicated at the time of sale that their property tax bill would be sent to a different address.
About 2.8 percent of the homes sold in December had been "flipped" within a three-week to six-month period, meaning they had been bought on the open market and then re-sold within that window. That's down slightly from a flipping rate of 3.1 percent of all sales in November but up from 1.7 percent in December 2008, based on public records. Flipping rates were higher before the housing market correction: In December 2005 the Miami-area flipping rate was 4.5 percent, while it was 5.0 percent in December 2004.
Buyers who appear to have used cash to purchase their homes accounted for 54.0 percent of all December sales, and those buyers paid a median $120,000 for their homes. Specifically, these were transactions where there was no indication of a purchase loan recorded in the public record at the time of sale. Some of these "cash" buyers could have used alternative financing arrangements outside of a typical purchase mortgage, and in some cases these buyers might be taking out mortgages after their purchases. All-cash deals are popular in markets where prices have dropped sharply and sellers favor the relative speed and certainty of cash transactions.
The use of adjustable-rate mortgages ("ARMs") to buy homes was steady in December at 5.7 percent of all purchase loans, the same as in November but up from a decade low of 4.4 percent in May 2009. However, December's purchase ARM level was down from 6.9 percent a year earlier. Miami's monthly average for ARM use over the past decade is 49.7 percent of purchase loans. In December, the median ARM purchase loan amount was $280,000.
Source:http://www.nuwireinvestor.com/articles/miami-residential-real-estate-sales-rise-while-prices-fall-54588.aspx
This article has been republished from DQNews. You can also view this article at DQNews, a real estate research and news site.
Friday, February 5, 2010
Friday, 2/12 from 9-midnight: Valentine's Prom Night Benefitting South Pointe Elementary at SET
Buy Tickets online at at www.fospe.org also join Friends of South Pointe Elementary on Face Book!
Please forward this flyer to your friends! It should be a super fun night and a chance for us parents to get out and shake our bones on the cheap as vips!
Set: 320 Lincoln Rd, Miami Beach RSVPVALENTINEPROMNIGHT@GMAIL.COM
*all purchases benefit FOSPE, the non-profit that put 4 paraprofessional to assist teachers in the SPE classrooms this year. All donations are tx deductable.
Please forward this flyer to your friends! It should be a super fun night and a chance for us parents to get out and shake our bones on the cheap as vips!
Set: 320 Lincoln Rd, Miami Beach RSVPVALENTINEPROMNIGHT@GMAIL.COM
*all purchases benefit FOSPE, the non-profit that put 4 paraprofessional to assist teachers in the SPE classrooms this year. All donations are tx deductable.
The 10 Must-Have Features in Today's New Homes
Americans want smaller houses and they are willing to strip some of yesterday's most popular rooms -- such as home theaters -- from them in order to accommodate changing lifestyles, consumer experts told audiences at the International Builders Show here this week.
"This is a traumatic time in this country and the future isn't something we're 100% sure about now either. What's left? The answer for most home buyers is authenticity," said Heather McCune, director of marketing for Bassenian Lagoni Architects in Park Ridge, Ill.
Buyers today want cost-effective architecture, plans that focus on spaces and not rooms and homes that are designed 'green' from the outset," she said. The key for home builders is "finding the balance between what buyers want and the price point."
For many buyers, their next house will be smaller than their current one, said Carol Lavender, president of the Lavender Design Group in San Antonio, Texas. Large kitchens that are open to the main family living area, old-fashioned bathrooms with clawfoot tubs and small spaces such as wine grottos are design features that will resonate today, she said.
"What we're hearing is 'harvest' as a home theme -- the feeling of Thanksgiving. It's all about family togetherness -- casual living, entertaining and flexible spaces," Lavender said.
Paul Cardis, CEO of AVID Ratings Co., which conducts an annual survey of home-buyer preferences, said there are 10 "must" features in new homes.
1. Large Kitchens, With an Island
"If you're going to spend design dollars, spend them where people want them -- spend them in the kitchen," McCune said. Granite countertops are a must for move-up buyers and buyers of custom homes, but for others "they are on the bubble," Cardis said.
2. Energy-Efficient Appliances, High-Efficiency Insulation and High Window Efficiency
Among the "green" features touted in homes, these are the ones buyers value most, he said. While large windows had been a major draw, energy concerns are giving customers pause on those, he said. The use of recycled or synthetic materials is only borderline desirable.
3. Home Office/Study
People would much rather have this space rather than, say, a formal dining room. "People are feeling like they can dine out again and so the dining room has become tradable," Cardis said. And the home theater may also be headed for the scrap heap, a casualty of the "shift from boom to correction," Cardis said.
4. Main-Floor Master Suite
This is a must feature for empty-nesters and certain other buyers, and appears to be getting more popular in general, he said. That could help explain why demand for upstairs laundries is declining after several years of popularity gains.
5. Outdoor Living Room
The popularity of outdoor spaces continues to grow, even in Canada, Cardis said. And the idea of an outdoor room is even more popular than an outdoor cooking area, meaning people are willing to spend more time outside.
6. Ceiling Fans
7. Master Suite Soaker Tubs
Whirlpools are still desirable for many home buyers, Cardis said, but "they clearly went down a notch," in the latest survey. Oversize showers with seating areas are also moving up in popularity.
8. Stone and Brick Exteriors
Stucco and vinyl don't make the cut.
9. Community Landscaping, With Walking Paths and Playgrounds
Forget about golf courses, swimming pools and clubhouses. Buyers in large planned developments prefer hiking among lush greenery.
10. Two-Car Garages
A given at all levels; three-car garages, in which the third bay is more often then not used for additional storage and not automobiles, is desirable in the move-up and custom categories, Cardis said.
Source: http://finance.yahoo.com/family-home/article/108701/the-10-must-have-features-in-todays-new-homes.html?mod=family-love_money
"This is a traumatic time in this country and the future isn't something we're 100% sure about now either. What's left? The answer for most home buyers is authenticity," said Heather McCune, director of marketing for Bassenian Lagoni Architects in Park Ridge, Ill.
Buyers today want cost-effective architecture, plans that focus on spaces and not rooms and homes that are designed 'green' from the outset," she said. The key for home builders is "finding the balance between what buyers want and the price point."
For many buyers, their next house will be smaller than their current one, said Carol Lavender, president of the Lavender Design Group in San Antonio, Texas. Large kitchens that are open to the main family living area, old-fashioned bathrooms with clawfoot tubs and small spaces such as wine grottos are design features that will resonate today, she said.
"What we're hearing is 'harvest' as a home theme -- the feeling of Thanksgiving. It's all about family togetherness -- casual living, entertaining and flexible spaces," Lavender said.
Paul Cardis, CEO of AVID Ratings Co., which conducts an annual survey of home-buyer preferences, said there are 10 "must" features in new homes.
1. Large Kitchens, With an Island
"If you're going to spend design dollars, spend them where people want them -- spend them in the kitchen," McCune said. Granite countertops are a must for move-up buyers and buyers of custom homes, but for others "they are on the bubble," Cardis said.
2. Energy-Efficient Appliances, High-Efficiency Insulation and High Window Efficiency
Among the "green" features touted in homes, these are the ones buyers value most, he said. While large windows had been a major draw, energy concerns are giving customers pause on those, he said. The use of recycled or synthetic materials is only borderline desirable.
3. Home Office/Study
People would much rather have this space rather than, say, a formal dining room. "People are feeling like they can dine out again and so the dining room has become tradable," Cardis said. And the home theater may also be headed for the scrap heap, a casualty of the "shift from boom to correction," Cardis said.
4. Main-Floor Master Suite
This is a must feature for empty-nesters and certain other buyers, and appears to be getting more popular in general, he said. That could help explain why demand for upstairs laundries is declining after several years of popularity gains.
5. Outdoor Living Room
The popularity of outdoor spaces continues to grow, even in Canada, Cardis said. And the idea of an outdoor room is even more popular than an outdoor cooking area, meaning people are willing to spend more time outside.
6. Ceiling Fans
7. Master Suite Soaker Tubs
Whirlpools are still desirable for many home buyers, Cardis said, but "they clearly went down a notch," in the latest survey. Oversize showers with seating areas are also moving up in popularity.
8. Stone and Brick Exteriors
Stucco and vinyl don't make the cut.
9. Community Landscaping, With Walking Paths and Playgrounds
Forget about golf courses, swimming pools and clubhouses. Buyers in large planned developments prefer hiking among lush greenery.
10. Two-Car Garages
A given at all levels; three-car garages, in which the third bay is more often then not used for additional storage and not automobiles, is desirable in the move-up and custom categories, Cardis said.
Source: http://finance.yahoo.com/family-home/article/108701/the-10-must-have-features-in-todays-new-homes.html?mod=family-love_money
Thursday, February 4, 2010
Now may be the time to buy a house
If you have a good job and good credit, the next few months might be a sweet time to go house hunting. Then again, maybe not.
Fence-sitters take the risk that Congress may let a rich tax credit expire, and that interest rates may rise. So, let's walk through some factors for buyers and sellers to consider as they consider jumping in.
-Mortgage rates are blissfully low, and that may not last. The rate on a 30-year mortgage averaged 5 percent last week, according to Freddie Mac. Rates are low in part because the Federal Reserve has been buying up about $3 trillion in mortgage-backed securities and mortgage agency debt. The aim is to hold down interest rates and keep mortgages available. But the Fed is slowly removing that financial crutch as the economy improves. It has no plans to buy any more past March 30. The likely result is an uptick in rates.
Meanwhile, the recovering economy by itself should raise rates as the year goes on. Economists at the Mortgage Bankers Association expect to see a 6.1 percent rate by year end. Such a rise would add about $104 to the monthly payment on a $150,000 mortgage
-The home-buyer tax credit expires on April 30, and no one knows if Congress will renew it a second time. Expect a clash between the real estate lobby and fiscal conservatives worried about the $1.35 trillion federal deficit.
To qualify for the credit, you must sign a purchase contract by April 30 and close by July 1. First-time buyers get up to $8,000. "First-time" is defined as someone who hasn't owned a home in three years. Move-up buyers get up to $6,500 when they purchase a new primary residence. To get the credit, you have to have lived in the old home for at least five out of the last eight years. The credits start phasing out at $125,000 in adjusted gross income for singles and $225,000 for joint filers.
-There are indications that home prices are near a bottom in St. Louis and may actually be rising a bit. That statement is dicey, because conditions vary by neighborhood and the data can be tricky.
First American CoreLogic tracks real estate prices across the nation. In November, its housing price index for St. Louis was down 0.46 percent from a year before. That's an improvement from October, when it was down 2.8 percent.
Stats from the St. Louis Association of Realtors tell a happier story. For the last four months, median sale prices in St. Louis city and county have been above the level of a year before. That breaks a long pattern of falling prices.
Things might look different if you're a seller. Do you want to put your house on the market near the bottom of a price cycle? Homeowners who have a choice in the matter - those who can still pay their mortgages - are largely saying no.
Inventories of homes for sale are down about 10 percent from this time last year, and 30 percent from the mid-decade peak of the housing boom, says Kevin Cottrell, chief economist at Kelsey Cottrell Realty Group.
On the other hand, if you're planning to move up to something grander, you might find a bigger bargain when you buy. And that $6,500 tax credit could swing a close decision.
Home sales in St. Louis peaked in October and November, as buyers raced the expiration date of the original first-time homebuyer's credit. Congress later extended and expanded it.
That rush satisfied some pent-up demand, but real estate agents are hoping for another rush around April. "People will wait to the very last second," said Mike Travaglini, a vice president of Coldwell Banker Gundaker's office in south St. Louis County.
It's still a buyer's market. Letty DeMay, president of the St. Louis Association of Realtors, tells sellers to expect to wait 90 to 100 days for an offer. Meanwhile, sellers are dropping prices to entice buyers, she said.
The quickest sales come in the $150,000 and below range - prime territory for first-time buyers. But job losses, fear of job losses and tight credit may keep buyers scarce, despite the government giveaway.
Mortgage lenders have been tightening credit standards, which means fewer eligible buyers, says John Frank, president of Paramount Mortgage in Creve Coeur. Mo. "It's getting tighter and tighter," he said.
Lenders are insisting on credit scores of 640 to 660 for loans sold to Fannie Mae, Freddie Mac and 620 for FHA guaranteed loans. Those standards are higher than the federal agencies themselves insist on. FHA - which guarantees loans for people with low down-payments - has been raising its own insurance charges to borrowers and demanding higher premiums from people with poor credit scores.
Fence-sitters take the risk that Congress may let a rich tax credit expire, and that interest rates may rise. So, let's walk through some factors for buyers and sellers to consider as they consider jumping in.
-Mortgage rates are blissfully low, and that may not last. The rate on a 30-year mortgage averaged 5 percent last week, according to Freddie Mac. Rates are low in part because the Federal Reserve has been buying up about $3 trillion in mortgage-backed securities and mortgage agency debt. The aim is to hold down interest rates and keep mortgages available. But the Fed is slowly removing that financial crutch as the economy improves. It has no plans to buy any more past March 30. The likely result is an uptick in rates.
Meanwhile, the recovering economy by itself should raise rates as the year goes on. Economists at the Mortgage Bankers Association expect to see a 6.1 percent rate by year end. Such a rise would add about $104 to the monthly payment on a $150,000 mortgage
-The home-buyer tax credit expires on April 30, and no one knows if Congress will renew it a second time. Expect a clash between the real estate lobby and fiscal conservatives worried about the $1.35 trillion federal deficit.
To qualify for the credit, you must sign a purchase contract by April 30 and close by July 1. First-time buyers get up to $8,000. "First-time" is defined as someone who hasn't owned a home in three years. Move-up buyers get up to $6,500 when they purchase a new primary residence. To get the credit, you have to have lived in the old home for at least five out of the last eight years. The credits start phasing out at $125,000 in adjusted gross income for singles and $225,000 for joint filers.
-There are indications that home prices are near a bottom in St. Louis and may actually be rising a bit. That statement is dicey, because conditions vary by neighborhood and the data can be tricky.
First American CoreLogic tracks real estate prices across the nation. In November, its housing price index for St. Louis was down 0.46 percent from a year before. That's an improvement from October, when it was down 2.8 percent.
Stats from the St. Louis Association of Realtors tell a happier story. For the last four months, median sale prices in St. Louis city and county have been above the level of a year before. That breaks a long pattern of falling prices.
Things might look different if you're a seller. Do you want to put your house on the market near the bottom of a price cycle? Homeowners who have a choice in the matter - those who can still pay their mortgages - are largely saying no.
Inventories of homes for sale are down about 10 percent from this time last year, and 30 percent from the mid-decade peak of the housing boom, says Kevin Cottrell, chief economist at Kelsey Cottrell Realty Group.
On the other hand, if you're planning to move up to something grander, you might find a bigger bargain when you buy. And that $6,500 tax credit could swing a close decision.
Home sales in St. Louis peaked in October and November, as buyers raced the expiration date of the original first-time homebuyer's credit. Congress later extended and expanded it.
That rush satisfied some pent-up demand, but real estate agents are hoping for another rush around April. "People will wait to the very last second," said Mike Travaglini, a vice president of Coldwell Banker Gundaker's office in south St. Louis County.
It's still a buyer's market. Letty DeMay, president of the St. Louis Association of Realtors, tells sellers to expect to wait 90 to 100 days for an offer. Meanwhile, sellers are dropping prices to entice buyers, she said.
The quickest sales come in the $150,000 and below range - prime territory for first-time buyers. But job losses, fear of job losses and tight credit may keep buyers scarce, despite the government giveaway.
Mortgage lenders have been tightening credit standards, which means fewer eligible buyers, says John Frank, president of Paramount Mortgage in Creve Coeur. Mo. "It's getting tighter and tighter," he said.
Lenders are insisting on credit scores of 640 to 660 for loans sold to Fannie Mae, Freddie Mac and 620 for FHA guaranteed loans. Those standards are higher than the federal agencies themselves insist on. FHA - which guarantees loans for people with low down-payments - has been raising its own insurance charges to borrowers and demanding higher premiums from people with poor credit scores.
Wednesday, February 3, 2010
Pending home sales rise in South Florida
Pending home sales rose in Miami-Dade and Broward counties during January compared to December, according to data released Tuesday by the Realtor Association of Greater Miami and the Beaches and the Southeast Florida Multiple Listing Service.
In Miami-Dade, pending sales of single-family homes increased 0.81 percent to 3,741. Sales of condominiums rose 3.5 percent to 4,647.
In Broward, pending sales of condominiums rose 9.4 percent to 4,137. Pending sales of single-family homes rose 6.2 percent to 3,310.
A sale is listed as pending when the contract has been signed but the transaction has not yet closed. Increased pending sales are an indication of increased future sales.
``Approximately six months after the South Florida real estate market touched bottom according to most economists, we continue to observe the recovery of the local market,'' Terri Bersach, chairman of the RAMB board said in a news release.
Nationwide, the National Association of Realtors said Tuesday that its seasonally adjusted index of sales agreements rose 1 percent from November to December to a reading of 96.6. That was a little lower than the 97.1 level analysts expected, according to Thomson Reuters.
The index has risen for nine out of the past 10 months as buyers scrambled to take advantage of an $8,000 first-time home buyer tax credit before its scheduled expiration Nov. 30.
Congress extended the tax credit to April 30 and added a $6,500 credit for current homeowners
Source: http://www.miamiherald.com/business/breaking-news/story/1458740.html
In Miami-Dade, pending sales of single-family homes increased 0.81 percent to 3,741. Sales of condominiums rose 3.5 percent to 4,647.
In Broward, pending sales of condominiums rose 9.4 percent to 4,137. Pending sales of single-family homes rose 6.2 percent to 3,310.
A sale is listed as pending when the contract has been signed but the transaction has not yet closed. Increased pending sales are an indication of increased future sales.
``Approximately six months after the South Florida real estate market touched bottom according to most economists, we continue to observe the recovery of the local market,'' Terri Bersach, chairman of the RAMB board said in a news release.
Nationwide, the National Association of Realtors said Tuesday that its seasonally adjusted index of sales agreements rose 1 percent from November to December to a reading of 96.6. That was a little lower than the 97.1 level analysts expected, according to Thomson Reuters.
The index has risen for nine out of the past 10 months as buyers scrambled to take advantage of an $8,000 first-time home buyer tax credit before its scheduled expiration Nov. 30.
Congress extended the tax credit to April 30 and added a $6,500 credit for current homeowners
Source: http://www.miamiherald.com/business/breaking-news/story/1458740.html
Monday, February 1, 2010
Invest in an Inspection Before Buying Miami Real Estate
When buying homes in Miami, a great investment, it’s standard practice to check out equivalent sales in the area to get an idea of value. But what do you do next?
You can do a walk-through and see that the back door sticks, but why? Maybe it because a hinge is loose but it could be much worse. It’s possible with some homes in Miami that something is wrong with the foundation.
It’s unlikely you’ll be able to pinpoint the problem unless you’re a building inspector.
Claude McGavick, a board member with the Florida Association of Building Inspectors, says, “A good home inspector will look at 800 to 1,000 things in a home.” He says inspectors follow standard guidelines that tell them what to look at and how to look at it.
Here are some tips for finding an inspector:
» Word of mouth is one of the best ways to choose an inspector for homes in Miami. Home inspectors in Florida are not licensed but that will change as of July 1st.
» Search professional organizations databases. They train their members and giving them inspection guidelines. Here are three places to start:
• Florida Association of Building Inspectors 800-544-3224
• American Society of Home Inspectors 800-743-2744
• National Association of Home Inspectors 800-448-3942
According to the Florida Association of Building Inspectors, standard inspections involve a visual examination of the Miami real estate property from top to bottom. The inspector will check the heating system, the central air-conditioning system, the interior plumbing and electrical systems, the roof and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement and visible structure. The inspector should tell you about any system that may be near the end of its serviceable life or not up to par, and why. It’s very important to pay special attention to the roof and to termite damage of Miami real estate properties.
In general, expect to pay about $300 to $500 for an inspection, says McGavick, who also is an inspector with Home Check Home Inspection Services of Bradenton. The size of the Miami real estate property, the age, special structures and so on can affect the price.
It’s not up to the inspector to tell you whether or not to buy a house in Miami. No house is perfect; you must decide which imperfections and eventual repairs are acceptable.
Source: http://miami-info.com/news/category/miami-real-estate/
You can do a walk-through and see that the back door sticks, but why? Maybe it because a hinge is loose but it could be much worse. It’s possible with some homes in Miami that something is wrong with the foundation.
It’s unlikely you’ll be able to pinpoint the problem unless you’re a building inspector.
Claude McGavick, a board member with the Florida Association of Building Inspectors, says, “A good home inspector will look at 800 to 1,000 things in a home.” He says inspectors follow standard guidelines that tell them what to look at and how to look at it.
Here are some tips for finding an inspector:
» Word of mouth is one of the best ways to choose an inspector for homes in Miami. Home inspectors in Florida are not licensed but that will change as of July 1st.
» Search professional organizations databases. They train their members and giving them inspection guidelines. Here are three places to start:
• Florida Association of Building Inspectors 800-544-3224
• American Society of Home Inspectors 800-743-2744
• National Association of Home Inspectors 800-448-3942
According to the Florida Association of Building Inspectors, standard inspections involve a visual examination of the Miami real estate property from top to bottom. The inspector will check the heating system, the central air-conditioning system, the interior plumbing and electrical systems, the roof and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement and visible structure. The inspector should tell you about any system that may be near the end of its serviceable life or not up to par, and why. It’s very important to pay special attention to the roof and to termite damage of Miami real estate properties.
In general, expect to pay about $300 to $500 for an inspection, says McGavick, who also is an inspector with Home Check Home Inspection Services of Bradenton. The size of the Miami real estate property, the age, special structures and so on can affect the price.
It’s not up to the inspector to tell you whether or not to buy a house in Miami. No house is perfect; you must decide which imperfections and eventual repairs are acceptable.
Source: http://miami-info.com/news/category/miami-real-estate/
Subscribe to:
Posts (Atom)