Top 4 Dangers in Buying Foreclosure Homes for Sale In Pinellas County

1. We might not close.  There’s a new dangerous and unscrupulous trend now where banks aren’t getting clear title (from outstanding liens and deed-in-lieu sign offs from Sellers) before listing Pinellas County homes for sale.  We’ve experienced and also heard about this first-hand from several insiders at several well-known banks and closing attorneys that represent these banks.  In other words, they are sometimes offering properties for sale that have no business being on the market!
2. We might not close on time.  Same explanation as above.  We recently represented a wonderful buyer who HAD to be in her new home by a certain date – and the closing was delayed over THREE weeks.  Trust me, the pain she went through due to the delay – not to mention the stress of not knowing IF we would even close - was unbelievable.   I can’t stress enough why it’s so important to have Pinellas Realtors that will go the extra mile for you.  In this case, it took contacting the CEO at a massive firm – and everybody else there – about 10 times a day – every day - to finally get it done.
3. You’ll ALWAYS have to pay extra fees that are paid for on ‘regular’ and short sale properties.  These include normally paid for by seller title insurance, state doc stamps (taxes) and other title fees.   This is a significant extra expense that can be easily made light of by your buyer’s agent and certainly the selling institution.  Make sure you get an estimate of these costs prior to signing any contract.
4. Almost ZERO contract protection.  The standard FARBAR and FAR contracts have ample protections for buyers regarding inspections, property defects, disclosures, clear title, etc.   However, bank REO contracts can not be altered in ANY way.  We have to take what they dish out – and trust us, they are all in the bank’s favor.  

Absolutely, there are great buys to be had buying foreclosure homes for sale in Pinellas County, yet let the buyer beware.  If you have questions about the process, these Pinellas Realtors would be glad to chat with you.   Feel free to contact us with questions. 

By the way, the truth is that a ‘regular’ sale home can often be a better buy than a foreclosure or a short sale – it just all depends!!   We see it all the time and feel free to ask us why.  We’re here to help.

There’s great news, however, if you’re in the market to purchase Pinellas Real Estate!  Buyers may now use the credit upfront as extra down payment money, to lower payments, pay discount points (reducing their interest rates), or to supplement closing costs.

The big “BUT” here is that buyers  CANNOT use the first time home-buyer tax credit toward the 3.5% minimum that is required of FHA insured loans.  The buyer still has to present those down payment funds, yet they can be a gift from a relative. 

The Truth About the Misinformation Currently Being Circulated Amongst the Mis-Informed: 

There’s a lot of misinformation out there saying that the $8,000 can be used for your down payment, but that’s just not the case!  It’s a convoluted mess because HUD originally released this Mortgagee Letter 2009-15, later rescineded it (the details as to why are unclear other than they realized they made a mistake), and now it’s up for public speculation as to what’s going to happen with that aspect of it.  For crying out loud, we reported last October that the FHA had just done away with all seller-funded closing costs - now they want to essentially reverse that?!  For the real facts, keep checking back, or better yet subscribe to The Pinellas Peach and you’ll be notified automatically.

Eligibility for the $8000 tax credit can be found on the IRS website.  It is always wise to consult with a tax advisor and a licensed Realtor to discuss your particular situation. At this time the key components to this upfront monetization of the $8,000 tax credit it that:

• it will only be available for FHA loans
• full documentation of income is essential
• low debt-to-income ratios are mandatory
• the buyer is still responsible for the 3.5% minimum down payment

I’m going out on a limb here, and this will probably tick some of you off, but making sure buyers have the discipline to save 3.5% for a down payment is probably a good indicator as to whether or not they’ll be able to keep up with mortgage payments in the event of an unforseen needed repair, life change, etc.  Otherwise we’re essentially back to 100% financing which is what got us all into this pickle in the first place.  100% financing with a rainy day savings account?!  Fabulous.  Otherwise, maybe it’s not time to take the home ownership plunge just yet.

Conventional interest rates had been hovering at historic lows of 4.75% – until this week, where they ended at 5.27%!  It is unlikely they will stay in these low ranges, whether the 4’s or the 5’s for any length of time say most experts.  Mortgage interest rates are tied to the bond market which has begun to take hits due to the state of the economy.  Money.com had this good synopsis Thursday if you want to delve deeper.

So, if you’re waiting for that $200,000 home to fall another $10,000 or 5% – this will take about three months in our current market.  Now its September 1st and you’re going to offer $190,000 and save about $50/mo on your mortgage payment.  But wait!  Interest rates have risen one point to 5.75%.  Now your mortgage payment is $125.00 MORE than it would have been last week.  This scenario has now cost you an additional $75.00/month – for the next THIRTY YEARS!!

$200,000 home with an 3.5% FHA 30 year loan:

4.75% = $1006.78/ mo payment

5.75% = $1126.30/mo

6.75% = $1251.79/mo

Some will say, “not a big deal.”   Really?  A 2% jump in interest equates to an additional $3,000 per year and over $162,000 over the life of the loan.  Hmmm… 

What’s the other boat?  Trying to time the bottom of the market.  A post for another day! 

A Taste of Pinellas is happening this weekend and it looks like it’s going to be even bigger and better than last year.  The setting alone (on the waterfront in Downtown St. Pete) is spectacular, but the celebration of great food and music makes it one of the best annual parties in Tampa Bay.   This event is like the Taste of Palm Harbor on steroids!  Admission is free and all of the proceeds go to support All Children’s Hospital. 

Food and drink can be purchased from the restaurant booths with tickets — a sheet of 8 tickets sells for $5 and can be purchased at the event. There will be a Kids’ Zone for children and a specialty & import beer garden.

But central to this great festival is the tremendous opportunity for local restaurants to present selections from their menus.  As of this writing some 40 restaurants are scheduled to set up and show off their extraordinary fare.  Just some of the tasty treats will be served up from the ever-popular Bob Evans, the succulent ribs from Brady’s Backyard BBQ,  the Courtside Grille , famous Crabby Bills , classic favorites from Five Guys Burgers and Fries , perfect sausage and peppers from Gratzzi Ristorante , and the local favorite, Hurricane Seafood Restaurant.

There will be music for every taste throughout the weekend but the headliners include: Night Ranger with Lita Ford on Friday night, Travis Tritt on Saturday and the ever-consistent KC and the Sunshine Band  on Sunday!

Visit the parking and shuttle map to get yourself situated.  We hope to see you down at beautiful Vinoy Park in St Petersburg!

Friday, May 29, 5pm-10pm
Saturday, May 30, 12pm-10pm
Sunday, May 31, 12pm-7pm

As Pinellas Realtors, we know that we have challenges ahead.  Yet, as we study the statistics here at the Pinellas Peach, the signs are becoming clearer with each passing month that we are in a slow recovery pattern, at least in terms of the absorption rate.  In fact, within the Keller Williams Realty Palm Harbor Florida office, we’ve all felt a significant uptick in buyer activity (and truly appreciate those rare days off!).  Want proof? 

Units Sold:  There are more Pinellas condos and Pinellas homes selling now than have since 2007.  Single family home sales were up 19.3% year over year in March.  Condo sales showed a 17% increase over March of last year.   If we had our magic wand, we could tell you if this trend will hold. 

Inventory:  The number of Pinellas homes on the market continues to drop, and were at their lowest point since March of 2006 when we were still in a boom Pinellas Real Estate Market.   The Tampa Tribune reported similar findings in April for all of Tampa Bay.

Absorption Rate (A/R):  The Pinellas County Real Estate absorption rates are higher than they have been since a couple of years.  Yes, folks, you can sell your Crystal Beach Florida homes if you want to! 

Pinellas Homes and Declining Median Sales Prices:  OK, every silver lining has it’s dark cloud.  Prices are still dropping.  Average sales prices are reported in our chart, yet the Pinellas Board of Realtors is reporting that the single family median price dropped 24.5% when compared to March 2008, and condo median pricess tumbled 20.9% during the same period.  Don’t dismay, it is still easy to sell your slice of Palm Harbor Real Estate quickly, with this proven home sale strategy in place.

Contact Matt and Julia Fishel, Licensed Real Estate Consultants, at (727)366-0325 (Matt) or (727)366-0324 (Julia) for an in-depth anyalysis of what these Pinellas home sales trends mean for you – whether buying Dunedin Florida homes you dream about or trying to sell your Ozona Florida home.  

This news is so fresh the FHA hasn’t even updated its website, but The Peach is here to let you know that you can purchase your Crystal Beach FL home up to $303,000 with only a 3.5% down payment.  SWEET!  Looking for a Tampa Bay golf course home?  We’ll be expanding this section soon so stay tuned.

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