Parkland Parrot

Appraisals: Why You Must Now Sell Your Parkland House Twice

Due to the large inventory of bank foreclosures and short sales currently on the market, banks and lending institutions are becoming even more stringent when qualifying potential real estate buyers for mortgages.  As a result, banks want to make sure that buyers have the ability to pay back money owed on the loans.

Banks also protect their mortgage investments by making sure that the mortgage’s collateral backing is secure.  The appraisal is now more important than ever, as banks want to make sure that if the borrower fails to make their payments on the loan, then the bank will be able to sell the home for at least the amount equal to the mortgage balance.  As a result, you cannot just find able and willing buyers to purchase properties at agreed upon sales prices.  Now, you have to take the extra step and sell these sales prices to appraisers.

Last week, the National Association of Realtors’ Existing Home Sales Report showed how appraisals are negatively impacting residential real estate transactions in the United States.  In fact, 14% of all transactions in April were either cancelled or renegotiated to a lower sales price, because of low appraisals!

Bottom Line:
When considering listing your home on the market, please work with a Realtor that can answer all of your questions and concerns regarding appraisals.  Remember, you will have to sell your home twice: first to the buyer and then the appraiser.  Do not get all excited when you agree on terms with a potential buyer, as that is only half the battle.  The second half is having the home appraised.  The Parkland Parrot Real Estate Team emphasizes to each of our sellers that the appraisal is probably the most important aspect of the real estate transaction.  As a result, your Realtor should meet the appraiser and present him/her with the the following items:

1. Upgrades & features of the home
2. Floor plan
3. Survey
4. Clean copy of the purchase agreement
5. Comparable closed sales in the past 6 months

Remember, banks cannot have direct contact with appraisers.  So, the only individual that communicates with the appraiser is the listing agent in order to allow the appraiser access to the property.  Make sure your Realtor does their homework and meets with the appraiser at your home.  Appraisers come from all over South Florida and might not be affluent with your particular community.  As a result, make sure that you and your Realtor put together a plan for both the buyer and appraiser.  If you are thinking about selling your home and would like us to explain the home selling process as it relates to appraisals, please give us a call at: 954-609-0591.

Know the neighborhood.  Know the value.  Know your hometown agents:  The Parkland Parrot Real Estate Team.  If you are interested in buying or selling in Parkland or South Florida and are looking for experienced local Realtors, please do not hesitate to contact the Squawk at 954-609-0591 or send us a message here.

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Related Posts:
5 Reasons To Sell Your Parkland Florida Home Now
30 Parkland Florida Homes Sold In April 2011
Hooray For Parkland and Broward Real Estate Home Sale Increases

The Effect Of Increased Mortgage Rates On Parkland Real Estate?

What will the effect of the expected increase in mortgage rates have on the Parkland and South Florida real estate market?

The FED has recently announced that they will no longer be buying Mortgage Backed Securities. Since October of 2008, mortgage rates on 30 year mortgages have decreased by up to 2%, as the FED was buying up these securities. Unfortunately, most experts agree that mortgage rates will start increasing in the coming months.  But, the question is by how much will interest rates increase?

Financial experts at Morgan Stanely strongly believe that rates will go up to approximately 7%, which ironically was the rate before the FED started buying the mortgage backed securities in 2008.  Other experts feel that interest rates will still remain low throughout 2010.

Today, Parkland and South Florida buyers must take into consideration the negative effect on their monthly mortgage payments and housing costs as opposed to home prices.  Below, please find a graph which accurately displays how even if prices do continue to fall, the increase in mortgage rates could significantly increase the cost for a potential homebuyer!

Buyers should be more concerned about their bottom line monthly mortgage payments for 30 year or 15 year mortgages. Many potential buyers get caught up on the price of homes, but in reality, they should be more concerned with how much their monthly housing payments will be during the terms of the mortgage.

To stay updated with all of the current Parkland real estate home information, receive our blog posts directly to your inbox by subscribing to the squawk.

If you are interested in buying or selling a real estate property in Parkland and need to speak with a Parkland Realtor or South Florida Realtor, please give us a call at 954-609-0591 or send a note to the squawk.

Buyer Demand For Renovation Financing?

I was reading Brian Brady’s blog Mortgage Rate Report, and he was discussing the new demand for renovation financing for buyers. Brady discussed the need for creative renovation financing, as mortgage rates will rise in the coming months.  As many distressed properties are on the market and coming on the market, perspective buyers are looking for ways to purchase these distressed properties at significantly discounted prices and finance the improvements needed in their loans.

Also, going green is also become extremely popular for homeowners.  Potential home buyers are looking for tax credits and special financing in order to make their homes more energy efficient.  The IRS is currently offering a partial tax credit for energy efficiency improvements.  Brady goes on to describe the 5 loan programs where buyers are financing over the purchase price for energy efficiency and other home improvements:

• VA Energy Efficient Mortgage permits the financing of energy efficiency improvements up to $6,000.
• FHA 203-K Renovation Mortgage allows the financing of larger renovation projects.
• FHA Streamline-K Home Improvement Loan allows homebuyers to finance their renovation project up to $35,000 over the purchase price.
• Fannie Mae Energy Efficient Mortgage permits the allowance of up to 115% of the purchase price of a resale property to be financed for energy efficiency. Newly built homes are permitted up to 105% of the purchase price for energy efficiency updates. 
  
• FHA Energy Efficient Mortgage, similar to Fannie Mae’s program, allows home buyers to finance up to 105% of the purchase price for energy efficiency improvements.

These loans will become even more popular as potential buyers continue to purchase bank foreclosures and short sales.  Many times, these distressed sales need many structural and cosmetic updating along with energy efficiency upgrades.  Remember, that financing over the purchase price means that the property must appraise for that price.  It is essential to work with a mortgage broker and Realtor that specialize in the above financing.  These are not the easiest loans to put together, so do your homework and work with true experts.

To stay updated with all of the current Parkland real estate home information, receive our blog posts directly to your inbox by subscribing to the squawk.

If you are interested in buying or selling a real estate property in Parkland, please give us a call at 954-609-0591 or send a note to the squawk.

Buyers That Are Prequalified or Preapproved?

Should A Buyer Be Prequalified or Preapproved?

With banks becoming even tighter on their financing criteria, many Parkland sellers and their real estate agents MUST make sure that buyers are truly qualified to purchase a home before entering into a purchase agreement.

Prequalification is the process where a lender or mortgage broker pulls credit and looks at the complete credit report of the borrower, as well as the  buyer’s income and debts.  As a result, a lender will be able to use this pertinent information to determine how much mortgage the potential purchaser can really afford. But, there is no bank accounts or employment verified during the prequalification process.

Preapproval occurs when ALL employment and credit is verified and approved by the lender or mortgage broker.  During the preapproval process, the potential buyer provides more detailed information in order to verify their statements.  After this information is verified, then the mortgage is approved, subject to a home appraisal.  The final loan is approved after the property appraises, and the bank receives all documentation and satisifes the contingencies and conditions of the loan before closing.

It is important for all sellers and Realtors to understand that a prequalification letter does not mean that a buyer is 100% able to purchase the said property.  When receiving offers on our Parkland property listings, we ask that ALL buyers are preapproved for a loan.  I really do not understand why a buyer would not make sure that they are truly approved to purchase a property in a particular price range and understand their exact terms and conditions of the loan.  As a result, the “prequalification letter” is just a piece of paper.  I want the preapproval letter and still have questions from the buyer’s mortgage lender before I even present the offer to my sellers!

The moral of the story is that with the lending institutions tightening their financing criterias, it is essential that all buyers get preapproved before looking at properties or at least before submitting a formal offer!

To stay updated with all of the current Parkland real estate home information, receive our blog posts directly to your inbox by subscribing to the squawk.

If you are interested in buying or selling a real estate property in Parkland, please give us a call at 954-609-0591 or send a note to the squawk.

30 Year Mortgate Rates Under 5% Again?

More Positive Real Estate News:  Mortgage Rates Under 5% Again

With the local real estate market starting to pick up, more good news from the homefront that interest rates are down at record levels again!

According to James Venney, a mortgage banker with Gibraltar Private Bank and Trust, mortgage rates on 30 year fixed loans have fallen under 5%.  Even more exciting that jumbo rate loan (loans over $417,000) restrictions have relaxed recently. Venney also points that buyers can now put down 20% and get a rate in the high 5% range.

James Venney also writes a great mortgage blog for the local South Florida market called: Juicy Estates

As a result of the drop of interest rates and especially the relaxed jumbo rate loans, this is all GREAT news for the Parkland real estate market!

Parkland price points are higher than most Broward County cities where buyers in the past were having difficulty coming up with the high downpayment requirements to get  jumbo loans.  If rates stay in the low 5%, we will have a strong finish in 2009!

To stay updated with all of the current Parkland real estate information, receive our blog posts directly to your inbox by subscribing to the squawk.

If you are interested in buying or selling real estate in Parkland, please give us a call at 954-609-0591 or send a note to the squawk.