Highlands County Talk

Sebring REO / Foreclosures are moving fast! We have a daily updated foreclosure list on our website and a surprisingly high amount of subscribers (it's free!).

It's a pretty simple process: you can see the current foreclosure list on our website MillsRealEstate.net and you can also subscribe to daily updates, meaning as soon  as a new foreclosure hits the market, you get notified. The same goes for changes in price - you get notified! Everything is updated every morning. Pretty neat, isn't it?

During the last two months we've noticed that many times when people call us about a particular REO property that has just hit the market, it becomes "pending or contingent" within a very short time - meaning someone has made an offer on it already.

The time a REO / foreclosure property in Highlands County spends on the market until it receives an offer is considerably less than for short sales or fair market sales. The current average is only around 95 days, while fair market sales take around 144 days to sell. 

If you are shopping for foreclosures and you find a property in Sebring you are interested in, don't wait around! Call us immediately and ask for Darrin: 863-202-5017!

Double check before you move ahead!

The media has done its fair share of painting a picture of doom and gloom when it comes to the housing market. No, not everything is fine and dandy in real estate and depending on your area, there might be quite some shadow inventory lurking in the dark.

Nonetheless, FoxNews has a great article about very affordable homes throughout the country that can be purchased without having to wait out a short sale or deal with damaged REO properties: http://www.foxnews.com/leisure/2011/04/17/cities-80000-buys-real-home/?test=faces

But before you move ahead, verify the information given:
A property for sale in Arizona, for example, was described as tiled throughout when the listing photos clearly show carpeting and the size of the property the article refers to is actually the lot size, not the home's square footage.

I couldn't help but comment on the article and set the record straight, at least for this particular home.

Even when it comes to the MLS, the data is not guaranteed accurate but deemed reliable. This means, there might be typos: A home listed for $100,000 shows up for $10. A home on 2 acres shows up as $20 acres. Before you move ahead, speak with your Realtor and have him or her verify the information given about a particular property.

Owner Financing Available! Many buyers have a hard time getting qualified for a mortgage these days. According to the Federal Reserve, nearly one quarter of mortgage appliants are being rejected.

FICO scores matter more than ever and many buyers might be looking towards Owner Financing as a way to purchase a property.

We recently spoke with a Polk County home owner looking to sell his beautiful golf front property. Before we met, we took the time to research the market and neighborhood and found that comparable homes haven't sold for more than $55,000 only a month ago. The seller sold us he had sold similar homes in 2005 for around $160,000 and would be looking to sell his current one within that price range. Wow, three times its market value.
We suggested he rent the place instead and wait until the market recovers. He then said  he would consider Owner Financing.  His terms seemed pretty reasonable and we liked the fact that he would be willing to help a financially stable buyer that wasn't able to qualify for a bank loan because of tight qualification criteria. What really bothered me was the fact that his Owner Financing didn't include a price reduction anywhere near what the property's current market value was.

In other words, the buyers would have to grossly overpay in order to do Owner Financing and by overpay I mean almost triple the market value. How great of a deal is that? Yes, the owner would give great terms on the loan, fair interest rate of 6% - wonderful but not so great anymore once you look at your monthly payment:

Market Value $60,000 at 6% over 30 years = about $360/mo

Owner's Market Value $150,000 at 6% over 30 years = $890/mo

Okay, let's assume the buyer is so desperate to own this home and doesn't mind that type of immensly inflated market value. 1 year after the closing, the owner gets laid off. He can't sell the home to get out from underneath the mortgage because the home hasn't appreciated enough by far. Now what?

Let's assume the buyers gets a great job offer and has to relocate but can't sell the home because...........yes, it hasn't appreciated enough by far. Now what?

Let's assume the buyers want to refinance after a year because their credit score has improved and their lender orders an appraisal..............not going to work either and you already know why.

Do your homework! Owner Financing can be an alternative to restrictive loan criteria imposed by banks but you need to do the math and weigh your options before you sign that dotted line.

Have you noticed there are less foreclosures available for sale in your Highlands County neighborhood than last year? Are you having a hard time finding a good REO property to purchase because there's isn't as much to pick from anymore? Is this the end of the foreclosure crisis in Highlands County? Short answer: NO!

Yes, there are far less REO properties available for sale these days and one might speculate that this means there is a big bold bright light at the end of the tunnel, meaning our market is well on its way to recovery and the bargain prices are going to be a thing of the past.

Let's stick with the facts and examine what we know:

- In January 2011, the Fort Myers News Press reported that banks have recently withdrawn hundreds of foreclosures in Florida. Lee County Clerk of Court Charlie Green (not Sheen) said "We think they're going to come back and re-file". So these are pending foreclosure cases that aren't going to be listed soon. Read the entire article here. I checked the court files for Highlands County and it appears there have been well over 100 Orders of Dismissal on foreclosure cases issued by the Circuit Judge since late fall 2010. Nobody knows why the cases were dismissed and how long it will take these lenders to re-file, IF they intend to do so. Meanwhile, none of these foreclosures are offered for sale.

- Bank of America and/or Countrywide have filed for foreclosue on a total of 2 homeowners in Highlands County since January 2011 while there were hundreds of BoA/CW filings annually in previous years. Does this mean nobody has defaulted on their loan since January? Probably not! Thinking back to the robo signing disaster last year, it is very likely that banks are simply holding back properties...........they don't want to get caught foreclosing without the legal right to do so and these waters are still pretty murky!

None of these cases are going away, they won't disappear, they don't get magically resolved. They are simply lurking in the shadows, waiting to have their day in court. Most likely, many will end up being Real Estate Owned (by banks) and then listed to be sold. Nobody knows how long that will take - but I'm almost certain it won't be next week!

According to the Federal Reserve, nearly a quarter of mortgage applicants are rejected.

"Good borrowers with one or two blemishes on their credit are being denied credit," says Lawrence Yun, the chief economist for the National Association of Realtors®.

As lenders are now requiring higher credit scores and larger down payments, many buyers are left out in the rain:

Anthony Sanders, director of Real Estate Entrepreneurship at George Mason University, estimates that the tighter credit standards has caused as many as 30 percent of would-be buyers - or even more - to sit on the sidelines.

In some rural areas of Polk County and within Highlands County, you can still qualify for a USDA loan with low credit scores or a limited credit history if you meet specific guidelines such as:

1. Verified Rental History
2. Alternative Credit, such as utility bills, auto insurance etc.
3. Savings
4. Job Stability

Keep in mind that building alternative credit is not a substitute for having negative credit but it is a solutoin for home buyers that either have no credit or a very limited credit history.

For more information about USDA loans in Highlands County and Polk County, check out Sean Stephens' Blog