5 Things You Should Know Before You Flip A Property

1. Money is made at the buy, not the sell of your flip. When flipping a house your money is made at the purchase not at the sell of the house. So, many times people buy a house with the intensions of making a huge profit only to find out that they could not make any money after all the renovations because the purchased price of the house was to high. When you purchase your property you need to be sure that you buy the house with enough money to make renovations, have carrying cost, and add about 5 $6,000. Now, cost is at $147,000, and that is if everything goes as planned. Profit is under 10,000 dollars. The mistake was made at the purchase at the home, not the sell.

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Buying Pre Foreclosures

Pre foreclosures are known as properties that have reached the final stages before they get repossessed or taken back by the lender or bank. The owner is still in complete control of the property or home, although the bank or lender will repossess the home if the owner doesn’t attempt to rectify the situation. Normally, if the owner makes things right with payment, the pre foreclosure will settle and things will go back to normal.

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‘Zombie’ Foreclosures Haunt Housing Market

A new study finds that 301,874 “zombie” homes—properties where home owners receive foreclosure notices and move out, leaving the home vacant and deteriorating—exist in the U.S.

The state with the highest number of “zombie” properties is Florida, with 90,556 vacant homes in foreclosure, according to data by RealtyTrac, in their first analysis of “zombie” properties. Illinois ranks second with 31,668 “zombie” properties and California ranks third with 28,821.

However, Kentucky leads overall in percentage of zombie properties; abandoned homes represent 54 percent of Kentucky’s total foreclosure inventory. Abandoned foreclosures also represent 50 percent or more of the properties in foreclosure in Washington, Indiana, Nevada, and Oregon, according to RealtyTrac.

In January, Reuters reported a problem with “zombie” titles—home owners who received a foreclosure notice and walked away from their home but did not realize their names remained on the deed and they were still financially liable for the property. In some cases, the banks never ultimately pursued the foreclosure, but the home owners were unaware of that since they already had moved out.

RealtyTrac counted any property that had been in foreclosure longer than the state average and that showed no significant recent activity on it as a “zombie” property in its report.

“I think the empty foreclosures is less of a long-term threat but it certainly is affecting individual communities and neighborhoods,” says Daren Blomquist, RealtyTrac’s vice president.

Source: “More than 300,000 homes are foreclosed ‘zombies,’ study says,” Reuters (March 28, 2013)

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Foreclosed Home Owners Are Back and Want to Buy Again

Home owners who once lost their home to foreclosure have returned to the market, eager to buy once again. 

These “boomerang buyers” could make up a large number of the future housing market, considering their numbers. Since the housing crash, 4.8 million borrowers have lost their home to foreclosure and 2.2 million did a short sale, according to RealtyTrac data.

As these borrowers get their finances in shape, repair their credit scores, and save up for a down payment, they’ll be looking to buy again, but their struggle will be over when they’ll be eligible to buy again.

Fannie Mae and Freddie Mac require those who once defaulted on their mortgages to wait five years and have a minimum of a 680 credit score and a 10 percent down payment. If they don’t have all that, they’ll have to wait seven years to qualify again. By seven years, a foreclosure is removed from a person’s credit report.

But if a defaulter can show the foreclosure was due to a hardship — like losing a job or illness — the wait may be reduced to three years, CNNMoney reports.

And some home owners have even be able to buy again after just two years of losing their home to foreclosure. For example, one Palmdale, Calif., couple says that after losing their home to foreclosure due to an illness that made it difficult for one spouse to work, they were able to buy again after two years. During those two years of being sidelined by the housing market, they made sure to pay all their bills on time, repair their credit score, and get their finances back in shape. They were able to qualify for a Veterans Administration-backed loan.

“[After bankruptcy], foreclosure is one of the things that hits your credit score the hardest,” says Anthony Sprauve, a spokesman for FICO. For example, foreclosures and short sales can decrease a credit score by anywhere from 85 to 160 points.

Source: “Boomerang buyers return to market after foreclosure,” CNNMoney (March 11, 2013)


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Big Discounts on Foreclosures Fading, Economist Says

Home buyers may not get as great of a deal on a foreclosure as they once did, according to Paul Diggle from Capital Economics in a new report.

Foreclosure starts are falling and the inventory of foreclosures has been decreasing, which has caused the discount on foreclosures to lessen.

The discount on foreclosed homes compared to other homes has fallen to a 12 percent average, according to Diggle. That was about the same percentage prior to the housing crash, he says. Last year the foreclosure discount averaged about 30 percent.

“Ultra-low mortgage interest rates and steady, if not spectacular, job creation could mean that the delinquency rate and foreclosure start rate are falling quickly,” Diggle writes.

Source: “Those Amazing Deals on Foreclosed Homes Are Disappearing,” Business Insider (March 7, 2013)

Search foreclosure homes in Northern VALooking for a bargain? You might find one in the foreclosures.

Foreclosures and bank-owned homes for sale

Potential Short Sales

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Foreclosure Crisis ‘Now Well Past the Peak’

Foreclosure filings continue their downward spiral, dropping to the lowest level in January since April 2007, according to RealtyTrac’s latest report.

Filings — which include notices of default, scheduled auctions, and bank repossessions — dropped 28 percent in January year-over-year.

“We’re now well past the peak of the foreclosure crisis,” says Daren Blomquist, spokesman for RealtyTrac.

Still, the foreclosure problem has a ways to go: Filings remain at double the pace of 2005, and foreclosure auctions are on the rise in 26 states.

“It’s likely that by this time next year, we’ll start to see 2005-type, pre-crisis numbers again,” Blomquist says.

The decrease in foreclosure starts in January was largely attributed to California, which saw a significant drop last month. Due to a new law in California that offers borrowers in default more protection, the state saw foreclosure filings fall 62 percent in January. The big drop made it the first month since January 2007 that California was not the leader in the nation in foreclosure filings — that state has been replaced by Florida.

Meanwhile, RealtyTrac also reported that bank repossessions were down 24 percent in January from year-ago levels, reaching their lowest ebb since February 2008 and putting it below half of the record amount set in September 2010.

Number of sold homes in Arlington

Source: RealtyTrac and “Foreclosure Filings Fall to Lowest Level Since 2007,” CNNMoney (Feb. 14, 2013)

Number of Home Owners Under Water Continues to Fall

The housing market recovery continues to grow stronger, but the economy remains “fragile,” according to the Obama administration’s latest Housing Scorecard for January. The Obama Administration’s Housing Scorecard is released monthly, providing a snapshot of the nation’s housing market.

typical Tudor home

“The housing market has clearly bottomed out nationally and is turning a corner with new home construction increasing to a level not seen since June 2008 and home prices showing strong annual gains,” says Kurt Usowski, deputy assistant secretary for economic affairs with the U.S. Department of Housing and Urban Development. “But with so many households still struggling, we have important work ahead.”

Government efforts to help struggling home owners avoid foreclosure are improving. Nearly 1.5 million homeowner assistance actions have taken place through the Making Home Affordable Program, and the Federal Housing Administration has offered more than 1.5 million loss mitigation and early delinquency interventions.

“Every foreclosure avoided has positive impacts for families, communities, and our economy,” says Tim Massad, Treasury assistant secretary for financial stability.

Also, the number of underwater borrowers continues to fall while home prices improve. Home owners who owe more on their mortgage than their home is currently worth account for 10.67 million borrowers, which is down from 10.78 million in the previous quarter, according to CoreLogic.

The inventory of existing homes for sale continues to drop, reaching a 4.4 months’ supply, according to National Association of REALTORS®’ data. In November, the supply of housing averaged 5.3 months.

Fewer homes are being sold due to limited inventories. Existing home sales fell to 411.7 million in January from 415.8 million in December.

 

Source: U.S. Department of the Treasury and “Obama Scorecard Warns Economy Remains Fragile,” HousingWire (Feb. 8, 2013)

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Virginia Aims to Slow ‘Drive-by Foreclosures’

Virginia lawmakers are fighting against “drive-by foreclosures,” saying the foreclosure process in the state is one of the fastest in the nation and needs to be slower and have judicial review.

Bills in the Virginia House and Senate will set out to slow the state’s fast foreclosure pace by increasing the time required for foreclosure notice from two weeks to 30 or 45 days. The goal is to give borrowers more time to challenge the foreclosure if needed.

“We simply don’t have enough time to stop a foreclosure because of the fact that it’s in 10 days or seven days,” Todd Condren, a title insurance lawyer from Vienna, Va., told the House Courts of Justice Committee.

The bills also set out to require lenders to face court review before foreclosing on home owners. Lenders will also be subjected to fines if it’s found that any foreclosure was based on fraudulent documents or documents that contained any errors. The proposed bills also will have a requirement that lenders maintain updated real estate loan records in county courthouses and give borrowers an opportunity to avert foreclosure by paying off any delinquency.

Virginia’s banking lobby officials argue that slowing foreclosures and requiring updated county land record filings would just prolong the already four year housing slump.

Source: “Bill Seek Judicial Review of Foreclosures in Va., Better Mortgage Ownership Records,” The Associated Press (Jan. 17, 2011)

Foreclosure Crisis Slowing Sales

The foreclosure mess is making it harder for banks to sell properties. ForeclosureRadar, which tracks foreclosures in five Western states, says the number of properties coming to auction in Arizona, California, and Nevada has declined by more than 30 percent.

Investors are backing away from sales because they fear that the properties they buy will be tied up in an investigation, says Sean O’Toole, CEO of Foreclosure Radar.

O’Toole believes the problem is short-lived and ultimately will be settled in favor of the banks. “The fear that has been created in based more in hype than in law,” he says.

Source: CNNMoney.com, Les Christie (11/29/2010)

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    We played a game at the office this Sunday. Lots of fun. Sincerely, Will Nesbitt Principal Broker   Nesbitt RealtyAlexandria VA licensed in the Commonwealth of Virginia and the State of Maryland 703 765 0300 (main) 571 237 7902 (direct)888 783 6391 (fax) ——– Original Message ——– Subject: The Empire Strikes Back Pictures From: [email protected]

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