Buyer Info

Here's articles I've written which you may find of interest as you prepare to purchase a new home. The home buying process can be intimidating if you go at it alone. Using a professional to look out for your best interests makes sense 100% of the time. Take your time searching my site.

Read through the articles I've put together and if I can be of any help, please call or email me.

Listed below, in chronological order, is an offering of articles I've written that pertain directly to buyers.

Housing Stimulus Bill Summary

July 31st, 2008 Categories: For Buyers, For Sellers, Real Estate Chatter

I’m going to catch some slack from my blogging colleagues on this one.  That’s because I’m reprinting an article in it’s entirety.  What a faux pas!  But for time’s sake, I opted for that this time.  This issue is too important and I don’t have the time for a full-fledged analysis of it but still want to make my readers aware of what’s going on.  I do hope to blog soon about the fact that this bill ELIMINATES in it’s entirety down payment assistance programs and I don’t agree with the change.  But for now, without further ado, I present you the National Association of REALTORS®’ take on the Housing Stimulus bill:

Summary of Key Provisions of H.R. 3221 - The Housing Stimulus Bill (as of 7/30/08)

H.R. 3221, the “Housing and Economic Recovery Act of 2008,” passed the House on July 23, 2008, by a vote of 272-152. On Saturday, July 26, 2008, the Senate passed the bill by a vote of 72-13. The President signed the bill on July 30, 2008. The bill includes the following provisions: 

• GSE Reform - including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• FHA Reform - including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The downpayment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).

• Homebuyer Tax Credit - a $7500 tax credit that would be would be available for any qualified purchase between April 8, 2008 and June 30, 2009. The credit is repayable over 15 years (making it, in effect, an interest free loan).

• FHA foreclosure rescue - development of a refinance program for homebuyers with problematic subprime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.

• Seller-funded downpayment assistance programs - codifies existing FHA proposal to prohibit the use of downpayment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.

• VA loan limits - temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

• Risk-based pricing - puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.

• GSE Stabilization - includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

• Mortgage Revenue Bond Authority - authorizes $10 billion in mortgage revenue bonds for refinancing subprime mortgages.

• National Affordable Housing Trust Fund - Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.

• CDBG Funding - Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.

• LIHTC - Modernizes the Low Income Housing Tax Credit program to make it more efficient.

• Loan Originator Requirements - Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

• 
  For more information, visit http://www.realtor.org/governmentaffairs.National Association of REALTORS®

Spoken by Maggie Dokic | Discussion: No Comments »

Short Sales In Miami-Dade County

February 26th, 2008 Categories: Community News, For Buyers, Homestead, Short Sales, Southwest Dade

If I had to take a guess as to what percentage of Miami-Dade County MLS listings are short sales and bank-owned properties I would guess 30% overall.* I think the percentage may be even higher in Homestead. There are communities in Homestead where 60 or 70% of the listings are distressed properties.

What do you, as a buyer, have to keep in mind when buying a short sale in Miami? First of all, you need time. If you’re in a rush and want to close in 30 days on a property, short sales are not for you. It can take a bank 3-4 weeks just to let you know that they have not accepted your offer and you may submit a higher one if you please, thank-you-very-much.

Another thing to keep in mind is that banks will often have the listing agents ask for “highest and best offers” from all prospective buyers whenever there are multiple offers on a property. So if you make an offer on a short sale, you may just have your agent call you and let you know that the bank wants your “highest and best offer.” No, the bank is not playing games with you to try and get more money from you. Yes, they want as much money as they can get for the property. So why don’t they just counter offer? It’s very simple…if the bank has 3 offers on the table they cannot counter-offer to all 3 because if all 3 prospective buyers were to accept the counter offer the bank would now be legally bound to sell one property to three different parties. They avoid this by just asking for everyone’s “highest and best offer.” Look deep within your heart (or your financial statement) and give your highest and best offer to begin with. I’ve seen buyers lose out on great properties over $2,000. Shame.

Keep in mind that even if you offer the listed price, you may not have your offer approved by the bank. Why is this? Because often banks will not set an “approved price” on a short sale. They will simply say to the distressed homeowner “in order for us to consider a short sale you have to bring us a contract.” Yes, this seems like a total waste of time and it can be for the poor buyer who presents the very first offer the bank has looked at. If the property is listed at $160,000 and a buyer offers the full amount only to have the bank get back to them a month later and say, “sorry, we won’t sell for less than $185,000,” I wouldn’t blame a buyer for thinking “well, why the heck didn’t you just set that price to begin with and list it as such?”

So how can you get around this? Have a knowledgeable agent on your side. Real estate agents working for buyers are usually paid by the seller, so a buyer has nothing to lose and everything to gain by using one. An agent worth her salt will inquire as to whether a list price has been approved by the bank (rare but it happens on occasion). If a list price has not been approved, she can pull comparables and come up with a number she thinks the bank may be willing to accept. There is no set formula for this. It has to do with inventory in the area, sales prices, list prices, how quickly the inventory is moving, how long the property has been listed and the list price history and more. The amount that is owed to the bank may or may not come into play but an agent can usually look up the mortgage amount and take this into consideration as well.

Another thing to keep in mind is that many agents do not want to work with short sales. The extra time involved puts a damper on things, yes, but this isn’t the reason they shy away from them. They sometimes stay away from short sales because they have no guarantee that they will even be paid for their efforts. You see, the same way that a bank has to approve the sales price, they also have to approve the commission paid to the real estate agents. Most banks know full well that there will more than likely be two real estate offices involved and have calculated the agent’s commission into the bottom line. But this isn’t always the case. I have heard of cases where agents who worked hard to bring a qualified buyer had to share a very tiny commission with the listing agent. So ask your agent up front if they are willing to work with short sales.

Remembering that the stronger your offer, the better your chances are of getting it approved, will serve you well. An offer is strong based on many factors, not just the sales price: the amount of your good-faith-deposit; the amount you are looking to finance; are you pre-approved?; how soon you are willing to close; the repair limit on your offer, if any; inspection periods; if you’re asking for seller concessions, etc. Again, an experienced and knowledgeable agent can help you structure the strongest offer possible.

Some short sales may require different contracts be used. This isn’t always the case. It’s actually the exception, not the rule. Whereas after a bank has actually acquired a property by means of a foreclosure and the sale is no longer a short sale but an REO sale (Real Estate Owned) chances are that they will require the use of certain contracts and addenda. Why does this matter? If the use of particular documents are required, your agent may not be familiar with them. I always suggest that a real estate attorney be used, but when unfamiliar documents are required, even more so.

A final word of caution, just because a property is being short-sold, doesn’t mean that the price is a bargain. Remember that the bank is short selling simply because the market value has gone down. So if they are owed $250,000 but a property is now worth only $200,000 paying a bank $200,000 is no better bargain than paying a regular seller $200,000 for a similar property. In fact, dealing with a regular seller may be best because the lender’s approval isn’t required in the mix. Having said that, I have to state that I have seen some incredible bargains on short sale homes, particularly in the Homestead area. So again, ask your agent to “pull the numbers” for you and help you determine if a list price is a good deal or not.

If you have any questions regarding short sale homes available in Miami-Dade county, please feel free to get in touch with me.

*this is only a guess on my part, based on my daily use of the MLS and the high number of distressed properties I see listed. I have not done a tally of distressed properties in the local MLS.

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Short Sales In Miami Dade

January 13th, 2008 Categories: For Buyers, For Sellers, Short Sales

It occurred to me that 80% of the home buyers I am working with in Miami are looking specifically at short sales yet I do not have any short sale articles posted on my blog. Hmmm! It’s really because I am busy working the short sales and have not had time to write about them.

I promise to return and dedicate more blog space to short sales but at the very least I’d like to explain what a short sale is.

So… what exactly is a short sale? Very simply put, it’s when a property is being sold for less than the amount owed to the bank(s) on it.

The short sale process is more involved than the traditional home buying process. There are things to look out for whether you are the seller or the buyer in a short sale.

If you need more information on short sales before I have the opportunity to write more posts, feel free to contact me.

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Mortgage Fraud in Dade County Revisited

December 19th, 2007 Categories: For Buyers, Real Estate Chatter

I am not going to make this one long-winded. After yesterday’s news of 31 arrests by the feds in a mortgage scam ring that spanned from one of Florida’s coasts to the other, you would think people would start re-thinking their beliefs about what is right and what is not when it comes to mortgages.

Alas, this is not the case. I think the fact that this has happened so frequently in our area has otherwise law-abiding citizens thinking that certain things are perfectly fine to do, when in fact they are illegal.

As a real estate agent I am frequently asked “how much will the house appraise for?” Even the very first time I heard it I knew what was going to follow: a quick lesson on mortgage fraud from me.

Who is teaching our Miami-Dade residents out there to ask this question? Is there an infomercial guru pushing that a home which appraises for more than the sales price can be used to tap into the equity? Are there coffee buddies discussing this somewhere? Are Miami housewives talking about this at cousin Maritza’s baby shower?

I am asked this question more often than I would like. And it is always by someone who innocently enough thinks it is ok to get a larger mortgage than the sales price simply because the house appraises for more. It isn’t OK. In fact, it is illegal. Not only is it illegal, it is a federal offense, you know, the FBI?

I was asked this question again yesterday. I could tell from the conversation that followed that they had no idea. They simply wanted to be able to pay off some credit cards with the extra equity.

Let’s start spreading the word about this. Here’s today’s homework: a link to the FBI’s publication on mortgage fraud.

hmmmm…maybe I made this a little long-winded after all. Oh well, it’s not as if it’s not merited.

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Palmetto Bay Homes For Sale - Clarification of Bargains

November 17th, 2007 Categories: For Buyers, Palmetto Bay Real Estate

I read this nbc6.net article today and can go along with most of what’s being said. I have to take issue with one small item there though. Zip code 33157 is touted as being Palmetto Bay and while a part of Palmetto Bay is certainly in zip code 33157, 33157 also encompasses parts of Cutler Bay as well as Miami.

This minor detail will make a difference in the way Palmetto Bay listings are viewed. The article states that there are 758 listings in 33157 which is Palmetto Bay. While there are 758 listings in 33157, only 197 of those are in Palmetto Bay. The rest are in Cutler Bay and Miami. As a matter of fact, the entire Village of Palmetto Bay has only 254 single family homes listed for sale at this very moment, which is considerably less than the 758 attributed in the article.

I’m not denying the overall point of the article. It is a great time to pick up a great home at a great price. And using a knowledgeable REALTOR® to guide you makes sense. Oh, and we are paid by the seller usually, so it doesn’t cost you anything. Now doesn’t that sound sweet?

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Do You Not Understand Its Mortgage Fraud?

August 18th, 2007 Categories: For Buyers, For Sellers, Homestead Real Estate, Miami Real Estate, Redland Real Estate

I like selling real estate in the Miami Redland.  I’ve met some great people in my business.  I’ve helped lots of folks and knowing I’ve done a good job is extremely satisfying to me.

Yesterday I didn’t like one of the people who contacted me.  I was on my way to a meeting in Aventura and driving on I-95.  I’m not that familiar with the area and was keeping an eye on the exits. 

My phone rang and I answered, “Hello, this is Maggie!”  The gentleman on the phone asked me about some homes in an area of Homestead.  I told him that I didn’t have homes available specifically where he said but a little further away I have a development listed with 15 homes still available for sale and affordable.

He asked me for the prices and if there were any incentives.  I answered all his questions and he said something about wanting “cash back.”  I told him we were not offering cash back at closing.  I went even further and told him it was mortgage fraud and illegal.

He said to let him worry about that.  He asked me again for the prices.  I repeated them.  “What will they appraise at?” he asked me.  OK, now I see he’s trying to skin the cat a different way.  I know where he’s headed with this.

I tried really hard to not sound arrogant when I replied, “they will appraise at what they’re priced at.  If they were to appraise higher, we would be selling them for more money.”  Now this may seem like common sense, but I did understand where he was headed.  He’s familiar with appraisals that come in, magically, at numbers that are inflated.  These inflated appraisals are key in being able to commit mortgage fraud.  I guess he thinks he knows my business better than I do. 

Mr. Cash Back must have realized that my patience was wearing thin.  He told me he’d call me back if he decided to look at these homes.  I’m happy if he loses my phone number.  The only orange I look good in is perhaps an orange scarf.  An entire jumpsuit might be a bit much.  Besides that, I worked hard for my license and am actually proud of it.  I won’t be risking losing it anytime soon.

By the time I hung up I realized I had passed my exit by 5 miles.  Dagnabit!

Spoken by | Discussion: 9 Comments »

What’s A CDD And Why Should I Care?

July 23rd, 2007 Categories: For Buyers, South Florida Living

OK, first of all, you must be wondering what CDD stands for. In real estate, it stands for Community Development District.

Now that we have that out of the way, why should you care what a CDD is? Let me tell you so it doesn’t surprise you 8 months after you purchase your new home.

Some new homes are built in what is known as a Community Development District. The Miami Dade Property Appraiser has his own definition and a darn good one at that. It states… “The Community Development District - CDD” means a local unit of special-purpose government. A community development district may charge separate non-ad valorem special assessments for satisfying the debt obligations of the District related to financing, constructing, maintaining and servicing the District’s improvements and/or services.

If it still isn’t clear, I’ll spell it out real simply…it boils down to a larger tax bill. You will pay more money for property taxes than someone else with a home valued at the same amount but whose home is not within a CDD.

How much more? Well, that depends. It could be in the neighborhood of $800/yr to $1200/yr or more. It is totally based on the types of improvements and/or services that were constructed, financed and maintained and on the budget adopted annually by the CDD.

If you are buying a home that is part of a CDD it must be disclosed to you. However, you may have stars in your eyes as you check out that shiny new townhouse and completely gloss over the fact that this will be an additional expense on top of the mortgage, taxes, insurance and homeowners association, if any.

There are many new developments in Homestead, Cutler Bay and Miami which are in CDD’s and that impacts your monthly payment. Make sure you’re including the additional cost a CDD brings when you’re figuring out your numbers.

For instance a CDD which imposes an assessment of $984 per year is costing you $82 per month. With an extra $82 per month on a 30 year fixed mortgage with 6.5% interest rate you could afford to purchase almost $13,000 worth of extra house in a community without the extra expense of a CDD.

Make sure you’re including all of your monthly expenses when figuring out how much home you can afford.

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