Home Buying

At least a few times a week I get an inquiry from a would-be-homebuyer who has found a house in foreclosure on realtytrac or some other foreclosure site, and they want to purchase the house and want to know they can do it or request my help in doing so.

A HOUSE IN FORECLOSURE IS NOT NECESSARILY A HOUSE FOR SALE!

The truth is unless the house is listed for sale or you have personally approached the owner and they have agreed to sell to you - you can't buy a house simply because it is in foreclosure.

BUT WHY CANT I WORK WITH THE BANK TO BUY THE HOUSE?

Until the lender completes the foreclosure process, they do not own the property and therefore cannot sell it. It is not theirs to sell.

BUT IF ITS ALREADY FORECLOSED BUT NOT YET LISTED CAN…

As a would be homebuyer wanting to go see homes there are generally two initial questions you are likely to encounter when talking to real estate agents:

#1 - Are you working with a Realtor in your home search? The reason Realtors ask this is to find out whether you are already working with another real estate agent as agency laws prohibit us from assisting buyers who already have an agent. If you have a Realtor you are already working with - there is no need to seek assistance from other Realtors. Contrary to popular belief, calling the listing agent won't get you a better deal, but it will leave you without representation in the largest financial transaction of your life. Not a wise choice, but if you do decide to proceed without your own agent, by…

According to the Mortgage Bankers Association (MBA), rates are headed to rise by the end of the year- to a predicted 4.4%. After a 4 year boom in refinances due to historically low rates in the 3%'s...the party may be over as rates start to increase by the end of the year. Economists seem agree with MBA's prediction of increasing rates, according to this Yahoo article.

Homebuyers-to-be still sitting on the fence watching the market should take note and consider taking action on their home purchase plans. While recent market reports for central CT towns do not yet suggest that values have increased significantly, rising interest rates could easily outweigh any savings from further drops in prices in many CT towns.

READY TO GET STARTED ON YOUR…

There is no shortage of real estate recovery headlines all over the internet and the news - making some buyers wonder if they missed their opportunity to buy a home at rock bottom prices. While in fact some areas of the country are experiencing a turn towards a sellers market - this is certainly not the case here in Connecticut. While recent CT market reports do in fact show an increase in sales activity since 2011, these same reports also show sold prices still on a downward trend year over year. 

The first 4 months of sales here in CT reflect a similar trend. Sales have in fact increased a bit in the last two years, although nowhere near the activity levels seen in the early 2000's:

However - sold prices have not improved and in fact are…

Credit events such as short sales, foreclosures, bankruptcies and deed-in-lieus present special challenges to former homeowners wanting to get back into homeownership after a home loss. While these former homeowners are generally in a better position financially after relieving themselves of an overleveraged home or excessive debt - there are usually some obstacles in the way of being able to purchase a home again, such as:

Credit score: All these events have some impact on the credit score. It will take some time of establishing good credit again to get yoru FICO scores back up to where you will considered for a new loan.

Down payment: Although there are a few programs that will loan at 100% of value, most lenders will want at least 3.5% of the…

Short sales can be good deals - they are usually in significantly better condition than foreclosed properties, and while short sales don't sell for 50 cents on the dollar - they do generally sell slightly under market value. But before making an offer on one - check out these 5 Tips:

• Make sure your buyers agent understands the short sale process and is able to qualify the sellers agent as well as the particular short sale situation to see if it is likely to close. You don't want to waste 8 months in contratc to not close because your agent didn't know well enough to qualify the listing agents short sale knowledge.
• Be flexible about a close date. A short sale approval can take a few weeks to a few months, but once it comes, you'll need to be able…

Many Connecticut real estate markets seem to have turned the corner and are now starting to improve. Many homeowners are excited about a potential return to peak values, however several significant challenges remain:

While all towns differ in the amount of lost equity since the peak and some have fared better than others, a significant amount of equity has still been lost overall. Recent CT market reports show these lossse as low as 15% in some towns and as high as 40% in others.  Even at an average loss of 25% since the peak, it will take many years for values to return to where they once were when many homeowners bought or refinanced their home. This will leave many CT homeowners underwater for a long time to come.

Let's take an example:

A CT…

What a year it was!  While media reports of nationwide housing recovery abound…here in Connecticut the statistics tell a rather different story. There's some good news and some bad, but looks like we have a way to go before we hit any significant housing recovery here in the Nutmeg State. 

Let’s take a look at the overall market first. The good news: Yes, sales did increase. In fact, sales jumped 15% from a dismal 2011 up to levels we have not seen since 2009. I don't recall 2009 as any great year either...but hey…it could be worse!

 The bad news: While sales did in fact increase, values continued on their downward trend:

And onto distress sales in CT - short sales and foreclosures. Short sales in Connecticut continued to grow…

Back in December 2010, I closed my first HAFA short sale with one very patient Connecticut homeowner. HAFA was a brand new program back then, and Bank of America was even more confused then they are today. On several occasions my client was ready to throw in the towel and walk away...but he stuck it out. Nine months later his short sale was approved and closed.

My client was richly rewarded for his patience when just 18 months later in May of 2012, he was approved for a new mortgage. It didnt take long to find the perfect home at a great price..with just one caveat - this home was also a short sale. Familiar with this process, we patiently settled in for the long road ahead. It took 5 more months and many headaches for this short sale to be…

Even after losing or short selling a home, most folks will eventually want to own another home. While re-establishing credit and meeting other lending guidelines will be necessary, there are minimum waiting periods for getting new loans after significant negative credit events. Below are the timelines for new loans for  (Fannie Mae and Freddie Mac) Conventional Conforming Mortgage Loans meeting FNMA and FHMLC  guidelines, (FHA) Federal Housing Administration Insured Loans, (VA) Veterans Administration Guaranteed Loan and  (USDA) United States Department of Agriculture Rural Development Loans. Please note that extenuating circumstances may have an impact on some of these timelines, and these basic guidelines do not serve as a substitute for a…