Tempted by a Short Sale or Foreclosure

If you could buy your dream home and save $200,000 or more, would you be tempted? For many retirees, the news reports of homes selling for half what they were 3 years ago are interesting. In fact, in many areas of the country the prospect of a bargain-priced distress sale has become so attractive that sales of new homes have just about stopped. In case you are thinking about plunging in yourself, we have prepared some background on the issues involved in this topic for our Topretirements.com visitors.

Short Sales:
- A short sale occurs when a home is sold for less than the remaining mortgage on the property.
- The tricky part is that lenders have to give permission for a short sale, which can be used to avoid a foreclosure. If the loan has been syndicated to many lenders – paralysis usually results
- Short sales tend to be good things for sellers, who preserve their credit ratings and their dignity (but sadly, losing all of their equity)
- They also tend to be good for banks, which avoid the expense of foreclosure and often get more for the property
- Short sales are often bad for buyers, who can get strung out for weeks or months by the banks or the multiple parties who own the mortgages
- Loan service companies can find themselves getting hurt by short sales, so they are often against them
- The Obama administration’s latest proposals are aimed at simplifying and rewarding short sales, an idea which is getting a lot of support from the financial and consumer protection sector
- In some parts of the country about 10% of the sales are short sales

Foreclosures:
- A foreclosure sale occurs when the borrower defaults on the mortgage and the lender takes over ownership
- Foreclosures often result in the best price for the buyer, for a multitude of reasons
- In some parts of the country over 50% of the sales are foreclosure sales
- A big reason for the low prices is that there are so many properties the bank’s can’t do a good job marketing all of them, they just want to get rid of them - fast!
- Chaotic markets and imperfect knowledge can work for (or against) you as a buyer. If you have superior knowledge about a particular home or neighborhood, you have a potential advantage

Tips from all over
- The sharks are feeding. Get a good real estate agent working for you if you don’t want to be eaten alive (“don’t try this at home”). An agent with experience in foreclosures and short sales is not only essential for your protection, but they have will access to properties you couldn’t find on your own
- You snooze, you lose. Foreclosures and short sales happen fast. If it’s your dream home, don’t dally
- Check out real estate firms and banks for lists of foreclosed properties in the communities you are considering. Or, keep your ear to the ground and take the initiative
- Don’t buy in a distressed neighborhood or one with a lot of other foreclosures
- Whatever you are buying, you are buying as-is. Any problems will be your problems now
- If buying a condo or there is a Homeowners Association, do your due diligence. Find out if there are many other bankruptcies or delinquencies in the development. How about their reserve funds; can they withstand an emergency without an assessment? Don’t fool around with a weak development.
- Harry Murray, vice president/manager of the J. Rockcliff Realtors office in Danville, CA told MercuryNews.com that “Investors account for more than 60 percent of the foreclosure buyers, (and) new sales are dead.

Bottom line:
Bargains exist out there, if you have the courage and the skill to find them. Act fast if you find your dream, but protect yourself.

Prediction:
After the dust settles the next investigation will Congress undertake is to find all the sweetheart deals that insiders made in this chaotic market. With the sheer volume of what is going on and all the uncertainty, insiders will always try to profit.

More References:
Foreclosure Market Offers Bargains for Savvy Investors

Foreclosures Hit Home on Cape Ann, Short Sales Aid….

What’s your opinion? Please use the “Leave a Comment” box below to share your ideas on short sales and foreclosure opportunities.

What are the “Must Have” Features in Your Retirement House

Most baby boomers are currently in a “hold” mode. For them, waiting out the economic storm means postponing their retirement or second home purchase. To help you while away the time, we’ve come up with an armchair/dinner table exercise - what are the “must-have” features you (and your S.O.) must have in your new retirement home?

By this time most of us have at owned at least a couple of homes. We know what we liked, weren’t that crazy about, and absolutely couldn’t get along without. But meanwhile our lifestyles have changed. The kids have grown up, a warmer climate might be in the offing, and visits from grandchildren are either here or on the horizon. Lastly, the market is forever changing, adding new features that no one ever dreamed of tempting us with before.

Builder Magazine recently came out with a list of its top 10 new home features, and it is a very interesting list. Obviously their list is slanted to help builders sell homes with the features they think you and I will like. Topretirements took the liberty of adding and substituting some of our own favorites, making it a top 15 list.

1. Radiant-heated bathroom floors. No longer are water-filled pipes required under your kitchen, bathroom, or bedroom floors - pre-made mats make installation much simpler and less expensive than the last time you might have considered them.
2. On-demand water heater. The Rheem Pronto is a good example of an on-demand heater that mounts in the wall and helps you avoid wasting energy for hot water stored in pipes and tanks.
3. Glass tiles. Now available in colors, they let the light in and brighten up your home.
4. Dual flush toilets. Can save 6000 gallons a water per year for a family of 4.
5. Low-flow showerheads. Use just 1 gallon per minute vs.3.5 for standard showerheads. Yet performance feels the same.
6. Water re-circulator. If you don’t upgrade to an on-demand heater, a re-circulator gives you instant hot water - no more jumping jacks while you wait for the hot water to arrive through your cold pipes.
7. Folding patio-door. Lets you easily open up an entire wall(s) to your deck or patio - instantly.
8. Central vacuum. One of our favorites. Stop lugging a heavy vacuum around, just plug the head and hose into convenient wall outlets. Doesn’t cost much more than a deluxe vacuum cleaner if installed in a new home.
9. Excellent insulation. One of the invisible upgrades worth checking out. Check the spec from your builder to make sure your ceilings are well-insulated.
10. First floor master bedroom. This is a no-brainer, yet we are astonished at how many homes built for the 55+ set have 2nd floor bedrooms.
11. Built-in Trash/Recycling stations. A built-in big kitchen drawer with multiple compartments for trash and recycling makes your kitchen more attractive and simplifies collection.
12. Solar hot water heating. Much more efficient and cheaper in most climates than photovoltaic systems. Payback in 6-8 years if new Obama proposals are approved.
13. Small wind turbine. New, quieter systems like those from Swift can save money if installed properly in a location with good wind potential. Use this wind potential calculator to evaluate your address.
14. Large, open shower. A shower that isn’t claustrophobic and opens or is windowed to a private garden makes bathtime a lot more of a pleasure.
15. Second sink in kitchen. Makes entertaining a lot easier.

See Also: Top 10 Trends in Active Adult Communities for 2009

What’s on your list? Please use the “Leave a Comment” box below to share your ideas on what “must” be in your new home.

Despair in Lehigh Acres - Housing Meltdown’s Core

It’s not a contest anyone wants to win - whose housing crisis was the worst in 2008. The contenders: Phoenix, Las Vegas, South Florida - all with year over year price declines of 30% or more.

But perhaps nowhere is there more despair and more signs of a meltdown than in Lehigh Acres, a huge exurb east of Fort Myers, Florida. Houses are abandoned, foreclosed, and in ruins. Even fast food restaurants are laying people off as the unemployment rate hit almost 10% in November. Thousands of dreams are in ruins, thanks to real estate falling from Fort Myers’ 2005 bubble prices of a median $322,200 to $106,900 in December, 2008 (Source: Florida Association of Realtors). In other words, a house in the Fort Myers Metro is worth 33% of what it was just 3 years before - the fall in Lehigh Acres is even worse. President Obama is due to visit the Fort Myers area on Tuesday, but residents characterized the visit in the New York Times as a “herbal remedy: it probably won’t hurt but it won’t do much good either”.

Meanwhile in Lehigh Acres things have gone from bad to truly desperate. One of the biggest examples of reckless overbuilding in the country, more houses were built in Lehigh Acres in the last 4 years than were built there in the previous 50 years. The market has completely unraveled; criminal activity is increasing with looting of empty houses, marijuana cultivation, and drug dealers. Residents are trying to sell everything they have for cash. Food pantries are overwhelmed with the need, and indeed recipients are increasingly trying to return food pantry items to grocery stores for cash. Houses are selling for $45,000, about one third of what they cost to build. Officials and residents are hoping that foreclosure and short sales will help clear out excess inventory, but no one is predicting that will be completed within a year or two.

Florida’s economy is also in a tailspin, so no one is expecting any relief there. Florida, which has always counted on unlimited population growth, is now stagnant; unemployment is high; and revenues are plummeting.

Meanwhile in other areas of the country, even those metros that had been unaffected up to now are now seeing declines as of the end of 2008. Atlanta, Charlotte, Portland, Seattle, and Dallas experienced record price declines according to Case-Shiller data. As they say in the movies - “no one is safe” right now.

What do you think? Please weigh in with your comments on what happened, or any reaction. Just use the “Leave a Comment” box below.

Why Not Live in an Award Winning Community

If you haven’t noticed, not every active adult community is created equal. Depending on the skill and commitment of the developer, the community can be interesting and an easy joy to live in - or boring and inconvenient. Some of the most interesting examples of the best community designs are evident in the 2008 Best in American Living Awards (BALA), which were just announced. The awards are sponsored by a panel of judges put together by Professional Builder, a division of the National Association of Home Builders. There are a number of categories (and all of the winners are worth looking at), but this article concerns the 2008 winners for the Communities division. Common themes among the winners include plentiful public spaces, a sense of community, green (sustainable) principles, and interesting amenities.

The grand prize for a community was won by Domus in Philadelphia’s University Park (which also won for Best Urban SmartGrowth). This new infill project was built in conjunction with the University of Pennsylvania, and obviously has a big attraction for baby boomers seeking retirement near a college campus. The project integrates residential space with commercial uses and an impressive amount of public recreational land. The buildings within Domus feature three distinct outdoor rooms that go from fully public to semi-private to private areas. Residences include amenities such as bamboo wood floors, white membrane roofing and private courtyards. Dennis Oppenheim’s “Wave Forms” outdoor sculpture is a popular feature. For Domus pictures.

Hampton Lake in beautiful Bluffton, SC was the BALA winner in Best Community:more than 151 units. Hampton Lake is a good example of what could have been a boring golf community turned into an exciting, mixed generation, lake side community with a resort-style amenity complex. Conservation is emphasized with the lake and a 340-acre nature preserve with 9 miles of trails. There are waterfront and wooded homesites, low-maintenance carriage and villa homes and vacation town homes. The heart of Hampton Lake is Lakeside Village with its family-friendly amenities: themed restaurant, general store, nature center, spa and fitness center, pools, boathouse, beach, overnight camping island and dog park. Pictures

Best Suburban Smart Growth Award went to The Residence at SouthPark. This project in Charlotte NC unites four stories of luxury residential units with 80,000 square feet of ground-level retail. Judges noted that the project successfully integrates several existing site features. The city of Charlotte was involved in the project to help carefully place the project so that it renovates an historic civic space and fountain on a prominent corner, preserving some well loved mature trees. The building’s U-shaped courtyard reinforces a sense of community and does not overwhelm the cityscape. SouthPark photos.

Washington Town Center, a mixed-use community, had the task of creating a distinctive identity for Robbinsville, N.J., a sprawling and affluent community with no downtown center. The overall plan includes parks, walking trails and other open public spaces. The design succeeds, judges noted, in inviting the community at large into its shops, restaurants and residential neighborhoods. Washington Town Center includes single-family homes, duplexes and townhomes. Historically accurate details include front yards with brick pier and iron fencing or hedgerows. The commercial part of the Center includes condominium units above ground-floor retail. Photos

What do you think? Please use the “Leave a Comment” box below to let us know!

Taking the Mystery Out of When to Start Taking Social Security

Ask any 4 people when they intend to start taking social security benefits and you might get 4 different answers. Ditto with how long should you keep working and how that work will impact your social security benefits (short answer: working longer is usually a good thing for your benefits). Even when to start with Medicare is not well understood (and this is the easiest one to answer: everyone should sign up 3 months before their 65th birthday).

The Social Security Administration is actually doing a very good job of helping to educate the public and remove the mystery out of the issue. As they point out, it is NOT a “one size fits all” kind of question - everyone’s situation is a bit different. To that end the SSA has come out with a short but informative podcast that will be an excellent overview for most people. You can download the podcast and other materials using this link at the Social Security Administration

Topretirements has also developed an extensive article, “A Surprising Answer to When to Start Taking Social Security Benefits“. Our article has some good background and a raft of excellent links for further reference.

Short Answer:
It all Depends!

Give us your opinion either here in our Comments section (below), or in the Topretirements Forum Topic: When to Start Taking Benefits