Here’s 3 key factors to consider when negotiating offers on a foreclosure.

I’ve based this on an example of a condo listed for sale in Tampa, Fl at $149,900. By the way, the unit originally sold for $269,000 back in 2005.

1. In this case the bank has already priced it at the lowest price per sq ft for sold units at $122.00. per sq ft.
2. How long is the bank planning on waiting for other offers to come in?
3. Are there currently other offers on the table?

Driving factors and why you may want to consider offering more:

I just recevied this email from another agent here in our firm.  He’s been working with a client for a couple months and it seems the buyer’s expectations are not inline with our market. “Sean has been frustrated by not being able to buy a foreclosure for less than asking price.”  He’s given up and has not requested any further information”  Looks like Sean has some competition.

.A foreclosure (REO) can close in 30 days or less. That makes it even more enticing because some people can’t wait months for a short sale. The bottom line is that they are willing to pay more instead of paying $1,200 in rent for another 6 months while they are waiting for a short sale. Makes sense.

What’s causing the bidding war? The Tampa Real Estate market’s inventory is down to 5 months, from 22 months 5 years. (You can download the latest housing report here). There’s not much to choose from, especially in the lower-end price ranges, and in desirable areas like South Tampa, where most of my clients are looking to buy at the moment.

Tips on how to deal with multiple offers:

The mentality of buyers when they know another offer exists is something you have to consider. As a general rule in this price range I would suggest bidding about 1K more than what I think someone else will offer. I can only speak from my experience as a Relator. If there are multiple offers most people would go up 5K on a 150K asking price. So an offer of 156K may get you the winning bid. Now, if everyone is thinking like me, why not add another $500.00 to be on the safe side?

We will never know what the other offers are, their financing terms, when the buyer wants to close and so on. My guess is that the bank would like to get it off the books by the end of the year. If someone is financing that most likely won’t happen, so a cash offer may be a more aggressive approach.

Ask yourself how badly do I want the buy this home? A few thousand dollars in the end isn’t going to make much of a difference obviously.

Remember, anyone looking in your price range is thinking the same strategy as you, crunching the numbers and looking at the comparable sales.

Feel free to take my opinion for what it’s worth:) oh, and if you don’t already have a Real Estate Agent that can guide you I’m happy to help.

See Also: Step By Step Process of Making an Offer Q &A

6 Reasons to Own Your Own Home-Still on the fence about buying a home in Tampa? Home prices and interest rates will likely never be this low again. Here are the biggest factors involved when deciding on home ownership.

• Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, and some of the costs involved in buying your home.
• Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

• Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
• Predictability. Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will rise.
• Freedom. The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.
• Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

Here’s a great example of how much you can save buying vs renting over a 10 year period, based on a $1,200 rent payment, versus purchasing a 150,000 home.

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Thinking of relocating to MacDill AFB in Tampa?  Here’s a great article on the benefits for first time home buyers for military personnel

Armed service, intelligence service and foreign service personnel on active duty and out of the U.S. for 90 days during any part of 2009 get an additional year to buy their homes – to May 1, 2011.
Another benefit is a waiver on the time of occupancy. Most home buyers using the tax credit must use that home as a principal residence for a period of no fewer than three years or forfeit the entire credit. But military, intelligence and foreign service members do not have to repay the credit if they sell their home in less than three years if they move because of official business.

From JerryMooresPhotography

“NAR is the leading advocate for private property and home ownership issues, and firmly believes that those who are in service to their country should be full participants in the home buyer tax credit law,” says NAR President Charles McMillan. “These men and women are often hindered by hardships from full participation in the American dream of home ownership because their duty disrupts them in the buying and selling of a home.” NAR was a main advocate for the home buyer tax credit extension into 2010 and its expansion to include present homeowners.

Under the tax credit extension, eligible first-time home buyers can get a tax credit up to $8,000. Current homeowners are eligible for a $6,500 tax credit, provided they have lived in the home they are selling, or have sold, as their principal residence for five consecutive years in the past eight years.
Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples.

The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.

If you are buying or selling a home near MacDill AFB and would like to speak with a Realtor, please feel free to call me (813) 784 7744

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Timing Couldn’t Be Much Better for First-time Homebuyers–
Be Sure You Make the Right Moves

By Rae Catanese, PA
Prudential Tropical Realty-Tampa, Fl

First-time homebuyers dominated the U.S. real estate market in 2009, accounting for roughly half of all residential transactions, according to the National Association of REALTORS®.

That trend is likely to continue well into the new year. That’s because interest rates are hovering near all-time lows, home-price affordability is near all-time highs and a third factor – Congress’ extension of the first-time homebuyer tax credit until April 30, 2010 – make conditions quite favorable for those considering homeownership for the first time.

Still, with the prospect of making one of the largest investments you’ll ever make in your life, you can easily become overwhelmed.

Some of the questions you may be asking are:

Will I be able to afford the home of my dreams? Do I have enough money for a down payment? Will I qualify for the tax credit? Will I make smart home buying decisions? If you go into the process prepared, your first purchase – like the current timing – can be just right.

The costs involved in the purchase of a home can seem overwhelming to first-time homebuyers. There are mortgage costs, the down payment, and closing costs to think about.

1.  Affordability–By looking at your income and debt ratio, your sales professional can help you calculate how much you can afford each month in mortgage payments.  But before determining your price range, you should also take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, insurance, homeowner association dues, utilities and maintenance. And if your down payment is less than 20 percent of the cost of the home, you will be responsible for private mortgage insurance, more commonly referred to as PMI.

2.  Mortgage payment–Fear of being rejected for a home loan is one of the main concerns for first-time homebuyers. To lessen the stress, you may want to get pre-approved for a loan before looking at prospective homes. This will not only help you feel more confident, it will also give you an advantage where there are multiple offers for a specific property. In addition, the fact that your loan has already been approved is of great value to the seller because it shortens the purchase process, and there is less of a chance that the buyer will back out of the sale. If you don’t have a specific mortgage lender in mind, ask your sales professional for a recommendation.

3.  Down payment–The down payment amount varies depending on the value of the home you choose and your mortgage lender. Your real estate professional will be able to explain the different options available to you.

4.  Tax credit–The first-time homebuyer tax credit, a key component of the American Recovery and Reinvestment Act of 2009, equates to as much as $8,000, or 10% of a principal residence’s purchase price, and is available to those who have not owned a principal residence in the past three years. You can use the tax credit to help purchase your home or help pay for its closing costs, or the credit can be used to remodel, refurnish and repair your property. See your tax advisor for details about the tax-credit program and how you may benefit. 

5.  Making offers–Don’t feel pressured into making an offer on the first home you see. This is a common mistake of many first-time homebuyers. Make sure you view different homes to get a feel for the marketplace. When you decide on a home to make a bid on, work with your real estate professional to get all of your questions answered before making an offer. But don’t wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.

Above all, remember there are no silly questions. Make sure you understand and are comfortable with every aspect of the transaction. Your real estate professional can be an invaluable asset in helping you make educated decisions so that your first home purchase is a rewarding experience.

Need a Buyer’s Agent? Questions? Email me or Call: 813 784 7744

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Here’s an update on the home buyer tax credit which is hopefully going to be EXTENDED until June 2010.  This will make a big impact on Tampa Real Estate, since many buyer’s have now run out of time to purchase a home by Dec. 1st.  Glad to see they are working on extending it!

WASHINGTON — Senators agreed Wednesday to extend a popular tax credit for first-time home buyers and to offer a reduced credit to some repeat buyers.  The tax credit provides up to $8,000 to first-time home buyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6% in September, and some industry representatives blamed uncertainty about the tax credit.

 Senators agreed to extend the existing $8,000 tax credit for first-time home buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to home buyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.

Please contact me with any questions: 813 784 7744-Rae Catanese, Realtor