Posts Tagged ‘Ocala Home buyers advice’
Buyers often come to me looking for a newer home here in Ocala. I often tell them that no one has been building homes here since the market crash in 2007. Of course it isn’t true that no one has built anything since 07 but there has been very little building. Builders simply can’t compete with the prices of resales.
Here are permits for single family homes by the year to illustrate my point.
Here are 5 things to avoid doing when you’re either getting ready to buy a house or already in the process. Doing any of these things will cause huge issues with your lender over financing.
1. Do not change jobs
2. Do not switch banks or move money from one account to another
3. Do not pay off existing loans unless your lender requests it.
4. Do not make any large purchases like a car or furniture
5. Do not change your marital status
These are all red flags to a lender and you will have to provide extensive documentation justifying any such action.
The purpose of a home inspection is to find a problem so large and costly the buyer might not want to buy the house. Or in some cases so many problems that add up to so much money that the buyer might want to back out of the deal. Home inspections aren’t intended to create a laundry list of repairs to make a home like new again.
One problem I encounter is that home inspectors as a courtesy provide maintenance suggestions in addition to needed repairs. The difference in repairs and cosmetic items is defined in the Florida real estate sales contracts but that doesn’t seem to help with the confusion.
The way that repairs are defined in the Florida RE contract can cause problems. For example a 20 years old roof that doesn’t leak but is at the absolute end of it’s life doesn’t need to be replaced. The same with termites. A seller can make repairs up to 1 1/2% of the purchase price. You might just want to walk away but the contract locks you in.
In certain circumstances like the above examples it’s better to use an AS IS contract that let’s you out of the deal for any reason regarding the inspection or you can use a right to inspect right to cancel addendum.
Link to a good home inspection article. Ocala Star Banner article on home inspections
When you write an offer on a house you’re expected to make a good faith deposit. That deposit is held in escrow by the title company and can be contingent on things like financing or a home inspection. I usually tell me buyers around $1,000.00 and it’s surprising how many sellers will accept that amount. However from a sellers point of view you have to ask yourself if you wanted to get out of a contract would you walk away from $1,000.00? A lot of people might if they had a good enough reason. But would you walk away from $5,000.00? Probably not. $10,000.00? Pretty much definitely not. A lot of my buyers are also sellers somewhere else. You have to look at things from both points of view depending on which side you are on at the time.
If you want to make a low offer on a home here in Ocala you have to give the seller a good reason to accept your offer. Here are a few things that make for a “strong offer”.
1. Cash. Cash means no finance contingency. The seller can be confident that their sale won’t blow up at the last minute because the loan gets rejected by the banks under writing department. Happens more often than you might think. Not all loan pre approvals are created equal.
2. AS IS. A contract that gives the buyer the right to inspect the home and walk away if the inspection is not satisfactory. The seller makes no repairs and knows exactly what they will net from the sale. Attractive to out of area sellers who would have a hard time getting repairs accomplished.
3. Fast Closing. A cash offer can close very fast, 7-14 days. The seller may not like the offer but is tempted by the fact that the deal will close fast and they can move on saving money in taxes, utilities, insurance, mortgage ect.
If you think that making an offer using a loan with little or no down payment, asking for closing costs or expecting the seller to throw in their furniture or a golf cart is the way to get a deal on a house then you’ve been watching way to many real estate shows on cable TV.
Most of my out of area buyers seem to like pets as much as I do. Many even travel with pets when they come to look at homes here in Ocala. I recently found a pet friendly hotel web site that has customer reviews. If you travel with Fido you might want to check this out.
I spend about 95% of my time as a buyers agent here in Ocala. One question that comes up is “what should I offer?”. I suggest that a buyer look at comparable sales to come up with an offer. A good comparable would meet the following criteria.
same sub division
sold in the last 90 days
within 1 mile of subject property
+/- 10% of the sq ft of living area
same # of beds, baths and size garage
+/- 5 years in age, 10 years if home is over 10 years old
same construction type
All this above can be used by a buyer to come up with an offer on a home or it can be used by a seller to find a proper list price. In the end it doesn’t matter what a buyer or seller thinks a house is worth. What matters is the price that similar homes have sold for in the past 90 days. Sellers should keep in mind that in order for a buyer to get a loan a bank will send out an appraiser who will use very similar criteria for an appraisal.
There are some great deals in Ocala real estate in addition to Ocala Short Sales and Ocala Foreclosures. For example it’s no secret that Florida is full of older retired people. Often out of state relatives inherit homes that they need to sell. I refer to these as estate sales.
Unlike foreclosures, that are rare in the Ocala 55+ communities, there are an abundance of estate sales. The 55+ estate sales vary from newer homes in very good condition to older homes in need of updating such as paint, carpet or appliances.
There are also quite a few estate sales outside the 55+ communities.
In addition to estate sales there are also vacant homes owned by investors who are unable to do a short sale and homes vacated by people who had to relocate for various reasons.
Benefits of buying a vacant home or estate sale.
- Quick closing
- Excellent prices
- Exist in 55+ communities
- motivated sellers
If you are interested in vacant homes in the Ocala area or an estate sale call me, email me or use my Ocala Dream Home Finder. Be specific, I can’t send you every estate sale on our MLS. There are just too many.
Right now is the opportunity of a lifetime to buy an Ocala home. Here are 12 reasons to invest in Ocala real estate right now.
1. Interest rates are at historical low with no where to go but up.
2. Many Ocala area home sellers will pay part or all of a buyers closing costs.
3. Fannie Mae Homepath Financing doesn’t require an appraisal and also offers renovation loans for their Ocala and Marion County foreclosed properties.
4. USDA offers 100% financing with no Private Mortgage Insurance (PMI) on many Marion County homes. Mostly homes that are not in the Ocala city limits.
5. FHA loans allow the seller to pay many of the buyers closing costs.
6. Conventional loans rates are at all time lows. Local banks want to loan money to buyers with good credit. Don’t let anyone tell you different.
7. Foreclosures are selling at a 50% discount from 2005-08 highs.
8. Most Ocala foreclosures are in good condition and easily pass a professional home inspection.
9. Many “traditional sellers” have dropped their prices to better compete with distress sales.
10. In the 55+ communities there are always great deals on estate sales.
11. Estate sales also exist outside the 55+ communities and are a hidden secret often over shadowed by Ocala area foreclosures and short sales.
12. Principle, interest, taxes and insurance are often not much more than renting.
If you are a first time buyer, a renter, a retiree or investor now is the time to buy.