' Finance Matters ' from Sydney Mortgage Broker - Nobel FInance » Real Estate

REIA bursts housing bubble

nobelfinance — Fri, 13 Aug 2010 00:58:04 +0000

Australia is not in the middle of a housing bubble according to the Real Estate Institute of Australia (REIA), contrary to recent comments by global investment management firm GMO’s chief strategist Jeremy Grantham.
REIA president. David Airey said: “What we are experiencing in the housing market is normal growth for house prices. If Australia was in the midst of a so-called housing bubble, then we have been there for some time. REIA’s data highlights that historically, median prices, compared to income, have been relatively stable for the past 10 years, taking into account normal fluctuations.”
According to the REIA over the period December 1996 to December 2009, median house prices increased from around $160.000 to around $500,000, a trebling in 13 years. But within this period there were four phases.
From December 1996 to September 2000. median house prices in Australia showed a moderate average growth of 2.1% per quarter. From December 2000 to December 2003. house prices appreciated at 3.9% per quarter on average. Then from March 2004 to December ?008, the average growth slowed to 0.8% per quarter. During 2009, growth of median house )rites picked up pace to 2.9% per quarter.

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Home starts rise modestly in first quarter of 2010

nobelfinance — Thu, 05 Aug 2010 00:15:07 +0000

The number of dwelling commencements rose slightly in the March 2010 quarter, the Housing Industry Association (HIA) has revealed. HIA chief economist Harley Dale said that total housing starts increased by 4.3% in the first quarter of 2010 to an annualised level of nearly 170,000. HIA’s forecast was for a 4% rise. He added: “There was a strong burst in ‘other dwelling’ starts in the March 2010 quarter… The strong run up in building approvals through to early 2010 is not translating into new home starts as quickly as is desirable.”
Harley cited “unjustifiably tight credit conditions”, uncertainty about the magnitude of rate rises in 2010 and some approvals simply being reissued with no firm plan for commencement as reasons for a soft first quarter update for new home building.
The HIA continues to expect a relatively healthy rise in housing starts in the 2009/10 financial year, but claimed a positive outlook for 2010/11 and beyond is far from assured amid supply-side obstacles.

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Sydney housing dream still alive

nobelfinance — Thu, 29 Jul 2010 03:14:25 +0000

Sydney may be the most expensive capital city in Australia, but there are still bargains to be had, a report from RP Data has revealed. Its findings show that Sydney actually had the greatest proportion of total sales priced below the determined level of borrowing power. Almost. 22% of all Sydney house sales were priced below $350,444, although most of these were situated in the outer rims of the city. The next best performer was Canberra, which had 15.3% of house sales below $301.556. The hardest place to find affordable housing was in Perth, which recorded only 11.8% of sales under $324.444. Research analyst Cameron Kusher said: “These results show just how important it is for buyers to do their homework. It can be very valuable for buyers to actually dig a little deeper into data. For an average income earner looking to buy property. more than ever location is becoming the most important attribute. The best prospects for growth in property value and the most desirable locations in which to live are those suburbs which enjoy close proximity
to public transport, retail and social amenity, schools, working nodes, healthcare, public open spaces and major roads.”

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Property market on the rise makes investors return

nobelfinance — Sat, 01 May 2010 16:33:39 +0000

Consistently high clearance rates and positive data from the Australian Bureau of Statistics (ABS) are pointing towards a consolidation in the housing market.
ABS figures released last week show that finance commitments, excluding refinancing, were at their highest level for the past 18 months.
Real Estate Institute of Australia (REIA) President David Airey the ABS figures were a strong sign of a healthy property market ahead.
“Other positive signs are the increasing level of investors in the market and the first signs that the influence of the first home owner grant boost is beginning to abate,” he said.

The value of investment housing commitments rose again in June, following increases in each of the previous three months, the number of first home buyer commitments as a percentage of the total also declined, according to the ABS.
Now could be the time to put more value into your property.

According to local real estates agents, the most common renovation that gives the most value to a property is the kitchen and bathroom. A few dollars spent in these areas can really make a difference in valuation for lending purposes or for re-sale value. Most buy – reno – sell investors also focus on giving the home extra features like built-in cupboards.

Some trade businesses , like Emporio Kitchens, have caught onto this trend and offer a one stop shop to take care of the electical, plaster & plumbing if required, for inquiries made on their website. Take advantage of their no obligation free quote service, what have you got to lose ? You might be surprised what a few dollars spent on key areas can do to the value of your home or investment property.

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Deficiency Topic Dealing With A Short Sale Revealing Facts You Did Not Know

nobelfinance — Fri, 25 Jul 2008 12:11:44 +0000

By Cory Boatright

I was reading more about deficiency questions with short sales and I thought I would elaborate a little on the subject. When you get a lender to accept a short sale the amount of debt forgiven becomes a taxable event.

Example: Homeowner owes $250,000 on a house. The lender accepts $170,000 for it. The homeowner is responsible for paying taxes on the $80,000 forgiven amount.

First thing that is important to realize is this.

Not ALL states have the option to file/collect on a deficiency judgment You may want to do some studying or contact a Real Estate attorney to find out which states have the ability to file/collect on a deficiency judgment.

Second is this. The homeowner is typically facing this REGARDLESS of your involvement. For a better understanding of a deficiency judgment let’s define it. {continued}

Deficiency judgment (understanding their are different types and this is a generic definition)

Legal action sought by a lender who wants to recover any losses on a foreclosure

If you default on a mortgage, the lender can not only sell your property to get their money back, but they can also sue you if the money from the sale isn’t enough to cover the loan. For example, if you owe a lender $100,000, but the lender only gets $90,000 in a foreclosure sale, they can take you to court for the remaining $10,000. If the lender wins, they can attack your assets, income, credit and peace of mind until you pay this amount. If you have Private mortgage insurance, a lender can use this money to offset any losses instead of getting a deficiency judgment. Keep in mind that only SOME STATES give the lender the right to a deficiency judgment.

OK… now that makes everything as clear as MUD…eh?

So…let’s put it in perspective for working a short sale…shall we?

The lender may choose to seek a deficiency if:

1. The state laws allow it
2. The loan type is “recourse” compared to “non-recourse”

How do you know what type of loan you own and what is the difference? The original loan documents should state what type of loan you are dealing with. It is common to see first mortgages (loans put in place to actually buy real property) are “non-recourse” type loans. That means the lender does NOT have a recourse option to come back to the borrower to collect for owed debt to them.

On the other hand, second mortgages from refinances, Lines of Credit, HLOC’s, Equity Loans, ANYTHING with “cash out” type programs are usually considered “recourse” type loans. That means the lender CAN exercise the option to collect on any debt owed to them from the borrower.

When you are working with a homeowner and putting together the short sale option for them. You will need to deal with the deficiency issue if you want them to be informed about it. Contrary to the opinion of many “self proclaimed gurus”; I think it is a good idea to address the issue and not avoid it. Saying that, I also think it is very important to re-emphasize that you are not providing a legal opinion on the matter. You could state…

“Mr/Mrs. Homeowner if I were in your shoes, I might have a question about….” You get the picture. If you are not an attorney don’t portray one.

The homeowner can be faced with either a possible deficiency (if their state law and loan type allowed it), or the lender may choose to write off the debt and send the homeowner a 1099 at the end of the year. It would be the homeowner’s responsibility to claim the money as income. You can also get that amount reduced, but that is another conversation saved for a later article.

The fact that you will be dealing with the lender for the homeowner puts you in control position. You can tell the homeowner that you will submit your short sale offer to the lender with a contingency that all deficiencies are waived upon acceptance. You can make this a benefit for the homeowner agreeing to work with you. Typically homeowners will let the property go to sheriff sale and hope for the best. You are working with the lender in the short sale and can request they waive all deficiencies for the homeowner. Will they agree? Most of the time “yes”, sometimes “no”. You can tell the homeowner that you will do your best, but ultimately it will be up to the lender for rules of acceptance. Remember, the bigger the issue you make of this topic, the more concerned the homeowners will be about it. Speak with confidence to them and move on to the next topic as quickly as possible. If they have specific questions tell them to consult legal authority on it.

I hope this helps.

Cory Boatright
Loss Mitigation Specialist

http://www.shortsalefundamentals.com

http://www.shortsalefundamentals.com/about-us.html

Cory has become an accomplished National Speaker, Trainer, Writer, Radio Host, Private Consultant and Musician. He also serves on the Board of Directors of a local landlord and property investor association called Millionaire Possibilities (MPREIA). He has been published in the Wall Street Journal for his successful business aptitude and has been truly blessed to pursue real estate as a full-time investor and Loss Mitigation Specialist. He and his wife (also his business partner) own several companies, including a Nationwide Loss Mitigation and Short Sale Company with a team of 4 full-time Debt Negotiators, have bought and sold millions of dollars in single family residences, duplexes, commercial property and land, continue to buy and hold properties for long term wealth planning and network with investors across the country. At the age of 31, the biggest lesson he has learned in his journey is this. “Be a solutions provider by asking how you can serve one another better. The rewards of servanthood are invaluable”- Cory Boatright

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