Karen Hurst

Rhode Island Real Estate Market - Karen's update June 2009

Karen Hurst — Fri, 26 Jun 2009 15:44:00 GMT

Once again the market in Rhode Island has stumped even the most long term astute professionals. While everyone knows about the economy, school and church consolidations, high unemployment and numerous short sales and foreclosures that have racked Rhode Island for the past 4 years or so, no one could predict the current market.

Earlier this year there was a flurry of home buying, mostly bank owned homes, or fixer uppers. This flurry led to an increase in sales as was reported by the NAR. Then in spring, another small flurry took place, this time first time home buyers were coming out to try and take advantage of the $8,000 tax credit and the unusually low interest rates, combined with the monthly dropping of prices. This really was an excellent time to buy.

The biggest problem being that most of these homes needed work and rehab, thereby cutting out the first time home buyer who was looking in their price range and then would have to add an additional $10,000 to $30,000 to get the home up to par. Even with all the new programs, first time home buyers are still at a disadvantage when it comes to buying bank owned homes. The selling banks, 90% of the time, will accept a lower offer as long as the offer is CASH and AS IS. A first time buyer, especially one going through FHA, has to offer higher and then has to be able to finance the repair items. Most selling banks do not want to sit and wait for this to happen.

Another major problem, that I have seen repeatedly, is the Title's of many of these bank owned properties not being clear to close. Once this happens, extensions need to be signed and discussed, some lasting 3 months or more after initial closing date, forcing some buyers to have to back out of the contract. An important note to this is that Rhode Island prices have been dropping so quickly, that the house you bid on in January and waited for it to close for three months is now worth less than you bid!!

All these are daily happenings and all contribute to the disillusionment of buyers. It becomes a vicious circle and right now there is no end in sight. I spend most of my time searching for "deals" for my clients. It takes diligence and hard work and patience, but eventually we find the one.

Yes, everyone knows the market will eventually come back, but the damage done in this particular market has been almost devastating.

For the rest of this year, I would advise First time buyers to act quickly, not only to take advantage of the lower rates (which will definitely go back up), but also to take advantage of the tax credit. This is probably the best time you will ever see to purchase a home. Yes, it's a lot of work and somewhat disappointing to not get the house you bid on, but if you are diligent, your home will appear and it will be the right one.

Are you looking for foreclosed homes? Deal or No Deal

Karen Hurst — Sun, 22 Mar 2009 14:34:00 GMT

Unless you are hiding out somewhere, you have to have heard about the immense number of foreclosures sweeping the nation. Rhode Island is one of the top states for foreclosures. The reasons are varied, loss of income (Rhode Island has a very high unemployment population), economy, bad mortgages, home values dropping. The list goes on. However, because of all this, there are a "few" good deals out there.

Buying a foreclosed home (also called Bank owned or REO, Real Estate Owned) can be viewed in many different ways. A first time homebuyer is not usually the best candidate for a bank owned home, due to the amount of work that needs to go into it to make it liveable. Also Investors with Cash, and AS IS, no inspection offers, are always viewed as a better offer. The selling bank does not really want to have to wait the time it will take to get a loan, when they could have a closing in two weeks. However, sometimes if you make a good enough offer and can show you are a solid buyer, then they will accept. How do you show you are a solid buyer?

First, you definitely need a prequalification letter to even put an offer in on a bank owned home. Investors need Proof of Funds (a statement from a bank showing the actual funds) As a first time buyer in 2009, a new program has come out called the Neighborhood Stabilization Program...This program is only available in certain neighborhoods and is on a street by street basis. You would need to contact your mortgage broker or bank for assistance. You can also go online and check it out. With this program you may qualify for up to 20% down payment assistance. Also you will be able to qualify for a rehab loan....Picture this. You find a house for say, $60,000 that needs loads of work. It is in the NSP area. You think it will need approx $40,000 worth of work to make it liveable. Now, you need to prove your figures with Contractors, plumbers, electricians etc, but once you have these figures you are now able to borrow $100,000 with a 20% down payment assistance. This brings your actual mortgage to $80,000!!! Plus if you buy before December 31,2009 you get the $8,000 tax credit!

Now you have a home that will be worth approx $120,000 (even in this market) it will be totally rehabbed like new and now you have instant equity...the difference between the $80,000 that you owe and the market value of approx $120000!!!! What is better than this?

Yes, it takes some work to find the house, get your contractors bids and follow through, but it would be well worth the effort.

Just remember that investors with cash are out there and they are literally jumping on these deals. Even at that, you can tell one you are interested and get a loan for $120,000 with a 20% down payment if it's in the right (NSP) area. Not quite as good a deal, but still not a bad one!!!

1 1/2 Story For Sale in Oakland Beach

Karen Hurst — Sat, 14 Mar 2009 06:00:00 GMT

Bank Owned ready for Rehab

• 1,106 sq. ft., 1 bath, 3 bdrm 1 1/2 story - MLS® SALE PENDING $61,900 - Investor Opportunity!

Oakland Beach, Warwick - Great potential in this bank owned home. Needs lots of work but well worth the effort. Only Cash or rehab loans will qualify.

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Single Story For Sale in Pontiac

Karen Hurst — Tue, 17 Feb 2009 06:00:00 GMT

Newly updated and meticulous!

• 924 sq. ft., 1 bath, 2 bdrm single story "Raised Ranch" - MLS® $229,900 - Reasonably Priced!

Pontiac, Warwick - Tired of looking at bank owned homes without heat and plumbing? Tired of being refused by banks due to homes not qualified? This home is completely redone and is the perfect first time homebuyer opportunity.

Don't lose out on the new low rates! Move right in and enjoy your summer on this quiet street close to everything.

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Single Story For Sale in East Natick

Karen Hurst — Tue, 17 Feb 2009 06:00:00 GMT

Almost move in condition!

• 1,560 sq. ft., 3 bdrm single story - MLS® SALE PENDING $159,900 - Bank owned

East Natick, Warwick - Great first time buyer opportunity!!! Mortgage rates are low and this home is almost ready to move in! Nice Colonial located on a dead end street, only 5 years old, next to bike path and near shopping and malls. Prequalification letter with all offers and As Is.

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