Wednesday, January 29, 2014

Dear Commissioner Lynda Bell, Let Me Educate You. Guest blog by Realist

Regarding yesterday's post, let me tell you about the housing market in South Dade. In Homestead, in particular.

Since last May, I have been looking for a house. I looked in 3 or 4 areas, both east and west of the highway. I looked every day. I swear, it began to be a full time job.

I, too, put in at least 7 contracts. I can tell you that I lost every one of them going in with the full asking price and ALL cash. I did not mess with financing as I went to a banker friend who said I needed to come up with cash to be able to buy a house to be competitive in the current market.

As a single retiree, financing was not available... you have to be working and at a job for at least a year to be financed. Your income (that is your salary, not investment income) has to be able to cover your expenses and the mortgage. They want your bank statements and W-2 for 2 years to prove it. You have to have a decent down-payment.

If anyone lends you money to close, you have to have a "gift" letter and copies of the bank statement showing where the money came from with the account information showing.

The market jumped 10 to 20% while I was looking. Houses that were selling in May at one price suddenly jumped by August an additional $20,000 or more.

I offered full price and up to 10,000 above in several cases. I didn't get the houses WITH ALL CASH.

In one case, I offered full price, and then offered to pay $14,000 to a homeowner association and then $18,000 on the owners IRS lien. I still didn't get the house. I was offering cash transactions and instant closings.

The point is: The real estate market is not for people who are not financially mature. If you have any credit blemish and you want financing, you better be prepared to have them demand everything but your underwear size.

Out of country investors are beating out other local cash buyers. Genius reported on this Dec. 7th 2013. What we need is less foreign investors buying up all the foreclosures in bulk. Maybe you should address that up there on the dais? Maybe they need a hoop to jump through or a surcharge for bulk buying that is manipulating our market.

Homestead has become a rental market for houses. It is a section 8 haven for spectators. I bet if you look at the number of house sold for cash vs finances in South Dade, you will would be surprised at the numbers.

Everyone looking for new houses are going to have to have great credit, good jobs and lots of patience. I would not even try to purchase with financing. To buy a house with financing you have to have sound credit and a willing financier. I was to the point that I knew I could always rent with my credit history and I was getting tired of dealing with the insane market.

In the end, I was able to purchase, by grabbing a house that first I looked at in May, which the investor who had the contract walked away from. My realtor called me the morning it came back on the market and we had an offer in within hours. I won the house over a higher bid because I paid cash and the other had to be financed. I could close in a week and the home owners bank didn't want to wait on the other person to deal with the financing.

How did your daughter get that house she now has? That is the big question. REALLY BIG QUESTION. Favors? Help financing? I would like to know. Maybe all those Sweetwater Fence contracts left her flush with cash.


Anonymous said...

There is a huge difference between you and Jenna Bell. You are not political royalty (in their own minds). Everyone in District 8 will suffer until every member of the Bell clan is lavished with the spoils they deem deserved.

Anonymous said...

I'm still stuck wondering where the $80K secondary financing is coming from in yesterdays post.

Moving forward though, I guess because I've been in real estate for far too many weird cycles, it depends on where you're looking to buy that you'd have the kind of problems finding something. South Dade in general is still a very depressed market compared to the majority of the County because most of the newer construction never should have been built in the first place. Section 8 is further depressing property vaues in surrounding areas so the appraisers are comping downward.

There are good buys out there and yes, it can literally be a full time job finding them. Right now, the best buys are through the banks online auctions. I don't mean the court house steps, I mean the one's through FNMA or other big lenders after they've taken title in a foreclosure. Even though there's probably going to be work to do on the property, you'll pay a substantial discount then a bidding war in the regular market where agents are actually creating some of the problems.

Anonymous said...

Hey, what about NON FORECLOSURES. There are plenty of them. We don't have a shortage of housing, only sweetheart deals.

Anonymous said...

"I WON the house.."

What a sad and sick way to view a home purchase.

Anonymous said...

Without knowing exactly where the blogger was purchasing, this is pretty unusual outside of areas West of US 1 in District 8 and District 9. It's no excuse for Bell who is all about herself and her family. I think the blogger didn't have a good agent or the right agent for the market they were looking in or were looking for something not common in the area.

Anonymous said...

$80k is a "gift loan", no doubt taken from the profits and proceeds off Mama June's many Section 8 rental houses, none of which are suitable for Honey Boo Boo Jenna's occupancy.

Realist said...

What the blogger and the realtor found was drug houses in keys gate, Chinese dry wall everywhere, out of town realtors who had never visited their properties, realtors who did not pass-on offers to sellers, multiple houses that went to "contract" within 30 minutes of notifying the listing agents that we were inside looking at it. There was even one house with padlocks on the outside of the black painted bedroom doors and blood soaked into wood floors. (no discount on the auction site for that one ).

We actually looked at one house that the listing agent called my realtor afterwards and asked if she thought he should make a low ball offer on the house (basically screwing his client). He was looking for investments and he didn't want to drive from Broward to look at it.

After one contract was not accepted, I called one listing agent in north Dade and asked he was ever told (by the guy he hired in south Dade) that I offered over full price cash. He was surprised and annoyed. I suggested that he check the guys web site ... It was not even current and fully functioning, the office information was wrong.

My realtor was not the issue... She was ethical and worked very hard. However, I was stunned by the amount questionable deals that were out there and the fact that there were realtors that seemed to be more involved in the "deals" instead of selling the properties.

We did run into several great realtors, and they got our business. I consider the real estate market in general in south Dade as corrupted.

Anonymous said...

Can you say where in keys gate did you find drug houses? I thought this issue had been resolved two years ago. I am looking to buy in that area because it looks nice and affordable. The only downside I found is the location (too far South for me).

I also thought it was the best area in homestead. Is this also a high crime rate area?

Back to the point: I know exactly what you mean. After 2 years looking for a house (having a steady job and good credit) I had to lower my expectations from Doral/Kendall to Homestead because it is the only place where the appraisals wont kill the deals by being 20k+ below the asking price.

Anonymous said...

One drug house in the shores and another serious one (to the point the chemical residue caused headaches.) across the street in another location.

Every gated community has crime. It doesn't go away.

The appraisals should be coming up as the prices went up in the last 4 months.

The biggest problem is that places are becoming rental communities and that there is so much Chinese dry wall that every buyer needs to test for it before closing. People aren't exactly honest about it.... They are slapping paint on the walls and cleaning up the places u see the black on copper and then you buy trouble. Of course, over crowded section 8 homes and the constant moving in and out makes the neighborhoods unstable.

Anonymous said...

I did not find chinese drywal at the shores, but I have heard other communitied nearby have had issues with it. I am sorry to hear about the drug house, since this is the neigborhood where I wanted to purchase. I thought Keys Gate was similar to Doral in the 1990s with a lot of potential, but maybe I am wrong. The crime rates have also been rising in the area lately...

In general, the market is pretty bad if you want to purchase in a decent area.