You already know this: it is a great time to buy. Whether you are looking for an excellent area with great public and private schools in Miami-Dade or you already know you want to be in Pinecrest, Palmetto Bay or Kendall, we can help you. Very few Realtors have so much knowledge of these areas and have the experience to guide you through the home buying process. We have been in this area since 1978 and have been immersed in many aspects of real estate since 1988. Both new and previous homeowners benefit from this knowledge and experience. We make available all of our resources so that your experience is easy and pleasurable from that initial showing to a successful closing transaction and beyond. We will always be there for you when you have questions or need other assistance.

1. First Time Homebuyers

Becoming a homeowner for the first time can be both exciting and intimidating at the same time. We understand this and are looking forward to guide you through the process. We will be happy to sit with you and give you an overview of the home buying stages, identify your specific needs and break down the first few steps for you so that you can get into it gradually but without losing sight of the critical steps. We have numerous resources available to support your needs. Because oftentimes down payments can be a challenge, we will explain special programs that can help you achieve you goal of home ownership.

2. Boomerang Homebuyers

In this new economy many homeowners found it impossible or impractical to hold on to their homes. But the desire to own never left, it just took a recess. If you find yourself again mentally ready to own another home, we can point you to a number of ways to achieve that goal. These include conventional loan financing and Low Down Payment programs. In fact, some special programs provide assistance after repeat homeowners have not owned a residence for a few years.

3. Financing Your Home

Regardless of the type of loan or special program you seek to purchase your home, it is important that you go through pre-approval before you start looking at homes. Through the pre-approval process, the financial institution you select will examine your finances and determine your ability to qualify for a mortgage loan, and equally important, how much money you can borrow. This figure in turn becomes your budget for the purchase of a new home. We can then confidently show you homes that fit within your budget. The other advantage of being pre-approved is that your offer will be given great weight because financing is basically set and your offer will not fall through for failure to get a loan, nor should you miss out on that home that you loved because of time delays involved in getting qualified for the loan. Also, pre-approval means that obtaining a loan commitment from the bank will happen quickly and you can close the deal and move in to your new home faster. You should also keep in mind that there will be certain expenses and additional reserve deposits (escrow), in addition to the purchase price. Some expenses will be before closing, some on the closing day but some of these may be financed (added to the mortgage).

A number of financial options are briefly described below. This is not an attempt to tell you everything you should know about these programs. It is merely a starting point to give you a sense of which ones may be more appropriate or advantageous for you. Each type of loan has specific approval criteria and guidelines. Interest rates on these loans will vary for a variety of reasons such as present rates set by the government, your credit score, and the amount of down payment you can make (this is usually expressed as a percent of the purchase price, e.g. 5%, 10%, 20%).

1. Conventional Loan Financing

This type of loan is one of the most popular. They are originated by most banks. They are not insured by any agency (such as FHA or VA) but if the down payment is less than 20% the bank will require Private Mortgage Insurance (PMI) which increases the monthly payments.

2. Special Programs Financing

Low Down Payment Programs

There are several low down payment programs that allow buyers to purchase a home with down payments as low as 3.5 %. Some programs are for first time homeowners, others for boomerang homebuyers after a few years of not owning a residence, some programs are available even to investors that want to buy rental properties.

1. State

The state of Florida has an agency, the Florida Housing Finance Corporation (FHFC), dedicated to helping state residents achieve the dream of affordable home ownership. The agency’s website ( www.floridahousing.org ) is a great source of information on the topic. The FHFC both provides home financing for individuals and acts as a clearinghouse of sorts that assist buyers find the best programs that they can qualify for. Among these are: 1) First-Time Home Buyer Program (FTHB); Home Ownership Pool Program (HOP); and the State Housing Initiatives Partnership (SHIP). These programs help buyers with down payments, closing costs, discounted interest rates for military personnel, etc. Assistance involving loans must be processed through a FHFC approved lender.

2. County

Miami-Dade County has several programs to assist county residents with their homeownership goals. These include: the First-Time Homebuyer Program; the Neighborhood Stabilization Program; the Infill Housing Program; the Homeownership Program for Public Housing Residents; and the Housing Choice Voucher Homeownership Option Program. More information about these can be found at: http://www.miamidade.gov/housing/homebuying.asp

3. Federal Government - FHA

Mortgage Loans - The federal government, through the Federal Housing Administration (FHA), facilitates home financing by insuring mortgage loans with low down payments (as low as 3.5% of the purchase price). These loans for the purchase of a home are sometimes referred as FHA 203b loans (http://portal.hud.gov/hudportal/HUD?src=/buying/loans). There are certain fees associated with FHA insured loans, however, without FHA insurance, buyers would have to pay expensive Private Mortgage Insurance (PMI) when securing loans with less than 20% down payment. FHA loans must be originated by a commercial lender, the federal government is only insuring the loan.

Renovation Loans (FHA 203k loans) – FHA has another loan insurance program to fund renovation of homes that need repairs, remodeling and/or expansion. These loans are known as FHA 203k loans. This program provides an effective way to allow buyers to borrow money for purchasing and fixing properties that in many cases would not qualify for conventional mortgage financing by banks.

4. Veteran’s Affairs (VA)

The Veteran’s Affairs Department facilitates home financing for certain military personnel by insuring mortgage loans with low (as low as 0%) down payments. There are certain fees associated with VA insured loans, however, without this insurance, buyers would have to pay expensive Private Mortgage Insurance (PMI) when securing loans with less than 20% down payment. VA loans must be originated by a commercial lender, VA is only insuring the loan. See details at http://www.benefits.va.gov/homeloans/eligibility.asp

5. Fannie Mae

Fannie Mae has large inventories of foreclosed homes that have not been resold yet. Fannie Mae is most eager to sell these REO properties. They also provide special low down payment financing for owner occupied or investment properties. They even provide renovation loans in addition to the mortgage loan for selected properties (www.HomePath.com).

4. Distressed Properties

While this term is typically used for foreclosure properties, we have expanded the definition to include several categories of properties that have may be in the foreclosure process, been foreclosed, or may be for sale in order to avoid foreclosure.

1. REO (Real Estate Owned usually by a financial institution)

1. Banks – When an individual bank forecloses on a property where the bank provided direct financing (and owned the loan), the property then is owned by the bank. Most banks have large inventories of homes that have not been resold yet and represent daily loses in expenses, liabilities, as well as a depreciating asset. Banks are most eager to sell these REO properties. They can be found at the website of some banks but offers can be placed through any local Realtor. The homes often need repairs but selling prices can be most attractive. These homes can be perfect for buyers that cannot otherwise afford a home and are willing to put in the effort and expense to get the repairs done at their own pace if repairs are minor. Alternatively, the buyer might need to set aside cash for the repairs or secure a renovation loan to hire a contractor.
2. Fannie Mae- This is a government sponsored enterprise that bought groups of mortgages from individual banks and turned them into securities sold to investors. As many of these loans defaulted, Fannie Mae, as the owner of the loan, foreclosed on the subject properties, which are now REOs. Therefore, Fannie Mae has large inventories of homes that have not been resold yet and represent daily loses in expenses, liabilities, as well as a depreciating asset. Fannie Mae is most eager to sell these REO properties. They can be found at the agency’s website (www.HomePath.com) but offers can be placed through any local Realtor. The homes often need repairs but selling prices can be most attractive. These homes can be perfect for buyers that cannot otherwise afford a home and are willing to put in the effort and expense to get the repairs done at their own pace if repairs are minor. Fannie Mae homes are made available exclusively to First Time Homebuyers through the First Look program for bids/offers. After that initial 15 day period investors are then allowed to bid. Fannie Mae sometimes provides incentives for buyers. They also provide special low down payment financing for owner occupied or investment properties. They even provide renovation loans in addition to the mortgage loan for selected properties.

3. Freddie Mac - This also is a government sponsored enterprise that bought groups of mortgages from individual banks and turned them into securities sold to investors. As many of these loans defaulted, Freddie Mac, as the owner of the loan, foreclosed on the subject properties, which are now REOs. Therefore, Freddie Mac has large inventories of homes that have not been resold yet and represent daily loses in expenses, liabilities, as well as a depreciating asset. Freddie Mac is most eager to sell these REO properties. They can be found at the agency’s website (www.HomeSteps.com) but offers can be placed through any local Realtor. The homes often need repairs but selling prices can be most attractive. These homes can be perfect for buyers that cannot otherwise afford a home and are willing to put in the effort and expense to get the repairs done at their own pace if repairs are minor. They also provide special low down payment financing for owner occupied properties.Freddie Mac homes are made available exclusively to First Time Homebuyers through the First Look program for bids/offers. After that initial 15 day period investors are then allowed to bid.
4. HUD – The US Department of Housing and Urban Development performs many functions to support homeownership. HUD is also responsible for the inventory of foreclosed homes that were financed with loans guaranteed by the Federal Housing Administration (FHA). HUD is most eager to sell these REO properties. They can be found at the agency’s website (www.HUDhomeStore.com) but offers can be placed through any local HUD approved Realtor. The homes often need repairs but selling prices can be most attractive. These homes can be perfect for buyers that cannot otherwise afford a home and are willing to put in the effort and expense to get the repairs done at their own pace if repairs are minor. FHA financing and/or renovation (FHA 203k) loans may be an option for these properties. HUD homes are made available to anyone including investors.

HUD Good Neighbor Next Door Program

HUD offers greatly discounted sale prices on their foreclosed (REO) inventory to public service personnel, specifically: teachers; police officers; and EMS technicians. See http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/reo/goodn/gnndabot details

5. Veterans Affairs (VA) Department

The US Department of Veterans Affairs is responsible for the inventory of foreclosed homes that were financed with loans guaranteed by the VA. VA is most eager to sell these REO properties. They can be found at the agency’s designated website (http://listings.vrmco.com/) but offers can be placed through any local Realtor. The homes often need repairs but selling prices can be most attractive. These homes can be perfect for veteran and non-veteran buyers that cannot otherwise afford a home and are willing to put in the effort and expense to get the repairs done at their own pace if repairs are minor.

5. Short Sales

A short sale is a real estate sale transaction where the bank and/or investor that own the mortgage loan on the subject property agrees to receive less than the amount owed by the borrower/owner. Each bank/investor has its own policies as to who qualifies for a short sale and conditions of the sale. Some banks may offer the borrower monetary incentives (like relocation assistance). Other incentives may include full or partial forgiveness of the deficiency (difference between the amount owed and the net proceeds from the sale), and reporting to the credit agencies that the loan was satisfied as a short sale which is usually preferable to a foreclosure. When loans are delinquent, banks typically have smaller losses doing a short sale than going through foreclosure which in most cases takes longer.

Buyers can benefit from buying a short sale property because many of them are sold below market price when compared to a standard property that can afford to be on the market a long time and might not need repairs. A short sale for a specific buyer must be approved by the borrower’s bank/investors. Some may be approved by the bank in advance but most get approval after the home is placed on the market. Either way, short sales can take anywhere for two to six or more months to be completed depending on a series of factors.

6. Handyman Special/Renovation

Whether you are handy or prefer to hire pros to do home repairs or improvements, homes that need work can be a good option for you. These homes can turn away many buyers and remain on the market long which will likely result in discounts that makes them more affordable and attractive. Depending on the extent of the work that needs to be done the home could be purchased with conventional financing, a repairs escrow in cash may be required by the bank, or a renovation loan (i.e. FHA 203k) may be needed. Of course there are no restrictions for cash buyers.