Reasons to Buy Now

According to Dan Kadlec from Time Magazine, “There are plenty of reasons to buy your retirement house now—even if you don’t plan to live in it for years."

The National Association of Realtors reported that even as primary residences fell, vacation-home sales rose nearly 5%. The typical buyer was 44; third of those people said they plan to move to the home full time later on.

In the September 17th issue of Time Magazine, Dan Kadlec gives some very good reasons why one should buy their retirement home now. Below is a condensed list of the reasons.

1. Home prices won’t weaken forever and they almost certainly will be much higher in 10 years. Waterfront and resort properties and those with spectacular views—just the features you dream of for a retirement home—can be expected to rise the fastest.

2. The buyer has the bargaining power and the time to research the purchase.

3. A cottage in the mountains or a house on the beach where you plan to spend the rest of your days doesn’t have to be subjected to the same rigorous evaluation as other investments. In theory, your retirement house won’t be sold until you’re not here to worry about it anymore.

4. When you buy before retirement, you’re able to start making the area part of your life right away. That helps you build a social network, which will ease the transition when you do make the move.

5. One way to bring the entire family together more often is by living in a fun, familiar house in a great location.

6. Buying while you still have children at home is a b onus. The kids will feel invested in the place, make friends and want to visit more often when they’re older.

Eventually prices will go up. If you don’t act now, there is the risk you will be priced out of the market. Even if you can’t live in the property now, renting it may be an option. Naturally you will want to do both the math and find a second home in a place you would really like to retire to.

Short Sale!

Currently there is a lot of talk about short sales, but what is a short sale? A short sale is the sale of real property where the fair market sale price is less than what is due on existing loan(s).

Today, foreclosure on a property is not the automatic answer to the problem of salvaging a bad real estate loan. Foreclosure is expensive for the lender. The lender is without monthly payment on the loan, there are foreclosure fees, holding costs, repair costs, marketing costs and costs of sale. A short sale is a way to prevent costly REO (Real Estate Owned) property to go back to the mortgage company after an unsuccessful foreclosure auction.

Keep in mind that a seller does not automatically qualify for a short sale. The first thing a seller must do is prove “hardship”. Also, if the Seller had obtained junior loan(s), the holder(s) of the junior trust deed(s) must agree to a release of their liens with little or no payment.

A successful short sale transaction requires the cooperation of all parties in the transaction. Normally, the lender will have restrictions on the amount of closing costs, repairs and even commissions.

The number of homeowners that will require short sales is staggering. Below are some statistics:

· 2.2 million U.S. households (460,000 California households) that refinanced with sub prime mortgages between 1998 and 2006 are expected to lose their homes to foreclosure (Report from Center for Responsible Lending, December 2006).
· One third of families who received a sub prime loan in 2005 and 2006 will ultimately lose their homes (Report from Center for Responsible Lending, December 2006).
· In most California cities, as well as in Denver, Washington, Phoenix and Seattle, interest only loans represented 40 percent or more of all mortgages issued in 2005. (New York Times, July 15, 2006).
· 15.2 percent of 2005 home buyers with pay-option ARMs now owe at least 10 percent more than their houses are worth (Comstock Partners, 2006).
· 13 million householders in the US (1.7 million in California alone) currently have no net equity in their homes (CoreLogic, 2007).