Friday, June 22, 2012

House Hunting Tips

We have a history with real estate. I’m a real estate broker, was an appraiser, was a mortgage broker, all in the State of Florida. And we’ve bought and sold a few properties.

The main lesson I want to share is: Do your own research. You simply cannot rely on what another person says; it does not matter if they are a Realtor, Banker, Appraiser, Surveyor…

Here are some quick tips that we’ve picked up. Hopefully, they will be a help to some of you.

  • Look up the property on the county appraiser’s site. Search “name of county property is in” property appraiser {Duval County Property Appraiser}. Once on their site, click “property search” You can usually find it by address. This will show you previous sales as well as the taxable value and even a building sketch and list of site improvements. There’s also usually a link to the tax assessor’s office so that you can see what the current taxes are and estimate your property taxes.
  • Then search the property on Google Maps. Check out the satellite imaging. {We didn’t want to be very close to high tension power lines or train tracks, so we googled every property before we spent the time and gas money to go see it in person.}
  • Most of the properties on the market today are foreclosures or short sales. Be prepared. The majority of properties have problems. We’ve seen holes in walls, destroyed flooring, wiring that’s been stolen, AC units have been stolen, a foundation that was literally washing away, and cabinets that had been ripped apart so that the wall oven and stovetop could be stolen. Just brace yourself. And start a savings account so that you can make repairs on the property you buy.
  • HUD homes. If you are interested in a foreclosure, the HUD HomeStore is a good place to start. You can search for properties and read the addendums (including the PCR- Property Condition Report- that will reveal any major known problems) all from the comfort of your home. Of course, in our experience, these inspectors can miss some things. Let the Buyer Beware. A note- HUD properties are listed with a Realtor and will be on the MLS as well as and You don’t have to know somebody to buy one.

In most cases, you cannot simply buy a HUD owned property. You have to bid on it. For this, you need a HUD registered real estate broker who can place your bid for you. This can be tricky. Many HUD properties seem to be listed below Fair Market Value, but if you bid above the list price, you must have cash for the difference. No bank (in my experience) will finance a loan amount above the listed price. Then again, if you make a full price bid, someone with cash might outbid you. C’est la vie.

  • Financing. Find a loan officer you like and make application. Then ask them if you qualify for a USDA 100% loan (No Down Payment Required). If not, ask them if you qualify for an FHA loan (As Little as 3.5% Down Required). Qualifying for these programs is more hassle, but less cash. You decide if it’s worth it.
  • One more personal bit of advice: ask your loan officer what is the maximum amount you can finance. Then divide that by 2 and shoot for finding a property at that price. Maxing out your credit is a good way to get stuck with a home you cannot afford to live in. {Speaking from personal experience here!}