Are More Real Estate Sales Falling Through?

by Isaac Benmergui, Esq on August 11, 2017

real estate salesAlthough the U.S. housing market has come a long way since the recession, a greater number of real estate transactions are failing than in recent years. According to online listing service Trulia, the number of failed transactions in major metro areas doubled between 2015 and 2016, going from 2.1 percent to 3.9 percent.

What’s behind the failures, and what does it say about the housing market?

One major cause of failed real estate transactions is more first-time homebuyers hitting the market. For a long time, Millennials held off on home buying, preferring to rent and stay flexible in terms of where they could move and live. But now, those individuals are jumping in, and they have less experience and fewer resources. In fact, starter home sales are more likely to fail, and do so at an average rate of 6.3 percent.

Another cause of failed transactions is price inflation. In markets with high demand and low inventory, competition among buyers can result in higher prices than the home may appraise for. Experienced buyers will be ready for this situation and come with extra cash to make up the difference between asking price and loan amount, but it may take new homebuyers by surprise and sink the deal.

So how can you avoid problems when it comes time to buy a home? If you’re a first-time homebuyer, research, research, research, and get an experienced real estate agent who knows the market well or a real estate attorney to help you avoid pitfalls. Avoid bidding wars if you can, and consider a low appraisal a red flag unless the market is super competitive.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Fannie Mae Dropping In-person Appraisals for Refi’s

by Isaac Benmergui, Esq on August 10, 2017

Fannie MaeFederal mortgage lenders Fannie Mae and Freddie Mac are dropping the in-person appraisal requirement for individuals who are refinancing a property. Some appraisals will be generated via algorithm, not unlike what Zillow and other third-party real estate sites do, but the data that Freddie and Fannie are using are based off past sales information, as well as notes and comments from previous appraisers.

Freddie Mac will fund up to 80 percent of a home’s value without appraisal on some refinances. Next, Freddic Mac will consider whether to finance new mortgages with 20 percent or more down without an appraisal. Fannie Mae is doing the same, but only with refinancing borrowers.

This is great news for borrowers, who can now skip the $500-700 price tag for an appraisal. However, it could be bad news for lenders since there will be no real-time quality assessments of a home before money is taken out. And taxpayers will foot the bill for loans that go bad.

As more and more homes are refinanced without a fresh set of eyes on them, the current appraisal data that the algorithm is based on will slowly become outdated, and computer-generated appraisals less accurate.

This doesn’t have dire consequences for borrowers who are refinancing, since they are already in the home and know what the situation is. But for purchasers, it could be risky. As Fannie and Freddie totally drop appraisal requirements, it would still be wise to get your own, independent appraisal to make sure the home you are buying is worth what you’re paying.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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How to Find a Great Real Estate Agent

by Isaac Benmergui, Esq on August 9, 2017

real estate agentBuying a home isn’t something you do everyday, so most people have to go through the process of finding a great real estate agent when they are ready to start looking for a home. Ideally, you need to find a lender first and get preapproved, so that you know your budget. Then you can start looking for an agent.

But how do you find one? Here’s a few easy steps that will make it simple.

  1. Narrow your home search. Now even if you haven’t been to a lender yet, you may have an idea about what part of town you want to live in, especially if you have kids. Many real estate agents specialize in one area or part of a city, so once you know where you want to be, you can find a real estate agent who knows the ins and outs of your area.
  2. Ask family and friends for referrals. And I don’t mean “My cousin just got her real estate license!” kind of referrals. Ask people who helped them buy or sell their last home, if they were happy with them, how the experience was, and any other questions you have about the process. Contact at least three agents for interviews, and ask them for referrals as well.
  3. Assess their level of experience. Ask about years of experience overall, in your particular market, and in your area. Ask previous clients about the pros and cons of working with this person. Try to figure out if they are thorough and detailed, since even routine real estate transactions are pretty complicated deals.
  4. Ask about other credentials. If an agent is a member of the National Association of Realtors, that means they are bound by a code of ethics that real estate agents don’t have to adhere to. Some agents are negotiation experts, while others hold credentials for commercial real estate transactions. All of these things may or may not be important to your search.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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How to Avoid Online Real Estate Scams

by Isaac Benmergui, Esq on August 8, 2017

online real estate scamsReal estate scams are happening all over South Florida. With a hot housing market, everyone is looking for a way in, and not everyone is stopping to ask, “Is this too good to be true?”

Most of the scams target out-of-towners looking to move who may not be able to come see the place in person first. Most begin with fake photos on listing sites like Craigslist, continue through conversations with a very responsive “landlord” online, and end when money is wired and the landlord goes dark.

Here’s how to protect yourself from real estate scams like this one.

  • Never wire money or use a prepaid card to put down a deposit. If you use a credit card, you can get that money back after you report the fraud. Wiring money is like sending cash—you’ll never see it again.
  • Verify the credentials of anyone you’re working with on real estate through the Better Business Bureau.
  • Insist on seeing the unit in person before you sign a lease or turn over money.
  • Do online searches for phone numbers or email addresses associated with online real estate ads. You may find the same exact listing pop up in other cities.
  • Be wary of amazing deals priced well below market value.
  • Scammers generally pretend to be overseas or out of town the entire time your dealing with them. That should be a red flag.

If you discover a fake listing, flag it or report it on the site it appears on. If you find yourself the victim of a real estate scam, report it to your local police department, the Federal Trade Commission, and the FBI’s Internet Crimes Complaint Center.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Five Tips from a Veteran Homebuyer

by Isaac Benmergui, Esq on August 7, 2017

five tipsSometimes, you just have to learn the hard way. But not always. A great way to educate yourself on the home buying process is to actually talk to someone who has bought a home before. Daniel Kline, a former editor of The Boston Globe’s business desk, has done it a time or two. Or eight. And he has some valuable advice to share that applies even in a seller’s market.

  1. Do your own pre-inspection at the showing. By the time you get to the inspection phase of the home buying process, you’re pretty well committed. So that’s a terrible time to find out that a home has issues. To save yourself time, flush toilets and run faucets during the showing. Listen for weird noises that could be an indication of trouble. Keep an eye out also for cracks in the walls or floors, and water rings or stains.
  2. Trust the appraisal. Likewise, it’s really hard to get to the appraisal and have the mortgage company come up with a low number. But if that happens, it means the bank thinks you’re about to pay too much. So even if you have the cash to make up the difference, think long and hard before you offer.
  3. Always do the inspection. In a hot market, some sellers can get away with offering their homes “as-is,” meaning they will not be making any repairs. So no inspection needed. Right? Wrong. “Even when buying an ‘as is’ property, make sure you have the right to break the deal if an inspection — which you should insist on — turns up a problem you don’t want to deal with,” says Klein. “That could cause the seller to reject your offer, but if that’s the case, you’re dodging a bullet. It’s important to know what you’re buying, and an inspection is the only way to do that.”
  4. It doesn’t hurt to ask. Especially in a hot market, you may feel like you can’t ask for an appliance that wasn’t included, an item to be fixed (if the sale isn’t as-is) or an extra like a home warranty. But you can always ask. Asking won’t result in the deal being terminated. The other party will simply respond yes or no and you can decide how to proceed.
  5. Think about resale. Even if you only need a two-bedroom house, think about the fact that they are harder to sell than three-bedroom homes. Maybe a condo would be a better buy if two bedrooms is all the space you need. This is also true with a home that has a quirky layout or would only appeal to really specific tastes. Before you buy, consider if the home can be made more neutral when you get ready to sell, or if other perks, like location, features or lots size, outweigh the quirkiness.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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