Older Americans who own Orlando real estate are not immune to the foreclosure process
Many Americans that are 55+, grew up thinking that real estate in Orlando would only appreciate in value and that you need to own a house to be financially secure. That way of thinking was passed on from there parents and was shared by just about everyone else in that generation. Unfortunately, according to AARP Senior Americans got in just as much hot water as the younger generations.
The perception is that older Americans are more housing secure than younger people, but the truth is that millions of Americans that are over the age of 55 are carrying more mortgage debt than ever before, over three million of which are at risk of losing their homes. And as of December 2011, approximately 3.5 million loans of people age 55+ were upside down, meaning that their home is worth less than the loan amount. From 2007 to 2011, a staggering 1.5 million + older Americans lost their homes to foreclosure.
Even though older Americans still have lower foreclosure rates than people that are under 55, they are increasing at an alarming rate.
Older Americans weren’t immune to the Orlando real estate boom and bust. They took out equity lines of credit when Orlando property values shot up, sold their homes for retail prices and purchased investment properties that floundered just like everybody else.
The biggest difference here is that if you’re under 55 and lose your house to foreclosure, you still have time to get back on your feet through hard work and perseverance. Older Americans don’t have this option because the truth of the matter is that time is not on their side. When I think about Older people losing their homes to foreclosure, it literally brings tears to my eyes, it’s just really sad.
For generations, home ownership has been a safety net in retirement, the report notes. Equity that built up over decades could be tapped for medical bills, supplement fixed incomes or help transition into an assisted living facility. If a senior needs to transition to an assisted living facility but can’t sell his house to get the money to pay for it, then that’s a huge problem.
Gail Matillo, director of elder housing for the Florida Department of Elder Affairs, recommends seniors call a local aging resource center if they are having trouble with house payments. The statewide hot line is 800-863-5337.
If you are in need of an Orlando Short Sale, call us for a free consultation.
Florida Homeowner Insurance companies are having a negative effect on Orlando Real Estate Sales
Even though the real estate market in Orlando is recovering in leaps and bounds, homeowners are not happy about the high price of Florida homeowners insurance. As a matter of fact, for some potential home buyers, it’s proven to be the straw that broke the camel’s back.
There are still great real estate deals in Orlando, but even if the price of the property is affordable as well as property taxes, etc., the homeowners insurance in some cases can be almost as much as a mortgage payment. That’s insane!
Citizens Insurance raising it’s premiums on Florida Homeowners
The main reason for the high cost of homeowners insurance in Florida is the recent increase that Citizens has made to it’s premiums. Many times this will cause potential real estate deals to fall through or even worse, it puts the new homeowner in a position to fail because he went over budget, and potentially cause him to default on his payments.
The state run Citizens claims that the had no choice but raise the premiums because they are supposed to be a last resort for people and now they are covering many more homes than the program was designed for. That’s not all, if massive hurricane were to hit Florida and deplete all the company’s reserves, all Floridians would get taxed thus hurting the state economy in a big way.
Read the fine print when Buying Orlando Realty
When it comes to buying Orlando Real estate, there’s more than just deciding which homeowners insurance company you’re going to commit to. You have to read the fine print and be aware of everything that you’re committing to. So many first time home buyers end up in hot water because the fail to understand exactly what they’re signing. Then there is another type of buyer, the type that wants to get into that new house so badly even though deep down they know that it’s beyond there budget.
That’s why you need an experienced Orlando realtor to walk you through the complexities of buying a home in Orlando. I personally will not allow a client to make what I know will be a bad decision for them. As Orlando real estate agents, we have an obligation to look out for the best interest of our clients and help them in any way that we can when it comes to buying or selling Orlando real estate.
“The City Beautiful” a great place to invest in real estate
Orlando is undoubtedly one of the most frequently visited places in the United States. The demand for real estate in Orlando is constantly on the rise. In fact, in recent times Orlando has witnessed an immense growth in the world of real estate. Moreover, the instability of the stock markets has made people turn to real estates for investment as well as a mode of income.
Though Orlando real estate provides a vast avenue for fruitful investment opportunities, Orlando foreclosures have also been on the rise. You’ve got to keep in mind the mortgage refinance rates as well when considering going for real estate investment.
However, in spite of everything else it remains a fact that Orlando isn’t known as ‘The City Beautiful’ not for nothing. Read along to find out the reasons why you should invest in Orlando realty.
1. Orlando’s scenic beauty – It’s a known fact that Orlando is a place that boasts of breathtaking sceneries, natural beauty, lush green surroundings, and blue lakes. This opportunity of nestling into the depths of such natural beauty is a major temptation.
2. Conducive climate conditions – Orlando is a place known for its warm and humid subtropical climate. This is a huge factor behind the real estate boom. If you’re coming from up north, then this is a major reason why you’d want to consider buying a home here in Orlando. Its weather will provide a welcome change for you.
3. Housing inventory provides you with more choices – There’s been a steady increase in the real estate housing inventory as well. As a potential investor, you’d find the luxury villas and condos as interesting real estate developments that provide attractive investment opportunities.
4. High demand for luxury homes – Real estate has seen a rise in demand with more and more luxury homes in Orlando being constructed. These are rented out as long-term or short-term vacation properties. Since tourism is high in this area, hence these luxury homes actually render a profitable option for the investors. Due to the rising demand for vacation homes, many investors are keen to buy them. Then they lease this property out to the tourists for a certain span of time.
5. Orlando has some major tourist attractions – SeaWorld, Walt Disney World and Universal Studios are some major tourist attractions. These attractions contribute to the curent real estate boom big time. Proximity of a property to these tourist attraction spots also add to the investment value of it.
6. New constructions are on the rise– There’s been a spurt in the growth of apartment complexes and condominiums. Moreover, resort properties are being renovated and fitted with extra amenities. These provide you with an added incentive for you to invest in property out here.
As a home buyer you have a lot of reasons to actually invest in Orlando real estate. With the help of our website you can Search Orlando properties like a pro in the comfort of your own home. Within seconds you’ll have a list of great Orlando properties for sale complete with listing price, photos and every other detail you want to know about the property.
Orlando real estate is once again a good investment for retirees
After the huge real estate bubble, we experienced between 2000 thru 2006, we all learned a painful lesson in 2007 when the market tanked. It’s just not normal for Orlando real estate prices to double over the course f only seven years. When the market crashed, Orlando’s real estate prices dropped to 50% of where they were and in some areas of Orlando, it was even more than that.
What I have been seeing more of recently, however, is that people are considering Orlando realty as a good investment for retirement once again. Here in Orlando, the bottoming process has already happened and prices have been on a steady rise. There is still a long way to go before we see a normal housing market, however, historically low mortgage rates are helping the market by making the cost of ownership more affordable, assuming that the potential buyer can qualify.
Sensing this opportunity, many are jumping into the rental market to boost retirement savings and income. There are however several important factors to consider when buying an Orlando property for the purpose of receiving a steady stream of income.
5 Tips for potential Orlando Landlords
1- Make sure that you buy at the right price- This is where working with an experiencedOrlando realtor will pay off big. Make sure your agent shows you the recent comparables in the area. Chances are that you won’t find anything at 30% market value unless it needs work done, but you should be able to buy something at fair market value, which is OK if you’re thinking long term.
2- Forget about flipping- The days of flipping houses for a huge profit are gone for the most part and you shouldn’t go into this thinking that you will be able to sell your investment property for twice what you paid for it in six months, it’s just not going to happen.
3- Take advantage of Historically low mortgage rates- Even if a potential home buyer is able to purchase an Orlando Investment property, I always suggest to them that they should consider getting a mortgage. With historically low rates right now, it’s a great opportunity for potential investors if they can qualify.
4-Consider hiring a property management company- Being a landlord can be a great source of income if you’re up to the task. However, I must warn you that it’s not for everyone. Landlords have to deal with not only the maintaining of the property, but they have to be available to tenants at a moment’s notice in case of emergencies. This is why you should consider hiring a property management company right from the start. You should work this expense into your budget before even buying your investment property so that you will know if the numbers make sense.
5-Get familiar with Orange county eviction laws- If you become a landlord for any amount of time you can expect to have a deal with an eviction or two [at least]. It’s very important that your rental agreements are solid and that you do background checks on ALL of your tenants no matter how nice you think they are. It may cost you a few extra bucks to get a quality tenant into your house but I can tell you from experience that paying a bit more upfront to do things correctly will save you time, money, and headaches in the long run.
It’s important for people considering Orlando real estate as retirement income to remember what the goal is. The goal is for the owner to be mortgage-free and to collect a steady stream of income on a house that’s free and clear.
By now just about everyone living in Orlando has heard of terms such as “short sale” , “deed in lieu”, loan modification, etc. It’s important to know exactly what the difference is between these terms are and what the implications are. For example; many homeowners believe that a deed in lieu is the same as doing a short sale. This couldn’t be further than the truth. A deed in lieu is simply put is a foreclosure with a smile on it’s face or a “voluntary foreclosure”.
An overlooked downside to a deed in lieu of foreclosure is the possible forgiveness of the deficiency balance. Under federal law, a creditor is required to file a 1099C whenever it forgives a loan balance greater than $600. This may create a tax liability for the former property owner because it is considered “income.” However, the Mortgage Forgiveness Debt Relief Act of 2007 provides tax relief for some loans forgiven in 2007 through 2012.
The key issue in a deed in lieu of foreclosure is whether the lender is willing to forgive the deficiency balance. Make sure to read the contract carefully to see how the deficiency balance issue is handled. If the document is unclear, take it to an experienced Orlando real estate attorney with experience in property law. An attorney’s time is not cheap, but will be a bargain compared to signing an agreement you do not understand and are surprised later to realize its implications.
Consider Doing an Orlando Short Sale Instead of a deed in lieu
I’ve had a countless number of Orlando homeowners over the years come into my office asking me to explain the difference between a deed in lieu and a short sale. By doing an Orlando short sale the lender agrees to accept less than the balance owed on the mortgage at sale. The deficiency balance may be forgiven and you also may qualify for a “Cash for Keys” program which means that by doing a short sale, your lender may give you a cash incentive [between 3- 30 thousand dollars] . On the other hand a deed in lieu of foreclosure is basically a voluntary foreclosure n which you sign the deed over to the lender and walk away. However, a foreclosure, unlike a deed in lieu of foreclosure, the ownership of the property is not transferred to the mortgage holder, and remains with the owner.
The lesson here is if you are considering either a deed in lieu of foreclosure or a short sale you must review the terms and conditions carefully and make certain you understand whether the deficiency balance is forgiven. This is why it’s absolutely crucial to consult with an Orlando Real Estate expertwhen making such an important decision.
Lenders prefer short sales over taking a property to foreclosure because they don’t want to own distressed properties. They would much rather see the owner sell the property and lose the deficiency balance than be forced to take the property through foreclosure, as foreclosure is a costly and time-consuming process.
Another reason to consider a Orlando short sale over a foreclosure is that Foreclosure auctions tend to bring significantly less money than a normal sale would bring. If the sale brings less than the amount owed on the loan, the remaining balance of the loan is called a deficiency balance. This means that you could end up with a deficiency judgment against you for the balance.
If you still have questions about Orlando short sales, come see us for a free consultation. We’ve been specializing in Florida short sales and our team of Certified Distressed Property Experts are up to date on the latest laws and regulations when it comes to Orlando real estate ensuring that our clients get the best options available to them.
