Foreclosures, buying tax liens
Q: Bob, we (our Association) have a few questions. Would you please answer as many as you can or desire before spring and answer the big question about (from a real estate agent’s point of view) what to do to spruce up your home for selling. We (several of us) will be going up north just before April and will try to sell our home for six months.
Roger and Association
A: OK, R & A. Here are a few questions answered, I won’t single them out.
Real estate opportunities: In this market the foreclosures are very real. I don’t know what the president’s plan will do for the market. It will probably get a little bit worse before it gets better. However, buying tax liens can provide good yields. To raise cash local governments auction off unpaid property tax bills, which gives holders a legal claim, or “lien” on the property. Investors then try to collect the taxes owed.
If they succeed, they get the taxes owed plus 10-12 percent interest, depending on the/your location and local laws. If the taxes are not paid, investors can foreclose (wow, there is a lot of that already going on!) on the property on which the taxes are owed and potentially sell it for a nice profit. CAUTION: This is a high-risk investment that requires knowledge of local laws regarding lien sales
Roger, in your e-mail you asked specifically about this, but with all of the foreclosures, be careful. Try The National Tax Lien Association at 877-470-9007 or on the Web, www.ntlainfo.org. Good Luck!
Q: What is happening with our insurance situation-raising rates, scams, etc.?
A: I read (and talked with a few insurance brokers) in a local newspaper that a big insurance company is pulling out of Florida. Who knows? Your main question was about the rates and were there/they scams? I would just comment- home owners beware: Some insurance companies, are imposing new hurricane deductibles based on 1-15 percent of a home owner’s insured value, I hear from several insurance experts. A 3 percent deductible means that a home owner would have to pay the first $9,000 in damages out-of-pocket on a home insured for $300,000-before the insurer spends a dime. Self-defense: Look for a reputable insurer that offers a dollar-amount deductible rather than a percentage.
In reference to your question about reverse mortgages. I wrote a column last year about this last year, but times change and this is a little bit different. Reverse mortgages soon will cost less to refinance. Unless our new president changes it, seniors who take these mortgages must pay the Federal Housing Administration an insurance premium of (percent) of the home’s value or (percent) of a federally mandated maximum price for the area, whichever is less. Home owners who refinanced a reverse mortgage would have to pay this premium again and more, if the home’s value (not many) increased. A new rule caps the premium at no more than 2 percent of the difference between the federal maximums on the original and refinanced mortgages.
EXAMPLE: A home owner refinancing a reverse mortgage on a home that has doubled in value from $100,000 to $200,000 may pay $2,000 in premiums instead of $4,000. As soon as the dust settles from the new administration, things will change??
Roger I will answer your question about sprucing up your home to put on the market and some of the others before you leave, probably in March.
Have a real estate question? Write, call, fax or e-mail:
Bob Jeffries, Realtor,
Century 21 Birchwood Realty, Inc.
4040 Del Prado Blvd., Cape Coral, FL 33904
239-540-6659 Office 239-542-7760 Fax