Buying a Home Cash

Buying a home with cash has definite advantages in today’s market. National Association of Realtors® research on cash sales shows that about 30 percent of residential sales are cash transactions. Among investors and international buyers, more than 70 percent of properties are bought outright. If you can afford to buy up front, the advantages are many: Sellers are likely to favor buyers who can pay in cash. The home price may be reduced for those who pay in full up front. All-cash purchases streamline the home-buying process: No loans means less paperwork and no delays for mortgage approval. Cash buyers can save money on closing costs, bank appraisals, mortgage applications and fees, title insurance, and so on. Cash purchases eliminate the risk of loan denial. Cash buyers pay much less for their homes in the long run: No loans means no interest. Cash buyers never have to worry about losing their homes because they can’t afford to repay their mortgage loans. Cash buyers gain full, immediate equity in their home. Financially and emotionally, paying with cash benefits the home buyer. Sellers prefer cash buyers Home sellers generally prefer quick, smooth sales. They know that even buyers who have been preapproved for mortgages might be denied by the lender later on. For example, a buyer who is an independent contractor might have difficulty proving two years of regular employment, or a buyer depending on a family member for a personal loan might later opt out (or the relative might). Therefore, when possible, sellers prefer to steer clear of buyers who have to apply for a mortgage. If you are buying with all cash, you have greater negotiating power on price, closing time, repairs, and more. Sellers are often willing to reduce the house’s price for cash buyers. Cash purchases avoid the risk of low appraisals Home appraisals are notoriously fickle. Lenders determine a home’s worth by weighing it against comparable sales — other homes in the neighborhood that may have sold at...

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Tax Auditors Targeting Condo Flippers in Toronto and Area

Here is an interesting article for people have been flipping condo’s In the past. CRA is moving in on the flippers!! Tax auditors target condo sellers in hunt for ‘flippers’ They’re looking primarily for people who bought condos before they were built, intending to flip them for a profit as soon as the project is complete.ax auditors target condo sellers in hunt for ‘flippers’ They’re looking primarily for people who bought condos before they were built, intending to flip them for a profit as soon as the project is complete.A Toronto tax lawyer is warning realtors — and people who’ve bought and sold new condos over the past seven years — that they could become unwitting victims of what he calls “abusive audit practices” by the Canada Revenue Agency.Tax auditors have been targeting the once red-hot Toronto and Vancouver real estate markets, looking primarily for people who bought condos before they were built, intending to flip them for a profit as soon as the project is complete.But other folks, including some who were forced to sell because their circumstances changed in the years it took for their new condo or home to be built, have been hit with the kind of massive tax bills usually reserved for real estate speculators.Toronto tax lawyer William Howse is warning realtors in a two-page bulletin, now being distributed to brokerages, that they also could be inadvertently swept up in the net.He cautions that if they have advised clients to cash in their condos or new homes too soon after construction is completed, even to use the gains to buy up, they could have clients sue for advice that is deemed to have run afoul of the taxman.The Toronto Real Estate Board declined to discuss the issue, other than to say the rules are “generally clear on the amount of time one has to occupy a unit (as a principal residence) to benefit from a capital gains exemption.” But the reality is, the law...

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69% of home sales are cash in S. Florida

By Mary Shanklin and Paul OwersStaff Writers4:55 a.m. EDT, August 29, 2013   In South Florida, 69 percent of all home sales last month were cash deals — and that’s way above the national average. Across the state, 66 percent of home sales were cash, compared with the national rate of 40 percent. One expert called Florida’s rate “astounding.” With one of the nation’s highest foreclosure rates, South Florida has a large supply of bank-owned properties. Lenders aren’t interested in waiting for traditional buyers to qualify for mortgages, preferring instead to sell to investors paying cash.  And that has virtually shut out entry-level homebuyers. “That’s where all the action is,” said Lex Levinrad, founder of the Distressed Real Estate Institute, a Deerfield Beach-based club for investors. “The banks have an urgent need to get these bad loans off their books as soon as possible. They’re willing to sell for 30 percent less to a cash buyer rather than waiting for a buyer with a mortgage.”  Much of the cash buying in South Florida is from foreigners who view condominiums as safe investments. In the past year, large funds have entered the region, buying single-family homes and renting them out for a year or longer. The Blackstone Group of New York and California-based Waypoint Homes are two of the larger funds buying in Broward and Palm Beach counties. Some industry analysts once feared that a so-called shadow inventory of homes would hurt the housing market. But David Dweck, founder of the Boca Real Estate Investment Club, said there are enough cash buyers here to support any excess supply of properties. “Without a doubt,” he said. “Without a doubt.” Cash sales made up 57 percent of Florida’s home sales a year ago and 61 percent of all sales in June of this year, compared with the 66 percent reported in July, according to the report released today by the real estate research company RealtyTrac Inc. “That’s astounding,” RealtyTrac Vice President Daren...

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Florida added almost 13,000 jobs in June

Florida added almost 13,000 jobs in June, according to private payroll company ADP. The service sector grew by 10,260 jobs, according to ADP estimates, while the goods producing sector added 2,650 jobs. The company’s estimates often do not mesh perfectly with Labor Department figures, but they can be a good barometer of what is happening generally in the labor market. California posted the biggest gains (31,040), followed by Texas (23,420), Florida (12,910), New York (10,000) and Pennsylvania (9,370). Those five states plus Illinois accounted for more than half of all private-sector job growth for the month. The South Atlantic region — the area including Florida — added more jobs than any other part of the country, about 36,000. The ADP regional report follows last week’s Labor Department report that the showed the U.S. added about 195,000 jobs. The national unemployment rate is now 7.6 percent. Florida’s jobless rate was 7.1 percent in May. The state’s June numbers are due out next...

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Hedge Funds are Buying Thousands of Single Family Homes

There have been many reports recently about large investors, such as hedge funds and investment groups, buying tens of thousands of single family homes in certain parts of Florida The reported strategy of these investors is to buy single family homes, perform minimum necessary repairs and maintenance, and then rent the homes for a number of years until the homes can be sold for a profit. Many of these large investors specifically target homes within community associations because community associations provide more stability and generally prevent homes from falling into more serious disrepair.  While different people may have differing views about whether the large investors are positive or negative, there is no denying that they are having an impact on Florida real estate. This article explores some of the potential issues for Community Associations, particularly homeowners associations, arising from the influx of these large investors to the Central Florida real estate market. Past Due Assessments:  Many of the large investors are purchasing distressed properties at mortgage foreclosure auctions. Because most properties being foreclosed in recent years are underwater (worth less than the amount owed on the mortgage), the bank (generic term used for foreclosing entity) usually ends up as the highest bidder at the judicial foreclosure sale. Upon taking title to the property after the foreclosure sale, because of statutory provisions contained in Chapter 718 and Chapter 720, Florida Statutes, the bank would usually only be liable for the lesser of the past 12 months of assessments or 1% of the original mortgage amount. Even if the assessments owed by the former owner of the property were four years past due, a foreclosing bank taking title at a foreclosure sale is usually only liable for the 12 months of assessments that came due immediately prior to the bank taking title.  The provisions contained in Chapter 718 and Chapter 720 that limit a bank’s liability for past due assessments do not apply to a successful third-party bidder at a foreclosure...

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10 Biggest Mistakes Real Estate Investors Make!

1)  Taking  too long to place ads for your property after it  closes.  You need to create momentum.  Follow up with your leads within 24 hour period.  Create a call back list on a spreadsheet helps. Have a email data base for future new tenants. 2)  S0 many investors focus 0n appreciation only, it is not a Guarantee and sacrifice with negative cash flow. Three Things that make for a good Investment. Positive Cash flow is King,  Equity Build-up if you have a mortgage, and possible appreciation. 3) Poor set of books , or bookkeeping. Very important to understand to keep a good record of your income and expenses,  time and time again people hand over to their accountant at year end a shoe box of expenses not knowing if they made any money. Paying unneccesary taxes! 4) Making individual appointments with prospects instead of creating a competitive environment. 5) Picking the wrong people to work with that do not understand your business! Work with a competant mortgage broker who has an understanding of investment properties.  Find yourself a good real estate  lawyer, accountant and real estate agent with investment properties experience! 6) Not responding to your tenant complaint regarding repairs. A good business owner gets back to their clients within 24 hour period. If you don’t care about your property do you think your tenants going to more? I don’t think so. 7) Not treating rental real estate  like a business. People buy rental properties for the wrong reason, your not just a Landlord who collects 12 cheques for the year and not see your tenants for another year. Remember your tenants are your clients. 8) Not following a step-by-step system. Too many investors “wing it.” 9) Trying to find a deal vs. studying market demand. A good deal means nothing if there isn’t any demand for the property. 10) Trying to save a $100 negotiating a purchase and losing thousands of dollars in future profits! If you buy right in the first place know what you are willing to pay for the property and bid...

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