If you have a question for us, you can email it to  rhondacagen@yahoo.com

Here are some questions:

My family and I are looking to buy a vacation home in Florida.  I know the market has been great if you’re a buyer, but if I wait, will the prices keep going down, and how much longer do you think the prices will drop?  Or, should I secure our purchase now?

Well that’s always a tough question to answer…… Should I wait for the market to keep dropping?  That’s an answer only you and your family can answer.  But, the statistics here show that the market is actually starting its recovery.  It’s been a slow process but its finally starting to happen.  I just did a blog on the subject, but I’ll repeat it here again.

If you want to buy a home in Palm Beach County, “there’s no better time than now”.   The market is changing drastically and we’re losing our inventory.  This is great news if you already own a home here, but if you’re a buyer looking to buy a home, it’s time to step on the gas pedal and secure your purchase.  Here in Palm Beach County, home prices and sales volume were up in June with a 14% surge in purchases of single family homes as opposed to last year at this time, as well as a 7% spike in the median sales price. We also have about a 5 month supply of inventory left, as opposed to last year at this time when our inventory was12 months.  Of course we’re still going to see the foreclosures and shortsales continue for a while, but due to the lack of inventory, the regular sales prices are starting to move up again.. The buyers who have been out there looking for months and have not secured anything yet are already getting frustrated, because there was so much more to choose from 6 months ago.    What does all this really mean?  If you seriously want to buy a home in Palm Beach County, it’s time to make you move…….. I always say, if you’re going to buy anything, BUY IT ON SALE.!

So, with that being said, make sure you do your market research as well, and if you really want to buy a home in Florida, you might want to consider “stepping on that gas pedal.”

Roni Cagen

I owe more money on my home than its worth and I need to get rid of it.  What’s the difference between a shortsale and a foreclosure? And, will I owe any money afterwards?

A short sale is basically a pre-foreclosure. It means the the sale of your home is contingent on third party approval (the bank) accepting less money than what you actually owe. (The bank gets shorted).   If you can’t negotiate with the bank to accept less money that what you owe, the bank will eventually take back possession of the home by filing foreclosure proceedings.

Before you short sale your home or go into foreclosure proceedings, seek the advice of an attorney first so you know the laws of your state, and the consequences it might have on you.  While every state has different laws, it’s not uncommon for the bank to accept a short sale, or to foreclosure on it, and then come after you later for a deficiency judgment.

You can still be on the hook if there’s a difference between what you owe on the mortgage and what the bank could sell it for at auction. And these deficiency judgments can haunt you for years to come. And once they have a judgment, they can pursue you anywhere.

What can be scary is that the judgments don’t have to be obtained immediately. Lenders or collection agencies can wait until debtors have recovered financially before they swoop in. In Florida, the bank can wait up to five years to file. Once the court grants a judgment, the lender has 20 years there to collect, with interest. (Hopefully these laws will be changing soon).

But many people today due to financial hardship just don’t have any recourse other than getting rid of the home if they are unable to afford it.  My advice is to always see an attorney to find out if this is the best course of action for you and your situation.

Roni Cagen

I really want to buy a home, can you tell me how to start the process?

In my opinion, the first step to buying a home is to know how much you can afford for the home. If you’re a cash buyer, you have a pretty good idea.  If you’re financing the transaction, make sure you work with a reputable mortgage broker to see if you can get pre-approved for a loan first.  Most top producing realtors will probably not even let you into their car without a preapproval letter. This determines if they are working with a serious buyer, or a window shopper, plus it also also saves them a ton of time so they know how to search for your home correctly.  Once you’re preapproved for a loan, you’ll get a breakdown of the costs associated with the loan, meaning the principle, interest, taxes and insurance. (PITI – your monthly mortgage payment to the bank.)  Once you know the breakdown of the costs involved with the loan, you can then figure out if it fits into your budget. If it does, the next step is to create a wish list of some of the  qualities you need in a home, and some of the qualities you would Like in a home.  There is a Big difference between your needs and your wants in a home, and you’ll start to see that once you start shopping. The next step and the most important step is to make sure you find the “Right Realtor” for your house hunt.

Roni Cagen

I heard it was very hard to get a mortgage these days.  Are the banks still lending money?

The answer to that is YES, although it’s harder to get a loan today than it was a few years ago. Banks are very careful now who they lend to, and this is something that they should have been done all along.  Unfortunately banks were lending to people who clearly should not have been approved for loans in the first place, and look at the mess it put us in.  Today they have made their requirements much stricter.  Today in order to get a loan, you Must have Good Credit, you Must have Good Income, and you Must have money to put down. And, it must be documented, or you will never get through the underwriting process.

Mortgage applicants must now meet strict debt-to-income ratios, sometimes set to 45%. This means that your monthly debts–housing costs, bills, etc.–may not exceed 45% of your documented monthly income. Lenders are going to verify this income through your federal tax returns.  Unfortunately for a lot of small business owners and independent contractors, their accountants are doing them a favor when it comes to their tax returns with all the deductions they can find, but when it comes to applying for a mortgage, it might not be to your advantage.  Your income must be documented to meet the guidelines.

Simply put, if you have a good steady job (have been there for a few years), make enough money, have good credit, your income to debt ratio is in line with the guidelines, and have enough money to put down, you will probably get approved.

Roni Cagen

I have a family friend who is a Realtor. I like her and she is a big help, but she gave me a price to sell my home and I think it is too low. So I called another agent who suggested a price more in line with my expectations. Who do I choose?

You might want to consult a few more Realtors on the market value of your home. Most of the estimates should be in the same range.  Unless there are circumstances in your neighborhood that determine different markets, such as a lot of Regular Sales, Shortsales and foreclosures going on at the same time.  If that’s the case, you have different markets within one market. And if that is the case,make sure the agent you choose is very familiar with your neighborhood to make a correct market analysis.

It could be that your friend is being more honest with you about the value of your home and the other Realtor gave you a higher number in order to just get the listing.  This is called “Buying a Listing.”

Or it could simply be that your friend is a good friend, but not that great of a real estate agent.

Roni Cagen

I’m selling my home “by owner,” and a real estate agent who wants to show my home to a buyer said something about “agent protection.” What does this mean?

This probably refers to the agent wanting to protect their right to a commission should you elect to sell to their client. In our home selling library, we have an article on types of listings. One of those is a “one time show.” This is something the agent will probably come in and get you to sign before bringing in their clients. It identifies the client, the commission, and prevents you and that buyer from negotiating directly at a later time, with the intent to cut the agent out of the deal and not pay a commission.

Roni Cagen

On a FSBO (for sale by owner), what is financial obligation, if any, to sell to client with buyer agent?

When a buyer’s agent has a client who makes an offer to buy your home, the offer will also ask you to cover the agent’s commission – either directly or indirectly. Since the traditional arrangement usually includes two agents and the customary commission is approximately six percent of the sales price, the commission asked for in this transaction should be approximately half. There is only one agent involved.

On the one hand, you save money over traditional agent marketing. On the other hand, you don’t make as much as if you sold the home at its full market value. Then, on the other hand again, sellers working with agents usually get a higher price for their home than seller who work by themselves. It is a difficult decision for you to make.

Either way, the offer will ask you to either pay the commission directly to the agent and their broker, or apply a “credit” to the buyer so that the buyer can pay the commission. Either way it comes out of the proceeds of your sale.

Roni Cagen