November, 2008:

How does the new tax credit work for first time buyers? Can we use the money for our closing cost?

 There is a formula for determining how much “tax credit” you may actually receive based on your income. The maximum credit is $7,500. It is only a credit on your tax return, so there is no actual cash that can be applied toward your purchase.


Worse, you have to pay it back over 15 years (interest free) or when the property is sold. To qualify, neither you nor your spouse may have owned a home in the past three years.

Houses are getting so affordable that we want to start buying some investment properties. The one we really like has some suspicious looking previous damage but the bank that owns it won’t provide a seller’s disclosure? Is this normal?

 The bank loaned money against the value of the property, then acquired it (took title) through a foreclosure or deed-in-lieu–of foreclosure. Until that point in time, they had a vested interest, but no personal knowledge of the condition or history of that property.



Buying such properties is a great method for building wealth. However, when purchasing bank owned properties, the terms of the sale will be strictly “as-is with right to inspect”.  You must order any and all inspections that you deem appropriate, and complete them within the allotted due diligence period.

I have been trying to sell my house for a long time and I’m considering an auction now to try and sell it. Will an auction work for a $250,000 house in town or is it just for beach properties?

Auctions can work for any property, but bear in mind that 70% of the auctioned properties in this area failed to sell at all last year! The 30% that did sell went for roughly 70% of fair market value.

Plus, as a seller at auction, you will be burdened with thousands of dollars of up-front fees that are non-refundable. In other words, 70% of such sellers last year ended up much worse off after the auction than they had been before!

If you place your property on the market with a local Realtor at 90% of fair market, it will sell quickly and without all the up-front fees.

We cannot keep making the payments on a second home that we own in Walton County. We can’t sell it because it’s worth less than we owe on it now. Can we do a short sale?

You can submit a short sale proposal to your lender, but they will not likely entertain such an offer while you are current on payments. Typically, lenders will not consider a short sale offer until you are three or more payments behind.  If you are making the payments, there is no risk of loss, hence, no incentive to negotiate.


The quality and timing of the short sale package makes the difference between an accepted or rejected short sale.

We made an offer to buy a bank foreclosure. The bank is demanding that we sign a 17 page as-is contract addendum. We made some changes because we didn’t like some of their terms and now they won’t sign at all. Don’t they want to get rid of this property?

Attorneys who were paid by the pound to produce these works of art have been paid to do so to protect the bank’s interest, period. The asset managers responsible for these files are not typically allowed to deviate from the standard, authorized contract addendums. You can get a great deal purchasing foreclosures, but read the contract, perform your due diligence and make sure that what you see is what you get.

Q: How do we know if we can qualify for a short sale?

In order to successfully complete a short sale, you must document two primary components – First and foremost, you must prove inability to make the payments. You don’t have to be totally dead broke, but it helps.

Secondly, you must prove beyond the shadow of a doubt that the property is worth no more than the offered price on the purchase contract. If this sounds too easy, there’s a reason. The completed package that is submitted to the lender for approval may easily top 150 pages and can take 30 or more hours to compile. A brief phone call can help us determine if you may qualify.