Finding that perfect home takes hard work
BY MONICA HATCHER
Felix Fuentes just closed on his dream home for a song. The three-bedroom foreclosure on a 1.25 acre lot is just blocks from his children's current school. In May of 2007, it sold for $823,000. Not even two years later, he picked it up for $350,000.
Finding it took some work -- a year, in fact, of eyeballing options and keeping a close watch on prices, but he eventually found the perfect home at a price he could not refuse. Now with South Florida saturated with foreclosures, homes have become much more affordable.
''Be patient,'' is Fuentes' advice for folks considering a home purchase. ``The house that you want is out there.''
Narrow your focus to an area where you would like to live and start doing your homework, he said. Most of it can be done online.
Here are some tips from Fuentes and others who buy and sell real estate:
• Get an agent: Since many of the properties you'll be looking at will be short-sales or bank-owned homes, getting the help of a real estate agent is probably more important than ever. However, some would-be buyers complain of overbearing agents who call them every day with new listings. Think about contracting with an agent after you have interviewed a few and narrowed your field of choices. If you want to exclude foreclosures and short-sales from your search, which would seem unlikely since that's where bargains abound, a real estate agent will be able to eliminate those using the MLS data base. Also, if your agent is being a little clingy, don't be shy about suggesting you limit your discussions to once a week or every two weeks.
• Or work directly with the listing agent: Fuentes said his buying strategy involved a lot of personal research, on Realtor.com and other websites. That strategy allowed him to pinpoint foreclosures he was interested in and engage with the listing broker rather than bring in a separate agent to represent him. His theory was that a listing broker stands to gain twice as much as another agent in commissions and thus will be more eager to facilitate the sale. Lenders usually sell foreclosures ''as is,'' so negotiations are relatively simple and revolve around price alone.
• Narrow your choices: At the end of January, there were about 64,000 homes on the market across South Florida. Doing some research on your own to winnow your choices will save you and your real estate agent a lot of time. Fuentes said it's worth holding out until you find exactly what you are looking for. With property values on the decline, you don't stand to lose much by holding out for the perfect home. ''Don't just buy a house just because it's a great deal,'' Fuentes said, ``If you don't like the house, it isn't a great deal.''
• Get prequalified: Getting a loan is tricky business these days because banks have significantly tightened their underwriting standards, making it a time consuming and cumbersome process. By getting prequalified, you'll not only find out how much home you can buy but you also might gain a negotiating edge because sellers know you can close a sale. Real estate broker Doug DeWitt, who sells properties for banks, said many agents handling foreclosures are swamped managing properties and want to know they're dealing with a serious buyer before extending the time and effort needed to close a sale.
• Make a reasonable offer: DeWitt said he had clients lose out on smoking deals because they made unreasonable offers on homes already priced to sell fast. ''If it's a fantastic deal, don't try to make it a super fantastic deal,'' DeWitt said. Premium foreclosures will sell in seven days with multiple offers, so don't assume that the bank will give the home away for peanuts.
• Beware of short-sale listings: Don't get over-excited when you see a staggeringly low price for a short-sale listing. In a short sale, a lender must agree to allow a buyer to sell a home for less than the amount owed on it. But usually a lender doesn't approve until there is an acceptable offer, so any listed short-sale price is usually an agent's guesstimation of what a bank is likely to accept. Some agents list short sales at excessively low prices just to get the bids coming in and increase the odds of finding a buyer acceptable to the bank.
• Know what you're getting into: Buying a foreclosure is usually an as is purchase with no warranties. So what you see is what you get. Before buying, make sure you do your research. You don't want to get stuck in a home that you can't afford because you have to spend thousands bringing it up to livable standards. Also, beware of liens and other encumberances that you may be responsible for when you take title.
© 2009 Miami Herald Media Company. All Rights Reserved.