What a difference 3 years makes. Right now the average price in Poinciana Florida is $73,000. You can still do 100% financing but only with VA, USDA(rural housing) or FHA with a gift from a family member or employer.
3 years ago I wrote this: (I highlighted the statements that truly show how far we have fallen)
Negotiated a deal on one of my listings yesterday. The Buyer is purchasing using 100% financing with Seller paying closing costs. My market is affordable housing with the majority of homes priced from $190s to $250s and it seems like most of the Buyers lately have been purchasing with no money down.
Now don't get me wrong I am in favor of home ownership for everyone but I fear a lot of the Buyers are going to have financial difficulties in the near future. With high insurance costs, property taxes and mortgage payments I am seeing payments of close to $2,000 per month for a starter home. That's a pretty big nut to crack every month in my area where most families are regular working class people and don't have any reserve funds if they should encounter a financial setback.
Also, a good number of these purchases are being made with ARMs with the Buyers basing their ability to pay on future raises at work or a part time job that they may or may not be getting. In my opinion Mortgage Brokers and Realtors are being overly aggressive in selling these folks on the advantages of home ownership without really taking the time to counsel the Buyers on the true costs involved. And since they don't have to come up with any money at closing they are sitting ducks for Mortgage Brokers who are charging them sometimes outrageous fees for doing these types of loans.
So my challenge to Realtors who are dealing with first time Home buyers with a little or no money down is to really take the time to explain the pros and cons of purchasing a home. If the Buyers are fully informed and are wanting to move forward then help them to negotiate fees or guide them to the myriad of programs available that can help them with financial assistance. Placing a Buyer in a home he can't afford can damage them for years. It can cause bankruptcies, divorces and even illnesses. So let's "Protect the public" it's what Realtors are supposed to do.
END
Maybe I really am psychic! What do you think?
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I have followed your Poinciana posts for 2 1/2 years.
Yea, I think you were a 21st century prophet.
It's great you saw what was going to happen too bad some other individuals didn't see it happening.
I do believe you wrote everything back then with the insight of what was coming. Now look.
Hey BB, wow, you really did nail it right on the head. You are amazing!
ROFL Love your videos!!! Where do you upload them onto? I'm uploading one on YouTube right now and it's taking forever! Still says 45 min to go.
Sincerely,
Kathleen
Nestor sounded the warning bell many times and it fell on deaf ears. We refused to sell residential properties during this period. We sold assemblages to developers and builders and did some redevelopment projects. Now they are calling us saying, Nestor was right.
Nope you're not psychic. Because I keep hearing from senior bankers, NAR economists, the fed, and the treasury, all of them say "THERE'S NO WAY ANYONE COULD HAVE PREDICITED THIS."
HA! Yeah right.
Then again I was way off myself. I was advising my clients to be cautious in 2005.
Thanks for this retrospective BB!
Most were caught up in the hype and the scramble....including agents and mortgage folks. I have a draft post still sitting on here about mortgage folks who don't respond to emails even though they are not in the business anymore. I think some are ashamed! You nailed it....Send a copy to the next politician who says no one saw it coming!
What happened here Hun?
You didn't even park me for the festivities. That little move is going to cost ya :)
TLW...ROAR!
I've been doing a good amount of 100% type financing. Two things: I am doing no ARM's - not sure why those around you are. Also, 100% financing is successful in situations where people DO have that reserve account. It does good for us loan officers to think about the client's family and spread a little fear so that they close and can stay afloat as homeowners. That reserve account is so important.
Imagine that- working now twice as hard for half as much.
Well Bryant, you definitely had a handle on what whas going to happen. I was a bit new at the time. You should be able to use this to your advantage, especially for those that blame us for some of today's problems.
Sounds like you were a prophet! I have one problem though. In those years, most of my buyers had already decided what they were going to do, and how they were going to do it! When I tried to counsel them about any possible problems in the future, they felt like I wasn't "on their side". They were determined in how they were going to do things, and if I wasn't on board, they'd find another agent who was! In many ways, we were just along for the ride... (sounds like another blog topic.. hmm)
No you aren't psychic, just a good guy who cares about people...Apparently not enough about TLW to save her parking space for her though...That'll cost you.
I advised several investors not to purchase duplexes during the boom. Investing is about the numbers, and the numbers were so far off. I also had clients that moved ahead anyway. I offer an opinion, and they can do what they want with that opinion. As just want to make sure people are informed. It is their money, not mine.
I know so many people that bought homes that I know they shouldn't have bought. I remember one of my tenants who bought a new home and was literally shocked. They could barely pay their rent to me on time and yet they were buying a new home. These people didn't think about the facts that if their payment went up or something broke down that they wouldn't be able to pay for it. What a difference a few years make.
Yep, you're psycho psychic all right . I read your posts religiously because you speak with common sense. Thanks for all you do.
Thankfully, the buyers we sold during this time period had money to put down and only a couple chose to do interest only and they had the ability to pay above the basic payment and we told them that was the only way to do this type of loan.
Sharon