I wrote this article in July of 2006. In light of where we are at today I'd say my concerns were valid.

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No money? No problem.

Negotiated a deal on one of my listings yesterday. The Buyer is purchasing using 100% financing with the 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(R) 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(R) are supposed to do.

Today, I have spent some time, trying to get my head around the current market in Poinciana Fl. I need to know how many properties in our MLS(Multiple Listing Service) are currently in foreclosure, bank owned or requiring a short sale. For the purpose of this post I will call these "default properties". I must say, this data is not easy to get.

The problem I'm having is a lot of the default properties are only mentioned in the comments section of the listing. If the REALTOR® hasn't clicked off the appropriate fields then the only way I can know if it is a default property is to read each listings remarks. Well, I can't do that. We have 1682 active listings and it would just take too long.

Anyway, here is my analysis based on what I could find.

OK, it's my opinion, based on my research, that these default property percentages are off quite a bit. I believe they are off by as much as 5%. I'm basing that on the amount of listings where the appropriate fields were not checked. Here is a sampling of the comments from listings that did NOT show up in my search for default properties.

• Short Sale all offers subject to third party approval commissions subject to lender approval & to be split 50/50 with listing and selling agent

• Pre-Foreclosure - Short Sale contracts are subject to 3rd Party Approval - Chance to own this beautiful home at a super low price. Take advantage of the buyers market. BRING ALL OFFERS!

• It's a STEAL of a DEAL! Are you ready to move in? *Pre-Foreclosure* SHORT SALE-SUBJECT TO 3RD PARTY BANK APPROVAL! *Sold As Is*

• Home For Auction: Pre-approved buyers only. Limited Service Listing. To show call Rodney @ xxx-xxx-6300. Home to be sold to HIGHEST and BEST OFFER acceptable to seller. Fax offers to xxx-xxx-6487. Buyer to pay buyer's agent commissions

• SUBJECT TO SHORT SALE APPROVAL.NO QUALIFY RENT 2 OWN WITH 5% DOWN. NO QUALIFY OWNER FINANCING AVAILABLE WITH APPROPRIATE DOWN PAYMENT. BAD CREDIT, NO CREDIT NO PROBLEM!

There are many, many more of these but I just wanted to give you a sampling. Then we have the properties that are priced to sale but are NOT default properties. Check out these remarks.

• *THIS IS "NOT" A SHORT SALE- PRE-FORECLOSUE-BANK OWNED PROPERTY-FAST REPLY FROM SELLER-NOT WEEKS LIKE SHORT SALES-*EASY SHOWING-CALL L.A. GREG-xxx-xxx-9620--IF YOU GET MY VOICE MAIL I WILL CALL YOU RIGHT BACK WITH INSTRUCTIONS---

• BARGAIN PRICED FOR QUICK SALE TO SETTLE ESTATE! INVESTORS DREAM, (Only needs MINOR cosmetics, interior paint & new bedroom carpeting.) Home has good bones and sits on a quiet cul de sac. PRICED WAY BELOW MARKET VALUE for a Quick Sale! Home needs minor TLC, sold as is with right to inspect. Home Warranty. Seller is motivated and wants a fast sale to settle estate. **THIS IS NOT A SHORT SALE OR FORECLOSURE, SO IT CAN CLOSE IN 30 DAYS OR LESS!** A FABULOUS DEAL FOR YOUR BUYERS. WON'T LAST LONG! This is a must see home.

Isn't that interesting? The reason these REALTORS® want you to know it's NOT a default property is because default properties are getting very few if any showings in my area. There are too many low priced properties available where the buyer doesn't have to wait for 3^rd party approval and their REALTOR® doesn't have to be concerned about their commission being sliced at the last minute.

So there you have it, a peek into my World, Poinciana Fl. I showed you mine...want to show me yours?

***The Real Estate Show is my listing. It is NOT a short sale!!!

Copyright © 2007 Broker Bryant Real Estate Ramblings | All Rights Reserved