Short sales have flooded the marketplace in Dr. Phillips and Windermere the past few years with real estate transactions characterized by response times for offers taking 6 months or longer. It’s not a surprise that many of these short sale transaction are unsuccessful but there’s a new program called HAFA (Home Affordable Foreclosure Alternatives) implemented by the federal government to relieve some of the short falls of a traditional short sale.

Some of the key benefits include:

• a mandated response time of less than 10 days from financial institutions
• relocation assistance to the homeowner of $3,000
• real estate commission can not be changed from 6%
• waived deficiency-meaning the mortgage debt is settled through the transaction and there can be no legal action taken on the outstanding debt

I know, it all sounds good to me but how do you qualify? You have to be an owner occupant who meets the following criteria:

• behind in mortgage payments for more than 60 days
• have a debt to income ratio higher than 31%
• have an outstanding mortgage of less than $729,750
• purchased property prior to January 2009
• have a Fannie Mae or Freddie Mac loan

The cool thing about this program is that you can initiate the short sale even before you get an offer. With a traditional short sale, home sellers would have to get an offer prior to the bank beginning the short sale process. This new program starts the process right away so they can provide the government mandated 10 day response….. awesome…. finally.

The only catch is the bank is involved with setting the list price and you must initiate the HAFA process prior to listing.

In any case, the HAFA program adds much needed improvements to the short sale process and should result in higher success rates for short sale transactions.

The program was implemented on August 1, 2010. To find out more about this program or you would like to list your home under HAFA, please contact me.

Under the original bill, those buyer would have had to close by June 30. The new bill extends the closing date to September 30.

I think it’s just fair since there’s so many short sales out there and I’m sure there were quite a few buyers who got stuck not closing because they chose a short sale which are notorious for taking forever to get a reply.

Visit msnbc.com for breaking news, world news, and news about the economy

I can see where the confusion comes from with all the ads that I’m hearing and seeing at the moment about the tax credit being extended. My guess it that those ads are not recent.

To the best of my knowledge, the deadline for the $8,000 tax credit for first time home buyers and the $6,500 tax credit for existing home owners is to be under contract by April 30, 2010. That’s just a couple weeks away. If you’re one of those procrastinators, then you better do it asap.

Keep in mind that you need to also close by June 30, 2010, so forget about all those short sales and new construction is out for the most part unless it’s almost complete. I just happen to know about a few that fits the criteria if you’re rushing for the deadline so feel free to contact me.

You’re right, the tax credit has been extended a few times but usually there’s a bill in Congress awaiting approval to extend. There’s no such bill that I know of right now so it looks like the tax credit is coming to an end for now and ya betta hurry if you want to cash in.

You’d think the appraisers would take this into account when valuating homes that do not involve banks, but who do you think hires appraisers? Appraisers raised appraisals for banks during the boom and now lowering appraisals in the bust. I don’t know about you, but that’s not exactly a free market system setting prices is it?

I remember the days when home sellers would not accept a price for their home out of concern they would bring the value of their friend’s home down the street. Well, the banks don’t care about this and we’re at their mercy to set home prices.

A significant proportion of home sales in SW Orlando this past year involved banks this past year and their actions will have a significant impact on our home’s value…. not in a good way neither.

For a healthy market to return to our area, artificial manipulations have to cease and that won’t happen until the foreclosures and short sales are mostly gone.

I don’t know when that’ll be, but you can be assured that the worst is over.

As many of you have noticed, the price of housing has come way down in the past few years. In many cases, it’s now cheaper to buy then to rent. No joke. It’s a reality which I don’t believe many people realize.

Let’s take a $130,000 home which is the median price of a home in Orlando currently. The mortgage amount on that home would be $125,450 on an FHA loan with the principal and interest payments being $748.39. You add taxes and insurance to the whole thing it’s still only about $900. There’s a fee called the MIP premium with FHA loans and that’ll probably puts you around the $1,000 mark. It’s basically what you’ll have to pay for a pretty crappy apartment.

On top of all that, you get $8,000 in cold hard cash if it’s your first home. Home buyers who’s lived in their residence for at least 5 years can get a credit up to $6,500. These tax credits are also now available to individuals earning up to $125,000 or couples up to $250,000 although there’s fewer of us in this particular earning situation.

You also get to write off most the interest and taxes on your new home which should mean a deduction around $10,000 from your income taxes for a property in the price range used in the example above.

It’s a great time to buy, but you’re not gonna make money on appreciation overnight. My suggestion is that you plan on staying in the property you buy a minimum of 5 years and preferably 10 years. The days of flippin real estate are over, but look at all the advantages you have in buying right now.

Your payments don’t go into some black hole like when you rent, they go towards increasing your tax deductions, accumulating equity, and the value will eventually increase although it may not be real soon.

The inventory levels in Orlando have finally come down to a reasonable 6-7 months which is typical of a stable market and prices have already come down 50% or more in many areas.

I’m not a fortune teller and can’t predict what the market will do but heck, look at all the savings you get even if prices stay stagnant for an extended period of time.

So I guess the answer is “heck yeah it’s cheaper!”.

Homeowners in the townhouse community of Phillips Bay in Dr. Phillips filed a lawsuit against the builder, Deluca Homes, in 2007 due to mold, missing stucco, and patios that are not structurally sound. The civil case is scheduled to be heard October 12.

Deluca Homes has also built the same style of townhouses in Carriage Homes at Della and most recently, Toscana. There’s already been a civil case against the builder in Carriage Homes at Della, so it’ll be interesting to see if one arises in Toscana although the style of construction was different.

Anyone considering buying a home here should find out more about the lawsuit before purchasing and whether or not the faulty construction is affecting the unit you’re buying.

Just because there’s a lawsuit doesn’t mean there’s something actually wrong, but you could be getting into a situation that requires a lot more attention than you’re willing to give.

My suggestion is to stay away until things get settled.

There’s been a big push among lenders for the FHA home loan. The advantage of this product is that it allows a buyer to get into a home with as little as 3% down. It’s really a nice choice for a loan, but it can be difficult to obtain if you’re looking for a condo.

One of the main reasons a condo building is not FHA approved is the guideline that requires a condo to be at least 50% owner occupied. We all know we had investors come into the SW Orlando marketplace by the bus load during the peak and many of them pushed numerous condos beyond the approved guidelines not to mention many of them are in foreclosure making the problem even worse.

Either way, I’ve compiled a list of FHA approved condos in Dr. Phillips, Metrowest, Windermere, Hunters Creek, Winter Garden, Clermont, and Celebration:

• Dr. Phillips: Windhover, The Point Orlando Resort
• Metrowest: Stonebridge Lakes, Stonebridge Commons, Stonebridge Place, Stonebridge Reserve, Golfview, Crestview
• Windermere: Oasis at Lakeside Village
• Hunters Creek: Golfview, Fountains at Crystal Creek
• Winter Garden: Tucker Oaks
• Celebration: Waterstreet at Celebration

To look up any condos not mentioned here, check out the FHA Approved Search on the HUD website.

I tried to look up Vizcaya and Toscana in Dr. Phillips, Veranda Park in Metrowest, Lakeside at the Lakes of Windermere, and Artisan Park in Celebration but they’re not listed on their site. They were probably beyond the FHA loan limit for Orange County, FL of $274,850 and now they’re priced in this range. My suggestion would be to contact your lender.

When a listing mentions a short sale, it means the seller owes more than the asking price. More and more short sales are getting approved but it will test your patience as the process typically takes at least 3 months and in many cases much longer.

If time is short, especially those trying to take advantage of the first time home buyer tax credit that’s expiring soon, then I’d probably focus more on approved short sales.

Buyers often cancel short sales because of the lenghty process so when these properties come back on the market, the next buyer can get an answer from the bank in about a week.

Just as with foreclosures, don’t assume a home is a good deal because of the “short sale” label. Consult with someone that’s knowledgeable about the local market…. aaah like me.

Click here to view the embedded video.

I noticed this post on the Bloodhound Blog yesterday, HR 2801: Will Home Ownership Move the Economy? about the new bill in congress to extend the home buyer tax credit. It’s up for vote in the House and will also require approval from the Senate but it’s a fantastic bill.

It removes the income limitation on the current home buyer tax credit and it raises the credit from $8,000 to $7,500 for 2 years or $15 grand which sounds even better.

If this bill passes, you’d have to be a idiot to rent instead of owning a home provided you can qualify for a loan with the more stringent lending requirements imposed by the lenders in this current climate.

Let’s all hope it passes.