What Happens When a Landlord Gets Behind on Their Mortgage in North Carolina?

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If you’re making rent payments to a property owner, you may worry about what happens to you with a landlord behind on your mortgage.

Renters have obligations to their landlords, but what is the obligation a landlord has to ensure the security of their rental property? What can a renter do if their landlord is falling behind on their mortgage payments?

There are a few options for during and after the process of foreclosure, if the landlord isn’t keeping up with the mortgage on the property. Although a landlord may not be doing anything against the law by refusing to pay their mortgage, a tenant still may have some recourse to avoid adverse outcomes from a situation that isn’t their fault.

Rent Skimming

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While it is true that renters cannot stop paying rent according to their leases, federal law does have some ways of protecting tenants experiencing “rent skimming”.

Rent skimming is when tenants pay rent on their lease, but the property owners don’t use the money to make the mortgage payment. Rent skimming is not illegal in most states! The landlord has no obligation to use rent funds for anything in particular.

In most cases, even if rent skimming results in foreclosure, it does not mean the tenant has a legal right to stop paying rent. However, North Carolina state law does have some options for protecting tenants at foreclosure.

Renting and the Tenant Obligation

Whether a person has a written lease or an oral agreement to pay rent money, they may not refuse to pay, even if the landlord misses their own mortgage payments. A landlord’s income from rental property can be used in any way the property owners wish and does not have to go toward mortgage payments.

If renters don’t pay according to their leases, they can face eviction proceedings, so even if the landlord is facing foreclosure based on non-payment, you must continue to pay rent. This does not mean you have no options overall, though.

In most states, including North Carolina, there is legal help for tenants during a foreclosure process. There are also resources available to landlords if they’re struggling to make payments.

Landlords and a Foreclosed Property

Your landlord has rights and responsibilities to the renter and the rental property. By law, the landlord must inform tenants if the property is sold to a new owner. Although a landlord does not have to inform tenants of any foreclosure process, this information is public record, and if the tenants at foreclosure act quickly, they can potentially avoid eviction.

Renters can contact an attorney for advice, but there are also government agencies that assist with protecting tenants at foreclosure. At both the county and state level, tenants can find a website that will document their rights and any obligation in the process.

A HUD-approved counselor is someone certified by the federal government to assist renters and homeowners. They can advise you on programs such as rental housing counseling and eviction prevention. They could also assist the owner; if the situation is due to accidental negligence and the tenants still have a good relationship with the landlord, this could be a good program to recommend to them.

For example, if the landlord loses the home to foreclosure, the tenant could still contact the lender to attempt to recover their security deposit. If you have contacted a law firm and have an attorney-client relationship, you or the attorney could also get permission from the new owner to remain in the property.

Resources for Tenants Concerned about Eviction

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There are government agencies, programs, and organizations whose business is assisting people experiencing problems with housing. An internet search can provide a potentially overwhelming amount of options. It’s often best to prioritize sources from federal or local government websites.

Other resources, such as a trusted real estate professional or a banker with whom you have a personal relationship may be useful. People who work in the industries of housing and finance are more likely to be aware of the options for someone facing housing insecurity or eviction.

Even if eviction isn’t imminent, these experts may be able to point you toward assistance. Generally, it’s better to start early, as soon as there’s a concern.

When Ownership of a Foreclosed Property Changes

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Foreclosures aren’t ideal for a tenant, but you may not have to vacate the property. If the landlord has failed their obligation to pay the mortgage, the bank may begin a foreclosure. Even if the proceedings cannot be stopped as the property is foreclosed, a tenant may be able to renegotiate a lease with the new owner.

It’s possible the foreclosure process has gone so far that the court has issued a notice to vacate the property by a certain date. Still, if the tenant contacts the new owner or the person who services the property, the tenants may be able to continue tenancy in the same rental unit with the new homeowners.

You could give notice to a new owner that you’d like to continue the lease agreement you’d had with the old owner. Therefore, you may be able to rent the same property, even after foreclosure.

Just because the bank has taken the landlord to court, doesn’t mean the tenants automatically face eviction. The ownership of the home can change, and the new lenders can continue to rent under similar leases. Just be sure to go through the appropriate channels with your county and state.

A New Lender, a New Lease

If you have avoided eviction when your rental property was sold, you may have negotiated a new lease. How can tenants at foreclosure act to protect themselves and their money with the new landlord’s services?

When an owner buys a vacant property under foreclosure, they may seek to rent it out under the usual channels. When the property already has a tenant, the owner should give the tenant notice that the property has been sold after the foreclosure. The new lender can then begin a new lease.

After a transfer of the mortgage like this, most legal help services will recommend that all parties on the lease file a notice with the court, so that the court and the bank have records of the agreement between the landlords and the renters.

Good for the Lenders, Good for the Renters

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It can clearly be stressful for anyone when a mortgage enters foreclosure. Whether or not landlords give adequate notice to their renter, there are still some options:

  • rent skimming is the practice of receiving money for a property but not paying the mortgage on that property
  • the tenant still has the obligation to pay on the lease, with or without notice from the landlord
  • the landlord must give notice to the tenant if the property is sold
  • foreclosure doesn’t have to mean the end of tenancy
  • even if a bank foreclosed on a property, the tenant can start a lease with a new landlord

If your landlord is falling behind on their mortgage, it doesn’t have to mean you’ll lose your house. You may have been responsible with on-time payments and still have a landlord who didn’t keep up with theirs.

Although you have some obligation to pay the landlord according to the terms of your lease, you also have options if a new landlord secures the property from the previous owner. In some instances, a new owner can offer better terms than the previous owner.

You Have Options, and There is Help

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Although the average person may not be aware of all their options when it comes to renting, there are services that can help. If you hold up your end of the lease agreement, you may be in good standing to remain in the home, even if it changes ownership.

Federal law has some protections in place for renters, but it’s natural to need help from outside organizations. You don’t need to be an expert on housing law to be able to stay in your house; you can always reach out to those who are!

How to Find the Right Real Estate Attorney for a Cash Sale

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Taking the leap to sell a home can be daunting in any circumstance, but when you’re working with a cash sale, it can be even more challenging. Knowing how to choose a real estate attorney for a transaction will give you peace of mind and make the whole process much easier.

Where does a real estate attorney fit into the process?

A real estate lawyer is part of the wider process of buying a home. They fit in at the close of the process, when the real estate transaction takes place. Their fees are usually folded into that nebulous idea of “closing costs”, the catchall that includes everything from the home inspection to the title company to the notary fees.

The real estate attorney can facilitate a positive experience and make it a smooth one. Their services offer the added benefit of helping the average person understand the closing process and all of the legal jargon associated with the final sale of the home.

Hiring a real estate lawyer is really about doing that due diligence that will make sure of all the necessary paperwork. The right attorney that’s been licensed by the state’s bar association will know all of the ins and outs of the process and be able to make sure that everything is in order.

Are you required to hire a real estate attorney?

Not every state requires that a real estate attorney be part of the process, but some places do. It’s important to check the laws in the place that you live to make sure that you’re following the specific requirements.

You can search for a listing of your state’s particular requirements, but such a list of the 22 states that mandate a properly licensed law firm to handle the closing is below.

  1. Alabama
  2. Connecticut
  3. Delaware
  4. District of Columbia
  5. Florida
  6. Georgia
  7. Kansas
  8. Kentucky
  9. Maine
  10. Maryland
  11. Massachusetts
  12. Mississippi
  13. New Hampshire
  14. New Jersey
  15. New York
  16. North Dakota
  17. Pennsylvania
  18. Rhode Island
  19. South Carolina
  20. Vermont
  21. Virginia
  22. West Virginia

Even if you don’t live in a state that needs an attorney to represent someone in a real estate transaction, you should still consider at least consulting with one during the closing process.

What is a closing attorney?

A closing attorney is a licensed attorney who specializes in transactions involving property.

This kind of attorney will look over everything that is part of the property transaction and explain all of the paperwork that both the buyer and the seller sign. They can make sure that all of the documents are not only accurate, but that they are also understood by both parties.

With some real estate transactions, there are specific issues that come up. This is especially true in complex real estate transactions, like those that involve inherited property or probate. It’s vitally important that everyone in a transaction knows what problems might arise and what issues to be prepared for, and a real estate attorney is the best option to make that determination.

How much will a real estate attorney cost?

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A lawyer who is a member of your state’s bar association will bring their many resources to bear on your property transaction, but that won’t come without a cost.

A good real estate attorney will charge somewhere between $150-$300 as an hourly rate for their services. This will include the time that they spend with you on the phone, as well as their fee for showing up to the final transaction at the closing table.

If it’s a standard real estate transaction, attorneys offer an all in prices that includes everything. You can expect to pay attorney’s fees of anywhere from $300-$2,000 depending whether you need a real estate support attorney who is new or highly experienced. The amount of the fee will also have to do with how much time the attorney will have to put into the transaction and what other requirements are part of the deal.

Upfront pricing vs. “blank check” pricing

There are lots of attorneys out there who work specifically with home buyers and sellers at closing only. They are able to do everything necessary, and an experienced real estate attorney will be able to get this done quickly.

You are the one in charge of the process, even if you’re working with an experienced attorney. There are lots of people who have practiced real estate law for a long time, and you should find one who works with you on your terms.

Sometimes an attorney will tell you that they want to charge you by the hour with a “blank check” model that lets them do the work for as many hours as they need to, then charge you when they practice law for your transaction after it’s all over.

In general, a reputable real estate attorney is going to give you a solid quote ahead of time either for a flat fee or for a specific number of hours at their hourly rate. You should have a good idea about what the estate attorney will charge you before you get done.

With cash closings, a particular attorney should tell you exactly what your final charge will be. Always make sure you get any quote in writing rather than trusting that it will all turn out alright.

How is a cash closing different from a traditional real estate sale?

A cash closing requires different real estate documents than a traditional real estate sale that’s done with a bank. The law in every state provides different requirements, like a home inspection or a buyer to have an appraisal done.

Lawyers who specialize in this kind of real estate will be able to tell their clients whether the cash sale needs other items to be done. Often, proof of funds isn’t even technically required for a real estate transaction, but it’s always a good idea.

The specific services surrounding the purchase contract and the closing documents are different for each state. Attorneys can help you know what exactly you need to do and which documents the state mandates.

Does a real estate attorney replace the real estate agent?

Any attorney will work in the best interest of the client to make the real estate transaction go through. The right lawyer will be able to do everything required by the bar association of your state.

In most states, you don’t have to have a real estate agent present in order to complete a real estate transaction. It has everything to do with what the laws are in your area. A real estate agent can help you do things like prepare the contract, but keep in mind that anyone can prepare a contract and then present it to be amended by an attorney.

In different states, attorneys are required for some of the tasks. For example, in some states a real estate attorney must prepare the documents for a home purchase, close the deal, and perform a title search. They aren’t necessarily required for personal loans or dealing with title insurance.

An attorney will be able to tell you what they can do in the initial consultation.

Where do contracts come from in real estate?

Contracts for anything dealing with the law can be found online, but these are only a starting place. Attorneys can provide reviews of these law documents as part of their services. Though resources exist online, these can’t be the primary way that you get to the end of the selling process.

An investor who regularly does real estate transactions will likely have their own home purchase contracts that they’ll present to you if you are working on a cash real estate deal. It’s always a good idea to have a lawyer who is recognized by the state bar look over these documents before you sign them.

Why you should still take an active role with a real estate attorney

Though a real estate attorney will be able to help you make sense of the process of buying a house for cash, you still need to take an active role in the homebuying process.

Look through the requirements of your state’s real estate law documents before you get to the real estate attorney. Real estate agents can sometimes help you make sense of some of the jargon, but real estate agents have their limitations as well.

Real estate law can be complex, and there are lots of things to think about in terms of the final transaction. A good real estate attorney will explain everything to you and will support your own investigation.

Take your time, even if you need a quick turnaround

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Even if you are working on a cash real estate deal that needs a fast turnaround, do your due diligence.

Real estate lawyers should be able to answer all of your questions, and you’re smart to slow down and make sure that you know everything that you’re signing before you sign in. When attorneys are doing a home search, they should do it thoroughly and they should support your needs throughout the transaction.

Hiring a real estate attorney is good for the buyer and for the seller, even in a cash closing. Clients who work with experienced lawyers can feel confident that everything is taken care of legally and in their best interest at the closing table.

Is Now a Good Time to Buy a House in Tampa? All Your Questions Answered

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Whatever the reason you’re looking at a house in the Tampa Bay area of Florida, you’ll want to know all of the ins and outs of the Tampa real estate market in 2022.

For the past couple of years, the real estate market all over the United States has been exploding. In general, this has to do with a low inventory of homes available versus the number of people who want to buy homes.

The Tampa real estate market is great for sellers, but for buyers it’s a huge challenge. The question of whether this is a good time to buy in Tampa Bay has everything to do with your circumstances and resources, but understanding what’s behind the current housing market will help you to make the best decision for your family and your budget.

Is now the time for you to buy a home in Tampa, Florida? Let’s get to the bottom of that question.

Why the Tampa housing market is so hot

The booming Tampa housing market is showing little signs of slowing down. In fact, Tampa Bay was listed as the most expensive in the country in 2022 according to a report in the Tampa Bay Times that was based on numbers from Zillow.

Those numbers are pretty astonishing. According to this housing report, drivers for the rise in home prices include the increase in the number of home buyers in the area, a growing job market, and a large need for housing in general, both in terms of purchase and rentals.

All of this comes together to mean that housing is hard to come by in the area. The low inventory of available homes makes it almost impossible for homeowners to find a home to purchase. This hot housing market has caused home prices to go higher in Tampa, and there’s no sign that the real estate industry is slowing down at all.

In fact, according to that Tampa Bay Times report, 2022 will see home prices in Tampa go up 25%, that’s compared to just 14% in the rest of the country.

Who’s buying houses in Tampa?

House interior in Tampa, FL

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Part of what’s happening in the housing market in Tampa is a flood of real estate investors.

In the last year, one in four homes in Tampa, FL was sold to an investor. In many cases, these investors are then turning these pieces of real estate over to convert them into rental property. Home sales to individual families are near an all time low.

These investors are often bringing cash offers to the table, something traditional buyers can’t do. Investment property is a huge factor in home values in housing markets around the downtown Tampa area and all over the county.

Economic growth in South Florida is pushing many buyers towards Tampa as well. People are leaving the astronomical home prices and economic realities in Miami. There are other factors pushing people north from South Florida as well, including the hot market realities in Miami, Florida and the increasing risk of flooding and hurricanes that have plagued the lower peninsula of Florida in the last decade.

What’s driving the buyer’s market conditions?

This is driven by the historically low interest rates that have changed the shape of the rental market and Tampa’s housing market. The Tampa metro area is far from the most affordable cities in the United States.

These factors make Pinellas County a hot housing market with rising home prices. Tens of thousands of families are looking for homes in the area and are not able to find them in this seller’s market.

The housing prices in Tampa are also going higher because the job market is growing faster than the amount of available housing. Though home values are going up fast as well, this doesn’t help homeowners who are looking for a good value with a local realtor.

It’s a great time to buy in Tampa if you can

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Though all of these factors are making it so that cheaper homes are not available, buying a dream home in Tampa Heights or other areas around the city is still a good investment. It’s all about figuring out how to enter the market and make the most of the rising property values.

To get to those real estate and home sales goals, home buyers have to find out what steps they need to take in order to find the right home for them in the Tampa metro area.

Curious about how to get there? Here’s all of the insider information to make it work when you’re trying to buy a home in Tampa.

1 – Figuring out what budget you need to buy a Tampa Bay home

With home values constantly going up in Hillsborough County and Pinellas County, real estate budgeting is no easy thing. Interest rates are fluctuating right now too, which is affecting both home sales and rental property.

The best way to figure out what you can afford is to use the 28/36 rule that is the gold standard in financial lending. Home costs, whether for rental property or a mortgage, should not be more than 28% of your monthly income. All in, your debt payments should not be more than 36% of your monthly income.

When working with a mortgage lender or a bank for a home loan, keep these real estate numbers in mind. How much house you can afford in Tampa will help make your house hunt so much easier.

To make the calculation of how much you’re likely to be able to get a loan for, multiply your monthly income by .28 – this will give you exactly how much house you can afford.

2 – Consider all of the costs in a home payment in Tampa Bay

Home interior in Tampa, FL

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Don’t forget to add all of the things that are included in a home payment in your calculations. this means homeowner’s insurance, interest, property taxes, required HOA fees, and principal payments.

One of the most striking things about Tampa is just how high those HOA fees are. Compared to the rest of the country, Tampa has huge costs from homeowner’s associations! In fact, Tampa HOA fees tend to run up to almost half of the total cost of the mortgage total! This is much higher than real estate in other places, even in Florida.

Most of these fees are on older homes, which tend to have much higher HOA fees than newer builds. Tampa in particular has a large number of older houses compared to real estate in other parts of Florida.

It’s not just HOA fees that are higher in Tampa than they are elsewhere. Hurricane season lasts for half of the year in Tampa, and the proximity to the Gulf of Mexico and the beaches means that flooding during that long hurricane season is more likely.

Not only that, but the older homes in Tampa also carry higher insurance rates. Overall, Tampa homeowners pay almost twice the national average in homeowner’s insurance premiums.

If you’re buying a house in Tampa, you may want to consider buying flood insurance for those long hurricane seasons. This will likely raise the yearly homeowner’s insurance premium by around a third, but it’s money well spent in the case that a hurricane does hit the area.

3 – Know what home prices to expect when buying a house in Tampa

If you’re buying a house in the Tampa Bay real estate arena, you’ll want to know how much you can expect to pay for real estate. This will let you gauge what property you can afford before you start talking to real estate agents.

In 2022, the median price for residential real estate for sale in Tampa is $348,000. This is up fifteen percent over 2021, though it’s still only a thousand dollars higher than the median home price across the United States. That’s a good number to know, because it means that even though Tampa real estate is going up a lot, if you’re selling your home in another part of the country to move to Tampa, you’ll likely be able to finance the real estate deal from your previous home sale.

Though the average listing in Tampa, FL is $348,000, the average sale price of a home in Tampa is actually $415,500. That’s a huge jump! This is because home sellers in Tampa are receiving so many offers for houses that the final sales price is driven up much higher than the listing price.

This is a critical piece of information for people who want to buy a house in Tampa. If you go in and make an offer that’s at the top end of the mortgage that you qualify for, you’re likely to get out bid on that piece of property on Tampa St. or in Sun Bay South.

To be successful in buying real estate in Tampa, take the approach of making a first offer that is well below the amount that you have on your mortgage loan. You need to be able to leverage up from the original sale offer that you make.

Average sales price is an important number for any potential home buyer to know when trying to buy a house anywhere, but in this market it’s even more important.

The median home prices in other major Florida markets are as follows. Seeing these numbers can help you better understand how the median sales price in Tampa compares.

  • Lutz – $445,000
  • Land O’Lakes – $407,000
  • Dunedin – $387,000
  • Hillsborough County – $350,000
  • Pinellas County – $350,000
  • St. Petersburg – $335,000
  • Clearwater – $325,000

Note that all of these are less than what the average home in Tampa is going for, with the exception of Lutz. If you are looking for a home in the Tampa metro area but don’t need to be right in the city on Tampa St., you might consider looking at one of these outlying areas.

4 – Get pre-approved if you can

Home interior in Tampa, FL

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In the market that’s this tight, there are only two ways that you’ll be competitive as a buyer.

  1. Get pre-approved for a home loan
  2. Pay cash for a home sale

There are so many qualified buyers who are ready to pay over market value for homes in Tampa right now that no one is going to be competitive on a home deal without having either a preapproval or cash on hand. There’s just no way to do this otherwise.

First time homebuyers in Tampa Bay should have good credit or a larger down payment if they want to prequalify for a traditional home loan. There are lots of great programs for first time homebuyers that will support you if you don’t have these two qualifications.

The City of Tampa in particular offers a robust range of first time homebuyer programs, but it also offers a lot of programs for people who have already owned a home. Here are five that are well established and are great resources for anyone looking for a home in Hillsborough County or Pinellas County.

  1. Mortgage Credit Certificate or MCC
    This housing assistance program will give new homeowners in Tampa a fifty percent tax credit on mortgage interest annually. It’s done through the Housing Finance Authority of Hillsborough Co., and it’s well worth investigating for both new homeowners and if you’ve owned a home before in Florida or elsewhere.
  2. Home Sweet Home Hillsborough Program
    This is for second mortgages, and it’s a fantastic program in Tampa. This second mortgage program gives homeowners up to ten thousand dollars that will either go to the down payment on the home or the closing costs. That’s a huge chunk of the sales process, and for potential Tampa homeowners it can tip the scale in this tight housing market.
  3. East Tampa CRA Down Payment Assistance
    This program is for renters in the Tampa area, helping them to transition from renting a home to owning one. Any renter who is trying to buy a home in East Tampa can apply to get up to fifty thousand dollars in support for their home purchase.
  4. Dare to Own the Dream (DARE)
    A program from the City of Tampa, DARE is a way for potential homeowners in the city to get support beyond the typical value of a first time home loan. DARE offers down payment support of up to forty thousand dollars in the form of a second mortgage. Here’s the amazing part – this money comes with $0 in monthly payments and 0% interest.
  5. City of Tampa Mortgage Assistance Program
    For homes that are within the city limits of Tampa, the Mortgage Assistance Program can help out with a loan for a downpayment of up to $15,000. That’s a huge number given the tightness of the housing market in Downtown Tampa.

These programs that help homeowners get into the house that will work for them in Tampa are an added benefit that makes buying in Tampa Bay much more reasonable for many potential homeowners.

5 – Finding a great neighborhood in Tampa Bay, FL

Kitchen in a Tampa, FL home

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Though price reductions are unlikely in the Tampa housing market, there are lots of ways for you to make the most of your home search in Tampa. One of the best ways is to learn about the neighborhoods around the metro area and find the place that fits you best.

Finding an area of the city that works for you and your budget might take some leg work or working with a local agent, but it’s a key component to getting a house in Tampa. Here are some top neighborhoods for Tampa homebuyers to look at.

  • Downtown Tampa
    The beautiful Tampa skyline isn’t visible from the condos downtown, but it’s incredibly convenient to live in the not-too-busy but still bustling downtown section of the city.
  • West Meadows
    Located in Northeast Tampa, this is a master planned community with integrated services. It’s a highly sought after area of Tampa for good reason.
  • Tampa Palms
    In New Tampa, this is a higher end neighborhood with highly ranked schools and lot sof local shopping
  • Davis Islands
    This exclusive part of the city has a price tag to match the beauty of its older homes, but it’s also well worth looking into for the historic nature of the old properties.
  • South Tampa
    Though this is an historic part of the city, it’s beloved by young families and professionals thanks to its accessibility and eclectic mix of restaurants and shopping.

These are just some of the best neighborhoods in the Tampa area. Hyde Park, Davis Islands, and Land-O-Lakes are some other expensive neighborhoods that might just have your dream home within them. Narrowing down potential Tampa homes that are close to job opportunities without having higher prices is the key to finding the right house in this market.

Takeaways about the Tampa, FL real estate market

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Though there are seasonal fluctuations in home prices in general, in the current Tampa Bay housing market, the best price is going to keep going a little higher.

In the last year, the median number of days that a home stays on the market in Tampa is just eleven days! Whether you’re a first time buyer or are selling your previous home to buy a new one, you’ll want to make sure that you’re on your game to get the home that will work for you.

Almost one in three Tampa home sales is a cash deal. Forty percent of homes in the Tampa Bay area sell over list price.

With all of this in mind, the most important thing for you to do if you’re on the hunt for a home in Tampa Bay is to prepare yourself by learning about the market. The more educated you are about the Tampa real estate market, the easier it will be for you to navigate the hot real estate market in this area.

Real Estate Market Update: September 2022

Real Estate Market Update: September 2022

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The weather is cooling and so is the market

At the beginning of the year, the U.S. housing market saw historically low interest rates and high demand for houses, creating a seller’s market. New data is now suggesting that the market is beginning to cool down, just in time for fall. 

According to the National Association of Realtors, home sales in July of 2022 were down almost 6% from June, making it the sixth consecutive month of decline. Even more astounding is that home sales were down 20.2% from the same time as last year. 

Other factors that have caused a cool down in the market can be contributed to the average interest rate sitting at just under 6% and the median price of a home being $403,800. However, this is down $10,000 from last month. The sharp rise in home prices is up almost 11% from this time last year. 

NAR Chief Economist Lawrence stated, “Home sales may soon stabilize since mortgage rates have fallen…thereby giving an additional boost of purchasing power to home buyers.” 

Although home sales and home building are declining, the same cannot be said for home prices. “Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price,” stated Yun. 

This is not all bad news for homebuyers. While home prices continue to rise in many markets across the country, housing inventory is marginally rising. The National Association of  Realtors estimates that the total housing inventory in July was 1.31 million units, an increase of 4.8% from June.

Homes are still selling fast though, with the average property remaining on the market for 14 days

Homebuyers are starting to become more cautious when considering purchasing a new home. With interest rates being almost double they were at the beginning of of the year, some buyers cannot qualify for loans or afford the higher rates associated with the interest rate. However, according to Freddie Mac, the 30-year fixed rate mortgage rate was 5.41% in July, down from 5.52% in June. 

As the market continues to cool down, buyers might see favorable conditions again. Potential buyers searching for a home could expect less competition when making offers and more homes to choose from. Contingencies might also be accepted again, leading to a more balanced market. 

The bottom line is that mortgage rates have dropped marginally, inventory has increased slightly, and buyers should continue to be cautious and patient when purchasing a new home. 

Virtual property? Real estate in the Metaverse

virtual real estate

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As a kid, we probably envisioned our futures much like The Jetsons with flying cars and houses that appear like skyscrapers out of the clouds. While we still might be a long way off from flying cars, real estate is starting to thrive in the metaverse. 

In the metaverse, the engaging and fascinating virtual world universe, investors are starting to buy up virtual real estate. The metaverse provides a virtual reality where we can live, work, and play with others. If you’ve ever wanted to live next door to a celebrity like Snopp Dogg, virtual real estate is your chance. 

Companies like Facebook (known now as Meta) are helping to spark interest in owning property in the virtual world. Virtual real estate is growing so rapidly, Technavio Research says the virtual real estate market is expected to grow by $5.37 billion through 2026.

Why Invest in Virtual Real Estate? 

Technology and our digital world will continue to grow and because of this, investors are hoping virtual real estate will be a good investment. The property, or parcel, you own in the digital world can be used for a myriad of purposes. 

Depending on the type of virtual real estate you purchase, you can design and build structures, host interactive experiences like concerts and games, or even turn it into a marketplace to sell any assets. 

Reader’s Digest states, “Owning digital real estate effectively gives you a place in the metaverse that you can call home.” The metaverse allows you to meet and interact with other players, which could leverage itself into buying, selling, or trading digital real estate just like you do in the real world. 

How Do I Buy Metaverse Real Estate? 

In order to purchase virtual real estate, you will need to do the following:

  1. Create a digital wallet to hold your cryptocurrency. Make sure to keep your wallet’s secret keys and passwords in a safe place and never share them with anyone else. Also be mindful of the type of cryptocurrency your platform (where you purchase your virtual real estate) accepts. 
  2. Research virtual real estate by looking at several different platforms and viewing the market prices available in those platforms. Some platforms are The Sandbox, Decentraland, and Voxels. While most of these platforms are suitable for gamers, you do not have to play games in order to invest in virtual real estate.
  3. Once you’ve found a parcel of virtual land you want to invest in, purchase enough cryptocurrency to keep in your wallet. After you’ve purchased your virtual real estate, you will receive an NFT of your metaverse property. 

Just like with buying and selling real estate in the real world, metaverse real estate can also have risks. Because the metaverse is still in the early stages, there is room for growth which could lead to potential gains in the future. However, digital properties and cryptocurrency values are constantly changing. Make sure to do plenty of research if you are looking to take the leap into virtual real estate. 

Taking Control of Your Yard Before Putting Your House on the Market

homeowner preparing landscaping for home sale

Image by Jared Muller via Unsplash

We’ve all heard the saying “First impressions matter” when meeting someone new, but did you know the same applies to your house? The landscaping of your home can influence potential buyers’ opinions since it is the first view they have when looking at your property.

If you’re about to list your home, enhancing your curb appeal will not only make your home more attractive to potential buyers, but it could also add value to your home

Before putting your home on the market, consider some of these tips.

  • Add or Replenish Any Mulch in Your Landscape Beds

Landscape beds offer a great chance to increase your home’s curb appeal by drawing attention to potential buyers. Enhancing the appearance of your landscape beds can make a huge difference, especially if you add or replace the mulch. 

Mulch comes in a variety of types that can fit the aesthetic of your yard: straw, wood chips, shredded bark, and more. The color and type of mulch you use can contrast any surrounding plants and flowers and make everything stand out more. Mulch also has several positive aspects as it’s relatively cheap, easy to apply, and offers health benefits to your plants. 

  • Incorporate Colorful Flowers in Your Landscape Beds

Adding colorful flowers to your landscape beds can also make your yard stand out against others. Consider planting seasonal flowers in your landscape beds before listing your property. Some seasonal flowers that are perfect for fall are mums, sunflowers, and black-eyed Susans.

  • Trim Trees and Bushes

Make sure potential buyers can actually see your home by trimming any trees and bushes. This will also allow more light into your home. Trimming any dead branches and shaping up bushes will show your yard is well-maintained. 

If you have any small plants in your landscape beds, consider trimming them as well. Doing so will eliminate overgrowth and help keep them in their intended shape. Keeping your landscape beds edged will also give off a clean appearance. 

  • Clean Water Features

Decorative water features can certainly draw attention to potential buyers. Make sure to keep the water clean and scrub off any visible algae, remove any dead leaves or debris, and replace the filter if available. 

  • Fix Irrigation Issues

Fixing any existing issues with your irrigation system will help potential buyers. While it can be costly, knowing there aren’t any problems will put potential buyers at ease. Make sure to provide them with any instructions on the system.

  • Powerwash Dirty Areas

If the exterior of your home has any paved walkways, fences, vinyl, or brick it might be worth your time and money to power wash this areas to make them look brand new. 

  • Maintain Your Lawn

One of the best ways to take control of your yard is to maintain your lawn. Keep the yard mowed and weeds pulled to maintain an attractive appearance and desirability of your home. 

Remember that first impressions are everything and curb appeal is what potential buyers notice first when looking at homes. 

Five Incredible Southeast Cities for Millennial Homebuyers

millenial exploring asheville, NC

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Millennial homebuyers looking for southern charm and hospitality can easily find them in cities like Raleigh, Asheville, Franklin, Savannah, and Richmond. Each is unique and has a distinct appeal. The biggest challenge will be choosing which one to explore!

  1. Raleigh, NC

With its diverse neighborhoods, history, great schools (Duke, UNC, and NC State), and job growth North Carolina’s capital city offers something for all millennial homebuyers. 

If you love visiting museums, Raleigh boasts three free, state funded options – the NC Museum of Art, the NC Museum of History, and the NC Museum of Natural Sciences. Raleigh is also home to several live music venues for small or large audiences, bringing in various types of entertainment for all crowds. 

Sporting events also play a major role in the lifestyle of Raleigh residents. There are plenty of games to choose from with the surrounding universities, not to mention Raleigh is home to NHL’s Carolina Hurricanes

There are also plenty of dining, shopping, and outdoor activities throughout the City of Oaks, making this capital city an ideal place for millennials. 

  1. Asheville, NC

Nestled in North Carolina’s Blue Ridge Mountains, Asheville is a city that gives off a small town vibe with all the amenities one would need. Asheville’s downtown is known for its restaurants, art galleries, and shops with many events happening throughout the year. 

If you’re a self-proclaimed beer enthusiast, Asheville is indeed the place for you with more breweries per capita than anywhere in the U.S. Outdoor adventurists can also revel in the many hiking and biking trails in the area with Pisgah National Forest nearby. You can also enjoy a scenic drive on the Blue Ridge Parkway or tour America’s largest home, the Biltmore

If you’re looking for a city that’s animal friendly and full of culture, Asheville is the place for you! 

  1. Franklin, TN

Located 20 miles from Nashville, Franklin, TN is an idyllic city bustling with a vibrant downtown and economic growth. Home to many health-care businesses and corporate headquarters such as Mitsubushi Motors and Nissan, Franklin continues to see a job market increase which is good news for millennial homebuyers. 

Residents in Franklin enjoy exploring The Factory, a former stove factory, that houses local shops, eateries, and entertainment. There are also plenty of historical and cultural sites to explore ranging from historic homes to farms to beautiful architecture in the downtown area. 

  1. Savannah, GA

Savannah is a charismatic southern city with tons of history and activities. It’s also an incredibly walkable city, making errands a breeze. If you value one-of-a-kind homes, Savannah has plenty of historic properties with stunning Greek or Gothic details. 

Living in Savannah also has the benefit of being near the coast. For those who enjoy watersports or recreational activities near the beach, look no further! The art scene is also impressive with nearby Savannah College of Art and Design

  1. Richmond, VA

Another capital city on the list is Richmond,VA. With its cobblestone streets and history at every corner, Richmond is full of amazing restaurants, museums, and its proximity to D.C. makes for fun weekend trips. 

Richmond is a dynamic city with amazing views of the James River. It’s also home to several universities like VCU and The University of Richmond, providing the city with diverse neighborhoods full of cool shops and entertainment venues. 

Wild Homes: The Shire on the Lake

hwild homes hobbit house in Michiganobbit house in Michigan

Image via Berkshire Hathaway Home Services

If you’ve ever thought about living like a hobbit but won’t be able to jet out to New Zealand anytime soon, The Thatch House in Charlevoix, Michigan might be the spot for you. Unlike a typical hobbit hole, though, this “mushroom house” marries cozy comfort with modern luxury. 

The charming villa boasts six bedrooms and five bathrooms and includes some unique amenities, including a sitting area with a view of Lake Michigan, right across the street. With a home theater, several fireplaces, and a large dining room table, The Thatch House is a great space for entertaining – whether it’s invited friends or a horde of hungry dwarves brought upon by a wizard with a quest.

wild homes hobbit house in Michigan

Image via Berkshire Hathaway Home Services

The original builder is nearly as fascinating as the home itself. Earl Young didn’t use blueprints; instead, he took inspiration from the surroundings, both for the shape of the home and for the building materials. He inspired a series of “mushroom houses”, although The Thatch House was his first home and didn’t fully encompass this whimsical, fantasy style until its redesign by Michael Seitz. 

wild homes hobbit house in Michigan

Image via Berkshire Hathaway Home Services

If the main house isn’t reminiscent enough like a Hobbiton for your tastes, there’s an accompanying chalet with one master bedroom and a loft with twin beds that mirrors the style of The Thatch House: lots of exposed stone with rustic wood furnishings. 

The Thatch House is within easy walking distance of several other mushroom houses, so those with an interest in quirky architecture may enjoy one of the several walking tours available. It’s also within a few steps of the sandy beach shores of Lake Michigan and a scant five minutes from downtown shopping, as well as the local marina. 

wild homes hobbit house in Michigan

Image via Berkshire Hathaway Home Services

If you ever find yourself in Charlevoix, a few hours northwest of Detroit, The Thatch House may be worth a visit. If you’re lucky, you might even be invited in for a second breakfast. 

The Slowing Real Estate Market’s Effect on Small Businesses

business owner housing market

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Although it might be obvious that large construction companies would be in less demand with new home construction declining, some consumers may not be aware of the significant impact the downturn in the real estate industry has had on their local small businesses. 

The US housing market finally began to slow down in May after two years of unprecedented rapid growth. By June, the typical US family could only afford about 43% of the new homes being built. In July, new home sales had decreased to 2016 levels. Even existing homes are down almost 6%, at the lowest level in two years, while the prices have continued to increase.

The Federal Reserve, voicing concerns about inflation, began to increase interest rates in the hopes of avoiding a recession, upping the rate by .75% in June. This increased cost in borrowing money likely tamped down potential homebuyers’ desires for bigger and better real estate. The days of buyers going under contract sight unseen are waning, and this creates a ripple across the home-building and renovation industries

As the housing market cools, homeowners have less incentive to renovate and improve their homes. Coupled with this, inflation is causing the costs and availability of materials to increase dramatically. Over the past year, construction businesses have seen some materials costs jump as much as 200%, and the average year-over-year increase may be as much as a 20% increase. These twin factors have caused a perfect storm for hesitancy among homeowners looking to renovate, buy, or build. 

This cooling off of interest in construction has recently been dubbed a “housing recession”. Builders, landscapers, and other small businesses related to improving homes for sale have had to lower prices in order to keep customers on their books, and their confidence in the market is taking a hit. Builder confidence has fallen every month in 2022, and is now below the 50-point mark into negative territory. The last time this measure wasn’t positive was June of 2014. 

So, what are small construction businesses doing while facing down the possibility of a market that may continue to decline into 2023? One option is changing the type of work that is the focus of their activity. Bill Albritton of Albritton Custom Carpentry in Charlotte, North Carolina is now doing more “kitchen facelifts”, a service that costs significantly less than installing custom cabinets from scratch. 

Another choice small construction companies might make to remain competitive with large firms that offer comprehensive building and remodeling services is to join up with complementary businesses to offer consumers more value. A landscaping company could join forces with a woodworker to design and create a new deck and custom patio with the shade trees and soft grass the client desires. Innovative connections like these may be the best way for small businesses to thrive during a housing market in decline. 

For those businesses watching housing prices and the costs of building materials closely, the recent downturn might be concerning. Those creative business owners who find new ways to generate a steady income stream are likely to be the ones best able to weather the storm. 

What Investors need to know about Opportunity Zones

home investor looking into opportunity zones

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Back in 2017, the Tax Cuts and Jobs Act was designed to create jobs and develop communities. One element of the act was identifying areas that needed more attention for economic growth; these are dubbed “opportunity zones”. In order to incentivize investment in these areas, the Department of the Treasury has created some tax benefits for these qualified opportunity zones, or QOZs.

To invest in a QOZ, investors can participate in a qualified opportunity fund, or QOF. Most people could invest in an opportunity zone, but only those making over $200,000 per year or with a net worth over $1 million are eligible to invest in a qualified opportunity fund. Before diving in, investors should know about these kinds of investments.

The benefits of the QOZ are clear, as the QOF invests in the real estate and businesses in the zone, but what is the benefit to the taxpayer with their money in the QOF? For one thing, investors can defer tax on their capital gains by setting it up in a QOF, waiting up to five years to pay it. For taxpayers who hold their investment in a QOF for ten years, any of their investment gains will be totally tax free at the end of that period. 

Any real estate investment carries risks, but a knowledgeable investor who carefully reads the information detailing the expectations of a particular fund should be well-equipped to determine if it’s worth the risk. Another reason a taxpayer may not want to take advantage of the tax benefits of a QOF is that some states don’t participate. So, an investor could still benefit from the federal tax deferral, but they’d be required to pay state tax. 

Eligible taxpayers should check with their tax and investment advisor to determine whether investing in a qualified opportunity zone would be beneficial to their portfolio. If deferring capital gains tax is of use, investing in an area struggling economically could be a way to do some good while reaping benefits for yourself. 

Why Tampa Bay is in the Top Ten Cities for Investors

Tampa Bay House for sale

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For three months in 2021, a quarter of home purchases were made by investors, not individual homeowners. Investor sales have gone up and back down since then, but investors are still almost 25% of the market as of the first quarter of 2022. So what makes the city so attractive?

As with most questions of real estate, a lot of Tampa’s appeal comes down to location, location, location. On Florida’s Gulf Coast, Tampa is a major port city and therefore attracts overseas investors who may want to control more aspects of their import business. Even if shipping isn’t your thing, Tampa is a relatively short drive from three international airports, so foreign business and tourism is easy to accommodate there. 

The infrastructure for business is robust here as well, with job growth continuing to rise, even when it’s slowing in other places. Travel and tourism is a major growth leader, of course, but Tampa has also seen expansion in tech, healthcare, and education. Plenty of jobs and housing prices expected to continue to grow for another year make this coastal city an ideal location for investment.

Many investors in Florida are paying cash for their properties, eliminating concerns about a mortgage and therefore mortgage interest. The local populace may actually appreciate some of the investment activity these days. Since the Federal Reserve has been increasing interest rates, some potential homebuyers are priced out of purchasing a home. Investors can offer rental properties at affordable rates until the market cools down enough. 

Population growth is another factor investors likely consider when looking at Hillsborough County. The population is forecast to grow 3.3% each year over the next few years, and the population tends to come from a wide array of backgrounds. Many Tampa inhabitants are multilingual, with residents from over 130 nationalities.

With rivers, beaches, and virtually no days without sun, Tampa can be a very desirable location for investors looking to rent out properties to sun-seekers. Economic growth indicators are still favorable in this part of Florida, so whether investors are in it for business or pleasure – or the business of pleasure – they are likely to be able to find something that will suit their needs in Tampa. 

Should I build a tiny house on my land in North Carolina?

This section includes real questions from real homesellers, plus our answers. 

tiny house in North Carolina

Image by Jed Owen via Unsplash

Dear Connect,

I’m considering building a tiny house on a piece of land I inherited near Raleigh, NC. Right now, the piece of property is sitting empty, but I think I can do more with it. I came close to selling it last year, but ultimately sentimentality won out. These three acres were owned by my uncle, who left them to me when he passed away two years ago. There’s a little pond on the edge that I remember him taking me fishing in when I was a kid. 

The Triangle is constantly growing, and this property is near Knightdale. When we used to fish there decades ago, it was out in the middle of nowhere. Now there are developments everywhere around it and the location is more or less considered to be “in town” now. 

Though I don’t want to sell it because it’s an inherited property, I don’t want to do anything with it. I’m thinking I could build a tiny house on it for little money, overlooking the pond, then do short term rentals so that my extended family and I can come rent it as a way to remember him. 

Is this even a good idea? I’ve done lots of research into tiny houses, but I can’t seem to find out if this would be a wise investment. 

– Fishing for advice in Raleigh

First off, let me offer my condolences on your uncle’s passing. Losing a loved one is never easy, and you’re clearly trying to preserve a piece of him with this transaction. That’s worth doing. Given that you own land in North Carolina, and particularly given that it’s somewhere in demand like Raleigh, NC, a tiny home is certainly a viable option. Let’s look at the benefits and the pitfalls of building a tiny house on your land.

One of the first considerations should be about infrastructure: what do you want, and what is available? If the impetus behind building a tiny home is to save on construction costs, you may reconsider if you’ll have to pay for new sewer, water, electricity, and internet to what might be a rural area. If you build something that is “off the grid” or make use of a septic system rather than city sewer, the costs will be lower. The flipside is that the value will also be considerably lower, both in terms of rental and resale.  

Although tiny homes are legal in North Carolina, some places have more restrictions than others, including whether or not the home can be on wheels. You’ll definitely want to look into what the codes are in Knightdale. 

Tiny homes can be a great entry point for a more sustainable, less cluttered lifestyle. In your case, it would allow you to preserve the land and legacy of your family while still improving the property. The tiny home community is also highly connected and will offer you a good place to go for support as you work to market it as a rental. Be sure to look into the hidden costs of building and maintaining a tiny home on your property, but it’s absolutely worth investing in. Good luck!

What to do if you’ve Inherited a Hoarder House in North Carolina

Image by Nathan Copely via Pixabay

Losing a loved one is a tough situation that everyone goes through at some point in their lives. Inheriting a piece of property when someone passes can feel like a blessing, but if you find that you inherit a hoarder house in North Carolina, then that blessing can feel like a burden.

The initial wave of shock

The first thing that many people feel when they’ve inherited a hoarder house is often shock. Unless you knew the person well and had been in their house before, you might not be aware then the home is in a hoarder condition.

It’s easy and understandable that you would feel overwhelmed if your North Carolina inherited property is packed high with junk. It’s easy to feel overwhelmed in this difficult situation.

Though family members often have an idea of what condition the home might be in, the stuff inside can be shocking when you realize that trash and extra items are piled to the ceiling. Getting past the initial shock of all of the clutter is tough, but it’s important to let those emotions flow through you rather than getting such and slowing you down too much.

Cleaning out a hoarder house in NC

After the initial wave of shock wears off, it’s common for people to want to sell a hoarder house in NC. The impetus will often be to get rid of the whole problem, rather than stopping and cleaning every room.

This isn’t easy. Selling a hoarder house means either leaving someone else to deal with the mess inside, or it means dealing with it yourself. The trouble is that a family member might want to know what important documents or family heirlooms are buried in all of that stuff that’s piled high.

North Carolina hoarder house cleanup isn’t something you should attempt on your own. Enlist the help of family and friends, or even community organizations like a church or a club that you’re a member of. Hoarding situations are complicated.

Hiring a professional cleaner is also an option. North Carolina has lots of companies who can help you to clean out an inherited hoarder house. Homeowners don’t have to do all of the sorting, trashing, and scrubbing on their own. It can be well worth it to work with a professional.

Dealing with the emotions of a hoarder house

Cleaning out a hoarder house is a massive undertaking. Going through everything inside the house can be overwhelming, not to mention it will make it hard to realize that your loved one had a hoarding disorder.

A hoarding situation isn’t easy, so tackling the easiest rooms first is your best bet for dealing with the stuff on site. Hoarders have a way of packing things in, and getting through all of those things in a house filled to the brim is going to take time.

Whatever the story is with your hoarder house in NC, finding the best way to address the problem means taking your emotions into account. Hoarder homes can be fraught with complicated issues, especially when a family member is involved.

Selling a hoarder house as is

Inherited house in North Carolina

Image by Wikimedia

It is a viable option to sell a hoarder house fast as-is. Depending on the situation at the property address, this could be the best way for you to go. The question isn’t whether to sell a hoarder house, but how.

Listing with a real estate agent

You can work with a realtor, but finding real estate agents who are willing to take on the project can be difficult. Often, a real estate agent is going to want a house to be cleaned out and ready to be shown before they do any serious marketing of the property address.

In general, NC real estate agents will insist that you clean out and clean up a hoarder house before they will take it on. A licensed real estate agent is unlikely to take on a house in this condition, but most real estate agents will tell you this upfront. If this is the road you want to go in NC, be prepared to make lots of phone calls to find someone who will take on this home.

Sell a hoarder house as a FSBO

There’s also the option of selling a hoarder house yourself as a for sale by owner property, or FSBO.

Though this is possible in theory, it adds a whole new layer to an already overwhelming situation. It’s difficult to sell hoarder houses as-is to traditional home buyers. Though you might be able to get it on the market without doing much work, getting someone to buy houses that are filled with junk is not easy. They’ll have to do the work themselves.

It’s not just about the clutter. The new owner won’t be able to see what repairs need to be made, and so the money they offer might not be much if the house is left unchanged. That’s if you can get a traditional buyer to make an offer at all.

Working with a cash buyer

The final option for selling a hoarder house is to work with a cash buyer or a home investor. Selling hoarder houses this way can mean getting the property address off your hands without having to put a lot of additional work into the property.

Investors know what they’re getting into with these houses. They’ll look out for structural damage and will know how to get more info on the home.

How bad is cleaning out a hoarder home?

Person cleaning out a house in NC

Image byJuan Pablo Serrano Arenas via Pexels

Aside from the piles of stuff itself, a hoarder home will often hide a lot of issues. Insect and rodent infestations can be a real problem.

A traditional home sale, whether it’s with a licensed real estate agent in NC or on your own with a FSBO, will necessitate a home inspection. This can’t be done until the house is cleaned out. All the clutter makes it easy to hide fundamental problems with the house, and potential buyers will be hesitant to even take a look.

Cleaning out a hoarder house is no easy task. It all depends on how much stuff you have to get rid of, as well as how long the house has been in that condition. It’s important to understand the scope of what you’re dealing with, then to break it down into manageable tasks.

One thing to keep in mind is that you can choose to clean out only part of the house, then sell it as is. This is particularly true if you’re concerned about sentimental items.

Who buys houses that are full of stuff?

There are lots of buyers out there who are willing to buy a hoarder house as is. These buy houses investors will provide a cash offer for a hoarder’s home, and they’ll take the house fast.

A hoarding house sale generally requires a lower asking price than a standard home sale. This is because whoever buys a hoarding house is going to have to deal with getting rid of all the stuff inside. The lower amount of money is often worth selling the hoarding house and getting it off of your hands.

Sell your hoarding house in North Carolina

Inherited house in North Carolina

Image by Gabriel via Pixabay

Anyone who is willing to buy a hoarding house in NC knows what they’re getting into. If you want to sell your inherited home in North Carolina, look for a cash buyer who will take it without involving a bank or other third party. This way, you can get in and out of the house fast and move on with your life.

Let the cash buyer deal with having a professional cleaner take care of the mess inside the house. They can determine the price of getting rid of the stuff, and they can address any underlying issues that might be involved. If they need to renovate to make a profit, in today’s market, then that’s something for the buy houses company to worry about.

Take the pressure off

A fair cash offer will keep your sanity intact while you move on with your life. there’s no need to let a hoarding situation overwhelm you.

If the idea of cleaning out a hoarder house fast makes you worry, then take a step back and realize you have options.

Why You Shouldn’t be Afraid to Talk to a Cash Buyer in Florida

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Selling a home can be intimidating, especially if you’re unfamiliar with the home selling process. People are naturally worried that they’ll get taken advantage of, which can sometimes make them leery of working with a cash home buyer in Florida.

Often, home sellers find that it’s less intimidating to go through traditional channels like real estate agents. However, a legitimate cash buyer is nothing to be afraid of. The key is understanding what a cash home buyer is and then making sure you protect yourself throughout the process.

You don’t have to be afraid of a cash home sale!

The traditional real estate process

Let’s start out by laying out the traditional real estate process.

Usually, a home buyer goes to a bank or a mortgage company to get pre-approved for a loan. The reason is that they don’t have the money to actually buy the house, but rather they have worked hard on their credit and saved a deposit. The bank will actually give the existing owner most of the money for the house, and the borrower will agree to pay it back over a number of years.

A win for the bank

In order for the bank to do all of this, they have to believe that the new owner is going to pay everything back. With a house in Florida, the bank can be fairly certain that they’ll get their money back, whether it’s through payments or by taking back the property through foreclosure if the borrower can’t pay. It’s a win-win for the bank.

To make sure that the house is worth the amount of money they’re going to loan to the potential homeowner, the bank requires the property to have an inspection and an appraisal. These not only cost money in addition to closing costs, but they also slow down the home sale. However, they do provide a safeguard for the bank in case there should be some kind of damage to the home that would reduce its value.

A win for the homeowner

For the new homeowner, they can afford the purchase price without having to have the cash on hand. This lets them get into a home and enjoy living there while they pay along the way. Its a winning situation for lots of homeowners, as they can then build equity in the home by making payments. Though the loan costs money, appreciation on the property covers the loan costs, in theory at least.

What is a cash home investor?

Hard Cash on a Briefcase

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Cash home buyers and buy houses companies buy houses by circumventing the traditional mortgage process. They don’t work with banks to back their real estate transactions.

When we say cash, that’s actually what we mean – they have enough cash in the bank to cover the entire price of the house in Florida. That money is sitting in an account somewhere, so no, you won’t get a suitcase full of neatly bundled bills at the closing. In fact, it’s against the law in the United States, Florida included, to complete a real estate transaction with physical bills. A cash home sale is still done with banks.

Where does the cash in a cash home sale come from?

Cash for a home sale in Florida

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It’s absolutely shady and scary to think about doing business with someone who is using cash in a duffel bag to buy your house. That kind of scenario invokes visions of Palm Beach drug dealers or Miami crime lords doing business in an abandoned warehouse. Though you might want to avoid foreclosure, you want to do it legally.

Cash home buyers who offer fair prices without realtor commissions can do this because they are running a business. In fact, the best cash home buyers are registered with the Better Business Bureau and have a strong reputation. They can buy houses in Florida with cash because they’ve worked with investors or have raised their own capital as a part of a business model.

Often, these kinds of real estate investors started off buying property in a more traditional way. It takes a while to build up the kind of capital required to buy houses in Florida for cash, though some cash investors started off with an inheritance or the sale of another business.

After that first cash home buy, investors have the capital to do it again and again.

The business of cash home buyers

Home for sale in Florida

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Make no mistake – cash home buyers are able to make this a fast and easy process because they are running a business. Where an individual buyer might want to buy a home to make money, they have an emotional motivation for you to sell your house in Florida to them.

Home investors buy houses with cash because they can offer a faster turnaround on the property, in addition to other benefits. There are no realtor fees with cash offers and the smooth transaction means the company makes more money.

In Florida, a cash buyer might take a distressed property and fix it up, then sell it for a higher price. They might also sell the house as-is to another investor or to a traditional home buyer who wants to move in and create a childhood home for their family.

How Florida homeowners benefit from cash buyers

Undervalued home in Florida

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Working with a cash buyer in Sunny Isles Beach or South Florida means you avoid paying fees and that you get a hassle free sale. There are no bank hurdles to overcome and fewer concerns about whether a sale will fall through at the last minute.

For someone who is in a time sensitive situation, working with an investor who will buy houses for cash might be the perfect solution. This is especially true for situations like:

In all of these scenarios, the timeline of a traditional home sale might be too long. If a homeowner in Fort Lauderdale or Tampa needs to sell fast, they can benefit from working with a cash buyer to get their home sale done quickly.

The fear of getting too little

Homeowners getting a bad real estate deal

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Selling your house for a fair market value in Florida is certainly important. Often, homeowners are concerned that they won’t get a fair price by accepting buyers’ offers for cash.

It’s important to keep in mind here that closing costs are significant in a traditional home sale. Closing will cost as much as eight to ten percent of the home’s sale price when working with a real estate agent. Homeowners in Florida pay that right off the top of any profit that they make on the home.

It’s not uncommon for people to find out near the end of the deal that the homeowner pays closing costs in a traditional real estate transaction. On top of that, when you sell quickly you save on the mortgage interest or potential foreclosure fees if you have a delinquent mortgage.

A cash offer will almost certainly be lower than the offer on a Florida house through the usual process, but when you add in repair value, savings from the speed of the transaction with a buy houses company, and the savings on real estate commission and closing costs, a cash sale is more aligned with fair market value than many people realize.

Is cash a low risk option for selling a home in Florida?

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When a real estate investor makes a no obligation cash offer for a house, it should come with no strings. A fair cash offer will likely be less than the price a real estate agent can get after weeks or months on the market, but given the fast closing date and the lower amount of closing costs, it becomes less of an inequity.

While the cash offer from a house company won’t come with a suitcase full of cash, it absolutely should come with a proof of funds letter from the seller’s bank. Think of this as the part in the movie when the person steps forward and opens the case to show the stacks of bills to prove that it’s real. In this case, it’s not stacks of benjamins but a guarantee from the bank that the money is real.

Working with a cash homebuyer or investor is a low risk option for selling in Florida fast. Closing will still happen with the help of a real estate attorney, and homeowners should always consult with an attorney before signing any paperwork on a home.

With any transaction, it’s important to look out for red flags and to make sure that your fair cash offer is coming from someone reputable.

Less likely to fall through

A cash home sale is actually less likely to fall through than a traditional home sale. Often, home sales fail at the last minute because the buyer isn’t able to get the mortgage company to sign on. That might be because of needed repairs that come up during the inspection or some life circumstance change. The mortgage process is anything but hassle free.

This isn’t the case with cash offers, where you sell your house in Florida fast and the home investor uses their own cash to fund the deal.

Not only does a cash deal make it possible to sell your house in Florida quickly, it also moves that closing date up sooner. After the initial cash offer, closing can happen in as little as seven days and usually no more than a few weeks with buy houses companies.

Steps to make sure you’re getting the best cash deal for your house

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Taking charge of the selling process is part of what makes a Florida cash home sale so appealing, and taking control means exercising autonomy. Here are some steps you can take to exercise the autonomy you want when navigating a sale to Florida cash home buyers.

1 – Consider as-is vs making repairs

Though real estate investors will often buy a house as-is, making necessary repairs will always increase the price you can get for a home. Depending on your timeline, a long repair process might not be worth the return you’d get on the property. In this case, you might consider lowering the price you expect to get for the home in order to sell fast as-is.

2 – Find trusted cash home buyers

Selling a Florida property to a cash investor involves researching who you’re selling to so that you know you’re working with a buy houses company that will create you well. Look online for reviews, check with the Better Business Bureau, and make sure that you watch out for red flags for real estate scams.

A buy house company should have an online presence with reviews and also be able to offer referrals. Look for companies that have registered with the BBB, as these buy houses companies will have third party accountability.

3 – Verify the cash in the bank

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Working with a buy houses company or a real estate investor who is ready to buy houses for cash as-is means trusting that they’ll come to closing with the money agreed on. You shouldn’t just trust the company with this kind of transaction though, you have to verify that it exists.

Always make sure that Florida cash home buyers provide a proof of funds document that shows that they have the money in the bank to pay for the transaction. Home sellers can even verify that information further with a phone call to the bank. There’s no need to blindly assume that the person you’re working with is being honest, and it’s worth the peace of mind.

4 – Get a contract before you commit

Don’t have faith in anything without a written contract. In the state of Florida, a home sale isn’t complete until the closing table – up until that point, the deal can fall through. Though who pays closing costs is negotiable and closing costs are lower with a Florida cash sale, nevertheless there is still going to be a closing with any real estate transaction.

At the closing date, the contract is final. Everything in the contract should reflect what you and the cash home buyers have talked about, without exception. It’s always a good idea to have a real estate attorney look over the cash offer, and always make sure that you work with a Florida cash investor who is willing to have someone else look over the paperwork.

Never sign anything without consulting a third party.

5 – Know what you home is worth

Even if you are selling your house quickly, don’t go into it without knowing what your Florida home is worth. Whether you’re in Palm Beach or Jacksonville, have someone evaluate your home if you feel like you can’t adequately evaluate it yourself.

If your house has title problems or has liens against it, it’s possible that a cash home investor will offer you less than you expected or even less than the home is valued. This is because they’ll have to cover the cost to get those issues taken care of. Those fees will come out of the Florida cash home buyer’s profit, so it has to come out of the sale price.

Knowing what your Florida home is worth means knowing all of the things that can bring the cost down. This will help you to get a realistic price for you house while also giving you the confidence to negotiate for a higher one if you deal with an investor who doesn’t want to give you the price you deserve for your Florida property.

6 – Be honest with the buyer

Finally, it’s so important that you are honest with buy houses companies and Florida cash home buyers. In fact, Florida law requires that you disclose any problems with the property that you are aware of.

For example, if there’s a termite problem with the home that you know about and you don’t disclose it during the sales process, that’s a violation of Florida law. However, if there’s a termite problem that you don’t know about because it’s under the house where it’s not visible or in the attic where you can’t see it, then you aren’t liable if you didn’t know it was there.

Sometimes, a cash buyer will forego the inspection or the appraisal of the home to get the sales process to go faster. Expect this to lower the price, but always be honest.

The worst case scenario if there is something seriously wrong with the house that you know about is that the buyer can come back and sue you. That’s something that no one wants to deal with!

Working with a cash buyer can be rewarding

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When you want to sell your Florida house, looking outside the box to innovative real estate methods can make all the difference in getting you the best deal.

Buying houses doesn’t have to be scary. In fact, working with a cash investor to sell your house fast can get your a fair price while also getting your house quickly sold. All the paperwork and closing elements for someone to buy property in Florida can be taken care of quickly with a cash sale.

Florida cash home buyers aren’t scary! In fact, the might be the best bet for you to get your home sold and for you to move on with your next life steps.

Attention Landlords: Here’s How to Evict Bad Tenants to Sell a Rental Property

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Rental property is often an investment that owners hope will give them a stream of income that will last for years, providing stability and paying rent that will cover the costs to build equity in the property. Unfortunately, things don’t always go that easily and landlords start to wonder how to evict bad tenants to sell a house.

Renters are notorious for not taking good care of the property. They are naturally not as invested in the home as an owner would be. Upkeep on the house and other trouble from a bad tenant can force a landlord’s hand.

Sometimes, selling a tenant occupied property is the best course of action for a property owner to recoup some of their money.

Dealing with a bad tenant

There are several different kinds of tenants. There are those that hum along, taking care of small repairs and paying their rent on time. These are the dream kind of tenants in a rental house. They always get their security deposit back because they take such good care of the property.

On the other end of the spectrum is the bad tenant. They don’t follow the terms of the lease agreement, they don’t pay rent on time, and they either constantly bother the landlord about small issues or leave the house in such a horrible state that the landlord must pay for repairs.

Many landlords find themselves struggling to collect rent and end up having to go through the eviction process to get even some part of their funds. It can be so bad that the landlord might decide that the best course of action is to sell the house with the tenant inside it.

The best solution is preemptive

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Struggling against bad tenants is difficult and it can be overwhelming. The best solution is to do the due diligence with all potential renters before anyone signs a contract. Make sure that they have good references and a stable source of income that will let them pay their rent on time each month.

The process of screening potential renters is always going to be easier than dealing with problems on the other side. The cost to go into small claims court and evict a tenant is much more cumbersome and difficult than doing the upfront process to screen potential renters.

Don’t accept the word of a potential renter about their past or their ability to pay their rent in the future. Ask that they provide documentation of everything through the application process.

Landlords trying to sell have a choice

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There are two ways to go about selling a rental house:

  • Sell the house with the tenants still there
  • Get rid of the tenants before you sell

What you’ll have to decide is whether you want to potentially go through the eviction process or whether you’d rather try to sell the house with the tenant still there. Both are real possibilities, and both have pros and cons.

Selling a house with a long term lease might be a dream come true for a new owner, especially if there is no back rent owed and the tenant does a great job of keeping the house maintained. Another landlord would be happy to buy this kind of house.

On the other hand, many tenants don’t take care of the property and get behind on their rent. In this case, the best bet is to try to get the tenant out of the house while following local laws. Instead of selling to a new landlord, you now have the option to sell the home as a primary residence through either a traditional real estate sale or through a cash home deal.

Tenant’s rights

Tenant’s rights are a substantive and important part of the conversation for anyone who is a landlord. Eviction is a last resort, even if someone is not paying their rent on time. Every state, from Florida to Michigan, has laws that protect tenants.

Don’t try to get around the local laws or the state and federal regulations that govern a given eviction process. You’ll have a much bigger issue to deal with if you don’t follow the law. Not only will it cost you more money, but you could find yourself in small claims court, and that’s a process no one wants to deal with.

Always look at the lease agreement closely before you start the eviction process. Most tenants would rather get out of the property, but if they want to stay put on the piece of real estate, then they will likely work with a tenants rights organization that will support their ability to keep being a tenant.

This is a time that you will want to consult a real estate attorney to make sure that you’re doing the right thing legally.

Landlord’s rights

Though we often hear about tenants rights, one of the things that is less in focus is the notion of landlords rights. In truth, the law does protect landlords just as it protects a tenant.

You have the right to sell your house fast whether there is a tenant living in or not. You also have the right to have your property taken care of in a reasonable way. There is not a blanket ability of the tenant to treat the property however they want to, and they of course cannot commit illegal actions on the property.

You are completely justified in putting the house on the market, despite the contract.

If you have concerns about what your rights are with the property and whether to accept the way that the current tenant is treating the property, always consult with a real estate attorney about your rights.

When the lease agreement is in effect

If a tenant still has time on the lease term or rental agreement, they can stay on the property unless they’ve done something that violates the lease agreement. If your tenant is not violating the agreement and the lease expiration is months away, then you might do better to at least try to sell the property with a current tenant.

A fixed term lease guarantees the right of the tenant to stay on the property through the end of the lease. You won’t be successful in getting them out of the property sooner unless there is an additional clause in the lease that allows you to break it early.

Keep in mind that even if you have a tenant’s agreement, you can always approach your tenant and tell them that you intend to sell the property sooner and that you’d like to end the lease or rental agreement sooner. There is no guarantee that they will leave, but it’s always worth it to ask before you pursue an eviction notice.

Things that can break a lease agreement

If your rental property has significant issues with the tenant doing damage to the home, you do have recourse to evict in most states.

Unless there is an early termination clause in the lease, there are only two things that can reasonably allow a landlord to break a lease and evict a tenant in most states.

  • the tenant commits illegal activity on the property
  • nonpayment of rent

Anything else that a tenant does on the property that is problematic won’t give a landlord grounds to evict. Even damage to the property has to be significant in order to rise to the level of breaking the lease. This would include things like making significant damage to the home.

If your lease does have an early termination clause, then you as the landlord have a way to follow the law and also get the tenant to vacate.

Problems that will keep potential buyers away

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Very few potential buyers are going to want to deal with a rental property that is in poor condition.

Significant issues with a tenant or a property can make a home unattractive for potential buyers who might take over the property. These include things like:

  • constant evictions
  • late rent payments
  • disruptive tenants
  • pest issues
  • roofing problems
  • structural issues

The old saying in real estate of “location, location, location” is also something to consider here. If the property is not in a desirable location and is surrounded by a neighborhood that might be a cause of concern, then selling the home with or without a tenant is going to require creative thinking.

You can almost always sell a house fast if you are willing to take a lower price for a cash offer, but that’s a financial choice that you’ll have to consider. It might well be worth it to just get out from under a bad house if you have tenant problems.

Can you avoid eviction and sell with tenants?

There is nothing preventing you from selling a house with tenants in it.

Keep in mind that the current lease you have with the tenant will transfer over to the new buyer, so that will have to be part of the negotiation process that you go through during the sale of the home. This adds a layer that all parties will have to deal with, but many buyers are looking for investment property.

If there is a bad tenant living in the home who has a history of problems, you may or may not be required to disclose the problems if you’ve been keeping track of them. Often, it’s best to disclose this information of your own accord, though in many states it’s a requirement of the sale process. Follow the state laws about what landlords have to disclose.

Also, make sure that you are not required to offer the current tenant first refusal on the sale of the home. Even if you’re dealing with a tenant who does not generally pay their rent on time or who has a history of mistreating the home, they could still be a potential buyer.

Showing a home with tenants

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Most lease agreements have a clause in them that allows the landlord to show the home as part of the sale process. Keep in mind that, though the tenant will be given notice of when potential buyers are coming to the property, that does not mean that they have to put the home in show condition.

The other option is offering money to the current tenant to get them to ready the home for sale. This could be in the form of reduced rent in exchange for cleaning up the property.

If you are set on selling a house with a tenant living there, you need to be ready to deal with making a fair share of repairs while they are there, which could be difficult. You’ll have to coordinate with a general contractor on large repairs, and a tenant might have to vacate the home for some of the work to be done.

Is it easy to sell a house with tenants?

Selling a house with someone living in it is not easy. Potential buyers will only be other investors or potential landlords who are willing to take on the complications associated with this new residence.

It’s not going to be easy to sell a house fast unless it has a month to month lease and you can get the tenant out quickly in order to facilitate the sale.

Eviction is a last resort

Though it might sound tempting to just send a notice and get the eviction going, you have to realize that the eviction process takes months and will ultimately slow down any home sale. If it’s difficult selling a house in the open market with a tenant living there, it’s much more difficult to sell when the home is in the eviction process. Looking for a potential buyer who will take the houses off your hands for a cash offer might be a better way to get out from under a challenging tenant. Buy houses companies can pay cash for homes and will help you to move on quickly, with or without a tenant in the home.

Essential Steps to Take if You’re Behind on Your Mortgage in Florida

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Even when the economy is doing well, it can be incredibly difficult to keep up with everything that you have to take care of in life. There are so many factors and things to juggle. When you fall behind on a mortgage in Florida, it can be overwhelming.

Don’t just assume that you’ll have to give up and leave the home that you’ve been living in. When those missed payments start to stack up, you have options that will allow you to take control of this seemingly uncontrollable situation.

Notice of default

The first step on the road to any foreclosure proceeding is a notice of default. Even though you’ve already missed a payment, the notice of default is the moment that it transitions from being an ethereal, unreal issue to being a concrete problem with your mortgage holder.

Federal mortgage servicing laws require mortgage payments to be behind a certain number of months before this notice can be served to a mortgage holder.

It’s only a notice of delinquency status – not a filing with the State of Florida.

Florida foreclosure laws start with this notice. It’s required that the lender files this with the homeowner to let them know that they are behind on payments and need to catch up. It’s a formal notice for homeowners in Florida who’ve experienced financial hardship and are now late on their payments.

This is only the very first step, and it’s just a notice of the delinquency status. If you’ve gotten a notice of default in Florida, sometimes called a breach letter, then you aren’t facing foreclosure yet. At this point, getting back on track just means catching up those missed payments, which will only be a few. There is also likely a late fee that you’ll have to pay in this instance.

Foreclosure sales take a while

Though it can feel oppressive and overwhelming, there is some time to get things in order before you get to a foreclosure sale. In Florida, it usually takes around six months for a home to be foreclosed on.

That may not sound like a very long time, but it’s enough time for you to jump into action and make some smart decisions about what steps you’ll take. You don’t have to just let that time tick away. Do the best thing for your situation and take as much preemptive action as you can before you get to that judgment date.

In most cases, it’s possible to prevent things from getting to that foreclosure sale date. It’s all about negotiating with the lender and being creative about what you’re doing in the meantime.

What are the options if you’re behind on your mortgage?

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If you’ve fallen behind on your mortgage payments, Florida homeowners have options to avoid foreclosure. Here’s what you can do:

  • Catch up missed payments
  • Ask the lender for a loan modification
  • Sell the home and use the funds to pay off the loan

Everything that you could possibly do to remedy the situation falls under one of these three categories.

Catching up on mortgage payments

If you’re able to catch up on the missed mortgage payments, then the foreclosure process will grind to a halt. This could happen with a personal loan, family support, or by taking on additional work to get those funds.

In times of financial hardship, that can seem to be an impossible task, especially if you are behind on property taxes or other home related costs. Struggling homeowners catch a hard time with many Florida mortgages when they get behind.

Pursuing loan modification

Getting a loan modification is a fantastic solution. This might mean temporarily reducing payments, changing the length of the loan to add on missed mortgage payments, or it could mean reducing fees and penalties. The loan servicer wants you to catch up in most cases because foreclosure is costly for everyone involved.

Often, a mortgage holder will be willing to work with a homeowner, following the grace period laid out in the mortgage contract. When the mortgage company agrees to new terms, that agreement constitutes acceptance of the modification.

Foreclosure action, including judicial foreclosures, will stop when the loan modification goes through. Mortgage lenders are interested in loss mitigation. Through loss mitigation, they are able to preserve the loan without having to do a foreclosure sale, which almost always results in the lender coming out upside down on the loan.

Keep in mind that this doesn’t take care of past due property taxes or other housing related expenses – it only handles the loan itself. Florida law allows the homeowner to deal with these things separately, but it’s still on you as the homeowner to handle all of these different things.

Selling a Florida house behind on payments

Pursuing a short sale or even a traditional home sale is another way to avoid a foreclosure sale. This is a final solution to the mortgage problem that you’re having, and it will allow you to move on without having anyone file a summary judgment motion and without you having to find foreclosure lawyers.

Federal and state laws allow you to sell your home at any point in the litigation process, even if you are still behind on the mortgage payment. This is true whether the property is your primary residence or if it’s a secondary residence.

This kind of sale will stop the monthly payments, but it will also affect your credit score. How much it affects your credit score will have to do with many factors. The good news is that selling the home will affect your credit score less than a foreclosure judgment.

Look for potential buyers who will give you fair market value for your home, but keep in mind that a quick cash home sale might save you money in the long term. Late fees and penalties can add up fast. Judicial foreclosures work through the system within a few months, and you’ll want to get the home sold fast if you want to avoid a personal judgment.

What protections are there for homeowners?

Federal foreclosure laws protect homeowners from being pushed out of their property without the proper procedures being followed.

There are a lot of protections out there for homeowners in Florida, whether you have a federally backed mortgage loan or are in an owner occupied residential property. There is federal money, as well as money through the Florida Department of housing that will help prevent getting a deficiency judgment.

Local agencies in the area where you live can help you find your way through all the lawyer talk, as these agencies interpret the legalese for homeowners facing foreclosure situations.

During the pandemic, President Joe Biden signed the American Rescue Plan Act, which provided lots of additional support for eligible homeowners. State foreclosure laws were preempted by this legislation, and it allowed the court to grant judgment cases to stop for the time period.

The Florida Homeowner Assistance Fund is another great option to pursue before the court grants summary judgment against you, the homeowner. The Florida Homeowner Assistance Fund provides not only money to help bring you back in the black on your loan, but it also can provide legal counsel.

Talking to an expert is essential if you have experienced a financial hardship that prevents you from paying your mortgage payments.

Working with a foreclosure attorney

Speak to a foreclosure attorney if you are unsure about what Florida department regulations apply to your specific situation. The attorney client relationship will protect your sensitive or confidential information, and you can feel comfortable telling them the whole situation. Be sure to find an attorney advertising their expertise in foreclosure.

A law firm that specializes in foreclosure sale options will be able to guide you through what you can do. Be aware that if you are texting an attorney, message and data rates apply. An attorney in this situation will be costly, but you can always pursue support from Florida legal aid or through homeowner preservation resources from the State of Florida.

Make the most of your time with the foreclosure attorney by bringing all of your paperwork to any meeting that you have with them at their office. The more prepared you are, the more they will be able to help you figure out what the best course of action is.

Taking action is the most important part

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No matter what course of action you decide to pursue to try to prevent foreclosure in Florida, the key is to start taking action as soon as possible.

A summary judgment motion asks that you relinquish control of the home and mandates that you are evicted from the property. No homeowner wants to find themselves in that situation, and you shouldn’t have to. A foreclosure sale is the last resort for this process, and it’s something that you shouldn’t have to face. Even if you have struggled with financial hardship recently, whether it’s because of a job loss, a divorce, the passing of a loved one, health problems, or a natural disaster, you still deserve to have a place that you can call home in Florida.

Why a Tax Lien Doesn’t Mean You Can’t Sell Your Home in Charlotte, NC

Why a Tax Lien Doesn’t Mean You Can’t Sell Your Home in Charlotte, NC

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A tax lien can sometimes sneak up on you. It’s not uncommon for North Carolina homeowners to forget to pay their property taxes for a year and not even realize that they’re behind. Then when it comes time to move, they have to figure out how to sell a house with a tax lien.

Whether a tax lien on a property is there because of unpaid federal income taxes, city or county property tax, or even NC state income tax, it’s possible to sell the house and get out from under the tax lien all at once.

That’s right – it’s possible for North Carolina homeowners to sell the property for enough money to pay off the tax lien after the home sale is complete.

While it is absolutely possible to make this happen, you should know that the process can be challenging. It’s going to be much easier to pay off the tax debt before you sell the house than it will be to work with the lender, the government, and the buyer to pay it off after the sale.

The basics of an NC tax lien on property

Any government entity can file a tax lien against a piece of real property like a house. The government does this when they’ve attempted to collect the tax debt from you through other means but were thus far unable to do so.

This tax lien can come from your local government, like the City of Raleigh or the Town of Halifax, or it can come from the county government, like Wake County or Orange County. The State of North Carolina can also come after taxes that you owe them by putting a property tax lien on your home. Finally, the federal government can place a lien on your North Carolina property for money owed to the IRS.

Tax liens have to be paid – there’s no negotiating

Why do government entities use tax liens? Because they’re incredibly effective, that’s why.

There’s no way out of a tax lien from the government. Unlike other kinds of debt like a mortgage lien, credit card debt, or even unfulfilled contractual obligations, which can all be worked around with either negotiation or time, property tax or debts owed to the Internal Revenue

If you have a tax lien on your house, you can’t do anything with the property, with or without a real estate agent, until the government gets its piece. Any tax advisor will tell you that there’s no way around this for a property owner in North Carolina with a mortgage loan.

It’s not just the sale of the house that the property owner will have a problem doing. You can’t refinance with your mortgage lender until you’ve found a way to take care of your tax lien.

Tax foreclosure in North Carolina

Do realize that the government is not going to come in and take your property quickly from you for judgment liens. They’re patient. You can stay in your home for a long time when you have property liens from taxes against it.

That being said, they will come for your home eventually if you continue to owe taxes on it that remain unpaid. When you ignore the tax payments that you owe to the Mecklenburg County government or the city of Charlotte, for instance, those entities can come for your home by pursuing foreclosure. The same is true of the IRS, which can seize your North Carolina home if you owe back tax debt on it for too long.

Sometimes, homeowners in North Carolina wait it out until it gets to this point before they take steps to get out from under the property tax liens or state tax liens. At this point, unless the NC homeowner can come up with the money pretty fast, either because they sell property or find the money another way, they’ll end up evicted from their home and the government body will own it instead.

Understanding equity

When you buy a home, you agree to pay into two different streams to your lender. One on side, your monthly payments go towards paying off the amount that you borrowed. This is called the principal. On the other side, your monthly payments go towards paying off the interest. The interest is the money that the lender charges you for the money you borrowed.

In the first several years that you own a North Carolina home, you’re mostly paying on the interest. Part of the payment goes to the principal, but the majority of the payments go towards paying down the interest.

The amount of principal that you’ve paid off is called the equity. The equity is how much of the purchase price of the house you actually own. Equity can also go higher if the value of the home has increased over time. If the home values on your specific property are higher than what they were when you bought the house, then the amount of the property that you own will be higher.

When you sell your house, the difference between what the person pays and what you owe the mortgage holder is your profit. In the case of property tax liens, you’ll need enough profit from the equity in your home to pay off whatever amount you owe to whatever government entity has put a lien on your NC piece of property.

Selling a house with a tax lien

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Though a tax lien doesn’t technically stop you from selling a house in North Carolina, it can make it considerably more challenging to sell your NC home.

Listing your house on the NC real estate market

You are free to list your NC house at any time. North Carolina doesn’t stop you from putting it out there that you want to sell your house, even if you have tax liens against it. After all, the government is going to get their money one way or another, and they’re more likely to get it from you if you sell your house than if it goes into the foreclosure process.

What happens at closing with an NC house with a tax lien?

Whether a tax lien prevents the sale of your house has everything to do with how much you sell the home for and how much you owe on the loan. When you are able to sell your house in NC for a high enough price that you have enough to pay off your tax liens, the government entities that you owe those taxes to are more likely to work with you to get the specific lien paid off through the sale of the home.

The problem comes when you don’t have enough money in equity on the property at the sale table to get the tax lien paid as well as any other liens that are on the property plus the remaining mortgage.

If this is the case, then the entire process could be stalled out. When liens can’t be paid off, then the house can’t be sold unless the government body agrees to discharge the remaining lien amount.

Tax liens are unlikely to be discharged, because the government knows that they could get the full amount owed if they take the house in tax foreclosure. That being said, there are circumstances where this happens. It involves negotiation with the government body, and you’ll do best to work with a North Carolina tax attorney to negotiate.

Paying off tax debt on an NC home

There are several ways to pay off the tax debt before the expiration date. Whether and how you pay will be determined by your circumstances and what the tax body will agree to.

It’s never a bad idea to contact a tax attorney before you try to deal with tax debt directly. They’ll be able to help you negotiate with the IRS or the tax body when you’re selling a house.

Working with the government to solve tax liens

The most direct way to take care of your tax debt is to contact the IRS, the local government, or the North Carolina treasury and ask them what options there are for you to pay off your delinquent taxes. Each body will have their own way to work with you on back taxes.

The could offer you one of the following:

  • direct debit installment agreement

With direct debit installment agreement, the government takes an agreed upon amount out of your bank account every month or every quarter to help pay down the back taxes that you owe.

Know that an installment plan like this could take a long time to pay off the tax lien certificate. You could be looking at several years to catch up totally.

  • offer in compromise

An offer in compromise is for federal and state tax liens and involves partial payment. In this process, you end up paying less than you owe through negotiation. The Internal Revenue Service or tax department agrees to reduce their legal claim against you, usually because of some personal circumstance.

With an offer in compromise, you’ll likely have to prove that your unpaid income taxes owed or property tax liens are because of some hardship. Taxpayer requests for these might also involve a payment plan to pay off the taxes. They’ll look at your bank account, your other assets, and the value of your property when determining if the taxes can be lowered.

  • tax subordination

Finally, you can request that the IRS subordinate federal tax liens. This won’t take the lien off your property, but it will put the IRS behind other creditors like your mortgage. While this is not a long term solution, and it will show up on a title search, this is one way to tackle a lien. This will make it easier for you to sell your house with a lien.

IRS Publication 784 is where you’ll find all of the details about subordination.

  • Acquiring a certificate of discharge of a tax lien

If there’s a best case scenario in the world of getting out from under a tax lien, it’s getting a certificate of discharge. A lien certificate or lien discharge really only applies to taxes that are being pursued by the IRS, so you won’t find it helpful if you owe NC state taxes, county taxes in a place like Edgecombe or Guilford County, or city taxes that you owe to Winston-Salem, NC or Chapel Hill, NC.

IRS discharge applications can be done online for your property to get the lien off. A certificate of discharge won’t work if you don’t have a substantial amount of property – at least twice what you owe.

  • Arguing that the lien isn’t legitimate

It’s also possible to go to the government body that you owe the taxes to and dispute the tax lien on the property. If you don’t think that the IRS has it right and that you don’t owe them what they say you do, you can ask for a Collection Due Process hearing from the IRS. You can then present your evidence and try to get the IRS lien taken off altogether. Again, this won’t work with liens from the State of North Carolina or localities.

  • Wait it out

This one isn’t for everyone, but you can technically wait it out. The IRS has ten years to collect liens on property. After that, the debt is automatically discharged and you’re off the hook.

This only applies to IRS liens. The State of North Carolina has different rules, and so does every county and municipality in North Carolina. You won’t be able to get out from under your mortgage or sell the property for a decade if you choose this option, and there’s always the possibility that they’ll try to collect the lien by taking the property through foreclosure.

The future of home ownership after a tax lien

Couple discussing how to sell a house with a tax lien

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The good news is that, unlike other kinds of debt, a tax lien won’t pop up on credit reports. That means your credit score won’t be hurt by a tax lien that’s been hanging out for a long time.

This means that if you sell your house in North Carolina and get out from under the lien, you’ll be able to qualify to purchase another home with a mortgage. Whatever a homeowner owes in tax debt won’t prevent them from participating in the home sale process in the future.

If you decide to work with a real estate agent in the future, you’ll be able to move on and get the dream home you want to live in.

Hidden Secrets of We Buy Houses Companies

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When it’s time to sell your home, most people start out by listing their property with a real estate agent, then crossing their fingers that potential buyers will come along. Hopefully, if they’re lucky, someone will give them the price they’re asking for.

Sometimes, the traditional route doesn’t work for a family selling their home. This could be because of life circumstances that prevent the home from being attractive to sellers, or it could be because of a tight timeline needed for the sale. Learning we buy houses companies’ secrets is one possible way to get around the challenges of a traditional real estate sale.

Selling your home to a company

Houses for sale with a real estate agent

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Deciding to sell your home to a company can feel a little odd for home sellers who are unfamiliar with what this process looks like.

On the surface, it can seem like all cash companies are the same, but the secret is that they’re all a little different. While yes, real estate investors commonly want to pay cash for your house with a quick closing, their motivations and needs can be very different.

Knowing how each of these kinds of cash companies approach a home sale can help you make sure that the money paid to you is what you want out of the home.

The business model of different cash companies

Though all of the cash home buyer companies might have the same overall process and the same end goal in mind, the way they operate is very different. This is one of the biggest ‘we buy houses companies secrets’.

Here’s a list of seven different kinds of we buy houses companies and investors that you might encounter when you’re trying to sell your house fast:

  1. House flipping investors
  2. Buy and hold investors
  3. Cash buyer franchisees
  4. Online buyers
  5. Individual investors
  6. Lenders and brokers trying to free up cash
  7. Home trade-in companies

Each of these real estate investors has a slightly different motivation that will give them a slightly different outcome when they’re trying to buy your house fast.

Most of the time, home sellers don’t even know what the company or investor that they’re working with is after – they just want to get out from under their house, and if someone is willing to pay cash for that home, well that’s all the better. In fact, many real estate agents might not even fully understand the different kinds of cash buyers that are out there.

Let’s break down what each of these potential cash buyers is looking for and how you as a homeowner can better understand their place in the real estate industry.

1 – House flipping investors

Homes in a neighborhood for sale

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Would you like some shiplap with that home flip?

If you got that reference, then you surely understand the concept of home flipping real estate investors. These folks are all over HGTV, and there’s no doubt that it’s fun to watch them buy houses, rip out walls, and transform the recently sold property into something that goes for a much higher price.

The key to a house flipper is that a finished home with all of the amenities is worth much more to a home seller than the cost of making repairs. This means that they can turn that house over to the market and make major profits on the deal.

It doesn’t always work out the way it does on TV, or else there would be a lot more house-flipping real estate investors out there. Sometimes, flipping a house is so expensive that it doesn’t make any money at all. A house might sell for a good price, but the repairs cost so much that there’s no profit on it. That kind of business can’t sustain itself.

In order to make any money on the house, no matter what the market, a house flipping business has to get that house fixed and on the market in less than six months. Selling homes slower than that means losing money every single month on a mortgage or on extensive repairs.

Paying cash for a house to flip is better business than doing the flip with a mortgage in tow. However, many house flippers need the cash to put back into the house, so they end up taking a mortgage out after they buy the house, even if they pay cask for the house initially. Sometimes, a house flipper will have other investors behind them to back them up.

2- Buy and hold investors

Buy and hold investors are a less known kind of business for real estate investors to be in. This is kind of a secret, undercover form of real estate investor, but only because you usually know them by another name – landlords.

These real estate investors make their profit by buying homes, usually homes that need some work so that they don’t have to pay top dollar for them. They take those houses and fix them up a little, then they rent them out to tenants.

Every kind of real estate investor has the potential to be a buy and hold investor. Real estate used in this way has the potential to earn consistent, steady income that is enough to pay off both property taxes and other real estate fees.

Online homebuying companies and large franchise cash buyers are potentially buy and hold investors, though in the United States, almost two thirds of rental property is owned by small landlords who only own one to three properties.

An investment company or individual may pay cash for your home, but they’ll often work with back end investors to buy your house with cash, rather than working with a bank for a traditional loan. This could add a little more time to the deal process when you sell your house to this kind of business.

3 – Cash buyer franchisees

House sold through a buy houses company

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Think of cash buyer franchises just like you think of food franchises like Mcdonald’s – because that’s exactly what they are.

These national brands create marketing materials and promotions, home buying processes, and online interactive platforms that are all geared towards buying houses for cash. They then take all of that messaging and knowledge and sell the rights to the name and the materials to local investors who use all of that to make their own money. These people are called franchisees.

Often, franchisees in any industry have to stick to a strict set of rules, regulations, and trade practices in order to maintain their franchise status. They also pay a fee, sometimes a very hefty one, for the benefit of having the franchise name attached to their business.

The names associated with franchise home buying are names you’ll probably recognize. think HomeVestors, We Buy Ugly Houses, I Buy Houses, We Buy Houses . . . you get the idea. Any time you see a lot of slick marketing and a ton of individual investors using a single name, you’re pretty much guaranteed to find a franchise behind it.

What these franchises do with the houses is pretty much the same as what any home buyer does with the houses. They either keep them as rental units or they flip them as fixer uppers.

After the sale is where it all gets really local. A cash buyer with a franchise license owns the property outright through whatever investment structure they’ve created, then they can do whatever they want with it.

To maintain their franchisee status and all of the benefits that go with it, they might pay a regularly scheduled fee, or they might pay a section of their profits to the parent company. The parent company has a vested interest in preserving its brand and keeping their franchisees growing, so they often offer training or support to their smaller investors.

4 – Individual investors

In the world of real estate, these are the little guys.

Individual investors who are seeking to pay the cash value of a home, either to flip it, turn it into a rental property, or just sell it again right after they buy it, are often just getting into the real estate business.

These individuals might not be very experienced in buying and selling in the market, but they do tend to be passionate. Often, the little guy is the one who is willing to work with a homeowner and go out on a limb to make the whole thing work.

These buyers might be on the road to their first purchase with your home, or it might be one of the first few purchases that they’ve made. For this reason, they might offer you a higher price than other cash investors for the simple reason that they’re trying to get some experience.

Everybody has to start somewhere, and individual home investors are a place where many people get their start.

5 – Online buyers

Large home sold through online cash buyers

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Over the last decade or so, online buyers have become the most important and prevalent means of selling homes across the United States and even across the globe. Sometimes known as iBuyers, these companies are almost impossible to ignore any time you get online and do a Google search for anything related to selling a home.

Some of the biggest names in the online homebuyers’ market are national companies like Zillow Offers, Offerpad, RedfinNow, and Opendoor. The big ones are all legitimate companies that are very public, and they all say they want to buy ugly houses.

One of the insider secrets is that these companies are not looking for distressed properties, but rather they’re really interested in homes that need very little work. These are not fixer-upper buyers by any stretch of the imagination.

Because they are looking for homes that are largely repair-free, they tend to make an offer that’s higher than what a cash offer would be from another kind of investor. The tradeoff here is that online buying companies tend to be pretty picky about where they’ll buy and how much work is left to be done on the houses that they buy.

Thanks to a huge cash flow and a major real estate presence, these companies can buy fairly quickly and they also can sell very quickly. In fact, this lightning-fast turnaround is a key part of the business model that these companies employ in real estate.

The sheer size of these companies means that the business model does not require them to make a whole lot of money on each turnover. They can make just a little profit, but they make that little bit of profit on tons of houses, which adds up to millions and more in profit across their business.

Though these companies are huge, the whole housing market is even bigger. Altogether, the big online buyers make up less than one percent of the total home sales in the United States.

6 – Lenders and brokers trying to free up cash

This is probably the least known reason that buy houses companies offer cash to homeowners.

Lenders and brokers sometimes work with home buyers to make a quick cash sale for a house so that the homeowner has the money to make a competitive offer on another home. This kind of deal comes directly through a bank or a mortgage broker, and it’s almost always in the form of some codified program that the lender offers.

In this instance, it’s the bank that then owns the home. They’re in charge of the sale, and they make the whole process work. With this kind of deal the homeowners now have the opportunity to turn over the cash they just got for the home and buy the new house with that cash.

Just as with any other kind of cash home sale, the homeowner now has the advantage of leveraging that cash payment to get a better deal on the home that they’re pursuing. This can be very important in a hot seller’s market.

This kind of deal is good for the homeowner especially if they are working to move to a new place and need to relocate quickly. House deals sometimes have to move fast in this scenario, and this is a solid way to make that kind of fast deal happen.

Nothing comes for free, though. With a lender or broker cash deal, there’s usually a fee for the business offering this service during the selling process. How much that fee is depends on the market and the cost of selling the home.

This kind of real estate transaction is good business for a real estate broker because they’ll earn commission on two transactions – the first home sale and the second home sale. It’s also a good deal for the bank because they’ll get to have the mortgage on the new property.

7 – Home trade in companies

home sold through a trade in company

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This kind of cash buyer is not totally different from the last one, but the major difference is that the business model of the whole company has nothing to do with lending money.

Cash offers from home trade in companies are more about buying time than they are the new owner coming in and actually buying the home. Typically, these companies are confused with online homebuyers, but they’re actually two different concepts.

The focus of this kind of home company is to give the homeowner the ability to buy a new home that’s in line with the value of their current house. With the mortgage now paid off, the homeowner has the time to sell the property on the open market for a higher price, and often a chunk of that price will go to the home trade company.

It’s absolutely critical that you double check that a home trade in a company is not a scam. One secret weapon of home scammers is to perform a “white knight” scheme, where they offer to pay off the mortgage in exchange for a future home sale. The trick is that they require the homeowner to sign over the title in the process. With the mortgage paid off and the title signed over to someone else’s name, the homeowner has no further legal rights to the property. The scammer then evicts them.

This isn’t a real estate scam that you can go to the authorities about because it’s all technically legal.

With that being said, home trade-in companies are typically a solid option for selling a house. If you want a guarantee that you’re not dealing with a home buying scam, talk to a real estate agent or a real estate attorney before you sign any paperwork.

Deciding whether to sell to a cash buyer

Homeownership typically involves the biggest transactions that an individual will ever make. Though this kind of deal is probably a rare occurrence in your life, it’s worthwhile to learn as much as you can about potential buyers before you get involved in a deal.

The secrets of cash buyers might not be relevant to every homebuyer, and cash price real estate sales aren’t for everyone. But you never know – real estate agents aren’t the best fit for all home sellers either.When the property that you’re trying to sell needs to get out of your hands without any repairs, then an as-is home sale to a cash buyer is the top way to go. Whether you decide to work with an individual investor, an online buyer, a trade-in company, or a cash buyer company, the secret to a good home sale is learning all you can about the industry and making a decision that fits your needs.