If you are currently considering a new home, there are many choices, and the choice you make can affect your life for years to come. Many people say that renting is a better choice than buying, because you can leave when your lease is up and you will not lose any money. Although renting might be the right choice for some, it can be the epitome of losing money. Renting does provide a place to live, but it provides the property owner with most of the benefits, from appreciation in value to tax write-offs. It is true that many people lost money and property value during the housing bubble, however, with interest rates at historic lows and home prices at pre-boom levels, purchasing a home can be a much better alternative.
There are several options when it comes to the purchase of a home. One of these options is to purchase an existing home, or as it is known in the real estate market, a “re-sale”. There are many different types of re-sale homes on the market, including homeowner-listed properties, real estate owned (REO), bank owned, foreclosures, and short sales, to name a few. All of these types of properties come with certain risks and rewards.
The homeowner-listed property is probably the safest type of transaction listed above, but is not completely without risk. There can be hidden damages, defects, mold, leaks, lack of maintenance, and even worn out or nearly worn out major appliances and systems that can cost thousands of dollars to repair or replace. Existing homes are built to comply with the building codes that are in effect at the time the home was constructed; however, there have been many changes and improvements in the code in just the last few years.
Real estate owned or REO is a class of property owned by a lender—typically a bank, government agency, or government loan insurer—after an unsuccessful sale at a foreclosure auction. A foreclosing beneficiary will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount. If there are no bidders that are interested, then the beneficiary will legally repossess the property. This is commonly the case when the amount owed on the home is higher than the current market value of this foreclosure property, such as with a high loan-to-value mortgage. As soon as the beneficiary repossesses the property, it is listed on their books as REO and categorized as a non-performing asset. These properties are, in many cases, priced lower than comparable homes, however there is a greater risk of concealed problems. Since many of these properties sit for long periods of time, there can be major problems due to neglect. They also may have issues relating to vandalism, either by the former owner who may have been bitter about losing their home, or by random vandals due to the home’s prolonged vacant status.
A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property. The property owner cannot afford to repay the liens’ full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency. Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties. One of the problems with this type of property, in addition to the issues mentioned above, is the length of time needed to complete this type of transaction. In many cases, a short sale can take up to a year or more, due to the different parties involved and the negotiations required.
Even though there are properties available that are priced very attractively, there may be lasting effects on the resale value when you go to sell the property. Since the above transactions are recorded as a matter of public record, a title search done by any future perspective buyers will reveal these facts, and may deter them due to many of the original concerns.
New construction properties offer many benefits beyond the absence of the aforementioned concerns. When purchasing a new home, the buyer is able to choose floor plans, elevations, features, and colors, as well as the home site. New homes are built to the most current building codes, which are stricter than older codes. Florida laws enacted after the catastrophic damage caused by Hurricane Andrew in 1992, require that the Florida Building Code (FBC) be reviewed and improved every three years. These reviews and improvements include a requirement to increase energy efficiency in new homes each cycle.
Maronda Homes has been building quality concrete block homes in Florida since 1972. These homes offer superior design and flexibility, while delivering low maintenance and energy efficiency. Over the past 40 years, Maronda has been providing Florida homeowners with an easily observable better value. They offer more home for less money, yet provide many design features and options normally found in homes that are more expensive.
If you are considering a home purchase and would like to see all of the benefits of a new Maronda home, there are great communities all over the North Florida and South Georgia areas. You may visit online at www.marondahomes.com to schedule an appointment, and there is a live chat service available to help with any questions you might have.