Today on our Real Estate Graduate call we had many students who brought up questions to generate many good discussions. We discussed preparing properties for the Winter season if one has rental properties. We discussed proper care in clearing of leaves that can cause liability issues during the winter. We also mentioned the basic benefits of Tax Lien investment.
HUD Process for foreclosures:
We also discussed these simple steps because of a question that related to it. The process is that if a home mortgage was guaranteed through the Federal Housing Administration (FHA) and the loan is defaulted upon then FHA will normally turn it over to another federal entity called the department of Housing and Urban Development (HUD). HUD in turn has their own system to sell off these properties. The properties are placed for sell through typical real estate networks including agents. It has a sealed bid system so the buyer doesn’t know what other offer amounts have been made. The initial bidding process is presented to buyers that will move into the home. The stipulations are that the buyer will move in and they can’t sell the home for at least 2 years. If HUD is not able to sell it off quickly enough, then the bidding process starts again and this time it is open to investors as well.
Baby Boomers are more likely to not sell off their personal homes:
We also read an article that discussed changes in thoughts and actions based on economic factors and the current real estate market. This article lets us as investors be more aware of buyers and sellers needs.
NEW YORK (CNNMoney)
Instead of flocking to sunny beach havens or downsizing to a condo in the city during their retirement years, a majority of Baby Boomers say they’re just going to stay put in their old home.
In a survey of 4,000 Baby Boomer households conducted by the non-profit Demand Institute, 63% of Boomers plan to stay in their current home once they retire.
Much of that has to do with the recession. The financial crisis put an end to years of rapid wealth accumulation, causing the typical Boomer household’s net worth to fall to $143,000 in 2013 from just over $200,000 in 2007, according to Federal Reserve data.
Not only that, but this generation is also carrying a lot more mortgage debt. The survey found that the median outstanding mortgage balance for 50- to 69-year-olds was $118,000 in 2013, up from $48,743 in 1992.
“Boomers’ nest eggs have shrunk dramatically in recent years,” said Jeremy Burbank, vice president at The Demand Institute, the non-profit think tank run by the Conference Board and Nielsen. “Financially, this generation is not necessarily ready for retirement, and half of their assets are tied up in their homes.”
Not everyone is planning on staying put, however; 37% of the Boomers surveyed said they were planning to make a move.
Nearly half of the movers said they wanted to get a bigger place — and that they intended to spend more money on it. But with a median net worth of just $40,000, this group was among some of the least wealthy surveyed. In fact, the report found that many of those who were looking to “upsize” were also looking to switch from renting to owning.
Those who said they plan to move into a smaller home were much more affluent, with a median net worth of $322,000, the Demand Institute found.
Whatever the size of the home, Boomers seemed generally unconcerned about whether or not it would be “aging-friendly” — even though a whopping three-quarters of them reported having significant health issues, such as cardiovascular conditions, arthritis, obesity and high blood pressure.
And only one-in-five of the movers said they intend to live in senior housing.
Instead, many of those surveyed said they plan to use their money to remodel things like kitchens and bathrooms in order to increase the value of their existing homes.
More than 17% of the 76 million Boomers are already retired and about 10,000 will reach the traditional retirement age of 65 every day for the next 15 years. And even though many Boomers plan to stay in their current homes, the Demand Institute estimates that this generation will purchase about $1.9 trillion in homes over the next five years.
“Their choices will have a real impact on the housing sector in the next several years,” said Burbank.
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