Real Estate Information Archive


Displaying blog entries 1-2 of 2

HUD Loosens Guidelines on "Flips" and Foreclosure Re-sales

by Chantry Abbott, SGI Mortgage

This has been a long time coming. On February 1st HUD will relax their rules and allow buyers to get an FHA loan on homes that are owned by the seller for less than 90 days – a move that will help expedite the rehabilitation and resale of foreclosure properties.

In English? After the "go-go" market of the mid 2000's and a ton of property "flipping", the government came out and said "you can't buy a home and flip it until you have owned it for 90 days." They call this "seasoning" and as is implied, it is designed to keep people from buying a home, inflating the price above market, then flipping it again.

After a long period of that rule in place, they've realized it is hampering the market.

"Property Flipping", or "Upside Down House?" (real estate humor!)

In a housing market where tighter lending requirements have made FHA financing the only option for some buyers, this 90-day policy has (1) kept some homebuyers from being able to purchase affordable homes and (2) prevented the quick resale of foreclosed properties, which affects the ability of communities to stabilize and rebuild.

If you are an Investor looking to flip homes: This change is great news because you can now go STRAIGHT to marketing the home in the MLS, etc immediately after purchasing rather than waiting 90 days.

If you are a Buyer looking for your next home: This change is great news because many of these investors put their homes back on the market at below-market prices to ensure a quick sale and naturally this will add to your options as a Buyer.

"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."

To ensure FHA borrowers are protected from inflated prices, the policy has certain restrictions, including:

  • All transactions must be arms-length and there can be no identity of interest between the buyer and seller (i.e. their business partners, cousins, aunts, uncles, siblings, etc.)
  • If the sales price of the property is 20 percent or more above the seller's acquisition cost, the lender must meet specific conditions for the waiver to apply. (referring to fact that an investor with buying power of CASH may buy a home for $180k at auction, then be able to sell in open "retail" market at $200k+)
  • The temporary waiver will be in effect for a period of one year, unless extended or withdrawn by the FHA.

It's easy to knock the government for being overly involved, but this is a well-placed effort on their part that should do much good for the market.

*Guest Blogger Chantry Abbott is Mortgage Professional with SGI Mortgage and knows his stuff! He is also skilled in handling reverse mortgages and loan modifications. He can be reached directly at or 435-979-1775.

Lipstick Needed for Pig - September Sales Figures are in!

by Jeremy Larkin

Look, I'm not going to sugarcoat this: Sales were down in September, the Economy is a mess and the Media isn't helping in any way shape or form. This is what Washington County Real Estate Sales have looked like for the past 3 months:

  New Listings Active Listings Sold Listings Months Inventory
Sep/2008 768 6,292 183 34.38
Aug/2008 818 6,403 227 28.21
Jul/2008 935 6,501 232 28.02

That last column is what we call the "absorption rate." 28 months of inventory was not good. 34 months of inventory is LESS good.

The flip side?

  • Credit actually IS available and we continue to see people buy and sell homes.
  • There are so many good stories out there, but nobody is telling them.

We just sold a home for 3 sisters from Idaho. They had held this condo in their family for many years and made a nifty profit. They were REALLY happy and it was closed and recorded just 38 days after it hit the market.

We assisted another young couple get into their first home last month and they are tickled pink. It was a bank-owned property, priced extremely well, and it got them out of a small apartment.

Then there is another family living in my immediate neighborhood whose' house is under contract to close sometime next week. They have owned it for 3-4 years, will take a nice little profit, use it to pay off some debt, then rent a larger home for a while preparing to buy again down the road.

I understand it is tough right now...BOY do I understand it. However, there really are good things happening for some people, housing values are getting back in line for the "everyman" and tremendous opportunities are surfacing for investors.

When all else fails I count my blessings every day to have a wonderful wife, 4 hilarious little kids and for every chance I get to enjoy the simple pleasure of pedaling and suffering on my mountain bike or road bike.

If you have any good, OR bad stories to tell about this market is affecting you, send them on over.


Displaying blog entries 1-2 of 2




Contact Information

Photo of Jeremy Larkin - The Larkin Group Real Estate
Jeremy Larkin - The Larkin Group
Keller Williams Realty
50 E 100 S, Suite 300
St. George UT 84770
Fax: 435-359-5085

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