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Posts Tagged ‘203K’

View from Amityville - Great South Bay, October 29, 2014 Photo Courtesy of Loretta Del Vecchio WeberPhoto courtesy of Loretta Del Vecchio Weber, 10/29/2014

As a realtor in an area devastated by Superstorm Sandy everyone asks the same questions, “So how’s the market? Are houses selling?” and the truth is that it is a tricky and ever changing market to be involved in. Emotions are raw and for every one household that is home and put back together we hear 10 other horror stories of people unable to get the funds to fix their homes. The media coverage is showing empathy for the Sandy Survivors but little is actually being done to speed up the process of the rebuilding of the South Shore.

Home values here in the 100 year flood plain remain depressed. Statistics from the National Association of Realtors show slight increases in sale prices but this really is not so for our local real estate. Zillow “Zestimates” are so far off for our area, the system simply averages sale prices of homes that have sold over a period of time while not taking into account the homes that have sold “as is” meaning storm damaged.

Many people filed a form with their towns stating that they were 50% damaged. The form was filed with the intent to get some tax relief for the time a home spent vacant and inhabitable or to secure a $30,000 ICC grant to get additional money to lift a house for the short period of time it was offered. Unfortunately, if people have filed this piece of paper they are now red flagged and must bring their home to current codes in order to get a Certificate of Occupancy. This means they must lift or demolish and/or build new. There is such a lack of continuity in the NY Rising Program and the SBA program. Homeowners are buried under paperwork and are signing papers that may have serious repercussions later in time, everyone should read what is written in the small print.

Facebook groups have formed to support people that just can’t get answers and are still struggling. Without these groups a majority of the information would still remain unclear. Sandy Support,Massapequa Style and Adopt A House have had and continue to have a tremendous impact on sharing and getting the correct information out to the public. Beth Ann Huff Henry and Michelle Insignia volunteer to moderate and help so many people.  Without their services, and those that support their sites along with their own support staff, many people would have questions still unanswered.

So, to answer the question of how today’s market is doing two years after Sandy I give you the following example.   I took a listing 2 weeks ago. The home is located in Copiague Harbor. The home is “as is”. The funds offered for repair of the home are not enough to repair it. The family, a mom, dad and a young girl and their dog have been living in a one bedroom apartment for over two years while they fought to get the money to return home. 2 weeks ago the decision was made to move on and give up the fight. The home is now listed “as is” and will be a short sale as well.  Let’s turn to the opposite end, to people that have knocked down and built new.  Many quite possibly were at the top end of their budget when purchasing the home that was previously destroyed.  Now, forced with being homeless or securing any funding possibly they have managed to rebuild their homes.  We will now have higher accessed taxes on these homes.  Will the family now be able to financially support the old mortgage, new loans, and higher taxes?  Will these homes eventually have to be sold or be lost to foreclosure because people made emotional financial decisions under duress? There is no simple, accurate answer.  Each case is individual but the after effects of Sandy and what it is doing to our real estate market will be consistently changing.

Realtors are struggling to pay bills as homes are not moving quickly. The extended education and increased knowledge of flood plain levels, flood premiums, and the increased complexity of obtaining CO’s have made an already tuff market even more difficult to work in. The storm was two years ago and the after effects are sure to go on for quite some time. As I walk my boys to their bus stop in the morning I see tyvek wrap flapping in the breeze and houses that are vacant and dilapidated in my 2 block trek. There is an awesome video done by a young girl that shows her journey and is representative of what is going on now, 2 years later. Her name is Caity Donnely and this is her video  Be careful, tissues will be required!

If you are thinking about moving or buying or just have general questions please make sure you speak with a Realtor that knows about what is going on. All of the rules stay with the house and a new homeowner may be required to bring the house into compliance even if you did not own it at the time of the storm! My advice is to be knowledgable in what and where you plan to purchase or sell.  My advice for those that were not affected by the storm, please be compassionate. It is not over for so many.

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Additional Help for Sandy Victims

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This article from the NY Times explains how a 203K loan (typically used for homes that do not meet current codes to be brought current when ownership is transferred) can be used to help repair a Sandy damaged home.  Structured to release payments to the new owner to make repairs by releasing construction payments under the banks supervision to take a run down home (possibly a foreclosure or flood damaged) and in the end the final mortgage amount under the 203K process is for the appraised value of the rebuilt home.

It is slightly complicated and each circumstance is different.  Having a trusted mortgage broker who has successfully completed transactions with this process is key.  Feel free to contact me for some references!

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