Grant money and its effect and relationship to foreclosures, winterizing homes and “flippers competing with “end users”

By
Real Estate Broker/Owner with Turn Key Real Estate 31RA0874656

First off, I want to wish all my Active Rain buddies, a healthy, happy, enjoyable and fun (for some “wild”, but don’t drink and drive!!!) July 4th Holiday week!

Many potential home buyers, especially the millennial X and Y’s are having a most difficult and challenging time coming up with their down payments to purchase.  There are some hope and possibilities that many are not aware of; it’s called grant money for various types of primary residences for first-time buyers.  This money is provided by Nassau, Suffolk and New York City and its five boroughs.  However, there are income limitations depending on the town or jurisdiction you want to live within.  Here is a link to provide further information:

https://www.nerdwallet.com/blog/mortgages/new-york-first-time-home-buyer-grants/ 

Also, from my personal experiences showing these individuals’ foreclosed homes, which can be more reasonably priced are always winterized; eg. the water is drained from all pipes, boilers and hot water heaters and electricity and gas are turned off.  I do truly understand the reasoning for performing this service during the winter months from late November through April 1, so there are no chances for any pipes to break and cause leaks and potential flooding of the home.  But unfortunately, those homes cannot be inspected due to the fact that everything is turned off, so the banks that handle these types of “grant money” loans, make this a specific requirement in order to approve the financing!  So it’s a catch 22, “dammed if you do and dammed if you don’t.”  However, I discussed this issue about a year ago, with the President of possibly one of the largest receivers of foreclosed properties in Long Island, who will remain nameless, as I imagine, he has enough business handling what he currently has had bestowed upon him by the banks and asset managers.  I am one of the few Brokers that have his cell number, for which he had told me that he never gives to anyone!  However, due to a very, very funny situation and something I shared with him, which had him cackling with laughter, he provided me his direct contact number, in the event of something that was so urgent and critical after or during business hours, that I couldn’t wait, he would allow me to contact him. I think I may have called him once! You’ll notice sometimes I diverge from my content to a short story that may or may not have anything to do with my column, but maybe funny, but crucial and critical to my networking agenda and the process I use with other professionals in real estate and other businesses, that enables me to connect with certain high profile or very important people; and in turn who may be able to assist a client seller, investor, purchaser, renter or lessee of residential or commercial properties.  For me, it’s called “Paying it Forward” like the movie back in 2000 with Haley Joel Osment (remember him, Sixth Sense, Forest Gump and Ai?) and Helen Hunt, Jon Bon Jovi, Jay Mohr, Angie Dickenson.  It’s one of my top ten movies that I believe everyone, especially including all our politicians and realtors and anyone in sales or consulting, should absolutely be required to watch as a pre-requisite to beginning their careers and jobs and then once a year as a refresher! This movie may just help people understand and utilize what the movie is trying to convey to everyone, if you give enough, not expecting anything in return, it will always come back to you in satisfaction and possible remuneration; as they say, “what goes around comes around.”   Build rapport and relationships and they will listen and they will come.  So now back to my point, when I was having this conversation with this high profile broker, I questioned him, why is it a rule or regulation to have all the utilities turned off with respect to foreclosures?  He explained the potential of broken pipes, yadda, yadda, yadda, yeh, I get that.  However, I proposed an idea to have him contact whomever he could, regulators, local politicians etc. to suggest that this situation could be adjusted and/or changed and then it would solve a major problem that I had been seeing for many years, no matter what the market conditions were, especially when inventory was excessive, as they say in “bubble” territory.  I am still waiting for that change, but maybe this column will spark some consideration from our politicos to the idea and make some changes?  The situation is like this, if you are a “flipper of houses” your only purpose is to find homes at the lowest price, that you are able to renovate upgrade and improve and then sell to the “end users” to earn the highest return on your investment and then move on to the next one, obviously raising prices within those towns, as we have seen over the last 8 years of our booming market economy.   However, you, as the investor, are generally paying outright for the purchase (cash transaction), and you are buying the property in “as is condition” with no guarantees or warranties as to the condition.  That is the risk that an investor “flipper” takes to earn his or her profit, sometimes huge, sometimes small, sometimes nothing but a loss!  This type of one-sided competition and situation completely prevents the typical end user to purchase at the investor’s “cash price” due to the fact that an end user is generally financing their purchase and cash is always “king” in real estate.  Most important, due to being a foreclosure, it does not allow the “end user” future homeowner to do an inspection, especially when it is winterized, which is a requirement when receiving grant money!  Who builds communities investors or end users?  Of course end users!  My proposal is that the government or banks enact a regulation, that allow potential “end user homeowners” who have come to an “agreed and accepted” on the sale price of the particular foreclosure to enable them to do an inspection by having the utilities turned on, as well as provide them additional time, which is, I believe, is somewhat limited,  before an investor can step in and bid; but with one caveat; if they do the inspection and it ends up that too much work has to be completed to have the house in a livable condition, or other reasons, then the buyer  would have a stipulation in their pre-agreement and/or the contract that if they didn’t go ahead with the sale, the purchaser would be financially responsible and obligated to bear the cost of re-winterizing the home at a set pre-determined price, which shouldn’t be very much, maybe a few hundred dollars at most, depending on the size of the home or number of hours needed to do the job.  That money would be held in escrow, but if they were to go ahead with the sale, the monies would go towards the down payment, closing costs, or whatever would be agreed upon or was in the regulation or law that was enacted.  But flexibility in the agreement would be important, so the buyer, the seller and the lender could determine where those monies would be used in the transaction.  Building roots in a community has more to do with the end users and families, who so desperately want to stay on Long Island and in New York in general; than someone like myself whose only agenda is to buy, fix and flip or even fix and keep to rent out; providing no benefits to the tenant, who is giving away their wealth, appreciation and tax deductions, as I have always stated in previous columns.  What I am proposing will help countless thousands to purchase their homes, build connections and long term relationships within their communities, especially those who qualify for grant money through the local, state or federal government.  However, at this point in time, the one stipulation is that they have to stay in their homes for ten years, enabling them not be required to pay back the grant money.  This type of situation would only enhance homeownership, just with a change in the rules or whatever regulations that keep homes winterized, especially at this time of the year, when no pipes will break!  We are losing and have been forcing our young people and families to relocate to other less costly states, away from their families and friends.   The “brain drain” of the smartest of our younger generation has been happening for over 30 years, (I had run for the Town of North Hempstead Supervisor, I think it was in 1987, against Ben Zwirn and John Kiernan, because Tom Dinapoli, our NYS Comptroller, then an assembly person, came up my driveway in Kings Point and then suggested I run).  I decided why not, just to see how things worked in the political system and I had the opportunity to speak in front of a crowd in Manhasset  as well as on News 12 with Melba Toliver (X ABC news lady)and expressed what I saw happening, back when homes were much, much less).  Nothing has changed and it’s getting much, much worse!  When are we going to wake up   We are losing ground to other states and it’s about time that we take a stand and make some critical changes to a very small thing, the winterization process with respect to foreclosures; and if this helps even one family to purchase a home and keep them from leaving Long Island and New York State, then it will be the first step of many that need to be considered as soon as possible, to stay ahead of the competition.  Let’s start in New York State and then maybe it would catch on countywide!  What do you think?

Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck.  He has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S.). He will provide you with “free” regular updates of sold and new homes in your town via the Multiple Listing Service of Long Island (MLSLI)or go to WWW.Li-REalEstate.Com as well as a “free” value analysis of what your home might sell for in today’s market without any “strings” attached.  He can also provide a copy of “Unlocking the Secrets of Real Estate’s New Market Reality or Our Seller’s or Buyer’s Guides for “Things to Consider when Selling or Purchasing your Home.  Just email or snail mail(regular mail) him with your request with your name, email and cell number and he will send it out ASAP.  For a consultation, he can be reached by Cell: (516) 647-4289 or by  email: Phil@TurnKeyRealEstate.Com to answer any of your questions or concerns.

 

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Sincerely, 

Philip A. Raices, Broker
Licensed Real Estate Broker Consultant
NYS Lic.#31RA0874656
Corp Lic#109909392

G.R.I. (Graduate Realtor Institute)
C.I.P.S. (Certified International Property Specialist)

Turn Key Real Estate 
3 Grace Ave Suite 180 
Great Neck N. Y.  11021-2415

Mobile: (516) 647-4289
Office  : (516) 829-2205
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Email: Phil@TurnKeyRealEstate.Com 

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