Lisa Carey Real Estate Blog at Carey Cottage, Tallahassee

There is a active debate in Tallahassee about the availability of affordable, or workforce, housing here in town.  Many think there isn't enough and propose giving assistance or grants to builders who will construct more inventory homes.  Others think the homes already exist, and the ticket is getting assistance money into the hands of buyers.

A search just moments ago of the multiple listing service (MLS) here in Tallahassee shows 240 homes with the following criteria:  3 bedrooms, 2 full baths, at least 1000 square feet heated & cooled, and between $70,000 and $185,000.  Another 107 exist in Gadsden County and 126 in Wakulla County, neighboring counties.  That doesn't include the many for-sale-by-owner homes or those sold by builders who don't use the MLS.  A builder I regularly work with builds new-construction, 3BR/2BA homes in Wakulla County starting at $114,000 and doesn't use MLS.  The homes are clearly out there.

I really do believe that getting assistance to the buyer is the answer here, unless our inventory dips well beneath current numbers.  And, it is a system with proven success.  Last week I helped a newly-married couple with nothing in savings buy a beautiful 3-bedroom home.  To give you an idea of the salary range - the groom is in the computer industry, the wife a part-time student and waitress.  New kitchen, new bath, new tile, paint, carpet, molding, 6-year-old roof, 1/3-acre lot, brick & vinyl siding, in an area with proven appreciation.  With only $500 down, we were able to put this $143,000 home under contract for $140,000 with the seller agreeing to repair any systems (plumbing, electric, etc.), fix any woodrot, and pay for a home warranty.  We found an assistance program that not only covered all of their closing costs (about $4000) but also reduced their principal.  Their new mortgage payments will only be about $100 more than rent for their 2-bedroom apartment.

How does it work? 

First, I work with lenders who are experts in assistance programs.  There are programs for first-time buyers, low-income buyers, buyers in rural areas, HOP homes, and more.  HOP actually gives the buyer 25% of the cost of the house as a no-interest, deferred payment loan, i.e. a $100,000 home would only have a mortgage of $75,000.  Buyers qualify and pay on the $75,000.  This is key - find the program that works best for the buyer and gives them a payment that is comfortable for their budget.

Second, weed through the homes and find the best of the best.  All affordable homes are not equal.  An affordable home with a roof that fails 3 months after closing is disasterous to a buyer without a reserve in the bank.  You'll need to kiss a lot of frogs before you find the prince.  Be patient, be careful.

Third, ask for seller concessions!  From closing costs to price reductions.  Ask for home warranties, a new refrigerator, blinds, repairs, etc.  You can even ask to have the rate bought down.  These extras get you across the finish line.

The homes are out there . . . and so are the programs.  Until inventory drops significantly, I would prefer to see the assistance granted to buyers not builders.  If you have any questions regarding these programs, or are interested in finding an affordable home, please drop me a line at Lisa@CareyCottage.com.  If you are already working with a Realtor, please feel free to use these tips for your own success.  Call a lender and see what you qualify for.  You might be pleasantly surprised.  Good luck!  Lisa Carey