You say you want a revolution? Well here it is. On November 11, 2011 the new and improved Castro regime, purportedly lead by Fidel’s brother Raul, instituted a policy allowing for the sale and purchase of real property.
Previously, a Cuban citizen could own property but did not have the right to sell it. As such, properties have been held and maintained by families for up to four generations, but as the families grew in numbers, the rooms in a house or apartment didn’t. Consequently, it is not uncommon for three to four generations to live under one roof. That scenario sounds like a sit-com just waiting to happen; 22 1/2 Men, 23’s Company, 37 is Enough, Modern Families (I’ll leave my agent’s number if Hollywood is listening). But seriously, what does this mean to the investor, speculator, banker and realtor? I’m glad you asked. In order to determine the potential emerging market, I’ve sought the opinion of various industry participants and asked each to share their own unique perspective. Question: Does Century 21, with 8,000 branches in 71 countries, have any plans to open offices in Cuba and/or the U.S. which would specifically serve clients who are interested in this new market? Answer: “C21 does not currently have plans to expand its presence onto the Cuban mainland or market.” Annia Garcia, Broker/Owner of Delphi R.E. Miami Fl. Ms. Garcia is of Cuban descent and offers; “Speculators from Italy, Canada and Spain are and have been investing in the market for some time now. American investors think Cuba is beautiful but they are still scared that the government can take back properties if they wanted to.”
On another but related front, I think it would be unfair to only consider the economic and capitalistic aspects of this scenario. As such, the feelings of the Cuban people should also be considered as part of this equation. I’ve taken the liberty to poll the average man, or in this case”hombre” in the street. Who, by the way, has a literacy rate of 99.9%? Leonardo, who is a Cuban citizen living in town of El Vedado, Havana was asked his opinion regarding potential U.S. buyers. Is it “Yanqui go home” or does the average Cuban welcome future American buyers? “We do not have bad feelings against the Americans or any other foreigners. We do welcome any help to our economy.”
Questions that remain: the owners of U.S. properties that were expatriated by the government in 1959 have yet to be compensated. (1.8 Billion +/- owed) Will the Cuban government offer reimbursements? And if so, will the value be based on the 1959 market? Will the compensation, if any, be retroactive? That’s another Cuban crisis to be explored at a later date.
Ultimately and in-short, until the embargo is fully lifted, U.S. citizens can not directly purchase Cuban real estate. And if purchased indirectly through third parties, it is as always, “Caveat Emptor,” or in this case; ” Precaucion al Comprador.”

A less than stellar market has done little to ease these jitters. Many would-be sellers have even decided to forgo moves for fear that now isn’t the time to sell.

Many others who have made the leap are ruled by emotions of sadness or regret. How does one let go of a home where so many memories were made?

The answer is in the attitude. It’s not about letting go. It’s about moving forward.

In order to let go of the negative feelings you have about the selling process there are a few crucial steps to take.

First, be resolute about your decision. If we allow ourselves to go back and forth between “I should” and “I shouldn’t”, you’ll always have uncertainty.

Second, remember that memories aren’t housed in the walls of your home; they live inside your mind. Those last a lifetime! Plus, take lots of pictures and video to document what life was like in your old home.

Third, talk about your decision. Bottling or resisting emotions can simply make them more pronounced.

Next, be willing to compromise. Today’s sellers are finding tougher conditions. There are lots of homes on the market and that means more competition.

Finally, refocus your attention on the fact that you’re moving on to a new phase in life! Published: October 25, 2011

Imagine you decided to get into great physical condition in 2011. It was your most important New Year’s resolution. Would you hire an out-of-shape trainer to help you achieve your goal? Of course you wouldn’t. You would want to take advice from a person that already is in the physical condition you hope to attain.

Shouldn’t the same principle apply when considering the financial risks involved in purchasing real estate in today’s market? We should want to follow the people who have already reached a good financial position in their lives.

How do we get the wealthiest people in the country to advise us as to whether or not now is the time to buy a home? It’s actually rather easy. Just look at what they are doing and do the same.

 Right now the wealthiest people are investing in real estate. It was recently reported that sales of condos over $4 million have skyrocketed. Crain’s NY Business explains:

Nine apartments asking more than $4 million went into contract last week, according to brokerage Olshan Realty. The firm tracks the high-end residential market and began releasing its data to the public last month. By comparison, during last year’s Christmas week, no apartments over $4 million went into contract …

In fact, the number of luxury apartments that went into contract so far this month, 52, rose 62.5% from the same period a year ago. UrbanDigs, an analytics and consulting firm that tracks Manhattan housing activity in real-time, confirmed the strong contract signing activity for luxury apartments last week. It defines the luxury market as including properties listed at more than $5 million and found that there were 83 such contract signings this month, up 10 from a month ago.

This coupled with previous information on the luxury purchaser proves the wealthy are again excited about real estate.

Bottom Line

If we want to make great financial decisions, we must look at what the most affluent are doing and do the same. The wealthiest are buying real estate. Shouldn’t we?

Many fear that higher initial costs are out of their reach. Recent studies have shown, though, that green options are many times only a fraction higher in initial costs. And with the energy savings that many homeowners see, the upfront cost quickly is erased by the long term savings.

Numerous tax credits and rebates are available, causing green to gain in popularity. Homeowners currently may take advantage of up to $1,500 in tax credits. These credits are set to expire on December 31st, but they could be extended.

“We think it would be a great benefit to both the environment and to our economy to extend these tax benefits, but they are scheduled to expire at the end of the year,” Shirey noted. “For that reason, NAHB suggests that home owners get the work done before Dec. 31, while the tax credits are still available.”

What does the tax credit covers? According to the National Association of Home Builders (NAHB), “The tax credit for efficiency upgrades in existing homes (Internal Revenue Code Section 25C) is available for 30 percent of the cost, up to a $1,500 limit for 2009 and 2010, for the installation of certain types of insulation, windows, roofs, water heaters, heat pumps, air conditioners and furnaces.”

Additionally, some energy star rated appliances are gaining steam. According to energystar.gov, “If you purchase an energy-efficient product or renewable energy system for your home, you may be eligible for a federal tax credit.” How much can an energy star appliance save you? A washer can cut your energy costs by one third and cut your water costs by half!

There’s also a tax credit with no upper limit — that for geothermal heat pumps, small wind turbines (residential), and solar energy systems. Geothermal heat pumps use the earth’s natural heat, from the ground, to provide heating, hot water, and air conditioning. Small wind turbines use energy from the wind to make electricity, while solar systems harness the energy of the sun. This credit is good until December 31, 2016, and can be used for existing homes and new construction. Both principal residences and second homes qualify, but rentals do not.

You can read more details on the kinds of products that qualify and instructions for obtaining the credit at nahb.org and energystar.gov.

The Federal Housing Administration’s (FHA) 203(k) rehabilitation program is “an important tool for community and neighborhood revitalization and for expanding homeownership opportunities.”

How does it work?

With conventional financing, a lender won’t close on a loan unless the condition of the property, and thus the value, ensure loan security. This means that a property requiring rehabilitation may be out of reach for many buyers. These properties generally require the buyer to find additional financing for the needed construction and repairs. These loans can involve short term loans with high interest rates. And in a housing market where many new homes are out of reach for buyers, rehab ready may be a good financial choice. The FHA’s program should allow more buyers to enter the market, and to help to move a specific segment of inventory.

As an alternative to conventional financing, the FHA is offering a chance for buyers to get just one mortgage loan, at a long-term fixed (or adjustable) rate, to acquire and rehab the property.

To be eligible, a property must be a one- to four-family dwelling that has been completed for at least one year. If a home has been demolished, part of the existing foundation must still be in place.

This program has been in use since 1978. Many borrowers, however, think that only “far gone” properties are eligible.

The house “doesn’t have to be falling apart; it could just be outdated,” said Joseph Latini Sr., the president of Hartford Funding, a lender in Ronkonkoma, N.Y. “It just has to appraise below market value and then at market value with the repairs.”

RealtyTrac.com reports that in August 2010, foreclosure filings rose by 4 percent, with 338,836 new filings, affecting one in every 381 households.

If you find yourself struggling to make your payments, here are some ways to avoid foreclosure.

First, be realistic about your situation. Answer phone calls from your lender and open your mail. This is the time to face your problem head on. Could a foreclosure be on the horizon? Be aware of warning signs.

Warning signs can include significant life changes, such as the death of a spouse, loss of job, illness, divorce, and steep increases in your mortgage payment.

If you are having trouble making monthly payments on other bills, now is the time to pay attention. Your mortgage could be the next bill that becomes too much. In order to curb missed payments, prioritize your spending.

Establish a budget and cut out any unnecessary spending (e.g. movies, cable, eating out, shopping) until you are in a more stable financial state. Apart from healthcare, there is nothing more important than your home. If you have assets to sell off, then do so! The cash may be better spend in helping you save your home.

Next, call your lender to explain your situation and to see what options are available. In these tough economic times, many lenders have programs that may help you stay in your home. Foreclosures do more than run ruin on your credit score, they also affect a lender’s bottom line. If working out an agreement with you can help them save that bottom line, the changes of them helping you are high.

When you speak with your lender, have proof of your monthly income, as well as your budget on hand. You will also need to have an explanation of why you are unable to make your payments. Has someone lost their job? Has there been a medical emergency? It is best to be honest and upfront with your lender regarding your situation.

Some options you may discuss with your lender include refinancing, reinstatement (where your lender allows you to pay the money you are behind in one lump sum and by a certain date), forbearance (a temporary reduction or cessation of your mortgage payment), a new repayment plan, and loan modification (a permanent change to some of the terms of your existing mortgage).

Beware of scammers during this process. Help and counsel from your lender should be free of charge. If you come across someone requesting a fee in order to facilitate help, chances are it is a scam.

The Making Home Affordable Program is also available for those who are struggling to make their payments. This program includes opportunities to modify or refinance your mortgage to make your monthly payments more affordable. It also includes the Home Affordable Foreclosure Alternatives Program for homeowners who are interested in a short sale or deed-in-lieu of foreclosure.

The sooner you contact your lender, the better. Don’t wait until you are days away from being foreclosed. The process of working out an arrangement with your lender could take multiple phone calls and weeks of time.

· More than 53 percent of single home owners reported that they purchased a home because it was more cost effective than renting in their area, while 68 percent of single home owners purchased a home that was less expensive than they believed they could have afforded to pay.

· Some 55 percent have less than a 30-minute commute to their office or work from home.

· Singles don’t shy away from foreclosures – especially single men. Thirty-eight percent would currently consider purchasing a foreclosed/short sale home, compared to 29 percent of single women.

· Of the 13 percent of single home owners who own their home jointly with another person, 49 percent made the purchase with their parents. Forty percent live less than 30 minutes or even in the same neighborhood as their parents or extended family. An additional 12 percent live with at least one family member.

· Number of bedrooms is important to 27 percent of single women, while only 18 percent of men were concerned.

Source: Coldwell Banker Real Estate (06/18/2010)