Sanford Realty, Inc. Real Estate Update

2010-02-20T15:38:00.000-05:00

Your Florida vacation was a blast, you enjoyed every single minute and now you are missing the casual glass of wine next to the pool and watching the scenic sunset? The current buyers’ market opens the door for all your real estate dreams under the sun – even more so if you invest from Europe considering the significant difference between the Euro and the U.S. Dollar at this time.

Still – there are several things worthwhile thinking of before making the decision to buy a house in a foreign country, especially if you may not be completely comfortable with the language and think of contracts and business communication. A realtor who can deal with you in your own language is a big plus – several real estate professionals in the area are European, many are German – we are one example. Communication is a vital point in every transaction and mistakes or misunderstandings can lead to costly errors.

First of all: consider the important why’s and how’s: do you want to use the home to spend your own vacation under the Florida sun once or more times a year, do you plan to make the home available to family and friends or do strictly think of an investment and consider renting the home out to vacation guests? The next question is where you want your dream home located – are you a boater or do you prefer golfing. Also, did you consider the maintenance costs and the responsibility that comes with homeownership?

The most important thing to do is to choose a realtor who earns your trust. The realtor you select to make your dream come true should be experienced and qualified. A real estate professional who is a member of the Florida Association of Realtors has to adhere to a strict code of conduct and professional ethical standards, he or she has also to fulfill certain requirements regarding c continuing education to stay on top of the ever changing laws and regulations in the real estate market.

Once contact to a realtor of your choice is established you will have to make your wishes as clear as possible to enable your agent to look for the best deal out there that is matching your requirements. The MLS system (Multiple Listing System) is a real-time computerized system that presents all real estate on the market at any given time. Details and changes are readily available and can be used to pre-select homes that match your wish list. The pre-selection process does not necessarily require you presence in Florida – reports along with photos or even video can be exchanged via e-mail. Once you have selected one, two, or three homes that you would be really interested in buying the time to hop on a flight has come – now we need you here in person to look and feel your new home.

Once a decision has been made your realtor will take over and handle the negotiations for you in your best interest. The process of buying should be fun and easy and not stressful for you – a good agent will make buying your home a pleasurable memory for you. Once you have signed a contract and offered a price you will be required to make a good faith deposit to demonstrate that you are serious and mean business. Usually 5% of the asking price is sufficient. Your offer can of course – especially now in a buyer’s market – be under the asking price. The seller must now react: either they will accept your offer or they will counter your offer – your agent will assist you to determine the best and fairest deal for all parties involved.

A good agent will also advise you to have a home inspection done once the deal is signed. An independent inspector evaluates the home and all technical gadgets during a home inspection and gives a detailed report about defects. Usually the seller will pay for repairs up to a designated amount. The last step is the closing which is performed by a title company. With the closing the home is officially yours – the title company takes care of everything. Dealing with a short sale or foreclosure is a little more difficult and much more risky for the prospective buyer – an experienced real estate agent will be able to assist you in a difficult process like this and will help you to get positive results. Financing has become a bit more challenging in the last couple of years but with a good credit score there is no problem; even foreign buyers who wish to finance in the U.S. do not usually encounter issues with financing. Still – everyone likes to see cash – a cash deal is the safest and easiest!

By the way – did you know that in Florida the seller usually pays for the realtors services, the buyer enjoys full service and attention having the seller pay for it – doesn’t that sound fabulous?

Curb Appeal

2009-12-21T17:35:00.001-05:00

What is curb appeal?

When selling a house one of the most important things is to make it look nice. This is usually referred to as: curb appeal. A prospective buyer looks at the house thinking of what he gets for his money and considers the cost of getting a run-down looking house into shape. Every good realtor will therefor discuss the "looks" of a home with the seller and will give advice as how to upgrade the impression.

Not only the outside counts, a prospective buyer will judge by the overall impression of the home. There was a time when the smell of home-baked bread wasn't just there because you wanted to make the house smell better for a potential home buyer but nowadays we use those simple tricks like scented candles and air fresheners and even choose the ones fitting the season (thanks for apple-cinnamon and gingerbread candles). It is always nice to turn on the lights inside the house, turn on soft music and have everything tidied up and neat and pretty before a showing. Remember, you want a prospective buyer to get the best possible impression of the house and you want them to say: "yes, this is my future house, my stuff will look just beautiful in this setting".

Love at first sight is a very romantic thing but also a very important fact in the business of selling houses. You want to make sure that the house looks impeccable from the outside. A prospective buyer driving up will look at the overall appearance, the curb appeal with a very critical eye. The little patches of mold or the faded color you don't even notice anymore will definitely give them the impression that the house is not very good cared for. An overgrown yard and weeds all over give the very same impression and will turn buyers away. We advise our clients to rather invest in a little color than to disappoint buyers and loose on the price in the long-run. Make sure the house and driveway get a pressure wash and some touch-up as needed, put some mulch out and clean the yard - a clean looking house will attract buyers while a house that looks like it requires a lot of work will scare them off.

Always think of what you would like to see in your future home: cleanliness, good smells and good looks - in general: good curb appeal. The better the curb appeal the more interested possible buyers will think of making this home theirs and this is what ensures the seller to get the best price for their home.

Happy selling,
Sanford Realty Team, Cape Coral, Florida

Cape Coral Among Forbes’ Newcomers List

2009-10-14T21:06:00.002-04:00

Forbes magazine studied the percentage of residents, one year or older, who moved into the 100 most populous Metropolitan Statistical Areas in 2008, and four Florida cities made the list – Cape Coral, Lakeland, Palm Bay and Bradenton.

The two least desirable destination cities for relocation are Detroit and New York City. Los Angeles and Chicago also had low levels of newcomers. Cities that attracted the most new residents tended to be college towns. "You have an educated population, and you have a large youthful population," says Alexander von Hoffman, senior fellow at the Joint Center for Housing Studies at Harvard University. “These places retain people after they’ve graduated, and attract like-minded people.”

Cape Coral-Fort Myers is home to several higher education institutions (Florida Gulf Coast University, and Edison College, to name just two).

Cities with the most newcomers are: • Colorado Springs, Colo. • Provo, Utah • Bakersfield, Calif. • Austin, Texas • Raleigh, N.C. • Columbia, S.C. • Cape Coral, Fla. • Lakeland, Fla. • Palm Bay, Fla. • Bradenton, Fla.
Source: Forbes, Francesca Levy (10/01/2009)

August 2009 Market Indicators

2009-10-02T08:50:00.014-04:00

June 2009 Market Indicators

2009-07-24T19:00:00.013-04:00

What is a Short Sale?

2009-07-19T16:51:00.006-04:00

A short sale occurs when the net proceeds from the sale of a home exceeds the sellers’ mortgage obligations, attorney fees, closing costs, including but not limited to such items as property taxes, state documentary stamps, closing fees and the real estate commission. If the offer to purchase is lower than the seller's obligation to the lender and the seller cannot make up the difference, the lender must agree to take a lower payoff and cover the additional costs of the sale in order transfer the property.

What is the difference between a Short Sale and Foreclosure?

A Short Sale is still in the name and control of the seller. The seller can put the property on the market for sale, set the price, negotiate a contract for sale and purchase and then request a reduced payoff of the mortgage from the lender. A Foreclosure is when the bank has taken the property and the seller no longer has the right to sell it.

Why are there so many Short Sales?

In the past several years in some markets the value of property took a sharp increase due to low supply, competitive prices and high demand. Interest rates were low allowing buyers to qualify for larger purchases. Lenient loan qualifications made it easy to get a loan. Some folks took their money out of savings, investment accounts and/or equity in their homes and bought investment property. Builders were building more homes and developments. Investors built speculation homes. Tenants became homeowners. Lot prices increased. Waterfront property was at a premium. Condominiums and high rises were built. Lots of people were moving into the booming real estate business and it was a seller's market. Little did anyone realize at the time the inventory was far exceeding the number of buyers to absorb them.

Many folks left their regular jobs to join the real estate industry to become investors, builders, construction workers, mortgage brokers and bankers, real estate brokers and agents, insurance brokers and agents to mention a few. Complimentary businesses opened up to support the real estate industry such as construction companies, mortgage companies, real estate companies, title companies, pool companies, flooring companies, landscapers and cabinet makers to mention a few.

With all this activity people were making more money and qualifying for larger loans. Luxury items became more affordable. Spending was on a rise.

Then, just as quick as the real estate industry rose, it fell. There was an over abundance of houses, absorption slowed almost to a halt, homes were left partially built, new construction slowed down, vacant homes were in abundance, investor buys slowed down and resale homes were everywhere. The Seller's market had ended.

The real estate industry was now transitioning from a seller's market to a buyer's market. The chance to profit in an inclining market was over. Sales seemed to come to a stop. Then the market slowed so much there was not enough business to support the real estate industry. Many folks began losing their businesses and/or jobs moving back into other lines of work or ending up jobless.

The cost of carrying the mortgage, high insurance rates, high taxes and lower values left many property owners upside down in their home or investment property when they needed or wanted to sell.

The downturn in the market, a large inventory of properties and related conditions have created a great hardship for owners to sell their property. Even with low interest rates and lenders willing to renegotiate loans there is a large inventory of property competing for the buyers. Many folks just can't afford to make their mortgage payments the length of time it takes to sell the property so they stop making the payments and become delinquent on their mortgage.

In the past, lenders would foreclose on most defaulted properties, but now there are so many people in jeopardy of foreclosure the banks have not been in a hurry to take back the property. Simply, there is a large number of defaulting loans hitting a market where there is a large number of resale properties. There may be a number or reasons lenders are allowing a longer time for foreclosure: handling the sheer number of defaults, costs of foreclosure is usually more expensive than a short sale, lending portfolio risks, etc.

Do I qualify for a Short Sale?

Anyone that cannot make their payments for hardship reasons usually qualifies for a short sale. The final decision belongs to the lender.

Are all Short Sale Properties inevitably going to Foreclose?

Not always, if the seller is able to close on the property by virtue of making up the shortage or the bank agrees to reduce the mortgage enough to cover the costs associated with the sale the foreclosure is not necessary.

How long does it take for a property to foreclose?

There is no set time frame. The lender makes the final decision when to proceed with the foreclosure action. There are many conditions which affect this decision and in many instances the lender may not even have control of the time frames due to so many changing variables such as the back up in the court systems due to so many foreclosures, the overwhelming number of loans in default a lender is processing, etc.

How do I know I should consider a short sale?

First we do a CMA or competitive market analysis which compares your home to other similar properties on the market. We base the price on fair market value. Once this price is established we do a "Net Sheet" where we calculate the seller's proceeds based on the fair market price less closing costs including but not limited to transfer taxes, property tax proration's, utility assessments, commissions and any other fees. If the net to seller is a negative amount the property is considered upside down and more is owed than the market will bring to offset the difference. The choice now is a short sale or if the seller has funds to make up the difference to sell the property.

Are there other options besides a short sale?

There are programs proposed by Fannie Mae and Freddie Mac to assist subprime borrowers. Many lenders may offer loan modification options allowing for lower payments.

What are my financial responsibilities and/or credit liabilities as a result of a short sale?

The lender may ask for a promissory note for all or part of the debt obligation not covered in the sale. This gives the lender the option to sue if the note is not paid when due. It is the option of the bank to decide whether this will be a condition of the sale.

What are my tax liabilities as a result of a short sale?

The IRS requires the lenders to file a Form 1099 stating the amount forgiven in the sale. The cancelled mortgage debt may be considered ordinary income and taxed at a rate of 15 to 30%. It is recommended sellers get advice from their tax advisor regarding their individual circumstances and tax consequences.

Current laws are being considered to eliminate or minimize tax consequences for short sale properties.

　　

The Contract Offer: What Price to Start With

2009-07-17T07:09:00.013-04:00

When a decision is made to make an offer to purchase a home, be sure to go back and take a second look. It is so much easier changing your mind about a home before a contract offer is made than after a contract offer is accepted and signed by the seller. This second appointment would be a perfect time to bring along others who may have an impact on a buying decision, such as parents, friend, contractor, etc.

Go through the home a second time and look beyond the owner’s décor, whether it was the home just previewed, the first one seen earlier in the day or the one previewed last week. Why? There are many reasons, but most importantly is seeing if the second look creates the same good feeling as the first, and then taking a closer look to see if there are aspects of the home missed during the first preview which may alter the decision to submit a contract offer.

So what is the right price to start with?

That depends on a number of things, such as the risk of losing the home to another buyer, how close to market value the seller’s asking price is and what is the maximum price willing to be paid for the home.

Even though the current market is considered a buyer’s market, there are many properties on the market for sale where the listing price is at, or very near market value, and where price negotiation will not be as great as other properties on the market that are priced well above market value.

In fact, don’t be surprised to find that there are multiple offers being submitted and negotiated. This does occur, more often than most buyers imagine, and it happens when a seller price their home to sell and sets a very attractive list price to attract buyers and sell fast.

When negotiating a real estate purchase offer, the seller wants to sell at the highest price and the buyer wants to buy at the lowest price! The reality is that a home will sell for what is worth, whether a seller is looking to get more or a buyer wants to pay less. Contract negotiation is all about getting agreement.

Often overlooked by home buyers at this point in the home buying process is the experience and value of your REALTOR® in the contract negotiating process. In preparing to make a contract offer, a buyer needs to obtain as much information as possible, and much of that information will be provided by their agent.

This is the point in time when buyers need to have trust in their REALTOR® when asking for recommendations and guidance. The truth of the matter is that this is the point in time when the buyer must know and believe that their agent’s concerns are for them.

The buyer should obtain a sellers disclosure if one is available and obtain additional background information about the home, such as the sellers desired closing time frame, if any offers were previously submitted or if a contract offer is currently being negotiated. This is information buyers should have when preparing to make a contract offer. Information like this is invaluable when deciding what price to offer and how to negotiate when submitting a contract offer.

So how does a buyer start negotiating to purchase a home?

That depends on the home. There are homes on the market for sale that are simply over priced, some slightly over priced, and then there are those listings that are priced to sell. There are home sellers who are pricing their home at three year ago price levels and will sell only if they get their price, there are sellers who must sell within a certain time frame and there are sellers who just have to sell.

In contract negotiations, one size does not fit all.

While there are many homes on the market, only one buyer gets to own the home in contract negotiations. A home buyer needs to decide how much they want a specific home and at what price!

Written by David Fialk

　　

May 2009 Market Indicators

2009-06-28T10:29:00.015-04:00

Southwest Florida is and will be a magnet for people who want to spend their vacation here or who even turn this vacation into a permanent one. If you kept contemplating investing in the Florida Real Estate Market and are committed to a long term investment NOW is your time!