Wednesday, March 24, 2010
Urgency in Sarasota Real Estate Market
As of March 31, only days away, the federal government will cease its backing of mortgage based securities. Many believe that this move will cause rates to begin to rise, perhaps rapidly. Buyers of real estate who are looking to secure a mortgage may see the window of sub 5% rates rapidly closing. A mortgage rate increase of even 1 percentage point makes a huge difference over the life of a loan. If you are considering a real estate purchase requiring financing, this may become the most critical factor to consider.
Thursday, March 11, 2010
Sarasota Short Sale Pricing - Follow the Bouncing Ball
Recently, a home came on the market priced at $325K. A few months later, having not sold, the price was reduced to a $285K short sale. When a buyer made an offer of $235K, the bank never responded. 6 months went by, not a word. The buyer backed out. When the bank foreclosed on the property and listed it as an REO, they priced it at $152K.
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Another property was listed as a short sale for $199K. It never sold. The bank foreclosed, and put the property up for sale for $300K, much closer to its real value. It sold rather quickly, which indicates that the bank never had any intention of selling the property for its short sale list price. These must have been dozens of offers.
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A short sale came on the market for $219K. Given the homes true value of closer to $300K, it went pending rather quickly. Months later, when it sold, it was for a price of $280K.
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For every story of a short sale that went smoothly, there are dozens more that make no sense. Some short sales do work out, and can represent awesome deals. But a buyer needs to buckle up, and hold on for the ride.
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Another property was listed as a short sale for $199K. It never sold. The bank foreclosed, and put the property up for sale for $300K, much closer to its real value. It sold rather quickly, which indicates that the bank never had any intention of selling the property for its short sale list price. These must have been dozens of offers.
****
A short sale came on the market for $219K. Given the homes true value of closer to $300K, it went pending rather quickly. Months later, when it sold, it was for a price of $280K.
****
For every story of a short sale that went smoothly, there are dozens more that make no sense. Some short sales do work out, and can represent awesome deals. But a buyer needs to buckle up, and hold on for the ride.
Thursday, February 25, 2010
Siesta Key Dreaming
I am watching the weather reports. Another snowstorm is set to hit the northeast, which just makes me thankful all over again that I moved south nearly 10 years ago. That was the best move I ever made.
So in the spirit of warmth, sun, and beaches, I thought it appropriate to revisit a topic of much interest - are there any affordable homes on Siesta Key? Now, more than ever, the answer is YES. And if you are even remotely considering a retirement or second home and you want to walk to one of the top beaches in the world, now is your time.
Siesta Key Homes - Starting at $249K as of 2/25/2010
Siesta Key Condos - Starting at $150K as of 2/25/2010
As a true beach bum who moved to Sarasota after standing on this very beach in awe, I can tell you...like me, you will never regret having a home here. Especially if you can get a great deal.
http://www.TrueSiestaKey.com
http://SeeSarasotaLive.com Live webcam located on North Siesta Key
So in the spirit of warmth, sun, and beaches, I thought it appropriate to revisit a topic of much interest - are there any affordable homes on Siesta Key? Now, more than ever, the answer is YES. And if you are even remotely considering a retirement or second home and you want to walk to one of the top beaches in the world, now is your time.
Siesta Key Homes - Starting at $249K as of 2/25/2010
Siesta Key Condos - Starting at $150K as of 2/25/2010
As a true beach bum who moved to Sarasota after standing on this very beach in awe, I can tell you...like me, you will never regret having a home here. Especially if you can get a great deal.
http://www.TrueSiestaKey.com
http://SeeSarasotaLive.com Live webcam located on North Siesta Key
Tuesday, February 23, 2010
Short Sales Changes Coming?
In November of 2009, the guidelines were set for non Freddie Mac/Fannie Mae short sale procedures. The guidelines are set to take place in April 2010. Fannie Mae and Freddie Mac are due to reveal their own version of the HAFA Act very soon. The acts, if implemented and workable, will solve some daunting short sale problems and hopefully begin to clear short sale inventory.
The act will address two of the biggest frustrations of short sales.
1) Blind offers - in the past, the listing agent often set the listing price without input from the bank as to what they will actually take.
New procedures will allow borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
2) Unacceptable time frames - In the past, buyers and sellers had no choice but to wait for unspecified amounts of time - average 6 months, but up to a year or more in some cases - for a decision from the bank.
The new act will allow for standard processes, documents, and timeframes/deadlines.
It is my opinion that should these new processes be implemented in an enforceable way, the inventory will begin to rapidly drop to a normal level. At the moment, short sales dominate the market, and buyers are often unwilling to enter into a contract with so many unknowns and opt instead to wait until a "traditional" sale hits the market. Once lenders begin to utilize these procedures, and short sales are easier to navigate, buyers will begin to take advantage of the sales.
The act will address two of the biggest frustrations of short sales.
1) Blind offers - in the past, the listing agent often set the listing price without input from the bank as to what they will actually take.
New procedures will allow borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
2) Unacceptable time frames - In the past, buyers and sellers had no choice but to wait for unspecified amounts of time - average 6 months, but up to a year or more in some cases - for a decision from the bank.
The new act will allow for standard processes, documents, and timeframes/deadlines.
It is my opinion that should these new processes be implemented in an enforceable way, the inventory will begin to rapidly drop to a normal level. At the moment, short sales dominate the market, and buyers are often unwilling to enter into a contract with so many unknowns and opt instead to wait until a "traditional" sale hits the market. Once lenders begin to utilize these procedures, and short sales are easier to navigate, buyers will begin to take advantage of the sales.
Wednesday, February 17, 2010
The Paradox of "Foreclosure Value"
The request goes something like this "I know there are a ton of foreclosures in the area. I want to take advantage of one, but I want to make sure I am buying something that will definitely increase in value"
Don't get me wrong, I understand what they are trying to accomplish. But when a neighborhood (or community or town or county) is rife with foreclosures, the concept of "recovery " and "values" is a dicey one. The very reason you can get so many properties for so cheap is generally because there are just too many abandoned properties in that area. Value in those locations is hard to guarantee. I recently looked at what appeared to be a great deal for a client - until we saw that 11 other homes ON THE SAME STREET were in distress. Value? Probably not.
In Sarasota, we do not see nearly the REOs as they have in other parts of the state - and exceptionally few in higher end properties (over $100K). And when the true steal comes up, it is gone within minutes. This is not an exaggeration. Recently, I saw an REO the moment it hit the system. Recognizing immediately that it was a deal - priced at $275K, worth about $400K - I ran out to the property to take photos for my customers. I got there less than 1 hour from the time it appeared on the market.
I was one of 17 people on property.
By the time one of my clients expressed interest 3 hours later, the property was pending. Gone. A true deal does not last long. The media has made it sound like there are no buyers. But Sarasota is crawling with buyers.
I look at every opportunity for my buyers - and sometimes we get lucky with an REO and steal a property. But I still maintain that some of the best deals to be had are from traditional sellers. If they purchased prior to the boom, they likely have plenty of equity in their home and can afford to sell. You get a great deal, and the home has actually been maintained. Not only that - those homes arent getting nearly the attention of the REOs, which often end in bidding wars and higher prices.
Don't get me wrong, I understand what they are trying to accomplish. But when a neighborhood (or community or town or county) is rife with foreclosures, the concept of "recovery " and "values" is a dicey one. The very reason you can get so many properties for so cheap is generally because there are just too many abandoned properties in that area. Value in those locations is hard to guarantee. I recently looked at what appeared to be a great deal for a client - until we saw that 11 other homes ON THE SAME STREET were in distress. Value? Probably not.
In Sarasota, we do not see nearly the REOs as they have in other parts of the state - and exceptionally few in higher end properties (over $100K). And when the true steal comes up, it is gone within minutes. This is not an exaggeration. Recently, I saw an REO the moment it hit the system. Recognizing immediately that it was a deal - priced at $275K, worth about $400K - I ran out to the property to take photos for my customers. I got there less than 1 hour from the time it appeared on the market.
I was one of 17 people on property.
By the time one of my clients expressed interest 3 hours later, the property was pending. Gone. A true deal does not last long. The media has made it sound like there are no buyers. But Sarasota is crawling with buyers.
I look at every opportunity for my buyers - and sometimes we get lucky with an REO and steal a property. But I still maintain that some of the best deals to be had are from traditional sellers. If they purchased prior to the boom, they likely have plenty of equity in their home and can afford to sell. You get a great deal, and the home has actually been maintained. Not only that - those homes arent getting nearly the attention of the REOs, which often end in bidding wars and higher prices.
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