- You have choices. Lots and lots of inventory, from which to choose. In Flagler County, building lots shot up to the $80-90,000 range and are now available in the $30-40,000 range. Salt water canal lots peaked in the $400-500,000 range and are now in the $200-300,000 range. An "average" 3BR-2BA house was in the $250-300,000 range, but now is more like $150-200,000.
- No competition. Remember the craziness of 2000-2005? You will likely be the only one on the seller's schedule today.
- An "offer" is OK. Before, it was often multiple offers and the real question was "how high above the asking price will work?" Not today. Probing the seller with a low offer won't get you thrown out.
- Time lines are more relaxed. Look at a few homes and talk about your needs and wants. Proceed at a normal pace and leave the Valium at home.
- Due diligence is again part of the process. Get your inspections done. Get an appraisal (even if you are a cash buyer). At one point, these contingencies were sometimes ignored to get a leg up on the other bidders.
- Builders have lots of specs... and are competing. The builders are actually the re-seller's nightmare right now. They have deeper pockets and can weather the storm longer than Joe and Mary Seller. The builder's house at $195,000 today was what the speculator bought in 2006 for $249,000... and tried (unsuccessfully) to flip for $295,000.
- Sellers will fix stuff. Many purchasers in the crazy years would be forced to forgo repairs, in order to beat out a competitor. Even the bank-owned sales today have wiggle room. They will tell you it's an "As Is" sale, but when your inspection reveals repair issues, the bank will often come off the price a bit.
- Few investors to compete against. And no speculators at all. Lots of mortgage fraud there. They'd sign the bank's document to say it would be "owner occupied" (to get the better interest rate)... but then it would be put on the rental market.
- Financing is "real" again. I love what one agent, Paul Pastore from RE/MAX Achievers in Phoenix, AZ, said: "The wink, wink, zero down, no doc, adjustable, 3.5%, sub-prime, no payments first six months, hybrid" loans are gone. Fixed rates are back, as are VA/FHA and regional loans for military, police, fire, nurses, teachers, etc. Good stuff.
- Location-Location-Location is doable again. No more living in Georgia and working in Florida. Homes are once again more affordable... where you need them to be.
- Yeah... it's a great time to buy real estate:-)
- (Thank you to Paul Pastore, see above reference, for his original article on this same subject)
Monday, October 29, 2007
Thursday, October 25, 2007
Sellers: Assuming you have priced your property with your head, not your heart - "Image is Everything"
I had some serious buyers here in Palm Coast this week. They had sold their home in Massachusetts and had cash in hand. They took a big hit on their sale and were looking for a bargain on this end. They had done a lot of homework on the Internet and had really appreciated the website we gave them to do their searching: www.frankzedar.remax-florida.com. I'll put in a shameless plug here. When it comes to national websites, www.REMAX.com blows them all away. (A recent comparison showed that the RE/MAX sites were more productive than the sites of Century 21, Coldwell Banker, and Watson... combined!) I can only guess that comes from the brand recognition and national advertising campaign, where RE/MAX spends more than all the major brands combined - where it counts - on national prime time TV. That big red, white, and blue RE/MAX hot air balloon is powerful stuff.
- We did a more focused search when they got here and we found a whopping 80% of what fit their criteria was up for "short sale." (That % includes all the ridiculous efforts on agent's parts to "hide" the fact that it's a short sale property). Come on - it is what it is. Short sales are fine for investor buyers... or for those who have time on their hands, but these folks were living in a motel and needed a quick sale.
- Here was a great question they asked (pay attention, sellers): "Why are prices all over the board for basically the same type house?" (3 or 4 Bedrooms, 2 car garage, 1600-1900 sq. ft., built since 2002, no pool, no water frontage, shingle roof, no gated community... you know - just a nice, average smaller home in a nice Palm Coast area). "What does it mean to see a range of between $135,000 - $299,000 for very similar homes?" What I told them is this: There are really two MLS's... One is where sellers are living in a mid-2005 fantasy land, where they say things like, "We don't want to give our house away" and "If it's meant to be, it will happen" and "If you'd just run more ads, people would buy it" and "There's a buyer for every home" and "Our house is better than the rest because......" The other MLS is where the realists live - the ones who understand the market and have let reason replace their anger. (This MLS, by the way, is the one where homes actually sell).
- OK, so we get out there to look. Wow... Wow... And "wow" again. Every lawn needed to be cut. All the bushes needed trimming. Every bed needed weeding and mulching. Every palm tree needed the dead, brown fronds cut. Every carpet needed shampooing. And how do you effectively show a home with no lights? And sellers ("Bank owned" property included), is it really cost-effective to leave the A/C off in Florida, so mold and mildew can have a field day?
- Bottom line for today's Blog? As agents, we have a responsibility to our sellers. It's called "brutal honesty." If they really need to sell, tell them where to price it and how to present it to the buyer. Sellers are in shock and are looking for strong, experienced, confident agents to take them by the hand and lead them through this mess. If they don't need to sell, advise them to get off the market and wait a year or two.