All news is relative.  Building permits are up which is good for construction and jobs. While building permits are up from last year, they’re a shell of what they were in the building boom, so you can spin the data any which way you want and we’ve seen it spun both ways recently. Good news for local jobs.

Good News For Local Jobs SW Florida Leading Economic Indicators
April Leading Economic Indicators

For years we’ve talked about statistics and provided updates about what’s going on in the local SW Florida real estate market.  Prices go up, prices go down, sales go up, sales go down, etc.  All along we’ve said supply and demand will affect the market, but ultimately the real rebound will occur when the economy improves and jobs return to the area.

Well, we’ve got some actual good news to report, and while some may spin it and say jobs are not what they used to be back in 2005, I would argue this is good news no matter how you look at it.  Nationally, jobless claims rose to 380,000 which was an increase, and this doesn’t even count those who have given up seeking a job, or whom are under-employed.

Locally it’s a much better story.  Two recent stories in the press touted jobs coming to SW Florida.  You may have heard about a company called Arthrex that is building a $25 million manufacturing plant in Collier County.  That will bring construction jobs to the area, but that’s just the beginning. According to a News Press article, the company employs 347 Lee County residents between its Plantation Rd complex and it’s North Naples facility.  The company plans to add another 400-500 workers by 2016 with an average salary at its Collier facility running $59,580. Arthrex expects to have about 2,000 local workers by 2016

I spoke to Government leaders back in January and other projects like this are in the works, so we look forward to bringing more good news to our area in the future.  Another local company made news this past week.  CarMax announced it is hiring for about 80 positions at its news store on Colonial Blvd.  CarMax is a retailer for used cars and a welcome addition to the SW Florida employment pool. By the way, if you’d like to apply for a job, visit www.carmax.com/careers

The real estate market has definitely been on the upswing since 2009.  For any recovery to be sustainable, jobs have to enter the picture, and now that is happening.  As inventory dwindles and more jobs come to the area, there is the potential for more construction opportunities, which fuels more jobs.  SW Florida has always been home to service industry jobs and construction, and with the addition of manufacturing companies like Arthrex, it could be a boom to our local economy.

There is talk of adding convention center space and perhaps a casino in the Fort Myers area which would also be a boom to the area job wise.  Gambling has always been a hotly debated topic and will always have opinions on both sides of the fence.  We’ll keep our eye on this however we suspect it will take months for this decision to play out.

SW Florida Distresses Sales Versus Traditional Sales
Traditional Sales Bring More Money Than Foreclsoures

Foreclosures are down which is another reason prices are up.  If you look at the attached chart you’ll see the median price of a traditional sale in Lee County Florida is almost double the foreclosure price.  This is a function of which homes come on the market in a particular price range, but I think it’s safe to assume that traditional sales are more indicative of actual market values than distressed sales. The good news is, there were almost 600 more traditional single family home sales the 1st qtr of 2012 than there were in 2011.

Let’s keep the Good News coming! It’s hard to spin this data as anything but good.

 

 

In a typical town in anywhere USA, local, state, and national economics dictate real estate demand and prices.  Sometimes destination locales and tourist areas forget this fact as some places buck national trends and can do well in a recession and poorly in boom times. Economics Drive Real Estate Markets Too.

Economics Drive Real Estate Markets Too
Economic Indicators Week of April 7, 2012

One could argue it all comes down to economics, and one could argue Florida will always have sunshine and retirees, so we’re immune to such things.  I agree that Florida has a lot to offer no matter the economic situation, and I also agree that economics affects us as well.

For instance, rentals are doing very well as many people have been foreclosed upon.  Foreclosures are synonymous with bad economic times, but it goes deeper than that.  People with bad credit are actually helping the rental market, which in turn makes the apartment building worth more.  REIT’s (Real Estate Investment Trusts) and insurance companies tend to buy up apartment buildings, and their value is derived from the income they generate, so as rents go up, so do values.  This can also affect single family homes, especially in the low to mid end.  Upper end homes never rented well enough to support their value, so their value is determined by something else, like appeal, and future price appreciation.

This takes us to national economic factors.  As Realtors in Florida, we all have access to economic data, and it’s important to look at how this data potentially affects real estate values here.  If nobody had a job, it would surely impact housing. All real estate is local, and so is economic data.  Today we are looking at national data, because this data affects real estate economies all over the US.  Other markets affect us here too.  If a snowbird can’t sell their home up North, there’s a chance they can’t or won’t purchase that 2nd home or retirement home in Florida.  If their market is in the dumps, or their 401k, they may be less inclined to invest down here, so even though we are insulated from certain events, we can still be affected.

Unemployment went down nationwide, but so did payrolls.  Many people gave up looking for a job and are not included in the unemployment data.  Of course, we also have the under-employed.  These are people who have given up on finding a job today they are qualified for and have alternatively taken a lesser job just to scrape by and pay some bills until jobs come back.

Average hourly earnings were down.  This can be because less workers are full time and more are part-time.  It could also be because there is pricing pressure and employers have had to cut salaries, or replace higher paying workers with less experienced and lesser paid employees.

Many employers are cutting back on bonuses, benefits, and salaries by furloughing employees in an attempt from laying more off, or shipping jobs overseas.  We are in a global economy, and we must compete, or business will cease to exist here in the US.

Construction spending is down, as is the average workweek.  These are not signs of a revved up economy and definitely a trend we’d like to see reversed. Keep in mind, small changes in numbers equate to big dollars, so it is important we start growing this economy in a sustainable way.  All these parts work together, just like real estate markets do.  We do not live in an economic or real estate bubble.  We are affected, so it’s important we pay attention to what’s going on.

We just finished season, and by all accounts it was very successful.  Many people from up North bought.  Many will come back and buy in the summer or by next year.  People loved their visit here.  We’re entering the summer months, and an election year.  This is the time of year economics matter.  Keep your eye on the news.

Together we’ll be watching to see if Lee, Collier, and Charlotte Counties can lure some businesses to SW Florida.  We’ll be looking at Florida employment figures, local construction, and housing numbers.  We’ll also be looking at the national scene. We really need about 400,000 new jobs per month to grow the economy.  Anything less than that is dragging our economy, and you can see that in March losing jobs did not help us gain 400,000.

Economic reports are only a point in time.  They go up and unfortunately down.  We’re focusing on trends and not blips.  We’re praying for positive trends.  I think this nation, and particularly SW Florida deserves some good news going forward.

 

Fort Myers Beach Spring Break
Fort Myers Beach

Last weekend I was down at Fort Myers Beach taking pictures for our Pinterest site.  I was amazed at how many people from all over were enjoying our beautiful beaches.  Traffic wasn’t too bad, although practically every car had out of state license plates.  This past weekend most seemed to be from Indiana, although there were plates from Kentucky, Ohio, Canada, and many Sunshine State plates as well.

Many were enjoying Easter break.  There were many college aged people, but also many families.  What’s not to love about our beaches?  SW Florida boasts some of the best beaches, and certainly the best weather in the country this time of year.  In fact, Fort Myers was on the map as the warmest city in the country this past week.

Best Florida Beaches
Best Florida Beaches – US News & World report

Two Local SW Florida Beaches Ranked as Top Beaches By US News World Report

In fact, US News and World Report ranked Fort Myers Beach as the 8th best beach in Florida, and ranked Sanibel Island as the #1 best beach in Florida due to its laid back atmosphere, art galleries, quaint eateries and supreme shelling.

Fort Myers Beach made the list for its small town feel.  I really like the wide beach with all the new sand since they’ve completed the beach re-nourishment project. People from all over the world travel here for our beaches and it’s a shame local residents get so busy working and tending to their families that not all get out to enjoy the beauty that SW Florida has to offer.

I know having lived in SW Florida for years there were long periods of time I didn’t make it to the beach.  It seemed like such a bother to pack up the car, go look for a place to park, find a spot on the beach, not to mention cleaning up all the sand that would inevitably find its way home with me.  In the past few years I’ve made getting to the beach a priority recognizing the sand, sun, and water are so relaxing and truly a natural wonder.

Perhaps the thing that makes SW Florida so unique is the small town feel, and the beach is no exception.  All are welcome here as practically everyone down here in SW Florida is from somewhere else.  SW Florida is truly a melting pot.  We’ve always attracted people from the Midwest, and in the last decade or so it’s seems we’re attracting more from the Northeast.  This could be the natural migration of people coming from the East coast of Florida who have always attracted people from the Northeast, or perhaps it could be the influence of ball teams like the Red Sox.

Whatever the reason people visit and enjoy SW Florida, few could argue an area has more to offer than right here.  We have world class fishing as many consider us the tarpon fishing capital of the world, top rated beaches, outstanding year round golf, and we’re home to influential innovators like Edison, Firestone, and Ford.  Even Al Capone called SW Florida home.

Whether you’re looking for a waterfront home where you can park your boat in your backyard, a golf course home, or a condo in a gated community, SW Florida has it all.  We even have vacant lots for you to build your life-long dream home.

This is the last weekend of season.  If you’d like to explore your options on how you could join the party and call the Fort Myers/Cape Coral area home, give us a call or send us a note and we’ll be glad to go over your options and answer your questions.  We too moved here years ago and remember what it’s like to have a dream and wonder what’s the best way to make it happen.  Once that dream becomes a reality you’ll be telling all your friends how you made it to paradise.

If we can help make that dream a reality, then you’ll help us with our dream which is helping others making their dreams happen.  Call the Ellis Team at 239-489-4042 or visit our website at Topagent.com

 

You can’t turn on the TV without getting daily updates from Fort Myers on the state of the Major League baseball teams.  TV networks love to use the new JetBlue Park, affectionately nicknamed Fenway South as the backdrop.  It’s named Fenway South because the field is designed to look like Fenway Park in Boston.  There is the green monster in left field baseball fans from all over will remember.  The designers took note to match the exact dimensions of Fenway Park when building this new stadium. Fenway South a Big Hit With Baseball Fans.
Fenway South a Big Hit With Baseball Fans
Fenway South-JetBlue Park
Some Lee County residents weren’t happy the county invested $80 million for a stadium that is in use one month of the year when we have such other pressing needs, and there is an argument for that.  The stadium was paid for by the bed tax, which is a tourist and development tax.  I think it’s fair to say this new stadium has caught the eye of baseball enthusiasts everywhere, and hopefully this translates into tourism dollars coming back to the area.
It’s hard to put a price tag on the free publicity our area is getting.  On a recent trip to a night game, I noticed the satellite trucks beaming the game up to folks in the New England area.  Combine that with ESPN broadcasting games and the daily baseball newscasts from Fort Myers, and you begin to realize this free publicity is worth something.
How many people from New England came this year or will in future years?  That’s hard to tell.  We can say that the real estate market got hot back in October, a full 3-4 months earlier this year.  We noticed many northerners buying, and that trend continues to this day.  I think people are also intrigued that we have two major league teams here, so maybe there’s something special and worth looking into in SW Florida.
Now there’s talk a 3rd team, the Washington Nationals may be interested in relocating here and taking over the old Red Sox stadium.  This would come with a price tag as the Nationals would want some of the very same things the Red Sox asked for, like practice fields closer to the stadium.  I’m not sure how much more money Lee County has to spend on baseball, especially in light of the fact the Twins are now asking for renovations to their stadium to the tune of about $60 million.  They won’t get anywhere near that, but they’ve asked.  Their contract says the stadium must be looked at every 5 years, and must be kept up with a certain percentage of the top spring training stadiums.
So the Red Sox stadium not only cost Lee County $80 million, but potentially lots more with upgrades to Hammond Stadium.  Politics aside, this is a time to revel in the fact that this new stadium has put SW Florida on the map, in a positive light, and after 6 years of making news for a housing crash, it’s nice to make the news for something good.  Our housing market is getting much better by the way.  All this leads to economic recovery and dollars being spent here locally.
While locals hate the traffic, keep in mind season only last a few more weeks, and we certainly enjoy the money spent all year long.  I’d say the 1st year of the new stadium was a success, and let’s hope it inspires more people to come here next year.  All the visitors bring money to the area, which spurs local jobs, and local jobs lead to economic recovery.  It’s all related, and each feeds off the other.  We’ve spent the money for the stadium.  That argument is over.  Let’s reap the benefits, enjoy some popcorn, peanuts, and Cracker Jacks, and cherish the sound of “Play Ball”.
Buyers and sellers have decided to Play Ball too.  Houses are flying off the market.  Let’s root, root, root for the home team and for our good fortune to continue.
Happy St Patricks Day to all, and may the luck of the Irish be with you.

Last week’s article drew much attention from readers all over the country. The article’s intent was to create interest and educate the public about military veterans’ issues, and from the feedback it worked. Follow-Up on SW Florida Military Veterans.

Follow-Up on SW Florida Military Veterans Miltary Residential Specialist Certification
Brigadier General Earl Jakes

We have limited space, so it’s impossible to clarify every detail, but there are a few points worth mentioning. Last week we said ” People don’t realize that if a veteran or active duty military is foreclosed upon, or does a short sale, they lose their military benefits forever. That’s a pretty steep price to pay. Remember, we, the United States, are the ones moving them around. They don’t have a say, and yet they suffer all the consequences.”

We should clarify this. If a veteran has a VA loan and has a short sale or foreclosure on that loan, they will lose their ability to get another VA loan. If they are foreclosed or do a short sale on a conventional loan this will not affect their certificate of eligibility. They are still entitled to their other military benefits.

This week we’ll touch on some new items as they pertain to real estate. Did you know that per the Servicemembers Civil Relief Act (SCRA) active duty military and their families are protected from eviction if they lease a house or apartment and cannot make rent. Service members also have the right to terminate a housing lease when they receive Permanent Change of Station orders or when they are deployed to a new location for 90  days or more.

There is also protection against default judgments against anyone in the military. This is especially important in SW Florida. Often I am asked to attend evictions and lockout proceedings against former owners or tenants on behalf of a bank foreclosing on the property. Before a court can enter a default judgment against a military member for not responding to a lawsuit or appearing at trial, the plaintiff who is suing the Service member must provide the court with an affidavit stating the defendant is not in military service.

Imagine someone working here in SW Florida and being called up to serve and being deployed overseas to Afghanistan or anywhere else the military needs them. They receive regular military pay during that time, not the regular pay they might be accustomed to. Just imagine if they came home and the landlord or bank evicted them while they were gone. How would you feel if this happened to you? For the privilege of serving our country, many service members returned home only to find their houses were foreclosed upon and sold to someone else. That’s quite a kick in the pants.

The SCRA creates rights for our Service members, like the right to terminate a lease if they are called, protection against foreclosure, health insurance protection, motor vehicle lease protection, and so on. There are many details that cannot be explained in a short article like this. I would highly recommend Service members contact their local AFLA office or visit http://legalassistance.law.af.mil A quick and easy way to read up on this act is go to www.Military.com and type SCRA in the search box. From there you’ll be able to read up on the entire act. This information is important to Service members, landlords, real estate agents, and the public in general.

I’d also highly recommend agents and lenders take the Military Residential Specialist course. There is so much more information you’ll learn that will not only help your business, but will also help educate the public and Service members as to options in dealing with military and their benefits. If you’d like more information on this course, feel free to contact me at Brett@Topagent.com

A few weeks ago I met with several military leaders including Brigadier General Earl Jakes pictured above, the civilian assistant to the Secretary of the Army from Texas, and others as we talked about the course and ways to improve the education of agents and loan officers. We hope industry has a better understanding of protecting and meeting Service members needs, because I can assure you, our military is protecting and meeting our needs.

SW Florida a Hot Bed for Military Veterans
SW Florida Military Veterans and Active Duty

Recently I had the opportunity to attend the Military Residential Specialist Program and I learned some very interesting things all agents should know in learning how to better assist our veterans.

I must admit, even though several members of our family served in the military, I didn’t have a full understanding of the needs of veterans because I personally didn’t lead that life.  This class has helped shed a light on some of those things.

I’ll share a few facts many people may not know.  When someone is active duty military, they tend to get moved around quite a bit.  Each member must find housing.  Some rent, some buy.  They get orders for periods of time, but you can just imagine how up in the air their life is.  Many have a family behind they care about deeply, so housing is important.

Because they never really know where they’ll be for great periods of time, making housing decisions can be difficult.  If they buy today, they may need to sell in 2 years.  What if the market declines due to base cutbacks or other economic factors in a community?  We don’t pay them a lot for their service, and they may not be able to afford the loss.  Many around here in SW Florida understand what it’s like to be stuck with a property that isn’t worth what you paid or what you owe.

People don’t realize that if a veteran or active duty military is foreclosed upon, or does a short sale, they lose their military benefits forever.  That’s a pretty steep price to pay.  Remember, we, the United States, are the ones moving them around.  They don’t have a say, and yet they suffer all the consequences.

Here’s another scenario.  Let’s say a doctor, lawyer, pharmacist; anybody really is now in the Reserves.  A Reservist can get called up for duty, just like many were for the Iraq wars.  When you get called up you leave behind the pay you were making and only get the pay the military pays you.  People tend to live a lifestyle depending on their job, so if you’re a doctor making a certain amount, and all of a sudden you get called up your pay may be cut 50% or more.  Your bills don’t go down 50%, they remain the same.

People need to understand the burden placed upon our military.  Not only do the serve our country, but they risk their life, and do so many times for less money than they could make back home.  Unemployment is 7% higher for veterans returning home than it is for the general population, and we all know unemployment is too high anyway.

The largest employer of veterans is the postal service.  What is the number one thing our government is trying to cut right now?  You got it.  In addition to cutting the military, we’re cutting the postal service.  Somehow we’ve got to do a better job protecting our vets.

As a real estate professional, we need to encourage a vet to use their benefits.  Several agents shudder when they see a buyer come in with an offer with VA financing.  Actually, VA loans are easy to do if you know what you’re doing.  An offer with a VA loan shouldn’t be looked down upon; it should be treated equally with other financed offers.  I understand cash is king and the seller only cares about their own sale, I just think we can portray these offers in a more positive light.

SW Florida a Hot Bed for Military Veterans

SW Florida has in excess of 250,000 veterans living among us.  Veterans are 9.5% of Florida’s population.  They served our country well.  The freedoms we have today can be directly linked to their efforts. Some of our military were spit upon when they returned.  The public has turned off on them in the past, and will in the future.

They may not be a cash buyer.  They have certain needs other buyers may not have.  Let’s at least try to give them a level playing ground and an opportunity to enjoy the good life SW Florida has to offer.  They’ve earned it.

If you’d like more information on the Military Specialist Certification, give me a call.  I’d love to share with you how you can learn to better serve this segment. Call Brett Ellis 239-489-4042 or email Brett@TopAgent.com

 

Prior to 2007 homeowners who had a short sale or foreclosure were subject to pay income taxes on any amount of forgiven debt. So let’s say a homeowner in 2006 had a mortgage of $400,000 and decided to sale as a short sale for $200,000, that homeowner would have had income of approximately $200,000 according to the IRS. Assuming this put that homeowner in the 25% tax bracket, this homeowner would owe an additional $50,000 taxes to the US government. Keep in mind, perhaps none of this money went into the pocket of the homeowner, it was simply forgiven debt. The same would be true for a bank foreclosure.

Important Tax News Could Save You Thousands
Important Tax News Could Save You Thousands

Back in 2007 the US government signed into law the Mortgage Relief Act which provided homeowners who used their home as a primary residence relief up to $2 million for married couples and $1 million for individuals from any shortage being treated as income by the IRS. In the previous example above, the $200,000 would be free from being treated as income as long as it was their primary residence. The lender must formally forgive the loan.

The US government is giving homeowners until December 31, 2012 to complete a short sale or foreclosure. Starting January 1, 2013 any debt forgiven, even on a primary residence, will be treated as income by the IRS and subject to taxes.

A homeowner doesn’t always control when the bank will take back a home or when the bank will complete the foreclosure transaction, so they cannot guarantee they’ll make the December 31 deadline.

A distressed homeowner does control to a greater extent the execution and timing of a short sale. While there is no guarantee the bank will agree to a short sale, or that the buyer will wait around long enough for the lender to agree, it is generally known the seller has more control over their fate in a short sale than a foreclosure.

Time is running out for many sellers as we have 11 ½ months to complete the short sale. Some short sales go smooth, and others are a bit trickier. Sometimes we have to sell it 2 or 3 times if buyers walk. The bank may respond right away, or it could take several months for the banks to complete their analysis depending on who the lender is, whether there is a 2nd mortgage or equity line involved, and especially if mortgage insurance is involved.

Most people just think the banks are slow, which is true. However, the process can be more complicated as the 1st lender may be due money back on certain losses by a private mortgage insurance company. This takes time for all to evaluate, and it must go in steps.

Some loans are guaranteed by FNMA or Freddie Mac, and there are governmental programs in place the lender must follow. A popular program you may have heard of is HAFA (Home Affordable Foreclsoures Alternative) Program. If the home falls under this program, certain procedures and timelines must be followed. Sometimes it takes time just to see if the loans qualify for this program. There are other programs as well.

This is why a seller should decide soon if they may need to sell their home due to hardship. The decision today could save thousands in taxes for years to come. Waiting too long could cost a seller big time.

A bankruptcy may be a solution to avoid such taxation after 2012, so we wouldn’t be surprised to see bankruptcies rise next year from sellers who miss this deadline.

The good news is lenders have beefed up their short sale department staffs the last few years and are equipped to handle more sales today than they were 5 years ago. We’ve had much success completing short sales, although the buyer must be educated that the bank will take some time, and they may counter the accepted price with the seller a bit higher.

No short sale is complete until the lender(s) sign off and everybody agrees to the terms. Short sales are a way to bring otherwise underwater overpriced property to the market at today’s lower prices. Education is the key for everyone involved. The agents involved, both buyer agent and seller agent must be competent in handling complex short sale transactions as both buyer and seller must be educated about the process.

Sales are already heating up this season, so 2012 could be an interesting ride. We’ll keep you posted on news affecting buyers and sellers in the SW Florida real estate market.

 

Because we are writing this article this week before official numbers are released, we decided to go inside the numbers and focus on listing inventory and sales data.  According to preliminary numbers researched by the Ellis Team, listing inventory rose again for the 3rd consecutive month.

Single Family Home Listing Inventory in SW Florida
SW Florida December 2011 Listing Inventory

Lehigh Acres has been holding fairly steady while Cape Coral is seeing the largest gains in inventory.  Fort Myers is inching higher ever so slightly.

What’s interesting is the distressed sales market.  We track a variety of graphs.  One graph not shown here because it’s a little tangled and hard to read in newspaper format shows large drops in distressed sales in Lehigh Acres, Fort Myers, and Lee County overall.  Cape Coral has held steady at 50.45% of all single family sales being distressed.  Lee County stands at 48% distressed rate in November.

SW Florida Distressed Sales Chart December 2011
Foreclosures Vs Short Sales December 2011

We have included a Foreclosures Vs Short Sales graph that is a bit easier to read.  It fairly well shows the history of the foreclosure and short sale market in SW Florida.  As you can see, the height of foreclosure sales was in June 2009, while the height of the short sale market was March 2011.

 

Banks revved up their short sale departments to handle an increased load.  It can be said that potentially each of these successful short sales may have saved a corresponding amount of foreclosures, so it was in the banks and the markets best interests to sell these homes as short sales rather than as foreclosures.

Going into 2012 we’re going to continue to watch the listing inventory and the mix of inventory.  Traditional sales are on the rise as a percentage of all sales, although many homeowners are not selling at today’s bargain basement prices.

Speaking of bargain prices, many buyers are calling wanting to buy homes for investment and expecting 2009 prices.  It seems like sellers are always the last to recognize when prices are dropping and buyers are the last to recognize when prices are rising.  Why is that?  Could it be selective hearing or denial?

We can definitively say that investment homes in Cape Coral and Lehigh acres bottomed in 2009 and have risen since.  Buyers today can no longer pick up a home for $35,000 in Lehigh unless it has major problems.  $70,000 is more common place for the low end now, so essentially prices in the low end have doubled.

Sales are flat in December versus November; however we are expecting sales to pickup in season again.  We’ve had no trouble selling homes.  The biggest challenges we’ve faced are closing these homes.  Lately we’ve been encountering title issues, mortgage re-disclosure issues due to any delays, and buyers not waiting patiently for the short sale approval.  We’re getting short sales approved within 60 days in many cases, but buyers are impatient.  Going forward the industry will have to do a better job educating buyers as to what the realistic expectations are for approval and closing time frames on short sales.

We’ll also watch foreclosure inventory as we are expecting a few more in the 1st and 2nd quarters of 2012.

We’ll keep our eye on the SW Florida real estate market for you, and whether you’re a buyer or seller, we hope Santa is better to you this year than he was last year.  The market is looking up, and we hope your holiday spirits are too.

 

From time to time we get calls asking about the best time share deals in Florida.  According to Wikipedia, “A timeshare is a form of ownership or right to the use of a property, or the term used to describe such properties. These properties are typically resort condominium units, in which multiple parties hold rights to use the property, and each sharer is allotted a period of time (typically one week, and almost always the same time every year) in which they may use the property.”

Time Shares in Florida Cypress Pointe resort in Orlando Florida
Cypress Pointe Resort Time Share in Orlando Florida

The Ellis Team doesn’t handle time shares in Florida as they are kind of their own specialty, although there are a few timeshare places at Fort Myers Beach.  What we do see more of in SW Florida are rental companies that will assist a homeowner and rent out a condo or home by the week while the owner retains full ownership of all 52 weeks of the year.

We have several condo projects and cottages in SW Florida that rent very well by the week.  A Buyer can purchase a home or unit and place it in the rental pool and produce very good income while allowing someone else to manage the property and rent out the unit.  The owner can even use the property so many days per year per the IRS and still claim it as an investment property.  We encourage you to speak with your tax advisor on those regulations as they pertain to you.

Unlike a property owner who owns all 52 weeks, a timeshare owner is only concerned with one week.  One advantage of a timeshare is its ability to be traded for other like kind properties all over the world.  We’ve talked to several people who own a timeshare say in Orlando and love visiting there, but they also enjoy the ability to trade it for weeks in Hawaii, Bahamas, Cayman Islands, Costa Rica, and all over the world.

Once you own a timeshare you simply pay the weekly maintenance fee each year and then you’re free to use the unit on your selected week, exchange it for a different week within your association if permitted, rent it out, or join an exchange service like RCI or VRI to exchange it for nice place elsewhere.  While you pay a yearly maintenance fee on your timeshare, there can be significant cost savings when exchanging your unit. Perhaps you own a 3 bedroom unit.  You may be able to exchange for a week of a 2 bedroom unit and another week’s use of a 1 bedroom unit, or both during the same week.

You can even exchange credits on your time share towards use on a cruise.  Depending on how nice your unit is, where it is located, and which week you have will determine how much credit you get towards exchange to another timeshare or cruise.

Timeshares can be great for those that like to travel.  Years ago timeshares were selling upwards of $30,000 in the Orlando area.  With the economy being down it seems prices have come down and now you can own them for much less.

In fact, we’re aware of an owner of a 3 bedroom unit at Cypress Pointe Resort at Lake Buena Vista in Orlando willing to sell their unit for $2,000 plus closing costs.  It is a 3 bedroom unit week 43 rated as Emerald and is close to Disney.  It can be exchanged for a 2 bedroom + a 1 bedroom unit or used as a 3 bedroom unit.  Cypress Pointe Resort offers lots of amenities for kids.  While we do not list or sell timeshares, simply call our office 239-489-4042 if you’re interested and we’ll put you in touch with the owner and you can deal directly.

If you’re looking for a condo on Sanibel, Captiva, or Fort Myers Beach and would like info on investing and what it would take to purchase and how much income you could derive from it, we can help.  Simply give us a call.

 

Banks are contacting customers who are past due or in financial trouble and offering owners or tenants up to $20,000 in relocation assistance to move out of home and hire an experienced agent to sell the home as a short sale.  Banks are also offering owners money to agree to a deed in lieu foreclosure in some instances as well.

Benefits of Short Sale Versus Foreclosure Chart
Alternatives to Foreclosure Chart

There are several advantages for taking the bank up on their offer.  If you let the property go to foreclosure, you’ll be evicted without relocation assistance.  Additionally your credit will suffer more in a foreclosure than a short sale or deed in lieu.  The owner is more in control when actively pursuing a sale through an experienced agent than giving up all control to the bank and the legal system.

A short sale is a commonly used alternative to foreclosure. Generally, when putting your home on the market, the goal is to market and sell your house for an amount greater than any and all outstanding liens against the property. Liens include all mortgages, escrows and fees on the property.

If you can no longer afford to make your mortgage payments and your house is worth less than you owe, a short sale allows you to sell your house at the current fair market value. You then have an option to move to a more affordable situation. In a short sale, the investor or owner of your loan must approve the sale because they are entitled to repayment of the loan and will be receiving less than the amount owed.

If you have additional liens on your property with other lenders, such as a home equity loan, all investors must come to an agreement in order to complete the short sale. This process takes time, and an experienced agent is required to navigate and negotiate through these challenges.

Another alternative is a deed in lieu of foreclosure. With a deed in lieu, you voluntarily transfer ownership of the property to your investor to satisfy the amount due on your first mortgage. In some cases, you may be eligible for a deed in lieu without first attempting a short sale of your home. A deed in lieu generally takes about 90 days, depending on your situation.

In either a short sale or deed in lieu you may be responsible for paying a deficiency.  There are many factors that determine this, such as if the home was your primary residence, what state you live in, your financial situation, etc.  Sometimes this can be negotiated with your lender.

In any event, most lenders agree it is much better on your credit report and they are likely to lend you money in the future faster if you agree to a short sale or deed in lieu instead of a full blown foreclosure.

If you’ve been contacted by your lender, it may be at least worth considering your options.  Don’t throw away documents sent to you by your lender.  If they make you an offer call your attorney for legal advice or an experienced real estate agent for advice on the program and assistance selling your home.

The banks really don’t want your home back.  They’d prefer that owners pay their mortgage payments.  When that’s not possible, it may be less expensive to offer the occupant relocation assistance and get on with the process of selling the home before it gets to the costly foreclosure process.  Once the home gets into foreclosure, the costs mount, the credit suffers, and owners lose options.

If we can help, call us at 239-489-4042.  Each situation is unique and it takes time to look into each program.  The good news is we have past experience with many of these programs.