In a shifting market it’s not uncommon for real estate appraisal values to lag behind the market of the moment.  We have such a market in SW Florida.

Real Estate Appraisal Values Lag Behind Market
Real Estate Appraisal Values Lag Behind Market

Have you ever noticed when gas prices at the pump rise, they seem to do so quickly and when they fall it tends to be slow?  Appraisals feel kind of the same way.  In a rapidly rising market appraisers are slow to pick up on the rise, but when prices are falling, they get conservative and offer time value adjustments to the downside.  Appraisers are simply protecting themselves because they have risk.  The last thing they want is a lender accusing them of over valuing property values.

Appraisers concentrate on what happened in the past and must wait on data to reflect on what is happening on the streets today.  It’s a lot like looking in the rear-view mirror, they can tell you where the market has been but not where the market is headed.  Appraisers must prove values with data all the while mitigating risk by being caught in a rapidly changing market.

There are things agents can do to improve value with the appraiser as well as sell over appraised value.  It takes an experienced agent to deal with these issues.  Sellers mistakenly believe it does not matter who they list with in a seller’s market.  It always matters who you list with, and now is no exception!

Experienced buyer’s agents are counseling buyers on what it takes to score a property today.  We are seeing multiple offers and many times the winning buyer will pay well over asking price.  Buyers are being counseled it may or may not appraise depending on the appraiser and the buyer will have to pay the difference.  The lender will lend based upon a loan to value ratio of the appraisal.  This does not stop the buyer from purchasing, but it might raise their down payment.  Lenders are now counseling buyers too that homes are selling for more than appraised value in many cases.  Real estate appraisal values simply are not keeping up.

Sellers are not accepting as many repair items after inspection either.  They do not have to.  If the buyer backs out there may be 10-20 other buyers willing to pick up that property the day it falls out.  In fact, many buyers are scoring deals simply on the fear of greed of a previous buyer who backs out.  Sellers have the upper hand right now.  Buyers are not really in competition with the seller, they are in competition with all the other buyers that would love to have their deal.

You never want to go back to sell a property a second time, unless the first buyer is not being reasonable or if the line of backup buyers is stronger and more motivated than the first.  This is one reason we spend time on selecting the best 1st contract.  We evaluate how likely this buyer is to complete the sale. We look at pre-approval letter, amount down, amount in escrow, and all terms.  The offer tells a story and prompts questions.  We may call the lender or ask further questions to help the seller make the best decision for them.

For buyers it helps to work with a team that represents a lot of sellers, because we know what listing agents are looking for in an offer, and we can help structure your offer to be more desirable.  Remember, your offer not only has to be acceptable to seller, it must beat out all the other offers.  Price is just one term among many the seller and listing agent looks at.

If you are looking to buy and sell, give us a call.  Brett and Sande can be reached at 239-489-4042 Ext 4.  We’ll be happy to talk about your situation and give you the advice you need to succeed. Visit www.SWFLHomevalues.com to see what your home is worth.   Good luck and Happy House Hunting!

See last week’s article “Correctly Priced Homes Selling with Multiple Offers

SW Florida Real Estate Market Update September 2020

Total real estate sales volume, also known as dollar volume, has bounced back for the year.  The total real estate sales volume is the sum total of the actual closed price of each sale.  This results in the total dollar volume of sales.

Total Real Estate Sales Volume Bounces Back

When prices are up and sales are up, dollar volume must be up.  The same is true when prices are down, and sales are down.  We know total dollar volume would be down as well.  Sometimes prices are up, and total number of sales is down, and vice versa.  Therefore, we look at the total dollar volume of sales, or total real estate sales volume.

This metric is another indicator of the overall health of the market.  We reported back in June when May’s official numbers were released that total real estate sales volume was down 42.7%.  That hurt, and of course was a direct function of covid-19 and the stay at home orders the nation was under in March.  Of course, Florida was under a stay at home order in April, as were other states.

Realtors learned to adapt.  Buyers were itching to buy, and they still are to this day.  We found a way to make transactions happen even in a pandemic.  The good news is we are back to the plus side for the year.  You will note, total real estate sales volume was up 1.5% over June of 2019 numbers.  While this is fantastic, it is not what brought us back to the plus side for the year. January, February, and March are what did it.  We were in a fantastic market pre-covid.  The great news is, we are getting back to a positive market again.

Interest rates are historically low, and the stock market is doing well.  The economy is doing better than expected given that states are not back to 100% open yet.  Some are wondering how mortgages in forbearance will affect the market going forward.  Nobody seems to know.  All we can say is the top Realtors learn to adjust their marketing in times of shift.  Top agents learn to pivot on a dime.  This is exactly what we did when covid-19 hit, and the Ellis Team sales numbers are up over last year.

Many local Realtors numbers are up, and many are way down.  The Realtors that pivoted and adjusted have done well, while those that did not market or keep up with their database have not.

The Ellis Team has several databases.  One of course is our past customers.  With over 5,000 sales in Lee County over the years, we have maintained a pretty healthy past client database.  The other database is buyers who are looking to make a move.  We have 10,677 right now in our database, so chances are, if you have a home to sell, we may have the buyer for it.

Our database is pretty neat.  When we take a new listing, we can search our database and see how many of the 10,677 are viewing properties on our site that match that home’s criteria.  Of course, we are adding to the database every day.  We spend thousands of dollars each month on the Gold Standard digital package, so we receive the best leads around.  Some of these leads are local, and some are out of state looking to make a change.

One thing we know for sure is, many of the buyers are coming from high tax states.  Other buyers are looking to escape the city life and get more rural.  We can target both buyers, and this is why Ellis Team sales are up, even in a pandemic.

To get your home sold Fast and for Top Dollar, Always Call Brett or Sande Ellis 239-489-4042 Ext 4 or visit www.SWFLhomevalues.com to get your online estimate instantly.  We look forward to speaking with you!

See last week’s article “Real Estate Marketing Trends Shifting to Professional Video Tours

Watch the Future of Real Estate Latest Video

 

Today we would like to share with you three timely real estate trends we are keeping an eye on in SW Florida.

Timely Real Estate Trends

The first is median time to contract.  This is the amount of time it takes the average property to go under contract for sale.  As you can see from the chart, it rose to 79 days.  That is a 11.3% rise from last year in June, and up considerably from May’s 47 days.  For the year however, we are still at 64 days, which is down 9.9%.  We will be keeping our eye on this metric.

Timely Real Estate Trends Median Time to Contract

Secondly, we are looking at new pending sales which were up 28.3% in June.  Some of this is pent-up demand from the previous months and some is the fact that interest rates are at historic lows.  Buyers do not want to miss out on this opportunity.

Timely Real Estate Trends New Pending Sales

Lastly, we are looking at new listing inventory.  New listings rose 9.6% in June 2020 over June 2019.  The issue is, new pending home sales were up 28.3% in June and up 2.2% in May, while new listings were down 1.6% in May and down 33.7% in April.

New Listings June 2020 Timely Real Estate Trends

You cannot have new listings down over 30% and new pending sales up 28% without it eating into existing inventory.  Existing stood at 4,090 listings in June, which was down 28.5% from last year.  This is a direct correlation between the three metrics we are analyzing in this article.

It is possible this market just re-balanced to the levels we are at today.  Or, it could be that sales are not higher than they are simply because there is not enough inventory to sell.  In other words, perhaps sales would be higher if there was more inventory.

We are seeing the most housing inventory gains coming in the $250,000-$300,000 range and in the $400,000 and up range.  Inventory is down below $250,000 and flat between $300,000-$400,000 in Lee County single family homes market.

Other Timely Real Estate Trends

Another trend we are seeing is agents from Miami coming over here with their clients and attempting to sell property over here.  Official June numbers show Palm Beach, Broward, and Miami-Dade areas with 3.9 months supply of homes on the market.  Lee County has 3.6 months, so technically we have less supply than they do relative to number of home sales.  It is possible they dipped recently and are sniffing over here for available properties to sell.

We saw this trend back around 2005.  It’s not fun because usually they have pre-qualification letters from Miami based lenders and we did not always find them to be legitimate.  More times than not, those buyers failed to qualify even though they had an out of town lender tell us they were golden.  It got so bad that local Realtors would require a local lender look at the buyer to make sure they were indeed qualified.  When I look at a pre-approval letter, I want to know that buyer can perform before taking it off the market for our seller.

The buyer may have been qualified, who knows.  In the end, the lender could not get the job done, and that gave agents fits because they worked so hard to find a qualified buyer only to find out they weren’t qualified, or the lender couldn’t perform.

No matter where you purchase, we tell customers to use a local lender, or a national lender with a reputation for results.  Otherwise local agents won’t trust your pre-approval letter and your offer may not get accepted, especially if there are multiple offers.  You do not have to use the local lender, just get a pre-approval from one so the sellers know you are qualified.

Realtor You Hire Matters

In a shifting market, the Realtor you hire matters.  This is true on the buying and selling side.  Always work with an agent that has years of experience in all kinds of markets, and several hundred if not thousands of homes under their belt.  The Realtor makes good money, and they are worth every penny when you need them.  It’s times like this when you really need experience you can count on.

Feel free to call Brett and Sande Ellis 239-489-4042 Ext 4.  We’re here to help.  Or visit www.swflhomevalues.com for a free home value analysis.

See last week’s article “Refinance Existing Home Versus Sell and Purchase New Home

Watch the Future of Real Estate

SW Florida real estate inventory supply rose slightly since October.  In October the months supply of inventory stood at 4.33 months.  Today the real estate inventory supply registers 4.43 months.  We’ve been reporting that listing inventory has been growing since October, but so has pending and closed sales.  This chart illustrates the relationship between active inventory versus closed sales the last 365 days and its effect on real estate inventory supply.

Real Estate Inventory Supply SW Florida

Sometimes we have a glut of inventory and low sales.  Other times we have low sales because there is little inventory to sell.  The relationship between the two data points tells a story.  The market is constantly moving; therefore, we are constantly studying it.  If you think you have the market all figured out today, you’re an expert for one day.  Studying the numbers is a never-ending process, but it is what’s required to keep clients educated so they can make the best selling and purchasing decisions available.

Looking closer at the numbers reveals in general the lower priced ranges below $300,000 did the best.  Most all these ranges saw even or declining supply relative to sales.  The $600k- $1 Million and the $1 million plus ranges gained the most inventory.  We have three possible theories as to why this occurred.

Higher priced homes generally take longer to sell, so it’s possible there is a lag between the time sellers place their home on market and time it closes.  The other theory could be that buyers have really turned on in the lower ranges due to lower interest rates.  Perhaps buyers in the lower ranges are more interest rate sensitive.  Lastly, it could be that mid-range and higher range buyers are move-up buyers and have recently sold their entry level homes.  They could help push sales higher in the mid ranges in the coming months.

While any of these theories are possible it proves that the market doesn’t always move in tandem.  Certain ranges get hot before others, and certain ranges cool before others.  We’ve even seen certain ranges remain hot and other ranges remain cold for extended periods of time in the past.  While every market is local, there are several sub-markets in any market.

Sometimes it’s unfair to report how the overall market is doing, because it can distort what’s going on at the neighborhood level, or at particular price points.  Have you noticed that certain stocks slump while the overall stock market is on fire?  The same is true in real estate.

The Ellis Team gets called on several listing appointments each month.  Sellers call us because they want an accurate valuation of their property.  They don’t want to under price it and give equity away, and they don’t want to over-price it and have it sit on the market with no offers.  Some sellers have an honest disagreement about what the market is telling them their home is worth, so they choose not to sell, or they list it above market value, and it fails to sell.  It’s natural to think your own home is worth more than other people think it’s worth because you’re emotionally tied to it.  We get it, and as humans we feel the same way about our own stuff.

Therefore, it pays to have someone else you can trust represent you.  A non-biased advisor can be honest with you and educate you about the market and where your home stands relative to the competition.  We enjoy helping people get Top Dollar for their homes through our market knowledge, expert negotiating, and world-class marketing.  We also know pricing it correctly upfront will help get a better price.  And if you place your home on the market and it doesn’t sell, don’t stop marketing.  It may be time to re-position it in the marketplace, but don’t stop the marketing.  You’ll need more marketing juice to inform buyers of the new price.

To learn more about your home’s value, simply call Brett or Sande Ellis 239-489-40402 Ext 4 or visit www.SWFLhomevalues.com to get a Free and instant online value of your home.

See last week’s article “December Real Estate Activity Busier than Usual

Good luck and Happy Holidays from the Ellis Team!

Southwest Florida real estate home prices increased 6% in April up to $249,000.  Median home prices had been $235,000 last April.  However, while the median price saw a rise, the average sale price only increased .9% over last year.

Southwest Florida Real Estate Home Prices April 2017

As you can see from the graph, in 2016 April’s numbers increased over March.  That didn’t happen this year.  The median price actually slipped $6,000 this April from March and the average sale price fell almost $15,000.

Pending inventory is down 10.1% and new pending sales were down 5.1%.  Active listings were up 4.6% although new listings were down 10.1%.

What does all this data mean for the Southwest Florida real estate home market?  We believe home prices have risen enough such that we’re in a fairly balanced market.  Our market is no longer rising because it had over-corrected and was undervalued.  Standard economic forces will be the driving factor going forward.  As we write this article today the Fed’s decision has not been announced.  It is widely expected they may raise rates .25% this week which would affect car loans and equity lines.  It may or may not affect 30 yr mortgage rates.

We do know that since the election over $4 Trillion dollars of wealth has been created in the stock market.  Home prices have risen as well.  Could we see some of that stock market money make its way over into the real estate market?  It’s happened before.

Rising interest rates typically erodes buyer purchasing power, so that’s not always good for the real estate market, although rates are low by historical standards.

Could baby boomers withdraw lofty 401k and investment money and move over to real estate?  It depends on their outlook of the stock market, interest rates, and the economy going forward.

Jobs are being created again too.  Over 700,000 have been created since the election.  This may be good news for the real estate market, although jobs are shifting.  Have you noticed retail sales are taking it hard?

Companies like Sears, Kmart, Lowes and others have struggled.  Shopping malls are closing across the country as shopping patterns are changing.  More are shopping online.

We’ll be keeping an eye on economic data as we think that will lead to consumer confidence.  We’ll also be looking at inventory supply numbers as well as builder inventory numbers.  We think there is an opportunity for builders to sell homes again.  If they build it, buyers will come.

Many local sellers would like to sell.  They just don’t know where they’d like to live yet, so they’re waiting.  In addition to touring available existing inventory, our team has been checking out new construction projects.  We think this may be the driver that unlocks home sales.  While inventory has risen some, it’s still low enough that home sellers don’t feel like they have enough choices to make a move.

It’s a double-edged sword though because as new construction inventory opens, there becomes more competition for existing home sellers.  Our economy needs both to fully thrive, but in the right proportions.

Southwest Florida Real Estate Home Prices Steady

I like where this market is right now.  The Southwest Florida real estate market is balanced depending on which price range you’re in.  If you’re thinking of making a move in Southwest Florida, give our team a call.  We know the existing inventory and the new construction projects.  You don’t pay more to use a Realtor when buying new.  Our fee is already built-in to their price.  It’s cheaper for them to pay realtors a commission than it is to advertise to bring in that many sales.  Plus, they know we have the ability to bring in more customers, so they treat our customers better.  It could cost you by not knowing all your options.

You need to know things like county versus city property taxes, CDD fees, homeowner and flood insurance rates.  These vary by location and age of the home.  We can help you sort all this out so you make a great decision.

Call our team at 239-489-4042 or visit www.LeeCountyOnline.com to search all the homes.  If you have a home to sell, call us and ask for Sande or Brett.  We’ll sell your home fast and for top dollar so you don’t miss that next opportunity.

Be sure to vote for the Ellis Team as Best Real Estate Team in News Press Readers Poll

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Watch the Future of Real Estate June 2017 Southwest Florida Real Estate Market Update

You’ve probably read headlines recently that the real estate market shifts have occurred . Not only is it true, it’s been predicted by those that study the numbers. However, the shift doesn’t tell the whole story.

Real Estate Market Shifts
Current Inventory

Just as we’re counseling sellers about the shift we see an uptick in listing calls and buyer contracts.  So if the market is shifting, how can it be that business has really picked up in last few weeks?

Perhaps you’ve noticed in just the last week the roads have gotten busier.  I sure have.  And I went to one of those large warehouse stores over the weekend and it was packed.  My wife and I both said “They’re back.”   That’s not why we’ve seen an uptick in sales these past few weeks however.

Real Estate Market Shifts new pending sales
New Pending Sales

We believe there is some pent-up demand. Buyers are desperately seeking homes in the $300,000 or less category, and we’re also seeing good activity in the $400,000+ range as well. We know the market as a whole isn’t as strong over $400k, so activity in this range is a good sign.

Real Estate Market Shifts

We’ve been watching official numbers and we are seeing declining closed sales, precipitated by declining pending sales, and increasing inventory. The numbers don’t lie and are indicative of a shift. Combine this with falling average sales prices and declining market volume and you know the shift is real.
So now that we know the shift is real, what can a seller do? Now more than ever it’s important to do 3 things.

1. Hire Experience- Agents who have worked and thrived through shifting markets are better able to guide through the experience.

2. Price it Correctly- You never want to get caught chasing the market down.  Not all price ranges are going down.  In fact, some are still going up.  Knowing where your home stands against the competition is critical.  Knowing where the demand from buyers is as well.

3. Marketing-Some agents say you can’t market your way out of a shift and it all comes down to price.  While it’s true that if you over-price a home, no amount of advertising and marketing will sell it, sometimes correct pricing alone isn’t enough.  This isn’t a bad market.  We’ve seen those before and this is nothing like that.  However, if it were a bad market, marketing becomes important because you have to do everything you can to reach the few buyers available for so many homes.

This is a shifting market, and that’s not necessarily a bad thing.  The market is fairly healthy.  Nothing goes up or down forever, and shifts along the way is a balancing act.  It keeps both buyers and sellers equal where neither becomes too powerful, but it can be scary if you’re on the wrong side of the shift.

Knowledge truly is power.  Knowledge leads to correct pricing.  Marketing is power too.  Marketing alone won’t sell your home, but it sure beats limited marketing.  Think of it as a sporting event. Shifts are won or lost by great coaches.  The talent on both sides are fairly equal.  Each side (Buyers and Sellers) has their set of strengths and weaknesses. It’s up to the coach to guide the team to a win.  The coaches right now are the full-time agents, and the agents with the most experience and winning track records are the ones to hire.

There’s a reason certain coaches win multiple Super Bowls. The top coaches are in demand, and teams pay them more money than first year coaches. It’s because they win, and if you’re a seller wanting to sell in a shifting market, you want to win. Hiring experience is the answer. So when the real estate market shifts, always go with experience.
We have a graphic in our listing presentation that reads “If you think it’s expensive to hire a professional, wait until you hire an amateur.” If you’re looking to buy or sell, call the pros at the Ellis Team 239-489-4042 or visit our website www.LeeCountyOnline.com and search the MLS like a pro.

 

16585 Wellington Lakes CIR, Fort Myers, FL 33908    13685 Wellington Lakes Cir

Open House Saturday 1-4 PM

 

Daniels Preserve Open Jouse
12494 Country Day Cir Open Sunday 1-4 PM

Future of Real Estate September 2016 Market Update

 

Hopefully everyone had a great Labor Day weekend.  The Ellis Team household celebrated with friends and family with a cookout and football party.  Good times were definitely had by all, and that’s the way it should be.  Beating the post Labor Day real estate stall isn’t rocket science, but more on that after we tell you about the stall.

I started cooking the day before.  I made all the sauces, put the rub on the meat, and eventually placed the pork on the smoker at midnight.  The plan was to smoke the meat at 225 degrees for about 17 hours.  The meat must reach a certain temperature, but inevitably the temperature gains stall out at about 160 degrees for a period of 5 hours or so.  This frustrates many who are not accustomed to the stall.

The stall is that period where temperature gains cease for a long while.  This is because at 160 degrees the meat begins to sweat and cool itself.  Juice go from the center to the edges during this time period.  One way to beat the stall is to wrap meat in aluminum foil at 160 degrees and keep the heat on.  By doing so you can retain some of the moisture and cut the heating time down.

Beating the Post Labor Day Real Estate Stall

So you might ask how does all this relate to real estate?  Each year after September the SW Florida real estate market reaches a stall.  If you know it’s coming there are things you can do to shorten the time-frame of the stall.  You must power through it as buyers and sellers are counting on you.

Beating the Post Labor Day Real Estate Stall

Knowing it’s coming is half the battle.  The other half is preparation.  Just as most of the work to cook the meat was done the day before, so it is true with the real estate market.

We continue to list and sell properties.  In fact, we’re cranking some sales now at a time when county-wide sales are down.  We don’t stop advertising, and we don’t stop prospecting for buyers for our listings.

In fact, much of the work we’ve done the past few months helps us with sales during the typical “Stall” time.  Some Realtors take off in the slow months, but this is the time to put the real work in.  Championships are built in the off season.  This was opening weekend and you can tell which teams put in the work as they were the most prepared for week 1.

When we list a home in September it’s very possible we already have the buyer we obtained in July or August.  We have a database of thousands of buyers we’ve worked hard to build up.  Some are buying today, some are buying tomorrow, and some next month.  We don’t control their time frame, we only control our efforts to obtain buyers for our listings.

Often times sellers will ask us if we have a buyer for their home.  Quite often the answer is yes.  When we take a listing we bring it back to our team of agents who cross-check our database to see if we’ve got someone for that home.  Perhaps we have someone flying in on October 2nd who matches perfectly.  Perhaps we have someone now.

In any event, we market the home too, because even though we may have 3 buyers for our listing the market may have one ready, willing, and able to buy it today.  And you never know which buyer will pay the highest price.

Don’t Sweat the Stall

It’s the hard work we put in year-round that enables us to sell homes every month of the year.  So we don’t worry too much about the “Stall”.  We advise our clients on what the market is doing, and if we’re doing our job at the highest level, perhaps we can shorten our client’s time-frame and power through it for them.

If you’ve got a home to sell, we should probably talk.  It’s possible we have a buyer for it, and either way our marketing attracts buyers.  If you’re a buyer, we’ve got some great new listings coming to the market in the next few weeks.  You can search at www.LeeCountyOnline.com or call us at 239-489-4042

We look forward to working with you!  Good luck, and Happy House Hunting!

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14154 Danpark Loop Fort Myers, FL
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14154 Danpark Loop

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Daniel’s Park

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Watch the Future of Real Estate September 2016

Marketing Homes in Hi Definition in SW Florida

The Ellis Team is proud to announce a new way to market real estate in SW Florida.  We are now Marketing Homes in Hi Definition in SW Florida. Technology has changed the way people view TV shows, movies, and content over the Internet.  Today companies like Netflix stream TV shows and movies direct to people’s homes or mobile devices.  People’s expectations are changing about how they want content delivered.

Marketing Homes in Hi Definition in SW Florida

For the first time the Ellis Team at RE/MAX Realty Group is bringing cutting edge technology to SW Florida and combining it with High Definition video and studio production editing.

The Ellis Team already ranks very high on Google.  Video is 53 times more likely to generate 1st page Google ranking over any other form of content.  Video provides a 41% higher click-through rate on universal results pages, and keeps visitors on your websites 6 times longer.

Videos 53 times more likely to generate 1st page Google ranking
Video Adds Higher Click-Through Rate

73% of sellers say they are more likely to list with an agent who uses video.  However, YouTube is filled with videos shot from cell phone cameras and terrible audio.  Consumers expect studio quality video, and when you provide that companies like Netflix flourish.

We think quality is important.  Video also allows us to tell a story about your home.  If a picture is worth a thousand words, how much is a video worth?

We’ve added a drone to allow us to take full motion high definition video of your home and community.  The drone adds perspective we just can’t achieve from the ground.  We’re able to show the lake behind your home, the golf course, property boundary lines, and proximity to landmarks.  Buyers love seeing homes from a bird’s eye perspective.  We also take stunning aerial photos from the drone.

We don’t stop there.  We add professional high definition video from inside the home as well.  Lastly, we compile the inside and outside video footage into a well produced video and upload it to various websites and YouTube.

We’re adding a Featured Homes in HD playlist to our YouTube channel which is already one of the most viewed YouTube channels in SW Florida.  To date we’ve received over 200,000 video views and this number will grow quickly with the addition of High Definition Property Videos.

We’re not the first to use a drone.  We’ve been marketing our properties using video for years to great success, so video is nothing new.  What is new is combining cutting edge technology like the drone with professional video inside the home, and professional video editing to create the ultimate viewing experience for a buyer.

We think showcasing homes in High Definition is the Future of Real Estate™.  Our new website explaining the program can be found at www.HomesinHD.TV

Each video takes some time to film and produce, so if you’d like your home featured in HD, call us now so we can get you on the list.  Of course we’ll advertise your home in the newspaper and all the various places we advertise, and we think you’re going to love the new high end video we’re bringing to SW Florida.

To search the MLS visit TopAgent.com  To learn more about Hi Def video for your home visit HomesinHD.TV

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Now Marketing Homes in Hi Definition in SW Florida

Most SW Floridians don’t realize that the US government raised rates on flood insurance back in 2012.  The Biggert-Waters Flood Reform Act of 2012 was signed into law July 6, 2012 and is being phased in over time.

Big Changes in Flood Insurance You Need to Know
Danger- Rising Rates Could Keep You Underwater

Big Changes in Flood Insurance You Need to Know

Realtors have been sounding alarms in Tallahassee and elsewhere because flood insurance rates under the new program could double or triple, effectively pricing new homeowners out of buying certain properties.  To make matters worse, FEMA (Federal Emergency Management Agency) has reclassified certain properties that weren’t previously located in a mandated flood zone into a now mandated flood zones.

Some homeowners have never had flood insurance on their property but when they go to sell it will be required.  Some homeowners have received letters from their lenders requiring them to obtain flood insurance.

The issue is Congress is essentially raising taxes by raising flood rates and making more people buy flood insurance.  The program was losing money so something had to be done, but the Biggert-Waters Flood Reform Act of 2012 said FEMA was to provide an affordability study on what the effects of implementation would be on consumers.  That study was to be completed by April 2013 but has not been done yet.

Florida Realtors President Dean Asher spoke to the members of the Florida Cabinet recently at the request of Governor Rick Scott.  He urged the Florida Cabinet to call on Congress to act now to delay “implementation of the Act’s rate increase provisions for grandfathered and newly purchased properties, pending FEMA’s (Federal Emergency Management Agency) report to Congress on the results of the affordability study that was required by Biggert-Waters.” That still-unknown affordability study was supposed to be submitted to Congress this past April, he pointed out.

Existing homeowners were protected by phasing in the rate increase but new homeowners have no such protection.  This may limit the growth in real estate as added costs to the buyer curtail how much they can afford to pay for the home.  It’s a total cost issue.  A buyer must weigh cost of home, interest rate, down payment requirements, home owner’s insurance, condo or HOA fees, taxes, and now rising flood insurance rates.  The total cost impacts buying power, and if a buyer is impacted you can bet sellers will be too.

FEMA has recently updated its website to help consumers identify a property’s flood zone and estimate the cost of a new policy.  It can be found at www.FloodSmart.gov The website gives a large range of costs but at least you’ll get an idea of a low end and top end and a list of agents that can write flood policies to check with.

We’re not sure what effect states can have on the federal government, so it’s probably safe to assume flood rates are going up and it may impact all of us in some form. We welcome any attention the State if Florida can give to the US government on this issue.

New disclosures to purchase contracts have just been released for new sales contracts.  Be sure to factor in the new changes as it could affect your cost of ownership.

To search the MLS for properties go to www.TopAgent.com or give us a call at 239-489-4042     Good luck and Happy House Hunting!!!

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Banks Revving Up For More Short Sales

Because Bank of America is the largest servicer of residential loans in the United States, it seems quite reasonable they would have the largest number of foreclosures and for a few years that was true. A few years ago Bank of America announced it was stepping up its efforts to assist homeowners with short sales in hopes of decreasing the amount of foreclosures. It takes time to ramp up, hire, and train enough people to lighten that load, and it used to be said that Bank of America was the worst at processing short sales. That can’t be said any longer as they actually closed more short sales in 2010 than foreclosure sales, and since they automated and moved their short sale process to Equator, an online sales management software tool, the process has become streamlined and much quicker.

No, we didn’t say Ecuador, a country in South America. We said Equator, an online tool qualified agents can become certified in to assist homeowners complete sales transactions. Not every agent will handle a short sale, nor should they. A short sale is a very complex transaction where the bank, or banks, asks for specific documents to help them make a decision on whether to accept less than the full mortgage payoff.

Banks Revving Up For More Short Sales
SW Florida Listing Inventory

This is a very complicated process because there are tax implications for some homeowners and investors, and the banks may sometimes ask for deficiency judgments in others. It gets really complicated when 3rd party liens are placed on the property, like HOA liens or judgments against the creditor. These must all be identified and negotiated as part of the process.

Listing agents are reticent to list these properties as they are more time intensive, and there is no guarantee the bank will agree to a short sale. Further complicating the process, the bank surely won’t agree unless every I is dotted and T crossed to satisfy their guidelines. This generally requires a hardship letter explaining why a short sale should be considered, a letter of authorization authorizing the agent to deal with all the various debtors and lien holders, bank statements, etc. Short sales also take time, as you may be dealing with a primary lender, the investor behind that loan, FNMA, a PMI company, and perhaps a 2nd loan and investor or a home equity line of credit.

Buyer agents are also reticent to show short sales as they’ve discovered some sellers are not a candidate to sell short, or the listing agent isn’t qualified to take the sale to closing. The short sale isn’t a sale to practice on, it must be done by skilled, tireless agents with experience and extensive training with the banks. If you’re a short sale seller, be sure to interview your agent and make sure they are a CDPE (Certified Distressed Property Expert) or similar designation and have lots of experience working with different banks. Wells Fargo, Bank of America, Nationstar, BSI Financial Services, ASC, and others use Equator and expect the agent to be qualified on that system. Others, like Aurora, SunTrust, Ocwen, etc. use their own proprietary system to consider a short sale and the agent must know how to reach each and identify what each lender requires. Ideally this information should be obtained at the time of listing, not when a contract is accepted as this will further delay the process. Learning on the job isn’t a great option for buyer or seller, so working with a listing agent who has experience closing these sales helps all.

Banks today are even reaching out to agents asking to help with our short sales. Two of the largest banks are sending their customers letters on how they may be able to short sale rather than lose their property to foreclosure and they’re even recommending qualified agents to assist. A short sale is not something a For Sale By Owner can do, nor is the bank looking for that.

As you can see by the graph, approximately 31% of all single family home listings today in Lee County are listed as short sale. Listing inventory is going down, and so is short sale inventory because successful short sale closings are going up.

If you’re on the brink of affording your home or property, talk to a short sale expert. It’s amazing that of the foreclosures, 71% of the homeowners never reached out to anyone for help. Help is available, and a short sale is much better on your credit. With banks today getting better at the short sale process, it pays to ask for help. Call your agent today and ask if they can help. If not, don’t hesitate to call us and we’ll see if we can get you help now so it’s not a crisis tomorrow.

The Ellis Team currently has 3 CDPE’s on staff. A CDPE is a Certified Distressed Property Expert, which requires intensive training and extensive short sale experience to attain. To help gear up for the increased short sale demand, the Ellis Team at RE/MAX recently hired Marisa Morgan who worked many years as a long time banker with Bank of America and also in the title business. For years Realtor clients came to her asking advice on how to properly package short sales so the bank would accept them. She sat down and met with several sellers so they understood the process, so it makes sense to add Marisa’s experience to SW Florida’s premiere team to help sellers sell their short sale properties.

Brett discusses short sale issues with Marisa on this week’s Future of Real Estate show entitled “Banks Gearing Up for More Short Sales in Fort Myers, Cape Coral, SW Florida” Video.