Category Archives: Southwest Florida Real Estate

Market updates and news and information about the SW Florida real estate market

New Ways to Market Real Estate Using QR Codes

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Marketing real estate has definitely changed over the years. We like to say it has evolved to meet the changing ways consumers react to seeking information. Some media are effective at reaching actual buyers and some not so much. When evaluating a marketing idea, we must first look at the target market, and whether its use will be effective in reaching that market.

TopAgent.com QR Code
Visit our Website TopAgent.com

We’ve been sitting on a piece of technology for over a year we’ve been pretty excited about. We didn’t start using it until recently because we felt its application wouldn’t be realized by the masses, until now. As an agent we can be Leading Edge or Bleeding Edge. Last year would have been Bleeding Edge, so why introduce something until the public is ready?

This new tool is called a QR Code. It’s basically a barscan format that allows a Smartphone to read a code and do something with it. The typical uses of a QR code are to direct someone to a website, to text message, call a phone number, or just text information.

Google has promoted QR Codes so business can place a code in their store window, in print advertising, or on flyers or billboards so consumers can get detailed maps and directions to the business from their phone, store hours, and basic information about the business. Google even places QR codes now on Google Places accounts.

QR Code Virtual Tour Pine Island Waterfront Home
Virtual Tour of Waterfront Home in Pine Island

We’ve been placing QR codes in our newspaper ad directing people to our website, our Google Places account, and to our Virtual Tours of our properties. Agents can even place QR codes on their sign so prospective buyers can obtain much more information right on their phone, instantaneously. Anywhere you can print or display a QR code becomes potential business.

The more information you place inside a QR code, the larger and denser it becomes, which means it will take up more print space. Certain readers have a hard time reading dense codes, so we encourage you to keep them short and to the point. Every technology has a purpose, and must not be overused in ways it wasn’t designed. A QR Code is best for someone who’s visited your business, at a property, or sees your message online. Its use is to provide information to a mobile user in a mobile world.

Did you know that over 200 million people access Facebook via their mobile phone? Did you know 6.1 trillion text messages were sent in 2010. Did you know the mobile market is more than doubling every year? The mobile Internet is growing fast and will overtake the PC as the most popular way to access the web in coming years.

Video Updates on SW Florida Real Estate
SW Florida Real Estate Video Channel YouTube

So the question is, what do you do once you get them to your site? Is the site optimized for the mobile experience, or does it load just like a regular webpage that is hard to read on mobile phone. The people who solve this issue will win in a mobile world.

So take out your phone and have some fun. The next time you see a QR code, you’ll know what to do with it. If you’re interviewing agents, be sure to ask if their utilizing this technology. Next year you’ll see the Yellow Pages incorporate this into their larger ads, and you’ll start seeing this code popup on more websites and more real estate signs.

Make sure your Smartphone has a reader. I recommend Barcode Scanner but there are dozens. It’s fun to price shop at a store with your mobile phone. This is especially neat when the store offers price guarantees. There’s no bigger thrill then when you whip out the scanner and scan the UPC code of the product and find out the store down the street has it for $20 less. The store you’re in will verify and match that price.

Barcode scanner scans UPC codes and QR Codes. If you’ve never heard of a QR Code, or wondered what that funny looking graphic was next to a real estate ad in the paper, now you know. We’ve provided some examples. Good luck, and good scanning.

SW Florida Real Estate Prices Gain Slow Ground in 2010

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Official sales numbers were released both nationally and at the statewide level, and the good news is SW Florida’s real estate median prices rose 3.65% from $90,400 in 2009 to $93,700 in 2010.

SW Florida Real Estate Year End Prices
Year End Prices SW Florida Single Family Homes

Does this mean we’ve experienced the bottom and on our way up?  The answer is possibly, as foreclosure sales have fallen and prices have risen in the lower end of the market.  As this lower end of the market rises, which comprises a large part of the Lee County home sales, it automatically drives the median price up.

Higher priced homes could actually be falling and also raise the media price up.  You might ask yourself, how could this be?  A Median price simply means that half the homes sold over a certain price point and half under.  So in 2010 half the single family homes sold at or below $90,400 and the other half sold at or above this number.

For the sake of illustration, let’s say 20 homes sold in a given month at $400,000.  Now let’s reduce all the $400,000 homes down to $300,000.  Do you think more would sell?  Of course they would.  So now let’s imagine the new bargains at $300,000 generated 60 sales instead of the previous 20.  This could pull the median up from $90,400 to perhaps 93,000.

I know this example is hypothetical.  We also know there are less and less $50,000 homes, so as there are less home sales at the bottom end, and more above the median, the median price gets pulled from the top end and pushed up from the bottom.  It is not however a great indicator of what could be happening at all price points.

We’re not saying the $400,000 market is still falling, although it could be.  What we know for sure is the bottom has firmed up.  It feels like anything priced correctly today at $150,000 or less is firm.  Priced correctly is the key term.  Homes priced at $200,000 today were priced much higher several years ago, and we are noticing these homes selling too.  In fact, we believe this season will produce more sales $150,000-$300,000 than we’ve seen the last several years.

Northerners are just plain tired of the awful weather up north, and they realize home prices are great deals now and they’re becoming increasingly afraid they may miss out on the bargains.

Speaking of inclement weather, this past week we had several buyers place offers from up North and they commented they just couldn’t take it anymore.  Several agents I’ve spoken with shared similar stories, so the bad weather up North may be good for business down here.

As you can see by the graph, SW Florida home prices are at 1997 levels.  This sure is a steep curve on the downside but the worst may be over.  We believe there will be more foreclosures, but it feels like we’re at about the 7th inning.  Most of the investors have already lost their homes, and now we’re down to average people who have lost a job, or lost household income and cannot afford the payments, and they just cannot sell at today’s prices.  How much more of these we see will depend on the national economy and how long the recession persists.  Uncertainty in the Middle East and oil prices will be a wild card, so let’s all hope for Egypt, Tunisia, Jordan, and anywhere else to remain calm and shipping lanes open.

Banks look like they’re bulking up to increase short sale business, although we’ve heard the talk before.  We can say Bank of America has been much better to deal with recently and we’ve gotten several short sales approved and closed.  It would be nice if other banks sped up their processes too.

Inventories actually rose in December despite an increase in distressed closings due to backlogs.  We expect this inventory could go down; however we believe there is much shadow inventory.  Many refer to banks holding back properties from the market as shadow inventory, but the shadow we’re referring to is regular homeowners who would put their home on the market if they could, but they just can’t because they owe too much and can make the payments.  There is now way to measure this, but typically most in SW Florida would move around every 3-5 years, and people just haven’t been doing that these past five years.  The reason:  See Graph.

We’ll be coming out with a new SW Florida Real Estate Video update, but until then you can view our December 2010 Video Update.

SW Florida Home Sales Rise in December

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Official sales numbers haven’t been released yet, so we study inside the numbers to see what the market is doing.  Our analysis shows single family home sales in December shot up 32% over November, and condo sales shot up over 54%.  We’ve been reporting the past few months pending sales have been building which could lead to a surge in closings.  December began that surge.

Single Family Home and Condo Sales in SW Florida
SW Florida Home and Condo Sales

Foreclosure closings in Fort Myers proper almost doubled from 65 to 123.  Short sales climbed from 49 to 68.  57.19% of the Ft Myers single family home market was distressed, up 10% from the previous month.  This tells us banks allowed more short sales to close, and we were finally able to close some of the foreclosure sales that were tied up.

Cape Coral experienced a 35.81% rise in home sales.  All facets of the market rose, foreclosures, short sales, and regular sales.

County wide foreclosure sales were up 55.19%, while short sales were only up 13.33%  So of the 32% increase in overall sales, a large part was due to an increase in foreclosure sales.  Like it or not, foreclosure sales are not only leading the market, they’re almost dictating it.  Distressed sales county wide last month accounted for 59.90 of all single family home sales, and foreclosures accounted for 41%.

So here’s the breakdown.  Traditional sales 40.1% Foreclosure sales 41.3% Short sales 18.6%.  Distressed sales are driving this market, and probably will for some time until employment rises in the area.  Many national news outlets are running with stories that Florida and our area will see further declines.  This is a case where the authors really don’t understand the market.

We’re not ones to fluff up the market.  In fact, we predicted declines in prices, and most would say we’ve been pretty spot on in our price and volume predictions.  While nobody can be perfect about something that hasn’t happened yet (The Future) we believe SW Florida was the first in crisis and our crisis may last longer because it was more widespread, but we’re in the later innings of the foreclosure crisis.

Most of our investors have already folded their cards and ran.  Today we’re left with more foreclosures, but they’re due to people losing jobs and income versus legacy investment choices.  Oh sure, there are some investors still losing their properties, but the debt issues (Resetting Adjustable Rate Mortgages) set to reset later this year isn’t much of a factor here as those investors are already gone.  This will be an issue up North more than here.

I hear people say today’s foreclosures are a result of bad loan decisions.  Again many of the early defaults were, but today’s defaults are more from average people losing one or more incomes.  These loans were a good decision at the time, but things change when unemployment exceeds 14%.

We look for solid sales volume going into season as visitors realize our prices are bargains and they’re trying their best to scoop them up.  A few are going for blood and are realizing they’re not in competition with the bank, but other buyers and they’re losing out in multi-offer situations.

Buyers in this market are wise to listen to local experts rather than national experts who haven’t studied our market and what factors are influencing it right now.  If I had a dime for every buyer who said they should low-ball because our market is going lower I’d probably have more money in my pocket than I do now.  Those same buyers would have a nice home at a nice price and wouldn’t be on the outside looking in wondering how they’re going to buy their little piece of SW Florida paradise.

Sellers are the last to realize a market has topped and buyers are last to realize a market has bottomed.  While all segments of the market may not have bottomed, many have, and the wise buyer will reset their expectations and go get their piece of paradise before someone steals their gem right out from under them.

In case you missed it, be sure to check out our  SW Florida Real Estate December 2010 Video Update

SB 550 What Went Wrong

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SB550 has not been well received in Florida.  That is an understatement.  Some of the published comments regarding the bill affecting septic systems or Onsite Wastewater Treatment Plants were:

“I hope they flush this legislation…”
“Something smells here.”

The most onerous piece of this bill is that many of those  who had an older septic system were required to bring it to code.  Why fix it if isn’t broke?

A coalition comprised of members of the Florida Association of Realtors, the Florida Homebuilders Association, the Florida Chamber of Commerce, Associated Industries of Florida and the Florida Onsite Wastewater Association have been meeting to address the situation.  Repeal or amend SB550 and simultaneously propose legislation addressing the issues of clean water and a good mechanism for wastewater treatment. The hope is to get a sponsor of the new bill at the same time SB550 is repealed.
On Site Wastewater Treatment Plants (septic system) basically treat where generated.  How efficient is that?  The other choice would be to just “sewer the world,” said Bob Himschoot.  Bob is indeed an area expert on the issues.  He has a degree in forestry and is a member of  more than one of the groups in the coalition. Those who know Bob know that he has the credentials.  He ran the family business Gulf Disposal and developed Gulf Coast Landfill before he sold them to Waste Management, Inc..  He is a Rotarian and past president of the Fort Myers Chamber of Commerce.  Bob  formerly served on the board of the National Onsite Wastewater Recycling Association and currently serves the Florida Onsite Wastewater Association.  He is president of Crews Environmental which he acquired 30 years ago.  His son and daughter are involved in the day to day operations.  When Bob isn’t driving to Tallahassee to promote clean water he is actively involved in the management of Crews. He has raised his family here and probably is good to his dog.  I don’t even know if he has a dog.  And, he isn’t running for public office so it doesn’t matter.  The point is that he is a person passionate about clean water in the state of Florida and has spent his adult life in that pursuit.

Bob advocates the onsite wastewater treatment plants. Without septic sytems there would be many more “non buildable” lots in the state of Florida. He says there are many nuances and unintended consequences to “sewering the world’.   His philosophy is “know what you have and maintain it.”  He is not opposed to some sort of requirement to pump and check the system every 5 years.  The cost per homeowner would be something like $500 or $100 per year maintenance.  Those of us on a central water system (sewer) pay at least $350 per year for maintenance of that system.  Look at it this way.  The system is permitted so it must meet the code when it is installed.  The buyer of the property is generally not involved in selecting the system or the workings.  Many move in to the property and expect a “happily ever after” with no thought of maintenance of the system.  Sometimes the septic survey and how a septic system works are never conveyed to the buyer. A buyer of a property with an onsite wastewater treatment plant must don the role of sanitation engineer. There are many measures that will prevent septic failure.

A county health official in the state of Florida has coined a phrase for raw sewage on the bathroom floor.  It is the “Ten Phone Call Failure” and what is better known as the Class I Failure.

Class II Failure is evidenced by raw sewage in the yard.  I recall a property management company giving me a tour of a duplex that the owner wanted me to list.  The backyard could not pass the “sniff” test. I was wearing sandals (I usually am) that day and slipping and sliding in stuff you don’t want to slip and slide in.  I did not know where to step next.  I just wanted to be sure that I did not slide and lose my balance.  When I got to my car I threw my shoes in a bag.  I disposed of the bag at the next receptacle. Adjacent to this wet area in the backyard  was an incredible vegetable garden with some of the best looking greens and plants I have ever seen.  I was so relieved that there was not a vegetable stand at the curb.  When the owner indicated no interest in repairing the septic or disclosing the issue, I did not list the property.  As always, “If you can smell it; you can’t sell it.”

Class III failure has no smell and no excess moisture around the drainfield.
Class IV failure  described as long term, environmental  degradation is the hardest failure to prove as it is determined by computer modeling and may provoke the cynics among us looking for at least some proof.

We should all be aware of things that will plug a septic system sooner. According to the local based plumber contractors, a garbage disposal is hard on any plumbing.  It sends larger pieces through the system.  Grease and even salad oil, coffee grounds, paper towels, cigarette butts are but a few of the items that will clog the system and can damage components if trapped.  Doing all of your laundry in one day might make you feel efficient; but, might be harmful to the system.  The new Energy Star clothes washer is said to use 50% less water than a standard model.

Limiting the amount of water that we use is not only beneficial to the water supply; it limits the amount of water that must be treated.  All Floridians have a responsibility to use our resources sensibly and to pass on a legacy of clean water to our children and grandchildren.

For more information:
www.thesludgereport.org

When the legislature meets again to consider this issue, let’s hope they pay attention to the likes of Bob Himschoot and the various members of the coalition.

Written by Sande Ellis

 

New Years Resolutions

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One thing is for certain.  Every year about this time two things occur.  Real estate experts begin prognosticating what they think will happen in the New Year, and most Americans profess what their new resolutions are for the New Year.  (Well, at least for the first few weeks)

SW Florida Real Estate Market New Years Resolutions

You know, we hear the usual stuff.  I’m going to join a gym, quit eating sweets, lose 10 pounds, quit smoking, attend church regularly, make an effort to spend time with somebody, or change some type of behavior.  Some stick, and some don’t, but we all seem to do it every year.

Maybe we do it in our personal lives, and maybe we do it in our professional lives as well.  I always wondered if the real estate market had a voice what it’s resolutions would be, so for fun I came up with a few.  Like any resolution, some will never happen, but wouldn’t it be nice if in some magical way all our resolutions stuck all year.  Here’s an idea on what we think the market’s resolutions might be:

  1. Short Sales-Banks would speed up short sale
  2. Less Foreclosures-In part because homeowners who cannot afford to stay would successfully navigate and close a short sale
  3. Economy-Jobs is what will pull us through.  May 2011 bring a better economy and jobs to SW Florida
  4. New Construction-Brings jobs, and will be a sign prices are recovering to the point people choose to build again
  5. Prices Increase-Prices may be artificially too low right now, but one day they will recover.  Wouldn’t it be nice if this happened this year?
  6. Lee County would attract outside business to relocate to SW Florida-We know the county and Chamber is working hard on this.  Results in 2011 sounds like a great resolution
  7. Commercial rebounds because economy improves and new tenants fill empty buildings
  8. Red Sox Stadium pays for itself-Lee County is saturated with new fans seeking warmth and sunshine
  9. Homeowners Associations cooperate and help us close properties faster
  10. Cities like Cape Coral and Fort Myers code enforcement worry less about every little dime and work with banks to actually get properties closed so we can get new buyers into property.
  11. Government goes on a diet-Property taxes decline again and more people can afford to move here.

I know, not all of these things will happen.  Just like in the real world, it’d be nice to have a perfect wish list.  I’m sure you have others.

May 2011 bring more prosperity than 2010 did, and hopefully we’ll see some meaningful improvement we can build upon.  Together we’ll all get through this.  Don’t forget, it’s always darkest just before the dawn.  If you keep your head in the sand, you might miss the sunrise.  With a little luck and hard work, may 2011 bring that sunrise and a beginning to a new day.

Happy New Year

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Many SW Florida residents will happily ring in the New Year and say good riddance to 2010.  Others will wish it was Groundhog Day and would like to wake up to 2010 all over again. Your perspective today probably depends on where you sit on the housing fence, and what your expectations are for the New Year.

So let’s set the table and give you some reasonable expectations of what to look forward to in the coming year.  Experts disagree on where the market is headed nationwide.  For instance, we noticed a recent Case Schiller national housing report that said October prices fell .8% year on year.  Only Denver and Washington D.C. saw small price gains, and cities like Las Vegas fell 57.8% and Dallas 8.6% from their peak.  Some cities have hit their lowest levels since 2006.  Case Schiller and Standard and Poors only tracks 20 major markets.  In their opinion, markets may not have bottomed, but they have stabilized.  This study concentrated on the past.

Standard and Poors Case Shiller Real Estate Home Price Index
S&P/Case Shiller Home Price Index

On the other hand, Fannie Mae believes the economic and housing outlook for 2011 is brighter.  Falling unemployment claims and an uptick in consumer spending this holiday season are reasons cited in the December 2010 economic outlook.  FNMA is a player because they insure many of the mortgages on the secondary market.  This essentially creates the financing that fuels the real estate market and the economy, and FNMA plays a large role.

For 2011 growth was upgraded to 3.4% from 2.9% due to changes in the economy.  The report assumes an improving labor market, which we’ve long said is the key to any housing market recovery.

Fannie Mae Chief Economist Doug Duncan was quoted as saying “Despite rising mortgage rates, our forecast for home sales is stronger than the previous forecast, given our brighter economic growth and labor market outlook. We expect modest increases in home sales, despite recent interest rate rises, due in part to modest additional declines in home prices, and we expect people to take advantage of affordability as their employment and income outlook brightens”.

So two top forecasters are predicting declines in home prices nationwide in 2011, but what does that mean for SW Florida? Many believe SW Florida was the first to react and our prices have already fallen.  Our prices have flattened and some believe we’re on the upswing.  This could be true as foreclosures seem to be falling.  We’ve cleared out seemingly all the investors from the 2004-2006 frenzy and now we’re dealing with foreclosures from regular folks who just can’t hold out any longer.  If this is true, inventory could continue to lessen, and eventually we’ll see upward pricing pressure.

SW Florida real estate prices are artificially too low and will at some point increase.  The real question is when, and at what rate.  If we’re setting realistic expectations, a full blown recovery could still be years away.  If we’re looking at statistics, 2011 could be a better year for sellers price wise, but nothing that will be earth shattering.  SW Florida is almost 100% dependant on investors, 2nd home buyers and the like until our job growth rises again.  Construction is almost non-existent and isn’t coming back strong anytime soon.  Until we get real investment and job growth going in SW Florida, there won’t be major upward pricing pressure.  For the near term, our upward pricing pressure will be the sunshine and all the great things SW Florida has to offer.  Our sunshine, beaches, and nature surely must look appealing to anyone stranded in an airport for 3 days, and each blizzard up North can’t but help make our outlook a little brighter.

Florida took its lumps in 2010.  We had an oil spill, high foreclosure rate, bumpy economy, and high unemployment.  The oil spill is over and we came out largely unscathed, our foreclosures are declining, and the economy may have started improving nationwide.  When this economy trickles down to SW Florida, all the pieces are in place for a brighter 2011.  The investors may wake up and wish it was Groundhog Day so they can continue to buy at 2010 prices, but the rest of us will be glad 2010 in behind us and we can all start moving down that road of recovery and progress.  Now if someone could just tell us definitely how long that road is, that would be nice.  At least now the table is set, and maybe realistic expectations will be met.

Official SW Florida Real Estate Numbers Released-December 2010

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The Florida Association of Realtors released official sales numbers this week and the numbers came in just about where we expected.  Last week wrote that by our calculations November sales were relatively flat versus October sales, and the official numbers bear that out.

Officially we had 6 more single family home sales in SW Florida in November than October.  October had 1,016 sales and November had 1,022.  Single family home prices were flat too.  Median prices were $90,000 in October and $89,800 in November.

SW Florida Real Estate Single Family Home Prices
SW Florida Median Sale Prices Single Family Homes

We are seeing a rise in pending sales as banks and title companies are struggling to get these files closed.  Closings are becoming trickier as homeowners associations are trying to collect as much or more than the law will allow and this delays closings.  Municipalities are trying the same thing with code violations, lot mowing fees, utilities, etc.  These tactics are really delaying closings.  With cash strapped governments it’s no wonder they’re trying to squeeze every dollar they can as tax revenues have declined.  They sell it as cleaning up the neighborhood and neighborhood stabilization, but money is the root and certain municipalities are much worse than others, and everyone in the industry knows exactly who they are.

These tactics do collect more revenues for government, but they also cause deals to fall through and properties to sit on market months longer, and we don’t believe this helps stabilize a neighborhood.  One of these days we’ll have to have the News Press do an expose on these tactics.

Statewide median sale prices of single family homes were down 5% and sales were down 15% versus last year.  Lee County sales were down 33% from last year, and prices were down 6%, so our price declines from last year are in line with the state, but our sales have been affected more radically.  This can be because our area is harder hit than others with foreclosures, and because of delays in the process by HOA’s and municipalities we discussed earlier.

We’re really going to be on the lookout in the 1st quarter of 2011 for what the banks do with inventory.  Evictions are due to start up again January 3rd with several of the large banks and Fannie Mae properties. Many of the large banks are resuming foreclosures again too, and the real test is going to be just how many are actually left to foreclose upon.

Our suspicion is we’re definitely in the second half of this crisis, and the worst is behind us, at least in SW Florida.  The rest of the country has more to go as we’ve already weeded out many of the investors from the boom, and the mortgage rests will affect other states more than us.  The real question is how many people are barely hanging on, and can they hold on long enough for the economy to recover.  This is the wildcard that will affect how many future foreclosures we see.  The sooner we clear out the foreclosures the quicker our real estate market can respond.  This, along with an economic recovery will do wonders to fixing a lot of ails.

Have you noticed that the weather has been dreadful this year up North?  A lot of northerners have, and SW Florida is looking pretty good in December.  Our prices are low, our weather is much better, and in a blizzard visions of sunshine, warm weather, beaches, and all the good stuff we enjoy seems worth looking into.  What used to be a dream can turn into a plan quickly, and we’re already seeing it.

Our market may be down, but it won’t be forever.  We just have too much good going for us to stay down for long, and this flat market could take off.  We’re just one blizzard away from several plane loads of buyers, so buckle up and let’s see what Santa and 2011 brings us.

Social Media Holiday Greetings From SW Florida

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People are celebrating the Holidays in a new special way this year, and some of it is quite interesting.  I’ve received e-mails from various sources, and regardless of what your religion is, anything that is beautiful and makes people think what the Holidays are really about is worth sharing.

Here are a few links, and feel free to share others as well.

A Social Network Christmas

A New Way to Remember The Spirit of Christmas
A Social Network Christmas

The Digital Story of the Nativity – The Birth of Jesus

Digital Story of the Nativity of Jesus

It’s in the Bag

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No, we’re not talking about Santa’s bag here.  We thought this week we’d do a mailbag of topics, and invite questions for future articles.  If you have a question or topic you’d like covered, simply e-mail me at Brett@Topagent.com and we’ll do our best.

Interest Rates

Yes, they’ve been on the move, and the move has been upward.  Rates have risen about .625% in the past 1-2 weeks.  For every 1% rise in rates, it takes away about 9% of a purchasers buying power, so buyers have just lost about 5% buying power in the past 2 weeks.  This is why the media and Wall St. talk about rates so much and where they are today versus historically.  Now, they are still historically low, but they have been moving up.  With prices this low, and rates still fairly low, buying power is still great even though it may not be what it was 2 weeks ago.

SW Florida Real Estate Market Update
It's in the Bag

Foreclosure Listings

Foreclosure listings for single family homes active on the market in Lee County stood at 768 in November Versus 1,107 today.  That’s a 32.42% increase in just one month, and we can attribute this to banks placing properties on the market after the foreclosure moratorium because of the robo-signing issues.  Most banks feel confident going forward, especially for their non-occupied properties.  We see this as a good sign.  The quicker we get all inventory out and to the market the faster the market can heal and move forward.

Pending Sales

Pending sales rose again in November which indicates buyers are ready, willing, and able to buy and they’re making every attempt.  This is another reason we’d like to see all available inventory on the market as the buyers are definitely biting.  All areas of Lee County are seeing a rise in pending sales.  Cape Coral saw a rise of 60 pending sales over last month, Fort Myers saw a rise of 69 sales and Lehigh Acres experienced a rise of 32 pending sales.  Season is upon us and we’ve notice an uptick in buying activity from buyers up North sooner than we did last year, which could mean we’ll be in for another good season this year.

Current Market Index

Each month the Ellis Team produces a current market index which accurately predicts forward activity in the SW Florida real estate market.  This month the index dropped to 4.22, down from 4.62 last month.  The lower the number the hotter the real estate market is.  A higher number indicates a buyers market. We wouldn’t say it’s a buyers market.  We’d characterize it as a sellers market if the property is priced correctly.  Buyers are competing against each other with multiple offers on properties that are priced correctly, and bypassing over-priced listings.  The market speaks.  Sometimes it’s as easy as slowing down and listening to what it’s saying, and if a property isn’t receiving offers, then there’s a good chance it’s the price.  The market is hot, but it’s not forgiving.

Closed Sales Flat

November closed sales were relatively flat Versus October.  In fact, our research shows they’re down slightly, but official numbers won’t be released until next week.  Last November sales rose, so when official numbers come out we could see a transaction drop from last year.

This is the last article before Christmas believe it or not, so next week we’ll either answer your questions or provide updated analysis once official numbers are released.  We hope Santa is good to you and brings you good tides and good cheer, and no matter how big the bag is this year, always look for opportunities to lift somebody else’s spirits this Holiday season and into the new year.

Tips on Buying a Bank Foreclosure in SW Florida

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Last week we gave tips on how to sell a home in today’s market from the non-distressed home seller’s perspective.  This week we thought we’d revisit tips on how to buy a foreclosure property since so many try, but very few are the winning buyer.  As a listing agent for many banks, we know what the banks are looking for. We speak to the asset managers.  If you follow these tips your chances will increase as not every buyer knows what the bank considers when looking at multiple offers, which many foreclosures receive.

The first thing buyers must understand is there is a lot of competition for these homes.  Typically bank foreclosures go fast, and for over asking price.  Everybody seems to want them.  So structuring your offer and submitting it correctly will increase your chances.

Tips on buying bank foreclosures in Cape Coral, Fort Myers, Lehigh Acres, and all of SW Florida
Tips on Buying Bank Foreclosures in SW Florida

Keep in mind, listing agents must have all the required information, so if they ask for something upfront, they mean it.  Listing agents don’t have time to track your agent down for this info.  We attach a document to each MLS listing specifying what is required with the offer.  Make sure your agent completes every single field.  We submit offers into an online system, and if information is missing, the offer cannot be submitted.

The bank never sees your offer until one is accepted.  The listing agent must enter information into and online submission, and it must conform to what the bank asks for, and all fields must be filled out.  If a foreclosure has 20 offers, the listing agent doesn’t have time to call 15 agents and beg for information they required upfront.  Keep in mind, it takes awhile to upload 20 offers, and the listing agent may be dealing with 20 properties.

Listing bank foreclosures is very time intensive, and the listing agent coordinates everything from repairs to working out HOA fees, title issues, code violations, etc.  Providing the required information is the first step.

Secondly, consider that you’re probably competing against other buyers, and that many will be above asking price.  So how do you compete?  Consider a higher escrow money deposit, shorter closing time, and definitely a shorter inspection period.  Bank asset managers are also gauging the strength of each buyer, so you want to put your best foot forward in hopes of getting the property.

Banks are on the lookout for buyers tying up properties then using contingencies to escape later.  Banks want solid deals, so you want to dress up your offer to make you look like the best buyer in the batch.  The price will be close to asking price or above because it’s a deal anyway, so you have to compete in other ways.

In many cases banks will counter multiple offers with highest and best.  Buyers are shocked when the bank doesn’t and just accepts one offer, so it always pays to pony up early on and go for it.  If you do get a highest and best form, assume the other buyer wants it as bad as you do, and act accordingly, because if you don’t, chances are you won’t end up with the home.

Be careful that your offer is written well and clearly states all fees and costs.  It is difficult to impossible to make changes later, and it could cost you the home.  Any change to contract later on opens up possibility the home goes back out for rebid and you could lose it, so it pays to write offer correctly the first time.  Same applies with names; make sure everyone who wishes to take title is on contract from beginning. You may not be able to add names until after closing, which could require new title insurance and additional fees.

If you’re purchasing as an LLC, make sure you provide documents upfront that you’re authorized to sign for the LLC.  The bank will ask.

These are some very useful tips by an experienced foreclosure agent. Each bank has their own rules, so be sure to follow directions well.  Make sure you’re working with an agent who understands contract language. Many times we see financing contracts that don’t match up or specify some costs buyer is not allowed to pay under the buyer’s financing program, and the offer cannot be presented to bank until language is cleaned up which could cost the buyer the sale because of delays.  Be sure to work with an agent who has experience writing clear and concise contracts and understands financing in and out.

Following these tips will increase your chances, and ignoring them will most assuredly have you scratching your head wondering why the bank selected another offer.  Good luck and happy house hunting.

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