Southwest Florida Real Estate Archives - Page 75 of 84 - Fort Myers Real Estate and Homes For Sale

We recently had a guest on “The Future of Real Estate” Video Show who opened my eyes on how to effectively test for Chinese drywall, and shed some interesting facts on the subject. To clear up a few myths, not all Chinese drywall is defective, and not all American drywall is good. Most of the problems associated have come from China though, thus the term Chinese drywall.

Watch Segment 1

watch Segment 2

Most people don’t really care how a car engine works, they only care that it works, and it gets them where they want to go. I won’t go into a lot of detail about how drywall is made, and that the tainted drywall was made with fly ash, a residue of coal combustion more commonly used in concrete mixtures. This scrubbing of the smokestacks emissions creates calcium sulfate, or gypsum, which can then used to make wallboard. American manufacturers gather the gypsum from the smokestacks after the scrubbing, which produces a cleaner product.

There are no set standards by the Federal government, so it’s hard to even use the word defective in the proper light as there is no standard. People are concerned that defective wallboard gives off fumes that can corrode copper pipes, blacken jewelry and silverware, and possibly sicken people.

Shipping records indicate that imports of potentially tainted Chinese building materials exceeded 500 million pounds during a four-year period of soaring home prices. The drywall may have been used in more than 100,000 homes, according to some estimates, including houses rebuilt after Hurricane Katrina.

The drywall apparently causes a chemical reaction that gives off a rotten-egg stench, which grows worse with heat and humidity. The Chinese drywall is also made with a coal byproduct called fly ash that is less refined than the form used by U.S. drywall makers.

Most of the drywall in question came into the country in 2006, following a series of Gulf Coast hurricanes and a domestic shortage brought on by the national housing boom.

We found an innovative inspector who has been able to successfully test for a compound called Strontium using an X-Ray gun. This X-ray gun can test each board in a home which is important because a home may have some defective drywall mixed in with acceptable drywall. In the past, inspectors were forced to remove drywall or inspect air conditioner coils, plumbing, mirrors, etc. None of these inspections were guaranteed or scientific because at lower temperatures the effects of the drywall can be masked to some degree.

Visual inspection of corrosive metals and the unique odor of Hydrogen sulfide (H2S) are certainly signs of bad drywall in a home. However, Drywall Science LLC is able to scientifically identify, using portable X-Ray technology (XRF), “defective” drywall from acceptable drywall by revealing high concentrations of strontium (Sr). This unique Sr signature for defective drywall was first reported by Unified engineering and later confirmed by the EPA and CPSC.

There is also concern about “Off-Gassing.” Off-Gassing occurs when infected drywall releases chemical compounds and infects otherwise good drywall. The good drywall literally absorbs the bad chemical compounds associated with the defective drywall. Insulation and other materials may also absorb unwanted compounds, so simply removing a few pieces of defective drywall in a home may not cure the problem.

Some experts say to effectively remediate a home, all drywall, insulation, and porous materials, should be removed and replaced. The bottom line is it’s essential to determine if a home actually has bad drywall before considering remediation options.

We’ve included a few photos so you can see what the gun looks like, and what the test results show on the gun. We are by no means inspection experts; however we were very impressed with this new technology and how it can scientifically look for defective drywall. If you’re purchasing a property, especially one built 2004-2008, or an older home that has been recently remodeled, we recommend an inspection.

You can watch the gun in action. We have video segments posted in our “Best Of” section on the “Future of Real Estate” which can be found at www.Topagent.com

Jack Frost of Drywall Science LLC contributed to this article and has a patent on this X-Ray gun. While we are excited about this new technology, the Ellis Team, RE/MAX Realty Group, and the News Press in no way guarantees the accuracy or claims of this product.

Each January everyone seems to ask what the new year will bring to the SW Florida real estate market. While nobody has a crystal ball, experience and detailed analysis lends clues to what the future may hold. Each year we release our annual State of the Market Report, which consists of the most detailed and current market stats around combined with our 20+ years of experience in the local real estate market.

We pull these stats in January after agents have a chance to enter all their year-end transactions. We pull from a variety of MLS databases then merge the data together and eliminate duplication of data. Some listings are input and marketed to Realtors in multiple Boards, and we want the most current but accurate data free of duplication. This all takes time, and then the real analysis can begin.

Single Family Home Inventory in Fort Myers-Cape Coral Florida

Fortunately we do provide a significant amount of data all year round to our readers and viewers of the weekly Future of Real Estate Video Show, so we can offer some preliminary data combined with experience and make some educated guesses as to what 2010 might bring.

As you can see from the attached graph, listing inventory has been rising recently, and pending sales have started to fall again. We think this may be due to the anticipated expiration of the home buyer tax credit at the end of last November, but that has recently been extended and expanded into 2010. Not only can first time home buyers take advantage of this credit up to $8,000, now people who currently own a home and plan to but a new primary residence can also take advantage up to $6,500. Contracts must be in place by April 30, 2010 and must close by July 3, 2010.

Add to this that our Northern friends are now here, and they are searching for homes. Word has gotten around up North that Florida is on sale, and prices have begun to rise in some sectors, especially the bargain buys. The Snow Birds realize 2010 may be the last “Season” to get these bargain basement prices, so they’re bringing their checkbooks looking to purchase. We wouldn’t be surprised to see pending sales rise in the next few months and inventory to fall again as Northerners help scoop up even more of our inventory. Investors have been hard at work in 2009 competing with first time home buyers, and we believe Northerners will be buying 2^nd homes that they may one day move into, or vacation to at the least.

The US Treasury Department has just issued new short sale guidelines which may make it easier to get short sales through for primary homeowners who are in trouble. This may help add sellable homes to the market, which could help increase sales and relieve some of the strain on foreclosures.

Speaking of foreclosures, we believe much of the entry level speculation inventory is now gone, and we expect higher priced inventory to enter the market, which will make 2^nd homes and move-up homes more attractive. As this occurs, look for more sales in the higher than median price range, which currently stands around $95,000. These new bargains at the higher price levels will help raise the median sale price.

Speaking of sales prices, we’ve seen 5 straight months of median price gains, and we look for that to continue. In fact, early on in 2010 we may start to see year over year price gains, something we haven’t seen in about 4 years. In other words, February or March of 2010 may see higher prices than February or March of 2009. We can’t state the actual month it will occur, however if you study the graphs and data you can see that day looks like it’s coming fairly soon.

Tune in to our weekly video show “The Future of Real Estate” at www.Topagent.com and stay tuned for our upcoming State of the Market Report which we’ll be releasing soon which will detail which areas of the county are moving, changes in averages sales prices, single family homes and condo data, and so much more. We’ll even break it down by zip code and graph it out so you can see how your area is doing, and what the future may hold. Stay tuned.

It’s official. Last week we predicted a surge of at least 125% +/- based on the sales we were studying for single family homes in Lee County. Official numbers were just posted, and it looks like it was on the + side of our prediction. Sales came in at 133% over last year’s numbers for single family homes, and prices were up a healthy 3.82% over last month, marking the 5^th straight monthly gain. Median single family sales prices now stand at $95,100, up from a recent low of $87,900 set back in June. As you can see, the market has turned around since June and has steadily increased in price, and has set records in sales volume as well.

This isn’t news to News Press readers or listeners of the Future of Real Estate Radio Show, nor to agents active in the business. For months agents have been telling buyers the market is one the move, and the time to buy is now, and buyers for the most part have gotten the message. It’s always fun when an out of the area buyer comes down and wants to make offers 20% below asking price because that’s what you do someplace else. Buyers seek the assistance of an agent and it is the agent’s responsibility to educate buyers and sellers to actual market conditions.

Fort Myers-Cape Coral Single Family Home Sales by Month

Most agents I speak with do a very good job at this. When you need an attorney typically you let them represent you and you follow their advice. Same goes with a doctor, typically you tell the doctor how you’re feeling and answer the questions and the doctor makes a recommendation for you based upon your needs. So why would an agent not offer the same advice to an out of town buyer or seller?

Like I said, most agents do. Many times we’ll receive multiple offers on a property, and most are at or above asking price, especially when the property is a good buy. Occasionally I’ll receive one that is 10-20% below asking price when I’m sitting with other offers above asking price. I’ll ask the agent working with the buyer what was it that caused the buyer to offer at that price. Sometimes we’ll get that’s all they’re qualified for, or that’s all they want to go or feel it is worth. Sometimes the agent replies the buyer just wants to buy it as cheap as they can. Who wouldn’t want to buy it as cheap as they can, but the buyer’s got to get in the game to buy it at all.

We’ve told people before, if you’re going to steal, don’t do it in slow motion. If you’re looking at a bank owned bargain, and it’s a steal, go get it. Chances are others are looking for the same thing. SW Florida is experiencing record sales right now, and if it’s a bargain, you know there will be multiple offers. Why try to get an additional 10-20% off when it’s already a bargain?

I then ask the agent why they haven’t told their buyer about the market, right after I inform them we have multiple offers. Sometimes I hear “I know, I know, I’ve tried to tell them but they won’t listen.” Other times I hear I don’t want them to work with another agent, so I just do what they tell me. Both instances are signs of lack of confidence in the agent.

It’s truly an agent’s job to educate. Buyers and sellers will thank you for it, because if you don’t do it, you’re just wasting their time and yours. After losing out on about 7 offers, buyers become frustrated. Agents become frustrated with buyers after about 2-3 offers if the buyer isn’t listening. So why not just cut to the chase and end it upfront. I know, there will always be another agent who will do what the client says, but if the client won’t listen to you, can you really help them?

It’s one thing to work with a buyer who is doing everything they can to buy a home. We have customers putting in offers above full price at the max of what they can afford and still losing out. That’s quite different than a buyer who is low balling out of ignorance.

Buyers and sellers should listen to their agent, and agents shouldn’t be afraid to counsel and give the cold hard truth to their customers. Market forces eventually win out in the end anyway, so getting there as quickly as possible is the best way to avoid frustrations, and get you in your first choice property instead of your 8^th choice. In a stagnant market your choices don’t change often, but this market is anything but stagnant and the market is on the move.

It pays to study the market and get ahead of the market. Sellers never want to chase the market down, and buyers hate to chase it up. 2010 will be an interesting year. It’s always fun to cover a changing story, and this story is changing. If you’re not buying or selling, it will be fun to watch. If you are buying or selling, it’s time to do your homework.

First, we’ll start with the good news. Official real estate sales numbers for Lee County for November 2009 won’t be released until December 22. Last year November single family home sales totaled 600 in the Lee County area. This year we expect somewhere around 1,355 total single family home sales +/-. Assuming the 1,355 is anywhere close to accurate, those numbers would be an increase of 125.83% over last year, which is pretty remarkable. We’re sure the headlines will tout this feat.

As many of our readers know, the Ellis Team developed the SW Florida Real Estate Current Market Index many years ago which has accurately predicted the forward direction of the local real estate market. This month we spotted a new trend. The Index spiked up a bit to 4.36, close to what it was back in March. A falling Index number is a sign the market is heating up, and a rising number indicates the market is cooling down. As you can see, the graph was heading down which led our market to record sales numbers all year.

This month is the first month we’ve witnessed a spike in a long time, which could indicate December and January sales may fall from August and September levels. We will want to keep our eye on this Index in the coming months to see if it is a continuing trend. It does make sense though as the Homebuyer Tax Credit was due to expire at the end of November. This credit was just recently extended, so we’ll have to see if this affects future home sales going forward.

We’ve also witnessed an increase in listing inventory the last three months. Pending sales are down over 100 units this month. The pending sales drop can be attributed to lag time in the Homebuyer Tax Credit, and diminishing listings in the lower price ranges. We’ve begun to see slightly higher priced listings coming to the market.

FNMA has begun listing more properties as foreclosures, and the banks we work with are bringing new inventory to the market now as well. These foreclosure listings are a result of foreclosures that began 6-9 months ago. New foreclosure filings are trending down, which is good news for the market 6 months from now.

We believe this season is going to be good, as visitors recognize this may be the last season to fully capitalize on our great bargains in SW Florida. It will be interesting to see just how much inventory we can draw down through the end of March, as well as through July when the new Homebuyer Tax Credit expires.

It’s not surprising that home sales trailed off just a little bit as they typically do this time of year. It’s actually been a little bit surprising home sales have been as strong as they have, but of course investors have been swallowing up properties at great prices, and first time home buyers who were employed and qualified for a mortgage found the tax credit too good to pass up.

Even with these record sales, we’ve still added to overall inventory the last 3 months. We’re going to want to keep our eye on that. We’ve also reported that we feel there is pent-up supply, which is people who want to sell, but just cannot at these low prices. It’s still very difficult to fully assess this market, as there are many hidden variables.

The Treasury department has issued new guidance in the sale of short sales. Details are forthcoming, but this should be a roadmap for banks to follow to make the short sale process quicker and a little less painful. You’ll still need a short sale expert as many of details haven’t gone away, but the process is being streamlined and unified so no matter which bank is involved the process would stay the same. Keep in mind, this is government, and most of their past efforts to modify mortgages and streamline have failed, so we’ll see if this is any different.

Bottom line is we have a hot market, and visitors have shown interest and are buying. It’s also the end of the year when sales fall, and they’ve remained very strong. We have seen an uptick in listings and a fall-off in pending sales in recent months, and this could all be related to the supposed home buyer tax credit expiration in November. We’re just saying we’ve spotted a slight trend in the numbers and it’s something to keep our eyes on. We still expect big numbers on Tuesday when official sales numbers are reported, and we expect healthy sales all season. Stay tuned, as we’ll be tracking.

We hear a lot about the economy and what Holiday sales will mean to retailers. Traditionally, Christmas sales are approximately 40% of a retailer’s year, and in some cases even more. Makes you wonder how they stay open the other 11 months of the year.

A lot of people also think Season makes the local real estate market. This may be somewhat true for condo sales, but historically single family home sales are fairly steady, with the 2^nd and 3^rd quarters usually accumulating the highest sales. Season usually brings a lot of visitors to the area, and of course when they experience our awesome weather in January and February, they dream about buying in the future, so they call and ask to look at homes, many times a few hours before their plane departs for back home.

Single Family HOmes Sales-Fort Myers-Cape Coral Florida 2009

We think this season is going to be different. Buyers from up North have already started coming down looking to pick up their dream home. They know that Florida is on sale right now, and the chance of getting a 2^nd home or retirement home next year or the year after at these prices is slim. Buyers are actually afraid they’re going to miss the bottom, and they know this may be their last season to fully capitalize.

Foreclosures are trending down right now, and median prices are trending up. Home sales set a record in every quarter so far in 2009, and nearly set one in the 4^th quarter in 2008. When we say set records, we mean they posted higher sales than even the peak of the market in 2005, only at much more affordable prices.

The national media has reported the low prices we have in Florida, and we’ve seen an influx of buyers from Canada, Europe, and all over the U.S. The first time home buyer tax credit has been a big help to first time home buyers up until this point, and the recently expanded home buyer tax credit for existing owners may help going forward to for sales that close by July 1 and are under contract by April 30, 2010.

Median sales prices currently stand at $91,600, and that is after its 4th straight monthly gain. To put this in perspective, in December of 2005 the median sales price was $322,300. Median prices today are roughly 28% of what they were only 4 short years ago. In other words, median home prices were almost 4 times higher than today. That is a sale no matter what store you’re at.

This sale we’re experiencing has not gone unnoticed by buyers. We’ve gotten some calls recently from sellers who live up North and want to sell because they see stories about property moving again in Florida. They didn’t like the prices last year, so they figure this year must be better. It must be nice to live somewhere else and not have to live what we’ve been going through here locally. They are usually surprised when we tell them what units are going for in the neighborhood. So many will wait to sell next year at higher prices, and they will probably get a higher price next year as buyers soak up all the bargains they can en masse.

I’m not sure prices are going back up to December 2005 levels, but they are slowly going up. We have pent-up demand from buyers and its being unleashed now, at least while the bargains are out. I think we have pent-up supply from sellers who would like to sell but can’t today, and that’s another reason why we don’t see prices quadrupling. This supply will eventually come to the market as prices rise and foreclosure inventory dwindles down the road. The economy will have to make a comeback too, and jobs will be required to complete this cycle.

In the meantime, get ready for a strong home buying season. Agents and title companies will be busy this season. Mortgage originators will be too except many of these sales will be cash. 2009 has been busy already. As you can see, it’s been record setting. We’ve been so busy we’re hiring agents to join our team. People think Season is the only time homes sell in Florida, and as you can tell from the chart, 2^nd and 3^rd qtrs are generally the prime time for home sales. Season 2010 might change that and make a run at big numbers if the inventory remains there to be sold. The buyers are there.

Here’s to a happy season to all. Buyers, better get your bargains now, because next year they may not be at today’s sale prices.

As you can see from the enclosed chart, short sale listings account for 53% of all active Cape Coral listings, 55% of Lehigh Acres listings, 35% of Fort Myers listings, and 40% of Lee County listings. While foreclosures account for more of the completed sales in Lee County, there are far less of them listed and they tend to go very fast. Short sales on the other hand tend to take much longer, and their sale is not certain at all. So we want to inform people of some of the things they should know about short sales.

Chart of Homes for Sale-All listings Vs Short Sales

A trend we see developing is many banks are requiring sellers to participate in the loss and pay money at closing, or agree to a promissory note that the bank will collect on. Sellers should be very cautious not to list the property too low or the bank will reject the offer outright if it’s not within reasonable value, and they are coming back on the sellers regardless of whether it’s a homesteaded property or investment property. Banks may not file a 1099 to the IRS on a homesteaded property, but they are in many cases on investment properties. The forgiven debt has always been treated as income to the IRS, so if you take a loss on an investment property, prepare to pay taxes on the forgiven debt regardless of your ability to repay.

This is another reason why selecting an agent with experience in short sales is critical. Not only must the agent understand what the banks want to see in the total package, they must also understand what the banks are doing today and their implications to their clients. Agents are not tax advisors; however agents can pass along valuable experience before you go through such an ordeal.

Buyers are very wary of buying short sales, as are buyer agents. Buyer agents typically only show listed short sale properties when they know the listing agent has a firm grasp on All the details needed to get the short sale through.

A listing agent should also make sure there is a title search done. If you miss a potential lien on property and do not list it on the estimated net sheet the bank requires, it will not be part of the accepted short sale and the seller or buyer must pay the difference at closing. It definitely pays to know all the back fees and penalties from HOA’s, utility companies, etc. upfront versus finding out later on and having the short sale deal blowup at closing.

You’ll usually want an estoppel letter from the homeowners association showing all back fees, because in a short sale they will need to be paid off. In a foreclosure the HOA may only be entitled to recover 6 months of back fees. This is one reason HOA’s should be more cooperative in providing this data. Many homeowners associations don’t realize their management companies are charging large sums simply to provide an official amount the owner may owe.

We also recommend sellers pay their HOA fee even if they are delinquent on their mortgage. Time is valuable in a short sale, and the HOA could actually file foreclosure papers much sooner than the bank might. When the clock is up, the short sale is dead. I can’t tell you how many homes we’ve seen listed as a foreclosure after the banks supposedly agreed to a short sale.

The bank(s) should only see one accepted offer from a seller. If a bank sees multiple offers it gums up the works, and sometimes leads the bank to believe it is a Hot property and should sell for more. Nevertheless, it increases the time it takes the bank to respond as it is much more work, and we should do nothing to increase that time. Furthermore, there is a legal risk by accepting more than one offer. The offer is between buyer and seller. The bank cannot agree to a short sale unless seller agrees with a buyer. The bank can only tell you what they’ll do if you have a sale. A seller could have legal problems if more than one buyer believes they have a valid contract with the seller.

We also don’t believe in sending in fake contracts to get the ball rolling with the bank. When banks discover this tactic they are less likely to work with you. Additionally, there is no such thing as an accepted short sale price. If you lose a deal, typically you have to start all over and the terms usually change.

There is a test program that is an exception to this rule on HUD properties, but that price is set upfront and has nothing to do with previously accepted contracts. There are many other things a buyer and seller should know. To view a video segment on HOA’s and management companies, visit segment 2 of last week’s Future of Real Estate Show. http://bit.ly/8pfMMf or you can visit http://www.youtube.com/brettellisfl for many real estate related videos.

Many people in SW Florida believe we have a Turkey of a market. They can list all the things that are wrong with the market, wrong with the economy, wrong with what the government is doing to fix things, and wrong with how the banks are handling things. And, in many cases these people would be right. There are lots of ideas on how to fix things, and in fact we’ve covered many of them here. We’ve been quick to point out what is working, and what needs to be fixed or tweaked, so we’ve participated in these discussions just like everybody else who has lived here for the last 5 years or more.

This being Thanksgiving weekend, we thought it might be nice to go over some of the things we can all be thankful for in the real estate market. Transaction numbers were just released for October, and home sales in Lee County were up 96% over last October, so we’re continuing the trend of record setting sales, eclipsing even lofty 2005 numbers. Sales were up 7% vs last month, partly because the 1^st time homebuyer tax credit was thought to expire by end of November which motivated people to close in October.

If you’ve followed these weekly articles, or listened to our radio show “The Future of Real Estate” you’ll also know that we’ve been predicting since June that the median single family home sales price would begin going up instead of down, and we gave statistical reasons why we thought this would occur. As you can see from the chart, median home prices in SW Florida have risen every month since June, which is definitely something to be thankful for as well.

SW Florida Real Estate Monthly Median Prices 2009

Condo median prices in SW Florida rose 14.07 % last month, but you won’t see that reported many places. Condo sales were up 143% over last year, so it’s not just single family home sales that are doing well.

The first time home buyer tax credit was extended until April 30 of next year, and buyers have until end of June to actually close on those properties. Additionally, the tax credit was expanded to existing owners under certain conditions. We were fighting for provisions like this, and while Congress didn’t go far enough, the fact that they did what they did is also something to be thankful for. We expect this to help the market going forward.

This year’s holiday season may be leaner and families have accepted that they’ll be giving their children less this year. Children have responded and they know times are tough. A parent’s greatest fear is they won’t be able to give their children everything they so very much want to provide for their children, but children are resilient and are supporting their parents through lean times. The truth is, children don’t need all that stuff to be happy. What they really crave is family time, and this tough economy has brought parents closer to their children.

A parent who has been laid off may now take a child to school, and we’ve seen many reports where parents are now more involved at school because they have the time. Parents are spending less on fancy tech toys and kids are having fun the old fashioned way, by playing ball in the yards, card games, board games, etc. We don’t mean to trivialize the pain many SW Florida families are going through, but rather point out a few of the silver linings in a tough environment. This is Thanksgiving after all, a time to be thankful for what we do have, and forgetful of what we used to have.

If nothing else, this economy has taught us to get back to the way it used to be decades ago, not 4 years ago. Society was caught up in how much we could buy, how much we could borrow, and it was fueled by rapidly escalating equity in our homes, among other things. We were taught on how to spend vs how to save. We bought things we didn’t need or even use. The market has corrected itself, and the question is, have we corrected ourselves?

I think the answer is yes, many people have made corrections. When this economy returns, and there are indications some things are getting better, will we be better as a community, as a family? Sometimes it takes a kick in the pants to learn a life lesson, and lord knows SW Florida has been hit hard. At a time when few see the positives, let’s take Thanksgiving to reflect on all that we do have, and be thankful that life has taught us to get back to the basics. Tell your loved ones you love them and how thankful you are to have them. Be kind to your neighbor, as they’ve probably gone through tough times like you have. We’re all in this together. We’ll come out stronger than before, because I believe at the height of the market is precisely the point we were weakest as humans.

I am thankful to be here in SW Florida. I am thankful for the friends and family I do have, and I am thankful to be back to basics. I look forward to brighter days, and together we’ll get there. Thank you SW Florida, and God Bless.

We’ve been reporting for weeks now that distressed property sales are moving. One component of a distressed sale is the Short Sale. A short sale is when a bank agrees to take less than what is owed on the mortgage so the property owner can afford to sell the home at today’s lower market values. Banks in the past have taken much time to decide and some have been stingy on accepting these deals, for good reason. We’ll come back to the reasons later on.

Many agents have been reluctant to show short sales to their buyers because banks have been declining a lot of these sales. We have a bit of good news to report, and that is short sales are rising. We’re not saying they happen overnight, or that they’re easy. We’re just reporting the fact that they’re happening more frequently now as banks develop systems to more adequately deal with these sales, and they realize they may lose less in a short sale than a foreclosure sale.

As you can see from the monthly chart, Cape Coral leads the county in short sales. All three areas, Cape Coral, Fort Myers, and Lehigh Acres are experiencing an increase in short sales from the banks. Cape Coral had 113 short sales in May compared to 151 in October. Fort Myers had 29 in May compared to 73 in October. Lehigh Acres had 30 in May compared to 49 in October, so you can see a definite increase in banks cooperating in short sales in just a few short months, no pun intended.

Why is it that banks are cooperating more? We’re not exactly sure, however we can speculate that banks have learned they lose less in a short sale than a foreclosure. Real estate agents have also learned what banks are looking for through education and are presenting better packages to the banks, which are key. Perhaps that Tarp money has freed banks up a bit to sell distressed properties. Most likely is that banks have been hiring and training people to deal with the barrage of requests and heavy paperwork load and they’re getting better at dealing with this issue.

Let’s look at some of the reasons banks take so long so we can understand the delays. Banks obviously don’t want to lose money. Banks generally qualify the seller and make sure there is hardship. Being upside down on a mortgage is Not considered hardship. There must be documentation proving the seller’s hardship, and this is why our sellers fill out a complete financial survey that is included in our short sale package to the bank.

The bank also wants to verify that the seller is selling at today’s fair market value, not some super spectacular deal for an investor or relative so they can make money on the bank’s losses. Keep in mind, the bank is taking less, so it is the bank’s loss.

The bank wants to make sure it’s an arm’s length transaction. They don’t want a family member buying it at a discount or an LLC being used as a vehicle to transfer property to a family member at a reduced price so the mortgagee can escape being upside down.

There may be more than one ban involved, and each one has limits on how much loss they will take on the short sale. They will weigh the current loss vs. and anticipated loss they may receive at foreclosure. They may wish to order appraisals before making a decision. We submit a BPO (Broker’s Price Opinion) to substantiate today’s market value with all accepted contracts.

We don’t let our sellers sign more than one offer and submit to the bank due to legal ramifications. And we don’t have our sellers accept an unreasonable offer that the bank will reject, so we do all the homework upfront. Why waste everybody’s time? Because all listings agents don’t do this, buyer agents are skeptical to show short sales and waste their client’s time and money.

Even if the listing agent does everything perfectly, there is no guarantee what the banks will do, and yet there are far too many listings being taken at incorrect prices and inappropriate situations, and that is bogging down the system. This is not the time to just throw something out there and Try because seller is desperate. Decisions made are impacting the buyer and seller’s lives, and a lot of time and energy is expended by all involved. It pays to do things the way the banks require them for maximum results.

If you understand what the bank is looking for, and work with someone who has experience actually selling short sales, buyer agents will be more likely to show these types of properties. Agents are getting better, banks are getting better, and hopefully we’ll see more short sales go through so neighborhoods don’t have to suffer through abandoned properties and all the negatives associated with foreclosures.

Lately our office has been inundated with calls from investors throughout the country looking to snap up foreclosure listings at bargain basement prices. It’s true, we do have some bargain prices, and foreclosures tend to be a good deal.

Most of these investors want to only talk to the “Listing Agent” because they believe they’ll get the inside track on these deals. There are some investor gurus out there selling tapes on how to buy these foreclosures, and as a foreclosure listing agent for many of the banks I can tell you that the advice given won’t help you much, so save your money on these tapes.

If you’re looking to purchase a bank foreclosure, here are a few tips:

If the property is a bargain, offer full price or better. Most of the foreclosures sell at or above full price. From personal experience our listings do, so we decided to pull up the entire MLS sales for 2009. Of the 8,080 single family home sales, the average List Price/Sale Price Ration was 99.02%, and if you look at median prices it was actually 101.8%. So the stats do match what we’ve experienced.
Be prepared to offer proof of funds with your cash offer, or a pre-approved letter from a major bank. Many of the banks require a pre-approval letter from the bank handling the foreclosure so they know they’re taking the property off the market for a good buyer.
Place more money in escrow. Believe it or not, banks do look at how much you place in escrow with your offer.
Make sure it is not contingent on the sale of another property. Banks are not taking contingent offers.
Work with an agent familiar with the process. In most cases listing agents take the information from your offer and input key bits of data online. The bank never sees your offer on the paper it is written until they accept one of the offers. Do not make the listing agent hunt you down for crucial information. Most properties have multiple offers, and the listing agent will just move on to the next offer filled out completely and correctly.
Use an experienced agent who knows how to properly write a contract. If anything does not make sense, the bank will reject that offer and go with another offer they have confidence in, even if it is lower in price.
Asset managers get graded on how close the final offer is to list price, and if they make the scheduled closing time. Asset managers get very nervous with offers that aren’t written well, as that’s a key sign the selling agent is poorly trained or new. If the agent is inexperienced, the confidence level of that closing taking place on time, or at all is compromised.
When a bargain comes on the market, don’t waste time. It may be too late by the time you find out about it, so be ready. If you know the market, and know what you’re looking for, be prepared to act. This is no time for “Buyers Remorse” as the market will spit you up and eat you alive.
Do your homework. Do not buy at the courthouse steps unless you are an expert in inspecting and title. When buying from a bank, do your inspections, read the bank contract closely, and know the market ahead of time. You’ll have little time to act, so be prepared ahead of time.

These tips, along with professional advice from an agent experienced in buying foreclosed property will serve you well, and give you the best chance of getting that bargain you’ve dreamed of. Good luck, and happy house hunting.

Watch The Future of Real Estate Video Show as we explain this and more.

We’re excited to bring you The Future of Real Estate Radio Show now on video. We just aired our first show which will be simulcast today on 3 radio stations along with the video. The advantage to video is we will be able to show graphs and charts as we discuss the market. We did have our first glitch, so the first chart we talked about on the show didn’t actually make it into the show, however we were able to recapture that portion and place it on YouTube.

Brett Ellis-Future of Real Estate SW Florida

To view the entire show go to Topagent.com To view the 1st segment with the graphs go to our YouTube broadcast. The first segment illustrated graphs of the distressed property market in SW Florida and how that affect the overall market. We look forward to bringing you future broadcasts each week, and improving on the quality. Sorry for the first glitch, but we are real estate agents afterall venturing out into the brave new world of video, and we’ll only get better.

Fort Myers Real Estate and Homes For Sale

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