5 Reasons Why I love Short Sales!!!!

Short sales have gotten a really bad rap and I am hear to proclaim my Love for short sales but mostly in keeping with the old Song, “Love the one yours With”  Short sales are here to stay for a while and instead of lamenting about the evils and perils inherent in them we might as well just lean to embrace them.  I have learned to appreciate and celebrate the good stuff and so in case you are not yet convinced let me tell you why.

1.  Short sales are a means to help owners get out of an underwater property with some of their dignity and some of their credit in tact. When you have a home that is worth 200,000 and you owe 500,000 and your income is a fraction of that you need some answers.  A short sale will usually be a less ding on your credit than a Foreclosure.

2.  Short sales are better for the neighborhood.  Short sales tend to impact a neighborhood less than several foreclosed properties hitting the market.  Foreclosures generally bring less money thus driving the prices down even further in an already depressed community. There is also more of a psychological negative with a foreclosure in the consumers eyes.

3.  There are many programs out there for consumers such as Co Op  programs, Cash for Keys, HAFA  among others that may allow homeowners to actually do a short sale of their home and receive a check at closing.  I actually did a short sale recently and the homeowner got a check for 1,000 dollars at the closing table that helped with their move.  Check with your favorite Realtor to see if you qualify for any of the programs out there.

4.  Right now and for the rest of this year you are able to do a short sale without a tax implication if it is your homestead.  There is no guarantee after 2013.

5.  Another plus for us Agents is obvious!!! What in the world would we have sold this year if not for short sales???? I know that I said not too many years ago….”Yuck I will never do short sales they are so hard to get closed!!!” Needless to say I changed my tune and have gladly helped customers close them on the listing and the buying side.

This is my short list for why I love Short Sales but if I really share my heart my biggest reason is to hear the sigh of relief and the smiles on the faces of my customers when we come to the end of that chapter in their lives.  It is important to remember all the people that have been so impacted by our changing economy and the fear that has gripped those whose lives have been forever changed.  When the day is done and the sale is complete the homeowner can start over and get his life back on the path that is moving in a positive direction.  Although simple this list…. it can be daunting so my advice is to grab your favorite Realtor and ask some questions and see if you too can fall in love with Short Sales!!!!

“The only people we have to get even with are those that have helped us”  Thankfully my list is long.

Karen Key Smith


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Sick and Tired of Losing Money?

IT seems that there are a lot of people excited about the market and sometimes buyers want to venture out on their own to purchase property whether it be by auction or a regular sale. There are some rather convincing reasons to use a Realtor to help you wade through fact and fiction and what is really a deal and what is just great marketing. To help you make that decision to use a” Realtor or not” let me give you some good motivation.

  1. A Realtor can help you determine what property would best serve your personal needs whether it be a straight investment or just a home for your family.
  2. A Realtor is more able to negotiate the price of a home on your behalf given that she knows the values of the local market. She also will make sure that you are pre-qualified so you will actually be looking at properties that will work for your unique situation. In addition, often times, a Realtor is better equipped and more experienced in negotiating real estate transactions.
  3. Home buyers almost never pay a commission to the Realtor therefore you get professional guidance and advice and a better deal on your new home with no cost to you. The only time a buyer would pay a Realtor commission is when agreed upon in advance, but in almost every case, the real estate commission is paid by the seller. Keep in mind ESPECIALLY when it comes to auctions YOU DO NOT GET a break by not using your Realtor. Your buyers premium is 10% whether you use a Realtor or not. Make sure you give them a call before you attend an auction and use their wisdom of the market and the property. For example, at the Island Reserve auction last Saturday, there were several examples of a little good timing and some sound advice saved in excess of $20,000.
  4. This is a big one and I have seen the sad results of this one from friends. It is important especially if you are not from the area to have a local Realtor who is familiar with the neighborhood that would best suit your needs as a buyer.

So basically a knowledgeable Realtor can actually save you a dollar or two and besides give them a call because if they are doing it they love what they do and they get so excited to share it with you!!! I actually wrote this because I got a really sweet call from one of our viewers that was not quite sure if it would cost her extra as a buyer for us to help her and I thought I just better clear that up.

We’re not going to beat around the bush here, we’re trying to make a living selling real estate, but we wouldn’t be doing this if it wasn’t what we love. First and foremost, we are relationship people. We are here to help you find what you are looking for. Many times we have turned people away from things and sacrificed commissions because it wasn’t what our buyer was looking for. We are always fair and honest, and if you ever have any questions, you can call us any time. And I mean, you can call us for ANY questions regarding real estate, and you don’t have to feel obligated to work with us. We just want to help you save money and buy your dream.

Thanks so much for watching our little show and for all your kind words….. we love it.

The Mystery of Selling Condos – SOLVED!

recessionIn order to sell anything, you have to create demand.  Not only do people have to know its available, but they need to have a desire for the product.  There must be a demand for the product you are trying to sell.

How do you create demand?  You have to create demand through scarcity.  People have to value your product and beleive that your product can’t be had anywhere else.  Now, there are tons of variables here, especially when if the product you are trying to sell is condos.  For instance, one has to consider not only price, but the quality of the resort.  One must consider the possibility of replication and whether they can get something of similar perceivable value for a lesser price in the same general area.

4 years ago, developers and sales teams created scarcity through having a unique product that wasn’t overly prevalent.  Of course, the frenzied market helped the sales stories along when buyers were turned away because developments were sold out.  Today, scarcity is created by offering a unique product that can’t be had anywhere else, or a product that is superior in quality.

For real estate today, how do you create scarcity with a surplus of inventory available?  You create scarcity through value.  If you want to sell real estate today, you have to be the best value on the market, with value being determined by a delicate balance of the quality of the product and its price. Of course, one has to keep in mind that as unique as a property may seem to the developer, sales agent, Realtor, etc., there is always something that is equally unique available on the market to most people.

Ok, so say you have found that sweet spot in the world of pricing.  Let’s throw a number out there, say, $250/foot – you are successfully selling your condos for $250 per square foot.  There’s not a frenzy, but you’ve got a steady stream of interested people and you actually have 10 or so contracts in the pipeline.  What should you do?  I mean, there’s demand, you don’t want to risk leaving money on the table right?  Maybe you should increase the price of the existing inventory just to be sure, right?  Wrong!

You’ve found something that works, you’ve done something right that has had a positive result.  What you were doing was successful.  At this point, if you change, then the result of that change will be different than the result of what you were already doing, and that’s bad.  The result of what you were already doing was that condos were selling, if that changes, then that means that condos are NOT selling – and that’s NOT good.

Here’s the kicker.  As soon as you raise the price, you lose the velocity that you had when the price is right, and quite possibly, sales may have halted all together.  The real problem comes in when all of a sudden, sales have stopped, you scratch your head, and all the while, prices are still coming down, week by week, month by month.  Not only that, but your credibility has been tarnished a little.  The buyers that were looking at your product aren’t that interested anymore, they are looking elsewhere to see if there’s a better deal (and there’s always a better deal, in this market).

Then, suddenly, it hits you.  You realize that when you raised the price, that’s when your velocity slowed, so you decide to put the prices back to where they were.  Condos aren’t selling at $250 a foot anymore.  Uh  oh, what’s that sweet spot now?  Well, it’s at $230 a foot, you just lost $20/foot AND time.  You disrupted your velocity and it’s going to be hard to get it back.  Things were starting to roll forward, increasing their pace, rapidly, but you stopped it wanting to maximize profit, but what happened?  You ended up losing more money, tarnished your credibility and wasted a lot of time, which equates to more money lost.

Hey, I’m no different then the next guy.  I don’t like to leave money on the table, but in order to survive in today’s market, you have to have your long-term glasses on.  You have to look into the future and realize that prices may still be falling, you have to expect that, you must anticipate that condo prices will not increase for the foreseeable future.

With that said, if you happen to find a price that results in sales, then you have to sell as many as you can as fast as you can.  A great lesson can be learned here from large-scale condo real estate auctions.  When the auctioneer finds the sweet spot in pricing, he doesn’t sell ten, then raise the price.  He knows that if he does, everyone will just leave.  If you find the sweet spot in price, you have to sell as many as you can as quick as possible and be glad its over.  Otherwise, you’ll be sitting on inventory that not only costs you money, but prevents you from making money too.

What’s the old adage?  If it ‘aint broken, don’t fix it.

Citizens Insurance Likely to Raise Rates

At the end of 2009, Citizens Property Insurance Corp., Florida’s largest home insurer, probably will be free to raise rates for the first time in three years.

On Tuesday, a state-appointed task force charged with returning Citizens to its original role as the state’s insurer of last resort agreed that any increase in Citizens’ rates should be capped at 10 percent a year for three years to ease the financial burden on policyholders.

It’s one of several recommendations the 11-member task force will submit to the Florida Legislature this month.

Citizens’ rates, which were frozen at 2006 levels, aren’t high enough to pay claims should a major hurricane strike the state, experts say. The rate freeze expires at the end of this year, and the state-run insurer said it plans to impose higher rates as soon as possible.

Read the rest of the article.

Buy Now, Real Estate Incentives Abound

There’s still time…

As 2008 is quickly drawing to a close, there are still buyers who are “on the fence” about signing that purchase contract right now.  If you are considering purchasing a home for your personal residence, probably the most important reason to purchase before the end of the year is the ability to file for homestead exemption for the year 2009.  This will provide a substantial tax savings, not only for 2009, but for the entire amount of time you intend to use the property as your personal residence.

In addition, the homestead tax exemption was recently raised to $50,000 per tax year and is now “portable” for those homeowners who would like to move up to a larger home or downsize for retirement.  For additional information, please contact the Bay County Property Appraiser’s Office at http://www.baypa.net.

There are many additional reasons to buy in Bay County even if you miss the December 2008 deadline for homestead purposes:  low interest rates, very affordable housing, a $7,500 tax credit for first time home buyers, and others.  Look for additional information on these great opportunities in the upcoming weeks of 2009.

Have a safe, happy and prosperous new year.

For more information, please contact Sandy at 850-303-1825 or sandythompson10@comcast.net. You can also visit her websites @ http://www.ringthebelles.com and http://www.sandythompsoncondos.com.

Use an Appraisal When Buying or Selling Real Estate

When I became an appraiser I had no idea that my profession would be of such interest to total strangers. The minute someone finds out what I do for a living, the next question is either “What is my house worth?”, “Where should I buy?”, and most recently “Are we at the bottom yet?” The one question I am rarely asked is “Why should I get an appraisal?” Appraisals are becoming multi-purpose real estate tools. In the past, appraisals were viewed as just another step in the purchase process.  Now appraisals serve as guides to help borrowers:

  • Know if a refinance is possible,
  • What price to realistically list a property at,
  • How long it is taking similar properties to sell and at what price they sold for,
  • Determine market rental rate for an investment property.

Anyone can order an appraisal – not just a bank!!  The appraisals completed for an individual contain essentially the same data as an appraisal for a lending institution and are given directly to that individual. Homeowners and potential buyers both should consider ordering an appraisal… why?

  • To avoid paying too much for a property,
  • To find out what their property’s competition sold for,
  • Avoid “under-pricing” their property in order to maximize potential profit,
  • Aggressively price property or negotiate a lower sales price based on prior sales.

Too often I hear “You won’t find a similar property listed for less!!” The problem with this phrase is that a property can be listed for any price – list price does not determine market value. There are some fantastic Realtors in our area that work extremely hard for their clients. However, buyers should not rely solely on an agent to research and organize data to the extent that an appraiser will, as it is not their profession.  In many cases, agents will contact an appraiser prior to listing a property to ensure they are pricing the subject realistically. It is important to note that appraisers are unbiased third party individuals and therefore do not have a vested interest in the outcome of the transaction (be it a purchase or refinance). Appraisers do not create value; rather we report the data from the current market.

Ultimately, an appraisal can serve as an invaluable tool in order to avoid financial ruin. Appraisals can help investors know the potential profit of that duplex they are looking to purchase,  help the first time homebuyer avoid paying too much for their first home, and can help the savvy condo buyer get a fair price along with that perfect gulf view.

Appraisals are not just for purchases/refinances – I have been asked to do appraisals for:

  • Employee Relocations
  • PMI (private mortgage insurance)
  • Estate planning
  • Divorce settlement
  • Tax abatement

I truly think that the housing market will begin to strengthen again – however the speed at which it does and the solidity of the foundation will be a direct result today’s buyers.  These buyers will need to do their homework, know exactly what they are purchasing and what the current market value is – not the anticipated value. Please, who ever your appraiser is, ask questions.  If you feel something was missed – ask your appraiser. If you don’t understand how to read an appraisal, let your appraiser know.  It is our job to build public trust in our profession – which will be a daunting feat based on the downward spiral the real estate market has taken.  The information and data contained within appraisal reports could prove to be invaluable to both the real estate novice as well as the seasoned investor.

I am a Certified Real Property Appraiser working predominately in Bay County with some projects extending west towards Destin and east of the Mexico Beach area. Prior to becoming an appraiser I worked as a mortgage loan underwriter – which has provided me with a unique understanding of both sides of mortgage loan transactions. – Jake