Selling Poinciana One Property at a Time.

OK folks, here's my year end market report for 2008. You read the papers and you watch the news. You hear all of the predictions and how bad things are. It's very depressing!!! BUT....Real Estate is very very local. This report is very specific to Poinciana Florida. It has nothing to do with real estate in other areas. Some areas are better and some areas are....well....let's just say some areas are better. If there are any that are worse please let me know. OK here goes...........

(INFO COMPILED FROM THE MID-FLORIDA REGIONAL MLS
SEARCH CRITERIA: ACTIVE 34758,34759 SUBDIVISION POIN) 

 Commentary from Bryant Tutas
Broker/Owner
Tutas Towne Realty, Inc 

I broke this analysis down to month by month in order to give you a true picture of what is going on in Poinciana Fl. Yearly averages will not work in a declining market. As you can see, the market in Poinciana is in dire straights. Properties ARE selling. In fact sales are increasing but...... 

There were 672 sales in 2008 compared with 420 in 2007. That's an increase of 38%. However, 519 of these closings, for 2008, were distressed sales(either bank owned REOs or short sales). That's 77%!!! 

There are currently 1,051 active listings (single family homes) in the Poinciana neighborhoods. This time last year there were 1,065. Not much movement there. 

The last 4 months we have averaged 87 closings. Using that figure there is currently 12.5 months of inventory on the market. That's pretty good since last year this time there were 25 months of inventory. Prices are low enough that properties ARE selling. 

I find it incredible that the median price for homes sold in January of 2007 was $225,000 and 24 months later it's $82,900. That just boggles my mind. What's even worse is that the median price for houses that are under contract (pending) is $79,900. That means that prices are still declining. 

What can you buy in Poinciana Florida for $79,900 today?

How about this 2113 sq ft banked owned property with 4 bedrooms and 2.5 baths built in 2006?

Or this 2093 sq ft REO with 4 bedrooms and 2 baths built in 2003?

If these won't work there are 308 more properties for less than $80,000. 

Folks, this about sums it up. 2009 is going to be quite the ride. Foreclosures are going to increase and values are going to continue to decline. Unless you absolutely need to sell you property DON"T!!! If you must sell....call me. 

If you are a buyer, you need to be buying. Prices are awesome and rates are low. If you are waiting on the bottom you may very well miss it. The only way we will know we have hit bottom is when it is in our rear view mirror. 

So there you have it.... Broker Bryant's year end market report for Poinciana Florida. I showed you mine will you show me yours? 

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Purchasing a property over here is pretty straight forward. When you see something you like I prepare a 5 page written purchase offer with the price and terms you want to offer. This is presented to the sellers agent with proof of your ability to purchase i.e. bank statements, letter of credit or mortgage approval letter.

Once the transaction is negotiated you will sign the final contact and place a deposit, usually $1,000 to $5,000 in escrow. That can be handled by wiring funds to the closing agent(title company) in Florida.

All foreclosure properties are purchased "As Is" with right to inspect. This means that within 7 to 10 days of contract date you can have the property inspected(surveyed) to make sure it is structurally sound.

The seller makes no warranties and and after the inspection you can either move forward or cancel the transaction and get your deposit back. This right to inspect is called a contingency to the contract.   Once this contingency has been removed we move towards closing.

The Title Company will do a title search and provide a title insurance policy guaranteeing you equitable title. This search and policy is normally paid for by the seller but with some of the foreclosure properties the seller(bank) will not pay for this and it becomes your cost. For a property priced below $100,000 the search and policy will be less than $1,000.  

Once all the contingencies have been removed from the contract and the title has been cleared to close(settle) closing documents are sent to all parties by the Title Company either via email or FedEx. Some of the documents will require a notarized signature so you may need a solicitor for this. After you have signed and the documents have been notarized you pop them back in the FedEx to the Title Company while also wiring the funds to close. Once the Title Company receives the documents back, from both buyer and seller, the transaction is closed and funded. The house now belongs to you.   

As your Broker, I will assist you with:  

1. Finding the right property
2. Preparing the offer
3. Negotiations
4. Arranging inspections
5. Connecting you with an Insurance Company
6. Making sure all contracts are proper
7. Reviewing the closing documents
8. Arranging property management if needed
9. And what ever else needs to be done to make sure it is a smooth transaction for you. 

I think this is all for now. Did I miss anything?  

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OK so my head is exploding today!!! So much going on and so many posts that need to be written. Including my year end market report for Poinciana Florida. But today I want to write about BBAs (Buyer Broker Agreements) and why they have never been more important that they are right now. 

I expect I'll get all the usual responses about "My clients would NEVER buy a house behind my back" and "The commission doesn't matter to me". If you believe these things to be true this post may not be for you OR maybe it's EXACTLY for you! 

This post gives one reason why a BBA should be important to the Buyer. In fact, it's my opinion, that a BBA is MORE important to the Buyer than it is to the REALTOR® and here‘s why. 

I spoke with a Buyer, earlier this week, who has cash and is ready to buy. It seems he has been trying to find an agent to assist him but everyone is too busy. Of course, after reading how slow the market is, he finds this hard to believe. So being the good little Broker that I am I explained it to him. 

His problem is....he is looking to purchase a deal, a foreclosure, a cheap rental property. And he should. There are some good properties that he can purchase for less than $50,000. As an Investor, these properties are the ones he SHOULD be buying. The only issue is the prices are so low, that the co-brokes (commissions being offered to sell the property) aren't worth the time involved in helping him find the right property. So he gets placed on the back burner. We may help him.....but only when we get some extra time. 

In fact, I have the same problem. He wanted me to go look at a property before he made an offer and I said I would......tomorrow. Today I was busy doing other things......that have a higher return. 

The reality is I can't afford to spend hours previewing cheap foreclosures that he may or may not be able to or want to purchase. 

This is where the BBA comes in. If an Investor is truly wanting to get a deal, in the very low price ranges, then it is to his advantage to give his Broker/agent an incentive to put in the time. Maybe he'll have to chip in $1,000 or so to meet the minimum compensation outlined in the agreement but surely, by agreeing to this, he'll get better service and therefore a better deal on a property. 

I have always been a firm believer in getting the commission out of the equation right up front. The best way to do this is to get a BBA signed. Unless of course you like working for peanuts. I don't. And won't. My Buyers deserve better than that. Do yours? 

Here's a sample BBA. 

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Florida Foreclosure and Investment Properties  

http://buypoinciana.com

Thank you for visiting our website and enquiring about Florida Foreclosure and Investment Properties on Rightmove.co.uk. In order for us to better serve you, please take a couple of minutes to REGISTER FOR PROPERTY DETAILS HERE.

Registering will ensure that you are getting updates only for properties that interest you. There are currently almost 100,000 properties for sale in Central Florida. Needless to say we have to narrow down your search. 

That's why registering is the easiest and best way to receive details for properties that meet your investment needs and budget.  In the meantime, here are samplings  of Central Florida Foreclosures amd Investment Properties that are available today.

$65,000 to $100,000

$101,000 to $150,000

Pool homes near Disney up to $175,000

Holiday Rentals $200,000 and Up

Please let us know immediately if you see a property you want to purchase or if you just need additional information.  We are looking forward to working with you. 

We Are At Your Service

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MAKE AN OFFER ON ANY FLORIDA PROPERTY LISTING HERE

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Mcalpine Homes LTD and 
Bryant Tutas/Broker/Owner
Tutas Towne Realty, Inc PO Box 969
Dundee, Fl 33838
Ph# 407-873-2747 Fx# 407-540-9381
WEB:http://www.buypoinciana.com
BLOG: http://www.brokerbryant.com
REALTOR OPPORTUNITIES: http://ttrealtynet.com

Hi folks, These are desperate times we are in. Some folks can do everything right and still find themselves in a bind. All we can do is give honest advice and let them make the decisions they need to make.

THE SITUATION

I am scared about refinancing now that the market is even worse.  I wonder if I should hold on to the money I was putting down on the house?

Things have changed and my parents are now talking about moving out of Florida.

If I listed this house for $129,000 fully furnished with all the new appliances, new furniture and shed do you think I could sell it? Buyer pays closing costs?

That would give me back the house money, the money for the fence and pay the furniture and appliance bills.  Do you think it would come close? With the landscaping (which you haven't seen) and fence and all?

You're listing homes for $90k and that makes me so scared. If I don't have a job next year I am in trouble.  I also want to get out of this area.  I would have all year to try to sell it, not a rushed deal. However, I feel like if I don't try to sell it now it will be worth $69k in 6 months.

 MY RESPONSE

Right now cash is king. If I had the money from the sale of your other home I'd place it in a savings account for the time being. Property values in Poinciana are certainly still declining and much more rapidly that I could have imagined 3 months ago. Most of this decline is due to banks reducing the price of their REOS (foreclosures) to get them off the books by the end of the year. This has caused values to drop an incredible 18% in the 34759 zip code since September.

Homes similar to yours are selling for $48 per sq ft right now. If we just used this figure it would make your property worth 2094 X 48=$100,500. There are currently 15 similar homes on the market priced at $100,000 or less. You paid $120,000 in September which at the time was the best priced home of this style on the market. To sell now will cost you money as it may take as low as $100,000 to get it done. Which is right in line with an 18% decline in property values.

You may be able to refinance at a lower rate that would make it feasible to rent out but I would NOT put any of my cash into the house unless you are certain you will be keeping the house for the next 5 years or more. If, as you fear, you are going to have to move because of your job situation you are better off using your cash to get settled elsewhere.

We can certainly try to sell. Even if you had to bring some money to closing you may be better off trying to sell now than having to sell 6 months from now. Bringing $15,000 to $20,000 to closing is much better than putting $40,000 into the property to lower your payment.   Or.....you can stay put. Get a room mate and save their rent money. END

WHAT WOULD YOU DO?

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Hi Folks. Brian Brady wrote a featured post yesterday and my comments started going off on a rant about short sales so I decided I best write a post to voice my opinion.

Let me say that whether you like short sales, want to do short sales or want to avoid short sales, they are here to stay. Short sales are a major part of the market and in my opinion will become even more so. Lenders WANT to do short sales. A successful short sale cuts losses and keeps the lender from owning a declining asset. 

This post is about taking control of the short sale situation from the get go, knowing what we are doing, preparing the Seller in advance of what to expect and being strong enough in our negotiation skills so we do not have to accept whatever bone the banks want to throw us.

Here are a few of my thoughts:

• With a short sale we are submitting CONTRACTS, not offers, to the lenders. We are not asking them to accept an offer we are asking them to accept a "short" payoff so a contingency can be removed from the CONTRACT and the deal can close. Anyone who submits an offer to the lender to see if they will accept it does not know how to handle short sales and is wasting time and clogging up the system.

• The lender is NOT a party to the contract(s)(listing or purchase). They do not control the purchase price and the commission. They do have control over how much they are willing, or able, to accept as a payoff. If this payoff figure is too high then a solution needs to be found. The solution may be to have the seller sign a promissory note, raise the purchase price or lower the expenses of the deal(commission etc...). However, lowering the commission in the deal does not mean the seller is off the hook for paying the FULL commission as agreed in the listing agreement. They can bring cash to closing to pay the difference and/or they can sign a note to the Broker. 

• If the lender, investor or PMI company ask the Seller to sign a promissory note, a good short sale negotiator, will be able to negotiate the amount of this note downward or may even be able to make it go away. The PMI companies almost always ask for a promissory note to be signed when the seller can afford to make payments. Be prepared for it. If the Seller has funds in the bank, IRA, mutual fund and/or decent income chances are they will be asked to pay a promissory note. This should be ascertained at time of listing. Get a complete financial package from the Seller prior to listing the property. 

• Our job is to do the best job we can to help qualified short sale sellers salvage their credit. It is the Sellers sole decision on whether or not to sign a promissory note. Their willingness to sign a note needs to be established at time of listing so we don't waste our time trying to help Sellers who are not willing to help us.   

• When a PMI company comes back requesting the seller sign a note I take it as an acceptance of my short sale request. Now all I have to do is negotiate the note. I have had a note request of $135,000 negotiated down to ZERO and one for $50,000 settled for $1,500 at closing. BUT the reason I was able to negotiate is because the Sellers truly could not afford to pay. Remember we are helping folks with a legitimate hardship not people that just want to avoid paying a debt.

• Commission should not be an issue in a short sale. A Broker/agent should know before listing the property what lender is being negotiated with and how much commission they will "allow" almost all are 5% to 6% if there are two Brokers...and 4% if there is only one Broker. Fannie Mae will allow 5%. Countrywide will allow 6% as will Wells Fargo and Washington Mutual. I just closed a on Countrywide short sale and in addition to the commission I was paid 1% as reimbursement of costs to maintain the property for a total of 7%. We need to know these things. 

Folks, agents are getting screwed on short sales because they don't know what they are doing. Sellers are getting screwed because they are hiring these agents.

Short sales are serious business and need to be treated as such. Sellers need to seek legal and tax advice and then hire a Broker/agent that understands the process.

My biggest frustration is the lack of education of folks trying to handle these transactions. The public is being harmed and that goes against every thing being a REALTOR(R) stands for. Let's take the time, to learn what we need to know, so we can help folks get on with their lives. Let's all step up to the plate. Not only can we help people but we can get paid for doing so!!! Are you ready to get serious?

FAQ  #1 What is a Short Sale?
FAQ #2 What is a Hardship and why do I need one? 
FAQ #3 What goes in the Hardship Letter?

DISCLAIMER: I am a Florida Licensed Real Estate Broker. This article is my opinion based on years of experience and the laws of my State. All Sellers are urged to seek competent legal and tax advice. I am NOT qualified to give advice in those areas.  

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