Archive for the 'Buying Real Estate' Category
APRIL…WHAT A GREAT TIME TO BUY!
Author: V.K. [Mel] Melhado P.A.
If you look at the long-term economic growth and the demographic trends regarding Florida, it bodes exceptionally well for Florida. By the end of the decade, we are projected to be the 3rd most populated state in the country and by 2030 an increase of about 75%.
Naples is a world-class destination and people are continuing to move here…an estimated 900 people a day and that figure will continue to increase, as long we don’t go into a full blown recession. If you look at the Milken Institute’s best performing cities, 5 out of the top 15 are in Florida. Jobs are quite plentiful in Florida, while the unemployment rate remains around 4%. 7 of the top 15 hottest job markets are in Florida.
Property is selling well even after the “high season” has ended. I think that some buyers fear that property has indeed bottomed out and they are worried that the exceptional values are beginning to disappear. And yet oddly, we still see other people stepping gingerly, somewhat afraid to pull the trigger for fear that they are on the wrong road.
Our coaching has been and continues to be that there are wonderful values out there and that this isn’t about the short term, so why not now!
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A SENSE OF URGENCY?
Author: V.K. [Mel] Melhado P.A.
More and more buyers seem to be popping up out of the woodwork and one wonders what the real motivation is. Is it just that seasonal push or is there something else behind it?
It may well be a combination of things, not the least of which is the modest rise in the mortgage interest rates, (the average rate for a 30–year fixed-rate mortgage shot up 32 basis points in just the past week, rising from 5.72% to 6.04%.) After trending up the past two weeks, long-term fixed mortgage interest rates are now where they were at the beginning of the year.
It also could be the fact that buyers have finally come to the conclusion that we are indeed at the bottom of the trough of the real estate market and they worry that the exceptional values in the inventory will evaporate, unless they take action now. To be sure there will be a strong inventory throughout the summer and into next year, but many of the great deals will be gone.
Whatever the reason is, after the lag the past year or so, it is great to see the enthusiasm back and we hope that it continues far beyond the ‘high season’. We have to remember and promote the fact that real estate remains the top investment vehicle!
IT’S A GREAT TIME TO BE A BUYER!
Author: V.K. [Mel] Melhado P.A.
Whether you’re a first time buyer having rented for years or whether you are seasoned professional, it is a great time to be a buyer in the Naples, Florida market! All indicators are excellent with interest rates at the lowest point in quite some time.
But buyers must get over the fear that the market is going lower and take advantage of some of the fantastic deals that are out there. They need to be made aware that they aren’t buying for the short term and that their investment will be a solid one, provided that they receive good guidance from their real estate professional.
The real issue for buyers in this market is that while they sit on the fence pondering whether the market is going lower, Canadians and Europeans are coming to town and quietly purchasing what they perceive to be exceptional values with their money that, in the case of the English is worth twice what ours is worth. Yes there will most likely be plenty of inventory around for the next couple of years, but the bottom line is that the good inventory will most likely be long gone!
SPEND A LITTLE TIME EDUCATING YOUR FOREIGN BUYER
Author: V.K. [Mel] Melhado P.A.Sometimes we, as realtors, tend to forget about the cultural differences between us and the Europeans. For that matter we can forget the differences between us and the rest of the world many times as well. From a financial standpoint, it can cost us dearly if we don’t pay attention.
Case in point…I recently worked some potential buyers from Sweden who now feel ready to buy, after renting from us for several years. My assumption was that because we had somewhat of a relationship (actually I thought that it was a good one,) because of the rental aspect over the years, that they would be loyal to me. (Potentially a huge mistake!) The second big mistake was that they understood that I am a full-service realtor.
You see in Sweden the only function of the realtor is to sell someone a property, they do not normally assist with the banking or much of anything else. In England, it is much the same. Realtors in England have their own listings, but do not represent other realtor listings, like we do here in the United States. So in many areas of Europe, buyers are used to dealing with multiple realtors before they make a purchase and there is no real sense of loyalty.
My Swedish buyers were rather stunned to hear that I handled everything, (from soup to nuts,) the contract negotiation, help with financing, should they need it, being the lea-son for the closing, as well all all the other work and follow-up that we as realtors do. They were pleasantly surprised, because in their country, the whole process is handled entirely differently.
The bottom line is that had I continued to make general assumptions about these clients, I very well could have lost a sale because they felt no need for a sense of loyalty. Instead I coached them fully on what I do as a full-service realtor and now they are mine for life!
Have You Checked Your Insulation Lately???
Author: V.K. [Mel] Melhado P.A.Sometimes living in Florida, we tend to forget the importance of insulation in our home or one we are contemplating purchasing, because we equate insulation with loss of heat and not air. Although in most cases we have the home inspected prior to purchase, this is an area that goes unchecked, and with the high cost of energy today, it is extremely important to look at it.
The most important thing to be aware of with insulation, other than the safety issues of urea formaldehyde and asbestos is the R value, or the insulating factor. The higher the number, the better the insulator, and there are new forms of insulation that can not only act as a moisture sealant, but a structural supporter as well.
Don’t be too shocked if the insulation in a 15 year or older home isn’t the same or near the R value of a new home. As a matter of fact, it can be considerably different! While there is no question that you could be saving on the air conditioning bills by adding more insulation, you also need to factor in the amount of time that you plan to own the home. Sometimes it can take years and years to recover the cost of having insulation blown in or however it is being done.
It is often prudent to have FPL (Florida Power & Light) or whoever your gas or power company might be to see if they have any financial incentive program or grant available to boost your insulation. You also might want to look to the inspector of a home that you are considering purchasing to check on the insulation and for recommendations, even though they don’t normally look at that area.
Do Home Inspectors Really Kill Deals?
Author: V. K. [Mel] Melhado P.A.I read with interest an article written by Barry Stone, a frequent contributor to Inman News, following a request by a licensed Home Inspector who asked Barry to address the issue of realtors who refuse to recommend a high quality inspector, like himself. His position was that he felt that it was totally un-ethical that he had been unfairly labelled a “deal killer”, because he was extremely thorough in his inspections. He felt realtors much preferred to refer inexperienced inspectors, because they were liable to miss things that he routinely caught.
Barry stated that he felt that it was a clear conflict of interest because real estate agents are the primary source of referrals for the home inspectors. Yet he also put a bit of the blame on the fact that the home buyers should be asking realtors who the best inspectors are and not just settling for a realtor’s choice. He also said that many realtors, because of their interest in their pocketbooks, are indeed tempted and prone to referring inspectors who are not as thorough as others.
For me, it really isn’t a dichotomy, and it is certainly because I prefer to take the ‘high road’ when referring a home inspector. I take my client’s interests to heart. More than my pocket book, I worry about the possibility of a lawsuit, should defects be found after closing because I didn’t recommend the best possible inspector available. Maybe I have been extremely lucky in my career, because I’ve never had a deal killed from the results of a home inspection, or just maybe it’s because, with proper negotiation, even the most potential damaging problems can eventually be resolved.
Just A Great Time For First Home Buyers!
Author: V. K. [Mel] Melhado P.A.If you work with first-time buyers, despite the down turn in the market, you are probably experiencing a pretty darn good run. When first-time buyers are ready to buy, the state of the market usually means little to them. They are extremely anxious to get away from the rental situations that they have been in for years and when they have the money, they are are ready to go.
First-time home buyers may well know what the market has been doing, but it is not of great concern, because they are in it for the long haul. When they are ready to buy, they are ready to buy and nothing is going to stop them. The bottom line is that any negative market news isn’t going to phase them signicantly. Home owners who are looking to trade up, on the other hand, are certainly more likely to react to a bad news market and hold off on their purchasing, until the market turns for the better.
The Naples Florida real estate market reflects a very strong ‘buyer’s market’, as does most of the rest of the country. I would encourage anyone who has an inkling of buying this year to take a strong look at what is going on and pull the trigger. Like the stock market, the real estate market is one where you best not try to time the market. Could it decline further…certainly, but for the longer term investor, your timing couldn’t be better!
Are You Dealing With FSBOs and BUBBAs?
Author: V. K. [Mel] Melhado P.A.
The great amount of real estate information available on the world wide web and elsewhere has certainly empowered both FSBOs (For Sale By Owner), as well as BUBBAs (Buyers Unrepresentated By A Buyer’s Agent), the latest in a real estate acronym. Interestingly, according to NAR (National Association of Realtors), this latest category of buyers increased by 4%, from 19% in 2005, to 23% in 2006. Of the 23%, 13% bought directly from a builder, without representation, while the remaining 10% bought directly from the seller.
The reasons as to why a buyer would not use a professional realtor to handle the transaction for them are intriguing, and I would suspect that it comes primarily down to commission. I am of the belief that the consumer mistakenly thinks that he or she is saving themselves the commission percentage if they forego a realtor. I don’t believe that they fully understand that the commission is paid by the seller. Most likely, they are liable to be first-time buyers who truly do not know how things work. I’m sure that there are also the buyers who are looking for a better deal from the seller direct, because they are not paying a commission.
The whole key lies in consumer education, whether dealing with a FSBO or BUBBA. In either case we need to educate them as to how complex and complicated buying or selling a property can be, the many steps involved and what it takes to complete a successful transaction. If we focus on the positive aspects of why it is important to hire a real estate professional, our conversion rate will be higher and we will be able to lower that 10% figure, which to me, is way too high.