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.

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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!

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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.

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Properly done, a 1031 Exchange can be a great strategy with regard to saving money and deferring any capital gains tax. One must remember that we are talking about deferring and not eliminating the tax, but with planning and forethought, it does make for a great tool in in your real estate investing arsenal.

Basically, although a bit gray in the way it works, a 1031 Exchange (Section 1031 in the IRS Code) allows taxpayers who are selling a property held for business or investment purposes to completely defer any capital gains from the sale, so long as all the equity (gains) from the sale are used to purchase a like-kind property. Failing to use all the gain to purchase a property of equal value or higher than the one sold, will be subject to standard capital gain taxes.

There are different kinds of 1031 Exchanges, like a Reverse Exchange or Improvement Exchange. With a reverse exchange, the seller will go out and identify a property to purchase, prior to selling his home. The exchange expert or QI will then set up an EAT (Exchange Accommodation Titleholder) who will purchase and hold the identified property, until such time as the exchange is completed. This must be done within 180 days. An Improvement Exchange differs in the fact that any proceeds from a sale can be used for new construction to build or make improvements to the replacement property. Using this strategy can help improve the amount of money saved. 

The key to a good 1031 Exchange is not only identifying key properties, but also using a 1031 expert to help with the exchange. Done correctly, a 1031 Exchange is a great way to conserve capital and increase wealth.

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With inventory at record levels in every area of the real estate market in greater Naples, buyers remain squarely in the driver’s seat and have the potential to pick up some good bargains at an excellent price point. One area that I find particularly interesting and think has huge potential for finding a real bargain is the new construction arena.

It wasn’t long ago that new construction home builders were employing a lottery system, because they had an enormous amount of people interested in purchasing their products and too little inventory. Many of these people were investors or , with many realtors among them. Their main interest was to close on the properties and immediately ‘flip’ them for large profits, with never any intention of owning the property for any length of time. When the real estate market turned, many of these speculators had not yet closed on their properties and are now caught in a situation that they had not intended nor planned for, a down market.

With the turn of events in the market, many of these people are ‘panic selling’, simply because they are not prepared nor have the ability to carry these properties for any length of time. In communities like Aviano, The Quarry, Tuscany Cove, as well as many others, we are now asking prices well below what the buyers have actually paid for the single family homes, town houses and condominiums. As new construction closings continue throughout 2007, I believe that this trend will continue and that there will be a plethora of bargains.

For those buyers out there who have held off, it presents a fantastic opportunity, but only if they are willing to jump in and test the water. If they don’t now, they might well be kicking themselves later!

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One interesting strategy for investing in a down real estate market is looking at the foreclosure market. I know that for some, it can be a bit disconcerting because of the fact that you are dealing with people who are in a tough financial position. But the reality is that you really aren’t dealing with them at all, you are in fact dealing with their banking or financial source and not the individuals.

After struggling for a bit with the philosophy of providing information on foreclosures, I decided to put up a direct link to foreclosed properties and potential foreclosures in all areas of the country on PreviewNaples.Com. Here you will be able to click on any state in the country, then click on a specific city or area. Prior to viewing the properties, you will be asked to fill out a short form. Don’t worry, no one will contact you other than myself and that will be to see if I can be of further help to you.

The strategy of purchasing foreclosed properties can be, in itself, rather challenging. But if you have the stamina to pursue it to fruition, it can be immensely rewarding. In a down real estate market, it is a strategy well worth investigating.

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With interest rates at historically low levels and projected to remain much the same throughout 2007, coupled with the fact the home prices have declined, the timing for purchasing a home in Southwest Florida is excellent, especially if you are a first time buyer. This past week, the FED left the prime lending rate alone for the fourth month in a row and the market correction that we’ve seen will open up new opportunities for many people, who prior, simply could not afford to entertain the thought of a home purchase as a reality.

If you are in the market for a home in the greater Naples area, you are certainly in the ‘drivers seat’. Having said that, there are two areas of the market place that remain exceptionally strong, the very low and high end. At the very low end, single family homes in the Golden Gate City are doing very well, and the prices are holding. The same can be said for the very high end of the market in areas like Port Royal and Bay Colony. Sales are exceptionally strong in both areas and there has not been much movement in pricing.

The homes in the middle brackets are lagging, and it is here that I feel a buyer has the best opportunity to find something that can be perceived as a great value. Inventories in these brackets remain at all time highs, so that offers at 10% less than the asking price are becoming quite common. Not only that, in many cases, they are selling at that price!

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