The tourists, as well as the ‘snow birds’ are back as we head into full-blown season in Southwest Florida. How do I know, well for one my buddy who owns a body shop is busier than he has been in months and second, my open houses have suddenly become very busy, which is a good sign.

Buyers are certainly back looking as they perceive that there are bargains to be had in the greater Naples Real Estate Market, and yet the question becomes are they actually buying? Certainly in some instances they are, but I’m hearing the same story from a lot of fellow realtors that people are continuing to try and time the market.

I have been telling clients and prospects for months that trying to time the real estate market is no different than trying to time the stock market, and if you happen to hit it, you are just plain lucky. And is there really any reason to try and time it anyway, after all, you aren’t buying for the short term.

While you are hanging around on the fence, waiting for the market to drop another point or two, you are loosing true bargains that are out there that are being snapped up by other savvy buyers. The North American buyer who remains ambivalent about the market needs to realize that they are in direct competition with the European buyer whose money is worth far more than ours and sees greater Naples Real Estate as a true bargain now not worrying about whether the market will go a bit lower!  

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It seems as if the many buyers are playing a waiting game in the greater Naples Real Estate Market today and I’m not too sure what they are waiting for. I get the impression that they perceive the market will go lower and with the great amount of inventory that we currently have will be there for quite some time to come.

As far as the market going lower, who really knows. I tell clients that if I could definitively put my finger on it and accurately predict the outcome, we wouldn’t be having this conversation. I would be down in Port Royal enjoying cocktails on my 150 foot yacht and we wouldn’t be having this conversation! With regard to the large inventory that we have now being around for quite some time, I would suspect that they are right, it will be around, but the ‘kicker’ is that the really good inventory won’t.

My perception is that with the influx of the foreign buyers coming to our area and the fabulous exchange rates that they enjoy, they won’t necessarily be waiting for the market to go down, because they will be feeling that they are getting one heck of a deal anyway. Plus their mentality comes from the standpoint that they are not buying for the short term investment, they are buying a vacation home to come to.

Point of fact…I have this wonderful single family home in Olde Naples that has only been on the market for a short time. At $1,374,900 I believe that it is priced extremely aggressively and literally has no competition in the Olde Naples area. And yet, I have had quite a few buyers through who have told me that they absolutely love the home and are seriously thinking of making an offer. In fact, I had one couple through three different times, spending a total of over three hours looking at everything. Upon leaving the husband said to me, Mel you will be hearing from me shortly. Well that was over a month ago and still no word.

My take is that they are playing the waiting game to see if the market heads lower and we are forced to reduce the price. If that is the case, I truly believe that this property, like other properly priced properties of value will not be around.

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The buyers are certainly out there looking, although they seem to be taking their time about writing offers even though the product is perceived as a value. For the sellers, it can be quite frustrating, since they have either reduced their price to get it to where it really needs to be or they have priced the property correctly from the onset.

I’m of the philosophy the it is useless to entertain taking a listing unless it is priced correctly right out of the gate. In my opinion, priced correctly means pricing the property so that it has no competition in the community, which generally makes it the lowest priced property by far.

Although sellers are usually reluctant to entertain that, I try convince them that it is far better, in today’s highly competitive market, to get to the bottom line initially rather than have the property continually go through a series of price reductions. I’ve never understood agents who have multiple reductions on a property, then terminate the listing only to put it right back on the market the same day. Since that information is mainly seen by other agents, you really aren’t fooling too many people.

As Alan Greenspan alluded to this past week, in order for real estate to sell today, it must be not only be perceived as a bargain, but rather an exceptional bargain at that!

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“Opportunity is missed by most people because it is dressed in overalls and looks like work” – Thomas Edison

I believe that the current ‘down’ real estate market that we are experiencing offers some wonderful opportunities to us as real estate agents, and although it might take a fair amount of work, the rewards can be great. I tire of the agents who are walking around bad-mouthing the market in general and try to let them know that if they are truly willing to work, (something that a lot of agents just are not used to since they experienced the boom years,) there is great opportunity out there.

One of the areas that I believe will make people who work it a substantial amount of money is the short sale or pre-foreclosure market. I find it interesting that many of the so-called real estate gurus are doing the infomertial circuit on television stating the the window of opportunity is now and could close soon. (I would suspect that the window of opportunity for making money in that market could be open for a good amount of time yet.) 

I can tell you though from experience, working in that arena is a lot of work and if you are going that route you need to be prepared for extended periods of time. I’m certainly not saying that it isn’t worth it, because it is, but you need to also prepare for some frustrating times as well.

Lenders do some goofy things, for what reason I don’t know. I recently completed a short sale, but the lender, a well known very large company took forever to make a decision about whether to take the short sale or foreclose. I couldn’t understand why when the sale was only less than $30,000 short and I read where it takes a lender an outlay of between $50,000 to $70,000 to foreclose on a property, plus the time involved. They then end up in the real estate business, some place that they don’t want to be. Nonetheless, they dragged it out for almost three months longer than they needed to. Go figure! 

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I enjoy blogging, but you know sometimes you just get ‘writer’s block’ and can’t think of anything that you want to write about. I certainly laud the people who write every day and it flows like water. I envy the fact that they seem to come up with something interesting or entertaining, whether it be about real estate or not. When I can’t seem to think of anything, I just won’t post for the sake of posting.

I read somewhere that top 10 lists are good thing to blog about, so here it is…the top ten list of common mistakes that can cost a home seller thousands of dollars. (I don’t believe that an explanation after each one is necessary.) The order that they are in is not necessarily by order of importance.

1.   Improper Pricing

2.   Not Providing Easy Access

3.   Bad Housekeeping

4.   Failure To Make Repairs

5.   Poor Home Showing Techniques

6.   Relying On Traditional Marketing Methods

7.   Making Decisions On Emotion

8.   Not Understanding The Market

9.   Working With Unqualified Prospects

10. Choosing The Wrong Agent

So there it is, some points for the homeowner and points some for the agent. You could write volumes about each one, but we’ll save that for another blog post.

Maybe by tomorrow my ‘writer’s block’ will have vanished and we’ll be back in the groove!

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Having just completed another short sale and being called today on yet another to list, I find myself in a quandary as to whether I really want to start doing more and more of them. It isn’t that they are particularly hard to get done, it is more a question for me of whether I truly want to start focusing on other people’s problems. Friends have said why not, it was their stupidity, (I prefer to look at it as a lack of knowledge,) that got them into trouble in the first place. Either way for me, it isn’t the easiest thing to mentally gear yourself up for.

Short sales are prevelant all across the country and I would expect that we will see more and more over the next couple of year at least. The only real good news is that a short sale will stave off and totally eliminate the seller having to declare bankruptcy, at least with regard to the mortgage. What happens after that regarding other bills owed is anyone’s guess.

The State of Florida is fairly liberal when it comes to bankruptcy laws. Having said that, all mortgages have a clause that basically waives your homestead rights and  allows the lender to attach or take your property.

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Foreclosures are in the forefront of the news and are taking their toll on the regular homeowner market as well as affecting complete neighborhoods. Properties that are not short-selling and go out to foreclosure will most certainly affect property values in the neighborhood where that foreclosure took place. Naturally the more foreclosed properties in a particular neighborhood, the more pressure on the downward pricing.

With the banks and lending institutions not wanting to be in the real estate business, they will dispose of the foreclosed properties by selling them for substantial losses, which will help to further depress an already depressed market. Those selling prices will now become the new benchmarks for appraisals, dragging the market prices down even further.

Across the country, foreclosures were up some 58% just in the first half of 2007. Projections are that there could be well over 2,000,000 filings prior to the end of the year. The states currently with the highest amount of filings are Florida, California, Ohio and Texas. What is driving the foreclosure market are the huge amount of borrowers with sub-prime loans, along with those with adjustable rate mortgages now adjusting. Last week Countrywide, one of the nation’s largest lenders, announced that some of their low risk borrowers were having trouble making their mortgage payments, which is not good news.

Some analysts feel that despite the downward pressure created by the general cooling off of the market, as well as the foreclosures, will, in the long run, help the markets that were overpriced. The philosophy is that it will help to speed up the healing process.

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How quickly the market can turn! Several years ago here in Naples, Florida, when the norm was over bidding on properties, (and even then you weren’t assured of getting them,) to now when builders and homeowners alike are doing anything to get their properties sold. How many BMWs can they give away and how much bonus money can be attached to successful contracts has now become the new norm.

Along with all the hoopla is the sheer fact that there are now more foreclosures than ever, primarily because of all the greed from the good old days and the properties that both large and small investors are stuck with that didn’t turn. Most of those investments were done with negative amortization mortgages, and now it is time to pay the piper and there is no income to do it.

The sad thing is, in my estimation, that many an unsuspecting (as well as uneducated) individual person got caught up in the fray. Some were duped into purchases by shady realtors who projected a non-stop rising market and got caught. Those are the people who haven’t the where withal to sustain their purchases and are now allowing them to go to foreclosure, because they have no other alternative.

Again, short sales (a term that we knew little about and was virtually unheard of) have now become the norm. The one good thing in a short sale is that if the lending institution is willing to go along with it, it does stave off foreclosure, but still does not mean that the individual or company is not responsible for that deficit.

It’s a wild real estate market that now we play in, and liable to be for some time to come!

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