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Archive for July, 2016

Top 5 Reasons SW Florida Homeowners Should Avoid Going FSBO

Top 5 Reasons SW Florida Homeowners Should Avoid Going FSBO. There are Top 10 Lists aplenty that detail just why any SW Florida homeowner should think twice before planting one of those For Sale by Owner signs in their front yard. One of them is that when you sell your home all by yourself, the sheer amount of time you’ll have to devote to mastering Top 5 Reasons SW Florida Homeowners Should Avoid Going FSBOprocesses that are already fully handled by full-time real estate professionals is a true waste of time. It’s one wheel that doesn’t need reinventing.

If you are among those considering how you will sell your own SW Florida property this summer, since your time is important, let’s start saving it now by cutting those top 10 lists down to the Top 5 Reasons to Avoid FSBOs:

  1. You’re involved. It may sound like a good idea to be your own salesperson since you are the most intimately acquainted with the product—your SW Florida house—but logic rules against it if for no better reason that buyers will be automatically skeptical of your impartiality. Why? Because you aren’t! You also don’t get the benefit of a professionally trained pair of eyes helping prepare your property to appeal to today’s buyers, nor the benefit of honest feedback that buyers won’t share with a FSBO seller.
  2. Legal peril. Throughout this year’s political debate, a frequent refrain from candidates (both local and national) has been the need to cut down on over regulation. Without getting into those weeds, it is certainly the case that federal Top 5 Reasons SW Florida Homeowners Should Avoid Going FSBOand state laws require a number of very specific disclosures. If you aren’t a real estate attorney, that lack of familiarity could make a FSBO sale an open door to after-sale litigation. When that happens, there goes any commission dollars saved (and maybe a lot more!).
  3. Expense. That’s right, one of the Top 5 Reasons to Avoid FSBOs is that a FSBO can actually amount to an extravagance. It’s logical, too—because most buyers take one look at your asking price, mentally subtract the commission, and proceed from there (wouldn’t you?). The most recent studies bear out the bottom line: only 8% of successful sales were made via FSBO, and on average, they sold for 15% less than the agent-assisted sales.
  4. Top 5 Reasons SW Florida Homeowners Should Avoid Going FSBOMarketing Oomph. We professionals market SW Florida homes all year long, 24/7. As a result, we know which marketing approaches are currently bringing in results, and which are wasting time and money. We also have open channels with the media companies we deal with regularly—an advantage that FSBO sellers can’t hope to match.
  5. Expert Opinion. The open secret is that those who know the most about how to get the best results from a house sale tend to rely on expert help. A good example came in 2014, when Al Bennati, the CEO of the “BuyOwner” dot-com (“the strongest For Sale by Owner marketplace”) decided to sell his own St. Petersburg home. He listed it with a Realtor®.

           Top 5 Reasons SW Florida Homeowners Should Avoid Going FSBO. There! Time saved already—who needed a Top 10 list when you have these? I bet you agree: these “Top 5 Reasons to Avoid FSBOs” are more than sufficient reason to avoid the FSBO route…and to give me a call instead Today!

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Construction Activity Sends Signals to SW Florida Home Sellers

Construction Activity Sends Signals to SW Florida Home Sellers. When we are keeping tabs on SW Florida’s real estate scene, it’s only natural to go directly to the portion of the market we are most connected to. If we are a renter or investor, our eye is drawn to trends affecting that segment. SW Florida home sellers (or potential home sellers) can be counted on to pretty much ignore that information, instead concentrating on the latest single family residential listings, asking Construction Activity Sends Signals to SW Florida Home Sellersprices, and news related thereto.

Yet some trends in one sector can significantly impact the others. That’s the way it is with construction—any kind of construction. Whether it comes in as new building or remodeling, when construction goes up, lots of impacts can find their way to SW Florida —some right away, some after a significant lag.

Last week there were reports and reactions to some recent national readings:

HUD reported that March building permits were 4.6% stronger than in last year during the same period. Permits is one of those lagging indicators—a timelier statistic comes in the form of actual housing starts. Starts are bird in the hand numbers, as opposed the permits, which are birds in the bush. U.S. single-family starts came in at more than a million (1,089,000)—a happiness-inducing number if you are a builder. That’s a full 14.2% stronger than in the previous year, though not as robust as in February.Construction Activity Sends Signals to SW Florida Home Sellers

Investors would be more apt to notice starts for buildings with five or more units. Like the single-family starts, they were down from the month before but stronger than in 2015. Usually, availability of more rentals relieves price pressure on the single-family residential market. But in today’s situation, where listings for starter and trade-up homes has been decreasing for four long years—the overall inventory shortage makes that effect less likely for SW Florida home sellers (at least anytime soon).

In the same way that it’s simple to imagine the builders smiling at the year-over-year building starts statistics, it’s equally easy to picture the bankers as less exuberant. Let’s face it, the nature of the banking industry is to be more restrained. After all, when we put our own money in the bank, we definitely want them to be cautious. Risk-averse. Stingy, even.

Construction Activity Sends Signals to SW Florida Home SellersThe BankersOnline website (“For Bankers/From Bankers”) played into the prototype, concentrating on housing completions rather than will-o’-the-wisps like permits or starts. And although the numbers there were even stronger (a whopping 31.6% gain over the previous year), a word of caution about over-reading the meaning of that leap is in order. A year ago March, residential completions had been unusually dismal.  

Construction Activity Sends Signals to SW Florida Home Sellers. All in all, even The Associated Press—who for some reason framed the same numbers into a gloomier cast than seemed reasonable—couldn’t help reporting what the National Association of Home Builders sentiment index showed: “an overall optimistic outlook for new homes as the industry heads into the all-important spring sales season.” That construction industry assessment might not seem to directly affect what SW Florida home sellers will encounter, but a lively market is good news for each. I hope you will give me a call if this summer’s market is one you are interested in exploring further!

Top 5 Reasons for SW Florida Real Estate, Naples, Ft. Myers, Bonita Springs

Top 5 Reasons for SW Florida Real Estate, Naples, Ft. Myers, Bonita Springs. Of the investor-friendly possibilities, real estate has some particularly welcoming attributes that have kept it perpetually close to investors’ hearts (and portfolios). Top 5 Reasons for SW Florida Real Estate, Naples, Ft. Myers, Bonita SpringsThis is particularly the case whenever tenuous national and world affairs make the future unnerving hard to predict.

Forbes magazine is one of the foremost sources that knowledge-thirsty investors consult for ideas and commentary about productive destinations for their extra investment capital; and some of those ideas recently surfaced in a piece on why real estate is “investor-friendly.” They pointed to five major characteristics that continue to attract investors:

  1. SW Florida landlords have a degree of protection from the kind of volatility that the stock and bond markets frequently experience because rental rates are by their nature more stable over time. Globally, even international investors find U.S. real estate markets to offer relatively safe haven in troubled times. Forbes also notes that real estate investments offer Top 5 Reasons for SW Florida Real Estate, Naples, Ft. Myers, Bonita Springsinsulation from price movements “since returns are derived from rental income in addition to price appreciation.”
  2. Any SW Florida investor who has been around for a while knows how inflation can be a real investment-killer. Research points to the price-raising flexibility that real estate investments embody—but you don’t need to be an academic to know that everyone expects rents to rise when the cost of living does. When inflation rears its otherwise unwelcome head, commercial real estate investments have “the potential to become more profitable.”
  3. Last year, global economic growth slowed for most kinds of investment Top 5 Reasons for SW Florida Real Estate, Naples, Ft. Myers, Bonita Springsassets, but real estate was an exception. Rising rents alone would have done the trick (but underlying appreciation also didn’t hurt).
  4. As an injection of a different asset class, real estate is a portfolio-strengthener. Spreading risk is one of the bedrock principals every SW Florida investor learns from the start—a real estate investment does the trick.
  5. Tax benefits. The income from a rental investment in SW Florida can be partially offset by depreciation and loan interest “that can add up to a substantial tax break.”

Top 5 Reasons for SW Florida Real Estate, Naples, Ft. Myers, Bonita Springs. This summer, the current listings offer any variety of such investor-friendly possibilities. When you decide that your own investment portfolio might benefit from the stability and other advantages that distinguish SW Florida real estate investments, I hope you won’t hesitate to give me a call today to investigate!

The (Sort of) (Probably) “Ideal” Credit Score for SW Florida Borrowers

Something is being offered that is actually for free. No, really.

The (Sort of) (Probably) “Ideal” Credit Score for SW Florida Borrowers. It is truly the case that lately some banks and credit card companies have been including a new benefit for their SW Florida clients: free access to their current FICO The (Sort of) (Probably) “Ideal” Credit Score for SW Florida Borrowerscredit score.

This isn’t the same thing as the ads we’ve been deluged with for years—the ones for “free” credit reports. Most of those wound up not really being completely free—at least not if you value your privacy (as in your email and other personal information). Most of them were bent on pitching you on surprisingly pricey subscription credit monitoring services. For anyone who placed value on the time it took to tell them “no” a half-dozen ways, these weren’t really “free.”

But if you are a lucky SW Florida client of one of the outfits now providing continuous access to your FICO credit score, it IS interesting to click on it now and again. The score goes down and (we hope) up as various information flows into the FICO computers.

“FICO” is shorthand for the Fair Isaac Corporation, which is by far the dominant credit rating creator. But don’t be fooled: not all FICO credit scores are the same because there are three different companies (Equifax, TransUnion and Experian) who collect the data. They pay FICO to furnish their branded versions of the scores. Each one has FICO assign different weights to different parts of your history—and the result is to create three different FICO scores.The (Sort of) (Probably) “Ideal” Credit Score for SW Florida Borrowers

 That’s why when you read a headline like Tulia’s “Magic Number: The Ideal Credit Score For Securing A Mortgage,” you’re right to be a bit skeptical, since an “ideal” credit score for Equifax and TransUnion and Experian would be unlikely to be the same. Nonetheless, the number given as “ideal” was probably pretty much about the best rule of thumb number you could realistically come up with: 740.

If 740 or higher is the ideal FICO number (considered to be in the ‘perfect’ range for mortgages), another (sort of) (mostly) correct number for SW Florida  mortgage applicants was 660—which they thought was a credit score that would The (Sort of) (Probably) “Ideal” Credit Score for SW Florida Borrowers“land a better rate and avoid jumping through additional hoops” than would 620—the basic requirement “for most lenders” looking to originate a conventional home loan.

The “most lenders” qualification, along with the differences in the credit scores offered by the different companies, means that there is a lot of wiggle room that can affect not just whether or not an applicant is successful in being offered a loan for their new SW Florida home, but what the terms of the mortgage will be. Given all that, it’s really impossible to take any one credit score number and say definitely what that will mean to your loan originator.

The (Sort of) (Probably) “Ideal” Credit Score for SW Florida Borrowers. Who doesn’t appreciate being given free access to their FICO score—even if you aren’t quite certain what the rises and falls are going to mean? The only time you actually get a real-world answer to that is when you are ready to buy a home and submit your application. That’s another time I’m here to help!

For SW Florida Readers: The Top 10 (of Top 10 Real Estate Lists)!

For SW Florida Readers: The Top 10 (of Top 10 Real Estate Lists)! Why it is that we’re drawn to “Top 10” lists in general is For SW Florida Readers: The Top 10 (of Top 10 Real Estate Lists)!a matter we can leave to the psychologists. Suffice it to say that the lists are a staple on the super market tabloids and they’re all over the web. I admit they get more than their share of my own attention, even when my curiosity about a list’s subject matter is negligible. It’s probably because they’re quick to skim through and agree or disagree with…

Since they are so pervasive, it occurred to me that there might be something to learn if we could determine which ones that deal with real estate topics get the most attention. SW Florida real estate didn’t have its own SW Florida -focused Top 10 real estate lists—but for the whole country, I guessed there could be hundreds (there were).

There turned out to be a lot of ads mixed in with the ones that were legitimate; but after 15 or so minutes of deep internet research, here’s what registers as—For SW Florida Readers: The Top 10 (of Top 10 Real Estate Lists)!

The Top 10 Top 10 Real Estate Lists

(Out of deference to the now-retired David Letterman, they’re presented in reverse order):

#10.     Top 10 Choices for a Rental Apartment with Pool in NYC

#9.       Top 10 Real Estate Terms Everybody Should Know

#8.       Another Top-10 List—Best (and Worst) Cities for Real Residential Estate [sic]

#7.       Top 10 Real Estate Traps (fyi, Number 10 is ‘Bad Laws’)

#6.       TopTenRealEstateDeals (it’s actually a website, so no spaces between words)

#5.       Top 10 Real Estate Trends

#4.       Top 10 Real Estate Myths

#3.       Top 10 Real Estate Markets to Watch in 2016

For SW Florida Readers: The Top 10 (of Top 10 Real Estate Lists)!#2.       Various Top 10 Real Estate Lists [honest, that’s the name of a list!]

-drumroll, please:

#1.       Top 10 Celebrity & Spectacular Homes

Number 1 won’t come as a surprise to many here in SW Florida —who can resist an invitation to take a peek at spectacular celebrity homes?

For SW Florida Readers: The Top 10 (of Top 10 Real Estate Lists)! Closer to our home, we have some pretty spectacular properties on the market right now (you can find them here on my site). Interested? Give me a call for a closer look!

 

Ironing Out the Wrinkles for SW Florida Short Sale Properties

Ironing Out the Wrinkles for SW Florida Short Sale Properties. Any dedicated bargain hunter who scours the SW Florida listings is not surprised to find among the most deeply discounted entries one of two notations: foreclosure or short sale.

Ironing Out the Wrinkles for SW Florida Short Sale PropertiesEveryone knows what the “foreclosure” designation means—it’s been repossessed by the bank. It’s an REO (real estate owned). By discounting the asking price, the lending entity invites buyers to take the property off its books. It is here that the economists’ favorite acronym, “TANSTAAFL” (There Ain’t No Such Thing As A Free Lunch), comes into play. Foreclosed properties have frequently been neglected by their previous owners, who are not happy campers. So the cost of rehabilitation must be factored in before any offer is made. Still, foreclosures can represent real opportunities for buyers with patience and determination.

Slightly different are foreclosures’ first cousins: SW Florida’s short sale listings. There are any number of unforeseen circumstances that can cause an owner to fall into financial distress, but when their home has to be repossessed, the impact on the borrower’s credit is immediate and drastic. It can make finding a new place to live difficult, and can even make future employers hesitate to hire someone whose record includes that kind of Ironing Out the Wrinkles for SW Florida Short Sale Propertieshefty unpaid debt.

SW Florida properties which fall in the “short sale” category are those in which the borrower has been unable to keep up with the mortgage payments, but who is arranging for the lender to agree to accept a payoff that’s less than the full amount owed. When a short sale is finalized, the result is still some damage to the original borrower’s credit, but less than had a foreclosure proceeded. The buyer will benefit from what should be a substantially lower price than a comparable SW Florida  property would bring—and a home that is usually in better condition. An eager lender can also sometimes offer favorable financing terms, too.

Ironing Out the Wrinkles for SW Florida Short Sale PropertiesBut remembering what the economists say about TANSTAAFL, there are also these points to keep in mind:

  • Short sales involve extra bureaucratic red tape. The fine print includes items such as the lender having to approve details of the sale—and that can result in nerve-racking delays.
  • Although the owner is usually trying to keep a short sale property in good shape to facilitate the deal, banks won’t allow a short sale until the borrower has seriously fallen behind in payments. That can mean an inability to keep up with the expense of proper maintenance. As in a foreclosure, canny short sale buyers make certain they know the cost of rehabilitation.
  • The possibility of sticky legal issues needs to be recognized. For instance, if the seller has filed for bankruptcy, it could squelch the whole deal. Negotiating a short sale can be considered a “collection activity”—and those aren’t allowed in most bankruptcy courts.

Ironing Out the Wrinkles for SW Florida Short Sale Properties. If one of SW Florida’s foreclosure or short sale-denoted listings has grabbed your attention, I can help. It will require attending to some technical issues attached to the specific property—but I’ll be pleased to help you navigate the process from beginning to end!  

Seeking Clarity on SW Florida’s Future Home Loan Interest Rates

Seeking Clarity on SW Florida’s Future Home Loan Interest Rates. A few weeks ago, two pieces of incoming information crossed my screen—items that related to the possible direction in which SW Florida home loan interest rates might be heading. 

Seeking Clarity on SW Florida’s Future Home Loan Interest RatesThe first came from a big national listing aggregator. It seems that once this outfit gets the idea that you are interested in homes in SW Florida, they conclude that it’s your wish to establish an ongoing relationship. They then display all the energy and persistence a large corporation can muster to share their meditations about this and that. They will continue to email you with regularity until you call a halt.

Along with other communications, they sometimes send attention-grabbing questions to everybody on their list—then share the answers from the “community” (that is, everyone who hasn’t begged off yet). Last week’s question was, “Is it better to buy a house right now or wait until 2017?” Since SW Florida’s current home loan interest rates are one of the prime reasons today’s market is so affordable, the posted responses would surely be relevant.

Some were confused (“When interest rates rise, this puts pressure on affordability, which then slows rising house prices…then is the best time to buy”). This commenter apparently hadn’t taken into account the fact that higher home loan interest rates mean higher mortgage payments—definitely not a more attractive time to buy.Seeking Clarity on SW Florida’s Future Home Loan Interest Rates

A crank in Upstate New York complained that houses around those parts were too spooky and expensive (“housing and all these old, some hunted houses costs easily over 500K”).

Other answers were more philosophical (“it is ALWAYS a personal matter whenever a large purchase is contemplated”). Some claimed dubious expertise (“BUY NOW>>>NEXT YEAR THE PRICE WILL BE GOING EVEN HIRE”). Others were observant (“You should go to grammar school and get some spelling lessons. Seriously”).

All in all, most did subscribe to the majority view that low home loan interest rates make the current environment genuinely inviting. One writer was defiantly emphatic (“Buy now; waiting costs you more for interest rate and purchase price”).

Seeking Clarity on SW Florida’s Future Home Loan Interest RatesAnswers like that (there were lots of them) made the second source of home loan interest rate news all the more relevant. It came from a source that should supply the most reliable clues to the future direction of rates: the financial press. Unfortunately, after reading many different takes on the breaking news, clarity was in even shorter supply.

The breaking news was the unsealing of notes from the Fed Governors’ discussion in March about this month’s possible interest-rate hike…or non-hike. As Bloomberg summarized, the takeaway from the minutes of the FOMC’s meeting had “…several officials leaning against such a move because it would send the wrong signal and others saying it might be warranted.” If this sounds like a muddy kind of clarification, even that’s too definite: “The debate, by flagging a potential April rate increase that’s nevertheless unlikely…shows the FOMC is prepared to move in a meeting, if necessary…” Or perhaps not.

 Seeking Clarity on SW Florida’s Future Home Loan Interest Rates. If Bloomberg is right that a rate hike IS unlikely, that would mean continued low home loan interest rates and smooth sailing for SW Florida’s residential market. And another good reason to give me a call. Come to think of it, if the opposite happens, it’s also a good reason!