Unforeseen Repercussions All Around In Florida
The Palm Beach Post reports from Florida. “Here in the eye of the nation’s financial storm, the Fed sits motionless, watching as inflation rises at the quickest rate in 17 years and home prices fall faster than any time since the Great Depression. Economists say this rare mix of consumer inflation and housing deflation has everyone in a bind. ‘The problem is that, for the first time since the Great Depression, the banking, housing and consumer sectors are all caught up in an inescapable Catch-22 trap,’ Bernard Baumohl, managing director of The Economic Outlook Group LLC, wrote in his analysis of the Fed’s position.”
“‘The prime collateral of banks consists of real estate, which keeps eroding in value each day,’ he wrote. “This is the vicious downward spiral that has ensnared the economy for more than a year.’”
“In areas with plunging real estate prices, such as South Florida, equity loans are drying up. Lenders originated only $128.3 million in home equity loans in Palm Beach County that in May, down nearly 60 percent from the same month last year, according to DataQuick.”
“‘The value of the house that I am living in has fallen,’ said Christel Silver, a Realtor working in Florida’s hard-hit Boca Raton-Delray Beach area. ‘There is no equity left, but three years ago, I could have gotten plenty of money’ in an equity loan.”
“Silver said she wishes the Fed would cut rates and lenders would relax loan standards to boost home sales. But she is not optimistic for the short term. No matter what the Fed does in September, home prices will remain depressed for a while because ‘we still have so much product on the market,’ she said.”
The Miami Herald. “The bursting of the Florida real-estate bubble now has a price tag: $153 billion. That’s the loss in market value of all Florida properties, from houses to businesses, between 2007 and 2008.”
“‘You’re seeing more of what you would think of as ‘fire sales,’ just really rock-bottom prices to move property,’ said the Legislature’s chief economist, Amy Baker. ‘It’s not a terrible thing. You want to see that.’”
“‘It seems like Miami-Dade is picking up declining [property-value] speed . . . or falling off a cliff,’ Senate tax analyst Ellen Fournier said.”
“The construction industry lost about 80,000 jobs in a year, making Florida the No. 1 job-loss state in the nation. ‘We’re basically an unhealthy patient right now,’ Robert Parrish, president of the Florida Home Builders Association, told Gov. Charlie Crist in a Tuesday round-table discussion with business leaders.”
“‘We’re not getting any better,’ Parrish continued. ‘We could be getting sicker. We’re looking for the doctor.’”
“Crist responded with a nervous laugh: ‘Well, I’m not a doctor.’”
From Miami Today. “In an unusual deal, The Related Group partnered with private equity firm Lubert-Adler Partners in a bulk purchase of 120 condo units at 50 Biscayne, a project Related co-developed. The price of $30.3 million, or an average price of $250,000-$300,000 for units that have been trading at about $400,000, represents a sharp discount, said Peter Zalewski, principal of (a) consulting company.”
“Mr. Zalewski said shortly after selling off 26 units in bulk to 50 Biscayne Suites LLC in May, the development partners paid off the construction loan to LaSalle National Bank. ‘That meant they no longer had to sell at whatever price the bank says is necessary,’ he said.”
“The partnership between Related and Lupert Adler is unusual, Mr. Zalewski said, and the implication is that Related ‘is throwing in the discount they should have made with the idea that ultimately they will be able to realize it when the market changes.’”
“‘The bankruptcy of WCI Communities earlier this week has had a psychological effect on fund buyers,’” he said. ‘Last Friday, regulators shut down First Priority Bank in Bradenton, which indicates that discounting of construction loans is going to begin at Florida banks. It says to funds that now is the time to deal, because the day of the banks trying to work things out with the developer is over. Banks need to start writing off loans. Another sign is that 80% of the 23,000 new condo units in downtown, Brickell and Biscayne Boulevard have been delivered.’”
“Lucas Lechuga, a Realtor with Miami Condo Investments, said it’s hard to say if and when the vulture fund’s action will affect prices.”
“‘If the buyer puts them back on the market at a discount it will affect the price and make it very difficult for people trying to sell individual units,’ he said.”
“In an interview last year, attorney Robert Barron, a shareholder at Berger Singerman, said creation of vulture funds is a logical outcome of the credit crunch, but the funds could bring unforeseen repercussions all around.”
“‘One problem is that whatever the discounted units sell at will become the comparable sales price for the project,’ he said, ‘and that will indirectly affect other buyers who have to get financing. So unless they are cash buyers, the developer is messing up their ability to close.’”
“In a report being released Thursday, the Census Bureau showed Broward’s population fell by about 13,100 between 2006 and 2007, the largest loss statewide and Broward’s first drop in population since 2000. Four other Florida counties also lost population for the first time since 2000.”
“‘This is clearly a reaction to the housing crisis,’ said William Frey, a demographer at the Brookings Institution in Washington, D.C.”
“One retired couple put their Sunrise home on the market two years ago. They were eager for a radical change in scenery and lifestyle. In June, the longtime South Floridians settled in Ocala. ‘We decided to come up and see where everybody was going. When we got up here in Ocala it was absolutely beautiful,’ said William Sorrells, a retired Broward County employee. ‘The economy is certainly a lot — what should I say? How do I say it nicely? — it’s not as nearly expensive as it is down there.’”
“One single mother who lived in East Kendall left in October. The reason: ‘Coming too close to foreclosure on my house too many times,’ said Maud Henrys, from Haiti. ‘It all just became too unaffordable.’”
“These days, Henrys is working as a nursery photographer in Cary, N.C., with four of her five children. She said she knows six other families who are recent transplants from South Florida, including her best friend.”
“‘We really love it,’ Henrys said. ‘I’ve saved thousands of dollars. Car insurance is 50 percent less. It was a no-brainer for me.’”
The News Press. “Ray Kest, professor in the MBA program at Hodges University, noticed more young people leaving in the last year, including his two sons. During the housing heyday in 2005, they followed him from chilly Ohio to sunny Lee beaches to make money. His 27-year-old was a carpenter and his other son, now 30, was a mortgage broker. As the local construction economy soured, they returned north in spring 2007.”
“‘For a short period, they made a lot of money. Then work dried up for them,’ Kest said, adding with a laugh. ‘And I said, ‘Well you’re not going to live with me.’”
The Naples News. “The Lee County School District is far below its student enrollment estimates for the upcoming school year, which starts Aug. 18. If the enrollment doesn’t increase, the district will post what may be its first-ever year-to-year decline in students.”
“As funding from the state is tied to the district’s enrollment, if 2,600 students leave mid-year — as they did last year - the district may have to give back some money to the state. ‘It’s a very desperate time out there,’ Superintendent James Browder said last week.”
“At the district’s Fort Myers student assignment office, Smith’s prediction of 1,600 procrastinators was exhibiting itself. There were at least two dozen waiting for placement in a school late Monday afternoon.”
“Jeanny Nakaya was one of those waiting. She and her three daughters are new arrivals. Despite the growing unemployment rate in the county, Nakaya said the family has come here for work. She said her husband, a pharmaceutical sales representative, has been relocated to Southwest Florida.”
“She said the family, which came from Shreveport, La., is looking to take advantage of the housing market. ‘For me to buy is awesome, but if I had to sell. Well, it’d be bad,’ she said.”
The Bradenton Herald. “The U.S. Census Bureau reported Wednesday that Manatee County’s population grew by about 3,000 people in 2007 over the previous year.”
“Nancy Engel, executive director of the Manatee County Economic Development Council, warned that the county might not be as lucky this year because a lot of construction workers are leaving the area because of the housing industry’s decline.”
“‘Looking at the 2006 to 2007 numbers, I don’t think anyone expected there to be a decrease in the population. But this year, we are looking at the rate of growth slowing down considerably,’ she said. ‘I think we are going to see a deeper hit from 2007 to 2008.’”
“Scott Cody, a demographer with the University of Florida’s Bureau of Economic and Business Research, speculated that some of the Census Bureau’s population estimates may have been slightly inflated in prior years.”
“‘With the previous estimates, we are not quite sure how many households were vacant condos, or just speculators buying property, and there wasn’t really a permanent resident living there,’ he said. ‘So some of the slowdown in the growth might have been houses that were always empty that now have the electricity cut off.’”
“‘We are working on our 2008 estimates and we can already see the drop-off in the growth in Florida,” he said. “Most of Florida’s growth is migration. And we have a lot of people who had come in to work in the construction industry and as those jobs dry up, they leave.’”
The Herald Tribune. “More than 300 people had already turned in applications Tuesday morning when Glenn Monroe dropped his in the box outside the future site of the new Janie Poe Housing Development.”
“‘A couple of guys on my street are out of work,’ said Monroe, who lives a few blocks from the site where crews demolished old public housing apartments in May to make room for 86 new mixed-income units. ‘I’m not the only one out here. This community is hurting real bad.’”
From Building Online. “Building Materials Holding Corporation, a leading provider of building materials and construction services to professional residential builders and contractors, announced it will discontinue operations at its wholly-owned subsidiary SelectBuild Florida over the next four months.”
“‘In light of the challenging homebuilding environment, we recognize the need to realign our business across the country to reflect local conditions,’ said Stanley M. Wilson, President and Chief Operating Officer. ‘The Florida market has weakened considerably and we anticipate it will be some time before improvement is seen. Housing starts in the Florida market have dropped from a peak of 265,000 in 2005 to only 99,000 in 2007 and an estimated 61,000 in 2008.’”
The Capital News Service. “A new state study says the value of property dropped six percent across Florida in the last year. Right now, there is a two year supply of existing homes for sale. Until that market is gone, new home construction will be lackluster.”
“Quentin Allen was a subcontractor, constructing high end homes until the bottom fell out of the market. He says it happened in the blink of an eye.”
“‘I had anywhere between 6 to 8 absolutely lined up and they went away all at once. Completely,’ Allen said.”
The New York Times. “A cheerful sign outside the glistening offices of Bank United beckons consumers to tap into ‘Mortgage-ade.’ Another promises a ‘59 Minute Mortgage.’ But easy money, it turns out, has created enormous problems at Bank United, Florida’s biggest regional bank.”
“By aggressively peddling a popular type of high-interest loan to risky borrowers, the bank tripled its profits in 2006 as real estate on Florida’s Gold Coast peaked, only to lose nearly $100 million in late 2007 and early 2008 as the market cratered. Now, its CEO, Alfred R. Camner, is scrambling to raise $400 million in capital, an amount nearly eight times the bank’s shriveled value on the stock market.”
“In an interview, Mr. Camner, who is also the bank’s controlling shareholder, testily defended the bank’s strategy. ‘We did it for over 10 years,’ he said, referring to the bank’s use of a risky but highly attractive product known as an option adjustable-rate mortgage.”
“‘For a very long time, it was an excellent performing package.’ he said. ‘It gave the borrower a chance to manage his money. If they qualified, it was an excellent loan.’”
“The strategy proved lucrative: Bank United’s assets more than doubled to $15 billion from $7.1 billion in 2003, while its total loans rose to $12.5 billion from $3.9 billion. By last October, the end of the bank’s fiscal year, Mr. Camner had allowed option adjustable-rate mortgages to dwarf overall mortgages three to one.”
“Bank United found itself on a particularly slippery slope as its newfound base of risky regional borrowers eroded. From mid-2006 to early 2008, the percentage of its assets designated as nonperforming soared more than fivefold to 4.75 percent.”
“‘The bank clearly did not understand the risks,’ said Gerard Cassidy, a banking analyst at RBC Capital Markets. ‘We believed that they pursued that business because it drove revenue and earnings growth.’”
“Indeed, the bank kept expanding. By the end of March, 48 percent of its $9.8 billion residential loan portfolio was outside Florida. ‘By opening up offices across the country,’ its president Ramiro Ortiz said in an interview, ‘we were diversifying risk.’ But, he added, ‘we never anticipated a national downturn.’”
From TC Palm. “Jubilant environmentalists cheered Brevard County commissioners’ unanimous approval Tuesday of land purchases that experts said would secure a critical conservation corridor between the St. Johns River and Merritt Island National Wildlife Refuge.”
“The commission approved three deals allowing the voter-approved Environmentally Endangered Lands program to acquire more than 1,500 acres in Scottsmoor for $21.1 million — land the program had pursued since the early 1990s.”
“During two hours of discussion, speakers argued that the land bisected by Interstate 95 linked a swath of conservation areas that had statewide importance for bio-diversity and water quality. But as with other recent conservation purchases, the county was accused of paying too high a price.”
“The total cost fell by $3 million since November, when commissioners — at the urging of Clerk of the Court Scott Ellis — requested updated appraisals to capture falling real estate values. Ellis argued Tuesday that commissioners could take better advantage of the market ‘free fall’ if they were more patient.
“‘Every single purchase that has been delayed has saved millions of dollars,’ Ellis said. ‘There is no danger of development.’”
‘That meant they no longer had to sell at whatever price the bank says is necessary’
Not that long ago, posters here asked when lenders were going to be forced to have fire sales. It looks like with the threat of bank failures, that day has arrived. And look at Related’s ‘condo king’ canabilizing projects he built! Truly stranger than fiction.
“…that day has arrived.”
I’ve seen it over the last 6 months in Palm Beach County. Houses owned by banks are listed just lower than any other home in the neighborhood no matter what the loss is. I’m watching prices come across my desk that bring back images of 1999 and 2000. Ocean front and fire sale are the only properties moving at the moment.
Andy, today I went to the courthouse for the foreclosure sale on Thursday.
I was taking Ben’s advice and not looking at the secondary market.
All the properties went back to the bank.
In 2 days of sales (maybe 60-70 sales) all but 3 went back to the bank, three were bought by one investor.
I just do not see the fire sale.
Yes prices are dramatically down, but am I missing something?
I think Ben’s advise will pay off but not just yet.
thx Muir
OooH! Ooooh! Look, Ben! Silver was just a canape! Here’s a REtard BUFFET.
‘Realtors live close to the edge’.
http://tinyurl.com/5l3hae
–”The hardest thing, where it all starts to unravel, is the effect of the difficult market on my self-esteem,” Van Scoyk (REtard) says. When home sales were booming, she reveled in snagging sales and closing deals, and then snacking on crackers and soda in her car on the way to a settlement she’d struggled to move to the table.”When the market is challenging like this, all the drama is gone, the hunt is gone, and this eats at your soul,” she says. “I love doing business, and there is less business to do. I am in mourning for my work life.”
–Now, he (Robert Milosh, REtard) is looking at renting out rooms. Renting out his entire house or selling it, he says, could leave him homeless. He took a bartending class in hopes of getting a job but says he could find only jobs as a busboy. “I’ve been looking for a job since October of last year and have yet to find anything,” Millosh says. “I apply for anything, as long as it meets my minimum salary and travel area. I figured real estate would always be there for me.”
Oh, golly, I’ve read the article twice, and I think I’m ready for another go, soon as my laughter tapers off.
BWAHAHAHAHAHAHHAHHHHHHHHHHHHHHHHHH!!!
Stop, my stomach hurts.
“now I’m losing everything for trying to be a good son” ( Millosh )
Well golly, you managed to run up hundreds of thousands in debt against you mother’s home and we’re sure every penny went to her medical bills?
Notice now that everything is falling apart “realtors were only trying to ‘help’ people”! Look PAL, we ALL have ailing parents, O.K!? Given the demographics of this country it certainly doesn’t make you anyone special.
”When the market is challenging like this, all the drama is gone, the hunt is gone, and this eats at your soul,” she says. “I love doing business, and there is less business to do. I am in mourning for my work life.”
I am against making mockery out of people who suffer from a job lose, but in this case I’ll make an exception. This person and others in their industry lied to consumers and many committed crimes that are still under investigation. For a participant in the largest housing ponzi scam in the history of the USA to speak out and want others to feel sorry for them is just plain nonsense!
This person laid their foundation to ruins through excess greed and outright fraud and is now paying the ulimate price of a career that is now upside down and it will stay that way for many years to come. I bet this person could have cared less what happened to her customers she swindled into buying overpriced property and then watching them fail.
What comes around, goes around and this is the price of greed!
”When the market is challenging like this, all the drama is gone, the hunt is gone, and this eats at your soul…”
Huh? What “hunt” was there when the market was GOOD? Lotsa sellers and lotsa buyers. There was no hunting. The hunt comes NOW, when things don’t come easy for you.
Her comment just proves how she was in it for the love of money. Not for the love of the industry, nor for the care of her clients.
The one variable the “mighty” Fed can’t do much about.
Inventory.
18.4 million empty homes, wasn’t it? Try fixing that through interest-rate policy.
BWAHAHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHHHHHH!!!
Faster Pussycat, Sell Sell
Be it in FL or wherever Realtors have developed this child-like insistence they really ‘will’ get the that pony for their birthday even though dad went through the roof?
Firstly, we live in an apartment! But they seem undaunted. I guess the ‘faith’ that the ‘mighty’ Fed will make this all just go away and make it seem like a bad dream is really working on my last good nerve.
Well, time should take care of that.
Sooner or later delusion needs to meet the needs of the stomach.
As if any further examples need be given, out in Bend, OR builders are imploring the city council to basically give them a 9 month freebie on SDC’s “until they sell the home”.
Oh I’m sure in their minds it makes ‘perfect’ sense but can you imagine anything more delusional than that? I can’t. That’s it for me.
I’m in SW Florida right now. I’m amazed that so long into the bursting of the bubble, the billboard ads for new homes are still everywhere. There are for sale signs everywhere. It’s as bad as it was last year. Lots and lots of empty commercial real estate as well, and tons of commercial “pads” (which I assume is just a graded lot) for sale. Also many for-rent signs all over.
One interesting thing that the change in perspective accomplishes: once housing implodes, you realize what a hot, sticky, humid, mosquito-infested swamp this state really is! It changes in people’s minds from shangri-la to shangri-sh#t.
Ever heard of no-see-ums? Come on down to Florida and hang out near a mangrove shoreline around sunset. You shall be in for quite an education!
“I’m amazed that so long into the bursting of the bubble, the billboard ads for new homes are still everywhere.”
The builders who intend to stay in business can’t just stop building. They’re slowing and pricing the homes according to new market fundamentals but new construction won’t ever go away entirely. They bought too much land and made plans to build these subdivisions when times were good.
The best comment I ever read on that came from the Miami Herald, when a columnist called Florida “a storm-lashed subtropical republic.” I’ve also read that the mosquito density on some of the uninhabited Keys is unbelievable, enough to keep you away even if you were covered in DEET. There are great reasons why this state was once thinly-populated.
This is literally true. Until mosquito control agencies got underway and managed to get the mosquito population down, most people couldn’t really move here, even if they wanted. It was generally unlivable and potentially very dangerous.
Three things more than other have contributed to Florida’s growth from nearly vacant state to sardine can: municipal and county pest control programs, the increased availability of air-conditioning, and the interstate system. I would add a fourth, Disney World, which has attracted virtually everyone born in Ohio.
LMFAO!!
Incredulous: I date the downfall of Florida, Oct 1, 1971. That is when rat-err-Disney World opened.
I am amazed that the Redneck Rivera (Panama city westward to the Ala state line) stayed relatively pristine for so long.
In my dreams I want to see Florida again as it was in the 60s.
“I want to see Florida again as it was in the 60s.”
Don’t we all. I can remember being the only car on the interstate around Tampa when it was fairly new; same for the Crosstown Expressway. What they’re doing to the Causeway to Clearwater and the roads around the airport is beyond hideous.
any guess as to the % of existing sales that were foreclosures in the recent spike ?
“…in the recent spike ?”
Here we’re still down in numbers year over year. Where have you seen a spike in those numbers?
Local media have decided to spin the gain in month over month sales, but that’s not proper to compare them that way.
existing up for june and some areas are showing july sales of foreclosures moving
Has to be the foreclosure sales driving the market. I’ve seen quite a few sales across my desk that I would have told you were impossible even 6 months ago.
Overall sales down 12% yoy per the report.
month over month, ehh, not so good a stat.
Especially when they are up against the numbers they just revised down!
You ask about seller types. In Lehigh Acres Florida, June 69% of the sales were “Corp”. Either a Reo or a builder firesaling. In Cape Coral it was 54 percent. If you are a real live human being trying to sell a house right now, good luck!
what “broke” counties do w your $$$
“The commission approved three deals allowing the voter-approved Environmentally Endangered Lands program to acquire more than 1,500 acres in Scottsmoor for $21.1 million — land the program had pursued since the early 1990s.”
they’re still overpaying
RE: “Silver said she wishes the Fed would cut rates and lenders would relax loan standards to boost home sales. But she is not optimistic for the short term. No matter what the Fed does in September, home prices will remain depressed for a while because ‘we still have so much product on the market,’ she said.”
The FB’ers Lament…
Oh, please, please Dear Lord-let me get out from under this onerous, monsterous, money pit by providing the means to foister it onto some other poor, ignorant, unsuspecting fool.
“Silver said she wishes the Fed would cut rates and lenders would relax loan standards to boost home sales.”
Here’s wishing Salma Hayek would relax her standards as well.
HAH! Me too! LOL!
My first thought was the movie Trading Places. Turn those machines back on!
“Silver said she wishes the Fed would cut rates and lenders would relax loan standards to boost home sales.”
Ugh!
What an idiot, just like a drug addict, why not just shoot some more of the same that got us into this situation.
Don’t worry Ms. Silver, the FHA is coming to the rescue! They will provide all the financing your buyers need - courtesy of you and me as taxpayers.
And if the lenders won’t redo the FB loans, Barney Frank is threatening that the “voluntary” provisions of the “rescue” bill will be changed to mandatory.
And we don’t need the Fed anymore, we are now on the hook for unlimited loans and equity infusions from the Treasury to Fannie and Freddie - so they’ll make all the crappy loans you will ever need.
Your government, hard at work……
I live in Florida and have a question. I’ve wanted to sell our house for years but my husband and son haven’t. My son leaves for college next week and my husband is somewhat worried about his job and may be seeing the light regarding the flexibility of renting.
If I can convince him to sell, or, if he loses his job and wants to sell, how should we do it? How hard is it to sell a house without a realtor? I think pricing would be easy, but what about the technical part and laws? Too tricky? What would you suggest?
I loathe real estate agents, however when trying to sell your home in a market like this, one who is willing to bust their rear end to make a sale is your best bet. Don’t over pay for the listing though. Many are willing to work for as little as 4%.
Definitely hire a realtor and price it at least 10% below comps (including fixer-upper foreclosures) for sale if you’re serious about selling.
I dumber than W and my MBA is a pos- selling yourself is easy- in FL you have to 3rd party the settlement so you can’t go wrong
the 5-6% is the deal maker, not the realtor
“…the 5-6% is the deal maker, not the realtor”
I know agents who sell between 25 and 30% of their own listings. Do you want to tell me how they don’t provide value?
Does that mean that they don’t sell 70-75% them?
“Does that mean that they don’t sell 70-75% them?”
Of course it does. But typical agents sell MAYBE 5% of their listings.
The price of your house is what’s going to sell it, not a realtor. Passing the money you save from the realtor’s commission on to the buyer will help you move it quicker. A nice big for sale by owner sign with the price on it should do the trick.
“The price of your house is what’s going to sell it, not a realtor. Passing the money you save from the realtor’s commission on to the buyer will help you move it quicker.”
I’ll say it again, don’t care for agents…but homes listed on the MLS are taking 4 or 5 months to sell IF they’re priced right. How long do you think it will take if you simply put a sign in the ground?
When I sold my house in NC I got it listed on MLS for a $500.- flat fee with some realtor. He didn’t do anything besides put a sign in the yard. Still had to pay the buyers realtor 2.5% but reserved the right to sell it myself. I would give that 2.5% a discount to people that didn’t show up with a realtor. House sold in 6 weeks for $160K asking price…in 2005.
The buyers used a realtor, so the $4000.- comission was their loss not mine as I would have extended that discount to any private buyer. Most people don’t know it, but it is ALWAYS the buyer that pays the realwhore no matter what they’d like you to believe.
RE: How hard is it to sell a house without a realtor?
Get an appraisal from a Residential member of the Appraisal Institute. It will cost you between $300/$400 which can save you thousands in money and time.
Then call in a couple of agents from reliable firms and have them prepare a “Certified Market Analysis”. They will do this for “free” in the hopes of obtaining a listing. The values they give you should approximate within 5% of your appraisal.
DO NOT DISCLOSE YOU HAVE HAD A PREVIOUS APPRAISAL DONE! Go with the one who presents a number reconcilable with your appraisal.
Remember-an appraisal is gonna get scrutinized severely in this lending environment. Better be kosher with your numbers or everything will come unglued later in the deal.
As much as I detest RelTards, the MLS membership pretty owns a lock on effective marketing. Plus today-as far as letting strangers into your house-you don’t know who is scamming and who isn’t or that somebody is casing your place to break into later on.
An agent will prevent this and also qualify potential buyers.
I’ve always gone for a flat fee commission which agents will agree to if they know you’ve priced your house competitively and they can move in a reasonable amount of time.
Thanks to all who replied. There are three agents who sell a lot in this neighborhood. Maybe the negotiation of the commission is the key here.
Find a flat fee broker that will put your house on the MLS. Last I looked that would cost around $500 (this was some years ago). You need to agree to pay the selling agent something, for example 3%, which is what they’d get anyway if they were splitting a commission with a regular rip-off 6% exclusive listing broker. Make sure the phone number on the listing actually gets answered by someone (I say this from previous flat fee broker experience).
I’ll disagree with most here.
1. Do a flat service realty for $299
2. Offer 3% plus a bonus.
How hard is it?
You said you could come up with a price, that’s a big part.
Use standard FARBAR contracts (ask for them)
Use a lawyer before you sign. (will cost you more than the $299 flat fee)
Except for using a lawyer, I feel very confident with contracts, inspections etc., I have sold three of my own houses in the last 4 years. (lived in all, never lost money)
Friends took a huge loss, but sold their flip. Bravo Realty. Only charges a flat fee for mls and of course the selling agents commission. There are other companies that have a flat fee mls listing. You may need a real estate attorney, which costs quite a bit less than the 3% your listing agent will charge. The real estate attorneys are hungry too, so you may get a great fee.
The name of the game is getting on the mls and listing low. The realtors can’t afford to black ball listings, they have in the past from small low fee companies. A pay check is better than no paycheck.
Us buyers are on realtor.com daily checking the mls for price. I don’t need a realtor to help me find a house. Went to an open house last weekend and of course the realtor was saying “let me help you find exactly what you need”. Just to shut her up I agreed. Of course every listing she showed me, I’ve seen a million times. she couldn’t provide me anything new. If the house is priced right, I’ll look, which is why I went to her open house. Not priced right enough for me to buy though.
I agree that you should use a real estate agent. First on the list should be the one with the most listings in the area - likely has some experience and also probably gets the most showings. Another thing you should do is ask the realtor up-front for a 1% discount off the commission if she gets both sides of the trade. Also, I would never use a male as an agent - women generally are better at this game, especially ones with a bit of age on ‘em.
What’s wrong with Craigslist and one of those real estate legal kits you buy for $40-50 bucks at Office Depot (or Office Max, forget which is which)? If you really want to make sure you aren’t getting screwed, then hire a RE attorney for a few hundred bucks to review the final paperwork.
I sold a house in 2006, sign and ad in the paper. In that case, a realtor came with the buyers for 2.5%. She did all the paperwork.
I sold my house this year. I put a sign in the yard and that’s it. Signed a contract in 3-4 weeks. In this case since the buyer didn’t have a realtor, I went to a title company and asked them what I needed to do. They gave me a standard contract for free which I filled out and the buyer and I both signed. I used that title company to close. They did all the other paperwork. My impression is that other than the initial contract, the realtor doesn’t really do anything. The title company does all the work.
If you want some more legal help though, I would look into hiring an attorney. F* the realtors, they are a waste of flesh. Put an ad in the paper, put a tube on your for-sale sign with GOOD pictures/flyer (people are going to extend the quality of your flyer to the quality of your house). An ad in craigslist and maybe some flyers elsewhere. Also advertise at work if you can.
Look at it this way, put it out yourself and give it 3-4 weeks. You should get some traffic. If you aren’t getting any traffic at all then it’s either priced too high or your advertising isn’t reaching enough people. You can always hire a realtor later but you can’t always unhire them. And applying the 3-6% realtor fees to the house makes your house more competetive.
Your house has to be “”ABSOLUTELY”"” premo….clean…spic & span…..Best it’s ever looked in it’s history…..
Spend the money to fix it up, and what ever you do, “”DON”T” expect the buyer to do anything but move into a beautiful home….Be satisfied with what ever you get…because the getting is going to be getting WORSE!!!!
“Be satisfied with what ever you get…”
And in a down market like we’re in now, the first reasonable offer you get is going to be your best offer. As time goes by and house prices continue to drop, people will only be willing to offer less and less.
Silver said she wishes the Fed would cut rates and lenders would relax loan standards to boost home sales. But she is not optimistic for the short term. No matter what the Fed does in September, home prices will remain depressed for a while because ‘we still have so much product on the market,’ she said.”
Oh My Gawd….this is exactly what got us into this mess. She can’t deal with your dried up stream of easy commissions. Now she will have to get a real job…Greeter at Walmart sounds just what she is qualified for!
The real estate agents I work with who are still in the business are the ones who were in it before all of the easy money. This one sounds like a hold over from 2003-2005.
and this gem-
“As funding from the state is tied to the district’s enrollment, if 2,600 students leave mid-year — as they did last year - the district may have to give back some money to the state. ‘It’s a very desperate time out there,’ Superintendent James Browder said last week.”
is just one more BS line on the entitlement mentality of ever-inflating growth. Schools especially serve the students that live in their district, and any superintendent that fears change is not one I would hire. Believing that enrollments only go up and baking in high priced on-going costs would, I guess, lead to the belief in ‘desparate times’.
Who would have thought that Realtors would take the - F America! Me! Me! Me! approach? So much for that helping families achieve the American dream BS. Affordable home prices need to be fought at any cost.
Geez, I guess she doesn’t know about risk. Even if the Fed lowers the Interest rate to zero, it doesn’t garauntee the banks will lower loan requirements. They lost BILLIONS of dollars with this practice, are they ever going to do it again..maybe in a couple of generations when the new crop of bankers come in thinking they know everything and will eventually repeat history again.
Yeah, the risk premium (spread) on mortgages will stay high. The Fed knows this.
Right now, most state money markets (for short-term cash funding) are yielding more than the Fed Funds rate (and they are free from both federal and state tax.)
That’s a heck of a lot of premium for these short-term funding needs.
“Silver said she wishes the Fed would cut rates and lenders would relax loan standards to boost home sales. But she is not optimistic for the short term.’
Poor, poor REtarded Silver. I feel her pain, because I too am unreasonably balked in my wishes by an unkind fate. For instance, I wish I had a trained team of magical lavender bunnies that would haul me to the market and back in some sort of pretty conveyance. I’m trying to think of one that wouldn’t bounce me around too bad. Maybe like some sort of sled with cushions. Oh, and there should be candy and strawberries in there, so I won’t get hungry on the way. Alas, I’m not too optimistic in the short term, either. Why, oh, why is life so UNFAIR?!
Silver sounds like a drug dealer who fantasizes about how much better life was before her best clients entered rehab and her suppliers got 10-20 years in the hoosegow.
Excellent series of articles on what is going to be a long, slow population decline in this state. I can see net departures reaching several hundred people per day, largely because the economic viability of core Florida wage-earners — those people earning $35,000 in a call center or managing a restaurant franchise or working as a public employee — has been almost totally destroyed. The game is far beyond over, yet no one realizes it.
“The game is far beyond over, yet no one realizes it.”
I have to diasgree with you. As property prices continue to fall and rents along with them, service jobs become able to pay the bills. That’s what this state was built on. People who retire will see Florida as a value again as long as prices continue to fall. People will need to sevice that population. What was abnormal was all of the construction, mortgage, and real estate related work that came here starting in 2001.
Bad Andy,
Agreed. At the right price, I suppose there’s a market for anything? Also I did a little bit of research yesterday regarding Manteca, CA and ’some’ of their home prices actually ‘would’ be cheaper than renting. Now that’s not to say that rents can’t get even softer but given that data, it could mark an entry point for some.
Thirty years in Manteca should give you a sufficient amount of pause even if prices were much cheaper than rent.
That’s Three-Zero years of living in a hellhole with not much of an economy, and by the looks of it, not much coming down the pipeline either.
Faster Pussycat, Sell Sell,
Seriously? You lived there, ‘that’ long? Well in a nutshell here’s the deal. My wife and I are sick of the rain ( and not really looking for work? ) Anyway, we both agreed we could ‘live’ *without a “view to ‘die’ for”. As we’ve deemed anything on the coast, a lake or drainage canal too expensive we’ve become more flexible in our definition of what constitutes “snow birding”.
We realize that saying “Stockton” or Fresno or whatever doesn’t exactly exude “success” but you know we’re just fine with it. If you’ve seen as many people deplete their “retirement” accounts as I have trying to rub elbows with “the right crowd” you begin to place a value on that which is sustainable ( not so much enviable )
Driven through it. Stopped for a coffee, as I recall.
You could just, here’s the shocker, rent.
You may change your mind before 30 years are up.
I think snowbirding in retirement is an excellent lifestyle! From my conversations on the topic with many snowbirders, I recommend the following:
Find towns with low crime, reasonable airport access and friendly neighbors. Just make sure you pick states with favorable tax laws. Also, find a good physician in both places. Keeping copies of your medical records with you is a good idea. Bleed the pipes of the home in the cold climate with RV antifreeze every winter and turn off the gas in both places when you leave. Not having a pet or indoor plants makes life easier.
I agree with the snowbirding lifestyle since I do it, and I’m sure that there are good doctors in Florida, but from my experience, they’re the exception. I either go north or west (Houston) for medical treatment if necessary during the winter.
Im not an expert on local taxes but didnt many places fight to have higher taxes on out of staters so taxes wouldnt go up for the locals. Of course this would have additional downward effect on prices. No one that supported such measures should gripe about negative equity.
In Florida, property tax rates are not higher for out-of-staters than for locals, but if you buy a residence in Florida and apply for homestead exemption, the sales price, generally, becomes the starting point of a fixed tax-inflation system. No matter what happens with real estate prices, the taxable “value” of a homesteaded property cannot increase by more than 3% a year. If you are buying a vacation or “investment” property in Florida, you cannot apply for homestead exemption on that property (though thousands of speculators did just this during the bubble, and are now subject to penalties, if not criminal charges).
Those who bought ten years ago at lower prices are often paying less in property taxes than someone buying the same properties today at today’s higher prices. And ten years from now, new buyers will be complaining about the buyers today getting a break.
When house prices come down, property tax bills get smaller; when they go up, property tax bills get bigger. That’s all there is to it.
Florida’s homestead exemption law prevents government property appraisers from endlessly doubling alleged property values based on manias or personal whims. Taking it away would do nothing to lower the taxes paid by new buyers (the notion of burdon averaging), but would enable cities and counties to increase everyone else’s property taxes as much as they wanted, and spend even more than they already do.
Maybe I am missing something but say a municipality needs to collect X in property tax revenues. Because the Homestead exemption would limit how much the mil levy or property value for tax purposes can go up for permanent residents but not out of staters, isnt it the exact same result? The out of staters end up bearing most of the brunt of tax increases in the form of increased valuations or MIL levy?
No matter how it is phrased, benefiting one group hurts the non-benefiting groups. Those receiving the fruits of the Homestead exemption are doing so at the cost of out of staters and thus discouraging out of state investment in FL, resulting in downward pressure on prices. I would assume that on average the out of staters wanting to invest in FL would be more affluent than the permanent residences. Thus, you are killing the goose that lays the golden eggs.
In summary, couldnt FL get the same property taxes by charging everyone the same MIL levy based on FMV with such MIL levy being less than the current MIL levy by doing away with the Homestead exemption? This would result in equality and promote further investment FL.
Out of state buyers who don’t live on the property cannot claim homestead exemption, but anybody, resident or non-resident, who pays x amount for a house today in the same district with the same millage rate will have the same tax bill initially. One however, can increase in taxable value over time without restrictions, while the other can increase in taxable value only by 3% a year. Without this, nobody buying property could estimate future taxes, and residents could lose their homes at the whim of the taxing authorities. That’s why they have repeatedly voted for homestead exemption: Once they move here they know that their property taxes can never increase more than 3% a year, at least in theory. If the county or city decides to increase the millage rate for a particular district — well, that would defeat the entire idea.
What sets the tax rate initially is the buying price of the property. If I have a house and sell it to you for a million dollars, you will be taxed on a million dollars, every year, with a maximum of 3% increases (the normal rate of inflation), provided you live in the house and claim homestead exemption. But, if I bought that house for a hundred thousand dollars twenty years ago, its taxable value for me would not be anywhere near a million dollars.
Anyone who buys a house to live in derives the same benefit from homestead exemption as anyone else.
Taking away homestead exemption will not increase tax revenues so that investors and vacation property owners will pay lower taxes. Taxes are never lowered, no matter how much money comes into the tax office. Taking away homestead exemption would make it impossible for normal people to live here, because their taxes could double or quadruple from year to the next. Only the very wealthy could afford to live here.
The counties will never have enough money to do what they want; they need to stop living in fantasyland and recognize that much of what they do is ridiculous, and many of their employees are overpaid, and many others are not needed in the first place. They brought in huge revenues during the bubble, not only from inflated property valuations but from property sales tax, and instead of storing up for a rainy day, they squandered every cent for all kinds of nonsense, including huge personal salary increases and retirement fund contributions. They got used to the big revenues, and now they’re appalled over the shrinking revenues. It’s their own fault.
Giving them power to raise everybody’s property taxes however much they wanted year to year would be a complete disaster. Homestead exemption binds their hands to some extent. A better law might be one that prevents more than a 3% tax increase on any property, homesteaded or not, but that will probably never happen.
Incidentally, many counties are STILL increasing property valuations, despite the bubble bursting two years ago and market values falling. If it weren’t for homestead exemption, millions of Floridians would lose their homes to speculators (the tax lien buyers hoping to get something for nothing), which is what happened to many Southerners after the Civil War. Crooked tax collectors could make up any valuations for properties they or their friends wanted, drive the taxes up, drive the owners out, claim the properties, reduce the valuations, and make out like bandits.
Thanks for the explanation. I guess my only remaining question is whether the Homestead exemptions would make it more likely that municipalites would feel the need to try to increase the millage rate more often than they would without the valuation limitations. Also one would think that municipalities would be indifferent to removing the Homestead exemptions and reducing the millage rate to a level that would achieve the same current overall tax revenue, and that such a move might have positive benefits such as increased demand for housing in FL.
In Denver there is legislation in place known as Tabor that requires voter approval for increasing millage rates. It has the lowest property taxes of any City I have ever lived in.
I think I would prefer to see universal lower rates and 100% FMV valuations, rather than disparate valuations which discourage new entry. I know others may have a differing view.
I don’t know. The millage rates vary, sometimes from block to block, so that there are something like thirty different rates just in Hillsborough County. The highest, I believe, is 3%, but many areas pay way, way less.
Here, I think, there might be a constitutional issue. Why should two people buying million dollar houses four blocks apart on the same day pay wildly divergent property tax rates?
Transaction (as opposed to listing, or wishing) prices have likely already done the majority of their falling in most of Florida. The problem now is that even if prices bottom, the gross accounting asset value still significantly overstates effective transaction values, which will result in an increase in bankruptcies and unemployment, and reduced consumer spending for an extensive period of time.
I live in Orlando and the building has started again down by the airport off of 417 by the Lake Nona exit. That development had just sat there for a couple of years. I also see building starting on the NE
side of town in Oviedo. I was pretty surprised.
“[T]he Fed sits motionless, watching as inflation rises at the quickest rate in 17 years and home prices fall faster than any time since the Great Depression.”
Soak the poor.
Soak them twice.
Keep rolling the dice.
“The bank clearly did not understand the risks.”
What a reassuring statement!
Check this house a huge project of over 3000 NEW homes is planned for Lakewood Ranch in Manatee county…. http://www.heraldtribune.com/article/20080806/ARTICLE/808060363/2055&title=Lakewood_Ranch_will_get_a__heart_
What about all the UNSOLD homes already avaliable?
This is an Indian Lake Estates waiting to happen. 75% vacant 40 years later.
Wow!!!!
I googled and linked to their website and they have an arial pic.
Andy!! You were NOT kidding! MY GOD!
http://www.indianlakeestates.net/Images/ILE-Airial.jpg
At night on some of those ill-conceived subdivision roads in that part of Florida, the quality of snake hunting is excellent. The creatures slither out onto the warm blacktop in the late afternoon, where they repose in warmth and isolation, unmolested.
So those sprawling “master planned” communities that went nowhere are good for something.
Sort of.
No, I never did eat the snake meat.
We would just catch ‘em for fun.
And no, gator tail doesn’t taste like chicken.
“‘The prime collateral of banks consists of real estate, which keeps eroding in value each day,’ he wrote.”
BS. The prime collateral of banks is the ability of it’s borrowers to pay the money back, with interest. That means the prime collateral of the bank is the PRODUCTIVITY of their borrowers. They deployed the money badly, and so did too many of us.
Well agreed. Just as the ‘value’ of the US Dollar hinges on the gov’s right to tax us! But I think the comment was borne more from a balance sheet perspective.
This why I always hate to hear the term “Home Equity Loan”. They should actually be called Job Equity Loans. I don’t care how much HE you have, if you don’t have a JOB with which to pay it back the rest of it really doesn’t matter!
“… ‘we still have so much product on the market,’ she said.”
Saying it like that is worth an added 3 years to the downturn.
I was stunned when I saw this quote:
“‘The value of the house that I am living in has fallen,’ said Christel Silver, a Realtor working in Florida’s hard-hit Boca Raton-Delray Beach area. ‘There is no equity left, but three years ago, I could have gotten plenty of money’ in an equity loan.”
I can’t imagine, at least in the universe I live in, ever thinking that the ability to borrow money against my house was some how “[getting] plenty of money.” Does this Realtor(TM) have any idea that this money would need to be paid back* and it’s not a windfall?
* (Well as it turns out the money didn’t need to be paid back, with the Government’s blessing, but that wasn’t known back a couple of years ago.)
“The construction industry lost about 80,000 jobs in a year, making Florida the No. 1 job-loss state in the nation. ‘We’re basically an unhealthy patient right now,’ Robert Parrish, president of the Florida Home Builders Association, told Gov. Charlie Crist in a Tuesday round-table discussion with business leaders.”
“‘We’re not getting any better,’ Parrish continued. ‘We could be getting sicker. We’re looking for the doctor.’”
“Crist responded with a nervous laugh: ‘Well, I’m not a doctor.’”
Sounds like the perfect running mate for McNasty!
Like ObomaNation would be any better?
B-b-but denial, obfuscation, and flouncing are all McNasty specialties! No one on his team says the same thing twice…
80% of voters would concur OKLandlord. It would be much much better than a 4 year extension of the current crime wave.
I posted a case study. I did on the new home sales in Lehigh Acres,
http://www.swflreia.com
The market has not had a lot of sales activity about 30 dollars a SQFT has went away this year. The sales numbers are doing well, prices are falling like a rock, thats not a bad thing.
Lee County Florida. This was the last hotbed of the Spec. builders.
Lehigh Acres crashed last, Cape Coral, crashed First. It is now doing well in sales, again, not in pricing. This bust is a big one. Its a bust for sellers, a boom for buyers that are buying for the right reasons.
“Crist responded with a nervous laugh: ‘Well, I’m not a doctor.’”
So many punchlines, so little time . . .
Realtor Robert Millosh prepares for an estate sale in the house he grew up in and now owns. He wants to move to a cheaper place, but the house isn’t selling.
Why move? You’ll achieve your goal if you just hang around where you are a while longer.
Well!!!! It reminds me of the saying from 3-4 years ago, when someone said; they always wanted to live in a $500,000 house…They just NEVER thought it would be the one they’d been currently living in ….Some people have dreamt of living on a desert island…Maybe they’ll be satisfied to live on a deserted “”STREET”"”…..