Friday, May 31, 2013

Condo Commandos

Is your condo board of directors acting within the law? Or are they making it up as they go and potentially exposing themselves and the association to lawsuits? I can say with certainty that there is more than one board of cowboy directors in Cocoa Beach that fits in the latter category. It's not uncommon to find condo associations enforcing rules that are in contradiction to the condo docs or enforcing legitimate rules unequally. I've had a condo director tell me that he knew the pet rule he was enforcing was different than the policy spelled out in the docs but that he was doing it for the good of the owners. This same board is also rigidly enforcing occupancy limits that are in contradiction to the docs. No one has challenged so it goes on.

Can't the Board just add a rule changing the pet restrictions in the docs? How about a new rule limiting the number of units one person or entity can own? We must go to the original docs to answer that. "The authority for the board to enact a given rule or regulation must be either expressly authorized in the governing documents or Declaration of Condominium or be reasonably inferred therefrom."

If your board has adopted a new rule prohibiting pets in contradiction to the docs you are under no obligation to find a new home for Spot. The law is specific about a board's authority and the process for limiting uses and rights. Merely adding a new rule to the old rules and backdating the document does not make that rule enforceable and it might expose the directors to liability. Targeting a specific owner through such methods is doubly dangerous. Cowboy directors, if you're reading this, you are encouraged to shape up and follow the rules. If you're in an association with a renegade board, you may want to point them to this post and to this one by Jean Winters, Esq.

"If honesty is the best policy, then is dishonesty the 
second best policy?"  _____Grant Williams

Sunday, May 26, 2013

What's Selling in Cocoa Beach?

Tasty pompano from the surf in south Cocoa beach
Almost a month into sea turtle nesting season and but a few days from the beginning of the 2013 hurricane season and real estate sales appear to be slowing somewhat. The Cocoa Beach and Cape Canaveral MLS condo inventory first broke below 300 units exactly one year ago and is still hovering in the same range. The makeup of that plus or minus 300 units has changed somewhat with average prices shifting upwards as the sub-$100,000 supply has been chipped away. Of the 34 units already closed this month, only five closed for less than $100,000. Compare that to the 24 units under $100,000 that closed in May 2012. There was only one sale for more than $375,000 in May 2012. We've had four closed sales so far this month above that number with three of them at or above $500,000.

The priciest condo sale so far this month was a 4th floor SE corner unit at 3800 Ocean Beach Blvd. that closed for $520,000. This unit has 3 bedrooms, 3.5 baths and 2392 square feet. Weekly rentals are allowed in this small 6 year old complex with rents in the $2000 per week range.

Another of the $500K+ sales was one of the pie-shaped, direct river 4/4 Magnolia Bay units. This 3rd floor 3024 square foot unit with a 2 car garage sold for $510,000.

An upgraded 7 year old, 4th floor direct ocean Michelina 3/3 with 2008 square feet and one car garage sold for $500,000.

In the sub-$100 per square foot club a 6 year old, non-waterfront four story townhome with 4454 square feet  in south Cocoa Beach closed for $425,000. It has ocean and river views being in the magic narrow strip of land that is south Cocoa Beach.

One of the big 2434 square foot 3/2 Puerto del Rio units closed for $372,000. It was direct river on the 4th floor.

An east facing Mystic Vistas 4th floor 3/2 with 1686 square feet in the A building sold fully furnished for $370,000. A foreclosed 4th floor 3/2 NE corner  in the D building with an ocean view and 1994 square feet closed for $262,500.

A 3rd floor direct ocean SE corner Beach Winds Cocoa Beach with 1618 square feet sold for $367,500. It had some remodeling and a 2 car garage. In the same building a 7th floor north ocean view 3/2 with 1464 square feet and a one car garage sold fully furnished for $230,500.

A nicely updated direct ocean Driftwood 5th floor SE corner 2/2 with 1118 square feet and some furnishings sold for $268,000. No garage.

A mainly original condition 5th floor north ocean view Mark 3/2 with 1506 square feet closed for $280,000. No garage but does have a carport.

A nicely remodeled ground floor direct ocean NE corner 2/2 Windjammer of Cape Canaveral with 1196 square feet and a one car garage sold for $226,900.

A fully furnished south facing 2nd floor, 2 story Cocoa Beach Club with two bedrooms and 2.5 baths and 1176 square feet sold for $225,000. It has a peek of the ocean over the pool and a carport. Weekly rentals allowed in this complex.

A very nicely remodeled ground floor east corner C building Royale Towers 2/2 closed for $205,000. 1256 square feet and a one car garage.

A direct ocean 2nd floor, 2 story North Triton Arms 2 bedroom 1.5 bath in downtown Cocoa Beach sold for $184,000. It has 1088 square feet and a carport.

Another of the bank-owned Pier Resort units closed for $169,000. It was 2nd floor with 3 bedrooms and 3 baths. There are no more of these units available with the last three under contract yet to close.

A foreclosed 2nd floor direct Banana River Harbor Isles 2/2 with 1308 square feet and a one car garage closed for $167,000. A slightly smaller 1st floor lakefront 2/2 in the same complex sold for $135,500.Next door at River Lakes a direct river 2nd floor 2/2 with remodeled kitchen, 1244 square feet and a one car garage closed for $155,000.

A fully furnished 5th floor south ocean view 1 bedroom, 2 bath Cape Winds sold for $138,000. No garage but weekly rentals allowed.

A nicely remodeled north ocean view 4th floor Twin Towers sold fully furnished for $110,000.

Other sales included three at Costa del Sol at prices between $148,500 for a 2nd floor direct river 2/2 and $86,000 for a ground floor non-waterfront 2/2.

There were two closed short sales at Oak Park on Tin Roof in Cape Canaveral for $150,000 and $160,000. That's half the new price of these units in 2006.

During this same time a remarkable ten single family homes have closed. It's remarkable because there are only 57 left for sale in our two cities. Half of the ten were canalfront in Cocoa Beach at prices between $277,000 and $481,765.

There are 301 MLS-listed condos and townhomes for sale in the two cities this morning. Of those, 26 are either short or foreclosed. Only three of the 57 single family homes are distressed, two short sales in Cocoa Beach and a lone foreclosure in Cape Canaveral.

Turtle nesting has been active in south Cocoa Beach and several dolphin in the 50+ pound range have been landed offshore. Weather has been beautiful and we watched a magnificent rocket launch earlier this week. Overall, a good month so far in Cocoa Beach. If you haven't found your place yet and want to experience what Cocoa Beach has to offer I still have some open weeks in beach rental units this summer starting at $785 total for 7 nights.

Have a safe holiday weekend and thanks to all who have served our country.

"If you're gonna do me wrong, do it right."  ___Vern Gosdin

Thursday, May 23, 2013

Big MLS Shakeup Coming

As of right now, most property listings on the MLS anywhere in Brevard County are visible to any agent or consumer who logs onto to search. It has been this way for as long as the MLS has been available online. When I checked another source this morning, I found that there are three oceanfront condo listings in Cocoa Beach and Cape Canaveral that do not appear on the local MLS but do appear on a distant MLS. How did that happen? Are the property owners aware that Cocoa Beach and Cape Canaveral agents who sell the vast majority of listings here aren't able to see or even know about their property for sale? These three are listed by out-of-town brokers in the Orlando area and posted on their MLS system but not our local MLS. Not good for the sellers. This glitch looks to become more common this summer.

Brevard County has, for some reason, two Realtor associations. We've always used the same MLS system and shared our listings with one another so that an agent member of the Melbourne association could easily see and show listings in Cocoa Beach just like a Cocoa Beach agent could see and show listings in the southern part of our county.

Unless some solution is reached in the next couple of months more Cocoa Beach and Cape Canaveral listings will disappear from It has always made sense to list with a local broker when trying to sell a property wherever that property is. Should our MLS become divided with some listings only showing up on a distant MLS, it will become crucial for sellers in Brevard County to ask their listing agent whether their listing will be on the local MLS. Exposure on another MLS can't hurt but, if that exposure means exclusion from, for sellers anywhere in Brevard County and especially Cocoa Beach and Cape Canaveral, the impact could be costly. I'm hoping for an eleventh hour solution but it appears right now that the split is unavoidable. I will continue to post sales and listing stats for Cocoa Beach and Cape Canaveral should it become a reality. For me it just means more work. For property sellers, loss of local exposure could prove costly.

"When times are tough and people are frustrated and angry and hurting and uncertain, the politics of constant conflict may be good, but what is good politics does not necessarily work in the real world. What works in the real world is cooperation."  _________Bill Clinton

Saturday, May 18, 2013

How Local is it?

All real estate is local. That is certainly true in Brevard County. I get requests almost daily from buyers wanting to take advantage of the distressed market that they've heard about and hoping find a foreclosure or short sale deal in Cocoa Beach or Cape Canaveral. If one looks at the distressed market in Brevard County as a whole (the market that the media typically reports) there are plenty of distressed opportunities. Exactly one quarter, 25%, of all residential listings in our county are either short or foreclosed. If we restrict our search to Palm Bay in the southern end of our county, 35% of the residential listings are distressed. Lots of opportunity there. Now let's cross a bridge and check our possibilities on the beach. In the 30 miles of beach south of Patrick Air Force Base from North Satellite Beach to Sebastian Inlet the distressed ratio drops drastically and is standing at just 9.83% of the total this morning.

Driving north along A1A past Patrick Air Force Base we have the two beachside communities of Cocoa Beach and Cape Canaveral with the Atlantic Ocean to the east, the Banana River to the west and the government owned Kennedy Space Center to the north. The opportunity in distressed property shrinks even more here. Of the 350 total residential listings in the two cities only 8% are distressed. For a buyer looking for a single-family home in either, there are but three distressed possibilities. If that same buyer wants waterfront there are none to see. If he's willing to consider condos, he has a whopping list of 12 from which to choose.

Has our bargain hunter missed his chance? Not really. He does need to reconsider his mindset that bargains only exist with distressed properties. Prices across the board were dragged down when the formerly huge numbers of distressed sales worked their way through the system and are still attractive in many cases. Now that the big numbers of distressed listings have disappeared, there is no dynamic to push prices any lower and we are seeing successive sales creeping upwards. If you're looking to take advantage of the still-low prices, as always, get your pre-approval process handled before you begin your search, do your homework so you'll recognize a deal when it appears and forget about a distressed-only search. Swift action is crucial for those looking for a good property in this market. Conditions will likely change at some point as they always have but, right now, preparation and swift action are among a buyer's best strategies. An informed and involved local buyer's agent will give a serious buyer their absolute best chance at success. AND, this bears repeating, multiple offers are a fact in this market. Calls for best and highest offer in multiple offer situations are common and are not a creation of evil Realtors trying to manipulate single buyers. Withdrawing an offer out of paranoia only gives the property to the other buyer. Adapt and win.

When an archer is shooting for nothing . . . he has all his skill.
If he shoots for a brass buckle . . . he is already nervous.
If he shoots for a prize of gold . . . he goes blind;
or sees two targets . . . he is out of his mind!
His skill has not changed.  But the prize . . . divides him.  He cares.
He thinks more of winning than of shooting . . . 
and the need to win drains him of power.
            – Chuang Tzu, 400 B.C..

Friday, May 10, 2013

First Right Tyranny

 Many condominium associations in Florida and the Cocoa Beach area have provisions in their documents that give members of the association (unit owners) the right to take over a contract for sale of another unit. The way this happens in most cases is that an owner first negotiates a contract for the sale of his unit with an outside buyer. Then the contract is offered to the other unit owners at the same price and terms. In some condos, the contract is mailed to owners and at others a notice or a copy of the contract is just posted on a bulletin board at the complex. The method varies as does the time limit for stating intentions. In most area complexes, owners have between 10 and 21 days to state their intention to exercise their first right and take the contract. If this happens, the original buyer is out and any money spent on inspections and appraisal is gone as well. Not fair but that's how it is.

Should more than one owner want to take the contract we have to go back to the docs to see who has priority. Again, the rules vary and we have several methods for determining priority. Some associations give priority to contiguous or adjacent units with priority usually favoring horizontal over vertical (I did not plan that ironic wording). Others give priority to the closest (numerically) unit number. Most, in the case of a tie, give the seller the right to choose. Acrimony is a not uncommon byproduct.

I have always heard that first right was initially a way for owners in a small community to legally discriminate against unwanted buyers. Should some "undesirable" try to buy in their community, one of the existing owners would just use his legal right to take the contract and prevent the undesirable from buying into the community. In my experience in the Cocoa Beach area that has never been the case. What is more common is that an existing investor owner will take any contract of a desirable unit unless the contract price is well above market. In practice that means that no outsider can buy in the complex unless he is willing to take an undesirable unit or overpay for a desirable one. That situation exists in a handful of units in our area.

Let's talk about short sales in first right complexes. The process can be quite perverse.When a seller of a short sale property signs an offer, the bank/s holding the mortgage must still approve the sale. The question for a short seller in a first right complex then becomes "do I submit this signed but unapproved contract to the association for first right, or do I wait until the bank approves the sale?". If the seller submits to the association before bank approval a couple of different problems can arise. Scenario 1: An owner exercises first right but the bank counters at a higher price than the contract the seller signed. The exercising owner then walks away and seller is back at square one with the original buyer long gone. Scenario 2: No owner exercises and bank counters at a higher price. Original buyer accepts the bank's counter. Because the contract has changed the contract must be submitted for first right again. An owner chooses to exercise their right and takes the contract. The bank refuses to transfer approval to a new buyer which means the short sale negotiations must start over at the beginning with no guaranty that the same price will be approved.

If the seller decides to wait until approval by the lender to submit to the association then other problems are lurking, one almost identical to scenario 2 above. I am involved in a situation like this right now with one of my contracts. The seller signed the original $35,000 offer from my buyer client for a small 2/1 Cocoa Beach condo in early September last year. Bank finally approved the short sale at the $35,000 contract price with $2000 seller contribution in January this year. The contract was then submitted to the association for first right and an existing owner took the contract. The bank refused to transfer the approval and the short sale negotiations had to be restarted. The bank responded in April with an approved price of $51,500 and $7000 seller contribution. That's $21,500 more than the approved amount in January. If we can't get the bank to accept a lower price then this owner/buyer will walk and everyone loses.

If you are a buyer of a short sale in a first right complex, be sure to ask your agent when the first right procedure will take place and be prepared for craziness and an illogical progression of events. Now that I think about it, you probably want to know, short sale or not, whether the unit you're offering on is in a first right complex. It might prepare you for the possible disappointment. Whatever your situation, may the force be with you.

"Animal Sounds"; "Condiments"; and finally, "Your Ass or a Hole in the Ground". Mr. Reynolds, unfortunately you're in the lead, so we'll start with you. __Alex Trebek as played by Will Ferrell

Wednesday, May 01, 2013

Moving Right Along

What a month April was. As of this morning the Cocoa Beach MLS is showing 67 MLS-listed condos and townhomes and seven single family homes closed in April in Cocoa Beach and Cape Canaveral. Only one of the 67 condo sales was a short sale. Eleven were foreclosures. Two of the seven single family homes were short sales and none were foreclosures. That puts the percentage of closed distressed sales in April at 19%. Only 8% (30 properties) of the remaining for sale inventory of 353 properties is distressed (short or foreclosed).

Higher priced properties have been moving with two units selling at the oceanfront Meridian for $685,000 and $725,000. Two units sold at Solana Shores for $425,000 and $455,000. Two other $400,000+ sales closed at Constellation and Harbor Club. Several other complexes had multiple sales in the month. They included the oceanfront Ambassador Shores in south Cocoa Beach, Harbor Isles, Cocoa Beach Club, Ocean Oaks, Stonewood, Spanish Main, The Constellation, Diplomat and the riverfront Treasure Island Club.

One direct ocean home sold in south Cocoa Beach for $1.24 MM. Only one of the 7 sold homes was not waterfront. Riverfront and canal homes sold in a range from $510,000 for a totally remodeled beauty in Snug Harbor to $230,000 for a handyman special on Riverview off 4th Street South.

Competition for good properties remains high. If you plan on getting a mortgage to purchase a property it will serve you well to get the pre-approval taken care of before looking at properties. Any offer contingent upon a mortgage is going to require a pre-approval letter. If you plan to pay cash, you will have to prove that you have the funds to close the deal. Either a letter from your banker stating that you have the liquid funds sufficient to close or an account statement showing sufficient funds will work. Get these items taken care of before offering so that negotiations can move quickly. Also, be prepared to offer quickly if you find a property you like as there are probably others looking for the same thing. Speed and preparation are being rewarded. Lowball offers are not. The days of buying below market value, for the most part, have passed.

"Other prohibitions from the beach ranger ordinance remain unchanged, including bans on drunken swimming, mobile DJ booths, campfires, high-volume drinking devices and leaping off the Cocoa Beach Pier."  Cocoa Beach City Commission