Sunday, February 23, 2014

A New Record

2014 has begun with a bang in Cocoa Beach and Cape Canaveral. January was the busiest January of the last ten years for the total number of closed condo sales with 59 MLS-listed condo and townhome units closed in the month. So far in February we have recorded another 28 closed units. Single family home sales have not been equally busy with only eight closing since the first of the year. That is partially due to the disparity in supply. There are 317 condos and townhomes offered for sale at the moment and but 73 singly family/half duplexes. Priced-right oceanfront units are particularly in demand. Of all units closed since New Years Day over a third sold in the first four weeks on the market. Prospective buyers, have your quacking waterfowl arranged in a linear manner and prepare to move swiftly upon target acquisition. There are undetermined numbers of others just like you.

Jack Sparrow: [after Will draws his sword] Put it away, son. It's not worth you getting beat again.
Will Turner: You didn't beat me. You ignored the rules of engagement. In a fair fight, I'd kill you.
Jack Sparrow: Then that's not much incentive for me to fight fair, then, is it?

___Pirates of the Caribbean

Thursday, February 20, 2014

Altitude Pemiums and Banker Insanity

How much more should a buyer expect to pay for an upper floor condo unit than a ground floor unit? Depends on the complex and the impact on the view but the move from the ground floor to even a 2nd floor identical unit typically costs more than $10,000. Ground floor units in all buildings will typically sell for a discount to the higher floor units, even in buildings where there is a decent view from the ground floor. There has always been more demand for units above the ground floor and the higher selling prices support that. In some cases there may be another premium for higher floors associated with the view opening up by getting above a neighboring obstruction. Example are the Constellation where above the third floor, the view from the west balconies opens up to include the three mile width of the Banana River and Merritt Island in the distance or Ocean Paradise where the north view opens up only at the third floor.

Hints for prospective buyers: 

Relying on unit numbers to filter out ground floor units can be faulty as some buildings with a garage on the ground floor start numbering units on the actual 2nd floor with misleading numbers like 101, 102.... Example: Meridian, Magnolia Bay and many others.

For persons or families who will be spending lots of time on the beach, the easier access to the beach off the patio may trump the better view of a unit separated from the beach by stairs or an elevator. Fishermen, surfers and kids seem to prefer the easier access of the ground floor.

A quick story about banker insanity. I mentioned in an earlier post that foreclosures aren't selling as quickly as they were just a year ago because of the banks' increasingly optimistic, often-insane asking prices. Let me illustrate that insanity. A ground floor unit at the popular weekly rental complex, Cape Winds, failed to attract a buyer after being offered for five months as a short sale for $89,900 in late 2012 and early 2013. It was withdrawn the end of February last year and the bank foreclosed. Fannie Mae put the unit back on the market in May and increased the asking by $52,000 to $141,900. Not surprisingly, there was no interest at that price either. They began a series of price reductions until they got to $109,900 where they dug their heels in. Still no interest so the property went to auction last month. At the auction the bidding got to $75,000 which wasn't enough to satisfy Fannie's reserve and the bid was rejected. It went to auction a second time and the bidding peaked at $74,500 which was also rejected by Fannie. They held a third auction and the high bid was $64,354. This time Fannie Mae accepted the bid and the property closed last Friday.

Bankers aren't the only sellers with unrealistic expectations but they are the most consistent. Whether a seller is a bank or an individual, if the property isn't selling, it's probably because the price is too high. Sellers of the 71 properties in Cocoa Beach and Cape Canaveral that have been on the market for over 300 days, are you listening? Get real and you'll probably find a buyer.

There are 319 condos for sale this morning in the two cities and 72 single-family homes. Of those, 39 are bank or relo company owned and nine are short sales. Over 100 have been for sale for more than six months, 58 of those for over a year.

"The difference between reality and unreality is that reality has so little to recommend it."  __Allan Sherman

Saturday, February 08, 2014

My Cousin Vinnie

The question of whether a buyer or seller of Florida real estate needs an attorney involved comes up frequently. I can't answer whether any particular party needs legal counsel. I can say that of the
hundreds of closings I've been involved with in Florida, attorneys were used in only a handful. Most of those were short sales where the attorney had been hired to negotiate with the bank. Typically in Florida, a real estate agent or one of the principals writes the contract and a title company handles the closing, with neither party represented by an attorney. If a buyer doesn't trust that the contract protects his interests then he would be prudent to have a Florida attorney or an experienced Florida real estate agent review the contract before signing. Hiring an out of state attorney to review a Florida contract might give a buyer less protection than having a less-esteemed but more experienced lowly real estate agent write or review it. If the used condo salesman doesn't inspire confidence, a Florida attorney is the best bet.

Will distant counsel know which Florida purchase contract is more suited to this transaction? What is the difference in the as-is contract and the FAR-BAR contract and why would a buyer ever want to use the as-is? Where is a buyer's escrow money more at risk in case of a dispute? Under what circumstances can a buyer cancel a contract and receive full refund of escrow deposit? How are contract time periods computed? What closing costs does the seller usually pay? The buyer? Relying on what is typical in another state may have one party paying for something they shouldn't. These are questions that "most" experienced agents can answer but might slide by Cousin Vinnie.

The contract can be fair to both parties or it can be slanted heavily in one party's favor. An unrepresented buyer or seller who isn't familiar with the details of our contracts and many addenda may leave themselves unnecessarily exposed if they wing it. If a party from the other side of the deal writes the contract don't assume it will be fair. Snowball in Cocoa Beach that's gonna happen. Stakes are too high.

"McVeigh's lawyer got him the death penalty which, quite frankly, I could have done."   Jon Stewart