Archive for June, 2008

Richard Eimers

The real estate market is all a buzz; most buyers that the agents in my brokerage talk with are hearing all kinds of amazing stories about the great deals that are to be had by going through the short sale or foreclosure process either with the mortgage holder or waiting for the foreclosure on the courthouse steps.

I speak from experience; we are selling about 1-2 Shore Sales per month in addition to our regular sales with “motivated” sellers. I am also certified as an Asset Preservation Consultant with Titanium Solutions. Titanium Solutions is an intermediary/short sale company who has relationships with most of the national, regional and local lenders’ “Asset Mitigation” or “Workout” departments. The lenders do not want to take the homes/properties back from the owners and would rather work something out but if a workout is not possible we are given 2 – 4 months to sell the property short before it is foreclosed.

As I look at the statistics of sales of improved properties sold since the beginning of this year, I find that properties are selling at about 90% of the asking price closing in 30 days or less. The only seller owned properties that are selling are those who have reduced their asking prices to a point that represents today’s values. If we look at how today’s value is determined; it is based on Comparable Properties SOLD with in the last 3 to 6 months.

The question of what type of transaction a buyer should concentrate their efforts on buying is simple once the buyer understands the realities of value and the position of the sellers/lenders.

  1. The lenders in both Short Sale and Pre-Foreclosure transactions will generally base the eventual selling price of the subject property on Sold Comparables and will typically negotiate with the buyer somewhere between 8% – 12% off that new fair market value. This new fair market value will be determined by a BPO or by a qualified appraiser and in most cases the outstanding mortgage balances do not enter into this calculation.
  2. When a property is Sold at the Courthouse steps the lender has a representative there protecting their asset, bidding on the subject property against the other bidders in an attempt to insure that the selling price will be at or above the mortgage amount.
  3. Unlike traditional Courthouse step auctions that most people are familiar with the value of the property in today’s real estate climate is less than the outstanding balance of the mortgage. So the eventual selling price will be more representative of current market values and less like a bargain.
  4. Motivated sellers, those who have been reducing their asking prices in an attempt to find today’s fair market value do so by having their REALTORs provide them with Sold Comparables, that is properties sold that most closely resemble their property and they typically increase that amount by about 10% in an effort to give a little back to the buyer during the negotiations. Most sellers believe that buyers feel as though they are getting a value if the seller comes off his price 5% – 15%.
  5. I hear many times from unrealistic buyers that they will wait until they can get a real “Deal”. Here is the quick math. If an owner’s property (including REOs) costs them $50,000 per year on a property valued @ $500,000 (assuming the property is priced at current fair market value) why would they come off their number $100,000? It has become common knowledge that this real estate market is at or pretty close to the bottom of the cycle; if over the next 18 months inventory and values stabilize the only direction left to turn is upward. If an owner opts to keep their property for this period and then sell they lost $75,000 rather than the $100,000 they were going to lose. If they choose to hold it longer, based on appreciation their losses will begin to diminish; the longer they keep the property the more their position improves.

My recommendation: buyers should look for properties priced at fair market value and negotiate aggressively. The deals are found when price, terms and conditions of the sale are outlined in a contract. The sellers respond best when they can see the pain and suffering they are going through is about to end, this is the motivation. Expect that properties that were bought by the sellers prior to 2003 to have equity and more wiggle room compared to properties bought in 2004 and 2005 where the sellers in nearly all cases are upside down and have to come out of pocket at closing – that’s no wiggle room – if the sellers have the money or the assets to bring a check to closing you’ve got a deal. If they don’t then there is a Short Sale on the horizon and the eventual selling price of the property will have little or no change.

Richard Eimers, Lead Agent
Main: 800-775-5914 |  Cell: 850-259-1798


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The Current State of the Market

John Holahan, REALTORBecause I continually am asked similar questions about the current state of the market, I thought it makes sense to share some opinions with you regarding the real estate market in this area.

The market still has a long way to go down?

Some areas do and some areas are actually appreciating. It all depends on whether the market has embraced a building or subdivisions pricing structure. I know of several condo buildings and residential developments that have had more sales in 2008 than in 2006 and 2007 combined. The pricing is lower than in those two years, but units are moving and every time one sells a new “higher low” is established.  Adagio, a Gulf front development located in Blue Mountain Beach is a great example of this trend. SeaCrest Beach, WaterColor, and WaterSound are examples of subdivisions where the market has responded well to current pricing. Most of these developments have corrected
between 30% and 50% from the peak market pricing.

Foreclosures and short sales represent the best deals?

Most of the properties in this category are the result of people who bought in an 18 month time frame at the absolute peak of the market and are far upside down relative to mortgage balance vs. property value. There are some diamonds in the rough. The process is long and tedious–banks have no sense of urgency, and properties are sold “as is” so what you see is not necessarily what you get. No repairs are usually offered and no warranties apply. The true best deals are from people who bought prior to 2004 and didn’t use their property as a piggy bank to enhance their life style. These people are realistic with the market and will still walk away from a closing with a check in their hands.

Why is buying real estate a good investment?

Real estate was never intended for a short term investment, just like stocks or any other long term holding. Every investment has a cycle which typically lasts about seven years. What happened in 2004 to 2006 was no different than what happened with the Dot com frenzy in the 90s. Prices were driven up by speculation and there was no value associated with the appreciation. I remember stocks that traded at very high P/E ratios and had negative earnings! Our real estate market was no different.  We peaked at the end of 2005 and 2006 and now have gone through a correction phase. Well priced properties are selling as the long term potential is significant. One has to remember we are dealing with Florida resort coastal real estate–not a
primary residential product in a market like Detroit. There will always be buyers for second homes in a resort area. People do not want to eliminate vacations and quality of life components for which they work very hard to accomplish.

The New Panama City Airport:

Slated for completion in 2010, this airport will provide direct flights to the Mid-Atlantic and Northeast markets. This is where the majority of the U.S. population lives and has above average demographics. If you compare the current real estate pricing in this area vs. that of comparable markets in south Florida, Naples, Jupiter, West Palm Beach, Marco Island, Sanibel, etc., this area is significantly less expensive for similar products. As soon as people in the above markets can have direct access to this area and discover how much nicer the beaches, water, amenities, and people are, the next significant appreciation phase should occur. Smart Money just named the Panama City beach area as the number one place to buy a second home due to some of these factors.

The profile of today’s buyer:

Today’s buyer is one who has done extensive research and by no means overextends themselves with this purchase. They make their decisions based on financials, extensive data and research, and as to how the property best addresses their needs. They realize that there are current opportunities in today’s market and whether the pricing goes down another 5% is of little concern as their holding timeframe is long term. They are end users that will actually enjoy the property, afford the property, and possibly rent it out to offset some expenses, but are not dependent on rental income to cover costs. More people today are paying cash than ever before, and real estate provides diversification in their overall investment portfolio. As one of my
clients put it simply, “At least I can use my property if it depreciates. To date, I haven’t established any long term memories with my stock shares.”

How can I help?

If you are considering real estate in this area, I will provide you with all the data that is necessary to see if this is something that makes sense for you at this time. I will take the time to fully understand your  objectives and to see if we can accomplish them together. I don’t subscribe to any hard sales tactics and have pretty much been involved as an owner with any aspect of a real estate transaction that is possible. My direct success depends on building relationships with success people like yourself, who one day may
purchase real estate in this area. My goal is to provide you with every tool that is needed to accomplish this objective.

John Holahan, REALTOR
850-837-8880 Office | 850-582-2893 Cell


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Don’t forget the Destin Harbor

MarkOver the course of the last few years, the Destin Harbor area has undergone some major upgrades and changes that are readily apparent when you first see the latest Peter Bos development, Emerald Grande at Harborwalk Village.

This majestic structure resides in royal fashion, situated on the southeastern side of the East Pass, welcoming all to Destin. Outstanding architectural design of this retail/residential community has created a new buzz along the waterfront with an influx of new shops and restaurants to accommodate just about anyone’s tastes.

For retail specialty shops, here some names you can expect to see as the summer progresses…Del Sol, Kitty Hawk Kites, Tis the Season, Sugarland Candy Shop, and Sonia Psychic Studio to name a few. And of course we have the new dining experiences that will unfold over the next few months, some of which may ring familiar. A rebirth of the old Harry T’s Lighthouse, Pat O’Briens, Water Grill Restaurant, Camellia Grill and Commander’s Palace which will serve up fine cuisine with a New Orleans flair.

This new excitement on the Harbor marks the beginning of many changes and improvements along the Harbor over the coming years. Also, I’d be remiss not to mention two favorites that also reside on or near the Harbor…Zampieris Harbor Grill located in the Destin Yacht Club and Marina on the waterfront ½ mile just east of the Destin Bridge. Excellent cuisine and ambience. Don’t miss this fine dining experience.

Lastly, I can’t leave out Dewey Destin’s. Located just north of Harborwalk Village on the North side of Hwy 98, this local gem is a must for those who want a taste for the true local flair. Serving up some of the best local shrimp where you’ll find yourself dining on a pier where the locals dock their boats for lunch at Dewey’s. Just ask any local and they’ll point you in the right direction.

So be sure to visit the new Harborwalk Village on your next trip down to the Emerald Coast and experience the buzz yourself. You won’t regret it…

Mark Evans, REALTOR
850-837-8880 Main | 817-637-2453 Cell


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Lucy Ballenger, REALTOR

It seems like all we talk about these days is short sales!  They are everywhere and are not going away.  

At first glimpse they appear attractive and a great bang for your buck.  In actuality, this is not always the case.  Lenders are swamped with the amount of paper work involved in completing the transactions and the fact of the matter is that it often takes months just to get rejected.  If you have the time and patience to go on with your life then a short sale me be a good fit.  However, if the idea of a gnat buzzing around your head on a hot humid day does not sound pleasant, there are other options.  

Many people have their homes listed for sale and are ready to sell.  Imagine finding a property that really suits your wants and needs…not just a great bargain which you will put time, effort and money into to make it your dream spot!  Imagine actually being involved in the decision making of the terms of the contract rather than being told the terms.  If this sounds like a plan, smash that gnat and give me a call!

Lucy Ballenger, REALTOR
850-837-8880 Office | 850-830-3234 Cell


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Watering Holes

DanaAs we approach the heat of the season, many people can only think of one thing—how to cool off!  We are blessed here in the Destin and South Walton areas because we have such a great Gulf breeze blowing off the Gulf of Mexico to keep us cooler than our inland area friends, but we can still use ways to get out of the heat.  While the top choice along the Emerald Coast is swimming at the beach, it is not the only option…

If you are lucky enough to own property here, then hopefully you own somewhere with a pool.  The pools in the Destin area neighborhoods and condo complexes range from standard rectangles to the elaborate lagoon style with splash areas, fountains, sprayers, lazy rivers at Destin West Resort, or the cool spas at the Village of Baytowne Wharf at Sandestin Resort.  Pools can be enjoyed at any time, any day, and with everyone.

For the young and young at heart, you may choose to brave one of the area’s water parks such as Big Kahuna’s in downtown Destin.  If this is your choice, you will definitely want to arrive as early as possible to get close-in parking, fewer lines to wait in, and to be able to scout a good area to camp for the day.  You can spend all day enjoying the waterslides, lazy river, wave pools, surfing pool, water mushrooms, sloped entry pools, and plenty of food to sustain your energy.

Finally, you may rather like to ‘cool off’ at one of the local watering holes.  Whether your style is sipping martinis in a lounge like Cuvee Beach or Zampieri’s, having a cocktail while watching the gorgeous sunset over the white sand beaches at the local’s favorite spots such as Whales Tail, Beachwalk Café, Bud & Alleys, or The Crab Trap, enjoying your favorite beer at O’Quigleys or Mellow Mushroom, or if you prefer, to watch the boats coming into the harbor at AJ’s, Lucky Snapper, or Harbor Docks, the Destin and South Walton areas have more restaurants and bars than you can imagine.  You will need to visit for more than a week to enjoy all of the area favorites. I have lived here for seven years full time, and vacationed here for 17 years, and I still haven’t tried all of the establishments (and I love to enjoy a good meal and a good drink!).

Let us help you find your piece of Paradise, so you can enjoy all of the ways to cool off on a regular basis!

Dana McIntosh, REALTOR
800-775-5914 Main | 850-428-0243 Cell

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