Find Your Own Cat Pee

Years ago, when I first started looking for homes to renovate and either rent out or fix up and  resell, I would tell my agent to find me homes that had cat pee on the carpet. You see, I liked homes that smelled bad, were closed up and hot, and had lots of garbage all over the place. I liked homes that most folk touring homes wanted to get out of as soon as they got into them.  I liked them even better if prospective buyers wouldn't even get out of the car to go inside. I liked these things expressly because most end user buyers did not these same things.  They just could not see past the garbage, the un-mowed lawn, and the smell of cat pee on the carpet.

You see, I know how to fix the smell of cat pee. I know how to clean up garbage and re-landscape a house. These are easy fixes.  As I became more experienced at renovating houses I added more things to my list that began with a bad smell.  I looked for properties that had these easy fixes that turned off other buyers.  These turn off's lower the attractiveness of the homes and lowered the price.  It made buying them easier for me.

I found a house in San Carlos Park a few years ago. The previous owner had rented it out to someone that actually raised large dogs. The house had all the right things wrong with it.  The stench was so bad in the home that most people turned away at the front door.  It was the middle of the summer and no air was on.  It was closed up, hot, and had flies inside. The garage was full of garbage, old appliances and boxes of junk.

The house also had all the right things - location, three bedrooms, two baths, a two car garage, and the yard, while messy, had a good base of mature trees and bushes. The air conditioning and the roof were in good shape (two key expense factors in renovations). The kitchen and baths, while in need of a good cleaning and paint were in decent shape as well.

I bought the house at an excellent price. To remove the carpet I had to cut it into small pieces.  It was so loaded with urine and feces that any piece over 5 feet by five feet was too heavy to carry. I then bought an ionizer for around $700 (I still use it today on renovation projects) and closed up the home with the ionizer and the air running for two weeks before the smell was gone.

After paint, new carpet, new switch plates and outlet covers, and I had a gem of a house to sell.

I still look for cat pee in my deals. I no longer buy single family homes to renovate, but what I mean is I look for problems with a property that I know how to fix.  You can be especially successful if you learn how to fix problems that others may not want to address.

Last week I put a contract on a piece of land upon which we would like to develop about 20,000 square feet of retail. The land previously had a UST (Underground Storage Tank) from a gas station that was on the site years ago.  I have some experience with UST's as I owned a bus terminal that had one.  I know the risks and I know the cost of remediation.  I was comfortable with the worst case scenario and how to handle it. I mentioned to one of my associates that this was just cat pee on the carpet.  His reply was, "Huh?"

That's what reminded me of the cat pee story and was the catalyst for this column. Look for the cat pee deals and furthermore, become experts in different kinds of cat pee, err, problems that can be fixed.

Let me tell you that I have made the mistake of buying properties that had the wrong things wrong with them as well. (I have mentioned before that I have learned more from my mistakes).  You can't fix, for example, not enough parking spaces.  I bought a commercial building near downtown Fort Myers years ago and ignored this basic fact.  For the entire time we owned it we had parking challenges, but it was 100% occupied when I bought it. However, once we had a vacancy it was almost impossible to fill it - we just could not offer the parking to the new tenant that he needed.

Sometimes there is a great quantity of cat pee.  I once bought a single family home in Wyoming, Ohio, a suburb of Cincinnati. When I was estimating what I could pay for this fixer upper nightmare, I went through the home and assumed I would have to replace literally EVERYTHING; from the roof to the furnace, to air-conditioning to the windows and all the ceilings.  I figured on all new plumbing and .all new electric, new bathrooms and two new kitchens. (It was an 8000 square foot home with two stair cases).  I based my offer on these replacement costs.  It was turned down and another offer was accepted along with two back-ups.

Three months later I got a call from the agent - by the way she is still working in Cincinnati and still one of the best agents I ever worked with - Karen O'Keefe. She told me that all the offers had gone away during their due diligence period, "would I still like to buy the home?"

I reworked my figures, again assuming I had to do ALL that work, and Karen placed the offer.  Later that day I got a call from the seller's attorney telling me he would like to save some time and counter over the phone.  I told him not to waste his time. My offer was final, but not contingent on any inspections. I would close in thirty days.

They accepted. They were tired of inspections and haggling.  I had identified the cat pee and knew how to fix it and what my cost were going to be.    By the way - I was correct in all my assumptions about replacement except for the roof. It was slate and cost me, believe it or not, $80 to fix one slipped piece of slate.

Another side note to this deal was that I was able to get 100% financing because I financed all the improvements at the same time as I bought the house.  I did have to put up cash for some of the improvements, and a lot of sweat equity; but at closing I brought no cash. .

Look for your own Cat Pee deal, but keep in mind that sometimes the Cat Pee is not with the physical but with the terms.  I once had a seller that would not give me the 90 days due diligence I thought I needed to properly evaluate the property.  This was a commercial deal that needed lots of site and traffic analysis, water retention issues and parking problems.  There was just no way I could get the answers I needed in less than 90 days.  I arranged a sit down with the seller.  I found out his problem was that his note was due in 60 days and he did not think he had the ability to rewrite the note.  I offered to loan him the money to pay off the note in exchange for the first mortgage and guarantees. I would then be able to take my time to evaluate the development possibilities without committing to the project.  I knew no one else would buy at his price with such a short due diligence (The Cat Pee).  I knew that my downside was that I would have to sell the property without developing it, but my taking over the note would let me lock up the property at a good price. It was a win win for both buyer and seller.   Because I solved the problem for the seller, I was able to get the deal at a very attractive price.

If you need help identifying the Cat Pee in your deals, work with a professional broker, one that has been there, done that.

Do you know the top ten things to inspect in a home?

A list of the top ten things you should inspect in a home before you close.

In Florida’s rising prices, multiple offers, and urgent buy signals, some home buyers today are being hasty and too superficial when making inspections. If indeed they make them at all. There are three times you can make an inspection, and only two of them make any sense at all:  1) before you make and offer,  and 2) after you make the offer and during due diligence, and  3)after you close. If you wait until after you close you obviously are taking a high risk.

Let’s talk about mitigating this risk and start with the inspection before your make your offer.  I once bought a house in Ohio that I knew was getting multiple offers.  I went through the house for a  few hours myself and I made my budget assuming that EVERYTHING needed replacing – from the roof down to the furnace. There was literally nothing that I did not include in my budget. My offer was low but had only a five day inspection period.  I remember the attorney for the seller calling me and telling me he wanted to save some time and was asking for my highest and best.  I told him he already had it, but that he could count on my offer going through because there was nothing that I could find during my due diligence that would deter me from going to closing.  My offer was accepted and I closed on the home.  To my pleasure the roof did not need to be replaced, but unfortunately everything on my list from my pre-offer inspection was on the mark.

The pre-offer inspection should help you structure your offer and perhaps indicated things you need to further inspect during your due diligence period.  When it was a buyer’s market (just a half a year ago down here) many times a potential buyer would offer a very attractive high price contingent on the inspection, and then beat down the price during inspection.  This is annoying to sellers and a waste of everyone’s time today.  A buyer, for example, would reduce his offer based on an inspection of a defect that should have been obvious during the pre offer inspection – like the air conditioner was missing, or the house needs to be painted.

If you know you are in an urgent buy situation (an REO for example) it is wiser to assume that all repairs are needed.  I always suggest a professional inspection when there is time. If there is not time assume the worst or don’t buy.

Check the county for building permits on your prospective purchase. This will tell you if there has been any recent work that you need to be aware of – or if you see there has been work and there was no permit pulled – you will know to be suspect.

I will give you my top ten list of items to inspect, and many of these things will depend on the age of the home. Of course all may not apply. Before you spend money on inspections, get the property under contract.

1.       Defective (Chinese) drywall.  There is no definitive test for defective drywall, only for indicators that there may be defective drywall present. I am confident that experts can determine if there IS defective drywall, but not as confident with negative test results. Blackened copper wires and air-conditioner coils and a sulfur odor are both positive indicators for defective drywall; as is a test for Strontium (by someone trained in testing for it).  But lack of blackened copper, for example, does not mean there is non-defective drywall.  If the house was built in the suspect years of 2005 and 2006, have an expert test it.

2.       Roof.  If the house is more than 15 years old or a very low pitch, FOR SURE have it inspected. Many insurers will require a roof certification in order for you to obtain insurance. The multiplier effect on cost of a roof leak can be huge. I would inspect all roofs during duediligence.

3.       Plumbing.  Pinhole leaks, roots in the soil line, and corroded copper from bad water are problems that can be grow once you buy. Check the age of the water heater and for corrosion on the valves. Look for pitting on the chrome of fixtures. Look for leaks under the sinks.

4.       Structural. Have the foundation and the “bones” of the house inspected. Windows, vents gutters all should be examined. Dry rot and wood destroying organisms  are ubiquitous in Florida.

5.       Electric. Look in particular at the panel and look for any non licenses work or additions that were done to the system.

6.       Elevation and Grade. Here in Florida we get a lot of water, is the lot graded properly to handle massive rains? Water should run away from the house and walkways and drives.

7.       Heating and Air-conditioning.  To me anything over ten years in age is on borrowed time. You can check the model and serial number and go to the manufacturer’s website to determine age.

8.       Insulation. Not only in the attic, but in walls as well.

9.       Appliances.  Get model numbers and serial numbers to check age.

10.   Deferred maintenance.  I like to see a house that is well cared for, well caulked, filters new in the registers, and a clean and presentable home. It implies to me that the house has been maintained.

Have I ever bought a house without a professional inspection?  You bet. But I do not suggest it unless you are planning on replacing all the major items above.

Let me say this. I like to find things that are wrong during my inspection on a house that I am buying, especially things I can quantify and fix. I used to tell people that I like a house that smells bad.  It scares off other buyers and a smelly house  I know how to fix.   I once bought a house with a rotten outer wall underneath a bathroom window that the shower sprayed on. The stucco was crumbling and a prospective buyer had kicked in the wall from the outside.  It scared the heck out of him.

 Well, the window was improperly installed when the house was new and over the years the shower leaked on the sill and the wall rotted. The repairs cost me $1500 to fix but heat kicked in wall sacred away other buyers. I got a deal.

Don’t be afraid of what you find during an inspection.  Get a bid for the repairs, add 15 or 20% to it and then use it in your buy decision. Once you quantify the problem, you can deal with it. 

And hire a professional to inspect.

 

Gregg Fous 800-439-1580  ext 52      gfous@marketamericarealty.com

Realtors Spend the Night in Line?

Realtors Spend the Night in Line?

Realtors spend the night in line, and it was not for the soup kitchen.  Maybe because its Mother’s Day today (May 13, 2012), but the Fort Myers News Press was full of positive news about the real estate market today. Two weeks ago I wrote about what’s going on in Florida Real Estate (Click Here) and today I get some affirmation from the media: “Builders are bouncing back”, “Construction permits Up”, “Neighborhood sells out”, “Cost of Financing hits new lows”.  It’ s one thing to hear propaganda from a real estate insider like me, but when the normally negative News Press starts talking positive – things are, well, pretty positive.

Building permits for single family homes in March reached 177 locally and this after four years of being limited to double digits. The same thing is happening all over Florida.  I was “running the traps” this week and all of my real estate friends are telling me the same thing: “We are busier now than we were all season.” And that’s if they had time to talk to me. Sarasota, Lehigh Acres, Naples.  Our Lehigh office has expanded to 4500 square feet – and the place was packed with buyers, agents , and quite simply: excitement.

The nine agents that slept in their cars overnight got in line to buy building lots in Naples for their clients. The price point in this particular community (Riverstone) is $340,000 to $600,000 lest you think that it was give away prices.

Earlier this week at one of our Market America Realty Sales meetings we had a builder come in and speak to the agents. Adams homes is bow selling three homes a week at their sales center in Lehigh Acres!

Adams Homes and GL Homes are experienced large builders.  But permits are also being pulled by new comers; the visionaries; the entrepreneurs that were not permanently scarred by the drastic drop in the Florida home prices.  

If you are thinking about building a new home, please get in touch with us. We can help.  We have a  number of choice lots though out the area and can help you navigate the home building experience.

_________________________________

There isn’t anyone that does not get a bit retrospective on Mother’s Day, remembering the first woman in our lives.  Gail and I wish you and the women in your lives a great day, fond memories, and hope today you can help build fond memories for the future.

Gregg

What Everybody Should Know about Florida Real Estate

First of all, this is a blog, not a book, so the title isn’t; “Everything You Should Know about Florida Real Estate”. Many of you have commented that I should write a book.  OK. I will, but I need to do it a page at a time. Many of you commented that I should hire a proof reader. Let me tell you something, if you read a blog of mine and it’s absolutely perfect, you will know I took your advice.  But in the meantime, please forgive, no,  embrace the typos and transpositions as a “tell” that I am the one who proofed it (and wrote it).

Now to the subject at hand:  What’s going on in Florida Real Estate and what should you know? In no particular order I want to share with you the answers I give day to day to this question.  The first thing you should know is that we are in a transition.  The market today is different from even six months ago.  The prices at the bottom and moving up as demand increases; and the inventory is depleted. We are not seeing as much flipping by investors as we are seeing “buy, fix up , and rent” investors.  Upper level homes are still going wanting for buyers as retirees and second home buyers look for smaller homes in prime locations. There are still deals, but they sell quickly.

Technology has made confident buyers come to the market thinking they know what’s going on. They don’t. Zillow does not know neighborhood trends.  Trulia does know the difference between active and active contingent, and Realtor.com can’t give you the pulse of the market; what’s hot and what’s not. A good amount of the initial time spent with buyers is educating them on local conditions. Use a local expert to help guide you.

The rental market is hot.  But be careful of rental prices given to you in pro formas.  Move in incentives and free  rent are skewing  yield rates. Yes you can buy rental property here and get a good return  (6 to 10%), but it is rarely as good as presented. This is due to differed maintenance; move in incentives, and underestimated lease out fees and management costs.

New Homes are hot. The last time any volume of homes were built was in 2005. Some of these have never been lived in, been air-conditioned, nor had the mechanicals put to the test (if they are even there). They have no warranties.  Because of this buyers are looking to new homes. They will be better built, perhaps Green, and will be smaller and smarter. And financing is cheap ( 3.88% today). And you can get what you want in a house.

Buy and Rent is the New Flip.  To build a new home cost around $120 per square foot. You can buy an existing home today for half that.  The rent less expenses will return you more than you can get in a traditional liquid investment. The gradual return towards a par with replacement costs is the bonus round.  At Market America Realty we literally have orders for 20 homes a month for cash buy and hold investors. What do they want?  They want homes in areas that will rent to people that will be buyers in three to five years.

Cost of Owning.   What does it cost to own a rental house in Florida? In the absence of accurate numbers for a specific house I use these rules of thumb:

Initial improvement and get ready costs                                $10,000

Annual Vacancy loss                       8%

Annual Cleaning and Repairs      .08% of Purchase Price

Annual Insurance                             .75% of Purchase Price

Monthly Property Management               10%

Leasing cost        One month’s rent

Annual Taxes                                     1.5% of Purchase price

Selling Costs                                       10% of selling price

 

Insurance Costs.  It costs more to insure a home near the water or in low lying areas. You can’t get insurance on an older home without a roof inspection. If you are comparing homes, get an insurance cost estimate before you buy.

 

Hurricanes.  More important to outsiders than the locals. Newer homes built since 1992 are better equipped to deal with them. Look for good drainage (we get a lot of rain), solid windows, and roof quality.

 

Air-conditioning costs and water costs are high. Check on insulation, age and efficiency of the air units, and make sure there is a deep well for irrigation.

 

Water and Sewer.  Not all homes are hooked up to city water and sewer, and if they are, not all the assessments are paid.

 

Termites.  Like the hot weather and the rain, bugs are a way of life here.  Get a WDO  (Wood destroying organism) inspection. All houses will have bugs,  they can be dealt with. It’s when the bugs have been ignored for a long time you have trouble.

 

A good house inspection with WDO will cost you around $250.  DO NOT SKIP this step.

 

Let’s talk about the commercial market.  It’s coming back. Empty retail and office space is getting filled. There are great deals on empty industrial buildings now. I do not expect that to last more than a year or two. In fact the rate of our recovery is increasing. Like a snowball, we are picking up momentum. The locations that are hot have the traffic and infrastructure. Look for a return of the industries that cater to the home building market.  Medical has been soft while the doctors fret about Obama care, but I see this loosening up as well.  It’s a great time for owner occupied purchases because there is money to lend to them.  It’s still very tough to get investor money for commercial property.

 

I expect a very busy summer for both home and commercial sales. Condos are disappearing as well. (Prices are well below replacement costs)

 

If we can help you in your real estate needs, just drop me an email

Gfous@marketamericarealty.com  skype: gregg.fous

Nothing happens until somebody…..

Nothing happens until someday produces something; that’s what O.R. used to say.

“You can’t sell it until you have it, the company runs on the engineers and production”. O.R. was a genius, he really was. He was in the “so smart that normal things escape him” category; eccentric. He talked to himself, would often forget to bathe, and most of the time he would finish a project in his head and forget to actually finish the project in real life. He figured things out like how to package spaghetti, how to build a golf ball manufacturing machine, and he once “Rube Goldberged” a vending machine for brewed coffee out of bailing wire and an old fortune telling contraption from the carnival and installed it in the factory cafeteria just for fun.

But factories can’t produce very much unless they sell something. I was on the side of, “Nothing happens until you sell something” category. “It’s about the people.”

It was always a good hearted discussion with O.R.  He loved to analyze and would often take the losing side of an argument just to alter my thinking; to come up with new ideas, and then figure out a new approach to a business or a manufacturing problem.

But let’s talk about the “sell versus produce” basis for a business.  For the most part our economy is consumption based, not production based. The names in the news today are all about the consumer: Google, Facebook, and I would argue even Apple. For a production based business model look to Ford, GM, Con Agra, and Exxon. For a production model, the company needs inventory, in fact it needs inventory that is better than the next guy, and cheaper, and more of it.  The consumption based model is all about the consumer, the company’s relationship with him and the company’s ability to know what that customer wants. Apple indeed excels on both sides of this discussion.

My thinking on this discussion of the consumptive based business gelled this week in relationship to real estate.  Three years ago we had inventory and lots of it. We had more houses than people to buy them. Agents and customers alike came to our company because we had the inventory. Market America Realty had more REO homes for sale than most agencies.  But I figured something out back them, and it had to do with the consumer.

Four years ago an REO agent’s phone would ring with a consumer or another agent asking about the foreclosed home he had for sale. If you could even get through to him, the conversation went something like this:

“Hello?”

“Yes, I’m inquiring about 123 Main Street?”

“Yes?” would be the reply from the overworked agent.

“Can you tell me something about the house?”

“It’s a 3/2 CBS home. The details are on the MLS. The price is $89,000,” came the curt reply.

“Ok, thanks, bye” and the potential customer was gone; poof. No name, no phone number, no discussion about what the buyer wanted.  The agent really didn’t care. He had the inventory and he was probably going to get ten offers on that very house within a week.

Every week, I made those calls to those listing agents for my buyers. It was upsetting. In order to sell back then you had to have the inventory.  The REO agent had a production based business model, not a consumer based.

I vowed to change all that and did.

Market America Realty was asked to get into the REO business by a VP for REO of a major international bank. He called me and said that he was a long time reader of my newsletter and would I like to be in the REO business?  Six months later we had over 100 listings from this bank’s three asset managers for REO homes.

Bam. I had the inventory. But what about the consumption base of our business?  I needed to make certain that we did not lose our grasp on the customer. 

Here is what we did: We made certain that every inquiry about every home in our inventory was captured. I would not let the busy listing agent answer the phone. We centralized the phone and email inquiries, we installed a top notch computer system that was cloud based. Each customer was interviewed, probed and his information was gathered. He was sent an email by me and subscribed to this weekly newsletter.   OTHER Market America Realty agents would follow up with that customer, not the listing agent.  The agent that followed up did not earn a living on his inventory. He earned it with consumers.

Inventory made the phone ring initially, follow up and client service kept the customers. All of our offices have the centralized phone system and inquiry handling. All calls come to headquarters in Fort Myers, and then immediately get fed by text, transfer or email to the agent that has the expertise that particular consumer needs, be it in Jacksonville, or down the block from the head office.

What’s exciting to me is the tools that are now available for refining information about the consumer, the ease of staying in touch with him, and the shift in acceptance of consumer based businesses.

Don’t get me wrong, I’m going to develop again – but my production will be based on a wealth of needs analysis of what my clients want.  I’m still an opportunist, but am better equipped to identify the opportunity and will have the consumer base to nourish it.

I still crave inventory, but inventory vanishes, customers don’t unless you let them. Customers are long term, inventory is ephemeral.

Thank you, by the way. Thank you for reading this and my other emails.  I appreciate very much the emails and phone calls I get.

I have not been working hard. It’s only called work if you would rather be doing something else.

Pizza, Beer, a Whiteboard, add Creative Brains: Let’s Do It.

My good friend Mike Freidman sends me inspirational quotes without fail every morning. Today he sent a quote attributed to Thomas Edison:

“Our greatest weakness lies in giving up. The most certain way to success is always to try just one more time.”

I replied this morning with my own quote: “Do. Or do not. There is no try”, this from the fictional Yoda in the Star Wars series.

I’m sure the amazing Mr. Edison (and my friend Mike by the way) would agreed with Yoda, Mr. Edison didn’t “try” to find the perfect filament for the light bulb. He did. 

To “try” implies the possibility of failure.

When I sat down with Carlos, Tatiana, a few beers and a pizza in front of a white board to form the roadmap for the Market America Realty business model, I did not think in terms of trying . I was going to DO.  Obstacles became hurdles, brick walls became detours, and success became all encompassing.

Unfortunately it is easier to explain why something CAN’T be done, and in some people a suitable explanation for giving up is, well, suitable.

“Did you tell that customer about the price reduction?”

“No. But I left a message”. Or how about:

“Did you tell that customer that his contract has to be extended?”

“I tried, but the email didn’t went through.” (That one is a direct and favorite quote of mine.)

In my real estate business we don’t get paid anything for trying.  We only get paid for success. That’s the reality in the realty business.

Part of that original business plan we drew on that white board five years ago envisioned a CRM (Customer Relationship Manager) software system that would integrate lead generation, with follow up and web landing pages and sites with MLS feeds, and forums, and document sharing, and listing management as well as drip email campaigns, transaction tracking, and information sharing among agents.  It envisioned social media integration and website integration; ease of daily updating of websites as well as professional graphics. There was no such thing five years ago. It took us two years to develop it and today it’s a realty. It was a DO. Not a Try.

A customer asked us to find him 20 homes a month that fall within a certain criteria. We told him if he adjusted his criteria a certain way we COULD DO IT. We did not tell him we would try.

This is an important point: If a client tells us, for example, he wants three bedroom pool homes in Sarasota for $75,000. We don’t tell him we will try. We tell him we CAN get him three bedroom pool homes for $110,000 or less. Do. Don’t do. There is no try.

When we put that Market America Realty plan together five years ago, it was not a wish list. It was not something we were going to try to do; it was something we would DO.  And we did.

This past Thursday we had the Grand Opening of our new Main Street location in Sarasota: about 150 participated in a festive and well received courtyard party –  giving us the opportunity to  meet many of our suppliers, local customers, prospects and friends. Our new Naples Office opened up the first of this month and I’m certain we will have an equally successful grand opening party the beginning of next season. Lehigh Acres is expanding into 4500 square feet in their current Lee Boulevard location.

Did we adjust the plan?  You bet.  I have said many times you can’t steer unless you start moving. The only adjustment I would make to Mr. Edison’s quote is to go from this:

“Our greatest weakness lies in giving up. The most certain way to success is always to try just one more time”, to this:

“Our greatest weakness lies in giving up. The most certain way to success is to keep on doing”.

The last three words may tell it all.

The last three words may tell it all.

It’s the last three words that are normally left off that say it all. My father, who lived into his 90’s, shared this advice with me.  “Gregg,” he said with his characteristic crooked smile,” Now that I’m 92 and I am no longer the 6 foot strong man I was most of my life, I walk with a stoop, arthritis has gnarled my hands,  my skin is as transparent  as  new born hamster, and I can’t see well enough shave without leaving patchy spots on my face; heck, my hair looks like the remnants of a spider web and my ears and my eyebrows look like abandoned birds’ nests, but people are always telling me I look good. Heck I have heard “You look good!” more times last week that I did the entire first 7 decades of my life.

“Ya know why? They leave off these three words: “For your age.”  Heck, most of these people thought I would be dead by now.  You see, we have pretty fast brains, but our mouths are much faster. The brain only recovers when the mouth has already started the sentence.”

The recovery of the real estate market her is Florida made me recall that lesson just last week. We are all complaining about the lack of inventory. Indeed we have more buyers that houses to sell them, we have more investors than income property, and more tenants than homes to rent them. BUT, if I add:  “At their price” to those exclamations; you being to understand why I thought of my Dad.

Our market is in a transition period right now. All of our agents are working with buyers and are very busy touring properties. It’s is taking those buyers, however, time to adjust their thinking to the current market.  Prices are rising, houses are on and off the market in the blink of an eye and the “deals” just ain’t what they used to be. Almost every day I get an email to “all users” (our internal broadcast email to all team members) looking for such and such house. Recently one of my agents reported to me that there were only six houses of the kind his client wanted available in Cape Coral  (he left off “at their price”), just like there are no riverfront homes available (“at their price”) and there is nothing to rent (“at their price”).

Sometimes it takes losing a few deals with low offers for folks to get the message. Sometimes it takes waiting for a better deal to come along while the one they had their eye on gets sold out from under  them. Will things slow down this summer?  I don’t think so. Money is too cheap right now.

Will we see some downward price pressure?  No we will not. Yes there are individually owned homes that are not on the market because pricing has been too low and there may be banks that have not “released” their inventory.  Incidentally, I, for one, do not believe that “the banks” have a collective mind for delaying “shadow inventory”. Indeed I spoke with a manager for an asset management company that services real estate owned by banks and he told me that 80 percent of the homes they manage are not on the market. In fact he added, most of the homes they service (lawns, occupancy checks, etc) they have managed to more than two years!  However, there is no doubt in his mind or mine that they would release them if they could, and slowly he has seen titles cleared and houses trickling back to the market.

The rising demand fueled by the growth in baby boomers, low cost of money and our excellent living will outpace the addition of any “shadow” inventory, and in fact, as prices increase, you will see houses came back on the market  (at their price).

You heard real estate is about only three things?  Location, Location, and Location?

But they left off three words: “At my price.”

 

Folks, this Thursday evening (April 12) we will hold the Grand Opening of our Sarasota Market America Realty and Investment office at 1970 Main Street, Sarasota  in the open court yard next to our building.  It would please me greatly if you are in the area for you to be our guest.  Just drop me an email at gfous@marketamericarealty.com  to RSVP. We will have food and drinks and many of our other office team members will be in attendance. Valet parking will be provided.  Hope to hear from you.

Gregg 800-439-1580  ext 52