Real Estate Auctions, Short Sales, High Point, North Star

Real Estate Auctions, Short Sales, Highpoint, Northstar....

Sometimes I wake up about 4:30 on the morning I am going to write my e-letter and I lay in bed about for about an hour - brain dead. I can’t come up with a thought worth sharing. This morning I had the opposite problem – so many thoughts and not enough order to them. This normally happens when I get excited about the market.
I am excited about the market.
There are opportunities all around me. Sometime I feel like a kid in a candy store.
First let me tell those of you with homes that you can’t sell, or condos that you must close on; that I understand you do not feel my enthusiasm. I understand why, and I have been there. My advice to you is this: look at the big, long term picture. Don’t continue to kid yourself or your friends. Strip the problem down and examine the alternatives.
You are not in an exclusive club. There are many members of the “I bought too late, or too high, or too much - club” Assess your situation, look at the worst case scenarios, and then make an exit plan. Look forward and not back. Okay, now you have to recover.
I keep saying this is the time to buy – buy YOU have to sell, and then once you sell, you have to recover financially. You, like this market, will recover.
No one alternative is good for everyone. Let me talk about two – The short sale and the auction.
THE SHORT SALE
A short sale happens when a seller sells below his cost. The term in our industry has gown to describe a sale that is indeed below what is owed to the bank. The existing lender agrees to accept a lesser amount due on their secured lien in order to release the collateral from the note. In essence, it allows the seller to establish an asking price at less than what they owe their lender.
A class that was given by Fidelity National Title recently provided us with a typical process for a short sale, as follows:
Step 1: Hook up with a competent and trustworthy real estate brokerage that can help you identify if you are a candidate for a short sales request. Market America Realty and Investments, Inc. can order listing packets from our title company that will provide information on a specific property, which includes the deed, copies of the current mortgages, lien information.
Step 2: Order a payoff statement from existing lender and determine if there is a pre-payment penalty.
Step 3: Work with your agent and title company in determining preliminary closing figures.
Step 4: Contact existing lender’s loss mitigation department to determine their requirements to formally request a short sale.
Step 5: Owner, Title Company, and real estate agent work with lender on satisfying lender’s requirements which could include a Broker Price opinion, copy of full appraisal, copy of estimated HUD, etc.
Step 6: Await lender’s approval or denial of short sale request.
Step 7: Inform all parties of approval or denial and any special requirements made by existing lender, such as renegotiating sales price, removal of contingencies, and any time specific limits.
Step 8: List and sell the property. (A typical listing may have the clause after the price “Bank approval required”)
If you want more details on short sales, please call us.
If you are looking to buy, we know of short sale opportunities. . They CAN BE wonderful opportunities and are typically great values. If you’re looking for a great deal, call us. We know of short sale properties in our area
AUCTIONS
Auctions are not for everyone, and they have been more common lately. The sad news is, for the seller anyway, they work better in a good market. The frenzy that some of the auctions create can actually achieve higher price points that a normal advertised deal. Auctioneers work closely with real estate brokers such as Market America to make sure that highest possible price is achieved and the pre-marketing is done properly. There are good auctions and bad. The best are well organized, well promoted, and offer absolute bids. (No reserves)
Last week out team went to an auction by one of the best. Fisher Auctions had a sale at San Simeon. If you missed it you missed a show.
There was no elevator music playing during this well orchestrated auction. Upbeat, anxiety causing, and high energy music rocked out during the Levitt and Sons developer close out with tunes ranging from Lynyrd Skynyrd, Starship, AC/DC, B-52’s, Fergy, and Jimmy Buffet at the Crowne Plaza Hotel. A crowd gathered outside as end users, investors, fools, and nosy folks tried to watch. Learn and buy.. Bidders made their way to an open seat with their bidder packet or to the beverage cart to cash in their free coupons for an adult beverage to loosen up a bit.
The community is called The Townhomes of San Simeon. The auction was well engineered and professionally executed by Fisher Auction Co. Inc. and they came in with a full team from Pompano Beach.
The Auctioneer, after reviewing the bidding rules, asked Rusty (the DJ) to lower the music. “Do I hear”… “The time to buy is now”… “Don’t let this one go”… the auctioneer got the crowd going as 7 people from Fisher Auction panned the room, pointing, screaming out, pressuring some, or asking for back up bidders.
The Market America team represented clients at this auction – on the buying side. This type of buying needs experience in bidding, and many bidders require the guidance that only preparation and experience can afford., experienced bidders know what condos would go first and then how many more would be released after the first set were gone, what to bid, and what condos to bid on. Our team will do a survey of the project – which homes have the upgrades, the good locations, etc. To do well as a bidder in auction, preparation is everything..
Current prices at San Simeon range from the $240’s to mid $300’s. Floor Plans range from 2 bedrooom – 2.5 baths and 3 bedrooms 2.5 baths all with two-car garages and square footages (under air) from 1,395-1,779.
There were 50+/- Luxury Townhomes, 20 offered at absolute, which means 20 condos would sell to the highest bidder, regardless of price.
The Maintenance Fees are $310 a month and includes hazard insurance, entry gated community, basic cable TV, monitoring of security alarm system, lawn and shrub care and automatic sprinkler system. Maintenance of all common areas, recreations facilities, pool, spa and tot lot. There are also builder warranties. Examples of the nights bidding can be found at the end of this newsletter.
What’s the catch? Yes, there are some. A Buyer’s Premium of 10% is added to the “Successful Bid” or the highest bid. Also, you had to bring $5,000 deposit in the form of cash, money order, a certified or cashier’s check at the time and place of the Auction and then that amount had to be brought up to 10% of the purchase price the day of the auction if you had bid on a town home.
What do you do if you want to SELL at an auction? You note these prices were well below the original ask price. There are quite a few auction companies that we have been working with that will work with us to put your home in an auction venue. We would first prefer to sit down and examine all of your options. An auction with a reserve is not as well attended as an absolute auction, and there are costs incurred that must be borne by you if the home does not sell when you put it out with a reserve. Different auction companies have different requirements.
I do not believe that an auction “sets a lower bar” for the market and drags it down. These buyers were, for the most part, end users. Auctions create interest, excitement, and, at the end of the day, cash for the seller.
­­­­­­­­­­­­I am receiving calls from buyers at Northstar, Oasis, and other waterfront condo communities about their alternatives. Some want to list with us once they close, some want to examine their hold/sell/rent. Others want to sell condos they have already closed on or are looking for tenants to help defray their carrying costs.
We are anxious to help and are interested in hearing from you if you have condos you want us to sell. We want your listings. Good condos, priced right, are selling. Our project at Parkside is a good example.
Many of the early buyers at Highpoint, Oasis, and Northstar bought at prices that just cannot be duplicated today. I know we could not build Parkside for what we are selling those condos for either. If you choose to hold long term you eventually will do well, but you will have to examine your carrying costs.
When ever you can buy below replacement costs – as long as the location is good – like waterfront – you will not lose; it is just a matter of time and market absorption.
Sellers may not be able to sell at the price they paid, because of the sheer number that will be available, but it does mean that condos coming out of the ground from now on will have to be sold at much higher prices. The big unanswered question is timing.
Until next week,
If you have missed past emails you can search here: ARCHIVES
Gregg Fous
Gregg@ma-realty.com
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Current Asking Price
Auction Price
(*add 10% Buyer’s Premium for FINAL price)
Townhome
Notes
Base: $282,400
Lot Premium: $ 30,000
Upgrades: $34,315
Total $346,715
$248,000
Casa Grande –
3/2.5 Lot – 151
1,779 SF under air
1st bidding– these were considered the fools.
Base: $282,400
Lot Premium: $ 7,000
Upgrades: $27,860
Total $317,260
$195,000
Casa Grande –
3/2.5 Lot – 084
1,779 SF under air
2nd bidding – prices lowered.
Three sold for $180k
Two for $150k
One for $145k
Base: $258,400
Lot Premium: $ 25,000
Upgrades: $10,015
Total $293,415
$132,500
Casa del Sol -
3/2.5 Lot -149
1,614 SF under air
On lake
Our client and the lowest price for the 3 bedrooms! About 4 sold for $135,000, Others sold for $155k, $140k
Base: $236,900
Lot Premium: $ 20,000
Upgrades: $ 26,815
Total $283,715
$127,500
Casa del Mar –
2/2.5 Lot 162
1,395 SF under air
About 7 sold for this price