If you have been watching the Florida property market this past year and you no longer know what to believe, you’re not alone. Half the reports say the market has bottomed and prices are rising, while half are more pessimistic and say prices are still dropping.
The internet has contributed to the confusion, not only about market conditions, but also sometimes about things like taxes, local laws and regulations. Much of the information available to consumers is actually posted by people who are neither experienced, nor knowledgeable in the local area, reporting outdated or erroneous “facts”. Many websites, blogs and forums are often written by people who are merely quoting what they saw or heard, compounding the problem of incorrect information (a little like Chinese whispers!).
Another factor is that much of the property news is very generalized and doesn’t account for the micromarkets operating within each state, where one area (for example the Orlando/Disney area), may be doing well, while another area of Florida may not. There are still some great deals, but how do you navigate through this overwhelming minefield of information? Here are some pointers…
Go local -
The best way to be sure of what is really going on in a specific area is to work with an agent who lives and works in that area and has their finger on the pulse of local market conditions. Not everything you see as a consumer on the internet is suitable for your personal requirements. Hire a local realtor to represent your interests as a buyer, someone who has both local knowledge, but who also has extensive experience with international buyers.
Find the right realtor – All agents must be licensed by the state (check www.myfloridalicense.com
), but only realtors (licensed members of the National Association of Realtors [NAR] have exclusive access to every property for sale in their area, via the member-only Multiple Listing Service (which is much more detailed, accurate and updated than any consumer MLS). A good realtor working on your behalf will match your personal criteria with what is available and guide you through the entire purchase process from start to finish.
Sort out funds first -
If you are planning on paying cash for your purchase, be prepared to offer proof of funds (usually a bank statement) when submitting an offer, because sellers usually require this to prove that you have the ability to buy, before accepting your offer. If you need a mortgage, you will need to show a lender preapproval letter with your offer, so you will need to start this process before your Realtor spends time looking for properties. A good Realtor will be able to assist you with US financing.
Do I need a lawyer?
In Florida, lawyers are rarely used for standard property purchases, because normally, specialized closing agents, known as title companies, handle the paperwork for both sides, very inexpensively and usually fairly flawlessly, because that’s what they do all day. This tends to smooth and simplify the process more than in the UK, or Canada, or even the majority of other US states.
Get real -
In the second half of 2012, prices started to rise because inventories were so low. However, many buyers still have unrealistic expectations of low prices, with incredible rental yields and quick profits, but remember that if something looks too good to be true, it usually is!
Distressed does not = cheap -
Don’t assume that distressed sellers, (bank owned foreclosures, or individual sellers of short sales requiring a very lengthy, tedious bank approval process), are willing to offload properties cheaply, rather than pay to maintain them. The truth is that most banks actually have no problem holding out until they get the price they need, which results in many banks turning down low offers. Many sellers owe more on the property than the property is now worth - not unusual now that properties are currently worth up to half of their price during the peak years of 2004–2007.
Short sales: worth a long wait?
Banks often allow borrowers to sell properties at the much lower current market value and the bank absorbs the remaining unpaid debt, subject to conditions, resulting in a “short sale”. Despite reports about this long drawn out process recently becoming more simplified, it generally still takes several months and is extremely tedious for everyone involved. Short sales can be a good option to get a great property at a really great price, but everyone has to be prepared for much frustration and hoop jumping, with the possibility of the bank not approving the short sale after several months of waiting.
Lesley Dolby is a licensed real estate broker, Dolby Properties Inc (www.dolbyproperties.com