The Strength of a Straight Seller

The best home values today can be found in the free and open resale market from “straight sellers” who have equity in their homes and are selling by choice. I use the term “straight seller” for a seller who is selling by choice (not motivated by a short sale/foreclosure). Straight sellers are financially stable in their property; maintain their home inside and out; and are 100% responsible and timely for their financial obligations to their lender, property tax/insurance and HOA.

With the majority of active listings in Multiple Listing Service (MLS) for east metro Orlando being short sales / foreclosures / bank owned, the straight seller has been slowing fading in to the background and are easily overlooked by buyers. Why? This is due to the misconception that the best home values today are short sales / foreclosures / bank owned.

Due to popular mass media, there is the perception of short sales / foreclosures / bank owned being the only place a buyer can find “a good deal”. But remember, no seller - private, short sale, foreclosure or bank - is going to give a property away in any market. So really what is “a good deal”? A good deal boils down to “a good home for a good price”.

When a buyer chooses a home, the purchase price is the first consideration; however, a strong second is the condition of the home. 95% of buyers want a home that is “move in ready”. Buyers do not have the interest, money, time or energy to buy a home, move in and then complete one repair after another. Buyers want to buy their home, move in and enjoy and relax…we all have enough on our plates with our jobs and families.

Straight sellers have the most desired product - a well maintained, cared for, lived in home, which positions them for a timely sale. Straight sellers are selling by choice and are not pressured to sell due to financial dire straights.

Most Desired Product A straight seller offers a home that is well maintained, cared for and lived in. A leaky kitchen faucet is repaired; the grass is mowed; an ant trail along the baseboards is eliminated; ripped window screens are replaced. On the other hand, it is commonplace for short sales to lose the time, money and attention of the seller. Owners or tenants in various stages of packing and moving out; basic home repair and yard maintenance not attended to due to financial limitations.

It is commonplace for foreclosure homes to be intentionally damaged or neglected by the owners who lost their home to foreclosure. Many foreclosure/bank owned homes are long vacant with no maintenance for months and months. Far from move in ready, the average buyer is not prepared to buy this kind of home.

Timely A straight seller will respond to an offer within a few days max. On the other hand, a short sale can take weeks or months to receive a response to an offer because the seller’s lender approves an offer, not the seller. It is a rare buyer who will wait weeks or months for a response to an offer.

For an offer on a bank owned property, a buyer can expect a delay of ten days to three weeks due to numerous addendums required by the bank and dealing with a third party administrator who manages the inventory of bank owned homes for the bank.

A straight seller is financially stable in their property with no financial dilemmas weighing down their ability to sell in a timely manner such as missed mortgage payments, property liens, delinquent property taxes or delinquent HOA dues. These are all areas of major importance in the transfer of property and have been known to derail or delay a closing.

Moral of this story: straight sellers are good deals - a good home for a good price.

Foreclosures To Surge in Spring Isle

Spring Isle is the one neighborhood along the Avalon strip that catches my eye the most. Something is working in this east metro Orlando neighborhood. I like the fresh, crisp look of the community – the homes, common area and recreation facilities. I attribute this to effective HOA management. Now, no one is a fan of HOAs, but this neighborhood truly stands out compared to the numerous neighboring communities up and down the Avalon strip. Spring Isle actually enforces common sense rules/regs such as no overnight street parking and no commercial signage. These things make a world of difference to the image of a community and for Spring Isle, it works.

Though still a neighborhood with active construction, the majority of Spring Isle came of age during the Orlando housing boom starting in 2005. Many buyers at that time (owner-occupied as well as investors) bought with easy-to-qualify financing and are now heading down the path to foreclosure:

- For active listings in the Multiple Listing Service (MLS), 50% are short sales or bank owned (8 of 14 single family homes and 7 of 16 townhomes). active

- For pending listings in MLS, 60% are short sales or bank owned (3 of 7 single family homes and 3 of 3 townhomes). These sales are anticipated to close Jun/Jul. pending

For a community of this size (567 homes as of this writing), there were minimal sales over the past 90 days - just six sales in MLS. Four of these sales were builder sales, plus two other single family home sales were short sales or bank owned. sold

A couple things are brewing here – overpriced homes and an avalanche of new foreclosures about to occur in Spring Isle.

Overpriced Homes For active listings as of today, 50% are listed at prices that just don’t make sense for the market. These homes are overpriced, can’t be getting any showings and will not sell. It appears that these listing prices are based on the seller’s purchase price, not priced according to market. These overpriced homes will remain on the market for many more months to come and will require substantial price reductions to even be considered for purchase by an informed buyer. Regardless of the seller’s purchase price, the home is only “worth what it’s worth”.

Avalanche of New Foreclosures Numerous Spring Isle homeowners who bought at the peak starting in 2005 and now need/want to sell, but are unable to make a profit (or even get their money out) are seeking “short sale” approval from their lender. In fact, 50% of active listings today are short sales. Remember, it is the lender who approves or denies a short sale, not the homeowner. Homeowners who are denied short sale approval by their lender will ultimately be foreclosed on. What this means is more and more Spring Isle homes on the market that are bank owned, not privately owned. And no one has more incentive to negotiate and sell low/sell now than a bank. Banks don’t want to own real estate – they are not in business for that purpose.

Curious about homes that didn’t sell for one reason or another? expired

Moral of this story: a home will only sell when priced according to market.

Why Isn’t Bridge Water Selling?

As an admirer of the finest neighborhoods surrounding me in east metro Orlando, I routinely watch the neighborhoods that I love the most. This handful of neighborhoods all have an undefinable quality that makes them stand apart from the rest. Bridge Water is one of those neighborhoods.

However beautiful Bridge Water is, there is one thing nagging me: why is this premier east metro Orlando neighborhood not selling? In the past 90 days, there has been one sale in the Multiple Listing Service (MLS). The one sale was a “short sale”. sold

Why the lack of sales activity in this neighborhood compared to other neighborhoods? Simple…overpriced homes don’t sell.

Start with a gorgeous, established neighborhood full of appealing family homes in a primo location central to major employers and educational centers. Add easy on/off, immediate access to 408, a major Orlando artery. Sprinkle in enjoyable community amenities including two community pools, fitness center, playground, basketball court and gazebo. Finally, garnish with a quick four-mile drive “thru the back door” to Waterford Lakes Town Center, east metro Orlando’s premier destination shopping locale. Top it all off with a dash of A-rated schools (elementary and middle). This is Bridge Water – an ideal family community.

For as challenging as the real estate market has become, people continue to buy homes. Why? People will always need a place to live. Period. That fact will never fade in any market. East metro Orlando homes are still moving, still changing hands, but not in Bridge Water.

With just one Bridge Water sale taking place in the past 90 days (a “short sale”) for such a quality neighborhood, only one explanation makes sense – overpriced homes. This neighborhood’s overpriced homes may be tied to the inflated home values of 2005/2006. Oh, the joy of 2005/2006 home appreciation many of us experienced…out of this universe…and simply effortless! But recall what drove the home value boom of 2005/2006 - minimal home inventory (nothing for buyers to choose from) and out of sight financing (anyone with a pulse could buy).

Fast forward to summer 2008, we now have an over abundance of inventory (an overwhelming number of homes for buyers to choose from) and strong, competitive financing (only for buyers with very good credit and a good, stable job).

There is no doubt we can expect a swift increase in Bridge Water sales with some significant price reductions to current inventory. There are 12 active listings today in MLS with a minority of the homes being priced right, priced according to today’s market. active For the few Bridge Water homes priced right today, I anticipate a successful closed sale for them this summer. For the rest of them, the reality is many more weeks and months on the market along with price reduction, price reduction, price reduction - no seller wants this, but reality is reality.

However, a significant trend is brewing in Bridge Water. There are six pending listings today in MLS with anticipated closing dates of Jun/Jul. This is a move in the right direction for the neighborhood and is one that I anticipate will spark even more homes to change hands this summer because the most recent sales provide the best comparables and those comparables provide the strongest supported evidence of homes values to sellers and buyers. pending

Curious about homes that didn’t sell for one reason or another? expired

Moral of this story: overpriced homes don’t sell.

University Estates Is Hot

There are a handful of premier east metro Orlando neighborhoods that I simply love. University Estates is one of them. When I drive thru these certain neighborhoods, I say aloud to no one in particular “I would live here in a heartbeat” (I live in east metro Orlando, though not University Estates). I want to share with you why I consider this neighborhood to be a stand out.

What I find intriguing about University Estates is their great sales over the past 90 days, which is atypical for east metro Orlando. Sales are hot and houses are moving! And these sales were not “short sales”, though there was one bank-owned. These were arm’s length transactions with seller and buyer being traditionally motivated. Though not a large neighborhood by any means (just 374 single family homes), this neighborhood is churning out the sales.

Why such sales activity in this neighborhood compared to other neighborhoods? Simple…good homes priced right sell.

Good Homes University Estates is simply a gem. It is a lush, developed, more mature neighborhood. The location is top notch - nestled between UCF and the city of Oviedo. There is easy access to Alafaya, 408 and 417. There is convenient shopping nearby – basic shopping (grocery, drug store, dry cleaning) plus destination shopping (malls, large shopping centers) as well as numerous professional and medical offices. The elementary and middle schools are both A-rated.

Priced Right Here are actual sales from the Multiple Listing Service (MLS) for the past 90 days (list is sorted by ascending sold price): sold

The majority of these homes (9 of 12) sold between $267,000 and $305,000 at an average of 93% of list price – these were not short sales and only one was bank-owned. These closed sales are a strong example of good homes being priced right, priced according to market.

Before a homeowner can make the decision to sell, the first and last question is all about the numbers. How much money are we going to make? With that, I submit to potential University Estates sellers: price your home correctly from the start and price according to market. Simple advice, but I believe this will be the wisest decision you will ultimately make in the sale of your home. The buyer of your home is coming armed and prepared with facts, data and a good agent - and they know what your competition has sold for.

Yes, all of our east metro Orlando homes were worth $50,000, $75,000 and $100,000+ more two and three years ago, but that’s history. You will not sell your home today for what it was worth at its peak in 2005/2006. Fact. Unfortunately as a realtor, I still regularly see homes listed at 2005/2006 prices…and it’s no surprise that the homes get zero showings and ultimately, languish on the market and never sell.

Though closed sales provide the strongest supported evidence of home values, sellers should also consider the competition in active, pending and expired status: active/pending/expired

Moral of this story: good homes priced right sell.