Pot of Gold

I wonder if these cruise passengers found the gold.

The inventory available is still not keeping up with the buyers and multiple offer situation is again becoming normal.  We are not alone in this situation as some markets are much more active.  My son is trying to buy a home in the DC area but it is extremely difficult to find one and when you do you better be quick.  In this area of the country the average days on market is nine days.  Some seller shenanigans are also taking place.  The NY Times reported that even after seller has agreed to a offer verbally, they are backing out of that deal and renegotiating with other buyers.  While this is good for the bank account it is still questionable ethics.  This is one of the reasons I try to get each transaction in writing up front.  In this same article it was reported that one seller agreed to sell his condo for $918,000 or $18,000  above list price, then backed out and sold to another buyer for $1,104,000.  I can just see the law suits coming.

As Fannie Mae and Freddie Mac continue to change their rules, the challenge of getting loan approval is rather tedious.  Ada has a contract pending using Everbank as the lender.  Everything was good to go until one week prior to closing and at that time the lender notified us that we couldn't close because the condo association didn't have law & ordinance insurance.  This insurance took place after the hurricanes Hugo and Andrew and has to do with replacement costs of the complex.  Not many associations carry this coverage and there have been numerous condos sold with financing in this same complex this year which were approved by Fannie Mae.  Ada is scrambling now to get this insurance on the single unit.  Real Estate is not easy.

Jim Bagwell

 

"Pink, it was love at first sight, yeah"

"Pink, when I turn out the light"  Aerosmith 

Rosetta Spoonbill, we saw this guy on the 9th hole on the dolphin course.  Needless to say that was the only birdie I saw on that hole.

For those who read the last blog, we talked about escrow.  Escrow is basically a good faith deposit.  When you make an offer on a property and come to agreement then the buyer is expected to make a escrow deposit.  The times when the buyer's escrow could be in jeopardy are as follows.  When a buyer makes a cash offer with a as-is contract, keep in mind that you have the right to inspect and cancel but you must do this in a timely manner and not let the inspection slide by as this is your only contingency.  If the buyer lets the inspection period expire or not notify the seller that the inspection is not satisfactory then the seller has the right to put in a claim on the escrow.

When the buyer is using a mortgage then they have a mortgage contingency and an inspection contingency.  Usually you have 5 days from the acceptance date to apply for the mortgage.  The buyer has to make a good faith effort to secure the mortgage.  Keep in mind you have to have a loan commitment to release this contingency.  If the lender can just not approve the loan then the buyer will receive the escrow with no penalty.  Both agents should keep a close eye on the contingencies so you can meet all dates and not cause stress to either buyer or seller.    

Time is of the essence in all Real Estate transactions.

Jim Bagwell   

Flippers are back in Florida

In Brevard County of all homes that have sold in 2013, 9% of these homes have been resold in 2013.   That is really significant and investors are rushing to buy sensing that prices are on the uptick.

Last blog we talked about the listing agreement, one thing we talked about was the escrow deposit.  Each contract should protect both buyer and seller.  This being said when you make a offer and get it accepted time is of the essence.  A good agent will protect the buyer when they make a cash offer with an inspection contingency.  This means that the buyer has an inspection performed by a certified inspector within a specified time period.  The inspection report has to be acceptable in the sole discretion of the buyer.  If not the buyer will notify seller that they are not going forward with the contract or renegotiate the price.  At this point the escrow is returned to buyer with no penalty.

When a buyer is securing a mortgage then you would have a finance contingency.  Usually within 5 days a buyer must make application for mortgage, try your best to use a local lender which is much easier.  The buyer must make a good faith effort to secure the mortgage.  In today's market it is usually safe to allow at least 30 days to obtain loan approval.  In this time period if the mortgage is impossible to obtain then the escrow is returned to buyer with no penalty or we can ask for an extension.

Next time we will talk about when the escrow could be in jeopardy.

Jim Bagwell

Is a listing agreemwnt considered a legal contract???

Actually a listing agreement is a legal contract.  It contains all the elements and everything that constitutes a contract.

These agreements can be as simple or as complicated as the broker makes it.  The agreement should contain the date of the agreement, the expiration of the agreement, the address & legal description, the listing price, all appliances in the property, all personal property that does not convey, amount of commission and how it will be split (our company always pays out 50% of commission to the company that brings buyer).  Some items to pay special attention toward is the cancellation fee if any (our company doesn't charge one) , the amount of days carried forward from expiration date if a previous looker decides to buy (our company makes it 30 days), the amount of escrow kept by listing contract if purchase contract falls through (our company keeps 25%, the reason for this is the amount of paperwork and time it takes to get a ruling from the Florida Real Estate Commission). 

Walker Bagwell Properties only use Far/Bar contracts for all transactions.  You may recall the large company that acquired several companies in Brevard County making them the largest in the country.  We recently received an offer from this company and they had added the clause to the purchase contract that states law, the buyer and seller agree that broker can file a lien on property in case they don't receive commission upon closing.    Now I realize they have attorneys on staff that have to have something to do but this is simply paranoia.  The listing agreement spells out the commission to be paid.

Just remember to keep it simple and protect both parties.

Jim Bagwell

"I don't have any reasons"

"I've left them all behind"
"I'm in a New York state of mind"  Billy Joel

I'll still take Cocoa Beach!

Well so far in July there have been 10 new oceanfront listings in Cocoa Beach/Cape Canaveral.  The most interesting is a SE corner on the 2nd floor in the Xanadu.  This unit has 3334 square feet with 4 bedrooms 3 baths and 2 1/2 baths, priced at $700,000 which is still not too high for the square footage.

In this same period there have been 12 oceanfront listings sold.  The highest are still in The Meridian which is a very nice complex with the best pool and gym on the beach.  The 2 units sold for $575,000 & $650,000.

At the present time there are 46 oceanfront listings that are under contract with a few new construction units that won't complete until 2014.

With the interest rates rising to over 4%, which is still a very low rate, some buyers think the rates will again lower.  I don't believe the rates will come down for quite some time if ever.

Jim Bagwell

"Born in the USA"

"Got in a little hometown jam so they put a rifle in my hand"
"Sent me off to a foreign land to go and kill the yellow man"
Bruce Springsteen

We had to take our son Jason to the airport last night for another trip to Dubai and then Afghanistan.  This will be his 4th time over there but this time as a civilian.  God bless all the men and women who are still there.  Treasure your freedom.

In the month of June there have been 14 new listings on the ocean in Cocoa Beach/Cape Canaveral.  In the same period there have been 19 oceanfront condos sold priced from $75,000 in Twin Towers to $550,000 in Michelena.  Two extremes for 2 totally different condos.  Although the inventory is still low you can still find what you are looking for in a condo if you are very patient.

Happy 4th!

Jim Bagwell