Has the housing market bounced back? Housing prices in Florida are still tremendously lower than they were just five years ago. However, though prices are still at a low, there is more velocity in the market, as short sale, bank owned, and other distressed properties are slowly being absorbed. According to the latest housing statistics, about 75% of sold and closed units consisted foreclosed and short-sale transactions.
Case study:
The Prado at West Palm Beach went on sale in March of 2004, during its construction. In one weekend, all 304 of its condos were spoken for, selling between $120s and up for studios, to $190s and up for one bedroom/one bath units, and from the mid $200s for two bedroom/two baths units. Following the completion of the building, prices appreciated between 25-50%, and the lucky owners who flipped immediately made out like bandits. And then the crash.
Of the 304 units nearly 100 were offered for sale in 2006-2007. Many were foreclosed upon, others transferred hands via a short-sale transaction. Today, May 30, 2011, there are FOUR units for sale. Inventory is low and prices are starting to inch up.
The best Opportunities Available
1. Brand New Developer Owned Units – 35% - 50%+ less than pre-construction prices
2. Short Sales
3. Bank / Corporate Owned / REO
Short Sale
Owners of distressed property (under water) stop mortgage payments and submit letter of hardship to bank, requesting their authorization to sell property below the amount owed. Bank absorbs the loss, pays off liens, and new buyer obtains ownership at below current market value.
Pros
- reduced price
Cons
- Transactions may take anywhere from 45-180 days.
- Wait does not always conclude in sale. Banks may pull out.
- Properties may need some repair and improvement
- Some short sales properties sold without appliances
Bank Owned /REOs
Pros
- Reduced price
- Quick turnaround
Cons
- As is – no repairs by seller
- Sellers often accept multiple offers
Making an offer on Short Sale / Bank Owned
- Proof of funds – if paying cash
- Letter of commitment from financial institution guaranteeing mortgage
- Quick decision making
- When offer is accepted, 10% of purchase price is required
- Closing takes anywhere between 15-45 days. Sometimes delayed by bureaucracy such as county clerk office (provides title company with tax obligations), property management (provides estoppel and/or liens if applicable), etc.
MAZOR REALTY OBLIGATION TO CLIENTS
Mazor Realty will only present ONE OFFER (the first received) to any property that accepts multiple offers to avoid Mazor Clients bidding against each other. Mazor Realty does require of clients to make reasonable offers to avoid wasting everyone’s time. (Example: a $60K offer on a $95K listed condo in a building with average distressed property selling at $85K will not be serviced.)
DISCLAIMER: Mazor Realty, in accordance with SEC regulations, does NOT provide investment advice. Data offered to clients is based on public information, including sales reports, rental reports, news media, and trade publications.
For More Information:
Mazor Realty, LLC
561-998-9500
