Some sellers speak to multiple agents, only to end up listing with the one agent who is suggesting the highest unrealistic listing price; this is possibly the worst mistake a seller can make. Unfortunately, this is the result of another common mistake which is failing to obtain, review and understand a detailed and comprehensive “Comparative Market Analysis” CMA report, one prepared by a qualified Realtor.

What should a CMA and the data that it contains show you as a targeted guide to what the market is currently doing? What should it contain? And how complex should it be so it may be understood by the seller.

The most important point to evaluate is the agent’s professional business practice in offering you a complete, thorough and detailed picture of the Real Estate market, a snapshot of today and the last six months in a properly drafted CMA.

Will the agent also posses the ability to explain in detail what the CMA is indicating as to the correct sales price, allowing a prudent pricing margin for the final negotiation.

Important components are:

• ACTIVE LISTINGS - Actives are comparable homes or condos currently listed “for sale”, in the same building, complex or subdivision, the other side of town, dissimilar or disparate age property do not figure in. It must be a like kind property in size and features, in other words comparing apples to apples not apples to bananas.Your agent must be clear and concise in explaining why and what he is choosing as a valid comparable to use.It is important to understand in the active listings category the “for sale” price in no way reflect what it will ultimately sell for, that may be determined by the existence of  a SELLER’s or BUYER’s market at the time, but competition still needs to be established.
• PENDING LISTINGS - Listings that are moving towards a closing and are currently under a contract, these offer an indication of market movement and also indicates at what price they were listed “for sale” before moving to contract status.It may clearly indicate that if you are priced above these, you will be facing a longer period of “days on market” DOM.
• SOLD LISTINGS  – Recent sales are the true comparables of your property.  It must include tax roll sale records for sales not done using Realtors for a complete picture. A six months history is what appraisers working for your buyer or financing bank will be using to prepare the appraisal report. Pricing above the market or ignoring this information may, ultimately fail the mortgage approval and sabotage the sale…again more days back on the market and starting over!
• WITHDRAWN, CANCELED,  EXPIREDS & OFF MARKET - Reasons for these, are mostly over priced or rejected offers, failed appraisals, failed inspections, rejected repair request, re-listed to avoid showing as an expired, or the listing agent getting fired for not having an effective marketing plan in place.Most expired listings are a consequence of having an unrealistic listing price. Some sellers are inexplicably not in the market to genuinely sell, but are rather holding out for a much higher than market sale price. It is just as surprising, that there are many agents willing to list these properties regardless of how long they will sit aimlessly in the market.

It is important for a Seller to understand that he and the Realtor are in it together, a partnership toward a common goal and both need to be informed, realistic and in agreement on marketing and pricing. A careful CMA analysis will reveal a targeted sales price and your Realtor should submit a marketing approach to use, without giving the property away.

Factors to consider when looking at a well drafted CMA are:

• Comparables size (sq.ft.)
• $/sq.ft. averages
• Comparable distressed sales
• Floor plan
• Condition
• Exposure
• Views
• Location
• Age
• Construction
• Amenities
• Upgrades
• Décor
• Architectural changes
• Security
• Proximity to traffic
• etc

Location, Location, Location – While this old cliché may be true, ignoring the other variables that influence pricing  indicates using poor criteria…Do your homework and allow your Realtor to do his. Once you have selected a qualified Real Estate Agent, you are set for a successful sale!

No representations are made and it is the sole responsibility of the Buyer/Seller and his personal Realtor and/or Attorney to verify and analyze any and all variables involved in the singular purchase/sale of any Real Estate, do not base any decisions solely on any of the above blog articles.

• Are you working with a Realtor who knows and understands Florida Statutes 718, governing Condominiums? A Realtor who is capable of explaining individual ownership of the residential living unit vs. joint ownership of the common elements? And can also explain the management of the above by a Condominium Association as well as the restrictions imposed by the rules and regulations that all shared owners must abide by?

• If you are a first time Condominium buyer that does not fully understand the pros and cons of the Condominium lifestyle…go back to #1 above and start over with an experienced Realtor that can better explain and guide you in the acquisition of your new residence, one who can offer a better insight of what you are buying into.

• What are you buying? In summary you will own the individual area of the apartment as defined by the floor, walls, ceiling, cabinets, individual appliances and the fixtures that compose the apartment unit itself.

• The common areas such as lobbies, hallways, elevators, meeting rooms, common plumbing & electrical as well as the roofing and any other building amenities such as swimming pools, recreation areas, tennis courts, etc. will be owned jointly and managed by an Association of elected directors with the help of rules, regulations and the condominium governing documents, much the same as a corporation or small government.

• Some common thing to find out prior to a purchase should be:
• Assessments due or pending, and for what purpose
• Pending special assessments in the near future not yet levied
• Restrictions and regulations on re-sale, leasing, renting or devising your unit
• Restrictions on the age of any children allowed to use the facilities
• Restrictions on pets by quantity, type or weight
• Restrictions on vehicle parking or parking other than passenger vehicles
• Restrictions on flooring, window coverings or any specific modifications
• Restrictions on noise level, hours or musical instrument playing
• Maintenance obligations and mandatory hurricane protection systems

• Review the condominium documents (condo docs), frequently asked questions and answers and ascertain the maintenance fees and size of reserve funds held by the Association and HOA membership requirements if any, for re-sales there is a 3 day rescission period in order to review the above (excluding weekends and holidays) vs. 15 days if buying new from a developer.

As for the purchase process itself:

• Best to start off by getting pre-qualified for a mortgage, it’s the best leverage to use when negotiating with a seller to show them you are able and capable of taking on a loan for a specific amount, it may not guarantee that you will be approved but it demonstrates that they are dealing with a serious buyer and not just an interested potential buyer.

• Location, location, location…you must consider lifestyle, commute, community amenities, schools, and shopping, dining and even the security of the complex itself.

• You need to consider issues such as the cost of maintenance assigned to the unit, bearing in mind that these fees can and do eventually go up, also check property taxes and insurance cost. And figure in, savings to your monthly budget in the form of Association paid cable, water or other utilities they may have bundle in.

• Request a market analysis from your Realtor once you have decided on a Condominium to assist in evaluating what a reasonable offer should be, also for a quick appreciation analysis, subtract what the Seller paid for the unit from the now selling price divided by the years they owned it to see an annual appreciation, bear in mind this will change by building, location and neighborhoods.

• Consult with your Realtor to carefully review the deal, no two properties are ever the same and should be viewed always on an individual basis prior to your offer, remember that when in doubt it is better to check with an Attorney, before rather than after the purchase, ask till you are satisfied and accept no less, you will eventually be living there!

• Condo living is generally an easier lifestyle with a lot to offer, once your homework is done…ENJOY!

No representations are made and it is the sole responsibility of the Buyer and his personal Realtor and/or Attorney to verify and analyze any and all variables involved in the singular purchase of any Real Estate, do not base any decisions solely on the above short introduction and opinions.

On our new website, we will blog about South Florida Real Estate and related subjects on the 1st and 15th of every month. It is meant to be informative for friends, acquaintances and loyal customers, I hope you enjoy my first blog post and find it useful!  Be sure to subscribe and share with your friends and coworkers.

In today’s Real Estate market my most often asked question is:

“Will I get a better deal on a short sale?”

To answer that question, it is best to start by defining what the client actually meant to say, perhaps what he wanted to say was a “Distressed property” and that category includes, yes short sales and also foreclosures as well as “lis pendens” which is Latin for Suit Pending, meaning that litigation is now pending and recorded on the property records by perhaps a Condo/HOA association, note holder, second lien holder, or even the taxing authority.

Now the BIGGER question begins, who am I actually dealing with? The surprising answer is that if anyone is actually still living in the home at the present time, they are either only one of the parties or may not figure in at all, and rather than deal with or present an offer to a sole individual, you may find yourself negotiating with multiple third parties. Institutions will have forms, agendas and their own standardized processes to follow.

Again we go back to another Latin word “Caveat Emptor” the common translation is let the Buyer Beware due to the increased responsibility of discovery and inspection of records and property rather than assuming that you will know up front of any title or physical defects.

Once you have been properly noticed by your Realtor of possible issues, complications and delays that can be associated with these types of transactions, we can now go back to the initial question: “Will I get a better deal on a short sale?” the answer is, you probably will! But that factor is better understood by having the right team on your side to point out, that what may seems like a good deal, truly be just that, and to offer you their knowledge and help you navigate to a clean closing working alongside an Attorney to verify liens, pending litigation, unpaid taxes, unpaid association fees, code and building violations, etc, and a Mortgage professional to have you prequalified rather than receiving a last minute refusal after having a deposit held for even months, while the selling institution took their time to decide on your offer. Please remember, not all deals are the same, and the issues will differ.

This is only a very brief insight of issues in dealing with distressed properties, rather than letting it turn into a nightmare, contact me to discuss what I can do for you.

Monthly activity report:

Sales Statistics for DADE County FL
Realist’s most recent recording date for this county is 06/28/2011