Within a one-year period of time, the real estate industry has almost done an about-face — it is no longer a seller’s market but not quite a buyer’s market. Realtors call it a transitional market. With the right guidance and information, buyers can make wise decisions about their dream homes, and sellers can plan effectively how to market their homes for the best value. In Southwest Orlando Bulletin’s Real Estate Guide 2006, local industry experts share their insights and experience to help those wanting to sell, buy, protect or enhance their property.
The following key provides information regarding a real estate agent’s specialized training: ABR, accredited buyer representative; CIPS, certified international-property specialist; CRP, certified relocation professional; CRS, certified residential specialist; e-Pro, designation by the National Association of Realtors to indicate electronic training; e-Pro 500, among the first 500 members of the National Association of Realtors to receive electronic training; GRI, graduate of the Realtor Institute; MBA, Master of Business Administration; and SRES, seniors real estate specialist.
Repetitive Advertising Is the Key to Selling a Home
by “Sonny” Walter Ensley, P.A.
Main Street Realtors
Many agents think their job is done when they get a listing. They may believe that the Multiple Listing System and a sign is enough. Many times these same agents end up causing a listing to expire because of a lack of exposure. Spending more money on advertising is the solution. It is common knowledge that the more advertising dollars spent, the more exposure a home gets.
Advertising in the Southwest Orlando Bulletin; Homes & Land; residential, luxury real estate magazines; local newspapers; and the Internet can be expensive. Still, the greater effort put into advertising, the better the results in selling a home.
In advertising, repetition is the key. Real estate offices that repeat advertising for several months, and even years, end up with a larger following. Both clients and other Realtors look for these repeat ads. Successful brokerages advertise often and repetitively.
A Custom Creation
by Monique Ashbrook, ABR, e-PRO,
Fine Homes & Estates-Certified
For many people, a chance to own a custom-built home is a dream come true. The opportunity to handpick everything from the layout to the faucets ensures that the home will reflect the buyer’s personal style and personality.
However, such an undertaking requires some special attention. For buyers, the following suggestions may help:
• Buyers need to consider the neighborhood and community in which they wish to build. A home built in an area where it will seem out of place is difficult to sell and will not support the investment.
• A builder or contractor should be thoroughly researched before he is hired. This person is extremely important once the project gets under way.
• A full financial analysis should be completed before a contract is signed. Buyers should plan for expected and unexpected expenses.
• Buyers must be prepared for delays. Even the most reliable contractor cannot guarantee that a project will be completed on schedule. The weather, permits and subcontractors are just a few factors that can effect the timetable.
Buying Second Homes in the Bahamas or Panama
by Maria McKee-Gandy, broker
Worldvest Properties Inc.
With local prices rising, more Floridians are looking offshore for their next vacation homes, and two of these hot spots are Nassau, Bahamas, and the mountains of Panama.
With waterfront lots in Nassau starting at just $200,000, many people are finding this a bargain compared to similar waterfront lots in areas like the West Coast and South Florida. A booming rental market and a new multibillion dollar resort slated to start soon make this island attractive to second-home owners, as well as investors.
Those looking for a milder climate are turning their attention to Panama. Located in Central America, just below Costa Rica, Panama offers sweeping views of the Pacific Ocean from mountain tops dotted with swaying palm trees, priced in the $200,000 range. The country also boasts an excellent infrastructure because of the heavy U.S. influence from the days of the Panama Canal. Health care, roads and even broadband Internet services are available in communities where more people speak English.
When purchasing offshore property, not all countries have the same title laws as those in the United States. An experienced international real estate broker can guide prospective buyers through the process. A U.S. certified public accountant familiar with international property investing, local attorney, and real estate broker can work hand-in-hand to ensure an investment is protected and maximized.
Experience! Experience! Experience!
by Bob Tenaglia, broker/partner
Realty Executives Orlando South
When looking to buy real estate, the old adage applies: location, location, location!
When a seller is looking for a Realtor to help sell his home, the most important factor he should consider is experience, experience, experience!
Now that the market has switched from last year’s seller’s market to this year’s buyer’s market, the need to find an experienced agent is paramount. Whether a person is buying or selling, experience matters.
If help is needed to sell a home, an experienced agent will help a seller determine the right price based on current market conditions, not the wrong price based upon the suggestion of one’s brother-in-law. Also, when it comes to advertising, that agent will know exactly the right media combination to help a house sell faster, which is a lot better than trial and error while it sits unsold.
If a person is buying a home, an experienced agent will guide him through the abundance of listings, using their skills and available tools to analyze the houses that are of interest and find the best home for the buyer. Whether it is information about schools, the commuting time to downtown, help with a mortgage, or just old-fashioned negotiating to get the best possible price, an experienced agent can get a buyer the house that best fits his needs at the best possible price.
Good News for Home Buyers
by Shirlei DeVito, sales associate
Hometown Realty
Everyone is talking about the shift in the real estate market, while many are reluctant to see the positive implications of the changes. With more inventory and choices, home buyers have more options from which to choose. It should be pointed out that buyers have really gotten more involved in the process of purchasing a home, and consequently, become more educated. This is not only a result of the hot market trend, but is also attributed to the many choices available to buyers. The higher inventory has proven to not only help normalize prices and balance the overall market, but has also served as an eye-opener for many.
There are plenty of choices for first-time buyers and move-up buyers. Buyers can be choosy, and real estate agents can help them with an array of offered properties.
Moving Up in a Down Market
by Eric Martell, Ph.D., Realtor, & Sally Martell, ABR, CRP, CRS, CRSP, GRI, Realtor
Re/Max Properties S.W. Inc.
During the past few months, the real estate market has changed from a seller’s market to a buyer’s market. The industry has not seen this many homes for sale since 1996. There will be less appreciation this year — about 5 percent to 8 percent — compared to last year, in which Orlando had in excess of 30 percent appreciation.
The good news is that it is an excellent time to buy. Buyers have many choices and can usually negotiate a better price than any time in the immediate past. In times of flatter appreciation, it is an important rule that money be made on the buy side, not on the sale. This means that buying correctly is even more important than previously.
On the other hand, as the seller, careful pricing within a percent or two of market value is important. A home’s condition also becomes critical. Well-kept homes that are priced correctly will not have any trouble selling.
It is also important to have candid and professional real estate advice in preparing a home for sale and marketing it. Agents who have survived the last buyer’s market are probably good choices since they know what to expect and how to sell in this environment.
The Million Dollar Market
by Carol Ann Hewitt, CIPS, CLHMS
Oxford Realty International Inc.
Who is buying million dollar homes? Typical buyers are about 47 years old, married with a few children, and have transacted with a real estate agent. They take their time buying — 40 percent taking an average of 6 months or longer.
A huge transfer of wealth from a prior hardworking generation to the baby boomers and a constant flow of foreign investors continue to fuel the luxury market, as the world market perceives the United States as a safe haven for investments.
Florida is the fifth hottest market in the United States. CNN recently reported that Orlando’s median price of $195,000 represents a 60.6 percent increase above the past five years, and it projects a 14.3 percent growth in the future.
Square footage is the “Holy Grail,” while larger rooms — and more of them — come at the expense of lot size. Well-designed quality kitchens and baths, sophisticated media rooms and wine cellars are favorite amenities. Children’s playrooms or bonus rooms are also essentials for the luxury buyer.
According to the local Multiple Listing Service system, the million-dollar-plus market in the Southwest Orlando/Windermere areas has had the greatest growth in the tri-county region since 2001. Consider the following sales of more than $1 million: 189 in 2005, 116 in 2004, 62 in 2003, 47 in 2002, and 23 in 2001.
Global statistics reported in USA Today indicate that during the past five years, a 154 percent increase in home values in the United Kingdom, compared to a 73 percent increase in U.S. values. The United States ranks ninth among other countries with increased home values, preceded by South Africa with the highest at 244 percent, 192 percent in Ireland and 145 percent in Spain. Germany, Japan and Hong Kong have experienced a decline in home value throughout the past five years, with Hong Kong down to 43 percent.
When compared to other types of investments, home ownership, with its favorable tax benefits, is still considered one of the best investments.
What Is Happening to the Real Estate Market?
by Lucy Martinelli, e-Pro, ABR
broker/owner
Century 21 Elite Properties
In Greater Orlando, 2006 is a “transitional market” — no longer a seller’s market and not quite a buyer’s market. Complicating the market is the “investor homes/condos/condo conversions” that came on the market, basically at the same time.
It is not unusual to have 20 to 40 properties in newly built communities, condo and condo/conversion complexes, all competing for the same buyers. That market will have to play itself out. Some investors will get their price, but more than likely, investors will have to be more realistic with the profits they are seeking or rent their properties until the excess investor properties level off.
During the past year, the public, including the media, have marveled at the appreciation of homes in the area. Seasoned agents realized it was a correction for undervalued properties compared to the Northeast and West Coast. In some areas, there is a leveling off of prices. Overall, in desirable communities the market is still brisk, and the pricing is strong. Prior to last year, seasoned agents would counsel their customers that the average difference between asking and selling prices is 3 percent — understanding that some will sell for full price, and some will sell as much as 10 percent off the asking price, depending on location, condition of property and schools, and whether the property was correctly priced to begin with.
Now, more than ever, it is important for buyers and sellers to choose a Realtor associated with a full-service office with national appeal.
Working With a Realtor Pays Off
by Shala Jamali, GRI, CLHMS
broker/owner
JEM Realty Group
Based on a recent survey by the National Association of Realtors, 67 percent of sellers relied on a real estate professional to sell their homes, while 29 percent chose to do so on their own. The study also indicates that a home sold by owner, sold for about $45,000 less than what it could have sold for through an agent. To derive this figure, researchers compared the median price of a for-sale-by-owner home ($210,000) to the median price of a home listed by a real estate professional ($255,000).
“The Florida 2005 Profile of Home Buyers and Sellers,” a study conducted by NAR on behalf of the Florida Association of Realtors in tandem with the national survey, looked into the characteristics of home buyers in Florida and their step-by-step approach to purchasing homes. It also studied buyers’ views of real estate professionals’ representation. It appears that sellers who were represented by an agent benefited from it financially, and the transaction went smoother with less hassles.
Where Have All the Buyers Gone?
by Rob Melton, Realtor
Main Street Realtors, Windermere
There is no doubt that it has been a roaring seller’s market for several years, with multiple prospective buyers for almost every listing. Full-price offers and even overbids from buyers were being received within hours or even minutes of the time of listings. Buyers were less picky, and, in some instances, were writing contracts sight unseen. Cash buyers appeared out of nowhere and often bid in almost auction-style for a desired property.
Now, the pendulum seems to be swinging to the buyer’s side. The key is supply and demand, and supply has increased almost five-fold in Greater Orlando, since this time last year. Demand has also slowed, and homes that would have been sold within a few days at most, are now lingering on the market for 60 days or more. Adding to the slowdown is the average mortgage interest rate, which is as much as 2 percent higher than it was a year ago.
New-home sales have also fallen. Just a year ago, builders were asking buyers to stand in line for the chance to enter a lottery, which, if they won, might give them a chance to buy a new home that probably would not be ready for occupancy for at least a year. Now, there are full-page ads with homes available for immediate occupancy at great discounts, free incentives and options, some even including a new car in the garage.
This is nothing new for real estate. The last time this situation occurred was in 1988, following a stock market crash in 1987. The recovery started almost immediately, with sales back to a normal pace within a couple of years, and they accelerated to a fevered pitch by 2003. This slowdown will not be as severe or for as long a period this time because of the resiliency of the economy. Florida, in particular, is more immune to these situations because of the constant inflow of new residents. A recent survey conducted by the National Association of Realtors indicated that Florida is expected to lead all states in new residents during the next 10 years.
For buyers, this is a good time to search for that dream home. For sellers, it will probably take a little longer to close a deal.
Security Issues to Consider When Selling a Home
by Sally Kamrada, CRS, GRI, e-Pro
Coldwell Banker Residential Real Estate Inc.
Whether selling a home with a professional real estate agent or on one’s own, there are some security measures to consider. Many strangers will be viewing the home. The majority are honest people. However, the following safety measures are for those who may see a home for sale as an opportunity for crime:
• There should not be a message on the answering machine stating the owner is not home. The message should say the owner is unavailable.
• When setting an appointment to show a home, it is a good idea for the seller to secure a name and phone number, then the phone number should be called to verify the information.
• Keys, credit cards, jewelry, prescription drugs and other valuables should be removed before a sh
• Prospective buyers should be escorted through the home. For safety, sellers should not lead or allow themselves to be trapped in a room. Smart sellers always leave space between themselves and a buyer for a speedy exit.
• A car parked on the street is less likely to be blocked in.
• A seller should not be alone to show a house.
• The seller should always carry a cell phone and have 911 programmed as a single-digit, speed-dial number.
• Personal schedules or too much personal information should not be discussed with potential buyers.
Think Globally, Act Locally
by Chuck Kane, real estate agent
Stirling Sotheby’s International Realty
As housing prices have doubled throughout the past three years, the “suburban shuffle” — selling a home to a neighbor — is unlikely since neighbors cannot afford to pay twice as much for only a little more home.
More and more Orlando-area homes are being sold to people who are relocating from California, the Northeast and abroad — regions where the high cost of living and favorable currency exchange rates make Orlando real estate prices seem like bargains.
To successfully market a home, the seller needs to team with a company that has a national and global marketing presence to capture the full universe of buyers. The concept to think globally but act locally has never been more important. Hiring the right company, one with local focus but global reach, is imperative.
Homeownership Makes Sense
by Susan McEachnie
Julian Properties Inc.
Many people are under the impression that they may be better served to lease homes or apartments rather than purchase them. They make this decision based upon what they read and hear regarding the escalating prices of real estate in Central Florida. They ask, “How can I afford a home in today’s market?”
The answer for many people is that they cannot afford to wait to purchase their homes. Every month delayed may result in less of a home that is affordable.
A home purchase is an investment in oneself, one’s lifestyle and future. Home prices in the Central Florida market have been remarkably stable, and, in most cases, the value of homes has increased. According to the National Association of Realtors, the value of homes in Central Florida increased more than 35 percent for the second quarter of 2005, compared to 2004. No one knows if the growth in home values will continue at such a dramatic rate, but what is known is that the longer one waits to buy, the more one will spend. With the increased growth this area has seen, combined with the strength of the local economy, there may never be a better time to buy a home than now.
The best decision one can make is to consult with a licensed Realtor to discuss options and start looking.
Tips for Home Sellers in a Cooling Market
by Jerry LaRose, Realtor
Stirling Sotheby’s International Realty
Dr. Phillips Showcase Gallery
This spring, home sellers may need to work extra hard to lure potential buyers. According to the National Association of Realtors, the inventory of unsold homes on the market rose to an 88 percent high in December. It can take several weeks — no longer days — for most homes in this area to sell.
Time-tested advice still rings true: Sellers should focus on giving their homes “curb appeal.” The yard should be well-groomed, the grass green, and the exterior of the house should look attractive and well-maintained. Likewise, the interior should be immaculate.
The next step in a cooling market is appropriately pricing a home. Sellers cannot assume homes will sell for slightly more than the last comparable sale in the neighborhood. It may even sell for less.
Sellers might price their homes at the same or a slightly lower price than the last comparable home that sold in the neighborhood.
Once a home goes on the market, a seller should make sure the home is widely marketed. Buyers increasingly browse the Internet, so submitting an attractive photo spread of a home’s exterior and interior can get more prospective buyers through the door.
Some eager sellers sweeten the deal by offering incentives to the buyers. These will not make or break a sale, but they can give hesitant buyers a little push. Some sellers also toss in a one-year home warranty, which covers major appliances and some other repairs during the buyer’s first year in the home.
A Real Estate Q & A
by Paul McGarigal, Realtor
Re/Max Properties S.W. Inc.
A comparative market analysis and an appraisal are standard methods for determining a home’s value.
A real estate agent can provide a comparative market analysis, which is an informal estimate of value based on comparable sales in the neighborhood that includes listing prices of current homes on the market, as well as those that have sold. Sellers can check this information themselves in public records. Researched properties should be similar in size, construction and location.
An appraisal, which generally costs between $200 to $300, is a certified appraiser’s opinion of the value of a home at any given time. Appraisers review numerous factors, including recent comparable sales, location, square footage and construction quality.
The cost of permanent home improvements, like new windows, can be added into a home’s cost basis, or amount of money invested in a home, which reduces capital gains when it comes time to sell. Capital gains are determined by the difference in price from the time a home is purchased and the time it is sold, minus the cost of any permanent improvements. However, the 1997 tax changes virtually eliminate the capital gains tax for most homeowners. The exemption is $250,000 for single homeowners and $500,000 for married homeowners.
Still, it is worthwhile to save all receipts for permanent home improvements, just in case. They also can be useful documentation when it comes to marketing a home.
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