Cape Coral Real Estate : February 2008

I just finished reading an article put out by The Associated Press over at MSNBC about the amount of FORECLOSURES. Looks like our area - Cape Coral / Fort Myers - ranks #1 according to data supplied by RealtyTrac.  You can click to read that article here.

Why all the foreclosures? I was asked just that last week by a woman who found me on my Cape Coral Real Estate website. She wanted to know why there were so many SHORT SALES and FORECLOSURES in our area.

There are a few reasons for it.

One reason is that real estate is cyclical. That's right. Real Estate goes up & it goes down. Check the historical data, it is true.

Another reason in our area specifically I suppose, everyone got greedy. Investors & just average people all wanted to make A LOT of $$$$ in real estate. They heard that their friends bought some land or a house in Cape Coral & doubled their money in 2 years. Heck, many of these same people made a lot of money in the previous few years here as well. Yes, that is also TRUE - check the records. But what goes up must come down?

It came down. Many investors speculators were just getting into the market here, building a new home hoping to make a fortune (because others did). Unfortunately, hundreds of other investors speculators were doing the exact same thing. The builders were delayed because of the influx, the city's permit department was behind too, - - you get the picture. Many investors speculators had to WAIT. While they waited many other homes finished & were sold to end users. But by the time their homes were near completion the supply was HUGE.  We still had a demand for Cape Coral homes but the supply was just too large.

Unfortunately, most of these investors speculators did not have a plan B. They assumed they would sell & make a fortune. Many, at this point, hoped that they could at least sell and break even or take a small loss just to move on. But we weren't able to tell the buyers to pay for the other's misfortune. They wanted a deal and were going to get a deal because of the excess inventory. Homes were, and still are, selling but they must be priced right.

The next reason is the lending. Yes, I said it. The lenders were giving loans to anyone with a pulse it seemed. How was it that an average person earning $50,000 a year was able to afford 2-5 brand new homes (around $250,000 each) with 0% down? HMMM. But they were given the loans. Did someone misstate the truth? Not sure but I do know that many were stated or even no doc loans so they weren't even checked on. The banks were making their money, so were the mortgage brokers. Heck, the real estate agents, appraisers, title companies, builders, etc were all making money as well. Home investor speculator was expecting to make theirs too.

The same banks that so generously handed out financing the previous few years were tightening up their guidelines. Many would be buyers could not qualify. Uh oh - that just shrunk our buyer pool.

Prices continued to decline, financing options changed, option arms reset, economy slowed as a whole....

So what can we do now? Read more about the Cape Coral Foreclosure problem....

Susan Milner

Broker/Owner

http://www.florida-future-realty.com/

copyright 2008

(239) 542-8521

Susan@SusanMilner.com

Last week I was out showing a buyer customer of mine some nice homes in a local waterfront gated community.

Most of the listings in this particular section of the community were listed as short sales. The short sale listings ranged from $280,000-400,000. Most were in the mid 300s.

None had recently sold. The ones that were not short sales were well over $400K.

When I called the listing agent with the least expensive unit to inquire about where they were at in the process he told me they were just waiting on an offer to submit to the bank. I asked him why he had listed so low & he said he thought it was a good place to generate some buyer interest. I guess he thought that starting too low would be a great way to get some leads. He then went on to say that I was only the 2nd call since the huge price reduction.

Really?? Want to know why? Well, because agents don't want to waste their or their buyer's time looking at a property that is not going to be able to be bought at or probably even near that price. We are not in a market to justify multiple offers & GAMES.

Agents, short sales should not be treated as auctions (unless you are truly conducting an auction). You should be listing them at, or just under fair market value. You should know what this value is if you've completed a true CMA. If you don't know what the property is worth maybe you should consider a new profession.

We price our listings at FMV & continue to make regular price reductions if we are not having much activity. This method makes sense & shows the lender a TRUE picture.

Usually when a buyer puts an offer on in a short sale they are expecting to save money - or else it wouldn't be worth the time & aggrevation BUT the banks are NOT giving away these homes. Sure, there have been a few STEALS but it is about timing and being able to wait.

Yes, I'm serious.  Please stop. These listings are NOT helping anyone. You are not helping the seller, yoruself, other agents or buyers. It is a waste of everyone's time. 

Are you using the listing & seller to generate buyer calls or are you seriously clueless????

Buyers & Sellers, please use your due diligence when selecting a real estate agent to assist you with the sale or purchase of one of the most expensive & often times, life-altering financial decision.

Yours in Success,

Susan Milner

Broker of Florida Future Realty, Inc.

(239) 218-2229

www.MoveMeToCapeCoral.com

Hearing about the great home values available in Cape Coral, Florida? We have many great homes for sale at very affordable prices. We now have homes listed under $100,000! This presents a great opportunity for first time homebuyers, relocators & downsizers. Add this to our newly passed Homestead Exemption rules & it probably makes a lot of sense for you to buy right now.

But are you ready?

Have you checked your credit yourself or had someone else pull it? If you haven't received your free credit report in the last year you can go to AnnualCreditReport.com to get your free copy right online. For a fee you can also see your credit score. Most important is to make sure there are no negative accounts on your report. Take the time to look through the report & resolve any issues.

Next, you need to review your monthly bills & figure out what type of mortgage payment you feel you can comfortably afford. The bank or mortgage professional will be able to give you the figures that you actually qualify for but you should also have an idea in your own mind as well.

Once you have contacted a bank or lender (You can get some names from your REALTOR), they'll give you a pre-approval letter & good faith estimate. The pre-approval letter will tell you how much home you qualify to buy. The good faith estimate will show you what your closing costs will be & what your monthly payment will be as well. If these numbers work for you then you are ready to start your search for a home.

Your REALTOR will be able to consult with you to determine your home buying needs & wants within your price budget. They will show you homes in your price range that are available for sale matching your search criteria.

Then together you'll pick out the best 3-5 homes to go view in person.

Pick the best one & submit your best offer.