South Florida Real Estate
The recent decision by some banks to freeze their foreclosure process while they investigate their procedures for handling foreclosures has a mixed effect on South Florida’s real estate market. While it may be a good thing for distressed owners who really want to keep their homes, it is probably not a great thing for current buyers and the overall real estate market. The reality of too many homeowners who bought at the height of the market, owners who are currently underwater, unemployed, or simply bought way more house than they could afford when banks were in a lending frenzy, means the majority of homes in foreclosure now probably will still be there at the end of the investigation. Yes, there are stories of homes foreclosed improperly, including that of an owner who had paid cash on the house, and many of the banks and their foreclosure attorneys have become mills that may have filed paperwork incorrectly or downright fraudulently (this is the fraud capital of the United States, unfortunately). These procedures should be investigated, stopped and punished. In the meantime, buyers who are currently under contract are in limbo and the real estate market, which has been slogging through high inventories, may slow since approximately 40% of the home sales in South Florida are made up of bank-owned properties.
The new “AS IS” contract has changed to clarify areas that were vague in the previous contract. These clarifications include, but are not limited to:
- An itemized list detailing the personal property that Buyer and Seller agree is to be included in the sale. Note: if there is a specific light fixture you want, to include/exclude from the sale, you should specifically note it in this section. A chandelier can easily be changed and is not considered a fixture.
- Clarifies that “All deposits paid or agreed to be paid” are the deposit and it is this entire amount that is in jeopardy should the purchase not go through and the deposit be in dispute.
- Clarifies that an executed copy of the contract needs to be delivered to all parties in order for it be accepted.
- States that if “Property related conditions of the Loan Commitment have not been met (except when such conditions are waived by other provisions of this Contract) that Buyer can get the Deposit back. So basically, getting a commitment with conditions is only worth the paper it is written on.
- Specifies the costs to be paid by Buyer and Seller.
- Has a special “Miami-Dade/Broward Regional Provision” for providing title evidence and insurance.
- Uses Calendar days instead of Business days in computing time periods.
Overall, these changes help both the Buyer and Seller by setting the expectations for each party. Let me know if you would like a copy of the new “AS-IS” contract. For clarification of the contract and legal opinions, please contact your attorney.
Just heading back from Charlotte, North Carolina, where the real estate market is still really slow. This 1993-built, 1472 square foot, 3 bedroom 2.5 bath, pool home in a neighborhood close to an amusement park, shopping and downtown is being offered at $164,900, which is less than the the median home price in Miami-Dade, ($182,900 in August, 2010). Although the pricing is lower than our median price, they have had very few showings since it was listed. For the most part, single family houses in Miami-Dade under $300,000 are selling fast and with multiple offers. There are currently only 74 active listings in Miami-Dade on the MLS that were built in 1993 or later, with 3 bedrooms 2.5 baths, under $200,000.
Now is the time to buy a home, really. If you don’t believe me, read who is saying that buying a home now is a smart move.
Fannie Mae is requiring more stringent reviews of loans from lenders so if you are going to be in the market for a home in the near future keep the following in mind:
- don’t incur any new debt, especially between the time you apply for the loan and the closing on your property;
- don’t apply for credit cards or anything that would require a credit check, as they are going to be looking at all credit inquiries, especially those prior to closing;
- do have plenty of documentation on the source of any large deposits as these are going to scrutinized a lot more closely. If you are getting a gift from a relative for the down payment, make sure you have a gift letter. If you are selling stocks or bonds have a copy of the transaction from your financial institution.
Forbes’ article Where America’s Money is Moving states that 8 of the top 20 counties where the wealthiest residents are moving are in Florida. In addition to the weather, beaches, lifestyle, drastically reduced real estate, the fact that Florida does not have income taxes continues to make the state one of the top destinations for high income earners.
The number one destination was Collier County. Though most of the people moving there were from other parts of Florida, many also came from northern cities.