All about houses for sale in Florida

A day or two ago, I came across an article I'd written in 2002 about the subject of houses for sale in Florida (particularly focused on Orlando real estate). It was written at just about the time the real estate market started on the crazy price explosion path that lasted three or four years and it was aimed at UK buyers.

Even though the demand for Orlando Florida property is now at a low level, a lot of the information is still relevant for newcomers to the Orlando real estate scene, so I've reproduced it below.

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"It's just buying a house, isn't it?"

What a surprise - the USA does things differently!

1. The UK
In the UK, a standard approach for a prospective home Buyer is to find out information about properties for sale by searching through newspapers and visiting or phoning Estate Agents in the area of their choice. And now, the Internet is playing an increasing role as Estate Agents and even owners add details to web pages and directories. Mainly, though, Estate Agents market properties and most frequently are the people who show potential Buyers around homes for sale. Their fees are paid by the Seller and they represent the Seller's interests.

The Buyer is usually on his own and co-ordinates advice from solicitors, surveyors and other experts he chooses to bring into the process. Legally binding contracts only emerge after days, weeks or even longer periods of time have been spent in examining everything about the proposed purchase.

2. The USA
In the USA, Realtors take a more collaborative approach. In each major city and region, Realtors enter the properties they have for sale ("listings") onto a common database (the Multiple Listing System or "MLS"). Since it is a common database, each Realtor has access to all of the properties entered onto it by all of the other Realtors with houses for sale in Florida and can show potential Buyers around any of the properties. The Listing Realtor is required to share the fee ("commission") received from the Seller with any Realtor who introduces a Buyer, whether this introduction is from the MLS or from any other means.

The effect is that a wider pool of buyers is reached more rapidly and a sale is achieved more quickly. As in the UK, the Buyer pays no fees, but a major difference is that a legally binding contract is expected at a much earlier stage than in the UK if a purchase is to proceed.

3. Buyer's Agents
Alongside this US approach, the concept of Buyer's Agent is prevalent. In Florida, a Buyer's Agent is a licensed and regulated (by Florida state) professional who provides input and expertise on all aspects of the purchase (including contractual, pricing and virtually all other aspects of the purchase).

Typically the Buyer's Agent is the Realtor who introduces the Buyer to the property in the first place, whether this is a new home or one of the resale ghouses for sale in Florida. For a new home, his/her commission is paid by the Builder. In a re-sale, it's from a share of the commission charged by the Listing Realtor to the Seller. The Buyer thus receives local advice and expertise at no cost - the new home Builder will not reduce his price and the Listing Realtor will not reduce his commission even if there is no Buyer's Agent to be paid.

For an overseas (e.g. UK) Buyer, the local expertise and guidance of a Buyer's Agent is especially valuable - and arguably essential, given the earlier stage at which contracts become binding. Otherwise, for example, how does someone new to the culture, business practices and legal requirements know the risks they may be taking and the rights to which they might have recourse in a potentially expensive and complicated transaction?

4. A Common Mistake
One of the most frequent mistakes made by UK Buyers is to proceed with a US property purchase as if things operated as they do in the UK i.e. they find a home for sale by searching a newspaper, driving by a For Sale sign or by searching the Internet, then go on to make contact with the Listing Realtor.

What is often not understood is that, in the USA, the Listing Realtor is, by law, required to consider the Seller's interests alone and he is prevented from disclosing certain factors affecting the price paid for the property (for example, if the Seller has financial reasons to sell and may accept a lower price). Anything detrimental to the Seller and advantageous to the Buyer cannot ever be disclosed by the Listing Realtor.

Some Listing Realtors will argue that a Buyer's Agent is not required because the differences between the US and UK systems are unimportant, and why shouldn't he argue this way? Without a Buyer's Agent, the Listing Realtor retains all of the commission. And he's far less likely to be asked the difficult questions he or his client would prefer to avoid.

5. New Homes
Let's consider the UK visitor, thinking of investing in a new home, and imagine that he has decided to use the services of a local Realtor as his Buyer's Agent. On a free day, he calls in on a new home development that he's not visited before. This time, he's unaccompanied by his Buyer's Agent, but he's had some guidance so he's ok, isn't he? Maybe not - there are still some pitfalls to beware of.

Builders are obviously very keen to attract people to their Model / Show Homes and they spend large sums of money to get them there - advertising, brochures, property shows and so on. The Sales Agent in the Model Home is employed by the builder (or in some cases, the developer, which to all intents and purposes for this example is the same). The Agent has usually received sales training and is often highly experienced in sales psychology - how to "push" the sale along and overcome every possible objection, with the goal of obtaining an agreement to purchase regardless of the wider implications for the Buyer.

However, despite any statements to the contrary, Agents are not independent and they do not (and legally cannot) act exclusively on a Buyer's behalf. They cannot, for example, be expected to highlight:

• Both the merits and de-merits of the extras they enthusiastically persuade a Buyer to add on to the basic home - e.g. tiling, upgraded carpets, more expensive bathroom fittings. Do these really add value to the home in the terms of rentals or resale, or is it just that they generate a disproportionately high commission for the Agent? Would these extras be of no help, or even detrimental, in circumstances where re-sale to a US buyer was later contemplated

• The particular advantages of one plot versus another, both for rental purposes and in the event of a resale - for example, the order in which plots will be developed and the extent to which building work will continue around a given plot for months to come

• The reason for certain plots being discounted or promoted - is it because of further, more attractive phases coming on stream soon, de-valuing the current plots even below the discounted price?

But the Buyer can still fall back on his appointed Buyer's Agent later, can't he?

Maybe not - the Buyer who registers when he walks into the Builder's office alone or gives out his personal details may have lost his right to Agent representation. That's how the system works. There is a Buyer's Agent commission built into the selling price each builder calculates, but few reputable builders will reduce the price where an Agent is not involved.

And consider this: can a Buyer trust a Builder who is prepared to give an "under the counter" price reduction? If the Builder will break agreements he has made with others in the industry (other builders and Realtors), what regard will he have for one lone UK buyer when it comes to honoring contracts and warranties? Food for thought!

So what?

We believe there are several conclusions to be drawn from all of this:

• Buying Florida property has unique issues and characteristics and it is significantly different than the UK - and Florida in particular can be a minefield for the unwary. Recognize this and plan accordingly
  

• Be cautious - make sure you've done your homework and thought through your next steps before moving ahead

• Get the right advice - use a Buyer's Agent and work with him to ensure you are fully armed

Conclusions:

We admit it: we're biased - we make our living as Buyer's Agents, but a major part of our commitment to the work is because we believe we add immense value to out-of-state and particularly overseas vacation home buyers.

If you don't like our style or approach, that's fine - but please make sure you do get professional advice from at least someone who can help you with what, for most people, is one of the most expensive investments of their lives.

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So there you are - that's a fairly simple explanation of the process of buying houses for sale in Florida but if you have any questions, please just get in touch.

Any Signs Of Life In The Florida Real Estate Market?

Just like the rest of the country, the Florida real estate market is trying to figure out exactly how this week's Washington DC news about home owner bail-outs will work. It looks as if we'll have to wait for a couple of weeks to see exactly what the rules and regulations will be:

"Who won't be helped by housing fix? . . . . The jobless and many of those who owe far more than home is worth won't benefit much from Obama's foreclosure prevention plan."

Source: CNN

"The program, which begins March 4, allows borrowers to refinance into 15-year or 30-year fixed-rate mortgages at the current market rate, which hovers around 5%. This could benefit those whose mortgages carry higher rates or those in adjustable-rate or interest-only loans, groups of people who could see big rate spikes in the future. The plan, however, will not reduce the loan balance."

Source: CNN

And in the meantime, there are signs of growing unrest about the Stimulus Bill (or "Generational Theft Act", as John McCain and others have described it):

"It’s been called “the rant heard around the world,” after The Drudge Report linked to the video with a screaming red headline. However Rick Santelli may have given CNBC viewers a preview of what effects Obamanomics will have on the populace . . . . On CNBC’s “Squawk Box” Feb. 19, the Chicago Mercantile Exchange floor reporter, along with several traders, expressed his outrage about President Barack Obama’s plan to “spread the wealth” for people that didn’t deserve it. He said a stimulus should go to people who live responsibly rather than some sort of housing bailout to people that lived irresponsibly."

Source: businessandmedia.org

But in the middle of all this turmoil, how is the Florida real estate market doing?

Well, there are some signs of life:

"New contracts: for the three months to January 2009 there were 5797 new contacts, compared with 3455 in the same period last year. A 67.8% increase . ."

Source: Orlando Realtors data

And some professionals are seeing positive signs:

"It seems that all of the people who WANTED to buy but were just waiting are entering the market! . . Miami and Florida was one of the first areas to be hit by the slow down, so I am hoping that our turnaround will be a sign for better things to come for our area and the rest of the country."

Source: activerain.com

But the market is, of course, still heavily biased in favor of buyers:

"Our real estate market here in Brevard County is flooded with short sales and foreclosure properties. There are some absolutely fantastic deals for buyers today. There are short sales at under $100,000 that are 1700 square foot homes, 3 bedroom, 2 bath, 2 car garages, on .23 acres, 2-3 years old, many never lived in. The deals are phenomenal!"

Source: activerain.com

And there are real doubts held by some observers that the steps already taken will lead to a recovery:

"Foreclosure Glut Clogging Courtrooms; Will Obama Make it Better or Worse? . . . Am I alone in thinking that perhaps the real bailout is for lawyers and judges to handle all the upcoming foreclosure cases that result from this plan?"

Source: biggerpockets.com

The conclusion? There's obviously a long way to go yet before Florida real estate regains even a little of it's attraction for many buyers.

Homes for sale in Orlando Florida - any signs of progress?

One way to check how the market of homes for sale in Orlando Florida is doing is to look at the monthly statistics issued by the Orlando Regional Realtors Association. The data covers:

". . . all listings taken or sold by ORRA brokers, regardless of location and is exclusive to residential property, which includes townhomes, duplexes, single-family homes, and condos. It does not include vacant land or commercial transactions."

So even though it doesn't include everything (for example, For Sale By Owner properties) it does represent the majority of what's available and it is a good measure of market status in the Central Florida real estate market. The Association covers Hillsborough, Lake, Orange, Osceola, Polk, Seminole, and Volusia counties.

Numbers for January 2009 were issued last week so let's take a look:

1. Inventory: As of the end of January 2009, the Realtors Association had 22613 homes for sale in Orlando Florida actively listed for sale. That is 12.1% better than January 2008, when the figure was 25724, so it does show an encouraging downward trend - but there is still a long way to go. With closed contracts averaging approximately 1200 per month, the latest inventory number represents around 18 or 19 months' closings. Some industry experts believe that number needs to be between six and twelve months' closings before the market is healthy again. Just by way of a contrast, four years ago when the property boom was at it's height, the inventory number was 3317!

2. New Listings: in the three months to January 2009, 11394 new listings were taken, 8.8% down on the same period one year before. That's one of the factors helping to reduce the inventory and it looks as if a fall in prices and long lead times to sell are reinforcing the message that, if you don't really have to sell, keep hold of your property until the market recovers.

3. New contracts: for the three months to January 2009 there were 5797 new contacts, compared with 3455 in the same period last year. A 67.8% increase, undoubetedly reflecting reduced prices, and reduced interest rates. Orlando properties are now more affordable. The January ORRA report also states that

"The median price of Orlando homes sold in January ($148,274) decreased by 33.06 percent compared to January 2008 while the area’s average interest rate dropped to its lowest point since May of 2005, creating market conditions that further tilt in favor of buyers."

- an enormous change!

4. Expired and withdrawn: A total of 10289 listings expired or were withdrawn during the three month period. In the three months to January 2008 this figure was 11845, so the trend is in the right direction. It is quite remarkable when you compare the 10289 number with New Listings in the same period: it tells us that for every 10 people who listed their home, another 9 took their property off the market. Clearly there will be some duplication here (some expirations will re-appear as new listings later) but it does highlight the difficulties faced by Sellers (if any highlight was necessary).

So there you have it: in summary, some progress but still very much a buyers' market. Still quite a way to go so we need more good news for the next few months. Maybe, just maybe, something useful will emerge from the Washington DC merry-go-round of stimulus, bail out and spending to energize real estate markets. Certainly a lot more progress is needed before those with homes for sale in Orlando Florida can expect a comfortable ride.

Homes For Sale In Florida - The First Questions To Ask

When you begin to look for homes for sale in Florida, there are several key questions that you should ask yourself right at the beginning, including:

1. Why are you buying?

Perhaps this is the most basic question, because it influences the answers to almost all of the other ones. If you’re already in Florida and just moving house, or if you already have family contacts here, you will already have some appreciation of where to get information, who can help and maybe even where to look.

But if you’re retiring from a colder climate in the USA, say New York or New Jersey, then Florida may be a very different place to the one you’re used to – and although all parts of Florida are hot, some are hotter and more humid than others!

If you’re buying a second home, you’ll need to know those locations that welcome such residents (and those that penalize them).

If you’re buying for investment purposes, focus on the places that are expected to recover most strongly from the current downturn.

2. What type of property?

Large or small, single family home or condo, ocean front or inland, money-no-object or as cheap as possible – there are enormous choices and each will help to focus your search.

For most people, budget constraints will dictate what type of property and will narrow down the locations available. Take account also of the latest loan finance programs that are available (if you’re not buying free and clear). You may need to get pre-approved for financing before going too far, because more and more sellers are insisting on that before taking any buyer seriously.

3. Where in Florida do you want to live?

Each area has different characteristics. For example, Miami is a large, sprawling city with lots of nightlife, multi-cultural populations and easy access to the Florida Keys. The South West e.g. Naples is a relatively expensive area with a high proportion of retirees – it has traditionally been a favorite of German buyers.

Further north, the Gulf Coast area around Tampa is less expensive (generally!) with a beautiful coast line and a great climate. Central Florida is dominated by theme parks and is a tourist favorite, with a concentration of single-family vacation homes and condos to the South West of Orlando.

Equally, areas further north such as Daytona, Jacksonville and Tallahassee have their own characteristics, plusses and minuses – and it’s for you to decide exactly what you need or want, of course. But until you do, you have a vast area to explore!

4. Who do you need help from?

Information is available everywhere - web sites; newspapers, referrals from friends or relatives, magazines in gas stations and supermarkets, Realtors, and so on and so on. Only you can decide whether you want to go it alone or get some professional help before you spend the big sum of money that homes for sale in Florida require.

If you're experienced at buying property, you may find the home buying process enjoyable. At the very least, you could try some Internet research to see how far you get first (and a recent report indicated that 70% of buyers now do that).

5. When can you visit to look around?

Technology is great and the Internet provides a fantastic preview of what’s available. Virtual tours can tell you a lot about a property. Ultimately, though, you can only get a true appreciation of whether that dream house is really what you want by paying a visit in person. If you need to move quickly, scheduling a visit is essential of course. If you can only move after you've sold your existing home or retired or sorted out other personal issues, you can be more relaxed. Whatever your circumstances, though, please make sure that you plan a personal visit before making any commitment. Hard though it is to believe, some buyers have purchased without this basic safeguard - and found out the hard way!


For more information on these and other questions, please check out more pages on this website.

Is Naples Florida Real Estate On The Mend?

Some recent news reports about Naples Florida real estate suggest that an upturn may be on the way. It may be too early to celebrate yet, but there are actually a few positive signs out there - for example, consider these:

• Coldwell Banker, February 2009: "The third highest sales price for Florida was in Longboat Key at $3,300,000. Three of the top sales in the Southwest Florida area include Cape Coral (at $1,825,000), Marco Island (at $1,250,000) and Naples (at $1,100,000). These international buyers are from Canada, the U.K. and India."

• Toll Brothers, January 2009: "FHA mortgages . . . . Naples was approved with the highest limit in the state, ranking higher even than Palm Beach. Naples has maintained strong market values even in a slumping economy. We are seeing buyers from Canada, the U.K, France, Germany, India, Denmark and Egypt buying property in our area."

• Bonita Bay Group press release, January 2009: "Buy-Now Urgency Hits The Naples, Florida Real Estate Market . . . . the 2008 sale of 11 multi-million-dollar model homes in its upscale Mediterra community to the market's realization that now is the time to buy."

Ok, ok, so they're all builders or Realtors and they have a vested interest in talking the market up. How about banks in South West Florida?

• News-Press.com, February 2009: "Some SW Fla. banks see light at end of the tunnel . . . the pace of new foreclosures is slowing and housing prices may have bottomed out . . . The median price of a house sold with the assistance of a Realtor increased."

So Naples Florida real estate may not be back to the boom times of a few years ago, and we may need to wait and see how the latest stimulus / bail out / financial contortions play out over the next few weeks. But don't you think that to some extent the gloom can be self perpetuating? After all, if overseas buyers are still to be found, even with the dollar exchange rate at the level it is, just imagine what will happen when the expected dollar weakness materializes later this year - could another boom follow?

So if you really believe in Naples Florida real estate, remember how fortunate we are to live in this climate, stay positive and keep working hard!

Orlando Florida property - how to find the information you need

The Orlando Florida property market is diverse and covers a wide area. Before diving in, think about some of the different geographical parts:

• North of the city contains some of the upscale residential areas including Winter Park and Longwood. The more expensive localities such as Windermere and Isleworth contain high quality and individual properties and are home to celebrities such as Tiger Woods and Shaquille O'Neal. You can also find a wide range of lower-priced but remodeled apartments and condos, especially in areas such as Metrowest, that are close to the upscale Millennia Mall and convenient for the downtown business area.

• Disney World and other theme parks are located to the south west of Orlando and are obviously a major draw for tourists – including the traffic jams that brings! Slightly further away from Orlando, in Kissimmee, Clermont and Davenport, there are thousands of homes and condos in vacation-home communities: absentee owners own a high proportion of these as either second homes or investment properties. There is a well-developed property management industry supporting the short-term rental industry as tourists learn ever-more about this option.

• Orlando Florida property in the university area to the east has experienced tremendous growth during the past 5 years. It has very competitive prices and many new sub-divisions. It is also very convenient for leisure trips to the coast and to the NASA facility used for Shuttle launches.

• The major international and scheduled flight airport is to the south of the city. Sanford Airport to the north is used by many UK charter flight companies.

So if you’ve narrowed down your interest in Orlando Florida property to one area, what next?

One major issue is that you probably have too much information, much of which can be confusing and just plain misleading:

• The majority of buyers start out a property search by using the Internet. That’s a great place to begin, but keep an open mind as many websites are out of date. Try Realtor.com, Trulia.com and Zillow.com – but take any valuations they claim to provide with a pinch of salt!

• Newspapers contain current data about Orlando Florida property for sale, including both new and resale homes. Try the Orlando Sentinel.

• Realtors obviously specialize in local areas and cost you nothing – the seller pays their fees. But look for one who has been in the business for some years and who is prepared to challenge your assumptions if you want the best service.

Ultimately there’s no substitute for an on-the-ground visit – that’s just as true of Orlando Florida property as it is of any other area, despite the growth of computer technology, virtual tours and slick marketing.

Find out first hand and your Orlando Florida property experience should turn out to be a successful one.

Is Now The Right Time For Buying Florida Property?

It's a fascinating, challenging and exciting time if you're thinking of buying Florida property - especially if you're in the market for a holiday home. But with turmoil in the economy, especially with all the bad news we're hearing about real estate, banking and job prospects, it is not a purchase to take lightly!

Just a few short years ago the situation was very different: there were more buyers than sellers, builders held waiting lists for properties in the most popular new communities and many out-of-State and UK buyers simply took the view "how soon can I buy and where do I sign".

How times change! Instead of sunshine and relaxation springing to mind, the first topic for many people when the subject of buying Florida property is discussed now is "foreclosure", followed by an intense debate on how things might go in the next few years. How much of a faraway dream a holiday home has become and how quickly.

Looking back, and it's easy to see now, the late 90s and the first part of the 21st century were a once-in-a-lifetime occurrence as far as buying Florida property is concerned. Before that, most people buying a holiday home in Florida were careful to look at realistic expectations of income and expenses before deciding whether to go ahead. Even if they took a rose-tinted view of their plans, finance companies applied sane criteria in an attempt to rein in over-ambitious borrowers and safeguard their loans.

Then came the boom years. Financial prudence went out of the window and a level of hysteria took over. Loan restrictions were eased. Stories about buyers "flipping" properties for an instant profit were commonplace and fired up a whole new wave of investors. And some less-than-honest sales people were able to get away with wild stories about likely rental income because property price increases more than covered any shortfall.

Eventually the game came to an end, as it was always going to. Property price increases were unsustainable. Reality has re-emerged: buyers need to take a realistic approach and recognize that a return to the normal rules of business has happened: don't buy what you can't afford to "carry" in the event of a downturn, take a pragmatic view of income and expenses and realize that prices can occasionally go down as well as up. Buy for the medium to long term and expect some "bumps" along the way. Equally important: don't believe the salesman's claims without extensive checking.

It's a major purchase you're planning, so make sure you avoid the pitfalls and try this website for lots more information: Buying Florida Property.

Good luck and happy buying!

Buying Florida Property

Welcome to Buying Florida Property.

This site provides information and help for anyone who is considering buying Florida property for use as a vacation or holiday home. If you have questions not covered in here, please feel free to use the contact form at Buying Florida Property