"Real People" Are Starting to Buy Florida Homes Again
If You Are Ready, What Steps Should You Take
Posted February 18, 2009
A recent newspaper article stated something that applies pretty generally to all of Southwest and Central Florida. At last,
"real people" are starting to buy homes again. Realtors from Marco Island to Tampa Bay
are beginning to see more prospective buyers who are looking for "homes of their own." Previously, Realtors lately have been seeing mostly bottom-feeders looking to "steal a home" in a short sale or foreclosure
and speculators looking to make money by "flipping" a home as an investment option.
Why is this happening? In large part, this trend is occurring because the price of homes and condos have come down far enough
that the average family can actually afford to buy one again. Previously, in many Florida communities, home prices had become so high that
the average family could not afford to buy one based upon their family income and other non-housing expenses they were already committed to.
In Lee and Collier Counties, for example, existing home sales increased by 155% in January. Across the U.S., in the 4th quarter of 2008 about 41% of all real estate transactions were either foreclosures or short sales.
dramatically reducing the number of such properties on the market and dragging prices down. In Sarasota County, existing home sales topped 500 for the third month in a row after
having fallen below that level for several months in 2008.
Across the U.S., new home construction fell again in January, 2009. New-construction home sales are essentially limited to distress sales of homebuilders’ existing model home inventories plus a few custom homes.
While this may seem like negative news, the fact is that the dramatic reduction in the number of new homes being built helps the real estate industry work off the high volume of homes currently on the market. Again
using Lee and Collier County Florida as examples, the current inventory of existing homes on the market is now down to 4.2 months, a big drop from the 21.5 months supply on the market a year ago. The number of homes for sale in Sarasota
has dropped to just over 4,400 in January, 2009 from numbers far higher than that last year.
So, what should you do about this if you are considering buying a home ? Here are the steps
you need to take to go from "dreaming" to "owning" a home in Southwest or Sarasota Florida:
- Hire a real estate professional.
An important first step is selecting a professional to help you find your dream home. Have a REALTOR® explain the advantages of using a
a realtor acting as your buyer's agent.
- Shop mortgage rates and terms and get pre-qualified (or better, pre-approved) for a loan.
A difference of even half a percentage point can mean a considerable savings over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8% vs. 7.5% is about $35 per month. Over 30 years,
that's $12,600.
Getting pre-qualified determines how much you can afford, whereas pre-approval further indicates to the seller that you really can afford to buy the property on which you are making an offer.
- Outline what you want vs what you'd like.
Create a realistic idea of the property you want... What features are important to you?
Make 2 lists: one of "must-have" items and one of the features you'd enjoy but aren't absolutely essential.
- Tour Homes that meet your needs and affordability.
Ask your Realtor to show you only homes that meet your needs and desires within your affordability. Make notes on what you liked and didn't like on each.
Review your notes frequently to eliminate homes that no longer best fit your goals.
- Know which features that will help or hurt resale.
In some areas, a swimming pool can actually detract from a home's value and make it harder to sell.
Another example; in areas with two-car attached garages, a single-car or detached garage may affect the future value of the home.
Your Realtor can point out features that hurt or help resale value.
- Make an offer on the one home that best meets your needs and desires.
Once you've pinpointed your dream house, it's time to make an offer. Rely upon your Buyer's Agent Realtor's expertise to bring order and calm to the process.
- Arrange for a home inspection.
After your offer is accepted, set up a home inspection. It's common to find problems, many of which are easily resolved. Your realtor can help find a reputable inspector.
- Conduct a walk-through inspection just before closing.
Demand a final "walk through" before finalizing the home buying paperwork to be certain that everything that was supposed to be included in the sale is still in the home and that all committed repairs have been made.
- Close the Sale.
Before closing, your Realtor will help you complete a "closing checklist" and avoid last-minute snags.
- Prepare to enjoy life in your new home.
Before you move in your furniture, take care of some basics: turning on electricity, water and gas, cleaning or replacing the carpet, and notifying friends and the local post office of your new address.
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