Archive for November, 2007

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November 15th, 2007 Categories: Featured Homes

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New Cutler Bay Condo For Sale - Built With All The Upgrades!

November 15th, 2007 Categories: Featured Homes

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Going, Going, Still Here! (or A Not-So-Successful Auction)

November 13th, 2007 Categories: For Sellers, Market Trends, Marketing

Are you trying to sell your Redland home in this market? Have you looked for alternative methods of selling your home? Have you looked at real estate auctions?

Real estate auctions can be very successful. And they can be total flops too. Yesterday I attended the latter at a gorgeous home in the Redland.

The home had been appraised at $900,000 back in June. My trained eye tells me the market value is more like $750K today. Was it an inflated appraisal back in June? Maybe just a little. No matter. The appraisal wasn’t an issue. The bids were.

I had seen the signs proclaiming this coming auction a few weeks back. I had read the small print. I knew what was going to happen because of it. Here’s the small print in a nut shell:

• -Bidders had to register and provide a $1,000 check at registration (no problem. If you didn’t win the bidding, you would get it back)
• -Winning bid had to add 7% as a Buyer’s Premium and that would be the sales price. So if the winning bid is $100K the sales price would be $107K (OK, this sounds good for the seller, but only good for the buyer if he gets the home at an appropriate price. Bidder, set your limit and stick with it)
• -House is sold As-is (no problem here either, you still have an inspection period and can back out if severe problems arise)
• -Seller to provide clear title at closing (good, because anything but is unacceptable)
• -Closing to take place with pre-chosen closing agent (this can be OK, but ordinarily the buyer chooses the closing company as the buyer is paying the title insurance. I’d need to ask more questions about this before I give the go ahead on this.)
• -and the one that I knew would result in a flop of an auction: Seller can accept, reject or counter-offer the winning bid. ah hah!

That last one is the reason the auction failed to reach it’s mark. There were approximately 25 people in attendance. From their nametags, I would guess that 10 of them were from the listing agent’s office. Perhaps another 10 were observers such as myself. The owners of the home were apparently there. They provided some info to the auctioneer and I took them to be the owners anyway. There were 4 registered bidders but only 3 did any bidding.

The low # of bidders was not the reason for this auction turning out the way it did. It was the last item on the list. Why is that last item the one that can make or break an auction? Because it told everyone who may have had an interest in bidding that it was not an absolute auction.

An absolute auction means that the winning bidder wins. Period. His bid does not have to be approved by the seller. The seller has agreed beforehand that he will accept whatever the highest bid is.

Can this be risky to the seller? You bet your sweet potatoes it can! But can it result in a heck of a lot of excited bidders at an auction? Bet those same sweet potatoes on it. Heck yeah.

Anyone who knows that a desirable home can be had for any amount less than the market value is going to try to be there and win the bidding. And once bidding starts, chances are he will get caught up in the furor and the bidding will start going the way a seller wants…up..up..and up!

That’s not what happened yesterday in the Redland. It took the auctioneer about 6 minutes to start the bidding at $150,000 and take it to $350,000. At $350K it stalled. He had a very hard time getting anyone to offer more than that. After some cajoling and dropping down from $400K, $375K to $360K he was able to solicit a bid at $360K. After a little more effort he was able to get it to $365K. But the buck stopped there. Not one of the 3 bidders was willing to bid more than that for this $900,000 home (that I think is worth $750,000).

Will the winning bid be accepted by the seller? My expert opinion is…heck no! Was it a total waste of time? No. I got an article out of it.

Unsuccessful Auction Part II

Spoken by Chris Hotz | Discussion: 7 Comments »

Taking Care of Minor Repairs Before Selling Can Save Your Deal

November 9th, 2007 Categories: For Sellers

Selling real estate in the Redland and the rest of Miami-Dade county, I have seen lots of things happen. One thing Ive seen happen (and its never pretty) is seeing a deal fall apart after inspections.

An inspection during the home buying process almost always generates reasons to renegotiate the contract. But it can also offer the buyer a clean way to make his getaway if hes having second thoughts.

How is this possible? Let me explain. When a buyer makes an offer on a house, the contract has a place where a repair limit is specified. A repair limit means the buyer is willing to take on X amount of dollars in repairs and still buy the house. A larger repair limit lets the seller know the buyer is pretty earnest about buying the home.

But how does anyone know what the repairs will be on the home? An inspector is hired. I always have my buyers request inspections. Most banks require them, but even if they dont, it makes sense for a buyer to spend a few hundred dollars now and save thousands down the road in unnecessary surprises.

An inspector cant tell exactly what the repairs will cost to fix on problems he finds. He can only estimate his best guess. More often than not, he will guesstimate on the side of caution and go higher than the repairs may actually be.

It is not unusual to see minor repairs on inspections add up to hundreds, and sometimes thousands of dollars. But it isnt necessarily accurate to think that it would cost that much to fix those things on your own. Thats an estimate to get a professional to do the work. A home seller can probably do a substantial amount of the work himself and do it cheaper.

For instance, on a report a broken dial on a stove might be $40 to repair but the knob only costs $12 at Sears. A broken window pane might state $200 but if you have The Home Depot cut the glass for you and you know a little something about glazing you can save $150 on the project. A broken doorknob on the closet door might bump up the report by $30 while the knob only costs $7 at The Home Depot and relatively no experience to replace. A leaky faucet might say $50 and all it needs is a $1 washer. Do you see where Im heading with this?

An inspection report could have estimates of $1,500 when in actuality it would only cost you $500 to repair these minor items yourself. While it makes sense to fix these things before hand so you dont have to renegotiate your contract and lose out on $1000 unnecessarily, theres more than $1,000 at stake. The entire deal is at stake.

How does an entire deal run the risk of being lost over minor repairs? Again, it goes back to that repair limit. Lets say, for arguments sake, that the buyer stated in the offer he made that his repair limit is $2000. Hes willing to buy your house for $xyz amount and even if the repairs on the inspection come to $2,000 he is still willing to buy the house. But if the repairs are estimated at $2,001 or more, he has the right to cancel the contract. He may decide not to cancel the contract, but he has every legal right to do so if he wants to.

So if the inspection comes up with a repair estimate of more than $2,000 your buyer now can say œSorry, I changed my mind. I dont want the house. But if the minor repairs had been made before putting the house on the market (at a cost of $500 to the homeowner) and the only thing that shows up on the report is some faulty wiring in the attic at an estimate of $700, the buyer is still bound to buy the house. And its going to cost him only $700 to fix the problem, so hes OK with that.

So dont let your repair limit get filled up with things you can fix yourself. Leave it for the true items that are best left to the professionals. Fix the little things yourself and fix them before you put the house on the market (or start fixing them the moment the real estate agent walks out the door).

In todays market, a qualified buyer is hard to find. Dont let yours get away after you have him. Head to the hardware store and get to work.

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Resting In The Redland

November 6th, 2007 Categories: The Redland

Sunday was a glorious day in the Redland. The air was crisp with the coming fall (at least for an hour or two it was LOL). The sun was shining. A gentle breeze was blowing. I sat on my porch late afternoon and took a snooze. Well, as much of a snooze as my two cats will let me take. The dogs were busy inside barking as well. It didn’t take a lot of effort on my part to ignore them =)
Days like that one make me glad I moved to the Redland. Selling real estate in Miami isnt terribly easy right now. But resting in the Redland is.

I listened to the birds calling. I watched the palm trees swaying in the breeze. I saw the neighbors take their horses for a stroll. They rode them down the dirt road. At the main road they could at least see some cars pass by. I preferred the tranquility of my porch.

Apart from the horses and the neighbors I saw no one else. Our street, like most in the Redland, doesnt get a lot of traffic. Ours gets even less since its not paved. Not many want to encounter the wrath of the mud puddles of a dirt road after a rain.

I closed my eyes half-way and enjoyed the time I spent doing nothing. The next day Id be actively back at work. That afternoon I had been working. But that very moment I did nothing but sit on my porch and enjoy the Redland. I highly recommend it.

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