For Sale

These days everyone is looking for a great deal. We probably have all seen on the television, “This mansion sold in 2004 for 8.25 million and just one month ago sold for a 2.25 million.” Maybe not that great of a deal but seeing stories like this leads us to believe that we should all be taking advantage of the next “deal.” Well maybe and maybe not.

The market I follow which is Anna Maria Island and the surrounding areas are a bit different. Sure, Anna Maria Island Real Estate has our fair share of bank owned properties better known as REO which stands for Real Estate Owned. But, it is a much different story on our tiny little island. Where most of the nation sees more than 25% of its for sale inventory being REO, we on the island range between 5% – 9%. For a risk tolerant buyer that wants to live on Anna Maria Island the reward can absolutely outweigh the risk and especially if you have performed a renovation yourself in the past. Below are my top ten list of things to know for REO buyers. Of course this does not cover all the risks and this should merely be used as an aid and I always, always suggest using a local attorney to help through the shark infested waters.

#10) Hire a local real estate professional. Don’t use aunt Ruth who has a full time job but dabbles in real estate on the weekends in another area of the state. You need to use someone that is burning through alot of transactions every year and has a vast array of resources that will be suggested. Who is a good attorney, building inspector, mold inspector, banker and there are many more. You want a REALTOR that works through alot of transactions.  This is best because you want a diverse array of support personnel and the more transactions the more the sales person has seen who does a good job and who does not.  In an REO transaction it is more critical than ever to use someone with experience in this side of real estate.  Sure, I understand why this step may not seem transparent but just give me a few more minutes and you will see why it is here. If you need help finding a good real estate professional check out my blog, top 8 key’s to real estate success.

REO for sale

#9) Hire a good local attorney. Use your real estate professional for guidance if need be. They know who is handling bank owned properties and who will do a good job. If your real estate professional cannot give you a few to call then I suggest you find a new real estate professional. You need a good real estate attorney to help with the title search. Most banks make no guarantee of title.   To put it as plainly as I can, do you want someone 3 years after owning your REO home to come knocking at your door telling you owe them $35,000 for the roof they put on 4 years ago?   Worst yet, banks make no claim that the title is “marketable.”  This basically means that you might not be able to sell your home due to a cloud on the title.  Do you think it is important later some day to sell your home?

#8)  No prorations after closing.  In most cases this is not a huge issue but it is important to understand this especially in the case of new construction.  When property values start to go up then be sure to ask your professional sales person what this could mean in the way of your pocket book.

#7)  Most banks can back out of the contract for whatever reason they want.  Could be because it is a blue sky.  So keep this in mind as you spend thousands of dollars on mold inspections, building inspections and maybe a survey or elevation certificate.  It is not uncommon to spend $3 – $5,000 prior to closing.  Realize, regardless of how much you

Real estate treasure

 spend to prepare yourself to buy the property, the bank can back out anytime and for any reason and you have no claim on the funds spent to prepare for closing.  No refund of money.  Why – cause that is what is in the contract!  In addition, do you think as a buyer they let you back out for any reason?  No way!  Most banks will allow you a period to inspect the property.  Some REO contracts have no contingency period and if that is the case proceed very very carefully and I suggest consulting your attorney.  Consider your deposit up for risk.  Why?  If you put $20,000 down as an escrow deposit and you find the home is ready to fall down and is now worth $200,000 less,with no contingency to back out which would you rather lose?  $20,000 escrow or $200,000.

#6)  Banks will almost never disclose anything regarding the property.  This means as a buyer you are walking around in the dark and have absolutely no idea about any pre-existing conditions.  Most banks will allow you a period to inspect the property after the contract for sale is signed.  If the contract has no contingency for an inspection consult your attorney and be very very careful prior to signing the contract.   Consider your deposit up for risk.  Why?  If you put $20,000 down as an escrow deposit and you find the home is ready to fall down and is now worth $200,000 less than it is worth with no contingency to back out which would you rather lose?  $20,000 escrow or $200,000.  By the way, most banks have a clause in their contract that says they can grab your deposit immediately even if there is a dispute.

#5)  Undisclosed tenants.  This is a doozie.  If there are trespassers or squatters in posession of the property it will be your responsibility to evict using an attorney.  This takes money and time, all of which is a limited resource.  In addition, most contracts state that if there are any security deposits or last month’s rent on hand that will be the REO buyers responsibility.  This all equates to hiring the right building inspector to review the property does not have any evidence of squatters, etc.

#4)  Cannot sue the Bank. This is one of the toughest that will should require strong re-consideration.  Sure you can sue anyone but most contracts require the buyer to reimburse the lender for any costs they incur due to the suit and most require a penalty if the buyer violates the covenant not to sue.

REO Value

#3)  Avoid addenda that states the buyer will take title of all liens, easements, encroachments, assessments and eliminate all obligations of the REO lender to remedy any of these issues.  If you have not already hired legal counsel to help and you see this in the contract for sale do yourself a favor and PRIOR to signing the contract get legal counsel to help.  You will need a contingency time for someone that you have hired to be sure none of these pre-existing conditions exist.  If there is a lien on the property from the local government due to uncut grass  or garbage in the yard of $150,000 and language is in the contract as stated above then you as the buyer will be required to remedy the situation.  Feel like paying an extra $150,000 for your property.  This happens every day and we have seen higher fines than this on Anna Maria Island!

#2)  Read the contract. This may seem obvious but I cannot tell you how many times I have heard buyers state I will sign the contract now and read it later. Also I have heard – I am sure my real estate professional will warn me about the highlights and low lights – NO, this is your money, your investment. Each bank uses a different contact and to read through most sale for contract paperwork, it takes a good 1 hour. So, read the contract before you sign and if you have any questions consult your attorney.

#1)  Did I mention to get help?  The REO lender will not adjust their contract for sale.  This means that you should have a contingency period for inspection of the building, title and any other concerns.  You need good legal counsel to search for title defects, assessments, easements,  you name it.   Could you try an REO buy without a good local real estate professional, probably.  Without a local sales professional your escrow deposit is at risk.  Without an attorney’s assistance there is no question that your entire equity position in the real estate transaction is at risk.  I personally would not want to lose either however it is the buyer’s tolerant to risk that will dictate how to proceed. 

If you have any questions don’t hesitate to email me or call – (941) 345-1288.    If you are in the Bradenton, Sarasota, Longboat Key or Anna Maria Island area looking for a great investment I would love the opportunity to help.  Please note, I am not an attorney and this list is not meant to be all encompassing and only a guide and REO tricks of the trade change often.

Questions?

Professional Real Estate sales agents boast that they provide the best service. So how can all REALTORS^® claim to provide superior service but provide dramatically different results? The thought that continues to come to mind is passion. The 80 – 20 rule applies to any service industry you research. Doctors, Sales Professionals, Medical Professionals, Plumbers, etc. It really does not matter which industry you are researching. Typically anyone can find the person that is within the upper 20% by asking intelligent and educated questions. Thankfully, finding a top 20% REALTOR^® is fairly easy with the right knowledge.

Let me provide a road map to your journey to find the sales person that will educate and aid you in what could be the largest sale of your life time. Below is a list of questions to ask when researching a listing real estate sales person for the sale of your single family home, condominium or duplex. In a later post I will be sure to publish a top ten list of questions for finding an outstanding buyers real estate agent.

Here it goes…

#10) What separates your real estate services from the rest? (The answer to this question should provide very specific examples of what unique services the real estate professional provides. This general question should also provide more information about their REALTOR^® services.)

#9) How specifically will other real estate professionals access your property? (This is more of an insider SECRET that most REALTORS^® won’t tell you. Full time real estate professionals prefer the use of electronic lock boxes. While the cost is substantially higher than traditional manual lock boxes, an electronic lock box allows the listing agent to retrieve a log of exact times and a list of REALTORS^® that have accessed the lock box. If a manual lock box is being used there is a fair chance that your real estate professional is part-time or not the real estate sales person you are

E-Lock Box

looking for! Electronic lock boxes also make for the EASIEST access to your property. Many real estate sales professionals are LAZY and they force agents to come to their office to pick up a key. Remember, 20% of the sales professionals sell 80% of the inventory and they are very busy. Sometimes due to a 30 minute round trip drive to pick up a key they may have to skip your property in the initial meeting with their buyer. They just don’t have time to run and pick up a key. An electronic lock box allows the buyers agent to show up at the home with their client, they use a special hand held device to type in their PIN and whala, two seconds later they have a key in their hand. That is a pretty big difference as compared to driving 20-30 minutes to come pick up a key. Not to mention IF the office is OPEN to get a KEY!)

#8) Will you be placing my home on the local Multiple Listing service (MLS)? (If the answer is maybe, perhaps or no, then run, run, run. Your local multiple listing service allows for other real estate sales professionals to view your home and easily present your home to buyers. MLS is what all other REALTORS^® use to perform searches

Realtor MLS

for their buyers. If the sales agent does not use MLS they ARE NOT a real estate professional. It is like carpenter using a rock instead of a hammer. Seriously, that bad.)

#7) Do you as a REALTOR^® have your own professional website? (A real estate professionals website is a very important tool for a REALTOR^®. It is similar to an engineer without a calculator. If the sales person does not have their own website they most likely are not the real estate sales professional you are looking for. Ask more questions but this is NOT a good flag.)

#6) How do you keep recent with the latest real estate best practices and technology enhancements? Do you have any

ePRO Designation

real estate education designations? (Your potential listing agent should be able to site several conferences, trainings, as well as real estate societies or communities that they utilize to stay in tune with the latest opportunities for listing properties for sale as well as buyer information. If they cannot site examples for you, it most likely means they are not passionate about the real estate industry. One last very important note, be sure your REALTOR^® is part of the National Association of REALTORS^®. NAR)

#5) Does your office offer incentives for selling listings internally? How do the rest of the agents in the office learn of new listings? (The listing real estate office should have sales meetings where they review new listings. A professional sales office will assist in the sale of your property and typically your professional sales agents office will sell 1/3 – 1/2 of their own listings internally because they intimately know the properties for sale. See more below about the REALTORS^® sales office.)

#4) How many sales professionals does your office have? Is the office always staffed by a real estate professional and what are your office’s hours. Are all your agents full time? (This returns to the fact that the office that your REALTOR^® has joined SHOULD review your property for sale in their sales meeting. The important point to this question is instead of having one person selling your property their entire office team will be selling it. In addition, full time sales

Island Real Estate

professionals attract similar like-minded professionals and expect the same from their office. The listing agent’s office should be open 7 days per week with real estate service personnel on staff 100% of the time. This is also CRITICAL because you never know when a buyer contacts a sales professional to review houses. Buyers usuall work Monday through Saturday and only have Sunday available to review houses. A good buyers agent will learn a great deal from their first caravan of reviewing properties with the buyer. Very often expectations of a home are tweaked and during the caravan the buyers are pointing to properties with for sale signs in the front yard. “What about that one?” If your real estate office is OPEN Saturday’s and Sunday’s the sales professional will be able to contact the office for showing instructions AND if there is an electronic lock box on the property buyer caravan will STOP AND GO SLIP YOUR PROPERTY INTO THEIR SHOWINGS. IF, there is no electronic lock box and IF the office is closed on Saturday’s and Sunday’s you are missing out on a high opportunity for interested BUYERS to review your property!)

#3) How many sales transactions do you perform per year and how do you rank among your peers in the community or county. (This is the toughest of all the questions but it needs to be asked. The top 20% that you are searching for will know this information. If the person struggles to answer this question and you get this far in the line of questions there is a fair chance they are in the early stage of their career. In addition, don’t discount a mature sales professional that is winding down. Was the mature REALTOR^® at the top of their game 5 years ago and now they are just starting to settle down? If the answer sounds convoluted or does not make sense you should probably move on to the next REALTOR^®. Does the “newer” sales agent team up with a more experienced sales professional to overcome a lack of experience as compared to a sales professional that has successfully completed hundreds of transactions?)

Real Estate Education

#2) Where does the sales person live? Do you currently have a listing in this location or which of the REALTOR^® current listings is closest to this area? (Does the sales person live and work in the area you are selling your home? This is not a critical item but if you have made it to question two and have two strong candidates to choose from then I would always suggest choosing the REALTOR^® that lives and works in their farm area -farm area is where you are selling your home. They will be able to more readily sell the positives of your neighborhood first hand as well positives of the community and the services that can be found. The second piece of the question is important later on and be sure to write down the address, City AND the price of the listing the REALTOR^® provides you. You will see why in a few minutes.)

#1) Ask yourself. Do I feel comfortable working with this sales person to sell my property? Do our personalities mesh? Does the sales professional listen to my expectations? (It is not necessary to be the best of friends but your conversations should be comfortable. At times you may be faced with offers that create adverse situations and an open line of communication with your listing real estate professional is critical to ensure your large fiscal transaction meets the success you deserve. Open and honest conversations are critical to your successful sale. If your conversation is strained during “small talk” you should move on to the next best sales professional that passes the questions listed above)

0) Sorry, just when you thought we were done, not yet. Now comes a very quick visit to the Internet to verify what you have heard. After the REALTOR^® has left and they have accepted, “I will call in two days with my decision.” Type in the sales professional that has best passed all our questions above and type their name into Google. Their website should

Realtor Logo

readily come up at the very least and hopefully you find several more results that provide some history of how well the person will be marketing your home. Do you see any newspaper ads where the sales professional has been quoted or used as an expert in their field? Now it is time to see the strength of the REALTORS^® marketing campaign. Go to www.Realtor.com and first go to your area and spend about 20 minutes looking at properties for sale and be sure to make notes of which REALTORS^® you see consistently on the website. Hopefully ONE of the real estate professionals that you consistently see has several listings you have come across. Take your list of two or three and make sure you look at a couple of the listings they have. Do they have a Virtual tour or video of the property for sale? Do they have a great description of the property or just a one line description? Are there plenty of pictures on their listings so that it makes it easy for buyers to retrieve more information about the property for sale? It is a known fact that buyers perform hours of research on the Internet prior to walking through any properties. Properties with a good description, plenty of pictures, and a virtual tour are 70%+ more likely to be viewed physically by potential buyers.

If the Real Estate professional of your first choice has plenty of listings. All their listings consistently show great descriptions, plenty of pictures and virtual tours, YOU HAVE FOUND YOUR Listing Real Estate professional. If you did not cross any of the REALTOR’S’^® listings then perform a more specific search with the listing you wrote down from your interview process. IF you have NOT found good descriptions ask your first choice REALTOR^®, why? There may be a great reason but it is doubtful.

If your first search of a REALTOR^® came up short use your list of sales professionals you wrote down while researching Realtor.com and start the process all over again. After going through the process once you will be a pro and for sure the second go around will produce the best Real Estate Sales professional for you.

I want to help!

Of course if you are looking for help to purchase or selling your property in Northwest Bradenton, LongBoat Key or Anna Maria Island, Florida, I would love the opportunity to help. If you have further questions about my services please call or visit my website. (941) 345-1288

For single family residential Real Estate on Anna Maria Island our transaction levels are up over 40% versus 2007. Continuing to be just as impressive are 2008 single family transaction levels. They are up 40%+ versus 2007. Condos and multi-family transactions are substantially up versus 2007 and continues the positive real estate news on Anna Maria Island.

Anna Maria Transaction Graph

Single family residential average square foot values continue to hold steady while multi-family, and condos continue to slip in value.

Anna Maria Real Estate prices

If you are interested in single family property on Anna Maria Island we expect 2009 to begin a modest appreciation period. Condos, vacant land, and multi-family will see a leveling period in 2009. Of course this data is for information only and should not be the only decision making information used to purchase your Anna Maria, Florida Real Estate. Please visit our website for more information on Anna Maria Island as well as Real Estate property for sale.

Property Tips

It seems we need to keep an eye out for scams every minute of our lives. Phishing scams, banking scams and now rental scams. The latest scam takes advantage of Annual Renters however it could be applied to bank owned Vacation Rentals as well.
See the article below thanks to Florida Association of Realtors…

“TAMPA, Fla. – July 14, 2009 – Property managers along the Gulf Coast beware: Criminals in the area are lifting rental listings, fraudulently adding their name as a contact, and posting it on Craigslist. The consumer sees a legitimate listing, but then contacts the criminal to request more information. A report has been filed with the Pasco County Sheriff’s Department regarding a specific incident in Hernando County. According to the sheriff’s office, criminals have gone to extraordinary means to collect the first month’s rent and a security deposit. In some cases, they have drilled into lockboxes and placed renters in properties. Tenants who pay the criminals then believe they have a legal tenancy. The case has been turned over to investigators with the Hernando County Sheriff’s Office, though Pasco County law enforcement authorities also remain on the alert for additional incidents. So far, the problem seems limited to the central Gulf Coast area, but it could be duplicated anywhere in the state. If Realtors suspect a similar crime has occurred, they should call the local police or sheriff’s office rather than try to deal with the problem.”

So how do we become educated consumers to be sure we don’t fall into the craigslist or classified advertisement scam?

#1) When speaking with the individual does the opportunity seem to good to be true?
#2) Ask the person listing the property if they are the owner or a property manager.
#2A) If property owner, ask for their full name and go to public records and verify the address is owned by this

Rental Scams

person.
#2B) If it is a property manager ask for their website and call the number on the website and ask for the individual you were speaking with. All property managers these days have a website!
#3) The lister should have plenty of digital photos of the property. Ask for plenty of photos.
#4) If the lister is promoting a vacation rental most would normally have a website. Check out the website.
#5) Most owners participate in a community organization that helps them rent their property like a chamber of commerce. Ask the lister where they participate and call the community organization for more information. Get the phone number from the world wide web NOT the lister! They could give their girlfriends number and after the conversation you would be no wiser.
#6) If all the above ideas get you no where and the lister has reasonable reasons why you cannot follow through on the points above then I would strongly suggest you move on to another property. If you cannot move on, ask very pointed questions about the property. Where is the hot water heater? Where is the electrical panel? Is there a garbage disposal and a dishwasher?

If renting long term NEVER give money prior to walking through the home. Remember if you have upfront concerns regarding the legitimacy of the lister then walking through the property alone with a potential thief is EVEN WORSE. Is your life worth a great deal on an annual rental?

Information

There is no doubt a great deal can be had by going directly with an owner. With a good deal comes risk. Working with a property management company like Island Real Estate certainly limits a tenant’s or vacationers risks.

For more information on Annual Rental properties available on Anna Maria Island and Bradenton, Fl visit Island Real Estate’s Annual rental website.

For more information on Anna Maria Island Vacation Rentals managed by a team of professionals visit Island Real Estate’s website.

Anna Maria Historical Society

ANNA MARIA, FLA – April 3, 2009 The Anna Maria Island Historical Society (AMIHS) will be presenting its fourth historic marker to The Island Playhouse in Anna Maria at 7 p.m. on April 13th, 2009.

Flood Zone

If you are still searching for your perfect “peace” of paradise be sure to visit Island Real Estate’s website for Vacation Rentals or if a longer stay is required review our Real Estate listings. If you are more in the luxury Real Estate market be sure to visit our new exclusive luxury Real Estate website for the Anna Maria Island and surrounding areas.