Estero – Bonita Springs – Naples Real Estate Market

By D. Michael Burke

While the word on the street is that home sales are increasing here in Southwest Florida, it may not necessarily mean that the market is coming back strong – not as of yet anyway. Nationally, speaking, new home sales are increasing, but the overall market is still weak. The point is will Southwest Florida follow suit or can we expect a different outcome based on our market’s unique attributes?

First, let’s look at things on a national level.

Sales of new U.S. homes rose in March and the number of new properties on the market was its lowest since the 1960s, but further gains will be hampered by the broader property glut.

Single-family home sales rose 11.1 percent to a seasonally adjusted annual rate of 300,000, the Commerce Department said on Monday, up from a near record low pace of 270,000 in February when harsh winter weather hit the economy. Analysts had expected a 280,000-unit rate in March.

The market for new homes is being squeezed by competition from previously owned homes and a deluge of foreclosed properties, even though inventories of new properties in March fell to 183,000 units — the lowest since August 1967. Builders, hurt by the weak market, are holding back on new home construction.

While housing now accounts for a fraction of gross domestic product, indications that it continues to struggle may weigh on consumer confidence and have a negative impact on spending. Standard & Poor’s Ratings Services described conditions for U.S. homebuilders as still tough and said it did not expect a significant improvement until next year.

A report last week showed there were 3.55 million previously owned homes on the market in March, well above the natural rate of between 2 million and 2.5 million. Including foreclosed homes and those on the verge of being repossessed by banks, economists say supply is anywhere in the range of 8 million to 9 million. Existing home sales rose to an annual rate of 5.10 million last month. The new home market accounts for less than 10 percent of the overall housing market. Underscoring the risks for new homes, distressed properties accounted for 40 percent of existing home sales last month. Such sales typically occur at 20 to 30 percent below value.

The overall housing market has been hamstrung by a scarcity of jobs and will likely continue to cast a shadow over the broader economy. Bad weather depressed new home sales in the first two months of the year and held back building activity. Much of the anticipated slowdown is blamed on the bad weather that blanketed large parts of the country in January and February and a spike in gasoline prices.

Manufacturing has led the recovery but with the labor market showing some signs of strength, there is cautious optimism that resales could see some modest gains. A recovery for the new home sales market remains far off. The median sales price for a new home fell 4.9 percent in March from a year earlier to $213,800. The spread between the prices of new and previously owned houses is now about $54,200, off a record high of $80,500 reached in January.

At March’s sales pace, the supply of new homes on the market fell to 7.3 months’ worth from 8.2 months in February.

What about Southwest Florida?

As season draws to a close in Southwest Florida the real estate market continues in an upward and promising direction. However, based on national findings, do we still have a long way to go to reach market recovery? No doubt our market was affected just as much but all others, but with great weather and our winter visitors, we may not be heading for as slow recovery as other markets on a national level. Why? The bottom line is that people still want to visit, live and retire here in Southwest Florida.

Let’s look at recent activity in our market.

Mortgage rates rose slightly with the average rate on a 30-year fixed-rate mortgage climbing for a fourth straight week, according to Freddie Mac’s weekly survey of mortgage rates. The 30-year fixed-rate averaged 4.91% this past week, up slightly from the prior week’s 4.87% but down from 5.07% this time last year. Financing is clearly available with 33% of the last 12 months’ sales being financed — compared to 67% of the market sold to cash buyers.

According to local real estate statistics, March 2011 sales increased an amazing 112% from March of 2008. Sales were posted at 1,217 units compared to only 573 units in 2008. The 2010 to 2011 increase was exceptional with a 70% increase overall. This is good news for buyers and motivated sellers as increased activity creates better prices and more offers.

The number of properties under contract rose to an even higher percentage gain with 140% more properties under contract in March 2011. Figures show 1,907 units were under contract in March 2011 verses 791 units in March of 2008.

The median price property in Southwest Florida continues to be consistent and is hovering at $175,000. This trend has remained the same for the last six months which covered our season of October through March.

The median price has remained rather consistent for past three years only moving slightly up or down. March of 2011 the median price, as mentioned, was $175,000. March 2010 was slightly higher at $200,000 and March 2009 recorded the median at $180,000. Overall, the Southwest Florida seasonal market, January through March, closed with a 3% increase.

Collier County was ranked 29th in the State for foreclosure activity with a rate of one in every 196 homes filing. The total was 992 properties in foreclosure which was a decrease of nearly 55% compared with last quarter, and a decrease of 70% from the first quarter of 2010.

The best news is the inventory continues to decrease. We have dropped below 9,500 units on the market. This figure gives us an average of nine months a unit will be on the market in the overall market. New inventory or units on the market was reduced by 16% compared to last year’s new inventory. Basic economics of supply and demand continue to have created some areas of multiple offers on properties for sale.

It is becoming popular for banks representing foreclosures to set the ‘low end’ list price verses an average price. By setting a lower list price, banks are creating multiple offers and have posted sales above the listing price.

The local market saw more activity from area developers this season also. Developers have stepped back to the playing table with huge incentive programs for general realtor sales. It is expected that new development sales will increase as well. WCI is back in Naples with ground breaking at Manchester Square off Livingston Road. Prices start in the $200’s and Andalucía off Whippoorwill Lane has begun a new sales promotion with a new development team where prices start in the $300’s.

Nationally speaking, recovery seems headed in the right direction, but the overall market is still weak. In comparison to Southwest Florida and based on our recent numbers, it seems that Southwest Florida may experience a quicker path to a stronger market. This is surely a sign of better times for this market and the surge of winter visitors, retirees, and homebuyers still continue in an upward trend…and why not? Who doesn’t want to live in Southwest Florida – even only part-time?

Thinking of buying? Now is a great time. Before you start your search, be sure to contact a real estate professional that is keeping a close watch on the market and knows how to interpret the trends!

By D. Michael Burke, P.A. Keller Williams Elite Realty

Michael@CoconutPointRealEstate.com

www.CoconutPointRealEstate.com

Bonita Springs Real Estate / Estero Real Estate / Naples Real Estate

By D. Michael Burke

So, you’re ready to see and you’re putting together your listing information. Your real estate agent should be assisting you with this. However, if you have not selected your agent yet and just want to start thinking about your listing, you should know what agents and buyers typically see as a red flag in a listing. The point is that if you want to get response from your listing, you may want to avoid these listing red flags.

Are you seriously thinking about not including photos? A big no-no.

Including photos in the listing should be a no-brainer, but sellers routinely list properties without pictures, and they do so to their detriment. One red flag in many buyers’ eyes is the lack of photos for a listing. There can be some legitimate reasons for few (or no) photos in a listing: The sellers want privacy, or they have valuables they don’t want in the photos. But many would-be buyers — rightly or wrongly — assume that there’s something wrong

It’s a good idea to have about a dozen photos, but that number isn’t a solid rule. You definitely want to convey a good sense of the property by ensuring the pictures match the description and showcase the the property’s best features. For example, if the listing emphasizes a great view, it pays to have a photo of the view.

If you’re selling in a short sale situation, including transaction details are critical.

In the last few years, buyers have been educated on buying distressed properties, whether it may be a short sale or foreclosure. But many have had not-so-good experiences with the process. No transaction details are big red flag for a distressed property listing.

When the listing says it is a short sale, but does not address whether or not the lender has been informed and approved of the price, it can be a concern. Be cautioned against getting involved when the listing language refers to third-party approval, but fails to identify that party. Short sellers who are able to be upfront about the deal stand a far better chance of attracting the right buyer at the right time.

Don’t over exaggerate or put “fluff” in your listing.

A listing that claims to offer the very best property on the market isn’t going to do you any favors at all. Don’t put outlandish and hyperbolic claims in your listing. Buyers and agents alike will see right through them. While creativity should be maximized to market a listing, these claims can be highly subjective and can be interpreted in many ways by different buyers. Some buyers may be turned off to begin with and some will inevitably be disappointed if the claim doesn’t live up to their expectations. It’s a fine line, but sellers do well to stay away from superlative claims. So rather than describing the house as "the best," a more sensible strategy is to focus on adjectives that are flattering, but leave room for other opinions.

Price your listing accurately, not just to get responses.

A low price sounds like a great way to attract buyers, but if you go too low, there’s a chance your strategy will backfire. A good real estate agent will not suggest a low-price strategy. In that strategy, multiple buyers will be attracted to the low asking price and eventually the sales price will climb close to market value as competing offers bid up the price. However, the strategy is not without risk in that some buyers will be alienated by a potential bidding war.

Even more worrisome is the possibility that a low price will attract unqualified buyers looking to snatch up a bargain. If that happens, the house won’t sell at all, and the seller will have devalued the property with a low listing price.

Beware of “the Flipper”

Believe it or not, phrases such as "newly remodeled" and "recently updated" can be red flags to some buyers because they could indicate that the seller is out to flip the house. That’s not necessarily a bad thing, but sellers should work to highlight any improvements while being careful not to present the home as a flip. This could make buyers and agents leery of improper permits, as well as shoddy remodeling work. So if you’re selling a newly remodeled home, make sure to emphasize that the work was properly permitted and executed at a level any homeowner would be happy with.

"As Is” – a little bit cautious

Selling a property "as is" isn’t all that unusual, and it shouldn’t be a deal breaker. But when you see the term in a listing — especially these days — it can be a reason for caution. These days, "as is" can mean previous owners took everything. While listing a property’s shortcomings has its drawbacks, it’s better to include obvious improvements a buyer will want to make, rather than saying "as is." If it’s clear that the house needs new carpet, it’s better to just say so because any serious buyer will likely use that as a negotiation point anyway. But if you list the property "as is," you could make the buyer think the worst. Your real estate agent can help you assess the best way to approach this.

You want the best possible listing to get reponses and sell your home. Being aware of these red flags will help make your listing speak in terms that buyers and agents want to hear. That being said, make sure you select an agent that follows these guidelines and will lead you down the right path. Your agent’s only priority should be to sell your home and to do it the right way.

If you not sure who to call, I’m confident that I can help you sell your property. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com.

By D. Michael Burke, P.A. Keller Williams Elite Realty

Michael@CoconutPointRealEstate.com / www.CoconutPointRealEstate.com

Bonita Springs Real Estate / Estero Real Estate / Naples Real Estate

By D. Michael Burke

As we know, home prices and sales were affected by a chaotic real estate market in 2010, but ended the year with a nice increase, according to information released Thursday, January 17 by Florida Realtors. Meanwhile, in a separate survey released the same day by the National Association of Realtors, the number of people who bought previously owned homes last year fell to the lowest level in 13 years. But home sales in December jumped to the fastest pace in seven months. The point is that the activity in December does not reflect the remainder of the prior year (in a good way), but it sure seems to be paving the way into 2011. First a look back…

In Lee County, the median sales price was $92,500 in December, up 3 percent from November’s $89,800. There were 1,322 houses sold, up 29 percent from 1,022 in November. Sales include only those assisted by a Realtor. For the entire year of 2010, prices were up 4 percent to $93,700 from 2009’s $90,400. Sales fell 6 percent from 16,260 to 15,207. Statewide, the median dropped 5 percent to $133,100 from $139,800 and the number of sales was up 4 percent from 14,923 to 15,550.

The first quarter of 2010 in Lee County was strong, but we have a few missteps throughout the year that affected the Southwest Florida real estate market. The oil well leak in the Gulf of Mexico started in April and caused buyers to waver as the oil continued to flow, but fortunately didn’t happen in time to dampen the positive effects of a tax credit for first-time homebuyers.

A wave of reports that major banks and law firms had made serious mistakes in processing mortgage foreclosures – including "robo signing," in which law firm officials reportedly signed thousands of documents without reading them – was another blow to the market unfortunately.

Thus, the gap widened between what sellers wanted and what buyers were willing to pay.

In Lee and Collier counties, home prices have been depressed by a record number of foreclosures and high unemployment. Many potential buyers held off on purchases last year, fearful that prices hadn’t bottomed out yet. The poor year for sales ended strong in December. Buyers snapped up homes at a seasonally adjusted annual rate of 5.28 million units, an increase of 12.8 percent from November and the strongest sales pace since last May.

Now, going into 2011, buyers want to buy and are not so inclined to take a step back.

And, with a dwindling number of cheap foreclosed houses hitting the marketplace, prices firmed up in 2010 and may continue that trend as 2011 wears on. I expect to see pricing stabilize with more people up North deciding got act sooner rather than later, especially with blizzard conditions in most of the country right now.

Overall, it’s safe to say that sales of existing single-family homes in Lee County got off to a strong start in January, rising 47 percent from a year ago to 1,115. So, if you’re trying to sell your property, you’ll be relieved to know that your home will sell even though it may not be at a price that will elate you. Of course if you’re in the market to buy a home, you’ll be thrilled. The healing has begun. Lastly, the year-over-year gains in sales and declines in median prices continued the trend of recent months, although fewer homes and condominiums sold in January compared to December.

The good news is that you don’t have to be confused by the numbers, the predictions, and the guessing. All you need a professional who can help you navigate through these waters and to achieve your objectives. Call me now for a free consultation or market analysis; I’m confident that I can help you sell your property or find the home you’re looking for. Call me today at 239-498-7600 or email Michael@CoconutPointRealEstate.com.

Bonita Springs – Estero – Naples Real Estate – As printed in the News Press April 2, 2011

By D. Michael Burke

International buyers are flocking to Southwest Florida to hunt for real estate bargains. These foreign real estate buyers come all the way from London, Toronto and Dusseldorf looking for profitable deals. They search the listings from throughout the Atlantic and come from the tundra region of Canada looking for real estate assets scattered with palms. The point is that international real estate buyers essentially seem to be on a shopping spree. These buyers are very optimistic regarding the overall real estate market, but are aware that this is the best time to make purchases in Florida. And, we welcome them with open arms!

Many are taking advantage of the drop in property prices, but most also see the Florida market as a desirable and secure investment for the future. In fact, during the last 12 months, foreign buyers purchased almost 25% of all the existing homes sold within the state.

According to an early 2011 survey conducted for the Florida Association of Realtors, a majority (65%) of Florida agents worked with an international client within the past 12 months and over 30% of them worked with 5 or more international clients in the same time period. Half of the survey respondents said that international buyers currently make up 25% of their business and 15% said they accounted for over 50% of their sales in the last year. The top international buyers of Florida real estate were Canadians, accounting for 36% of the foreign purchases. Other top foreign buyers included folks from Latin America at 16%, the United Kingdom at 15% and the rest of Western Europe at 14%.

Additional highlights included:

• 11% of foreign buyers bought new construction.
• 51% purchased a single-family home; 37% purchased a condo and 11% purchased a townhome.
• 38% purchased in a suburban area; 30% purchased property in a resort area; 25% purchased in a central city and 7% purchased in a small town or rural area.
• 15% of foreign buyers plan to use their property less than one month per year; 21% expect to use it one to three months and 34% three to six months.
• 81% of foreign buyers paid cash for their property purchase.

Many Real Estate agents are of the view that the interest of the foreign buyers is likely to invigorate the real estate market in the region. Their views are substantiated by the fact that the international real estate buyers not only tend to make purchases in cash, but are also financially secure. This is primarily owing to the fact that most of the countries from which they come have not been battered by the economic turmoil to the extent the United States has weathered in recent times.

Additionally, buyers from abroad would not be foreclosed on provided they are off their jobs. In general, the foreign buyers are always more secure bets for the real estate market compared to any local buyer who may be having plenty of risk in the current fiscal system.

According to statistics made available by a survey jointly undertaken by the National Association of Realtors (NAR) and Florida Realtors, as many as 112,283 members of Florida Realtors finalized approximately 90,000 transactions with foreign clients until August this year. At the same time, the survey states that during the last 12 months, transactions with international buyers contributed to roughly 22 per cent of the existing home sales in Florida.

Enter our Northern Neighbors, the Canadians

Among the foreign real estate buyers flocking Southwest Florida as well as the entire state, the Canadians seem to be taking over the market. Precisely speaking, around 36 per cent of the home sold to foreign buyers in Florida has been secured by the Canadians. According to the survey by NAR and Florida Realtors, this has made the Canadians the biggest segment among the foreign real estate buyers in Florida. Buyers from western European nations were next accounting for as many as 29 per cent deals.

Talking about the trend, lets point out that the investors from Canada has searched for real estate property in Lee County way back in the 1970s, however, their concernment appeared to disappear till about two years about.

Foreign buyers accounted for around 10 per cent of the real estate deals conducted by Island Coast Realty and of this, the Canadians were involved in approximately eight per cent of the transactions. In addition to this, the Canadians also form the bulk of the tourists who visit the region.

Going by the information provided by the Lee County Visitor & Convention Bureau, around 114,765 Canadians visited the region during 2009. In comparison to this, as many as 104,089 visitors from the United Kingdom came to the county, while the number for visitors from German-speaking countries, including Germany, Switzerland and Austria, were 180,155. This statistics was provided by Visitor and Convention Bureau (VCB) that spent approximately $265,000 on advertising, both international print and online, during the 2009-2010 fiscal.

In fact, the dominance of the Canadian real estate buyers has been such that some agents maintain a Canadian telephone number and provide offerings in the Canadian print media.

If you look at the present trend, you will find that the increasing power of the Canadian dollar or the loonie in comparison to the dollar of the United States has actually facilitated the interest of the Canadians in purchasing real estate in Florida. Presently, the exchange rate of the US dollar vs. the Canadian loonie is – one US dollar equivalent to $1.03 Canadian loonie. Moreover, the further northern country has not witnesses any foreclosure disaster or bank failure.

Compared to purchasing real estate property in Canada and other places abroad, the foreign buyer, especially the Canadians, is presently more positive regarding making purchases in Southwest Florida.

While the majority of the international real estate purchasers, which include the Canadian buyers, deal in cash, but the real property agents point out that the existence of as many as five branches of the Royal Bank of Canada in Southwest Florida has been of great convenience in conducting business with the Canadian buyers. It has been easier for people from Canada to acquire real estate property in Florida owing to the initiatives taken by the Royal Bank of Canada. Also, the majority of the lenders having close business relationships with the Canadians, but there were only a few lenders who were presently working with investors from other countries.

The foreign real estate buyers flocking Southwest Florida in search of new property may be categorized into two groups. While the first group comprises those who are searching for second homes, the second group includes buyers who acquire investment property which they want to rent out – in any case till they are prepared to make these their second home in Florida.

While the Canadians have been dominating the real estate market in Florida now, even the buyers from the United Kingdom and Germany have a considerable presence in the region. In addition, international buyers from all over the world have been showing keen interest in the region’s real estate market right now.

According to local real estate agents, while a weak US dollar has been stimulating interest among the foreign investors to acquire property in Florida, headlines and reports in the US newspapers that have been highlighting Southwest Florida as the leading area to find foreclosed properties. These are the two main aspects that seem to be facilitating the revitalization of the real estate market in the region.

Referring to the U.S. newspaper reports regarding the foreclosure properties in Southwest Florida, this has triggered worldwide Internet searches for real estate property in the region.

Are you a visitor from abroad looking for a second home or an investment property? Or, maybe you’re a seller interested in marketing your property to International Buyers? Whatever the case, make sure you get a real estate agent who knows the market well and has knowledge about International sales.

Bonita Springs – Estero – Naples Real Estate

By D. Michael Burke as printed in The News Press.com 12-March-2011

There is good news to share! We are seeing an increase in Southwest Florida home sales, especially in the Naples housing market. In January, pending sales – or the number of new contracts written – increased nearly 36 percent to 1,101. That compared to 810 contracts in the same month last year, according to a monthly report by the Naples Area Board of Realtors. The point is that we are seeing signs of an upward trend here in Southwest Florida. The weather up North combined with attractive home prices have produced higher pending home sales, as well as renewed confidence in our community.

Shelton Weeks, a real estate professor and director at Florida Gulf Coast University’s Lucas Institute for Real Estate Development & Finance, describes the renewed interest as the “wealth effect.” This means buyers are looking at their portfolios and feel wealthier than last year. They feel more confident, which increases the probability that they will buy a home right now.

However, make no mistake – it is not just the wealthy who are buying homes.

Based on NABORs report, here is the breakdown which compares this January to last:

· Pending sales for properties in the $1 million to $2 million price range increased 63 percent, with 52 contracts written.

· Pending single-family sales increased 40 percent, with 536 contracts written.

· Pending condo sales increased 32 percent, with 565 contracts written.

NABOR’s report tracks sales made through its multiple listing service in Collier County, excluding Marco Island.

With the rise in activity, it turned out to be the second busiest January for new contracts in the past 11 years in the Naples, Bonita and Estero markets. The highest January on record was in 2005, when 1,543 sales went pending in the three markets. For the first time in several years, we are seeing multiple offers on properties and while prices remain stable in general, some areas are already beginning to experience supplies of less than one year.

In January 2009, there was a more than three-year supply of non-waterfront, single-family homes on the market in the Park Shore, Moorings and Seagate neighborhoods. The supply is now down to about a year.

While pending sales rose in January in the Naples market, actual sales declined. There were 507 closed sales, down from 562 in January 2010, according to NABOR’s report.

This is due to the slow down during the last quarter of 2010. Everything after June was down. There were many reasons for the sales slowdown seen after June, including the after effects of the massive BP oil spill in the Gulf of Mexico, the instability of the stock market, the shaky economy and a lack of consumer confidence. These contributing factors caused many to back away from buying because of the oil. They were going to wait until it was settled.

The under $300,000 market continues to see the most activity in the Naples market. There were 377 closed sales in this price range in January, down from 392 in the same month a year ago.

In addition, the number of short sales in the Naples market is at its lowest point in over 19 months. This indicates a significant market change.

NABOR started tracking short sales – sales made for less than what’s owed on a mortgage – in July 2009. In January, 76 short sales closed in the Naples area market. That compared to a high of 142 in June 2010.

Many believe this will be an ongoing trend. There was a time when short sales could take 18 months or longer to close, but are now taking 60 to 90 days to close. More pending sales are traditional transactions, rather than the distressed transactions. About 47 percent of the closings in the Naples area market were foreclosures or short sales in January. In past months, it has been as high as 58 percent. The median price – the price at which half the homes sell for more and half for less – dropped to $156,000 in January, down from $180,000 a year ago, in the Naples area market. The average number of days a property was on the market declined 15 percent to 160 last month, down from 188 a year ago.

In Lee County, members of the Realtor Association of Greater Fort Myers and the Beach Inc. recorded 1,039 single-family home sales in January, up 2.16 percent from the same month a year ago. Month-over-month, closed sales dropped more than 20 percent. The association’s statistics reflect all sales made by its members, not just sales in Lee County.

Currently, there are 1,649 single-family homes under contract in the Fort Myers area market. Pending sales jumped more than 31 percent from December to January, with 393 new contracts written last month. Meanwhile, the median price declined to $81,000 in January, down from $85,000 a year ago and $88,000 in December.

Bank-owned homes accounted for the majority of the sales in Lee County last month. More than 45 percent of sales were foreclosures, 20.9 percent were short sales and conventional sales made up the remaining 33.5 percent of the market.

While these shifts in sales and median prices appear negative, the fact is that they represent the seasonal pattern that has been established in the prior three years. This year, as the cold weather hit early in the Northeast and mid-section of the country, many residents of these northern states are visiting our area to escape the winter cold. With attractive prices and stable inventories, this was when many visitors will decide that this is the time to buy.

In the Naples market, there are 9,388 homes and condos on the market. In the Fort Myers area, there are 6,784 single-family homes in the multiple listing service, or MLS.

Whether you’re visiting Southwest Florida and considering a home purchase here or if you’re a year-long resident looking to buy or sell, the time is clearly now to start planning and looking. Be sure to stay informed by learning as much as you can about the Southwest Florida real estate market. That’s where I come in! You need a knowledgeable agent who can look out for your interests and keep you informed about the market!

As published in The News-Press October 30, 2010

Making Short Sales a Viable Option

By D. Michael Burke

How many real estate owned properties do we have on the market right now that could have been short sales instead of foreclosures? Lenders may drag their feet during the short sale process, but the fact of the matter is, a short sale is better for everyone involved. It keeps a foreclosure off the homeowner’s record, of course, but on average the bank loses only 30 percent on a short sale, instead of 50 percent on a foreclosure. And of course, you can’t ignore the benefits to the real estate market: Fewer foreclosures means less of an impact on prices.

My point is, there is strong incentive for us to make the short sale process more easily navigated by homeowners who are in trouble. Luckily, we are already starting to move in that direction with the Home Affordable Foreclosure Alternatives Program (HAFA). The program is designed to shorten the short sale process and make it easier for both buyers and sellers to navigate.

HAFA changes the short sale scene in quite a few crucial ways. First of all, it enables qualified homeowners to get answers on the lowest sale price a lender is willing to accept before they list the house for sale. If the homeowner is determined eligible for the program, they will receive a Short Sale Agreement (SSA), in which the homeowner and the lender agree on a list price, how long the house will be kept on the market, and how much mortgage the homeowner has to pay in the meantime. In addition, the lender agrees not to move to foreclose as long as the homeowner complies with the agreement, eliminating another of the common problems with completing a short sale.

Another issue that HAFA resolves is the length of time it usually takes to complete a short sale. The lender must determine whether the homeowner is eligible for the program within 30 days. Considering traditional short sales could take as long as six months to close, this shortens the wait time considerably. Furthermore, since the homeowner’s eligibility is determined before they list the home on the market, and a list price is pre-approved by the lender, there are no hurdles to left to cross once you list your home for sale. If you get an offer, you don’t have wait for the lender to approve the amount (which is what usually takes so long in a short sale), since they have already determined the lowest amount they are willing to accept.

Obviously, HAFA makes significant changes to the short sale process, streamlining it in ways that enable homeowners to sell their homes and stay out of foreclosure. So what’s the catch? The answer is that not every homeowner is eligible. In order to qualify, you have to meet the program requirements, to ensure that you aren’t engaging in "strategic default" – in other words, that you aren’t missing payments by choice rather than necessity. Because the legislation allows homeowners to get out from under homes free and clear, without any responsibility for the difference between the short sale price and the amount owed on th e mortgage, it is reserved for homeowners who have real need.

Although there are some gaps in who HAFA covers, the legislation is an important step in a necessary direction. Short sales are often ineffective in preventing foreclosures because lenders take a long time to approve a sale price, and in the meantime may start foreclosure proceedings. Therefore the National Association of Realtors has voiced strong approval for a bill introduced in September by Florida’s own Rep. Tom Rooney, which would require the lender to respond within 45 days. H.R. 6133, if passed, would make short sales a viable option not only for homeowners who qualify under HAFA, but for the rest of us as well.

When housing values fell several years ago, they left many homeowners owing far more than their homes were worth. To add insult to injury, jobs have suffered too, and many of these homeowners can no longer afford their homes. While most would prefer a short sale to foreclosure, getting approval from the lender can take so long that many homeowners have been forced into foreclosure anyway. Unfortunately, this has serious implications not only for the homeowner and the lender, but also for the real estate market as a whole.

Obviously, it is in everyone’s best interests to make short sales a more viable option for everyone. If you would like to find out more about the short sale process to find out whether it is for you, or discuss HAFA to see whether you might qualify, please don’t hesitate to give me a call. With my short sale experience and resources, I can help you make educated decisions and successfully navigate this difficult process!

Contributed by D. Michael Burke, P.A. Keller Williams Elite Realty
Michael@CoconutPointRealEstate.com / www.CoconutPointRealEstate.com

By: Michael Burke – Bonita Springs, Estero, Naples, Luxury Real Estate Expert

Published in The News-Press  October 9, 2010

3 Great Advantages of Owning vs. Renting

By D. Michael Burke

Faced with Southwest Florida’s current real estate market, many potential homebuyers respond by holding off, waiting to buy until the market grows stronger. If this is you, you are missing out in more ways than you know. Not only are prices extremely competitive right now, you also may be throwing away a year’s (or two’s or three’s) worth of rent.

My point is, there are many advantages of owning a home instead of renting. When you own a home you have all or nearly all the control, from where you live, to what you do with your home. Furthermore, when you pay toward a property you own, you are contributing to your future, whereas rent paid is money you’ll never see again.

Here are three great reasons to own your home!

Greater Stability

When you own a home, you have more control over where you live. Many of us have had to experience the disappointment when the landlord raises the rent or decides not to renew your lease. When you buy a home, you can’t be forced to leave against your will unless the bank kicks you out for missed payments – and even then, it takes a while.

Of course, owning your home doesn’t necessarily mean you won’t ever have to move, but it does mean that you will have more control over when and why you move. You might have to move because you change jobs or because your family outgrows your home, but you won’t have to worry about finding a new place to live every year or two.

Greater Control

Of course, a huge advantage of owning your own home is that you can do what you want to it. In most rentals, you can’t so much as paint the walls a different color without the landlord’s approval. Furthermore, why would you want to spend that much money on paint for someplace you might live for only a year?

When you own your home, on the other hand, you have complete creative control. You can paint, landscape, and remodel as you please. You can replace fixtures, carpet, and appliances. You can even knock out a wall or enclose a porch if it suits you. Furthermore, all of these expenses are actually investments in your home: If done correctly, repairs and remodels actually help to maintain or even add to the value of your home.

Greater Savings

There are so many ways that owning a home saves you money in the long run, that I could write an entire article on this subject alone. Basically, though, it boils down to a few points:

Tax savings: One of the biggest advantages of being a homeowner is how much you can save on your taxes. All of the money you pay toward the interest is deductible on your tax returns, and in the first few years of a 30-year mortgage, quite a bit of your payments goes toward the interest. Additionally, your property taxes and even some repairs (such as energy-friendly upgrades) may earn you tax deductions or tax credits.

Forced investment: The portion of your payment each month that goes toward the principal is nearly the same as putting that amount into savings. Despite short-term ups and downs in the housing market, housing values always increase over time. When you sell your home, whether four years from now or forty, you will reap the gains in that investment.

Current market conditions: Right now, competitive housing prices and low interest rates enable homebuyers to lock in spectacular savings. Think about it. Housing values are ready to start climbing again, so if you buy now, you invest in property that will only increase in value. Plus, interest rates are so low that if you don’t refinance, you’ll save thousands of dollars over the course of a 30-year loan. In a few years’ time, those who took advantage of these market conditions will be paying less a month to own their home than others are paying to rent.

If you are skeptical about the advantages of owning your home, ask the homeowners you know whether they would ever go back to renting if they had the choice. Most will say no. The security of being able to stay in one place without worrying about moving every year, the freedom of being able to do whatever you want with your home, not to mention the financial advantages of building equity, make it hard to ever go back to a situation where you merely pay to inhabit a place – nothing more.

When buying a home, it is important to find a real estate agent you can trust to help you make good decisions. If you have any questions about why buying right now is a good idea, please feel free to contact me. In addition to discussing the advantages to owning instead of renting, I can show you how much you’ll be saving by buying when prices and interest rates are low – not to mention the signs that the market is on the rise. As I often tell my clients… The numbers never lie!

By: Michael Burke – Bonita Springs, Estero, Naples, Luxury Real Estate Expert

Published in The News-Press  October 2, 2010

What to Do if Your House Hasn’t Sold

By D. Michael Burke

For at least the last year, the real estate market in Southwest Florida has shown clear signs of stabilizing. The number of closed sales each month has risen steadily, and with fewer new listings, our inventory has fallen to a more manageable level. Prices are still competitive, but haven’t fallen in some time – in fact, we have noted modest increases in average sales price in 2010.

My point is, there is no reason in the current real estate market why your home should not sell. If you have had your home on the market for several months and it hasn’t yet sold, there are a few things you can do to improve its chances.

Reassess the Asking Price

Before you set your asking price, your real estate agent should have done a comparative market analysis (CMA) on similar homes in the area. A CMA shows you what homes have been selling for in the last six months, and by calculating the average price per square foot on comparable properties, you can arrive at an appropriate asking price for your house.

If a few months pass and your house hasn’t sold, however, it could be that the asking price is still too high. A good asking price should generate interest in the form of both showings and offers. If your home is getting showings but no offers, the asking price probably needs to be dropped by about 5 percent. If you are getting mostly drive-ups with only a few showings, on the other hand, you should consider a more substantial reduction in your asking price, perhaps 10 percent. Without lots of showings, you won’t get any offers, so your goal should be to set your asking price where it will generate plenty of interest.

Perform a Fresh Analysis

Even if your real estate agent did a CMA when you set the original asking price, a few months have passed. Take advantage of the new sales data available! Maybe the market has changed, and that is why your home isn’t selling. Only part of the purpose of the CMA is to determine the current price. It should also be used to detect upward and downward trends in the market – your agent needs to be able to use what the CMA shows of current trends, as well as their own experience with the neighborhood, to predict what will be an appropriate selling price when you list the home.

Reconsider Your Marketing Strategy

After price, marketing is one of the most influential factors in how quickly your home sells. Even a great price won’t generate interest if no one knows the home is for sale!

A good selling agent will have an effective system in place for marketing the homes they have listed. A great website with state-of-the-art tools is a must, for example: In 2009, the National Association of Realtors discovered that an astonishing 90 percent of buyers start their search online. This means that if your real estate agent doesn’t have a strong online presence, your home may be getting overlooked.

How a home is presented online is equally important. Professional photos, three or four 360-degree views, and virtual tours can make all the difference. Think about it: If most of your buyers are starting their search online, they are likely to overlook listings with just a picture of the front of the house. It is the listing with lots of bright, clear pictures and a virtual tour that is going to generate enough interest to make them request a showing.

If your home has been on the market for a few months and hasn’t sold, try not to feel discouraged. Instead, take action, as there are still things you can do to generate interest and offers. Take a hard look at what you have been doing to sell it so far. Is the asking price competitive with other, comparable homes in the neighborhood? Is the house being promoted effectively? If the answer to either of these questions is no, you may be able to turn things around just with a new asking price or a more effective marketing strategy.

By now it ought to be obvious that your choice of a real estate agent can make a huge impact on how quickly your home sells. A good selling agent should know the neighborhood well enough to be in tune with housing values and market trends. He or she should also make full use of the tools of the trade, including CMAs and online tools. Whether you have a home that is not selling, or you want to know how to set your listing up for success from the very beginning, please feel free to contact me with your questions!

By: Michael Burke – Bonita Springs, Estero, Naples, Luxury Real Estate Expert

Published in The News-Press  October 16, 2010

How Owning Your Home Saves You Money

By D. Michael Burke

Owning your own home is the American dream, yet some people get scared off by the price tag. There is no doubt that owning a home is often more expensive at first, but within a few years that should start to even out a little. In the long run, owning is considerably less expensive than renting, plus it’s an investment – you’ll be able to get your money out of the house again when you sell it.

My point is, although at first your mortgage payments will be higher than what you’d pay in rent, in the long run you’ll be doing yourself a favor by buying your own home. Here is a quick list of the many ways you save money by buying your own home.

Deduct interest paid on your tax returns. Most homeowners have enough deductions to justify itemizing on their tax returns. The way this works: At the end of the year, your mortgage company will send you a statement with the total amount of interest paid over the course of the year. This amount can be deducted from your taxable income on Form 1040 Schedule A.

As long as the interest you paid plus your other deductions totals to more than the standard deduction you can take, deducting your interest will benefit you. Depending on how much your home loan is for and how much interest you are paying, this can actually be a huge benefit. In the first few years of the mortgage term, a higher percentage of your payments will be going toward the interest on the loan, so this tax deduction can really help to offset the greater expense of a mortgage during the first few years. As your payments start going more toward the principal, rental rates will also be rising, so if you don’t refinance, you will actually end up paying less every month in the long run.

Deduct property taxes paid on your tax returns. The annual property taxes you pay on the house can also be deducted on your taxes. This is also found on Schedule A.

Other tax incentives. If you have already bought your home, you may have been able to cash in on one of the biggest tax incentives: the first time homebuyer tax credit, which ended on June 30th of this year. There are other tax incentives, too, though. For instance, on your 2010 income taxes you will be able to get a tax credit for the cost of any energy-saving improvements to your home. This includes new windows, exterior doors, and high-efficiency water heaters, furnaces, and central air conditioning units. Although you have to spend money to save money, if the repair is needed anyway, you can save money on your taxes by making home improvements that save energy – plus you get to enjoy the savings on your utilities.

Save money with competitive pricing. Right now is a unique time. Home prices are pretty competitive, but the market is recovering and sales are rising, so prices won’t stay low for long. Buying when prices are low enables you to lock in those savings, and if you don’t refinance or borrow against the house later on, you’ll be making the same low monthly mortgage payment twenty years from now, when everyone else is paying double.

Save money with low interest rates. In addition to the competitive housing prices, interest rates are hitting rock bottom right now, offering even more savings. Even a percentage lower rate offers considerable savings over the life of the loan. Besides, think about it – by buying when prices AND interest rates are low, you are getting the lowest possible monthly payment. In a few years, when property values and interest rates (and therefore rental rates) have gone up, you’ll be sitting pretty!

Force yourself to invest in your future. One of the biggest advantages to owning your home is that when you make your mortgage payment every month, that money is going somewhere, whereas when you rent you never see that money again.

When you own your home, you are saving money for the future in several ways. First of all, a portion of your mortgage payment goes toward the principal, which you get back someday when you sell the house. In addition, inflation and rising property values mean that when you sell, you will get more than what you paid for the house.

Save money on moving costs, deposits, etc. Of course, buying a home doesn’t mean you’ll stay in it forever, but it does make it more likely that you will settle down and stop moving as often. Those who rent usually end up moving almost every year, because that’s how long the typical lease is for. There are many reasons people don’t stay in the same place for as long when they rent, but a number of the reasons – the landlord decides to raise the rent or not to renew the contract, you don’t get along with them or dislike how they manage the property, etc. – no longer apply when you own your home.

Moving may not seem like a big deal to you, but let’s face it – moving is expensive. Paying a deposit on your new home, renting a truck, maybe even taking a day or two off work to get moved in and settled – all of these costs add up, especially when you are paying them year after year.

Don’t Be Fooled by the Price Tag!

A lot of potential homebuyers are scared away by the cost of buying a home. Buying something comparable usually means a mortgage payment that is a few hundred dollars more a month, more or less depending on how much of a down payment you make and whether you have to get mortgage insurance. Don’t miss the big picture, however. Buying a home means that you lock in today’s price and interest rate; while you may pay more a month at first, in ten or fifteen years that will no longer be the case. Also, the interest you deduct on taxes helps to offset the higher monthly cost for the first few years.

Besides the obvious stability and freedom you achieve by owning your own home, there are a lot of opportunities to save money. For more information on how owning a home can be cheaper, as well as the other advantages of owning over renting, please feel free to call me anytime. My door is always open!

As published in The New-Press Sept 18.2010

5 Insider Tips for Buying or Selling a Short Sale

By D. Michael Burke

The real estate market in Southwest Florida has shown a steady upward trend for about a year now, largely thanks to the competitive prices that buyers are enjoying. The number of closed sales is up, inventory and new listings are down, and prices have even shown signs of beginning to rise as well.

Economists are also predicting, however, that another wave of foreclosures and short sales will hit the market. This can be good news for both buyers and sellers: Buyers can still count on getting a good deal, and sellers can count on said buyers hanging around.

More to the point, though, this means that we aren’t done navigating the sometimes-stormy waters of short sales. To help buyers and sellers through the process, I collaborated with Jackie Nary, the short sale specialist in my office, to put together a short list of insider tips. Regardless of which side of the short sale you are on, here are five things every buyer and seller must know.

1) Hire an agent with short sale experience.

"Hiring an agent with a lot of short sale experience is crucial," Jackie says. Your agent is there to guide you through the process: to tell you what to expect, to guide you in making or accepting an offer, to know what must be done and when, and to keep in touch with the other party’s agent so that both buyer and seller area always up to date.

The seller’s agent, however, is of paramount importance. "This person needs to have lots of experience in the short sale world, have a great success rate, and be persistent in getting things done," Jackie says. "The success or failure of your short sale lies in the hands of the seller’s agent."

2) Expect the process to take time.

You probably already know that a short sale takes longer than a traditional sale, but do you know how much longer?

"Make yourself very comfortable if you are buying a short sale," Jackie says. "I have had them completed in as little as two months, and as long as a year and a half." While it is true that lenders are getting faster at approving short sales, it can be hard to anticipate how long it will take in your particular case. Buyers and sellers alike are better off planning for the worst-case scenario until they are proved otherwise.

For buyers, this means you should not be in any rush to move, and if possible, you should have the flexibility to move quickly once the sale is approved. For sellers, however, the implications are more serious: A successful short sale will require planning ahead if you are to avoid foreclosure.

"The closer a homeowner is to foreclosure, the harder it is to get the short sale completed and beat the clock," Jackie says. "Sellers need to understand the wheels of foreclosure continue to turn even though you are in a short sale situation."

3) Be ready to provide the bank with everything they need.

Sellers take note: The success of your short sale will depend on how well you present your case to the lender. This means having everything ready to go when it is needed, including your hardship letter, pay stubs, bank statements, investment accounts, the past two years of your tax returns, and a profit and loss statement if you are self-employed.

With most of this information, all that is needed is for you to gather the required documents. The hardship letter, on the other hand, leaves room for a little finesse, and accordingly, should be given more time and attention. "If the seller were writing an essay and the winner was to get $250,000, I am sure they would write a great essay," Jackie points out. "Their hardship letter needs to be at least that good, as it could be worth that amount or even more."

4) Maintain good communication.

Since a short sale can take a long time, it is especially important for the seller’s and buyer’s agents to maintain good communication throughout the process. Especially for the seller’s agent, dropping the ball is almost a sure way to lose a buyer. A buyer wants to know how things are progressing and whether the seller is getting any closer to getting approval for the sale.

As Jackie points out, you have already invested a lot of time and effort into marketing your home and negotiating a contract, and letting them lose interest and walk away would mean that you would have to start all over again. "Once you have a buyer, you want to hold on to them. Letting them know you are making progress is one way to do this."

5) Consult a professional if needed.

Finally, many buyers and sellers make the mistake of thinking that just because their agent is experienced with short sales, means they can give advice in subjects outside their area of expertise. "Sellers need to understand that their agent is not a CPA or a lawyer," Jackie says. If you need someone to advise you on the tax implications of a successful short sale, or if you want legal representation during the short sale process, be sure to consult with a professional who can give you the guidance you need.

Successfully navigating a short sale may seem overwhelming, but an experienced agent acts as your guide throughout the process. An agent who knows the ins and outs of short sales will make sure your offer is appropriate and your paperwork is submitted on time, and will keep tabs on the lender while they review the short sale.

If you are planning on buying or selling a short sale, it is important that you hire an agent with a track record for successfully completing many short sales – or an agent whose own experience with short sales is strengthened by having an expert on their team. For further questions, I invite you to contact Jackie Nary, who handles the short sales in my office, or myself.

Contributed by D. Michael Burke, P.A. Keller Williams Elite Realty
Michael@CoconutPointRealEstate.com / www.CoconutPointRealEstate.com