Monday, August 20, 2007

What are buyers in Miami Beach thinking?"

As a Realtor in the Miami Beach area we deal with many buyers who are a bit hesitant and wondering where the Real Estate market will lead us into.....Here is an excerpt from a buyer of mine and his reason for not buying at this moment, mind you this buyer is a cash buyer and does not really have to worry about interest rates going up so the decision not to buy now is based on waiting for prices to go down a bit while most buyers want to lock in the low rates that we have now instead of waiting to see how the market will do and risk rates increasing.

....."Our opinion is that the Miami market is still too volatile, and ripe for further market correction. The continuing eroding of the secondary finance markets as well as the Fedral Reserves continued resistance to easing Fed funds, leads us to believe over built and or over priced markets still have considerable downward market pressures that may well result in market freefall. Particularly areas of over saturation of similar product such as is the case in Miami and Miami Beach areas. The Miami Beach and Miami condo market appears to be a particularly oversaturated market. Therefore, while we are still very interested and committed to a property acquisition in the South Beach area for our needs, we feel it prudent to wait and see how the Miami Beach and Miami condo market reacts to the continuing market instability...."

I do agree and I think the market will settle with prices falling a bit, in the long run everyone will benefit once the market corrects itself

Wednesday, August 16, 2006

Internet buyers now Typical

The most typical buyer for Real Estate in a recent study done by CAR the California Association of Realtors in 2006 has been the Internet Buyer. The internet buyer is wealthier, younger, better educated and probably married than your traditional home buyer according to the survey CAR conducted. Also, internet buyer reported being more satisfied with the home buying process than the traditional buyer.



But in the last several years per CAR the two types of buyers have been converging and the survey that was done examines this issue.



Your internet buyer has become the typical homebuyer but there are some distinction between the internet buyer and the traditional buyer. Since 2001 homebuyers using the internet for the home buying process jumped to 70% almost a double of what it was.



The use of the internet has changed the way business is done between the buyers and their Realtors as well as the way business is done through the Real Estate industry. The role has improved the Realtors
role in the real estate transaction because of the way the homebuyers have been using the internet as very useful tool in their home buying process.



Using the internet the nice out of ten internet buyers said the internet helped them understand the home buying process much better and also indicated that they were more in contact and in better communications with their Realtor along with faster response times.



Because more internet users have faster access to online information, they are able to receive quicker information about products and services. This same need for quick information has also been used for learning more about the home buying process and how it works and to help them be more educated and return this give the buyers a sense of control over the process when buying a home.



The traditional and internet buyer have said that their experiences in conducting home searches was much different than each other. The internet buyer did alto of research about the process of buying a home verses the traditional home buyer relied more on their Realtor for how the process is conducted



Other Findings by CAR




  • The median age of the internet buyer was 39 and the traditional buyer was 42.

  • More than nine out of ten internet buyers were married while the traditional home buyer was eight out of ten.


  • Internet buyer spent 2.2 weeks looking for a home they ultimately purchased versus a traditional buyer spent 7.1 weeks

  • 54% of internet buyers said that the information they found on the web was less useful than the information given by their Realtor.


Tuesday, July 04, 2006

Why Choose a Miami Beach Realtor®

Why Use a Miami Beach REALTOR®?


All Miami Beach real estate licensees are not the same. Only Miami Beach real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.


Real estate transactions involve one
of the biggest financial investments most people experience in their lifetime.
Transactions today usually exceed $100,000. If you had a $100,000 income tax
problem, would you attempt to deal with it without the help of a CPA? If you
had a $100,000 legal question, would you deal with it without the help of an
attorney? Considering the small upside cost and the large downside risk, it
would be foolish to consider a deal in real estate without the professional
assistance of a REALTOR®.


But if you're still not convinced of
the value of a REALTOR®, here are a dozen more reasons to use one:


1. Your REALTOR® can help you determine
your buying power
-- that is, your financial reserves plus your borrowing
capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.


2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.


3. Your REALTOR® can assist you
in the selection process by providing objective information about each property.
Agents who are REALTORS® have access to a variety of informational resources.
REALTORS® can provide local community information on utilities, zoning. schools,
etc. There are two things you'll want to know. First, will the property provide
the environment I want for a home or investment? Second, will the property have
resale value when I am ready to sell?


4. Your REALTOR® can help you negotiate.
There are myriad negotiating factors, including but not limited to price,
financing, terms, date of possession and often the inclusion or exclusion of
repairs and furnishings or equipment. The purchase agreement should provide
a period of time for you to complete appropriate inspections and investigations
of the property before you are bound to complete the purchase. Your agent can
advise you as to which investigations and inspections are recommended or required.


5. Your REALTOR® provides due diligence
during the evaluation of the property.
Depending on the area and property,
this could include inspections for termites, dry rot, asbestos, faulty structure,
roof condition, septic tank and well tests, just to name a few. Your REALTOR®
can assist you in finding qualified responsible professionals to do most of
these investigations and provide you with written reports. You will also want
to see a preliminary report on the title of the property. Title indicates ownership
of property and can be mired in confusing status of past owners or rights of
access. The title to most properties will have some limitations; for example,
easements (access rights) for utilities. Your REALTOR®, title company or attorney
can help you resolve issues that might cause problems at a later date.


6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.


7. Your REALTOR® can guide you through
the closing process and make sure everything flows together smoothly.


8. When selling your home, your REALTOR®
can give you up-to-date information on what is happening in the marketplace
and the price, financing, terms and condition of competing properties.
These
are key factors in getting your property sold at the best price, quickly and
with minimum hassle.


9. Your REALTOR® markets your property
to other real estate agents and the public.
Often, your REALTOR® can recommend
repairs or cosmetic work that will significantly enhance the salability of your
property. Your REALTOR® markets your property to other real estate agents and
the public. In many markets across the country, over 50% of real estate sales
are cooperative sales; that is, a real estate agent other than yours brings
in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information
about your property to other real estate agents through a Multiple Listing Service
or other cooperative marketing networks, open houses for agents, etc. The REALTOR®
Code of Ethics
requires REALTORS® to utilize these cooperative relationships
when they benefit their clients.


10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.


11. Your REALTOR® can help you objectively
evaluate every buyer's proposal without compromising your marketing position.
This initial agreement is only the beginning of a process of appraisals,
inspections and financing -- a lot of possible pitfalls. Your REALTOR® can help
you write a legally binding, win-win agreement that will be more likely to make
it through the process.


12. Your REALTOR® can help close
the sale of your home.
Between the initial sales agreement and closing (or
settlement), questions may arise. For example, unexpected repairs are required
to obtain financing or a cloud in the title is discovered. The required paperwork
alone is overwhelming for most sellers. Your REALTOR® is the best person to
objectively help you resolve these issues and move the transaction to closing
(or settlement).








Copyright NATIONAL ASSOCIATION OF REALTORS®



Thursday, June 08, 2006

What is a "Buyers Market"

To most Realtors a typical market in real estate is when homes stay on the market at least on average six months before they sell. Realtors keep track of the DOM or the Days on the Market of all homes listed and sold.

If the number of DOM "Days on the Market" goes above six months then it is typically said it’s a Buyers Market if goes below six months then it shifts to a Sellers Market. As we are seeing now here in Miami Beach in the surrounding areas of Miami-Dade County and Broward County and South Florida the last three years and more have been a really nice Sellers Market demanding any price and getting what they ask for. The market now is slowly shifting into a Buyers Market and the homes are taking longer an the inventory of homes have increased. Now the Buyers have a lot to choose from this inventory we have here in Miami Beach and the surrounding areas.

Winter time is said to be a Buyers Market. In slow times, homes for sale are marketed aggressively and would sell for a lower price versus if the home was marketed during a busy period.

Come Spring time the activity picks up with more homes coming on the market since this is when families (typically still considered the largest buyer demographic) tend to want to buy their home so they can move during the summer season.
But a Buyers Market can still exist during this season if the DOMs get longer, falling prices and a large inventory for buyers to choose from.
Buyers market can lag around for a while if a large employer in the area closes its doors, natural disasters such as they experienced in New Orleans when Hurricane Katrina came rolling in and of course here in Miami Beach with Katrina and Wilma and Charlie, Hurricane seasons affects the market in such a way for DOMs to be longer. All this can affect home values for years.

Once homes for sale become competitive, buyers realize they can choose from many since the inventory is so large. Material things in homes become bargaining chips for buyers like the expansive chandelier or the expensive curtain. Buyers can demand those items be part of the home for the sale to take place.
Other contingences the buyers would ask for are possible costs to be off set for example to pay for some of the closing costs or maybe even a home warranty.

One thing for sure is that the market is never one sided. At any given time the market can shift and the turn of a dime. An area that has seen depressed times can spur many investors to reinvest into an area because of the low prices and shift the market the other way with prices being driven upwards as we have seen here in recent years in Miami Beach, Doral, Homestead, Miami Shores, Biscayne Corridor and Downtown Miami.. For more information about your market conditions contact your Realtor Randy Haddadin a Miami Beach Realtor at 305-903-9850.

Friday, May 19, 2006

Agents: So you want to enter the Luxury Home Market!!!

Entering this high end luxury of the real estate business Realtors need to concentrate on two items: Service and Competence followed by a sophisticated marketing plan. To woo these affluent buyers and sellers agents need to know a few things about doing business with them.

Affluent clients care about price: value equation than about the price alone. This means these types of affluent clients do not mind paying a premium for products and services you have to offer. With this in mind, Realtors who are seeking such clients need to really differentiate themselves and be really unique compared to their fellow Realtors are also targeting the business of the wealthy. Once you have proven yourself and the services you can offer that others cannot, then you negotiating your professional fee will not be an issue.

The wealthy client has grasped the idea of the internet and what it can do for them. Using the internet is becoming a lead generation and Marketing tool for Real Estate agents to reach such clients. One needs to have a system in place to capture these leads and managing the leads along a strategy for marketing and promoting your listings.

Remember that wealthy clients are smart and will study the market and also do their homework. They will even interview other realtors who will be vying for their business and to become their Realtor. So be prepared and do your homework. The affluent client expects you to be a wealth of resource for them for market statistics and information about the real estate industry.

Remember, you are helping the affluent client with a luxurious life style choice. You are assisting them with this pleasurable experience of dining, driving and more. The home they choose is a life style and you have to be aware of this life style. Also, your marketing efforts should influence you and how you market the properties. Having a “party to sell the house” is an effective marketing tool because your are pointing out the life style of the home you are marketing. These types of intimate gatherings are being used more and more in much pricier properties and create a buzz in the market area you are working in and targeting.

The Affluent are striving to be a connoisseur of sorts. How can you tell a good wine, a great steak and recognize a handmade suit. They want to be able to identify and appreciate quality. Here is where we the Realtor need to know product knowledge and how it is important. We need to know the top of the line appliances and fixtures, top notch finishes and what adds value to a luxury home. To be luxury home specialist you need to know fine homes and how to market these luxuries properties to be credible in their eyes.

Finally, one needs to understand the motivation of affluent buyers and sellers including their attitudes and how to meet their expectations and needs. We are selling a dream of living a life style worth living. Many spend to be in this prestigious affluent group which define this segment of life style. Spending to some means and signifies power and to others it’s a self worth and a reward for all the hard work to get into their current position and status within their affluent group. Even some say wealth signifies an achievement and prowess. But as Realtors, we are there to help to assist the wealthy in gaining their dream and lifestyle living.

Sunday, May 14, 2006

Second-home owner survey shows solid market

WASHINGTON -- May 12, 2006 -- A new survey of second-home owners by the National Association of Realtors® (NAR) shows baby boomers continue to dominate the market, and a growing number of second homes -- more than one-in-10 -- are owned by minorities. A surprising majority of respondents own multiple properties in addition to their primary residence.



David Lereah, NAR’s chief economist, said the market continues to be dominated by the baby boom generation. “Middle-aged, middle-income households are the driving factor in the second-home market, with favorable demographics providing a solid fundamental demand in this sector for the next decade,” Lereah says. “Boomers believe in diversifying their assets, and most second-home owners see their purchase as being a better investment than stocks. A surprising majority of survey respondents hold multiple properties, and they are interested in purchasing additional homes.” About six in 10 respondents own two or more homes in addition to their primary residence.



Minorities have become more active in the market, accounting for 11 percent of vacation home purchases between 2003 and 2005 in contrast with 6 percent of purchases in 2002 or earlier. In the investment property segment, minorities accounted for 17 percent of transactions between 2003 and 2005 compared with 11 percent in 2002 or earlier.



An unexpectedly high number of vacation-home owners, 21 percent, own two or more vacation homes. In addition, 34 percent of vacation-home owners report they own two or more investment properties.



More than half of investment property owners, 53 percent, own two or more investment homes and 12 percent own two or more vacation homes.



Analysis of U.S. Census Bureau data shows there are 6.8 million vacation homes in the United States and 37.4 million investment units in addition to 74.6 million owner-occupied units.



NAR President Thomas M. Stevens said the term “second home” appears to be something of a misnomer. “The fact that so many owners of vacation homes and investment property have additional properties is a bit of a revelation,” says Stevens.



“We’ve always known that a certain segment has invested heavily in the rental market, and some people earn their living simply by holding and managing investment property. What we see now is a crossover between largely vacation- and investment-home owners, with people recognizing the value of those investments and pouring more assets into real estate,” Stevens says.



The typical vacation-home owner is 59 years old, earned $120,600 last year, and purchased a property that is 220 miles from their primary residence, though 34 percent were less than 100 miles and another 34 percent were 500 miles or more. Eight out of 10 drive to their property, and half of vacation homes are located within the same state as the owner’s primary residence. Eighty-three percent of owners are married couples.



Three-fourths of vacation-home owners purchased for personal use, although one-third also wanted to diversify investments, and 18 percent intended that the home would become a primary residence in retirement. Only 13 percent of vacation owners listed rental income as a reason to buy. The typical owner spends 39 nights per year at their property, and three-quarters do not rent out. Of those who do rent their vacation home, the median number is 12 nights per year.



The median age of an investment owner is 55, with an income of $98,600 in 2005; 75 percent of owners are married couples. Their investment property is located close by, within a median distance of 10 miles.



Two-thirds of investment-home owners purchased their property to generate rental income, and half viewed the property as a way to diversify investments. Eight out of 10 spend no time in their property. Not surprisingly, 80 percent rent it out, with 73 percent renting for at least six months per year.



For all second homeowners, their most recent property was purchased a median of six years ago. However, most have held additional properties for longer periods.



As for attributes desired in a vacation home, two-thirds want to be close to an ocean, river or lake; 39 percent close to recreational or sporting activities; 38 percent close to vacation or resort areas; and 31 percent close to mountains or other natural attractions.



Leisure activities of interest to vacation-home owners include beach, lake or water sports, 57 percent; boating, 38 percent; hunting or fishing, 32 percent; golf, 21 percent; biking, hiking or horseback riding, 20 percent; ski or winter recreation, 17 percent; and tennis, 9 percent.



Half of vacation homes are located in resort or recreational areas, 18 percent in small towns and 16 percent in rural areas. Four out of ten are detached single-family homes, 22 percent are cabins or cottages, 21 percent condos in buildings with five or more units, 7 percent a townhouse or row house, 5 percent a mobile or manufactured home, and 3 percent are located in two-to-four unit structures; 1 percent were other. Six percent said their vacation home was a timeshare unit.



The median size of a vacation home is 1,480 square feet, 29 percent were new when purchased, and owners estimated the current value to be a median of $300,000 – 68 percent said the value of that property was lower than their primary residence. Sixty-five percent of owners said their vacation property was a better investment than stocks.



Six out of 10 investment properties are located within metropolitan areas. Half are single-family homes, 21 percent are a duplex or apartment in a two-to-four unit structure, 13 percent condos in a building with five or more units, 8 percent a townhouse or row house, 3 percent a mobile or manufactured home, and 2 percent a cabin or cottage; 4 percent were other.



The median size of an investment property is 1,520 square feet, 15 percent were new when purchased, and owners estimated the current value to be $200,000. Three-fourths said the value of their investment property was lower than their primary residence, and 70 percent said their property was a better investment than stocks.



Four percent of vacation-home owners and 8 percent of investment owners said they intended for their child to occupy that property while in school.



Among buyers of second homes in recent years (since 2003), two-thirds purchased through a real estate agent. Eighteen percent of vacation homes and 17 percent of investment properties were purchased directly from owners, while 14 percent of vacation homes and 7 percent of investment properties were purchased directly from builders.



Thirty-two percent of all vacation-home owners and 24 percent of investment owners paid cash for their property. Combined with mortgages that have been paid-off, 82 percent of vacation homes and 75 percent of investment properties are owned free and clear.



Of owners who purchased with a mortgage, the median downpayment on a vacation home was 27 percent and the median downpayment for an investment home was 23 percent.



When asked about the source of downpayment funds for more recent vacation-home owners with loans, who purchased since 2003, half said savings, 23 percent from the sale of other real estate, and 19 percent identified equity or sales proceeds from their primary residence.



For more recent investment owners who purchased with mortgages, half said downpayment funds came from savings, 28 percent from equity or sales proceeds of their primary residence, and 18 percent from the sale of other real estate.



“With older baby boomers just now reaching 60 years of age, and younger boomers in their early 40s, the lifestyle preference of boomers will figure prominently into future demand for vacation homes,” Lereah says. Eleven percent of vacation-home owners said they were planning to buy another home within two years, and 10 percent said they planned to sell.



On the other hand, ownership of investment property hinges on financial gains that can be expected from rental income and appreciation. “Mortgage interest rates, local economic conditions and the local rental market are more important factors in investment decisions. Cooling appreciation rates and greater loan oversight are expected to discourage the speculative element in the investment market, although that is likely to be a relatively small portion of the overall market,” Lereah says.



Even so, 35 percent of all investment-home owners said they were planning to buy another home within two years. For those who currently own four or more investment units, 64 percent said they planned to buy another property within two years, and 17 percent said they planned to purchase five or more additional properties.



Twenty-eight percent of investment owners plan to sell a property within two years.



The 2006 National Association of Realtors® Profile of Second-Home Owners is based on an eight-page questionnaire mailed in January 2006 to a nationwide sample of 45,000 households who owned more than one residential property. It generated 416 usable responses from vacation-home owners and 619 from investment owners.



NAR sells the full study results, and it can be ordered online at www.realtor.org or by calling (800) 874-6500. The cost is $50 for NAR members and $125 for non-members.



© 2006 FLORIDA ASSOCIATION OF REALTORS®

Monday, May 08, 2006

Are Consumers driving the Real Estate industry into a change?

A new study conducted by National Association of Realtors that compromised of real estate brokers, Realtors and consultants reveal that consumers are a driving force behind this industry change. Consumers are demanding more real estate products and options. With conflicting consumer desires, the consumer is asking for more personalized services but also some autonomy in the real estate transaction.

The study also showed the at consumers want:

Online searches and tools
Full information about properties listed
Rapid response to their online and telephone inquires
A friendly experience with the real estate agent and company
A Smooth transaction process with no hidden surprises along the way and at closing
Low commission fees or fee packages
Last but not least, a sense that the Realtor and Real Estate Company add value to the whole transaction process of buying and selling.

The reports also states that retail giants like Wal-Mart and Home Depot dominate in their sector because they can offer more services coupled with lower prices and if companies cannot compete in this changing industry that consumers demand they will go out of business, hence they will fail like General Motors has to the foreign competition.

Because of the over saturation of Realtors in the market place pressure to lower the fees is at a rapid pace the study has shown. Because of this, realtors and real estate firms need to experiment with using different business models to survive in this ever changing Real Estate industry.

The advancement of technology and the internet has also empowered the consumer to demand more services and information. It yet has to be seen if this change in technology and the fast pace growing of the internet will be revolutionary or evolutionary. Consumers are very comfortable using the internet to buy and sell real estate and to look for vital information about neighborhoods and property listings which all are readily available online at the fingertips of potential buyers and sellers.

One consultant in that participated in the study stated that in the next five years, 10% of Real Estate transactions will be conducted over the internet but the other side of this, many consumers will still demand the traditional model of doing real estate business transactions

The data contained in the MLS is a big factor and key issue. Should the public have access to this information so easy or should it be controlled and be a service for realtors and brokers?

Also, the changing market conditions will allow the industry to test different business models to be able to survive the coming changing times.

Finally, managing internet leads is very important to realtors and the growing referral fee business among real estate professionals. The study showed that 25% of transactions came from the referral business which can determine long term profitability.