Palm Beach County Home Sales Strong- Inventory Shrinks And Prices Decline
The median price of a home in Palm Beach County fell to $180,300. That means that half of the homes sold in Palm Beach County sold for more and half of the homes sold for less. The prices fell about 20% last month overall in the county of Palm Beach.
But buyers are out and ready to buy and inventory is shrinking while prices continue to decline for another few months or so.
Sale of homes on the market are strong. We have negotiated short sales in the 1990’s recession, 1980’s recession and starting in 2007 in the current recession and housing bust. During 2008 and 2009 it was not uncommon for us to have 50 to 70 short sale listings in our inventory. But that number has changed.
In 2007 very few agents other than ourselves would even touch a short sale listing and the banks knew a whole lot less than they do now about how to process a short sale. Now many agents are taking short sale listings as inventory shrinks, those that know how to negotiate short sales and those that don’t.
When this happens in a market proactive brokers need to see where the market is heading and be there and ready for the shift.
In September of 2010 the median price for a home in Palm Beach County was $225,900. So you see, it did drop again.
For more information about how the market is doing in your specific town in Palm Beach County contact Nestor and Katerina Gasset at 561-753-0135.
Citigroup Settles For $300 Million – Civil Fraud Complaint
Citigroup settles a civil fraud complaint. It was alleged that Citigroup promoted an investment tied to the housing market where they did not tell their investors that they were betting that those same securities would fail.
Securities and Exchange Commission says that Citgroup took $1 Billion of the investors’s money and combined it with other assets that failed in the mortgage meltdown.
Citi traders bet against these securities and made money even though their investors would lose money. One of the traders had an email that was pulled up in the investigation that was saying that this deal was the best and biggest ‘short’ ever.
Investigators say that the investors had no idea what Citi was doing and that they were being bet against. Another email from a Citi trader said that this was the “worst investment ever”. Yet, they were making a ton of money off of it while the investors were losing all their money they had entrusted Citi with.
More big banks are being scrutinized by the SEC.
Goldman Sachs is agreeing to pay out $550 Million to settle claims that they did not tell their clients that they were betting against some of the mortgage securities.
JP Morgan Chase agreed to pay out $153.6 Million for the same kinds of accustations.
Wall Street firms took risky morgages and put them into instruments that ended up imploding when the housing market went bust.
The reason that Citigroup has to pay more out is because the SEC says that Citigroup was actively involved in marketing this to their investors knowing full well what they were hiding or covering up and that is called Fraud. Citi employees created the deals, they created the packages and the marketing materials and then actively marketed those to their investors and they made $160 Million betting against the security.
Goldman Sach’s securities and packaging was done by an outside marketing company and outside hedge fund investor.
Citi says they did make money on this particular event and security but lost a lot more money on other securities and other debt obligations that eventually took the company down in 2008.
Sun Sentinel printed a very one sided article mostly about listing agents in our markets. The staff writer took one buyer, interviewed her and then presented her complaints which we will address in this post. However, with each allegation there was no interview or record of the defense or the counter. This was a very one-sided article. While there were two very small snippets from listing agents the counter to the complaints was not really addressed. And the list stands very clearn with bolded points.
So here is the counter to each of these allegations made by this buyer.
First, let me make this disclaimer- not all listing agents are good, not all listing agents are bad. Not all listing agents are ethical, not all listing agents are un-ethical. Just as it is with every single occupation and business in our world today. The same applies to buyers and to buyers agents.
This buyer says she has ALL CASH and wants to buy a condo in South Florida. She says that she has been looking for a second home for 2 years and has not found one yet.
Just that statement alone raises red flags in our book.
Here is her list of reason why she can not find a second home and then our rebuttal is directly underneath each of her excuses reasons:
1. Homeowners are testing the market and have no intention on selling. She says that they are turning down her ‘reasonable’ offers.
While this statement may be true from some sellers it is not true of the majority of the sellers. The odds of this being the case for every single condo she has seen in two years? Ah, like 100 to 1! Did the writer of the article go and talk to all the sellers in the buildings she is interested in buying in to ask they why they turned down her offers? Most of the time when a buyer says this it is because they are making what they consider to be a fair price and the seller does not think so. The seller is not under any obligation to sell the unit for any less than what it is listed for and even at full price they still can turn down offers.
2. Listing agents do not return phone calls to set up showings- they can’t find the keys- and when they do the keys don’t work.
Again, this is such a general statement and blanketing all listing agents like this is really not exploring the entire picture. How does she know if this is the listing agent or if it actually may be her buyer agent calling the listing agent the night before like at 10 p.m. and then expecting the showing to be set up for 9 a.m. Sorry, not going to happen here. If her buyers agent called me at 10 p.m. I would not even answer the phone. Then I would return her call at 9 a.m. There are those who call on a Saturday night after 10 p.m. and expect the seller to open the door for them at 9 a.m. on a Sunday morning. On owner occupied properties the sellers need more notice than that.
Many sellers have tenants in their properties and tenants require 12 to 24 hours notice. We have sellers who are police officers and have firearms so they must have notice prior to showings. We have a seller who is an FBI agent and they must be at all showings for obvious reasons. There are sellers who also require 24 hours notice and that is clearly stated in the MLS under showing instructions. Our gripe in return is that buyers agents don’t read the showing instructions in the MLS. We also have automated showing desk and buyers agents can simply make an appointment through the showing assist but they still call us because they don’t want to get on the MLS to set up a showing! So the knife cuts both ways.
The writer interviewed one buyers agent who said he just goes to the seller’s home and knocks on the door and asks if he can show the home because he can’t get a return call. Well, we have that happen to our sellers and we have a phone answering system that logs all calls so if they do call us, our receptionist does return the call back. But sometimes she says that the seller can not show the house at the requested time and guess what- those buyers agents do go to our sellers’ doors and lie. They either lie and say they could not reach our office or they lie and say they set up an appointment.
3. Listing agents and sellers ask ridiculous prices and they insist that the housing market did not effect their building.
First of all, this could be true. The fact is that there are buildings that have not been effected very much by the real estate bust. Waterfront condos on the ocean in Miami are still selling for 1 Million plus with no signs of slowing down. Yet, condos inland a bit more are sitting there and you can not give them away at $25,000. I don’t think this buyer in this article is in the latter category. But there are always pockets in markets that remain insulated from recessions and downturns. She is looking at the wrong buildings if this is a problem for her.
About 60% of our closings in our markets are ALL CASH. So she is not the only one bringing cash to the table.
4. Listing agents misrepresent condo rules and regulations.
Hmmm. that is a COE violation, an NAR S&P violation and a Florida statutes violation so that is a very big accusation and I would say that the staff writer and the buyer better have some pretty good evidence that this is the case before printing this.
Florida Law requires that buyers are to have 3 days (for re-sale condos) in which to review the condo docs, rules and regulations. If they don’t like them, they can cancel their contract and get their earnest money back without penalty. We recommend that a buyer goes over the condo rules with their attorney. This is why we have in the condo rider that the listing agent is not representing anything about the condo rules. It is not the listing agents’ responsibility to explain the rules to a buyer.
5. Homeowner associations make rules that are too restrictive like they don’t allow an owner’s family to stay in the unit for more than one month without the owner present.
Now, here the writer actually spoke to a condo representative. The condo rep defended their position on rules. The rules are requested and voted on by the members of the board. So if you don’t like the rules, get on a board and start lobbying for changes to the rules. But the problem with this complaint is that these rules have always been in place in many condo developments for years and years. This is not something that just happened since the real estate market tanked.
Now, our opinion is that the reason that this buyer can not find a home based on her complaints is that she is:
Many times listing agents and buyer agents are on opposing sides of the fence. Remember sellers are people too. While they do have a product on the market ( their home) courtesy and respect should still be used. This is not a restaurant where you may be demanding on what you order. This is someone’s home and they still have a life.
Attention: Wellington Homeowners in Foreclosure or behind on your payments.
If your loan is being serviced by Bank of America- the nations largest mortage servicer- you may just happen to qualify to get up to $20,000 to do a short sale instead of waiting for the day you lose your home to foreclosure.
You must have your short sale submitted before November 30, 2011 in order to qualify for minimum payout of $5000 and up to $20,000. You get the $20,000 or less at a successful closing of your short sale which also means you will need to move out of your home.
Your home will need to get listed with a real estate agent or broker who knows how to negotiate short sales. You also have to submit your request to do a short sale without an offer.
Your closing date has to be before August 31, 2012 in order to qualify. There are pros and cons to submitting a short sale package without the offer. The biggest negative to this method is that in many of the cases where you start the short sale process prior to an offer, the bank gets a bad appraisal and asks us to list the house way above what it would ever sell for.
But it may just be worth the gamble for a $20,000 check in your hand at closing.
Why would the Bank of America do this? Because the foreclosures here in Florida are taking an average of 676 days to finish. There are two, three, four years before there is any resolve to many foreclosure cases.
The other reason the banks are offering this incentive is to help encourage you not to steal all the appliances and trash the house. If you accept the offer you also must promise to keep your home clean and in good shape and in tact.
This program is being tested in Florida by Bank Of America. If it works well here in Wellington and the rest of Florida they will consider offering this program in some other states.
If you have a Ginnie Mae, VA or FHA loan that is being serviced by Bank Of America you will not be able to get this incentive as those do not qualify for the program.
The best part about the Bank Of America Florida incentive program is that most of the time they are also going to waive any deficiency against you. Remember that all deficiency waivers come with one exception- if they believe you committed fraud, they can rescind on the deficiency waiver.
If you have a home in Wellington Florida or anywhere else in Florida and you are in the foreclosure process call us today to see if you may qualify for one of these cash pay out programs for doing a short sale at 561-753-0135. There is no cost and we are not attorneys and not giving legal advice. You call is totally confidential.
We were listing Wellington short sales when Countrywide was still in business. Nestor successfully closed his first short sale in 1995 and I did some short sales back during the 80’s recession.
When we started blogging about short sales in 2007 very few agents knew what a short sale was or how to do one. In fact, many of the agents who are now doing short sales were saying in 2007 that they would not even touch one with a ten foot pole. Worse than that, attorneys and title companies who do closings had no clue how to close a short sale or how to properly do a preliminary HUD1 to be sent in with our short sale packages. We helped train our favorite title company in properly closing short sales and understanding exactly what the prelim HUDs need to be like.
There were no designations for short sales, there was no CDPE or SFR or any other designations. You either knew how to do the or not.
When 2007 came- actually it was May of 2007- right before we joined ActiveRain- the world stood still here in Florida. The Florida real estate market came to a screatching halt. The listings were not selling and buyers stopped buying. Sellers refused to believe the market crashed and buyers refused to pay the prices that properties were listed at. The air here was so thick you could cut it with a knife. Doomsday reporting by the local media did not help matters in these parts either.
By the time the 2008 NAR and MLS dues were payable- thousands of agents in Florida left the business. Unless you had money saved up in the bank- you were not going to make it through 2007. There were the exceptions of certain areas that are immune to most market changes.
Since Nestor and I had experience with short sales we embraced the new market because we always do well in recessions. Most of the listings back then were with Countrywide. Nestor mastered the art of making people feel good about themselves years ago and this one negotiating skill has got us to the top of the major banks and servicers to get our short sales closed. My skill in negotiating comes with my talent of empathy and being able to get two parties to see each other’s viewpoints and then compromise on a settlement.
Nestor has a way of knowing what is coming down the pipeline in real estate and has always been right on the money when he says the market is going to do something or a well is going to dry up soon so we have to find a new niche or a new twist on the real estate business in order to stay on top.
Six months before the real estate market here crashed he was warning us that we had to strategize about where we would be working in the real estate business. Prior to the crash we specialized in land assemblages that we would put together and present to builders and developers. We and especially Nestor was instrumental in getting some very nice townhouse and single family home development projects and plans sold to top notch large developers.
Obviously developers put a halt on their buying and building when prices sank by nearly 50%. This is when we said we needed to find a way that we could add value and still be profitable by returning to the residential side of the real estate business.
That is how we got started in listing Wellington short sales and helping homeowners avoid foreclosure by helping them complete a short sale. It was as Nestor calls it, ‘the wild wild west of real estate’. From the third quarter of 2007 and all through 2008 and 2009 we listed more than 99% of the other realtors® in our markets. We listed short sales all over the state of Florida. Our title company drove down South to Miami and up as far north as Tallahassee in order to assure our short sales closed.
There is a time and a place to make changes to your business plans. If you are too stuck in to a certain plan with no flexibility you will go down with the rest who don’t make their move when the iron is hot. It is even OK to leave the business if it is not what you are passionate about. That is more than fine. Only you and those who are affected by your decision can decide what the right path for you to take is.