Miami Dade Real Estate Scoop

I was speaking with a friend yesterday and she was surprised to find out that I have home buyers in Miami who can't find homes.  Well, let's rephrase that.  The can find homes, They just can't get them under contract.

I realized that she was not the first person I've talked to lately who was surprised at this.

"But I thought it was a buyer's market right now?" they always ask me.

Yeah, according to who?  The news that prices are low, foreclosures are high, short sales abound, is always out there.  But it is only in the very recent weeks, that I have seen the media getting the truth about finding a home out there:  home buyers are having a tough time of it right now in Miami.

Yes, there are lots and lots of listings. Over 8,300 single family homes in Miami-Dade county are listed for sale right now.

But then you remove the overpriced listings because, well, because they're overpriced.  Momma didn't raise no fool, now did she? ::wink::

And you don't really remove the foreclosed listings, but you almost should.  The ones that are priced right are getting multiple offers.  Sometimes fifty or more.  I've been on both sides of the deal with these, as listing agent and buyer's agent.  So I know first hand that listing agents are not making this up.  With mulptiple offers on the table, chances are stacked against you getting your offer accepted.

And then there's the short sales.  Yeah, those.  I don't shy away from them.  But I do make sure I ask lots of questions of the listing agent when selecting whether to show them or not.  If the listing agent hasn't got a clue, we pass.  The process is already long enough, add someone who doesn't know how to do it right, and it's slow as molasses AND perhaps dead before it starts.  When my buyer makes an offer on a short sale, I advise and counsel that we are in it for the long haul.  So we MUST make sure that there's a decent chance it will get to closing.

Remove the above and what does that leave?  Well, it leaves the regular sales.  Remember those?  Ahhhh. Those days were good, were they not?  There was a seller, there was a buyer, and there was a deal.  I long for them again.  But let me snap out of my daydreaming!  There are some well priced regular sales to be found.  And they sell quickly when you find them.  So make sure you act fast.

Add to all that the buyers scrambling to make the April 30th deadline for the $8,000 home buyers credit and you have a very brisk Miami real estate market.

The tides have changed.  If you're out looking at homes in Miami, make sure you have the benefit of working with a professional by your side.  Contact your local Realtor today.

Still wondering whether you should be buying that Miami home?  First-time homebuyers dominated the U.S. real estate market in 2009, accounting for roughly half of all residential transaction, according to the National Association of REALTORS®.

That trend is likely to continue well into the new year. That's because interest rates are hovering near all-time lows, home-price affordability is near all-time highs and a third factor - Congress' extension of the first-time homebuyer tax credit until April 30, 2010 - make conditions quite favorable for those considering homeownership for the first time. Homes in Miami are once again affordable!

Still, with the prospect of making one of the largest investments you'll ever make in your life, you can easily become overwhelmed. Some of the questions you may be asking are: Will I be able to afford the home of my dreams? Do I have enough money for a down payment? Will I qualify for the tax credit? Will I make smart home buying decisions? If you go into the process prepared, your first purchase - like the current timing - can be just right.

Resources--Before starting out, educate yourself on the process. Attend a homebuyer seminar in your market, and check out myriad real estate resources online, such as this blog.  You can bookmark it for future reference or subscribe to my articles. In addition, you can visit www.MaggieSellsMiami.com, through which you can access millions of property listings and gain environmental reports, property profiles and value-range estimates for just about any residence in America.
Your real estate professional also is a great resource. Don't hesitate to let him or her know that you are new to the process. Your real estate professional will expect you to have questions at each step, from house hunting to making an offer through closing.

The costs involved in the purchase of a home can seem overwhelming to first-time homebuyers. There are mortgage costs, the down payment, and closing costs to think about.

Affordability--By looking at your income and debt ratio, your sales professional can help you calculate how much you can afford each month in mortgage payments.  But before determining your price range, you should also take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, insurance, homeowner association dues, utilities and maintenance. And if your down payment is less than 20 percent of the cost of the home, you will be responsible for private mortgage insurance, more commonly referred to as PMI.

Mortgage payment--Fear of being rejected for a home loan is one of the main concerns for first-time homebuyers. To lessen the stress, you may want to get pre-approved for a loan before looking at prospective homes. This will not only help you feel more confident, it will also give you an advantage when there are multiple offers for a specific property. In addition, the fact that your loan has already been approved is of great value to the seller because it shortens the purchase process, and there is less of a chance that the buyer will back out of the sale. If you don't have a specific mortgage lender in mind, ask your sales professional for a recommendation.

Down payment--The down payment amount varies depending on the value of the home you choose and your mortgage lender. Your real estate professional will be able to explain the different options available to you.

Tax credit--The first-time homebuyer tax credit, a key component of the American Recovery and Reinvestment Act of 2009, equates to as much as $8,000, or 10% of a principal residence's purchase price, and is available to those who have not owned a principal residence in the past three years. Existing homeowners may also qualify for a credit of up to $6,000.  You can use the tax credit to help purchase your home or help pay for its closing costs, or the credit can be used to remodel, refurnish and repair your property. See your tax advisor for details about the tax-credit program and how you may benefit. 

Making offers-- Make sure you view different homes to get a feel for the marketplace. When you decide on a home to make a bid on, work with your real estate professional to get all of your questions answered before making an offer. But don't wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.  This is particular important in today's Miami market, where the best values are often foreclosed homes and multiple offers are the norm.

Above all, remember there are no silly questions. Make sure you understand and are comfortable with every aspect of the transaction. Your real estate professional can be an invaluable asset in helping you make educated decisions so that your first home purchase is a rewarding experience.

A year and a half ago, when I listed my first REO, the selling banks were being less cautious about the pre-qualification letters submitted with the offers.  But then too many deals fell through, a lot of time was wasted and, as property values were still declining then, money was lost when the property had to be returned to the market to find another buyer two to three months later.

Most banks then decided that they would not consider an offer unless it had a pre-approval from one of their own branches.  In theory it sounds benign enough.  It certainly is a way to do away with the “fluffy” pre-approvals that aren’t worth the paper they are written on.  But in this market, where each foreclosure that is listed garners at least 10 offers (and in some cases 40 and 50 offers), having to pre-qualify your buyer with a different lender every time you submit an offer is ridiculous.

I have a buyer who has been looking for almost a year now.  He’s getting really frustrated that not enough properties matching his criteria are showing up.  And when one does, we submit an offer immediately to try and get in before the slew of offers comes in.  We put together really decent offers.  They have been above asking price, but not ridiculously high just to get the offer accepted.  We dot all our I’s.  We cross all our T’s.  We fill in all our blanks.  We submit copies of our earnest money and copies of our pre-approvals.

But what happens when you get really tired of having your credit pulled time and time again just to get pre-qualified by the seller’s choice of bank?  Unfortunately, there’s not much that can be done.  The listing agent won’t submit the offer without that new pre-qual.  I am dealing with an offer we submitted yesterday on a foreclosure.  I submitted a brand new DU approval with the offer from my buyer’s mortgage person.  This was a DU that was pulled for this buyer, for this home, for this purchase price and still the listing agent won’t accept it.  He insists that we go to his mortgage broker for a pre-qual.

It sounds to me like this is the listing agent’s requirement, not the sellers’.  The reason I think this is because most sellers are having buyers prequalified by their own entity.  Wells Fargo wants Wells Fargo pre-qualifications.  Chase wants Chase.  But with this one, I am being asked to take my buyer to a local mortgage broker, not a direct lender for their approval.

Now, I am not a mortgage broker and will never be.  I prefer to let each practice his own specialty and will not try to wear two hats, with neither fitting quite right.  But isn’t a DU approval just as good from one mortgage broker as from another?  Maybe this is where I am wrong on this.  Because I am not a mortgage broker, I may be misunderstanding the power of the DU.

What I do know is that a real estate agent can be as frustrated as her buyers.  Oy vey.