"All the young dudes"

"carry the news" David Bowie & Mott the Hoople

The pic is of the old fisherman's wharf, back in the day it was a cool place to take the kids because while you were waiting for your dinner the kids could go out on the dock and feed the catfish. It is now scheduled to be a condo clubhouse.

We were discussing in our last week's sales meeting the state of the market. In the month of October there were 596 single family homes sold in Brevard County. Of these 224 were under $100,000 and 245 between 100K and 200K, that leaves 127 over 200K. So it is not hard to figure out that the number of sales are up but the prices are well down.

Merritt Island

There is a complex of condos on S. Tropical,Sunset Bay, which is on the Indian River with pool and exercise room. There are several on the market but the one that grabbed my attention is a 1 bedroom 1 bath, foreclosure priced at $23,800.

A home off Newfound harbor, 3 bedrooms 1 bath built in 1960 and priced at $67,000.

A home in a golf course community with 3 bedrooms 2 baths and pool, priced at $238,000.

Newspaper

There was a article in today's paper that had a consensus of Realtors that thought the prices would go up in 2010, if they are right then it could be the time to buy.

Thanks
Jim Bagwell

Mr. Taxman

"The Beatles"

First time home buyer tax credit.

I am sure most of you know that the 1st time home buyers credit has been extended with additional benefits.

For the 1st time buyer, which means you haven’t owned a principal residence in the prior 3 years. The tax credit remains at $8000 and time frame was extended to May 1, 2010, you have to have a signed contract by this time and have until the end of June to close the transaction. The income level for these buyers is now $125,000 annually and for married couples $225,000.

Current home owners

To me this is exciting news, for current home owners who want to buy a new principal residence, you will get up to $6500 in tax credit. You have to have lived in your current home for 5 consecutive years of the last 8 years. Income levels are the same as 1st time home buyers. This means over 70% of all home owners qualify for this program.

Purchase price of properties is now up to $800,000.

This is a real tax credit and can be used to pay income tax due or added to your refund.

This whole thing is a very good thing for home buyers because of the lowered prices of all kinds of properties now on the market.

Jim Bagwell

"You got to serve somebody"

"It may be the devil or it may be the lord" Bob Dylan

I am sure most people were brought up similar to me to believe that a person’s word is their bond. Especially when a contract is signed to acknowledge this agreement that is the reason that foreclosures and short sales were so distasteful for all of us.

I have since had an epiphany that has really changed my attitude. We have helped many sellers and buyers with short sales and foreclosures and in each situation it was the right thing for both parties. There are so many people out there who are burning through savings and 401K’s to pay for homes and investments which are now valued as much as 50% less than when purchased. Now intelligently speaking this is not the best thing to do for your family or yourself, it is our pride that is forcing us to keep it going. Truth is it will be years before the prices are back to a point to sell at a break even or profit from a sale.

The lenders themselves are the main culprit behind our dilemma. For a few years the banks made huge profits and rolled along, now some have filed bankruptcies’ and others have been bailed out by the government. To pay us back for our generosity some of the bigger banks are now going to charge a fee to their clients that are never late and do not write bad checks, why because they don’t make enough money on the good clients. That is why I now feel that the majority of people, investors included should not have a moments worry over a default.

Some properties to consider:

At the top end, short sale direct Newfound Harbor home priced at $799,000. This home was built in 1979 and features 3709 sq ft, 5 bedrooms and 3 ½ baths, pool screened, 3 car garage, tennis court,2 boat lifts and a tiki bar. All of this sits on 1.22 acre on beautiful Newfound Harbor.

At the lower end a 1600 sq ft home on the canal with 3 bedrooms 2 baths updated in 2005. Priced at $179,900.

These are both short sales!

Jim Bagwell

For the serious fisherman

Interesting how intelligent buyers are today, agents who do not recognize the facts are doomed to fail. A client was in my office the other day showing me the Wall Street Journal and the map of troubled real estate markets across the nation, now of course almost the entire coastline of Florida was in black which indicates trouble. For the good news, there was one white little square which was central Brevard County. I believe we can thank waterfront property for this anomaly. Basically there are very few areas which have the varied type of waterfront homes we have in Brevard.

The number of good buys are too numerous to focus on a few. With the exception of resale oceanfront condos of which the inventory is actually down, you can almost always find a home suited to your desires within your price range.

Our local paper over the weekend wrote that Sep marked the 4th month in a row that the number of resale homes in Brevard dropped however we were still above the 2007 & 2008 figures. The Wall Street Journal reported over the weekend that Home sales in Sep rose to a 2 year high and the inventory dropped to a 7.8 month worth which is the lowest in 2 ½ years. All of this equates to the fact that a buyer today can expect to pay 2002 price for a home today.

Pick of the day!

For the serious fisherman or woman, This home is located on a point of the east side of Merritt Island which means that you can go straight to the locks at the port and be offshore in the quickest time in all of Merritt Island. Home has 3 bedrooms 2 ½ baths and sits on .36 acre with great views of open water. Home also has a pool and spa with a 3 car garage and R/V boat space. Priced at $900,000.

Jim Bagwell
Broker

Brevard County Property Values

In the Real Estate section of our local paper there was an article saying how much the activity has picked up in Brevard County. This is true and in my opinion is due to the pricing of properties. A lot of home owners are seeing what the foreclosure process is doing to their property value and are pricing accordingly.

As of 6/29/09 in our MLS there are 533 bank or corporation owned properties. Some of the corporation owned properties are owned by the developer but most are owned by Freddie Mac, Fannie Mae or VA. There are also 1345 short sales in Brevard. So you see we have to work on getting these properties sold to really get the property values back to a positive posture.

Some of these properties are very interesting to be in foreclosure.

A 727 sq ft condo in Titusville priced at $9,900. This is not in good shape and not a very good location but for a rental property definitely possible.

A 3901 sq ft home on Merritt Island with pool and on the water with a short trip to open water, 4 bedrooms and 4 baths and priced at $719,900.

A 4 bedroom 3 bath ocean front penthouse in Satellite Beach with 3690 sq ft priced at $649,900. This is a good buy for this complex.

Short sale possibility

Remember that short sales can be frustrating but can be worth the wait!

A 3014 sq ft single family home with 3 bedrooms 2 baths and 2 ½ baths; this property is on the ocean on .35 acre. The HOA fees are $1647 per quarter but include structural insurance and lawn service. The only drawback to me is the location which is almost to Sebastian Inlet but for a 2nd getaway with great golf, fishing and surfing then this would be fantastic property.

Thanks

Jim Bagwell

Chinese drywall

I am sure most of you have heard of Chinese drywall, this drywall was shipped during the time period of 2002 to 2008. Testing of the affects is not as yet complete but there are things that we are sure about what this drywall causes in the property.

The drywall manufactured in China emits a sulfuric gas that will turn copper pipes black and can damage A/C coils. Some residents in the affected homes have complained of respiratory problems and dizziness. The health issues are not proved as yet but the FDA is working on the test right now.

Most of this drywall was used in Florida but the class action suit will be heard in New Orleans and contain cases from 3 states including Florida.

Now most people think that if your home wasn’t built in this time period you are safe but when you think of all the remodels and repair of water damage that have been completed in this time period then the possibility is still there in older homes.

We have already put an addendum in place that addresses this issue so if you are buying a property ask your agent to use it. To be safe ask for a complete seller’s property disclosure and ask your home inspector to check for the possibility of the presence of the drywall.

Seemingly good buy!

I have not been inside this home but it appears to be a good buy. Not a short sale or foreclosure, the home has 2115 sq ft with screened pool and is on a canal. Priced at $319,000 located in Diana Shores in central Merritt Island.

Just cover your bases in all transactions.

Jim Bagwell

Your own worst enemy

I have become very frustrated with agents who are still in the booming market frame of mind in a still down market.

Back in the day it was extremely rare to make an offer on a property and get an acceptance without a counter. There are still agents who feel they must have a counter when they get any offer on one of their listings. The fact of the matter is a lot of times the 1st offer will be your best offer and sometimes your only offer. Now what are they trying to do, maybe to say to their seller that they have worth but a lot of times they are hurting the very people they are hired to help.

The key to it all is to perform a very thorough market analysis and be very honest with your seller on what to expect. When you as an agent give your seller false hope on what their property is worth today you are contributing to the down market.

Always remember that as a seller or a buyer it is your call on what to offer and what to accept. Your agent is bound to follow your instructions; the agent is paid for their knowledge of the market and their skill of negotiation and to protect your interests always without fail. You should ask for your agent’s input but it is still your call.

Jim Bagwell

"Should 5% appear too small"

"Be thankful I don't take it all"

Forgive my digression, my wife and I went to a “Classic Concert” featuring Beatle music and brought back all kind of memories. If you get a chance go see this show it is great.

You have heard me talk about Space Talk which is a forum that all our agents get a chance to speak about current happenings or ask for help. Recently we have had an influx of agents speaking about simultaneous closings which involves an investor buying a short sale and reselling the property instantly to another buyer at a profit to the investor. The second buyer was found while the short sale process was ongoing. These agents are screaming fraud which is totally ludicrous since these very same agents were buying pre-construction properties not that long ago and selling the same day at a nice profit.

The only way to recover this market is that there are people who have some money and want to make more money; hence you invest for a return on your money.

At the present time there are 58 short sales in Merritt Island alone, some of these are very good deals if you can get them at list price. The short sales are priced from $69,900 to $950,000; one of these is a 2 story pool home on Sykes Creek with almost 3000 sq ft. This home was purchased for $815,000 and is now on the market for $659,000.

The deals are there and there are buyers who sold at the right time and haven’t owned in the last 3 years which makes them eligible for the 1st time home buyer $8000 tax credit so it may be time to jump back in the game.

Jim Bagwell

"Money can't buy me love"

photo courtesy of Don Hoover since my camera failed.


But it can buy a great property in Brevard County especially if you are a 1st time home buyer. If you haven’t owned a home in the last 3 years you can qualify as a 1st time home buyer. With this in place you can get an $8000 tax credit and this time it is not a loan, at tax time this credit can go toward your refund or reduce tax payment. One of the best parts of this deal is you can use this credit as a bridge loan for down payment and repay at tax time with your credit.

When you add this to the fact that the 1st quarter of 2009 had the biggest drop in property values since the downturn began and puts us at 2002 prices, it is a great time for the buyer and especially the 1st time home buyer. The last 2 months has seen a slight uptick in property value so we may be finally leveling out in prices.

If you are a 1st time buyer and are considering buying a home then you should go to a lender now and get a pre-approval and be ready to go when you find a home. It is now possible to buy a $150,000 home and have a monthly payment of around $1000 including taxes and insurance so now you can say it could be cheaper to own than rent. With a price of $150,000 the choices are endless and you can pick the home will fit your needs.

Now usually we specialize in waterfront homes but it is indeed an exciting time for 1st time home buyers so we have expanded our market. Sunset lakes is a nice gated community in North Merritt Island and there are numerous short sales starting at $162,500 now remember don’t be in a hurry if you are dealing with a short sale. There is a canal front home in Merritt Island priced at $178,200, this home has been stripped by the owner in preparation of renovation but it has now been foreclosed. This would be an excellent opportunity to use the FHA 203B loan and get renovation costs built in the mortgage.

Give us a call today!

Jim Bagwell
Broker

"You gotta stop and look around"

"19th nervous breakdown" the everloving Stones

It has been awhile since I have posted and for that I apologize.

We have seen a very dramatic increase of activity in all markets but especially in single family homes. Condos are still a challenge but can still be obtained with diligence in financing.

The best advice I can give you is to really contemplate on what you want in a property and what price you can live with and then obtain a good buyer’s agent. A lot of buyers still think they can get a better deal if they work through the listing agent. This couldn’t be further from the truth, in Florida we are assumed to transaction brokers which means if we know what the seller will take for the property we are not allowed to share this information. However if you have a buyer’s agent they can still function as a single agent for you the buyer and any information gathered can be shared with the client. One exception of this is that if it is the agent’s listing then the agent has to convert to a transaction broker which is after all very fair.

Another misconception is this will cost the buyer to have a agent, typically the commission is paid by the seller and disbursed at closing. The upside is you have an agent working for you to find a property that you would desire, a automatic search can be built to notify you of anything in your price range with the amenities you desire emailed to you everyday until you hit upon the property. You may encounter a situation where your agent can find a “for sale by owner” and then they may ask you to pay commission, you could still very well win in that the property may be priced less than market value.

The opportunities are endless with canal homes now below 300K and the list goes on and on. We are still making a lot of short sale offers and they can be a great deal, keep in mind you have to patient to make it work, let your agent work for you.

Hope this helps and remember to hydrate!

Jim Bagwell

Merritt Island canal homes

Merritt Island Canal homes

We did find one thing that is not exactly shocking but it did narrow our search. There is only one canal home on Merritt Island that is priced under $300,000 and offers 2000 sq ft. That one is a short sale; the water is not that good and it needs work. The home is priced at $249,999.

Now when we reached $300,000 to the mid 300’s we found good sized homes and some are in good shape. If you price your listings by sq ft dollar, this makes perfect sense.

Our listing at 1745 Basin st. has been reduced to $369,000. The best part about this home is that it has been renovated from the studs out to paint including wiring and plumbing. This is a benefit that you will only find in a couple of homes on the canals unless they have been torn down and built new but then of course you will pay a premium at new home prices.

If you would like to see pictures of this home, just email me at walkerbagwell@aol.com and I will email you the link.


Thank you

Jim Bagwell

"We're so sorry uncle Albert"

You got to love the Beatles!


I did receive a negative reply from my last post on contracting out short sales. I can only assume it was from one of my Realtor peers. For the record I am not questioning anyone’s sincerity or ethics in this practice. My point is that the short sale process almost always turns out to be a very personal and emotional transaction for the seller. The most important part of the transaction is the initial meeting between the seller and the listing agent. The listing agent must at that time offer all alternatives to the seller and inform the seller what is expected of them to complete the transaction. Although foreclosure, bankrupts and short sales are much more common than most of us have ever seen, it still is a bitter pill to swallow. There are many of us that have never been in financial situations that we see at the present time and this makes for a very stressful time for everyone. This is the only reason I personally feel that contracting out short sales is not the most efficient method to handle the transaction but if the listing agent is totally uncomfortable or unwilling to put in the hours necessary for this type transaction then definitely find someone to help you and bring them in from the onset of the transaction. I hope this clarifies my position and I apologize if I offended anyone.

We are in the process of showing canal homes in Merritt Island that can be purchased around or under the $300,000 range. I will share our showings on the next post.

Jim Bagwell

"Its been a hard day's night"

Recently I have seen agents advertise to other agents to handle short sales for a fee. Obviously experience is not a prerequisite since I have seen that some of the people offering have never completed a short sale. There are many agents that would never have considered being involved in the process because it is so time intensive with no guarantee of commission. Now that it is evident that there are so many short sales on the market that it is unrealistic to exclude these properties and still serve their buyers, they are coming around to the facts of the market.

With a small company of 18 agents, we are now in negotiation of 12 short sale contracts. This requires a staff and commitment from the entire team to bring these offers to fruition. It seems rather corny but it does bring a bit of satisfaction to get people out of a tight spot and on the other hand get buyers with patience a very good deal in a down market. We have seen more satisfaction from sellers who got the 3000 lb gorilla off their back than we have seen in good times with sellers walking with a couple of 100 grand.

I was looking to show some of my favorite listings that are priced right but the numbers are staggering. If you are looking to live on the water or not on the water then there is a price for you.

If it is a short sale just remember to be patient and keep looking once you have put in an offer on a short sale. Remember if you don’t have approval from the lender you are not committed.

Merritt Island Foreclosure News

The good news is that if you are looking for a deal through a foreclosure or a short sale, the time couldn't get much better!

Florida has now moved into the number 2 position nationwide in the number of foreclosures. The top four states are 1. Nevada 2. Florida 3. Arizona 4. California. These states account for over 25% of the nation’s foreclosed properties. As a result these states will receive the bulk of the 100 billion in foreclosure bail out money, I wish I could shed some light on how this money will be used but I have no clue. Now these numbers don’t include short sales and a lot of these are in the foreclosure process.

I believe you will see the banks move to get to be more cooperative in closing these properties and get them off the books. At least we want to believe this in order to make our lives a little easier. At the present time we have 8 contracts in negotiation for short sales. It involves a whole lot of work especially for the listing agent. In no way do we represent the lender in the short sale process we represent the buyer, seller or both. However the lenders can be the biggest obstacle in this process. Look for an experienced agent!

My favorite properties in the foreclosed world of Brevard County.

An 1800 sq ft home in Viera priced at $169,900. This home has 4 bedrooms and 2 baths with a 2 car garage. Home was built in 1997 and features vaulted ceilings.

A home with over 2500 sq ft located in beautiful Villa De Palmas on a deep water canal that will accommodate up to a 40’ boat. This is a pool home with 4 bedrooms 2 ½ baths. This home was originally listed for $629,000 and is now on the market for $549,000.

Thanks

Jim Bagwell

2008 Recap

I thought we would recap the market for 2008. We will do Merritt Island this blog and next we will do Suntree/Viera.

2008

In all of Merritt Island there were 421 single family homes sold in 2008. The price range ran from low of $47,500 all the way up to $2,800,000. Of these 421 there were 98 of the homes on navigable water be it canals or river. These 98 ran from $153,000 to $2,800,000. You do pay a premium for being on open water.

2005

In order to get a feel of the turn of the market, I went back to 2005. In 2005 there were 719 single family homes sold. The price range started at $65,000 (trailer) up to $2,275,000. Of these 719 homes 175 were on navigable water they were priced from $159,000 up to $2,275,000.

To start off 2009 we have 469 homes active in Merritt Island. The price range runs from $34,900 up to $4,242,500. The higher price is a home that can be built and seems to be an albatross as in one form of another it has been on the market since 2003. Of these listings 166 homes are on navigable water priced from $171,000 up to $4,242,500. When you get in the middle $200K range it is now possible to get a home on the water that you can actually move into and enjoy Florida.

A buy?

It is not often I recommend one of our listings as a buy but we do have a great house at a good price. It was built in 1968 and we all know what you get for a home built in 1968. This one is different since it has been taken down to the bones and put back with everything new including wiring and plumbing. This home shows great with 2324 square ft, 3 bedrooms 2 baths including a work shop on the back of the house for escape. The lot is landscaped to the 10th degree and includes a covered boat lift and dock. It sits on a wide canal with great views. Priced at $389,000 or $168 per sq ft.

Happy new year to everyone!

Jim Bagwell

"What would you do if I sang out of tune"

Too bad that is how I sing!

Recently I read an article on MSN by Scott Burns about Madoff. Hopefully you all know who he is and what he has done. Mr. Madoff has made 50 billion of other people’s money disappear. Now that is a lot of milk money. Mr. Burns suggested that we revert to medieval times and declare Mr. Madoff an outlaw and the punishment would be he forfeit all his property and if anyone found him they could kill him on sight. Mr. Burns doesn’t think this would cruel and unusual punishment. Now I have my doubts that this would not be cruel and unusual but as yet I am not homeless so my opinion could change any minute.

Parallel universe

My wife showed property this weekend to some dear folks who are looking to relocate to Cocoa Beach. They already have a short sale contract in on a nice condo on the ocean. We suggested they continue looking since you never know the outcome on a short sale. They went to several complexes built by the same builder on the river and on the ocean. They look very well built with great views. The thing that bothers us is that even though the builder says a lot of units are sold when we search county tax records nothing shows up as changed as far as owners. The builder still controls the association since the percentage has not been met for sold properties.

Doubts

At Walker Bagwell we have always been cautious with buyers when they approach a complex we are not sure of the solidity of the complex or management of the complex. I spoke with my wife and my partner about being too cautious. We decided what we have done in our time of business is to advise our friends and clients in a way that doesn’t have anything to do with commission but everything to do with protecting their interests. We feel good about every deal we have advised against going to closing. No money made but when the turn comes the clients will still know where to go to when they want to buy their dream. If you think about the agents that didn’t see the downturn of the market and advised their clients to buy pre-construction and are now in foreclosure or short sale situations, it is mind boggling what commission was made and what money was lost. Fortunes were made or lost in the last 3 years.

Conclusion

What we have lost in commissions we have made up in trust and goodwill. I do believe we will continue what has worked.

Jim Bagwell