Jacksonville FL Real Estate Update

Unfortunately there are some unscrupulous lenders out there (just as there are unscrupulous RE agents) who are more interested in their own pocketbook than in your best interests. The nonprofit Florida Associateion of Mortgage Brokers has requested that we (RE sales associates) pass along a few tips to help rid the industry of these unscrupulous individuals and companies. In that spirit, I will be posting each tip individually over the next few days.

SHOP AROUND AND COMPARE - If you need to borrow money for a home purchase, refinance, home repairs, medical expenses or bill consolidation, shop around with different brokers and lenders. Compare interest rates and find out what the total costs of the loan and your monthly payment will be before making a decision. Use the Good Faith Estimate from each application to compare the loan terms and costs.

As mentioned in a recent, FSBOs often price their homes too high. In completing a comparative market analysis for a FSBO yesterday, we found that they had their home overpriced by a minimum of $30K. In fact, the home should be priced about $40K less than they have it to be in line with 'sold' comps for the last 6 months. They may find a buyer (because many buyers work under the misconception that they are saving money by purchasing from a FSBO - both sides of the deal DO NOT get the benefits of not paying real estate commissions), but even if they do, it will never get an appraisal at that price.  As is so often the case, sellers think they have the nicest house in the neighborhood making it worth 10%, 20% or 30% more than all the others. We definitely have our work cut out for us.

Buyer’s Market - Seller's Market - Multiple Offers - Limited Inventory. If you are buying or selling property you’ve probably heard these terms and wondered what they all mean and how they might affect the pricing of a home.  Or, does the price put on a property even matter? The fact is, the asking price is possibly the most important factor in determining how fast your home sells.

We know that you want to make sure that you price your home high enough to make a profit, as well as leaving negotiating room.  But, you should consider also that, even in a hot seller's market (like we were in last year), overpricing your home is probably the most dangerous mistake that you can make as a seller. Besides the asking price, there are many things that can affect how quickly you sell your home (i.e. how you market your home), but for now, let’s just consider the price.

It really doesn’t matter if the market is a buyer’s market or a seller’s market, the fact is if the home is priced fairly and your home is in a condition that appeals to the average buyer, you should be able to sell your home if you are able to market it to enough potential buyers. However, partly due to the hot seller's market we experienced in 2005, we are seeing more and more examples of overpriced homes, and as a result, homes that do not sell. A home may be overpriced for many reasons. Some sellers consider their first asking price to be a trial period, where they just want to see if they can attract a better-than-normal offer. Others simply insist that their home is worth more than any objective market analysis would indicate. For example, sellers who have been trying to sell their home themselves for months may now want to raise the price since they are considering hiring a Realtor for representation and will be paying a commission. The sellers still want their net price, so they try to add the sales commissions to the listed price. Homes like this usually stay on the market the longest and end up being sold for less than market value.  

There is considerable data available showing that homes listed with a real estate agent sell for far more than those not listed with an agent – more than enough to cover the commissions paid.Many sellers know of a home that sold for a high price in their neighborhood.  They naturally assume that their home should be similarly priced. But, they may be unfamiliar with the particular differences between that house and their own that would justify the difference in value. One of the primary reasons so many for-sale-by-owners fail is because the seller is personally biased. It is just too easy for people to convince themselves that something they own is worth more than its real value. It’s very hard to put yourself in the buyer’s shoes when assessing your own property.  That’s just human nature.

It is important to know that there are buyers in every price range in your market just waiting for the next property listing. They've already seen everything that fits their criteria without finding the right home. If you are trying to sell your home, chances are you’ve been shopping for a new home yourself.  Think about how your attitude is when looking at it from your perspective as a buyer.  If your home is priced right and it fits, you could have a quick sale. However, if it is overpriced, the buyer may not even see your home at all or won't make an offer. And with interest rates on the rise, timing is critical in finding the right buyer. By overpricing your home, you may exclude buyers who qualify for your home now. When you get around to reducing your price to where it should be, interest rates may have risen, thus bumping that buyer to a lower price range.

Overpricing can cause you to lose that buyer forever.  Even if you are able to find a buyer willing to pay your price, it still must appraise… but that’s a topic for another time.More Info at www.BestHomesInJacksonville.com

• 78% of renters believe that it is generally true that people cannot obtain mortgages without perfect credit.
• 52% of renters believe that they personally can't get a mortgage because of credit issues, even though 46% of the first-time homebuyers surveyed didn't believe their credit was "excellent" or even "very good".
• 56% of renters believe that a down payment of 15% or more is required when buying a home.
• 55% believe that size of a down payment is a personal barrier for them, even though 74% of first-time homebuyers reported they put less than 15% down.

As mentioned in my previous article, Jacksonville has earned the distinction of being one of the most affordable cities in America. And, when compared to the rest of Florida, real estate in Jacksonville is a downright bargain! In fact, according to a recent National Association of Home Builders/Wells Fargo Housing Opportunity Index, Jacksonville is the 68th-most affordable market of 158 markets surveyed nationwide. And in Florida, where prices have sky-rocketed, Jacksonville remained by far the most affordable major market, ahead of Tampa, Orlando and Miami.

That's one of the reasons why so many Californians are relocating to our area. In fact, according to data compiled by the IRS, more people moved to Jacksonville from San Diego County than from any other county in the nation between 2003 and 2004. Other areas from which newcomers are arriving in huge numbers include New York, New Jersey and the South Florida counties of Broward and Dade.

Our message to anyone thinking of relocating to Florida? Ya'll come on down... we'll give you a great big Southern Welcome!

It's kind of strange to talk about real estate "bargains" in a day and age where a $200K home is classified as "entry level". But the fact of the matter is that Jacksonville may well be one of the most desireable relocation and investment areas in the nation. Relatively speaking, it is an absolute bastion of affordability.

According to the most recent findings, nearly 57% of homes sold in the greater Jacksonville area are affordable for families earning the region's median household income. When you consider the fact that Jacksonville is far from a high-income producing area, that makes it all the more appealing to investors from other parts of the country where incomes are considerably higher.

Any Investors interested in the Jacksonville, Florida market? Feel free to contact us. Many agents do not like working with investors but we have a system that works for us and for our investors so we don't mind at all. For good resources, check out our investor's page at http://www.besthomesinjacksonville.com/Investors_Information/page_1675280.html

In our Jacksonville market, we are beginning to get more and more inquiries from FSBOs. The reasons are pretty obvious, I suppose. Even homes listed in the MLS are taking MUCH longer to sell than they were just a few months ago so, without adequate marketing these homes aren't even being noticed. And to make matters even worse for those trying to sell on their own, they don't seem to be aware of the fact that double and triple digit appreciations are over (at least for the time being).

In our farm area alone, we are seeing FSBOs at $15K to $50K overpriced. If they are able to sell at these prices (more power to them), the unsuspecting buyers who thought they were getting a deal by not using an agent are the ones losing out. Regardless of the market, whether you are a buyer or a seller, statistics indicate you'll be better off by contracting the services of a professional. After all, we're talking about the largest investment most people own.

First off, I need to acknowledge that the vast majority of REALTORS conduct their business ethically. I don't know statistically, but my guess is that we have as high a percentage of ethical members as any professional group in the USA. That said, a few bad apples can definitely spoil the barrel. There are some who just don't care and do whatever they please as long as they don't get caught. Some even get caught, fined and jump right back in doing the same old stuff. I think we can all agree that these agents are rare and we all decry their actions.

But there is another group that I want to address. They are the agents who are willing to cross over into the 'grey areas' if you will. They would never knowingly write a bad contract, fudge a report, suggest anyone lie about anything related to a transaction, take money 'under the table', etc, but at the same time, they see nothing wrong with ignoring city ordinances - yes, that's right, they think it's perfectly acceptable to break the law because "everyone else is doing it." Like undisciplined adolescents, they excuse themselves with this lame reasoning.

What am I talking about? Directional signs.

In our city, it is illegal to post directional signs (with only a few exceptions such as "open house" signs and they must be removed immediately after the event). And yet, we see them all over town. Our local board, NEFAR, has warned agents repeatedly that it is illegal, carrying hefty fines but agents continue to use them. Oh, the use tapers off a bit right after the warnings but then increases after awhile.

I've observed some street corners with as many as 8 different signs pointing in the same direction. (Ignoring the fact that they are illegal, does this even make good economical sense? If there is already a sign pointing toward my listing why on earth would I waste my money - let alone take the risk of being fined hundreds of dollars - putting up another sign?!)

And, really folks, do you like the way it makes our city streets look? I don't. To me it is just plain tacky.  Also, if agents would practice good ethics by obeying this law, they would have good standing to demand that the city enforce the law as it applies to FSBOs too. Imagine if the FSBOs couldn't put up these signs how much harder it would be for them to attract buyers. As professionals, we are already paying for legal advertising. Let's make the FSBOs pay too.

You may ask, "Is this really a question of ethics?" I would answer, "absolutely!" What is more unethical than knowingly breaking the law?

Disclaimer: If directional signs are legal where you work then this article doesn't pertain to you.