Lets make a deal "Fact or Fiction?"

It seems like foreign buyers and out of state investors still think there is a fire sale going on homes in South Florida. They read the papers and listen to news reports of prices declines in excess of 50% and think thats the norm when in fact its not uncommon but is far from the norm. Many potential owners have such high expectations for snatching great deals that they lose the opportunity to take advantage of the opportunities that do present themselves, because they believe they are in the drivers seat when in fact in many cases they are not.

For instance there was this very rare Fannie Mae condo foreclosure, on the ocean in South Palm Beach, completely upgraded which sold a few years ago for over $500,000, this foreign investor came to town thinking he could name his price and win. The property was listed at just under $200,000 lower then its accessed value. Well this investor offered only $120,000, long story short, he bid it up to $170,000 and refused to go any higher. The winning offer came from another investor at $172,500, so the initial investor lost out over chump change, the second investor was the big winner and it only cost him $2,500.

Since the peak of the recession and the peak of home inventories about 2 yrs ago the markets have improved dramatically, in many areas resale inventories have dropped by 50%. Thats not to say the there still aren't great deals to be had but they are becoming harder to find and there are more buyers looking at the same properties. Consequently you can have several buyers fighting over a deal and its not uncommon to see the prices bid up higher then the original asking price.

So is lets make a deal "Fact or Fiction" ? I guess you can say it depends on: What market your shopping for a home in and what you consider a deal. There are areas in every county in every state that got hit harder then others as it relates to home price declines. Some areas have realized price declines of over 50% while others have only dropped 25% and a few wealthy areas homes prices have actually held there ground pretty well.

So what is a buyer to do, to start be realistic. Find out what the homes have been selling for in the area you interested in. Look back six months, looking back further is useless because prices have been stabilizing since then, looking at prices beyond six months would give you a false impression of current home values. What you do not want to do is lose out on a good deal because your comps and your offer were not realistic based on the current market.

Also make sure your ready, willing and able. If your asking a Realtor to shop properties for you but your not willing to accept what the current market is expecting then your not "ready". If your asking a Realtor to show you homes that your going to low ball without any expectations to be realistic about pricing then your not "Willing". Finally if your thinking that you will work out how to finance your purchase after you make the offer and not before then your "not able".

The real estate market in South Florida has been dealt a serious blow but it is on the mend. Do not fool yourself into believing there is a "fire sale" going on because there is not. There are some great deals, many good deals and many more that are just deals. Not everybody wants to be out at any price, those that wanted to have already, those that may be left are working more deals with lenders that help them keep their homes or leave them in such a way to preserve the homes value. As a result the housing market in South Florida has been and continues to slowly improve.