Emerald Coast Real Estate

Ok, we’ve spent countless hours discussing your needs and wants for your dream home or condo.  You have looked at dozens of listings that fit your criteria.  We have spent several days together looking at those properties.  We have researched prices, written offers, and negotiated “The Best Deal” for you. 

Now what happens?

Unfortunately, in too many instances, I see buyer’s that have worked so hard to get the best deal only to give it all up with their financing.  This is a shame considering that mortgages are the easiest component to negotiate.  How do you keep this from happening to you?  Follow a few simple rules:

1.      Get at least 3 quotes.  Every person has a “financial” profile.  This includes your income, debt, assets, credit scores and other pertinent information.  Your rate and the amount you qualify for is based on this profile.  All mortgage companies are looking at the same information and for the most part trying to put you in the same types of programs.

2.       Get quotes from lending institutions or mortgage brokers in the local area of your real estate purchase.  Out of state lenders just do not have the experience dealing with investment properties, second homes, and vacation properties along the Emerald Coast.  There are nuances with Florida Coastal Properties and you don’t want to lose your dream home because your local bank didn’t come through.

3.       Make sure the quote includes, at a minimum; 1) A good Faith Estimate 2) The interest Rate 3)The Lenders Charges 4)Disclosure of any pre-payment penalties

The person that initially works with you on your loan will have little to do with the loan after closing.  Customer service is important but if you choose reputable local companies, you will most likely be getting equivalent service from all of them.

When you call and ask for a quote, make sure to let each know that you will be soliciting quotes from them as well as two of their local competitors.  This will insure that you get the best rates right out of the gate.

Many lenders, either intentionally or accidentally, underestimate insurances and taxes on the good faith estimate.  This will make their quotes look better in comparison to more accurate estimates.  The insurance and taxes are based on property valuations and in the end, will be the same regardless of the lender.

Let me know if you have any questions.  I look at dozens of good faith estimates each year and can help you decipher each quote.

I had a client in town that was looking for a home in destin. They were looking for a house with a pool and wanted to stay below $325,000. I searched through over 100 listings on the MLS and prepared a short list of a dozen of so properties to look at. While viewing the fourth home, we truly found a gem.

Featuring over 2300 square feet of living space, a swimming pool and hot tub, large master suite and separate guest suite, this beautiful home is priced below $300,000. For those looking in Destin, in this price range, there is no better deal available. Check out some of the photos below.

UPDATED 2-1-2008  THIS HOME IS NO LONGER AVAILABLE.

Whether we are buying a new car, computer, plane tickets, or Real Estate, we all want the same thing, which is “The Best Deal”.  With most items, the best deal is assured when we buy the item that we want at the lowest price. 

Real Estate doesn’t work that way.  In addition to the purchase price, things like closing costs, lenders fees, property taxes, and state taxes affect your initial overall total cost.  As a buyer, this overall total cost should be what you are concerned with minimizing.  Keep in mind that most seller’s are focused on PURCHASE PRICE.  Let’s take a look at how to put together a smart offer.

Purchase Price:  This is the most visible and important of all terms in the offer.  It’s also potentially the most offensive and emotional component.  If the property is fairly priced and you want the best deal then make a reasonable offer and focus on the other items.  Seller’s often don’t even look at the rest of the offer if this value is not in the range of their expectations.

Closing Costs: These can be 2%-4% of the transaction.  Many shrewd buyers will ask seller’s to pay these.  The net effect is a reduced overall total cost to the buyer and is achieved with less pain than offending the seller’s with a low-ball purchase price.  I’ve had several listing agents tell me that my offers have been accepted, even though the seller netted less, because of the overall structure and presentation of my offers.

Lenders Fees:  These are fees charged by your lender.  Neither I nor the seller’s have any control over this.  I’ll discuss negotiating the best lending or mortgage deal tomorrow.

State Taxes:  These are charged by the State.  The amounts are not negotiable but who pays them are.  Smart offers ask the seller to pay for these.  These can amount to 1%-2% of the purchase price.

Pre-Paids:  These are required by insurance and mortgage companies in order to establish an escrow account.  The amounts of these are dependent on the purchase price of the home and are not negotiable.  However, who pays them can be.  Again, smart offers have the seller paying a portion or all of these costs.

“Smart Offers” are for buyer’s that have found the property that they want and want to get “The Best Deal”.  Combined with my expert negotiation skills, I’ve found that my buyer’s normally get in their dream home or condo for 3%-6% than otherwise possible.

The Real Estate Environment in Destin may have changed in the past few years but a few things are the same.  In particular, buyer’s are still looking for the “hot” deals.  In 2003 and 2004 pre-construction condos were the rage.

In those days, the phones literally rang off the hook for people looking for pre-construction properties.  Many buyer’s didn’t care about the condo layout, project amenities, location, costs of ownership or anything else.  They just wanted to know where to sign the contract and where to send the deposit.

Today, the phones are ringing off the hook for buyer’s looking for lists of foreclosures and short sales in Destin and the surrounding area.  In both cases, the bank or mortgage holder is involved in the selling process.  Banks are one group of motivated seller and buyer’s can often get a great deal.

The fact is that the early buyer’s of pre-construction condos got in at the right time and made a lot of money.  Some short sale and foreclosure buyer’s will do the same thing.

The key for buyer’s though is that the most important characteristic of a good buy is not about the category that the sale falls in but in the true value that the property represents.  For example, many people that bought pre-construction in 2005 could have bought an existing property at the same time for 10-15% less than the pre-construction that they were looking at.  Because their friend, relative, or someone at a party said pre-construction was the way to go, they overlooked the best investments and made an uninformed decision.

The same pitfall exists today.  While foreclosures and short sales represent one group of motivated seller’s, they are not the only group.  Other motivated seller’s include:

1) Estate Sales
2) Couples Getting Divorces
3) Long term owner’s with low cost basis
4) Seller’s with unexpected illnesses

There are other groups that could be added to the list, but the point is this…..

DON’T GET CAUGHT UP CHASING THE LATEST CATCH PHRASE.  IF YOU WANT A GOOD DEAL, LOOK AT ALL OF THE MOTIVATED GROUPS, NOT JUST ONE.

I had a buyer in the office today inquiring about the cost of owning a condo.  I thought I’d share my answer with you because there are a few things that you should consider if you are thinking of buying a condo:

Maintenance:  the nice thing about owning a condo or townhome in Destin or along the Emerald Coast is that the Home Owner’s Association takes care of most of the maintenance to the structure of the building.  The rule of thumb is that if a repair is needed to the outside of your condo, common walls and balconies, the Home Owner’s Association will take care of it.  If the repair is needed inside your unit, it is your responsibility.

It certainly takes away from having to worry about a lot of repairs that most home owners are faced with like roof, water intrusion, etc.

You are limited though in what can be done to the outside of your property by the rules of the association.  So, if you’re thinking of doing something creative like changing a door or the type of windows that you have, you will need the review and permission of the association’s board first.

Rules & Regulations/CC&Rs:  mostly all condos and townhomes are governed by CC&Rs (Covenants, Conditions & Regulations) that have been created by the original developer of the complex and possibly modified by the board of directors over the years.  There is also a separate document for Rules & Regulations listing additional items to consider.

It is very important that you read both documents thoroughly prior to purchasing your condo or townhome to ensure that you are comfortable with the association’s pet policy, quiet hours, move in/move out process, etc.

Financial Documents/Meeting Minutes:  please review the balance sheets and budget of the association to ensure that it is in good financial shape.  You want to see a healthy amount of reserves for unanticipated repairs and for needed replacement items down the road.  If there are no reserves or the reserves are limited, you might face a special assessment.  Special assessments can be levied and add to the cost of ownership if the association is unable to pay for needed expenses.

I also recommend that you review a full 12 months worth of meeting minutes.  This will give you a pretty good idea of the issues that have been encountered in the past and what is anticipated for the future.

Insurance:  most associations have structural insurance and in and around Destin most carry earthquake insurance.  Your Realtor will ask for the insurance certificate to see the limits and the type of coverage for a particular condo complex.  I always suggest buying additional insurance coverage for the interior of your condo or townhome.  This policy will cover your furniture, jewelry and liability.  Most insurance carriers will provide them and they are not overly expensive.

COSTS OF OWNING A CONDO/TOWNHOME:On top of the regular expenses like your mortgage, taxes (usually run about 1.2% of selling price in Destin),insurance and utilities, you will have to pay Home Owner Association (HOA)Dues. 

HOA dues are monthly fees that support the maintenance of the outside of the complex, gardening, pool & spa and other amenities, structure insurance, water (yeah!  most condo/townhome owners do NOT need to pay for water), and common area electrical and gas.

So… if you are thinking of buying a condo or townhome, make sure to add the HOA dues, set aside some funds for a possible unexpected special assessment and include funds for an interior insurance policy.

I get a lot of people asking about “the numbers” and how they work for condominiums.  Specifically, people want to know about taxes, insurance, association fees, and other monetary costs associated with a condominium.  I had such a request today and will share with you the work up that I done.  The unit that I used for the analysis was Emerald Towers Unit 306 in Destin.  This particular unit has 3 bedrooms, is located on the sixth floor, and feautes over 1700 square feet of living space.  View the complete details here:  Emerald Towers 606

The complete expense analysis is quite complicated and will depend on many different factors.  Depending on your personal financial situation, there can be significant tax advantages including; depreciation, property tax, property expense, and interest reductions.  These factors can greatly reduce the after tax cost of ownership.  Combine these benefits with the long term appreciation enjoyed with real estate and you can see why so many people have to have a place on the beach.

When will the Real Esate Market Turn Around?  That’s a question that I get almost daily.  To borrow from Wall Street…..”You can always spot the bottom when there is blood in the Streets”.  That is in reference to stockbrokers and speculators that jumped out of high rise buildings during the great depression. 

When things look the worst and people have no hope, they sell because of fear or necessity.  This point in time is when the most savvy of investors begin to accumulate.  When you think about it, you start to see the logic.  Whether people are selling as a result of fear or necessity, it doesn’t matter.  The affect is the same, tons of inventory available with motivated sellers.  With Real Estate, forced sells are easy to monitor.  Specifically, the majority are individuals that can no longer pay for their homes, condos, or lots. 

The number of Okaloosa and Walton County Foreclosures has been increasing month over month for the past 3 years.  At some point, we will see these decrease and the truly motivated sellers will be gone.

Only a few people will ever time the market perfectly and buy at the bottom.  For the vast majority it will be too late.  The truly savvy are buying now.  They aren’t looking to buy something to flip in six months but are accumulating undervalued assets for the long term appreciation.