Orlando Foreclosure Discounts Shrinking

Orlando Foreclosure properties just aren’t the bargains that they used to be. In August of 2009, the average discount on a foreclosed home was about 24%. As of September of this year, it’s now down to about 7% compared to what a home buyer would’ve paid for the same property in a conventional transaction.

Orlando, which is one of the cities that was hit the hardest by the foreclosure crisis has such a strong demand right now for properties that the discounts are pretty much gone unless the house is in need of major renovations. Our company specializes in Orlando short sales and I can tell you that just about every one of our listings receives multiple offers for the listing price or above.  It’s extremely rare these days that we get an offer that’s lower than the listing price because buyers know that it’s a very competitive market right now. As a matter of fact, about half of our properties end up selling for over the listing price.

Regular homebuyers [not investors] are the main reason for the increased demand for Orlando real estate. Everyone wants to take advantage of the historic affordability, which means the combination between lower home prices and great mortgage rates. This doesn’t mean that you still can’t get a good deal in Orlando, but be prepared to submit multiple offers on multiple properties. It’s because of this that it’s much more work to be a buyer’s agent where you have to show multiple homes and submit multiple offers before you find what your buyer is looking for. It’s very common these days to go see a house that has been listed for less than 24 hours and find out that the home already has multiple offers on it.

Orlando Re-Habbers Still Turning a Profit

The average home buyer wants nothing to do with remodeling a home after they’ve purchased it. This is why there’s soo much competition for Orlando homes that are move-in ready. However, for the home buyer that is willing to roll up his or her sleeves and dive into some major home repairs, there’s still a profit to be made. There are some lenders that will complete the renovations on their own foreclosed properties before putting them back on the market, but most of the time they just want to sell them as-is.

Homes that are in need of repairs can still be good investment opportunities if you know what you’re doing. Using an experienced Orlando realtor to help with your search is highly recommended. It’s also important to know what repairs need to happen and how much the repairs will cost before you commit to buying a fixer-upper. Although profit margins are quite a bit smaller than they were a few years ago, a full-time rehabber can still make a decent living from flipping houses.

 

 

 

 

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Orlando Realtor’s income up by 25%

Recent studies by the National Association of Realtors show signs of promise for today’s real estate professionals. For the second year in a row, business activity rose for real estate agents since 2011. The gross median income for an Orlando realtor in 2011 was $34,900.00 and in 2012 it shows that realtors made an average of $43,500.00. The numbers aren’t in for 2013 yet but you can bet that the average Orlando realtor’s income is even more than it was in 2012. This is great for the industry because more agents will be able to continue working as agents instead of having to find another job because of market conditions, as was the case in 2007-2008 when soo many agents just weren’t making enough money to survive.

Real estate agents that have been at it for a while of course make considerably more. Agents that have been in the business for more than 8 years showed an average income of $58,300.00 for 2012. It’s like anything else in life, the more work you put into it, the more reward you will get from it. On the opposite end of the scale are newbie realtors [2 years or less] who only averaged $$9,700.00. For these agents, they are facing an uphill battle and more than half of these newer agents will get frustrated and eventually seek employment elsewhere.

Realtors Working twice as Hard for the Same Money

Studies also show that a realtor back in the most recent peak of the Orlando real estate market in 2006 was making twice the amount of money for the same amount of work. Now the tables have turned. A realtor these days has to work double-time in order to make the same income they were making 7 years ago. With all the new laws and regulations in place, realtors have to really know what they’re doing. Not too many transactions are easy to get closed, there seems to always be an obstacle or two or three, especially when you’re trying to close on a short sale. Real estate transactions these days require skill, competence as well as patience to get them closed.

 

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How Do Orlando Real Estate Agents Get Paid?

I was meeting with a client last earlier this week that was looking for a 4-bedroom home in East Orlando. At one point in our meeting, she looked at me with a blank stare on her face and asked me how much I was going to charge her to find her a house. Just at that moment, I realized just how many pieces there are to the puzzle in a real estate transaction.

As Orlando real estate agents, we’re aware of everything involved with buying and selling homes because it’s our profession and it’s something we do every day. However, a first-time buyer may be completely clueless about how a real estate transaction works. That’s why it’s our job as real estate agents to make sure the buyers and sellers are completely informed about every last detail of the transaction they are about to be involved in.

Typically the buyer’s agent’s commission gets paid by the seller. Here’s how it works… The agent representing the seller AKA the “Seller’s agent” signs an agreement with the seller AKA a “Listing agreement” to pay a specific amount of commission in order to sell the home. Then the listing agent will enter the listing into the Multiple Listing Service [MLS] and based on whatever amount they agreed upon with their client, they will usually offer the buyer’s agent 50% of the commission. When the transaction is complete both agents are paid out of the seller’s proceeds.

How do Realtors get paid when it’s a short sale?

It works a bit differently when it’s a short sale or foreclosure situation. In a short sale scenario, the seller is upside down on their mortgage which means that there is more money owed on the property than the property is actually worth. A short sale is a pre-foreclosure arrangement between the seller in which the lender is agreeing to the sale of a property for less than what is owed in order to re-cooperate some of their money. This usually means that the seller is financially unable to bring any money at all to the table. In this case, the Bank pays both real estate agents. Banks will usually approve a commission of 5% or 6% which is to be split 50/50 by both agents involved.

There is one situation in which the buyer pays the commission which is pretty rare. Some homeowners choose to sell their property “For Sale By Owner” in order to avoid paying any commission at all on the sale of their home. In rare cases like these, the buyer pays the agent when the transaction closes. It’s never a good idea for a buyer to enter into a real estate transaction without the representation of a licensed Orlando realtor. 

Orlando Real Estate Broker

A Real estate agent plays many key roles in getting the transaction closed. A realtor can also play the role of negotiator making sure that the buyer gets the best price possible on the property, most of the time the amount of money that a buyer saves on the transaction far exceeds what they agreed to pay the agent.

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