When you examine the current Orlando real estate market a few things are undeniable. The most important fact, there has been a huge decline in Orlando home prices since 2006. Secondly, the foreclosure inventory is still incredibly large. The third factor is that interest rates remain low. There are two potential ways to look at these things. You could look at these facts and say that we are in weak real estate market and an economy that’s struggling. Orlando Real estate investors however, will look at this scenario and see dollar signs
Currently, Orlando home prices sit around 35% below the peak price of 2006 and is starting to show some signs of a recovery. Foreclosure properties and REO’s are the biggest reason for lower than normal home prices. Even if you’re not in a distressed situation, that’s who you’re competing with. This will not change until there’s a demand for more inventory.
Here in Orlando, real estate is already showing significant signs of recovery. Banks are moving short sale files along a lot faster than they used to and inventory is moving.
There are many real estate analysts that say that we haven’t hit rock bottom yet. However, I believe differently. I think we hit bottom in Orlando about six months or so ago and we’re already on the comeback trail. I don’t think we’ll ever see what we saw in 2006 nor do I want to see inflated home prices.
If you’re anOrlando short sale realtor, you’ve noticed that banks are moving short sale files along much faster than was the case a year, or even six months ago. Although our company has an unusual 100% closing ratio on Orlando Short sales, most brokers close about half of their short sale files, which still isn’t bad considering all the work that’s involved. Not to mention everything that can go wrong throughout the process if you’re not experienced in the Orlando short sale arena.
Even though short sales can take anywhere from 2 months to a year from contract to close, people are willing to wait. Sellers that live in the house that they need to short sale have a huge advantage because they can continue to live in their house rent free until the short sale is completed. This really helps families relieve some financial stress, and ultimately translates into the homeowner being in a much better position financially when it’s time to move.
Potential Orlando home buyers also don’t mind waiting because they know that the payoff will be worth it if they are willing to stay in there and play the game. I believe that right now is the perfect time to buy an Orlando Home. The market is starting to stabilize but you can still get a good deal on an a great Property. This time next year people who were going to buy Orlando Real Estate and never did are going to be kicking themselves.
Best Practices for Dealing with Orlando Short Sales
Orlando Short sales are distressed properties in that sell, by mutual agreement between the buyer, homeowner, and the mortgage co, for less than what is owed on the property.
If you’re a seller and you need to stop an Orlando foreclosure on yor hoome, this a great way not only stop the foreclosure, but to get out of debt with your lender, and many times even walks away with cash from the closing. The best part is that it doesn’t cost you anything so you have nothing to lose! That’s not all… you can continue living in your house mortgage free while the short sale is being processed which can be for up to 2 years in some cases [depending on the lender].
For buyers, it’s a great way to obtain a real estate investment. Yes, they can be tricky to find and obtain, but are worth the work… sometimes.
Here are 4 tips for short selling in today’s real estate market.
1. The short sale realtor The final price for a short sale is determined by the lender, not you or the buyer. Many buyers have learned this the hard way because they submitted an offer that did not come anywhere close to the bank’s asking price. This doesn’t mean you have to lock yourself into the asking price, but you do have to start from there and work your way down. Doing this will increase your odds of the bank accepting your bid. Unfortunately, if you have an Orlando realtor that is not experienced in doing short sales then you have a big problem. The realtor has to be willing to negotiate with the bank and be ready to show proof as to why the offer is what it is by doing a market analysis on the property among other things.
An Orlando Short Sale Expert will go back and forth with the lender several times before coming to a mutual agreement that works for all parties involved. With some lenders like B of A we’ve had short sale files that have taken over 2 years to close. If your Orlando realtor is not willing to be persistant and stay the course with the lender for as long as it takes, then you probably hired the wrong Orlando real estate agent for the job.
2. Be careful of going too low Another tip is to avoid going too low when you submit your offer. A bank has to balance the benefit of having a buyer take the property off of its hands without having to go through foreclosure and spend more money versus accepting far too little for the property and missing out on a lot of money. If your offer is too low chances are that they won’t accept it. However, a good realtor will guide you through this process as well.
3. Have your Orlando agent check comparable homes This one should go without saying. You have to know what the true value of the property is, as well as how much, if anything, you plan to spend on repairs or upgrades. If there are substantial repairs that need to happen, this can be great for justifying your offer. This is why you should work with an experienced realtor so that he or she can you through this process.
4. Have your Financing Ready When you’re searching for an Orlando short sale, make sure that you have your financing in place and ready to go. If your realtor shows you a property that you love, chances are that someone else loved it to and usually the first person to submit a solid offer to the bank will get their offer accepted. If you’re a cash buyer then your offer stands an even better chance to get accepted.
Remember, Shortsales take time and you have to be patient . If the bank rejects your first offer, which happens a lot, address their concerns and make them a counter offer. Thousands of Orlando properties that were purchased would not have been bought if the buyers sdid not stay the course and stick it out. Considering the stabilizing market my advice to clients is to send in your highest and best offer from the start. I’ve had clients lose their dream house over a couple thousand dollars and every single one has wished that they would’ve gone up that extra two or three grand.
Since mid-2006, residential values in Florida have declined by 51 percent. Hundreds of thousands of properties have been, or are, in foreclosure and huge numbers of homes have been repossessed. Check out these numbers for the state of Florida.
• 150,000 residential properties in Florida have been repossessed, and are now REO’s.
• 371,000 foreclosure cases are open in courts today.
• 530,000 residential mortgage loans are at least 90 days past due and in default.
•265,000 homeowners have not made a mortgage payment in more than two years.
•1 million residences are in some form “distressed,” whether in foreclosure, owned by banks or in default.
• 46 percent of mortgages are “under water” … in other words, the debt exceeds the current market value of the residential property.
809,… this is the average number of days to process a foreclosure in Florida — It’s easy to understand why Orlando short sales have become so popular with both lenders and sellers, because are the best option for both parties and they create positive movements in the total market.
Will 2012 be the Year of the Orlando Short Sale? I think so, I also think that 2013 might be an even stronger Year of the Short Sale in Orlando because of the volume of pending foreclosures.
There was a group of 150 people that consisted of analysts, lawyers, bankers, real estate agents and developers who attended a forum that more lenders are warming to short sales. They all agreed that distressed homeowners are overcoming their psychological hurdles and coming to terms with the financial implications of an Orlando short sale.
Although, the impacts of Orlando foreclosures and short sales and the fear of more to come are still a threat and prevent value appreciation from returning to its previous levels, there are still some positive signs of growth in the market.
The market is seeing a remarkable spike in Orlando short sales, an increase in overall median sales price for existing homes and increases in median sales prices for foreclosed properties. The Orlando Regional Realtor Association (ORRA) reported that in November 2011, short sales jumped 39.38 percent versus prior year sales. Surprisingly, the accompanying median sales prices jumped by 7.07 percent; rising from $99,000 to $106,000. The fact is that 73 percent of homes under contract and pending closing are short sales” …Wow! That’s a big number.
Although the performance stats for the Orlando real estate market are encouraging we’re not out of the woods yet. The good news is that there will be some great real estate deals in Orlando for some time to come. If you need to get your Orlando house sold for top dollar quickly, contact us today.
