Between 2008 and 2010 you could easily buy a property in Central Florida for at least 25% below the property’s market value. Since then we’ve seen these huge discounts on real estate shrink to about 3% or less. Even with Orlando short sales, the banks are just not giving us the deep discounts that they were just a couple of years ago.
When I tell people that we’ve been specializing in doing short sales since 2005, they would ask with a bewildered look in their eyes “did short sales even exist back then?” or “how were you doing short sales in a hot market?” and the truth is that we just marketed to people that were in foreclosure and tried for the short sale with the bank and they were accepting these jaw-dropping low ball offers. And believe it or not our closing rate on short sales back then was about 85%.
I believe that the lenders were always a bit behind when it came to knowing what was really happening in the real estate market, there seemed to be a delay, kind of like getting today’s newspaper next month. Within the time it took them to catch up to what the reality really was, home buyers were getting some really great deals on Orlando short sale properties, especially cash investors that we’re able to buy multiple properties at one time.
These days it’s evident that lenders are more “on the ball” when it comes to knowing what the true market value of a property really is.
I think it’s pretty obvious to everyone that the Orlando real estate market is getting hot again and we’re not done yet. We’ve had buyers just a few months ago that didn’t want to pull the trigger and buy yet because they wanted to hold out for a better deal, against my advice. When they contacted me again recently they didn’t like what I had to say, not one bit. These same buyers are now scrambling to buy a property with a great sense of urgency. This holds true for a lot of people who thought that the market was still on a decline.
With very little inventory out there, prices continue to rise and it looks like this trend will continue for a while. Every new Orlando listing that we get in our office ends up getting a contract on it within three or four days.
Some properties fall short on the Appraisals
When an Orlando property gets listed for a certain price many times buyers will submit a contract for thousands of dollars over the asking price. The problem lies when it’s time to get the property appraised and the numbers are just not there. As solid as the market appears to be right now, appraisers are being more careful when doing their job. Appraisers get their numbers from properties that have been recently sold in the neighborhood so that means there’s not much wiggle room on what they can do or what they’re willing to do.
Before the real estate market crashed in 2007, appraisers along with a whole lot of other real estate professionals got into some big trouble for bending the rules to benefit their clients as well as themselves. These days appraisers are more “by the book” than ever and I think it’s a good thing.
