I never understood why so many sellers do not do this automatically before putting their home on the market. If they sell a car, they book it out. If they sell their jewelry, they have it appraised. Why would anyone selling real estate, price it without knowing its true market value?

In the Navarre and Gulf Breeze areas, an average appraisal would cost under $500. A typical mortgage payment would be over $1000. Do you see where I am going with this? An appraisal costs half (or less) of one mortgage payment. An over priced home will stay on the market for months until the price is reduced to meet market needs. Each additional month is another mortgage payment down the tubes.

If you don’t want to spend the money for an appraisal, the next best thing to establish market value is a Market Analysis from your favorite Realtor. Be sure your Realtor shows you the most recent sales of homes which are similar to yours as well as any pending sales and expired listings (what has not sold). This is where you find your market value.

After establishing your market value, you can compare your numbers to what is currently for sale to see where you are in relation to the other homes for sale. Either way, your home will only sell for what the market will bear. The sooner you price it according to current market values, the sooner you will have it sold.

The next thing you have to know is the market condition. The best indicator for market condition is the supply and demand indicator. How many homes in your price range are on the market and how many are being sold each month. If you calculate less than a 6 month inventory, the odds are in favor of the seller (that’s you).

However, if you calculate more than a 6 month inventory the odds are in the buyers favor. That is the market we have been in for the last 2 years. In a buyers market, a shopper has a large inventory to select from. Many times a shopper has a hundred or more homes to choose from in their price range, they will usually look at the lowest priced homes with the most square footage first.

This is why it is so important to be amongst the lowest priced homes in your category. If your home is priced in the middle of the bunch, you could easily be competing with forty to fifty homes that are priced lower than yours and the odds against you become even greater.

You need to have your home priced within the lowest half dozen in your square footage range. One of our local builders said it best. “Prices are dropping. It’s a race to the bottom and we are going to win.” This builder understood the climate of a declining market.

While most of his competition were “hanging in there”, this builder was able to sell his inventory at prices which seemed low at the time, but are out of reach in today’s market. Here we are months later and most of the other builders still have large inventories. In order to “stay competitive”, the remaining builders have been dropping their prices as the market has trended downward. This is called Trailing the market.

Had these builders been willing to race to the bottom in the first place, they would have sold their inventory months ago at prices much better than they could yield in today’s market. We can take a lesson from this. You do not want to trail the market to the bottom, or do you want to win by pricing it right the first time?

If you have a home in the Florida Panhandle, check out what homes in your neighborhood are selling for at http://www.search-panhandle-homes.com . If you would like a FREE market analysis, contact Jon Payne with Navarre Beach Realty at 850-259-9765.

Find great real estate bargains in the Florida Panhandle like, Navarre, Ft Walton Beach, Mary Ester, Gulf Breeze, or Destin, go to http://www.search-panhandle-homes.com

We have all been reading and hearing about foreclosures popping up everywhere. If you see one you are interested it, there are certain things you need to know. The first thing I would like to clear up is the common misconception many shoppers have that suggests you can pick up a foreclosure for .40 to .50 cents on the dollar.

In a market like we are seeing, you might think banks would be happy to see any offer, even if it is low. However, the federal government strictly regulates how much the banks can lose so don’t expect any low offers to be accepted. An offer within a 5% margin of the asking price has a decent chance of getting accepted. The end of the year might bring some exceptions to this rule.

When submitting your offer on a foreclosed property, you will need to have your financing in line. Every offer must include a pre-approval letter if the property is being financed. If you are paying cash, they you will have to include proof of your funds.

Each bank will have its own addendum’s that they want the potential buyer to sign and add to the offer. These addendums are written to accommodate the laws in all 50 states, so they can be pretty exhausting reading, but do read what you are signing. You will have to sign them if you want your offer accepted.

Another thing about bank owned real estate; they are all sold in “as is” condition so hire a professional home inspector. Most foreclosed properties have the utilities turned off, so when you do your inspections, you will need to turn the utilities on in your name so you can inspect the functionality of the home.

If you are using a lender, things can start to get complicated. All conforming and government backed mortgages like FHA,VA and Conventional mortgages require the home to be in good condition. If the appraisal reveals problems to the home like wood rot, broken windows, or roof damage (to name a few), the lender will not fund the transaction until these items are repaired.

Since the bank will not make any of the repairs, you will have to handle the repairs out of your own pocket or you will have to pay cash for the home. If you decide to handle the repairs, you will have to hire a licensed and insured contractor due to the bank’s liability. In fact, some banks will not allow repairs at all because they just don’t want to be liable for any accidents which could occur on the property during the repairs. To avoid the whole repair issue, ask your lender for a non-conforming product or pay cash for the property.

There are some other points to consider also. Most banks want to close quickly. They watch their bottom line daily. When making your offer, schedule your closing date within 30 days. Be sure your lender (if you use one) is on top of their game because most banks will charge the buyer a fee for every day it takes to close after the original closing date.

And one last thing: When your offer reaches the bank (seller), it will probably be put on a stack of hundreds of files. The people who work on your file have strict guide lines to follow. They work each file the same, over and over. You just don’t have a face with a system like this. There is no humanism here. No emotion, just files and they have to be a certain way or they get kicked back.

As long as you are prepared for what the banks are looking for, and you have an experienced Realtor, you can have a smooth transaction. You just have to play by their rules. There are lots of great deals on Real Estate out there. Right here in Gulf Breeze, Navarre and Ft Walton Beach, there are many great deals on the market. Many of them are bank owned foreclosures. To find great real estate bargains in Gulf Breeze, Navarre, and Ft Walton Beach, go to http://search-panhandle-homes.com.

One more important tid-bit: Bank owned properties are not “Short Sales”. Short sales are a completely different type of real estate purchase and carry a whole new set of rules. Actually, each short sale transaction has its own set of rules. Short sales are much more complicated and time consuming than foreclosures. If you are going to deal with a bank, it is much easier once the home has been foreclosed on.

Jon Payne is a Licensed Florida Real Estate Agent with Navarre Beach Realty, Inc. You can reach him by email at jon@jon-payne.com or on his cell at 850 259-9765. http://Jon-Payne.com

For great real estate bargains in the Florida Panhandle, to go to http://search-panhandle-homes.com.

REALonomics.net advocates that the industry open up the property information portals to consumers and upgrade its approach to how it is interacting with the consumer by implementing more social networking such as www.CityBlogUSA.com, a community blogging network for every city in the USA.

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