Establish Realistic Goals When Shopping for Property

With the Internet espousing $20,000 single house foreclosure deals, the public's expectations of what is available on the market is quite warped. Recently, I showed a property that was listed for $39.9K. Most of the townhouses in the area were going for $80K or more, so this unit was a real deal. After viewing the property, there was only about $5K in repairs. So the property truly was an amazing deal--at $39.9K. My customer hesitated to "make a decision" and lost the deal, however within 4 days there were 11 cash offers at significantly more money than the listing price. Eventually, the property sold for $80K and the "deal" turned out to be just like a regular sale. But for all the naive internet shoppers, the listing changed their perception of the marketplace, because they don't follow up to find out what the real sale price is verses the listing price. Today, inexpensive properties are going through price wars.

As realtors we are seeing more gimmicks to try and delude individuals into believing that there are unbelievable deals. Typically, the $40K properties that we see as realtors are missing all the appliances, terribly located, mold problems, critter infested, missing or damaged walls or other major renovations needed. There ARE deals, but remember the deals are relative. If a property was selling for $2 million and it is listed for $1.2 million in move-in condition, it's a deal. If a property was listed for $79K a couple years ago and now is $50K which requires lots of work. That's not as good of a deal.

Another reason many buyers have unrealistic goals is that they see a friend's property that they just finished renovating. The friend paid $150K for the property and put in $70K in upgrades. When the buyer asks the friend what did you pay for it. The natural response from the friend is to say $150K, but the reality is that in its current shape, the property is worth $220--with months of living in upheaval during renovation.

As buyers, set expectation in reality. Don't expect that all the units in a condo are going to go for the same price as the 30-year old, original condition, short sale price. All properties in the same building aren't work the the same price. (Most sellers think their property is the best in the complex!!)

To also put South Florida in perspective, there are only a few places in the US where the weather is nice all year round. Hence South Florida is one of the most desirable places in the US to live. When people move to Florida they want to be near the water and amenities. All these factor add value to the property. So if you want sand-access with your beach front property, you will pay more money than if you choose to live 5 miles from the beach.

For more information on what a buyer should expect to pay when purchasing in the Fort Lauderdale area, contact Kirk Nicklas at 954.547.3146.