It's a popular new concept and something different than a condotel (see my last post). Fractional ownership is just what it says: You own a Fraction of a whole! There is a new development in Key Largo (Fishermans Cove), anticipated to be completed December '07 : There are 6 residences and each residence is sold by 1/8th. The first six buyers will be able to purchase such fractional ownership for 295K (After that prices will be between 350K to 450K) with a refundable reservation fee of 5K!Here some general info: 6 well appointed residences • Fee-Simple deeded real estate • 1/8ownership3 BR/3BA fully furnished • 2300 sq ft. living space • 450 sq ft.private balcony Waterfront luxury residences, overlooking a tropical lagoon pool,and the pristine Gulf of MexicoWith NO maintenance or hassles...all at a fraction of the cost ofwhole ownership!Amenities & hospitality services you would expect from a 5-starresort Roof top owners' retreat plunge pool The Big Chill Restaurant and Bar (with room service)Usage of 2008 fully maintained Club Boats & Dockage (Provisioned, fuel; stocked with bait, food, beverages, deliveredto your dock)Private cabanas with flat screens & butler service Membership to The Marina Club adjacent to propertyConcierge ServicesPre-arrival grocery shoppingPersonalized storage lockersHD TV/DVD in LR & all bedrooms with DVD library Fitness Center, Spa treatment room & servicesDaily HousekeepingAll utilities included: (cable, phones, Wi-Fi, electrical, gas, water & sewer, PLUS allreal estate taxes & insurance)A truly carefree vacation ownership with NO hassles ormaintenance! HOA monthly dues $824.00!No lodging or initiation fees!

"I am waiting for the market to hit bottom!" That's what I hear lately from a lot of my buyers. When is the bottom of the market here? Nobody will know until AFTER the turn. Bottom will be there for a short moment; after all it's a full circle and once it hits bottom it will be on the upswing. Is the bottom here now? I don't know myself to be honest and neither does anybody else. I do know this: The Keys are a unique market with a very limited supply of Real Estate and actual sales prices have not made the same drop as Real Estate in most other areas. There are not a lot of distress sellers in the Keys. Period!What has dropped are the asking prices! Asking prices are no longer 'any number in the sky' but a number based on previous sales and not on inflated prices on houses on the market that are not selling. I have buyers calling me telling me how amazed they are by how much prices have dropped because a house that was for sale for 2,5 Million a year ago, is now on the market for 1,7 Million. That is not a price drop; that is a seller who woke up; realizing that his property never was worth 2,5 Million even at the height of the market!Yes, it is true that actual sales prices have dropped somewhat but not drastically. What is definitely true is that properties have not appreciated over the past couple of years in the Keys. We were used to prices going up between 10-30% annually.No matter where you look mediawise: Real Estate is not doing too well! It is a buyers market (More sellers than buyers make a buyers market) . Buyers feel that they should be able to get one heck of a deal now and that is true in most markets in the US. Not so much here: I have written many very low offers in the past year only to find out again and again that sellers are not willing to sell their property for much less than the last likewise property has sold for.I met a good friend of mine yesterday evening, an appraiser in the Keys for the past 22 years, and I asked him if he thought that we are at the bottom of the market and he immediately answered "Yes, I think so". Maybe he is not right; we won't know until the turn has been made.My point is that this is indeed a great time to buy and sooner or later the bottom was/is here and will be... gone ....The market was somewhat similar to what it is now when I started working in the Keys and I saw just how quickly the market can change once it is on the upswing. I cannot tell you how many times I heard "I should have bought a couple of years ago" .... don't let that be you in a couple of years!

One would think they are and they certainly can be, but you are making a mistake if you are only looking at short sales and foreclosures in the Keys! Firstly: In comparison to other areas we have very few foreclosures! Most of the few owners who are in distress are owners who bought at the top of the market with 'creative' financing (E.G. interest only loans or variable rates).

Just in case you do not know what a 'short sale' is: A short sale is a sale in which the lender has agreed to take less than what is owed on a property and the borrower can prove that the market value now is less than what is owed and that the borrower will probably default on his mortgage payments if the property is not sold shortly. Here is the 'problem' with a short sale: If a property was bought for 1 Million Dollars two years ago and was bought with 10% down with an interest only loan; there is still 900K owed to the lender. A property that was bought at the very top of the market for 1 Million might now sell for 700K. The bank might agree to a short sale at 800K (that's still a 100K loss to the lender) but it's not really a good deal to a buyer if the buyer can buy a similar property for 700K from somebody who purchased the property five years ago for 500K and is not in distress but simply wants to sell his property.

You must keep in mind that the Keys are a very unique area and Real Estate is governed by location.

Real Estate was doing great everywhere four/five years ago but appreciation in property value was one of the greatest in the Keys! You were able to buy a condo for 300K and the value doubled within a year IF you sold the property the following year. Many owners felt that the appreciated value was money in their pocket and did not realize that it is only money in their pocket if it is actually there and sold the property for the profit.

Once the market started to slow down sellers were not willing to take less than what their property was worth at the height of the market because in their mind the value of the property was what they had anticipated being able to sell it for.

Of course that is not true: The value of everything is how much somebody is willing to pay for it!

I cannot tell you how many good offers I wrote on properties in the past couple of years; offers sellers should have taken but wouldn't because they felt entitled to making 300K within three years of ownership and that's ok because it is their property and they get to decide for how much they will sell. Nevertheless a lot of these sellers are now realizing that the market is not what it was and if they really want to sell they will have to lower their price.

There are quite a few sellers who want to trade up and are looking to buy something larger in this buyers market but in order to do that they need to sell their other property first. These sellers might take considerably less for their property so they can have a down payment for another property that they in return can get for a good price now.

You will not find one person in the Keys who does not believe that Real Estate will be booming again just like it did not too long ago.

As in every investment you need to play your cards right and it is much wiser to ask a seasoned Realtor what is a great deal right now then to just be interested in Foreclosures and Short Sales. You might be able to get one hell of a deal from a seller who purchased his property ten years ago for little money (little being relative) and is now ready to move on and just wants to sell. Find a Realtor whom you can trust and take advantage of their expertize! A saved commission can cost you a lot of money if you over payed for the property just because it was a short sale and you thought that all short sales are great deals!

Let me clarify that there are short sales that are a great deals but don't limit your search to just those properties!

Hi everybody,
I thought I'd write another post with some deals; after all that's what all are buyers are looking for. In case you don't read my blog regularly: be careful to only look at foreclosures and short sales; they are not always the best deal out there.
Read here why

These are some good deals currently on the market from MM74 to MM110:

Condominiums

Canal front homes

and open water front houses

Let me know if you are interested in any of these properties and thanks for reading my blog!

As I watch what properties are going under contract or have sold I am sometimes flabbergasted why this property sold and not another very likewise one for considerably less money. Here is the most likely reason for that: The buyer had no idea that the other less priced property was on the market.
If you worked with a Realtor you probably assumed that the Realtor did her/his job and aided you in finding the best deal. That is unfortunately not always so. I won't bore you with agency relationships (They are what enables an agent to do the unethical thing of selling you something that might be overpriced and not tell you about other properties for sale by other agents).
When an agent gets a listing; the 'going rate' for commission is between 6 and 7% in Florida. (This is not a fixed commission!). The agent then lists the property in the MLS and agrees to pay (Generally half of the commission)to a cooperating agent who brings a seller. Needless to say that all agents prefer to sell their own listings: Making 6% instead of 3% and making their seller happy.
Let's say you call an agent on an ad they are running for a listing; that listing in particular does not suit you but the agent asks what it is that you are looking for and sends you some listings that you are interested in. You meet with the agent, look at some properties (Let's use condos in this case)and really like one complex. The agent happens to have 10 listings in that complex and shows you all ten listings. It is clear to see which of the ten listings is the best deal. You make an offer and the seller is quite negotiable in price. Wow! What a deal you got! Except the condo next door to the one you just bought for (let's say) 630K and is in the same condition as yours, is on the market for 499K.
Beware: Make sure that your agent is a transaction broker and not a single agent for the seller! Ask your agent to give you a print out of all listings listed in the MLS (Not just the agents listings)and demand to see all of them.
I just had an agent who is on site at a condo complex call me and ask me to give him a higher commission should he sell my listing in the complex where he works; if I did not agree to the higher commission he refused to show my listing. (It is the lowest priced nicest unit on the market and by far the best deal).
Something might look like a great deal but you better make sure that there isn't an even better deal out there!

Here is the usual update:

These are all new listings since my last post

Properties that have gone under contract

Sold properties

Thanks for reading my blog!