I Could Have Bought for Less...

By
Real Estate Broker/Owner with Daytona Condo Realty, 386-405-4408

Every now and then I sit and scroll through old e-mails, deleting some and stumbling upon those that at one point were very hyped about buying a condo on Daytona Beachside, requested tons of information, asked me go to the unit and take dozens of photos...

But it is part of the job, and I do it.

Just last January-February I have exchanged 17 e-mails with a customer, who was looking at something definitely oceanfront or great oceanview, 2 bdr/ 2 baths... Finally he picked the least expensive unit in 89 Oceanfront Condominiums in Ormond Beach, cut it by another $30K and wrote that if he could get it for $140K, he would then present an offer with a long list of contingencies...

I am not the Seller, I am only an agent, so I contacted the Listing agent. Usual story. The unit was priced $34K lower than next lowest priced unit, and the reason for that was that there was a serious legal problem with ownership, and getting it was not a simple thing. There should have been attorneys involved and the outcome was not looking rosy. Of course, dropping it another $30K was out of the question. I relayed it to my customers, and they disappeared.

Yeah, yeah, yeah, I know that the market in Florida is terrible, I can read newspapers and I watch TV, so you do not need to tell me. So far I did not hear from the media that Sellers are paying Buyers to buy their properties. Ain't happening.

If it is the lowest price, it is usually a distressed sale, and that was exactly the manifestation of those "terrible" housing market conditions in Florida, that media was reporting. Did media anyone that the prices for a 2 bdr/2 bath 1,200 sf direct oceanfront condos in 89 Oceanfront was $140K? Or even $169K? The low "crazy" price in this building was from $199K. And it is a far cry from the top price at peak market at $407K. This is where you have your over 50% drop in value, but it does not mean that you take the lowest price and then want 50% of it... Ain't happening.

So, 6 months later, are there any changes at 89 Oceanfront? Pricewise – not much. Excluding that challenged distressed sale with asking $169,900, normal price unit before was from $192,500 and to mid $200s. Now it is $199,900. Any other changes? Yes. If half a year ago there were 7 units for sale, today there is only one.

And though the numbers may differ from condo to condo, the trend is the same. Inventory is down and is low. Of course, when there is only one unit in the building, there is no competition in this building. The only competition is other buildings. But their inventory is also low and getting lower every month.

Does it tell you what it tells me? Do you see what I see?

It tells me that there is a reason I already hear from customers the question «Isn't it overpriced» when they are looking at the lowest priced unit. How can it be overpriced if it is the lowest price in the condominium building?

 -- Because we could buy a unit here for less.

You sure could. But you didn't.

image of Jon Zolsky, Daytona Beach ShoresSerious about condos in 89 Oceanfront, or any other condo in Daytona Beach area? Call me 386-405-4408. Prices are still good.

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Rainmaker
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Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good afternoon Jon. What a powerful story. Yes, I see where you are going and cutting bait is the best you can do with these people. i hope it picks up for you.

Aug 10, 2011 08:20 AM #1
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Kristal Kraft
The Berkshire Group Realtors - Denver, CO
Selling Metro Denver Real Estate - 303-589-2022

Well stated Jon,  buyers tend to forget they need to look at the whole picture, that a global shot of the complex and all around it.  Zeroing in on one unit and making the assumption the unit is over-priced is not the best approach.

Those folks will be looking for a steal 10 years from now and regretting they didn't act sooner.

kk

Aug 10, 2011 08:26 AM #2
Rainmaker
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Robin Dampier REALTOR®
Coldwell Banker King - Hendersonville, NC
Hendersonville & Western NC Real Estate Source

Ah yes, the buyers who are looking for a seller who will pay them to buy their property.  Geeze.

Sue of Robin and Sue

Aug 10, 2011 08:57 AM #3
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Sheila - absolutely true. this was my biggest pet peeve with Trulia. I had a lot of calls from Trulia when I was paying them $39 a month, but all those leads were the same type, where people had a lot of requirements but it had to be for the price that was not realistic

Aug 10, 2011 10:31 AM #4
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Kristal - these folks usually are forced out fo the market and fall early prey to the warming trend. Thank you

Aug 10, 2011 10:32 AM #5
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Sue - wouldn't it be nice?

Aug 10, 2011 10:34 AM #6
Rainmaker
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William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

"I know that the market in Florida is terrible, I can read newspapers and I watch TV, so this is not a surprise."

Jon,

What? What can you depend on except doom and gloom from main stream TV or newspapers?

Bill

PS: Isn't it nice if you'll except a clouded title they'll discount it $34,000.oo!

Aug 10, 2011 10:48 AM #7
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Bill - thanks. I reread, not the way I wanted, made some changes. IU for one have nothing against the media, as when I read articles, they quote us. If they say that market is slower, most probably it is. Media does not set prices, and people just like to assume what is not there.

As for the cloud on the title, relatively recently there was a situation where the contractor won against the bank and the judge granted the contractor the first position. We needed a sale there and we contacted the lienholder to get a partial release. They refused.

I went to the attorney and mentioned $13,000 as the maximum exposure. He asked me how I came to that number. well, i fugured that that would roughly be when you take to total ampunt of the claim and divide by the number of units in the complex.

So, was it $13K-$14K. No. What was it? $9 Mil.

Aug 10, 2011 12:35 PM #8
Rainmaker
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William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Jon,

Ok, so there's a joint and several lien for %9,000,000.00, no provision for a partial release and some agent took a listing?

I'd never do bussines with that idiot! I know that's harsh, but this hurts your clients!

I'll bet heads roll at the title company.

Bill

Aug 10, 2011 01:05 PM #9
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Bill - we had listings before they won in the court. Of course, we were not the  only ones. Anyway, it all worked fine as the new owner could  not do anythhing wiithout finding a way to deal with that, so they first fought and reduced it, and second, they posted $5 Mil bond. The have 414 units to sell, so there is not that much risk.

And, finally, they are suing the GC for crappy job, so I do not think that lien can stand long enough

Aug 10, 2011 02:38 PM #10
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
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Bill, also, forgot to say. I am thinking of buying there, and I would not hesitate to agree to an exception in the Title policy.

$10,000 would scare me to death. $9 Mil do not bother me a bit. They can with the same success sue me for a trillion

Aug 10, 2011 02:40 PM #11
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1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Yep!  They could have but they didn't.. they should have and they know it.  When inventory is down and prices are low but not as low as they used to be, the buyer really missed it.. He had more choices before.  Nice.

Aug 13, 2011 03:36 PM #12
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Judi - when the prices start changing, you still have not missed it. It is just the beginning. Many savvy investors wait until that moment, as it gives them the assurance that they are not going to be stuck with the property on falling market

Aug 14, 2011 04:51 AM #13
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