Risky Business: Real Estate Auctions

risky business - blog

Have you seen the show Flip or Flop on HGTV? A husband and wife real estate team in California purchases homes at auctions with cash in order to renovate and resell them. We recently had a client who was interested in how real estate auctions work, and if they were a smart investment for her.

Home auctions and renovations produce high drama – they make for a good TV show, but are certainly a risky investment. Here are four risks you take when purchasing a home at auction:

Risk #1 – 10% Earnest Money

If you buy real estate at auction, you have to put 10% down and that is absolutely nonrefundable for any reason. You are committed from contract.

Risk #2 – No Inspections

All your inspections must be completed prior to bidding. You can’t really inspect the property before contract because usually the utilities are not on, and you are not guaranteed to win the bid. If you are buying with a loan, it is worse: no appraisal or loan contingency (and, you have to use the auction house’s lender).

Risk #3 – 5% Auction Fee

On top of your purchase price, they add a 5% auction fee. The auction house charges 5% premium and often an additional “technology fee” ($300 to $1000) for holding the auction to the buyer (in addition to whatever they charge the seller).

Risk #4 – Advantage to the Seller Continue reading

Hurricane Danny: Are You Prepared?

Copy of Sink or Swim?Seminole County Office of Emergency Management and first responders are preparing for the potential impacts of Hurricane Danny.

This weekend, you may consider preparing your home and devising a plan in the event Hurricane Danny makes landfall in Central Florida.

For more information, please contact the Seminole County Office of Emergency Management at 407-665-5102.

 

Here are a few steps to make sure you’re ready:

  • Trim trees and shrubbery, make sure any weak or dead limbs are removed.
  • Clear loose and clogged rain gutters and downspouts.
  • Prepare to evacuate if you live in a flood zone. Floods are the #1 natural disaster in the USA.
  • Persons with medical needs should register with the Office of Emergency Management if planning to go to a Special Needs shelter, or call 407-665-5102.
  • Make a list all medications and medical information.
  • Review insurance policies, take photos of your home, and make household inventory (include receipts, serial numbers, and purchase dates). Place these papers in a water proof container.
  • Restock your Family Emergency Disaster Kit, and view FEMA’s checklist here.
  • Purchase electric weather radio with a battery back-up, or a portable radio.
  • Consider signing up for one of the electronic text notification systems provided by Nextdoor, or the Office of Emergency Management.

Market Update: July See Sales Growth & Tight Inventory

Market Update - blog

Orlando Regional REALTOR® Association’s monthly market report is out! July closings increased over 33% compared to last year. When compared to July 2011, the July 2015 median price is 59.20% higher.

Right now inventory is very tight with a pace of just under three and a half months of supply. The total inventory count is down more than 2% compared to this time last year, and down almost 2% compared to last month. Homes spend an average of 69 days on the market and sell for about 96% of the listing price.

Seminole and Lake Counties are seeing the biggest growth in sales comparisons to July 2014 with Lake County increasing 24.26% and Seminole increasing 23.11%.

As we continue to see a squeeze in inventory, fewer days on the market, and increases in higher median prices we move towards a seller’s market. We’re keeping our eye on mortgage rates and the drop in cash sales but for now sellers are seeing their homes sold successfully.

Click here to view the full report of statistics.

Searching for a Brand New Abode or a Lovable Lemon?

choosing the right home - blogIn February of this year the Wall Street Journal reported that Orlando fell on the list of “metro areas with the most fixer uppers listed for sale.” Often purchasing a fixer upper saves money, but there are ways to tell if it’s right for you. We’ve gathered the profiles of four types of homes to search for that run the gambit from “huge time and money investment” to “brand, spanking new.” There may be some options that surprise you.


1front (2)The Lovable Lemon Dwelling

“If you can’t be handsome, be handy.” – The Red Green Show

This is one of our favorite quotes and it totally applies to searching for a home that needs some care! The first sign of a lovable lemon is in the listing description with phrases like “as-is.” When viewing this home buyers may think “I can picture a more open layout,” or “the bathroom shower is disgusting.” It is important to keep certain repairs in mind. Large projects like the roof, foundation, or framing can be expensive.

The Lovable Lemon Dwelling is right for you if:

– You love taking on a project (even Ikea furniture or assembling children’s toys).
– You’re handy, or you’re willing to learn to be handy (houzz.com has some great tutorials).
– You have an eye for design.
– You want to save money on your initial purchase of a home.
– You’ll be able to fund projects overtime.
– You have time on weekends and holidays.
– You’re patient.


1exteriorfrontThe Cosmetic Makeover Crib

“There is a kind of beauty in imperfection.” – Conrad Hall

Not quite full remodel, not quite move-in ready, these homes can be deceivingly simple to fix up without a lot of time and money. They generally have good bones, like a newer roof and appliances, pleasant layout, and attractive cabinets and vanities. What throws buyers off of these homes are visual elements like the carpets, wallpaper, or fixtures. Cosmetic fixes are easy and cost-effective to change, they just require a little imagination.

The the Cosmetic Makeover Crib is perfect if: Continue reading

Keep Your Next Closing Safe from Fraud

Birthday Post - blogReal estate transactions have changed a lot over the last 5 years of rapid technological advancement. Scammers and thieves have changed with the times.

The latest alert is that thieves are hacking emails of buyers, title companies and realtors to send out a false claim for closing funds from the buyer in the form of a certified check.

As if closing is not stressful enough, now you have to worry about getting robbed when you don’t have cash.

How do you make sure this doesn’t happen to you? 

1. Almost all title companies now require closing funds to be wired, and most do not accept certified checks any more. The reason for this has to do with the advent of the availability of digital editing software and high tech printers—scammers started forging certified checks. A wire is sent from your bank, through the Federal Reserve, to the bank of the title company. It can take anywhere from an hour to the end of the day for this money to transfer by wire, but the funds usually arrive within a couple of hours.

2. According to Florida Realtors, the scammers hack into your email, view the correspondence between you and the title company, and then attempt to email you from a fake email account that will look like the title company. Continue reading

What You Should Know About Selling Your House with Pets

Pets & Your Home - blog (1)

We loves pets here at The Sparrow but we know having pets can be tricky if you want to protect the investment you’ve made, you’re looking to rent a pet-friendly house, or you’re trying to sell your home. We’ve collected our best advice we can give to sellers, home owners, or renters with pets to make a sale or move out run smoothly. These preventative measures can save time and hassle further down the road.

Keep It Clean!

First and foremost, the best thing you can do to improve your chances of selling a home is to keep it clean and free of pet odors. Some of these suggestions are also handy for renters who would like their deposit back, and home owners who want to keep their house ship-shape.

Carpets and Walls
– When cleaning the carpets, ask for or use a cleanser with Pet Enzyme.
– Try to clean up accidents as soon as they happen.
– Be sure to patch, or paint any scratches or chew marks on baseboards or walls.

Daily Maintenance (especially important if you’re selling and want to be show ready at all times)
– Sweep up hair, dirt and dust from the floor and baseboards.
– Remove pet waste from the yard.
– Wipe nose prints and paw marks from windows and sliding doors.

When a Showing is Scheduled
– Remove pet beds and food dishes.
– Consider leaving a pet with family or a kennel during the first few weeks of busy showings.
– Take the pet on a walk, or make sure they are in a crate and out of the way during a showing. Continue reading

Thinking About Selling Your Home?

should we sell- - blogWith last week’s good news regarding the surge in Orlando real estate market, you might be considering selling your home, and you’re not alone. According to Florida Realtors, a recent Fannie Mae survey showed that, “homeowners are becoming more upbeat about potentially selling their home.” 52% of the Americans surveyed believed selling their home now would be profitable, the highest percentage recorded since the National Housing survey began. Florida Realtors also reported that in June “[Florida] statewide median sales price for single-family existing homes…was $203,500, up 10 percent from the previous year.”

There are a few factors contributing to this positive mood Continue reading

Market Update: Sales Record in June

Market Update - blogThe real estate market in our area has a head of steam, and keeps moving. June sales were a record 3500 homes sold in our MLS in a month, and a 21% increase over last year.

Ironically, a lot of people perceive the opposite is true, because a lot of “perception” is based on emotion rather than facts. The interest rates have wiggled up above 4%, but that has not slowed things down. Foreclosures and foreclosure filings are down, inventory is down (3.5 months in June—a strong sellers market).

Looking at the law of supply and demand, we should see an above average appreciation for the next year, probably something like the 7% we have seen in the last 12 months.

View all of the statistics from Orlando Regional Realtor Association here.

New Listing: 5/4 Equestrian Home in Chuluota, FL

This Chuluota home is listed at $735,000. It is 3913 sq ft, with 5 bedrooms and 4 bathrooms. It’s in an equestrian, upscale, quiet, gated neighborhood on secluded 5 acre lot on Lake Pickett, a 900 acre spring-fed lake with no public access and two water ski courses.

Click here to see the full listing on the MLS.

When the Floods Come, Will Your House Sink or Swim?

Flood Info - blogAccording to SunSentinel Florida properties make up 37 percent of flood insurance policies nationwide. Flood risk is a common concern among Central Florida home buyers and owners for a good reason, FEMA estimates that the average flood insurance policy costs about $700 per year. Policy rates in moderate-to-low risk areas are about half of the average.

So how important is flood insurance when purchasing a home?

For homes with the high-risk designation, there is a 25% chance during the course of a 30 year mortgage that the home will be flooded. High-risk homes with federally regulated or insured lender mortgages are legally required to purchase a flood insurance policy. It is highly recommended that moderate-to-low risk homes opt for flood insurance, although it is not legally required. Moderate-to-low areas claim a third of all U.S. disaster relief money every year.

What is the flood risk for a home in Central Florida?

The most likely risk scenario for a flood in Central Florida is a tropical storm or hurricane (or even a heavy rain). This is especially likely for storms that hang over the state for a few days. The ground cannot absorb the large amount of water and drainage becomes sluggish. The other scenario encountered in Central Florida is floods caused by new developments. As Metro Orlando grows, new homes and roads are built, meaning there is less ground for rain to accumulate. This type of flood might happen over a few hours.

Click here to see FEMA’s Flood Map of Central Florida. Once in the portal, select your area and click the view map on the left.

How can flood map changes affect rates?  Continue reading