FIND HOMES and CONDOS available in brand NEW communities where you can make new friends and enjoy sunshine and warm breezes! Call CONNIE right now for a professional referral to your special area of interest. 561-866-1642
According to today's South Florida Business Journal, deposits for the year ending June 30, 2012 grew 6.1%. Despite being the epicenter of the real estate meltdown, the region just may have more money to lend!
See http://www.youtube.com/watch?v=Hdpf-MQM9vY for time lapse photography of sustainable modular building. The same builder is planning 220-story building for 2013. To read more about Zhang Yue and Broad Sustainable Building, please see http://www.wired.com/design/2012/09/broad-sustainable-building-instant-skyscraper/all/?pid=924 "Lego maniacs" with environmental friendly answers?
Where is everybody the last two weeks in July? In order to stimulate mid-summer sales, at least one major developer is offering incentives. This may be the best time of the year to make a "deal" as evidence indicates the market has finally turned and is trending upward. So say a number of economists recently polled by The Wall Street Journal.
And we thought run-away capitalism created quite a bubble in Miami 5-7 years ago? Just look at what the Chinese government is doing: building 10 new cities a year and shopping malls that are nearly empty. Meanwhile those who could inhabit them live in relative squalor. Watch, listen and learn with this You Tube Video: http://www.youtube.com/watch?v=rPILhiTJv7E
AGENTS: We are beginning to update the database to bring you the latest in new (and far better) price ranges on residential projects. While there are scattered updates on projects throughout Florida, we are concentrating on the SE region this month. Expect new prices to be announced on major condominiums undergoing loan restructuring by end of summer. Watch this space for announcements! Also, there are new projects underway. To see new additions on the system, login and click on "New Additions" above the blue SEARCH bar. Check each project's full page entry for the date of the last update. The most recent updates are more reliable.
Real Estate Agents reading this memo should make every effort to match prospective buyers with new construction projects offering in-house financing. Call all your contacts. Ask if they know of someone ... or perhaps have a son or daughter, now steadily employed (and with a relatively "clean" credit record), who needs a new townhome or "starter" home. If they are saving for a downpayment, tell them "don't wait!" Here's why: Reason #1: The "Immediately Available" inventory on new homes is shrinking. We have already begun to see some very recent price increases on homes where builders have "found the basement" in pricing and are adding a few thousand to the list price on current inventory. With stricter lending policies in place, fewer spec homes are being built, causing demand to rise on existing inventory. Reason #2: The deadline for downpayment assistance from third party lenders is September 30th. After that, first time homebuyers will need cash of their own for downpayments. While waiting to save for a downpayment, home prices are likely to rise because... Reason #3: The federal "bailout" of the secondary mortgage market entities Fanny Mae and Freddie Mac may add to heavy inflation. Today's borrowers will pay back with cheaper, perhaps much cheaper, dollars. For more information on the largest government bailout in US History, see the statement dated September 7, 2008 by Secretary of the Treasury Henry M Paulson or simply google "Fanny Mae and Freddie Mac bailout" for a selection of commentaries on how this recent federal action is likely to affect you. Reason #4: Get your first -time buyers in on the $7500 tax credit (matched with a further price reduction from some developers). While this is really an interest-free loan that must be paid back, the cheaper inflated payback dollars ($500/YR for 15 years.) may make this worthwhile for the first year of home ownership. More details on this credit are available here.
This past Wednesday (July 30, 2008), President Bush signed H. R. 3221, The Foreclosure Prevention Act of 2008, which contains sweeping measures affecting residential mortgage reform, residential taxes, REIT Investment Diversification, and veterans' housing matters. Some energy measures are addressed as well. This Act provides a good portion of the material you might expect in the next Core Law portion of Continuing Education for real estate licensees. Moreover, there are changes in the tax code which could affect all homeowners. Inman News contributor, Matt Carter, points out that the FHA changes in the bill are a "mixed bag" with regard to stimulating new residential sales. On the stimulus side are such measures as 1) the $7500 tax credit for first-time home buyers, 2) an increase in the FHA loan limit to $625,500 which will allow guarantees in high cost markets, and 3) a moratorium on risk-based insurance premium pricing for FHA guaranteed loans. On the repressent side are measures designed to reduce risks and protect the economy. These include 1) an increase in the FHA downpayment from 3.0% to 3.5%, 2) elimination of seller funded downpayments through third party non-profit assistance programs, and 3) a likely increase in mortgage insurance premiums for all mortgagors. The downpayment assistance programs accounted for 35% of FHA sales in 2007, up from just 2% in 2000, according to the HUD source cited in the Inman article. Carter says "HUD claimed the practice artificially inflates home prices and triples the likelihood of default." On the other hand, home builders rely on these programs to assist their buyers in the lower-priced markets. The reduction in the buyer pool from the withdrawal of these assistance programs could be significant. For a better understanding of the issues covered in this massive piece of legislation, we recommend that you watch for more Inman News articles on the reforms and that you glance over the Library of Congress Summary of H.R. 3221. Chances are you will be put to the test on some of its measures in the near future!
This week's FORTUNE Magazine, dated June 23, 2008, specifically cites Miami (NOT the Beach) and Tampa may be among the six best US markets for investment in a feature article entitled "Real Estate: Where The Deals Are." Prices have fallen 21.7% and 17.5% in a year according to the S&P/Case Shiller home price index. (See our last ALERT on The State of Real Estate for a discussion of these indices). The FORTUNE article gives hints as to where to find the best deals within these areas and strongly points out what we have been saying all along... look to new construction deals first. Shopping foreclosures and depressed neighborhoods are likely to bring the investor more problems... and less margin for negotiation than a developer with inventory to move quickly and deliver in new condition. While it is difficult to determine exactly when the market has hit its lowest, we can say this much: your prospects, if seeking a mortgage, are likely to get the lowest interest rate at this time. Economic indicators show that interest rates are likely to rise, perhaps quickly, in the coming year. Low prices and low mortgage rates suggest a good time to help that prospect find a home before interest rates spiral upward and make that desirable home unaffordable.
This month, newconsearch.com moved into the Technology Business Incubator in the Research and Development Park at Florida Atlantic University. Along with many promising businesses in the incubator, we are supported by the great folks at the Enterprise Development Corporation.
Several recent articles about the state of real estate have caught our attention recently in Inman News. Major contributing columnist, Bernice Ross, has written a two part series. The first is entitled "Put a gag on Chicken Little" and the second is entitled "Where's the Beef in Home-price Reports?" In these two articles, Dr. Ross compares and contrasts data from the S&P/Case-Shiller index upon which news media heavily rely for dramatic headlines, and the indices provided by OFHEO (the Office of Federal Housing Enterprise Oversight), NAR, and Realogy which show more moderate declines in pricing. In today's PM issue, Inman News columnist and mortgage specialist, Matt Carter, reviews these two articles and adds his own critique regarding the price comparison indices. He points out that each has its strengths and its weaknesses. Which index to "believe" may depend on the specific local market and housing style under scrutiny. We highly recommend that you review these articles as you seek to be better informed about the "State of Real Estate." Another article of interest to us at newconsearch.com is titled "Debtor Nation: The Highjacking of America's Economy" which is an interview with financial analyst Michael Hudson, PhD by ACRES USA. It begins with a discussion of the sub-prime crisis and covers a number of related economic and political topics, with historical context, relevant to today's major issues. You may want to print this article for careful study.
Senators Chris Dodd (D-CT) and Richard Shelby (R-AL), Chairman and Ranking Member of the Senate Committee on Banking, Housing and Urban Affairs, announced last week that they have developed a bipartisan agreement to help address the nation's housing crisis. Called "The Foreclosure Prevention Act of 2008," the bill under consideration contains provisions to: 1) Increase the FHA loan limit 2) Provide $4 Billion to purchase and rehabilitate foreclosed properties in communities hit hardest by foreclosures and delinquencies 3) Provide $100 Million in Pre-foreclosure counseling for families in need 4) Enhance Mortgage disclosure information for consumers to be given to them no later than 7 days prior to closing 5) Lengthen time a lender must wait to start foreclosure proceedings after a soldier returns from service 6) Provide $10 Billion for refinancing of subprime loans for first-time homebuyers through Federal tax-exempt private bonds 7) Provide tax credit of $7000 over two years for purchasers of homes in foreclosure and 8) Extend net operating loss carryback to homebuilders hit hardest by the slump. This latter measure will extend a law allowing corporations to apply excess net operating losses to tax returns from prior profitable years and receive any applicable refunds. For 2008 and 2009 losses, the provision would extend the "net operating loss (NOL) carryback" to four years (back to 2004 and 2005, respectively) from the two years currently in law. Measures to prevent companies from abusing the intent of the provision are also included. For more details on these proposed measures are available, here.
On Tuesday, January 29, many Florida voters will go to the polls, not only to indicate their preference for their party's nominee but to vote Yes or No on Amendment 1: Florida's Property Tax Amendment. Tax cuts and property tax reform are essential to restore the health of Florida's real estate market both immediately and over the long term. The Pros and Cons of this particular Amendment have been discussed in the The Orlando Sentinel, The Herald Tribune, The Sun Sentinel, and The Palm Beach Post. Florida Realtor organizations have supported it. A more detailed analysis of this amendment can be found in a professional blog entry over at Active Rain. Everyone in our industry should study the merits of this amendment carefully and vote accordingly. The amendment will provide some tax relief to property owners. However, it will not address several factors that have stalled sales in our markets. While Fed policy and the credit crunch cannot be addressed at the state level, I see two important factors that are under our control, yet remain un-addressed by this amendment: 1) Our property tax system discriminates against a very important group of buyers: second-home buyers. Many people who move to Florida in retirement, begin their migration by purchasing a second home here. As property values have increased rapidly, the burden of taxation has shifted unfairly from the long-homesteaded to new buyers and the non-homesteaded. This has slowed the pace of migration to Florida. Should this continue, it will have serious consequences for many different aspects of the Florida economy. States compete and Florida will fall behind if our tax system continues to punish newcomers. 2) Property taxes provided a windfall to state and local governments as property values increased rapidly over the last several years. Swollen budgets will have to be trimmed so that Florida continues to be an attractive business environment as well as a great place to live. Whether Amendment 1 passes or not, there is still much work to be done to return to a healthy real estate market.
Online video is a powerful tool for making websites easier to use. We have updated our first two video lessons on how to use newconsearch.com. The series will eventually comprise 7 videos.
We at newconsearch.com wish each and everyone of our customers a Happy and Healthy Holiday season. We also would remind you, if you are fortunate enough to have buyer prospects considering a purchase in the near future, do take a close look at end-of-year "specials" that developers are promoting. Some sales centers are offering gift cards for bringing in customers and upfront immediate cash bonuses for end-of-year contracts. If searching for suitable communities by price, consider expanding your price range upward by one notch on the system as we have not received updated pricing from all actively selling communities yet. Call the sales center to verify pricing and special promotions. Many thanks to you, our customers, for your support in 2007.
Online video is a powerful tool for making websites easier to use. We have produced two preliminary videos on how to use newconsearch.com. The first video covers registration and basic searching. The second video covers additional features such as sending property to a buyer, contacting a community and using google maps.
newconsearch.com has reported deep price cuts on new homes through the year, up to 40% in some instances. Now, as the year comes to an end, developers with inventory homes are advertising even more cuts to attract buyers in the present market. Many must unload considerable inventory by year's end. This past weekend, we saw one leading builder in the SE Florida market advertise a weekend sale with price cuts up to 21% over the posted price of each model on its website. Why so deep? And Why now? Empty new homes that go unsold over the New Year have high carrying costs for the developers who now must pay taxes on improved lots, as well as carry the cost of electricity, water, trash removal, landscaping maintenance, and general upkeep including pest service. It all adds up. As for price cuts in the condo market, just have a look at this two-minute You Tube entry on a recent Miami auction: Bottom line: If you know someone who needs a home, you may help them drive the best deal right now... before the end of the year.
In the last couple of weeks, the staff at newconsearch.com received a number of calls from "returning" agent subscribers who, after several months, suddenly needed to search our database for their new buyer prospects. Here is a quick review of how to use the database to find new construction opportunities for your buyers: 1. Review the projects in your immediate hometown area. Do this by logging in and choosing your county and town/city for a search when you are NOT rushed. 2. Practice using the POWER SEARCH bar filters. Refine your search by style and price. Become familiar with ALL the search options you have under each BUTTON on the POWER SEARCH bar. By doing this, you will learn quickly how to find homes with dockage or new country club communities, or a midrise condo for a buyer who does not like tall buildings. 3. Find the gray "RESET" button. Use it to clear your search criteria and start over with a new search. 4. Broaden your search over several cities by holding down the control key as you add cities to the search. 5. Explore the email program from any Community Details page by clicking on the action key "Send to Buyer" under the POWER SEARCH bar. You may want to upgrade your account to "Premium" to actually send the property description to a prospect. 6. Try the CLICK-TO-CALL button on the action key or beneath the contact name. Get an update on the latest incentives for the project. Request a brochure. 7. Note the advertised projects on the gray bar to the right side of each page. These contain links to other projects where the developers want your extra attention! 8. Check the URL in the address bar at the top of any Community Details page. The number of the project is in the address bar. This number may be typed in the Property Search window (to the right of the logo on any page) to get to a specific project details page. 9. Go to the HOME page and explore the PUBLIC SITE that is based on Google map technology. Zoom in and out; drag the map across the state and watch the change of Premium Agents in the sidebar. Zoom in and watch the red bubble turn into house icons. Click on one or two icons to see what the public sees on newconsearch.com. Note how public visitors are encouraged to talk to an agent for details. 10. Be ready to receive a call from a prospect if you are a Premium Agent who has uploaded your photo and website. Remember to put the project number in the "Property Search" window when they ask you about the project by number. 11. Handle changes in your account by clicking on "Account" above the blue POWER SEARCH bar in the PROFESSIONAL SITE. You may add website integration of the newconsearch.com search engine on your own website. 12. Print (or save) this page for referral.
With resale inventory at record levels in Regional MLS, the successful listing agent must use all available marketing tools to attract buyers for his or her listings. This includes a complete, up-to-date, and accurate Comparative Market Analysis or CMA with any comparable new construction properly cited in the analysis. It is not satisfactory to simply hide behind a "down" real estate market as an excuse as to why your seller isn't getting more viewings or offers on his house or condo. Activity on our public site shows those buyer prospects are out there "shopping." What do these buyers "see?" They see new homes ready to move into and no hassles over early closing dates. They see strong incentives from developers with special pricing, offers to pay closing costs, HOA fees, and mortgage rate buydowns. If you are a listing agent, you need to attract these buyers for YOUR inventory and make sure it is competitive and ready to sell. Your first step is to become familiar with the CMA modules on your MLS search engines such as MLXchange and Wyldfyre. If you need a little help, check your MLS for free advanced classes where they cover these modules. When these systems "pull in" comparable listed properties for a CMA, there is generally a line where you may add "outside" properties such as FSBOs and new construction for the "automatic" analysis. Your second step is to search the newconsearch.com database for comparable properties with immediate occupancy. Developers have high inventory right now, so this should be easy to find. Generally speaking, developers respond much more quickly to market conditions than individual homeowners in a resale situation. Next, call the sales office and pose as a buyers' agent to get the latest pricing and incentives. This is a GOOD thing. Even if you do not have a buyer on-the-spot, you may have several prospects later for the new community as a result of marketing your comparable listing! Remember, you will be advertising for buyers looking for similar properties. Finally, choose the specific models most comparable to your resale and include square footage, features, and incentive pricing in your CMA. If time permits, take the seller over to the new community to actually see the competing models! Adjust your pricing as needed.
Developers are responding to present market conditions with new flexibility in downpayments and now is the time to have your buyers take advantage. One major nationwide developer is offering a summer special program in the Tampa area with "0" down and "0" closing costs and "0" interest for six months for buyers who qualify and seek a loan through the developer's preferred lender. If pressed, other developers may offer similar terms. It pays to ask. At newconsearch.com, our daily research calls to Sales Consultants at new projects reveals this flexibility. They give us one figure for the "Minimum Deposit" information window, but are quick to tell us that it is "not written in stone" and they will "work with your prospect." In situations requiring more funds on deposit, we see developers offering graduated payment arrangements, requiring only a fraction of the deposit upfront at contract. This is especially true of pre-construction condominium project sales. Knowing this should encourage you to work with buyer prospects "sitting on the fence" and "saving" for a sizable downpayment. They may be closer to getting their "dream home" right now! Generally speaking, the best "deals" are to be made on Inventory Homes with buyers who can close within 30 days. And you just may find a generous commission and bonus for yourself as well. HINT: Include STATUS: "Immediate Occupancy" on the POWER SEARCH bar as you build your search criteria.
Developers have reduced their prices significantly since mid-2006 and many offer a variety of incentives for your buyers. Among those incentives are sizable upgrades, reduced down payments, funds back at closing for up to a year of payments, closing costs paid by the developer, one or two years of HOA fees (Home Owner Association or Maintenance), no fees for leasing an investor's unit, and generous commissions and bonuses to cooperating agents. As a trusted real estate agent, you should help your buyers evaluate each and every incentive. Remember, these incentives come at a cost to the seller. While they may mean less money out-of-pocket for the buyer at closing, they are still part of the overall cost of the property. Ask to see the lender's "Truth-in-Lending" cost sheets and refer to title services for a preliminary HUD statement on the proposed or a similar closing before your buyer signs the developer's contract to purchase. Evaluate incentives, line-by-line, with the buyer to determine the immediate value and the long-term cost implications. In most cases, the buyer can make a counter-offer to purchase at a lower price if some or all of the incentives are excluded. If the buyer is in a position to do so, it may be advisable to pay all the closing costs. The lower price, if properly negotiated, will result in lower monthly payments, lower property taxes which are based on market value at closing, and possibly lower insurance premiums. This could add up to a significant savings over several years of ownership. When considering a counteroffer to a developer, it is advisable to have it drawn up by a real estate attorney who understands the new construction process and is familiar with builders' contracts. If you cannot recommend two or more, ask your broker or other agents for referrals. The immediate out-of-pocket expense to the buyer may be modest and the attorney is likely to insist that his title services be used to conclude the transaction. This should be another benefit to your buyer, who will see you as an outstanding professional who protects their interest well beyond the closing.
The overheated residential real estate market in 2005 and the correction in 2006 have brought unprecedented high inventory levels in both new construction and resale markets in 2007. Market times have increased substantially, bringing some sellers into distress if they must sell and relocate. Add to that scenario the recent increase in foreclosures from the sub-prime lending market and you have a strong need for Accelerated Marketing Techniques, or Auctions, designed to sell property quickly through competitive bidding. Some developers are making use of this means to sell remaining inventory, particularly when near build-out in a given project. This brings new opportunities for brokerage. When a developer approaches a major auction firm, the auction firm may engage a local brokerage to assist with producing a thorough market analysis and showing the property. A successful auction will attract many bidders with deposits in hand. Not only will the listing broker will be paid commissions on completed sales, he will also have the registrations of unsuccessful bidders who are ready, willing and able to buy another property. The cooperating buyer’s agent will be paid his or her commission at closing if the buyer's bid is successful. If not, the prospect is probably in better position to bid on another property, either through another auction or through the conventional sales process. Agents should stand by that buyer. Agents may learn more about real estate auctions through the National Auctioneers Association (see www.auctioneers.org) which is affiliated with NAR or National Association of Realtors. The terms described below are taken from their website and can be found by clicking on "Media" in their menu and going to "Glossary." Absolute Auction An auction where the property is sold to the highest qualified bidder with no limiting conditions or amount. The seller may not bid personally or through an agent. Also known as an auction without reserve. Auction With Reserve An auction in which the seller or his agent reserves the right to accept or decline any and all bids. A minimum acceptable price may or may not be disclosed and the seller reserves the right to accept or decline any bid within a specified time.
Vacation and second property markets have grown considerably in recent years. The National Association of Realtors reported that nearly 40% of all purchases in 2005 were not primary residences. Responding to this demand, developers continue to build new property for this market and convert hotel suites into individual ownership opportunities. This is particularly true in Florida and real estate agents need to know how to serve buyers for this market. Newconsearch.com helps agents find such properties. Under STYLE in the blue POWER SEARCH bar, agent subscribers will see the "Vacation Property" option with specific styles under it. These include Condominium, Townhome, and Single Family options, found in resort areas, where deeds allow short-term rentals. These styles also include Casitas which are small, free-standing structures, individually owned, typically on the grounds of a resort. Fractional Ownership and Hotel Condominiums have been the subjects of the last two articles in our series and they constitute the remainder of deeded property ownership opportunities. Below you will find a comparison chart of these two styles along with non-deeded "Time-Shares," a style we do not post in our database. For more information, agents may refer to the NAR Field Guide to Vacation, Resort, and Second Homes. Property Type Hotel Condo Fractional Ownership Time Share Ownership Whole ownership One unit = one owner entity. Deeded. Divided ownership; one unit = several fractions. Each owner has a deed for his/her fraction. One unit = many shareholders with "right to use" for a specified length of time each year for a specified number of years. Investment Probable tax shelter; May appreciate. More income if low vacancy rate. Fraction likely to appreciate in proportion to whole unit appreciation. No concern about vacancy rate. Depreciates because 40 to 50% of purchase cost goes toward sale of shares (ads, commissions). Use Usually anytime. May be placed in hotel rental program when not occupied by owner. Set time for personal use; usually 4 to 13 weeks per year, depending on size of fraction. 1-2 weeks/year for personal use; maybe 24-50 shares per unit. May be "fixed" or "floating" time. Size Hotel-size rooms: Studios, one bedroom suites. Units may be combined to form two bed-room suites. Generally large spacious condos and estate homes suitable for families vacationing together. May have 3-6 bed-rooms. Suites: One or possibly two bedrooms. Location Urban business centers and heavily populated resort areas such as ocean-front or theme park resorts. Interior resort areas offering golf and/or other sporting facilities requiring acreage. Often more exclusive private club atmosphere Any popular vacation venue. Maintenance Maintenance relatively high. Paid year-round by owner. May be offset by rental income. Owner pays only his or her fraction of total annual maintenance and taxes. Management fees may apply. Cautionary Notes Do not buy for income purposes. Many factors affect vacancy rates. Hoteliers are passing vacancy risks to owners. Do not buy if you cannot easily afford the lifestyle or want to individualize your vacation home. Do not buy for exchangeability; owners often disappointed with other resort accommodations. Also rental and resale markets not well-established.
Hotel condominiums offer the opportunity to own and live in a condo where you never have to cook or clean and where room service can be yours at the push of a house-phone button. The concept has been around for 50 or 60 years in such old-style New York hotels as the Pierre, Carlyle, and Waldorf-Astoria. However, in recent years a strong interest in this form of ownership has begun to flourish in other cities and we are seeing quite a few offerings in Florida. Condo hotel properties are enticing because they provide amenities not usually found in conventional condominium buildings. Residents may have the same privileges as an overnight hotel guest, such as full concierge services and signing privileges at the hotel's restaurant, bar and retail shops. For a fee, the hotel condo owner may utilize hotel staff for cleaning and maintenance of the residence. The units are generally sold designer-furnished and may be placed in a hotel "rental" program when not in use by the owner. Generally, they are more expensive than comparable non-hotel condominiums and monthly maintenance charges may be considerably higher. They tend to be small in size and may or may not have a kitchenette. Studios may be combined with an adjacent one-bedroom unit to create a "two bedroom" hotel condo. Hotel condominiums are found in sophisticated urban business areas and in exclusive resorts. Among the noteworthy hoteliers offering such residences are Ritz-Carlton, Four Seasons, and Starwood. The typical buyer may own several other homes.
Fractional owner-ship offers a middle-ground solution to second home ownership. It lies between whole ownership where the owner has sole responsibility and exclusive use of the property, and time-shares where the owner buys vacation time in a resort (one or two weeks per year) and not the real estate itself. The popularity of fractional ownership is growing among second-home buyers. By sharing the cost and responsibility of home-ownership, the fractional owner may enjoy a much larger vacation home, with more amenities, at a fraction of the cost of sole ownership. This has particular advantage in high-end resorts where the real estate is expensive. The fractional shares vary from 1/13th share to 1/2 share, allowing the share-holder as little as four weeks residency or as much as six months residency per year. A buyer may buy multiple shares in a residence. Generally, the resort management also manages the property for the owners and makes sure that all is in order between occupancy dates. If the management has a global reach, fractional owners may participate in international vacation exchange clubs. Such clubs, though quite exclusive, give the owners a real feeling of "a home away from (second) home," with all the familiar services in a distant land.
Over the last last two years, many investors have disappeared from pre-construction markets. They have been burned by falling prices, by inability to qualify and close on their contracts, and by developers of projects which are on hold or unlikely to be completed. The perception is that cooling markets make it impossible to reap the benefits of appreciation. Smart investors look for opportunities in any market. Pre-construction investors continue to form an important link in the financing of new developments since large segments of the end-user market will not consider purchase until projects near completion. In today's market, we see investors assembling syndicates to increase their leverage. Enterprising financiers and brokers negotiate deals with developers on behalf of investors. These deals shift the risk from the purchaser of pre-construction back to the developer. In recent weeks we have seen another change as developers now extend the special terms, previously offered strictly to institutional and "block" investors, to individual pre-construction investors. These terms may include: Deposits remain in escrow, not used for construction costs Interest on deposits accrue to the investor Investor-contracted units receive preferential sales treatment Investors receive protection against price decreases We have also seen developers add special risk-reducing terms specially designed to appeal to individual investors in the event they must close, including: Mortgage interest credits Developer paid maintenance Participation in rental programs While some communities have incorporated some of these terms into their offerings, we have begun to see complete programs oriented to the new pre-construction investor. An example of a complete program is Parc Place North in Delray Beach. According to John Kavazanjian of Florida Premier Real Estate, Inc., the company marketing Parc Place, "Our exciting program enables the investor to enjoy an extremely attractive return and while being protected from the types of risks that have kept investors on the sidelines. We are very excited to offer this to investors." John can be reached at 561-214-9426.
In last week's article, "Online Leads Require a Responsive, Human Touch," we started to examine the service expectations of Internet buyers and the implications for agents who work with them. This week, we will cover some useful concepts to help agents understand the different types of online lead generation with a focus on judging lead quality. Traditionally, lead sources are compared in terms of the close ratio or the number of leads required to produce a single closing. While the close ratio can depend on how the agent responds to the lead, leads do have inherent quality. Poor quality leads disappoint agents and may cause them to dismiss an entire source of business. To determine the quality of a lead source using the close ratio, the agent needs several closings from that source. This may require working 100's of leads! How can we judge the value of a lead generation system prior to receiving many leads from it? The Interactive Advertising Bureau recently released an industry guide to lead quality. This report details five components to lead quality: Origination Motivation Exclusivity Age Verification These components help to compare lead-generation services and determine the likely quality of the leads provided. Origination Lead Origination describes how the buyer is presented with the opportunity to submit his or her contact information. For example, the buyer might have used a search engine, portal or other website such as newconsearch.com or an agent website. Other sources include lead networks and situations where the buyer may have registered for a related service or purchased a related product. Search is often the best origin for a lead as it is tied into the next component, motivation. Motivation One of the first steps in qualifying any prospect is determining their level of motivation. What can we know about the motivation of an incoming lead before receiving it? It all depends on what happens around at the point of lead capture. A consumer who uses a search engine to locate information in the early stages of a property search is a likely buyer-prospect. When they encounter the lead capture form, what if any enticement encourages them to register? Too much unrelated enticement may decrease lead quality. How much information does the form require? How engaged is the prospect? Exclusivity This component is easy to understand. How many times are the leads sold? Exclusive leads are the most valuable and the value of a lead decreases rapidly if it is resold a number of times. Age How fresh is the lead? Last week, we learned that Internet buyers expect a rapid response from agents. In this highly-competitive business, the sooner you can get on the phone, qualify and cultivate the lead, the more valuable it is. "Real-time" or near instantaneous leads are the best and they rapidly loose their value as more than a day or two passes. Verification How reliable is the lead contact information and other data? Has any of it been confirmed by the lead source? We have all seen bogus addresses and phone numbers submitted through registration forms. It is so easy to submit misleading or false information and we can all understand why some people do this. The important thing is to know what has the lead source done to verify the information provided. All of these components of lead quality can be scored on a scale of 1 to 10 according to the guidelines in the IAB white paper, however, just keeping these components in mind can help us size up and compare different lead sources at a glance.
Forward-looking agents have long utilized online lead-generation in their business. Now that a great majority of buyers use the Internet as a critical part of their home purchase, every agent working with buyers must learn the techniques of lead generation and incubation to continue to enjoy success. According to the California Association of Realtors, 67 percent of Internet buyers selected their agent because he/she was the first to respond to their inquiry or was the most responsive. Eighty-six percent of Internet buyers said the agent's response time was either "extremely important" or "very important" when they decided which agent to use. Expectations of responsiveness broke down as follows: 23% of Internet buyers expected their agent to respond instantly (compared with 0% expectation of traditional buyers). 44% of Internet buyers expect an agent to respond in 30 minutes (compared with 3% expectation of traditional buyers). 67% of Internet buyers expected their agent to respond within four hours. With typical close ratios for online leads hovering around 2%, it can be a daunting proposition to respond as quickly as the client may expect. The best agents claim to enjoy close ratios above 10%. How do they do this? A hard-sell, a canned response or template email is not sufficient. Nothing substitutes for a rapidly returned phone call and ongoing telephone contact. Buyers who must work with an agent they do not already know have a difficult time judging how effective that agent will be. From the results of the California Association of Realtors Survey, we can see buyers use the speed of the agent's first response as proxy for the agent's likely performance. At newconsearch.com, we aim to produce the highest quality online leads. Once the lead comes in, whether through newconsearch.com or another source, the agent's responsiveness, qualification and incubation program is essential to achieving a high close ratio.
Tax-time is a great time to renew contact with your previous year's buyers. Chances are, you helped them purchase a new tax shelter and they are grateful as they deduct interest payments on their Form 1040. Loan fee points paid to acquire a primary residence in the year of purchase may also be tax-deductible. Since one point equals 1 percent of the amount borrowed, this can amount to several thousand dollars. Many lenders "forget" to include this loan fee on the borrower's year-end IRS Form 1098. As the agent on the purchase, you have a copy of the information on your buyer's HUD closing statement. Right now is the time to make copies of those closing statements, with the loan fees circled, and send them out to your 2006 buyers and buyers of your sold listings. Your buyers and their accountants will thank you and hopefully remember your thoughtfulness and send you referrals. If you think they do their own taxes, point them to IRS Publication 936 for a clear description of the deduction on Line 12 of Schedule A, Itemized Deductions. The savings could amount to a nice out-of-town weekend or more!
Several factors in the real estate market have come together to make this an attractive time to add income property to your portfolio. They are: Low Rates - How long will they remain this low? High Inventory - You have a broad choice. High Commissions - 4% and 5% is not unusual; some are higher. Money Back Incentives - These may include 12 to 24 months of payments, HOA fees, and money for furnishings, upgrades, etc. Since inventory is high, the investor should consider options carefully. Locations near a growing university, a military base, or a vacation site that allows short terms rentals are likely candidates for a good return on investment. Clean landscaping, where there is space between shrubs and the building, is a clue to good maintenance. Simple hip rooflines mean less maintenance costs than heavily gabled architecture. Cement block construction through upper stories generally means greater durability and soundproofing. A good look at the HOA budget for reserve funds and special assessments may provide considerable insight to the worthiness of the investment. At newconseach.com, we see attractive opportunities among many postings. You can find them in a number of ways. After choosing a market area, go to the STATUS button and choose “Rental Conversion” for possible postings (113 projects presently in the system). Or, you may start with the Google Map, found at the top of any detail page, and drag it around the vicinity of your favorite university, military base, or resort area to explore any kind of suitable property. newconsearch.com is posting new vacation developments in a host of attractive resort locations. Look for more postings under the STYLE “Vacation Home” or “Fractional Ownership” or “ Hotel Condos” for more investment opportunities.
Thanks to all our Premium Agent subscribers who heeded our early call to get your photos and websites uploaded. You made our public search look gorgeous right from our "launch" on January 15th. Last Monday we had a report from a Premium subscriber with Keller Williams in Miramar, who received a lead from our brand new public site. Please let us know as you begin to receive these high quality lead calls. We are eager to refine the process and really make it work for you. We call the leads "high quality" because public visitors to our website see your photo and contact information on the sidebar and they choose who they want to contact. How much better is the lead who calls you, rather than "leads" who must be contacted? During my 20 years of listing and selling homes in the greater Boca Raton area, I always felt that a prospect who called me was a "gift." If they chose me, I knew I stood a much better chance of concluding a transaction with them. Remember to quickly qualify a lead when you receive one from newconsearch.com. If the lead is merely a prospective contact, make sure to add them to your "drip" marketing to incubate them until they are ready to buy.
newconsearch.com attempts to clearly define each project in the database for its visitors. Sometimes this is very tricky. When we hear about a new project and study its advertisement, it is important to find out if the project constitutes the whole community, or if the project is one part of a Master Planned Community (MPC). A neighborhood of single family homes, or town homes, or condominiums offering limited or no amenities, may constitute a single project in the system. Usually these projects feature only one or two housing styles and less than 1000 residential units. However, when a new project touts extensive amenities such as multiple community centers, golf courses, several ball fields, and commercial areas, it is considered to be an MPC or part of an MPC. Typically, an MPC allows limited access and may be gated. It may be bounded by highways; however, within the MPC vehicular traffic is restrained and streets are pedestrian-friendly. It is generally composed of 600 to several thousand residential units. If the MPC has one builder and one sales center, it is placed in the system as one project. An example of this would be Verano, a 3000-acre community in Port St. Lucie with 27 holes of golf, clubhouse, wellness center and spa, extensive sports facilities, a performing arts center, specialty shops and restaurants, and a school. The developer, Kolter Communities, has one sales center from which a variety of neighborhoods and home models may be considered by the potential buyer. If the MPC features neighborhoods by more than one builder and there are multiple sales centers, each sales center constitutes a posting in the system. For instance, the very sizable MPC called Tradition, also in Port St. Lucie, features neighborhoods by several major builders. Each builder has his own sales center within the MPC. Thus, newconsearch.com entries are noted as "Town Park at Tradition" (Minto Communities) or "Heritage Oaks at Tradition" (Kennedy Homes) or "Victoria Park at Tradition" (Engle Homes). Sometimes two or more builders contribute to the same named project and have separate sales offices within the project. When this happens, newconsearch.com agents will see named entries such as "Newport Isles by Centex" and "Newport Isles by Lennar." Certain popular project names reoccur in our system. To clarify the difference between projects with the same or similar names, we add the town to the name of the project. As an example, "Meridian" becomes "Meridian at Boca Raton" to differentiate it from "Meridian at Cocoa Beach." The town name may or may not be part of the actual name of the project, but we add it for clarity. We hope this helps you understand the organizational level of projects within the system. Always keep in mind that we do not send a project name forward in your buyer email program and that we do not include the name of the project in the public description on our website. This is to encourage prospects to contact YOU for more information and to keep YOU at the center of the sales process. Here's to Happy Surfing and Selling with newconsearch.com
Agents and Developers both seek to maximize the effectiveness of their websites in capturing buyer leads. Some are much better at this than others. How effective is your website? What tools are you using to analyze it? Website hosting companies usually offer simple tools to tell you how many visits you have had, where your visitors are coming from, what search terms they are using, and so on. Did you know that there is a free tool available that can help you do much more? If you are serious about making your website work for you, I suggest you give Google Analytics (www.google.com/analytics) a try. Internet marketing is a specialty unto itself and most agents do not have the time to master all the skills involved. There are companies out there which take advantage of this situation and that is frustrating. When we operated our first real estate website several years ago, we engaged a local company to run a pay-per-click campaign for us. It turned out to be an expensive waste of money and I later found they charged us three or four times what the service actually cost. We hope this has not happened to you. If you expect the Internet to be an important part of your lead generation activity, you must learn some of the concepts involved if you are not already familiar with them. Here are a couple simple definitions to help you get started: Funnel - The funnel is the process by which you gradually convert a visitor into a lead, prospect and finally hopefully a sale. All agents have funnels and your offline marketing activities are all part of your funnel. On your website however, the funnel is usually the sequence of pages (it may be just one or two) by which the visitor offers up their contact information or picks up the phone to give you a call. Goal - A goal is an end to the funnel. It is a page which says something like "Thank you for requesting more information. We will contact you shortly." This page appears only after successful completion of whatever you want that visitor to do. It is important to define a goal page so that Google Analytics can tell you exactly how well you are converting your visitors into leads. Most Agents who have had a website for a while or have attended training classes know the difference between pay-per-click and natural search traffic. Google Analytics can help you ascertain the effectiveness of your pay per click campaigns as well as your link strategies. Without powerful analytics, it is hard to know if you are spending money effectively. Try adding Google Analytics to your site. It is pretty simple and free. We will continue with more helpful tips like this in the coming weeks.
newconsearch.com supports agency. We think Realtor Services are an essential part of every real estate transaction and we plan to support our Premium Agent subscribers with words directed to buyer prospects. Here is a recent article that will give you a few ideas to share with your prospects: Why You Need A Real Estate Agent When Considering New Construction There are two good reasons to use a Realtor when considering a new construction purchase. First, the real estate professional will help you sort out the best possible choices. Secondly, the real estate professional will help you get the best possible service from the builder. Most developers and custom homebuilders welcome the brokerage community in introducing their product to buyer prospects. They know the experienced professional has pre-qualified the prospect and is showing them appropriate properties. This saves time and effort on the part of the developer's sales staff. Broker commissions are part of the developer's total marketing budget and are NOT added on the price of any given property. Buyers commonly have a misconception that they will pay a higher price if represented by an "outside" agent. If this were true, builder relationships with brokers would break down quickly and at a great loss to all parties. Once you and your agent determine appropriate projects to visit, you should expect your agent to do the following: Set up an appointment with a member of the developer's sales staff so that you will be warmly received in a timely fashion. Help you make comparisons among the models offered. Have in mind for you the possible resale value of a given lot and model. Help you evaluate any of the builder's specials. Recommend legal review of the builder's contract so as to reduce the likelihood of surprises or disappointments and to make sure your interests are properly represented. Accompany you on a final walk-through before closing, providing an extra practiced eye in spotting overlooked details in the final stages of construction. By having your interests represented, you are far more likely to enjoy quality service in your home purchase from introduction through closing and occupancy of your brand new residence.
We at newconsearch.com offer our heartfelt thanks to you, our customers, for making 2006 a wonderful year. Even in this rapidly changing market, we experienced tremendous growth thanks to you. While we have big plans for 2007 and many improvements just around the corner, we would like to mention some of last year's accomplishments. 2006 at a glance: Over 10,000 agents signed up for accounts on newconsearch.com. Agents performed over 281,000 property searches. We added 1186 new communities, including many in Central Florida and Tampa. We contacted over 2450 project sales staff and management. We generated 28,000 leads for builders. We completely re-designed our software so we can grow bigger and better in 2007. We have worked hard, even over the holidays, creating tools to improve your business in the new year. Agents, developer representatives and the buying public will all benefit from the programs we will launch in the coming weeks and months. In the meantime, we wish all of you a happy and prosperous 2007!
A recent article on ClickZ, an advice and opinion site for marketers, outlines some of the hurdles Developers face as they come to terms with online marketing. According to a study quoted in the article, "[there is] a large disparity between where buyers are spending their time (77 percent used the Web as the primary source)" and where real estate marketers are spending their ad dollars. We suspect that Developers spend approximately 15% or less of their ad budgets in online media. Developer marketing is complex because Developers need to reach three different groups: Buyers, Agents, and often times, Investors. In the last two years, we have seen a lot of innovation on the part of brokers assembling groups of investors to help Developers launch projects through pre-sales events and network buying. While a few brokers and agents attempt to market new construction independently online, only newconsearch.com has been effectively helping Developers in Florida reach out to Agents and their buyers in a targeted and trackable manner. The life cycle of a project does not lend itself to the concentrated and patient investment in legitimate Search Engine Optimization (SEO) techniques required to really benefit from "natural search." In analyzing over 2200 projects and hundreds of websites, we have not seen a single developer website which was really optimized for search engine traffic. These websites are glossy brochures that are sometimes beautiful to look at, but completely invisible to search engines. We have seen many Developers jump on the Agent email marketing bandwagon in the last year only to find the response rates going down. Developers, agents and other vendors all bought the same lists of agent addresses. These are not opt-in lists and agents did not give permission to be on the lists. Internet providers and corporations have gone to great lengths to avoid delivering this type of mail. In this environment, an agent either gets frustrated because his or her email box is filled with 100s of messages per day or they never receive the message at all. Email blasts for a single project are similar to the traditional postcards -- they are lost in the clutter and useless if the agent does not have a prospect at the moment they chance to open the email. We understand and we are here to help. On newconsearch.com, your project is never lost in the clutter and it can be found the moment an agent has a prospect. Our weekly Alert email is sent to an opt-in list of over 12,000 subscribers. Our agent subscribers always find something interesting in the email, so we enjoy much higher open rates and response rates than any individual e-blast campaign. Plan to make 2007 the year you really engage the Internet. Lock in our recently reduced ad rates to boost your business in the first quarter. Space is limited and rates will increase. To discuss your online marketing strategy for 2007 and take advantage of our expertise, call us at 877-257-6880 and ask for Steve at extension 701.
With early season record low temperatures and bitter storms gripping large parts of the American Mid-West and Northeast Coast, the prospect of owning a residence in Florida is much more inviting. Thousands of homeowners suffered a week without electicity and heat as ice storms downed powerlines across the northern US. Experienced Florida Realtors know those heavy winters storms make the local real estate office phones ring. Be prepared for the Winter Escapee! newconsearch.com can help. When you search a suitable region, check the STATUS link for "Immediate Occupancy" and add that to your search criteria. Make your buyers happy. Find them a new home in our warm sunny climate where prices are going down and incentives are going up. Expect higher commissons for selling quick delivery homes. Sending attractive new project descriptions on the newconsearch email program is a great way to whet the appetites of prospective Florida buyers!
Project updates on newconsearch.com continue to reveal new, significantly lower prices as developers seek ways to entice buyers for their "quick delivery" homes. Cuts of 23% and higher can be found. For example, Minto Communities is offering cuts of 170k to 275k on their models in the large Olympia development near Wellington. Across the highway, they are offering cuts of 111k to 139k on models in their adult community of Buena Vida; in one case this is 40k deeper on the same model than advertised in last week's Palm Beach Post. D R Horton is offering 25k to buyers in several communities, such as Knollwood single family and Verona Palms townhomes. DiVosta says "move now" into one of its southeast Florida communities and your first payment will not be due until July 2007. Agents are advised to call the sales centers for the latest pricing and incentives, which are changing daily. Smart listing agents will use the latest competitive developer incentives to help their sellers bring asking prices into line with current conditions needed to sell. Give yourself an investment "gift" this season. Incentives have never been stronger for those wishing to add rental income to their investment portfolios. newconsearch.com helps you find investment properties offering high commissions. On the Power Search filter bar is a link called "details". Click "Yes" for "Investor Friendly" and choose "Commissions at least 5%." You will find 113 possibilites in SE Florida alone! Combine your commission with extra incentives offered by developers in today's market and you may pick up income-producing properties with little out-of-pocket.
Seasonal party-time is upon us! And you, as Realtor®, are likely to be greeted by "How's Business?" or "I hear the real estate market has really tanked..." Both your attitude and your response in these social situations are critical to your business and family relations. Unprepared, you will blame the 2006 market and hurt your real estate career. However, "armed" with a little forethought, up-to-date market knowledge, and creativity, you may greet everyone in your "sphere-of-influence" with confidence and improve your business in 2007. Remember to be "proactive" in getting helpful information to your prospects, whether they are looking to buy or sell right now or sometime in the future. The market is readjusting and you need to let your prospects know that there are good opportunities for real estate investments. Be prepared to cite some concrete examples in your general market area, especially in new construction projects and conversions that are aggressively retooling to find the buyer demand. Developers have inventory to sell right now and they cannot afford to let their homes and condos sit empty. In recent weeks, they have become far more realistic in their pricing incentives to help you, the agent, bring buyers to the closing table. They have done this in a number of ways including sizable price reductions, generous cash benefits at closing, adding upgrades, lowering down payments, and raising agent commissions. And for your sluggish listing inventory, why not employ the strategies of successful developers? Have you looked at comparable new properties and included them in your Competitive Market Analysis? The New Year is a great time to sit down with your sellers and readdress marketing plans. Perhaps the best way to avoid the negative real estate greeting is to put some "fun" real estate images into the minds of your friends before you see them. Let them "live a dream" with a weekly email greeting that contains some new project that you just discovered, such as a new Trump Tower, a mountain retreat, or a home site in Belize resort that backs up to the world’s only Jaguar Preserve. This makes for interesting cocktail conversation and is likely to result in you, as the “perceived expert” on hand, being remembered as the helpful professional for their next real estate transaction.
It appears that new developments opening up in the present market are offering more realistically priced homes. Such projects offer good comparisons for listing agents and should be included in CMAs wherever appropriate.
Look for us at the FAR Convention and Trade Show September 14 & 15 at the Hollywood Diplomat.
Last week newconsearch.com launched an entirely new website, with an improved search, many new features and an all new look. We encourage everyone to visit the new site.
As developers go to great lengths for buyers, they are offering unheard of incentives and benefits. After factoring in a 5% or 6% commission, agents might find this is just the right time to pick up some investment properties with very little cash out of pocket. To search for high commissions, go to [Power Search] and click on "Particulars." Click into the commission field and select a base commission you want to see; i.e. "5%" or "6%" Projects that meet or exceed that rate will display in the search results. HINT: the symbol ">=" means "greater or equal to."
Agents! Do you have a child headed off to college? Before paying that dorm housing bill, do a little homework. Click on newconsearch.com and select Status "Rental Conversion" to see what may be offered in that college town. Some of these developers are so anxious to help qualified buyers that they offer rebates equal to one year of mortgage payments and HOA fees! Consider putting the student on the deed and have him/her apply for the homestead exception. More savings! And let's not forget those higher commissions: they could pay a tuition bill and some meals!
newconsearch.com is pleased to announce that we have added staff this past week to further our mission of providing the most effective online vehicle for real estate Agents and Developers to market new construction. These recent additions will help us update our data more frequently, improve quality and support our statewide expansion this summer. We look forward to serving you even better over the coming weeks and months.
newconsearch.com has immediate openings for Market Research Associates in Boca Raton. The successful candidate(s) will gain a broad overview of the residential new construction industry with opportunities to advance in an exciting and growing startup company environment. Daily duties will involve contacting the sales centers for new communities to obtain information about available product, entering data accurately in the company's database, as well as offering support to both real estate developer marketers and real estate agents in the use of the website. Required Skills: map reading, clear English telephone voice & pleasant manner, English composition, strong Internet research skills, familiarity with Google maps and/or MapQuest, strong general computer multi-tasking. newconsearch.com also has openings for Sales Associates. To learn more, visit our Careers page.
To help agents locate new developments in relation to their surroundings and to easily generate driving directions, newconsearch.com now supports Google(tm) maps. On any Project Detail page, Premium Subscribers may simply click on the link marked "View Google Map" to obtain a map. The link will not display if newconsearch.com does not have enough information to generate the map. Satellite photos may be accessed where available by clicking on the "Satellite" button in the upper right hand corner of the map.
In response to demand from our Agent subscribers, newconsearch.com has begun to expand throughout the state of Florida. Enjoying record growth in subscriptions from agents around the state (over 1000 in the last week alone) we have begun to add projects and communities around the state. We have over 450 projects to add from Centex, Lennar, DR Horton, Centerline, Engle, KB Home, Transeastern and many more on the way. We have begun to re-organize the system to facilitate faster project entry and better maintenance. All this will result in a more powerful and complete system for Florida real estate agents and developers. Please bear with us as we work through the growing pains and thank you for your support!
In response to many requests from our users, we have added a powerful new search capability to newconsearch.com. This capability will support our continuing geographic expansion as well as many new features under development. New capabilities include multi-city search, market region search and investor-friendly search. The new search page may be accessed via the [Advanced Search] link at the top of any page.
In preparation for a phase of rapid growth, we have introduced a new design for our site. This design better explains our services and will provide the platform for the exciting features and enhancements we will be rolling out in the coming weeks.
The Boca Raton News published a business profile on New Home Construction Search, Inc. The article can be found here.
According to an article in the New York Times on Tuesday, the Commerce Department said that new home sales jumped 13 percent nationwide in October, to an annual pace of 1.42 million, a record. This contradicted earlier predictions of a cooling in the market for new homes.
Luxury home builder Gordon Homes has just opened their sales office at Addison Place for AZURA, their 92-home enclave near the Royal Palm Polo grounds, east of Jog Road in Boca Raton.
We are pleased to announce a new service for subscribers of newconsearch.com: Email Alerts. For a limited time, this service will be sent to all registrants regardless of subscription status. These Email Alerts will contain a listing of new projects which have been added to the system as well as short news items of interest to our user community.